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Gulf Oil Disaster Report Card: Grading BP, Transocean and the Feds

The one-year anniversary of the Deepwater Horizon disaster that killed 11 people and sent 4.9 million barrels of oil into the Gulf has come and gone. Unfortunately, the story of the Gulf coast and its recovery is hardly over. In many cases, the path to "becoming whole again" has just started. So where are we -- as a nation, region, ecosystem, and industry -- one year later?

The Macondo well is capped, but tar balls the size of SUVs are still washing onto beaches; lawmakers talk about improving safety and yet legislation has languished; and some of the saved and relocated Gulf pelicans have been spotted, but dolphins continue to wash up along the coast. In short, we're far from healed.

Now's the time to assess exactly how far we have left to go. The grades in the report card are by no means the final word. The claims process could suddenly improve and BP could prove that it has changed for the better. But here's where we are one year and a day since the disaster began.

BP: Ready to drill and spill some more
BP could be doing much worse. The company has sold some $24 billion in assets with more planned for later this year; its share price has rebounded some 70 percent from its oil-spill related low of $27.02 back in June; and predictions it would fall into bankruptcy never came true. At least not yet.

Even better for the company was oil spill claims czar Kenneth Feinberg, who determined it will only take two to three years before virtually all Gulf residents and businesses make a full economic recovery. The upshot? Feinberg will base final settlement payments to oil spill victims on this quick-recovery scenario. That's excellent news for BP, which can be pretty much assured that its compensation to oil spill victims won't exceed that $20 billion figure, and will likely come in below that.

That doesn't mean BP is performing well in the eyes of Gulf coast residents or even within the industry. It survived and that's it. CEO Bob Dudley talks of change, but it will be years before we know if he's successfully transformed BP's culture. BP's board almost got its bonus and compensation strategy right and decided not to pay bonuses or salary increases to any executive directors involved in the Gulf oil spill. Dudley hasn't asked for his life back nor has he skipped out on his duties to enjoy a yacht race. That's progress, folks. Not much, but it's progress.

  • Grade: D+
Transocean: Ended the year with a few horrible decisions
It's hard to believe any company could overshadow BP's numerous gaffes from those first weeks of the disaster. And yet Transocean (RIG) managed to do just that several times. Right after the spill, Transocean was criticized for how it treated survivors, who said they were coerced to sign waivers after they were brought ashore following the explosion. The company also has been criticized for allegedly obstructing the federal government's investigation.

But the best -- or worst moment -- came in 2011 when Transocean declared in a securities filling that 2010 was its "best year in safety performance" ever. As a reward for this outstanding result, executives received two-thirds of their target safety bonus. An uproar from lawmakers and Gulf coast residents followed, and Transocean apologized. Sort of.

  • Grade: D-
Offshore regulators: New name, same problems
The Interior Department has made some efforts -- some long-awaited ones -- to clean up its troubled sex-for-oil Minerals Management Service. The agency got a new name (Bureau of Ocean Energy Management Regulation and Enforcement), and some retooling. Interior Secretary Ken Salazar ramped up the restructuring into 2011 and seems to committed to fixing the agency.

Still, it's been criticized by the oil and gas industry and their advocates for issuing permits too slowly. The rate of permits has started to accelerate, but pressure from the industry and pro-drilling lawmakers won't let up anytime soon. The real test will be over the next two years. Will the BOEMRE improve efficiency in permitting and manage to improve safety? Congress doesn't appear up to the task, so that leaves the BOEMRE.

  • Grade: C
Claims process: Loads of complaints and thousands still waiting for payments
The so-called independent Gulf Coast Claims Facility, which took over from BP in August, has received 857,000 claims from more than 504,000 people and businesses. To date, the claims center headed by Kenneth Feinberg has paid more than $3.8 billion to 180,000 claimants. But most of that was in the form of emergency payments or to folks who accepted quick-pay settlements of $5,000 for individuals or $25,000 for businesses. Thousands have yet to be processed and some 43,000 claims have been turned away with a request for more documents.

Gulf coast residents and business owners have complained of a slow and often unfair process that operates without rhyme or reason. Feinberg has essentially acted as BP's lackey, a description backed up by a judge who told the claims czar he could no longer call himself independent. And that was before he got a $400,000 per month raise.

  • Grade: F
Oil industry: Heavy lobbying and self policing
The oil and gas industry knew the Deepwater Horizon disaster would be trouble. And they were right. A moratorium on deepwater exploration drilling lasted several months, projects were put on hold and in the end the industry was left with stricter regulations.

The industry responded in three ways: It blamed BP, increased its lobbying on Capitol Hill and made up "self-policing" standards like the Exxon-led Marine Well Containment System to show their responsiveness.

  • Grade: C-
Lawmakers: Pressure to drill and no safety reform
Congress grilled the executives of BP, Halliburton and Transocean as well as other oil company CEOs last year in a series of hearings. But now that public lashings are over, the enthusiasm to actually pass legislation to make offshore drilling safer has stalled. Instead, a GOP-controlled House panel advanced a trio of GOP bills that would speed up offshore drilling permits in the Gulf and open up new areas in the Atlantic and Pacific coasts.
  • Final grade: D-
Public health: Problems persist

Right after the spill, 376 people in Louisiana -- most of whom were cleanup workers -- reported dizziness, nausea, headaches, cough, chest pain and respiratory distress, all acute health effects typical to exposure to crude oil, according to the Louisiana Department of Health and Hospitals. By September, more than 2,100 acute health complants related to the spill had come in, National Geographic reported using figures from the U.S. Centers for Disease Control and Prevention (CDC)'s National Institute for Occupational Safety and Health.
Gulf coast residents are still reporting medical and mental health problems. Environmental justice group Louisiana Bucket Brigade found that nearly three-quarters of Gulf coast residents polled this year reported health concerns that they believe are related to the spill.
  • Grade: C-
Local and state governments: SUV anyone?

There were a few early missteps by state officials, including Gov. Bobby Jindal's failed artificial barrier islands. The more egregious abuses of power are unfolding right now. BP money is a-flowin' into the coffers of communities impacted by the spill. And public officials are using it for stuff that's well -- questionable at the very least. Tasers, brand-new SUVs, iPad and laptops were all purchased to "help in the recovery." If this misuse of BP funds continues, some of these folks may get themselves voted right out of office.
  • Grade: D
Wildlife and marine life: Mixed.
The oil spill did offer one positive side effect: the closures allowed some fish populations to rebound. And some of the rescued and relocated Gulf pelicans have been spotted in recent months.

The spill is still taking a toll on marine life in some areas. Just this month, scientists linked the deaths of some dead dolphins discovered along the coast to the BP oil spill. That number could grow. National Oceanic and Atmospheric Association officials and other experts have said they're bracing for a new wave of dolphin deaths as the bottlenose calving season begins in earnest this month. And then there's the Gulf Dead Zone, which already existed thanks to agriculture runoff in the Midwest, and appears to be getting worse.

  • Final grade: C-

Photos obtained by BNET Technology blogger Erik Sherman from a confidential source, the photos include a timestamped series in which the rig goes from listing heavily to sunk beneath the waves in just four minutes.
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