June 10, 2010 / 6:13 PM / 9 years ago

Florida wants escrow funds as heavier oil washes in

PENSACOLA BEACH, Florida (Reuters) - Florida demanded on Thursday that BP Plc put $2.5 billion in escrow to cover potential losses from the Gulf of Mexico spill, as heavier concentrations of oil begun sloshing up on its shores.

Patches of oil from the Deepwater Horizon oil spill blanket a beach in Pensacola Beach, Florida June 4, 2010. REUTERS/Lee Celano

Tar balls and crude oil “mousse” entered Perdido Bay in northwest Florida, near the tourist haven of Pensacola, late on Wednesday, prompting state and local officials to step up skimming operations before it tainted spawning areas.

Red snapper, grouper and speckled trout are among the fish that spawn there. Neighboring Alabama’s primary oyster beds also are in the same area.

Mike Sole, secretary of the Florida Department of Environmental Protection, said the heavier concentrations should continue to arrive on northwest Florida shores over the next several days.

“We’re going to continue to see this type of impact for the next 72 hours,” Sole said. “We really need to keep our attention on this.”

Florida Attorney General Bill McCollum sent a letter to BP demanding that it put at least $2.5 billion into a dedicated escrow account to cover spill-related losses to the state and its residents.

McCollum, in a close race for the Republican gubernatorial nomination, said the account was essential as Florida braced for what would likely be a “staggering blow” to its economy, with a significant impact on workers and government revenues.

The $2.5 billion is based on an economist’s estimate of potential losses in 23 Gulf Coast counties in tourism-dependent Florida.


The spill, which began when an offshore rig exploded on April 20, killing 11 workers, has cost BP $1.43 billion so far, according to the company’s estimates.

The consistency of the oil washing ashore in northwest Florida, a cross between tar balls and fresh crude, has made collection difficult. Oil absorbing booms have been ineffective and skimmers have struggled to pick up the debris in an inland waterway shared by Florida and Alabama, local officials said.

Spill clean-up and containment efforts have been hampered by breakdowns in communication between local monitors, state officials and representatives of the Unified Command Center — grouping BP and Transocean Ltd. with federal agencies — in Mobile, Alabama, officials said.

“We need to figure out how to be proactive and not just react to reports,” Sole said.

Debris from the spill reached the Panhandle region of northwest Florida late last week. But until Wednesday it had been limited to relatively small tar balls, washing up on some white-sand beaches.

State meteorologist Amy Godsey said a prevailing Gulf of Mexico current known as “The Loop” has begun to reattach itself to a more northerly “Loop Ring” that has kept the bulk of spilled oil from working its way into the Straits of Florida.

Oceanographers say it now seems likely that oil from the spill will enter the Straits. If that occurred, oil would be carried by the Gulf Stream along Florida’s heavily populated Atlantic coast and then further up the U.S. eastern seaboard, they say.

Additional reporting by Jane Sutton; Editing by Paul Simao

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