Investment banker Fred D. McCallister of Dallas
believes he has the answer. McCallister, vice president of Allegiance
Capital Corp. in Dallas, has been trying since June 5 to offer a dozen
Greek skimming vessels from a client for the cleanup.
“By sinking and dispersing the oil, BP can amortize
the cost of the cleanup 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. By managing the
cleanup 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.”
A BP spokesman from Houston, Daren Beaudo, denied the
allegation emphatically. He said, “Our goal throughout has been to
minimize the amount of oil entering the environment and impacting the
shoreline.”
A report released Thursday by the U.S. House
Committee on Oversight and Government Reform included a photo depicting
“a massive swath of oil” in the Gulf with no skimming equipment in
sight. The report concluded: “The lack of equipment at the scene of the
spill is shocking, 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 in trying to win approval
for the Greek vessels, along with the frustrations others have
expressed in offering specialized equipment, contradicts the official
pronouncements from BP and the federal government about the approval
process. For foreign vessels, that process is complicated by a 1920
maritime law known as the Jones Act.
Coast Guard Rear Adm. James Watson, who oversees the
Unified Command catastrophe response in New Orleans, determined in
mid-June an insufficient number of U.S. skimming vessels is available
to clean up oil, essentially exempting from the federal Jones Act
foreign vessels that could be used in the response, said Capt. Ron
LaBrec, a spokesman at Coast Guard headquarters in Washington.
The Jones Act allows only vessels that are U.S.
flagged and owned to carry goods between U.S. ports.
To further clarify, Coast Guard Adm. Thad Allen, the
national incident commander, promised expedited Jones Act waivers for
any essential spill-response activities. “Should any waivers be needed,”
Allen said at the time, “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.”
LaBrec said 24 foreign vessels, two of them skimming
vessels, have operated around the catastrophe site, in federal waters
with no need for Jones Act waivers. He also said Watson has the
authority to approve operation of foreign-flagged vessels near shore,
where the Jones Act comes into play because of the port restrictions.
Says Fred D. McCallister, Vice President, Allegiance
Capital Corporation:
“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. “If it’s something he
decides is absolutely needed, he can get it in here without BP
approval.
“The equipment that has been offered — 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. That has been occurring since early in
the response and will continue to occur.”
Dealing with BP
McCallister said none of his dealings have been with
the Coast Guard. He submitted requests for Jones Act waivers to
Unified Command, but said questions about the skimming vessels have
come from BP.
BP spokesman Beaudo said McCallister was notified
his offer of skimming vessels has been declined because the vessels
will not pick up heavy oil near shore. Beaudo said he did not know when
McCallister was informed. McCallister said he received communications
from BP on Thursday that indicated his proposal was still under review.
In fact, he sent supplemental material Thursday, which was accepted,
to show the skimming vessels will pick up heavy oil like that
bombarding Mississippi’s coastline. The 60-foot vessels, he said, can
skim high-density crude up to 20 miles offshore. Equipment on board
separates the oil from water.
Desperate for skimmers
All the Gulf states dealing with oil have pleaded
for more skimming vessels. The Deepwater Horizon Web site indicates 550
“skimmers” were at work before bad weather suspended operations.
Mississippi Gov. Haley Barbour’s office has ordered
private shipyards to build skimming vessels because so few have been
working in state waters. George Malvaney, who heads the Mississippi
Coast cleanup effort for BP subcontractor U.S. Environmental Services,
said offers of skimming vessels and other equipment take time to
review. He believes Mississippi will 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.”
More than Meets the Eye?
As the catastrophe reaches Day 73, McCallister, who
grew up in Mississippi and has family on the Coast, 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.
“I am concerned it is seen by BP as being the most
pragmatic financial approach. But they’re playing Russian roulette with
the Gulf, the marine life in the Gulf and the people in the Gulf
region.”
Written by Anita Lee for McClatchy