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Gov. Crist creates team to offer legal advice on dealing with BP

TALLAHASSEE — Saying he was preparing for the worst while hoping for the best, Gov. Charlie Crist on Monday assembled a small army of generals to provide legal advice to Florida as they brace for a potential legal skirmish with oil giant BP.

Former Attorneys General Bob Butterworth and Jim Smith have agreed to advise Crist, also a former attorney general, and current Attorney General Bill McCollum for no charge on what the state must do to prepare a case again the oil giant.

Their job will "do all the things that may be necessary to be legally prepared for this,'' McCollum said.

McCollum said that BP's general counsel has said it will pay every damage claim filed by both government and individuals for lost revenues, business and environmental costs and "err on the side of granting the claim'' when they are disputed.

But McCollum added that he is "not confident" the state won't ultimately have to sue, just as the state of Alaska did after the Exxon Valdez spill.

"There was a period of great cooperation with Exxon and then at some period it broke down,'' McCollum said. "I'm hopeful this won't.''

Crist, who spent Saturday in Apalachicola meeting with oystermen and fishermen and Sunday with charter boat operators in Destin, said that while no oil had yet reached Florida's beaches, "there probably already has been some economic impact.''

The U.S. Coast Guard began work fortifying another stretch of the beach, this time Apalachicola and Port St. Joe, east of their current operations in Pensacola and Panama City.

BP is set to weather a financial storm

BP's financial wounds from the April 20 drilling-rig explosion may be serious, but they probably won't be fatal. One analyst report, issued by Citigroup, even declared in its title, "Reaction to the Gulf of Mexico oil leak is a buying opportunity."

Even though most investors have soured on BP, driving down its stock price by 19 percent and wiping out $36.7 billion of its market value since the explosion, the firm is still a behemoth. The company has a market value of $152.6 billion, bolstered by a global marketing network, a lucrative oil venture in Russia, a promising contract to boost production in a giant Iraqi field and scores of other large interests. It remains the largest oil producer in the gulf. Measured by revenue or assets, it is among the world's five largest companies.

Citigroup analysts said that stockholders' reactions seem "disproportionate to the likely costs to the company." It noted that punitive damages against Exxon for the 1989 Exxon Valdez oil-tanker spill were originally set at $5 billion in 1994 but were reduced on appeal. The company in 2009 agreed to pay less than $1 billion, including interest.

For now, at least, BP's prodigious costs combating the oil spill in the gulf are outweighed by prodigious profits.

On Monday, BP said it spent $350 million in the first 20 days of the spill response, about $17.5 million a day. It has paid 295 of the 4,700 claims received so far, for a total of $3.5 million. By contrast, in the first quarter of the year, the oil giant's profits averaged $93 million a day.

Governor wants session to deal with oil

Gov. Charlie Crist said Monday he wants a special legislative session soon — maybe the week of May 24 — to deal with two timely issues: a proposed constitutional ban on drilling for oil off Florida's coast and tax incentives for utilities to diversify and explore renewable energy sources such as solar and wind power.

Crist said the special session looks more likely after a phone conversation with Senate President Jeff Atwater.

"I'd like to do it in a couple of weeks," Crist told reporters at the Governor's Mansion. "Sooner's better than later. People are concerned, so why not now?"

The governor predicted getting at least 72 House members and 24 senators to vote for a drilling ban would be easy. "Now?" he said. "Who's going to vote against that?"

Gov. Crist creates team to offer legal advice on dealing with BP 05/10/10 [Last modified: Tuesday, May 11, 2010 1:45pm]
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