[Corp. Watch] BP deliberately delaying clean-up to spread out costs

[Corporation Watch]

Gulf Residents Accuse BP of Skimping on Skimming Ships

 By Anita Lee

(Sydney Morning Herald, July 3) -- From Washington to the Gulf, politicians and residents wonder why so few skimming vessels have been put to work soaking up oil from the Deepwater Horizon catastrophe.

	Investment banker Fred McCallister of Dallas, Texas, believes he has the answer. McCallister, vice president of Allegiance Capital in Dallas, has been trying since June 5 to offer a dozen Greek skimming vessels from a client for the clean-up.

	''By sinking and dispersing the oil, BP can amortize the cost of the clean-up over the next 15 years or so -- as tar balls continue to roll up on the beaches -- rather than dealing with the issue now by removing the oil from the water with the proper equipment,'' McCallister testified earlier this week before the U.S. Senate committee on Commerce, Science, and Transportation.

	''As a financial adviser, I understand financial engineering, and BP's desire to stretch out its costs of remediating the oil spill in the Gulf," he said. "By managing the clean-up over a period of many years, BP is able to minimize the financial damage as opposed to a huge expenditure in a period of a few years.''

	BP spokesman Daren Beaudo denied the allegation. ''Our goal throughout has been to minimize the amount of oil entering the environment and impacting the shoreline,'' he said. But report released on Thursday by a U.S. House committee included a photo depicting ''a massive swathe of oil'' in the Gulf with no skimming equipment in sight.

	''The lack of equipment at the scene of the spill is shocking," the House report concluded, "and appears to reflect what some describe as a strategy of cleaning up oil once it comes ashore versus containing the spill and cleaning it up in the ocean.''

	McCallister's experience, along with the frustrations others have expressed in offering specialized equipment, contradicts pronouncements from BP and the government about the approval process.

	For foreign vessels, that process is complicated by a 1920 maritime law known as the Jones Act, which allows only U.S. flagged and owned vessels to carry goods between U.S. ports.

	Coast Guard rear admiral James Watson, who oversees the unified command catastrophe response in New Orleans, determined in mid-June that an insufficient number of U.S. skimming vessels were available to clean up oil, essentially exempting foreign vessels that could be used in the response from the Jones Act.

	Coast Guard admiral Thad Allen, the national incident commander, then promised expedited Jones Act waivers for any essential spill-response activities.

	''Should any waivers be needed,'' he said, ''we are prepared to process them as quickly as possible to allow vital spill response activities being undertaken by foreign-flagged vessels to continue without delay.''

	Captain Ron LaBrec, a Coast Guard spokesman, said 24 foreign vessels, two of them skimming vessels, had operated around the catastrophe site in federal waters without need for Jones Act waivers. He said Admiral Watson had the authority to approve operation of foreign-flagged vessels near shore, where the Jones Act comes into play.

	''If the unified area commander (Watson) decides that it's a piece of equipment he needs, either BP would contract for it or he can do that himself,'' LaBrec said. ''The foreign equipment that has been offered that is useful for the response has either been accepted or is in the group of offers that is currently in the process of being accepted.''

	BP spokesman Beaudo said McCallister was notified that his offer of skimming vessels had been declined because the vessels would not pick up heavy oil near shore, but McCallister said he had received communications from BP that his proposal was still under review.

	 He sent further material on Thursday, which was accepted, to show the skimming vessels will pick up heavy oil such as that bombarding Mississippi's coast. He said the 54-foot vessels could skim high-density crude up to 5 miles off-shore. Equipment on board separates the oil from water.

	All the Gulf states dealing with oil have pleaded for more skimming vessels. Mississippi Governor Haley Barbour's office has ordered private shipyards to build skimming vessels because so few have been working in state waters. The Deepwater Horizon website indicates 550 ''skimmers'' were at work before bad weather suspended operations.

	George Malvaney, who heads the Mississippi coast clean-up effort for a BP subcontractor, said offers of skimming vessels and other equipment took time to review. He said he believed Mississippi would have a ''substantial skimming effort'' by late next week.

	''Just because it's a skimmer doesn't mean it's effective,'' Malvaney said. ''There's a lot of people out there saying, 'We've got skimmers'. Some are effective, some are not. That's what we're trying to wade through right now.''

	McCallister believes there is just more to it. ''Looking at it from a businessman's perspective,'' he said, ''if I am BP, assuming I don't have a conscience that would steer me otherwise, the best thing I can do for my shareholders, my pensioners, and everybody else, is to try to spread the cost of this remediation out as long as I can.''