Unlike Exxon Valdez, fishermen swiftly settle with BP over Gulf oil spill

Patrik JonssonThe Christian Science Monitor
Daniel Beltra I Greenpeace photo. The Q4000 (left rear) and Discoverer Enterprise (foreground) are currently collecting about 25,000 barrels of oil a day inthe Gulf oil spill.
Photo by Daniel Beltra/Greenpeace
The Mighty Servant 3 works with two vessels of opportunity to recover crude oil from the Gulf of Mexico on June 18.
BP photo
USCG photo. An oiled gannet is cleaned at the Theodore Oiled Wildlife Rehabilitation Center on June 17, 2010.
U.S. Coast Guard photo
Louisiana Wildlife and Fisheries photo. An oiled pelican attempts to dry itself by extending its wings.
Louisiana Wildlife and Fisheries photo. Oiled pelican stands on a rock.
Louisiana Department of Wildlife and Fisheries Photou
Louisiana Wildlife and Fisheries photo. A biologist nets an oiled pelican on the beach at Grand Isle.
Louisiana Department of Wildlife and Fisheries Photo
Louisiana Wildlife and Fisheries photo. An oiled pelican stands behind an oiled boom.
Louisiana Department of Wildlife and Fisheries Photo
Louisiana Wildlife and Fisheries photo. An oil-covered brown pelican is placed in cage for transport.
Louisiana Department of Wildlife and Fisheries Photo
Louisiana Wildlife and Fisheries photo. A mat of oil on a beach at Pass a Loutre.
Louisiana Department of Wildlife and Fisheries Photo
BP photo. A vessel of opportunity helps with skimming operations in Wilkinson Bayou, and Bay Jimmy near the north side of Barataria Bay, Louisiana on June 20.
BP photo
USCG photo. Boats from the Vessel of Opportunity program participate in the clean up efforts around Bay Jimmy near Grand Isle, La., June 21, 2010.
U.S. Coast Guard photo
NASA photo. The oil appears as a maze of silvery-gray ribbons in this photo-like image from the Moderate Resolution Imaging Spectroradiometer (MODIS) on NASA’s Terra satellite.
NASA photo

Gulf of Mexico fishermen battered by the aftermath of the 2010 BP oil spill suddenly settled a major class-action lawsuit against BP on Friday, agreeing to what's likely to be a $7.8 billion payout in return for dropping the litigation.

The settlement, representing some 100,000 fishermen, oil spill workers and others isn't likely to please all the potential litigants still trying to get compensated for the economic effects of the spill, the worst in US history, which bled 2.3 million gallons of crude oil into the Gulf's most sensitive estuaries and fishing grounds, and onto its white sand beaches.

Others worried that the deal would simply shift the payout onus from BP onto a small cadre of lawyers, who themselves stand to make millions. And in reaching the settlement, BP managed to clear perhaps the single biggest hurdle to putting the 2010 spill behind it and moving on with oil exploration in the Gulf. It's still embroiled in civil litigation with the US government over spill damages and with Deepwater Horizon contractors over liability.

Comparisons to Exxon Valdez litigation

To be sure, the settlement, one of the largest class-action settlements in history, is substantially larger than the $1 billion settlement from the Exxon Valdez oil spill in 1989. But while the potential payout in the BP lawsuit could have been larger had the case gone to trial, it's likely that at least some of the claimants and their advisers considered the experience of Alaska fishermen in the wake of the Valdez oil spill, where many believe the 20-year-litigation became an equal, or larger, tragedy than the spill itself. That case was finally settled in 2009.

“The faster Gulf Coast residents can move on with their lives, the better – and if the settlement can help speed that process along, it’s a win,” Time.com's Bryan Walsh writes.

It's a contention backed up by scientific evidence. According to studies of fishermen in Cordova, Ala., near the Valdez spill, “Data revealed that as important commercial and subsistence resources failed to recover and litigation remained unresolved, many local residents ... experienced chronic psychological stress, social disruption and collective trauma.”

The study, co-authored by psychologist Stephen Picou of the University of South Alabama, drew parallels between the two disasters, noting similarities between communities tied both economically and psychologically to the natural resources affected by the spills. It noted that stress levels in some Alaska communities remained at the same level in 2009 as they had 20 years earlier, in the days after the Valdez spill. Picou said that more recent data “suggest that similar consequences may be forthcoming for Gulf of Mexico communities affected by the BP oil spill.”

Gulf's warm waters promoted oil deterioration

But differences have also emerged between the two historic oil spills.

For one thing, while thick oil affected shorelines and fish stocks for decades in Alaska, conditions in the much warmer Gulf promoted deterioration of the oil and may have limited its long-term effects on fish and shrimp stocks. While many tourist towns basically wrote off 2010 as a lost season, tourists largely returned to the Gulf's beaches in 2011, lessening concerns about long-term economic impacts of the spill. And fishermen who saw their catch nearly halved in 2010 say many fish stocks appear to have rebounded.

Given those realities, and the trumpeting of the Gulf's health by regional tourist boards, some observers worried that claimants were giving ammunition to BP's contentions – which could have been raised in a trial – that its liability was smaller than predicted.

"Our state and local leaders have been so quick to declare that the beaches, seafood and Gulf Coast are doing fine that we may have screwed up the chances of the remaining outstanding BP oil spill claims to be paid,” Pensacola blogger Rick Outzen, publisher of the Independent News, wrote last year.

The disaster began in April 2010 when a wellhead known as Macondo blew out deep below the Deepwater Horizon exploratory drilling rig, leading to an explosion and fire that killed 11 workers. As the rig sank, oil began to spill freely into the Gulf. It took 87 days for BP, working with government scientists, to plug the well – a drama that introduced phrase like “junk shot” into the vernacular and unraveled like a slow-motion nightmare for coastal communities who helped fight off the oil with booms, surface fires, and beach rakes.

BP has already paid out billions from a $20 billion trust fund it set aside shortly after the spill, at the behest of the Obama administration. BP set up an independent claims fund that has itself become a source of frustration for many Gulf residents who have struggled to prove the extent of damages from the spill on their livelihoods. While the settlement allows individuals to continue to sue BP, experts do not believe those claims will be substantial.