Five years ago, an explosion on BP’s Deepwater Horizon oil rig killed 11 men. For 87 days, oil flowed into the ocean, at least 3 million barrels spilled into the Gulf of Mexico and marred the Gulf Coast.
This week BP agreed to pay 18.7 billion dollars to settle litigation with four gulf states and the federal government — that includes the largest Clean Water Act fine in history.
Along with devastating environmental damage, the spill had a major impact on the economy along the coast. Jobs along the gulf coast were lost, and many businesses shuttered. Individuals, mom and pop companies, and outposts of major chains were all deeply affected.
In the middle of all of this, a hotel opened on Florida’s Pensacola Beach: the Margaritaville Beach Hotel, part of Jimmy Buffet’s franchise, the first of its kind.
Expectations had been high — the hotel had prime real estate on one of the most beautiful beaches in the Gulf. But even in peak season, it didn’t sell out until Labor Day weekend, months after opening.
Jennifer Jackson, the director of Marketing and Activities at the Margaritaville Beach Hotel, says that the spill was scary for the hotel, especially since expectations were so high. “There were a lot of jobs at stake,” Jackson says, “obviously when the oil spill happened, there was a lot of tension, there was a lot of nervousness.”
Staff at the Margaritaville Beach Hotel were concerned about how the spill would affect their opening, and tourism in general. “I think the positive parts were that we had such a good team not only that was working to clean up the oil spill but that at the hotel here, to kind of keep everyone’s spirits up,” Jackson says.
Through social media and marketing, the hotel publicized its opening. Jackson says it was about letting everyone know “Hey, we are open…yes there has been a tragedy with the oil spill, but we’re still opening and we’re still a beautiful beach, and we’re still a great tourism destination.”
A normally super-crowded summer season had disappointing sales, and the hotel didn’t sell out its rooms until Labor Day, but since then, has rebounded, with a number of record breaking high sales seasons in the past couple years.
Jackson says that while there were concerns about how the long-term environmental impacts might develop — whether there would be fish washing up on shore, or new tar resurfacing — things have been running smoothly for the hotel.
For many of the people who lost jobs or money after the spill, recovery hasn’t been as easy. Five years after the spill, roughly half the people who’ve filed monetary claims against BP and have been approved still haven’t been paid.
The final deadline to file a claim was recent — only June 8. These settlement claims will come from a different pot of money than the $18.7 billion federal settlement agreed upon this week.
After a couple of different agreements and several trips to court, BP and the plaintiffs — mostly individuals and businesses — agreed on an uncapped settlement. The company would pay out claims for legitimate economic damage to people whose livelihoods were hurt by the spill.
Frank Petosa, a partner at the law form Morgan and Morgan, represents many of those people filing claims against BP. “The settlement agreement has very objective formulas to determine whether or not someone qualifies for compensation,” Petosa says. He says BP agreed to the settlement initially, but fought the ruling to the Supreme Court, where they were dismissed.
The arguments over the settlement agreement have delayed financial reimbursement for the claimants. “Some industries have been devastated…I have clients that never recovered, they went out of business,” Petosa says, “luckily the settlement agreement put in place the ability for businesses that ultimately went out of business to receive some degree of compensation.”
While tourism and some businesses have bounced back, other industries are still struggling…especially those dependent upon environmental factors, like the oyster industry and fisheries.
“There’s been a recovery,” Petosa says, “but the problem is, we still don’t know what the long term impact is going to be.”
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