By Andrew Restuccia - 02/02/11 04:37 PM EST
In almost all cases, Gulf residents and businesses should be able to recover from last year’s massive oil spill by the end of 2012, the independent administrator of BP’s $20 billion oil spill compensation fund said Wednesday.
The conclusion comes in a draft methodology released by Kenneth Feinberg, a Washington lawyer appointed by President Obama last year to oversee the compensation fund. Feinberg will use the methodology to dole out final and interim payments to oil-spill victims during the next two years.
Feinberg said he expects those affected by the spill to reach a 30 percent recovery this year and a full recovery in 2012. Oyster harvesting is the one exception to that rule — the industry will have a “longer" recovery period, Feinberg’s office said.
Compensation payments will be based on this timeline. Most claimants will receive two times their 2010 losses, while oyster harvesters will receive four times their 2010 losses.
“Others may disagree, but I’ve tried as best I can to come up with a formula that I think will work and will adequately reflect the uncertainty of the future of the Gulf,” Feinberg told reporters Wednesday.
Feinberg has been criticized by Gulf officials and lawmakers for not releasing a methodology for doling out oil-spill compensation. He acknowledged that Wednesday, saying, “I’ve been criticized for not having an open enough process. This is designed to deal with the transparency problem.”
Stakeholders have two weeks to comment on the draft methodology, which has been posted for public viewing on the GCCF website. The GCCF will begin making final and interim payments in February.
In the six months that Feinberg has been in charge of the fund, the GCCF has paid out nearly $3.4 billion. Many of those claims were paid in an initial, three-month emergency payment period.
After Thanksgiving, the GCCF began the final payment process, which will last until 2013. Claimants have three options under this process. They can opt for a one-time “quick-pay” payment of $5,000 for individuals and $25,000 for businesses; a quarterly interim payment; or a final, lump-sum payment.
If claimants accept a “quick-pay” or final payment, they must sign a release agreeing not to sue BP or any other companies responsible for the spill.