January 27, 2011 - Orange Beach, AL (OBA) - WASHINGTON, DC - Thursday, U.S. Senator Richard Shelby (R-Ala.), today testified at a hearing before the Senate Committee on Homeland Security and Governmental Affairs’ Subcommittee on Disaster Recovery examining the Claims Administration and social services in the aftermath of Deepwater Horizon Oil Spill.

“While the national press has moved on, the Gulf Coast continues to face the challenges from one of the largest disasters in our nation’s history. The damages caused by the oil spill could last years. Our residents and businesses are severely hurting and we need a commitment by all stakeholders to the Gulf Coast’s full recovery. In particular, it is my expectation that the Gulf Coast Claims Facility will uphold and follow through on its obligation to the people of the Gulf Coast.” The text of Senator Shelby’s testimony is below:

“Madame Chairman and Ranking Member Graham, thank you for allowing me to testify before the committee today.

“While the Deepwater Horizon rig has been capped, the boom recalled, and the media on to the next story, many may think this disaster is over. This is not true. Like many Alabamians, I remain extremely concerned regarding both the short and long term effects the oil will have on the Gulf Coast’s economy and ecosystem. Alabama’s Gulf Coast region may take decades to recuperate, and downstream effects could cripple the region for years to come.

“Since the oil started pouring into the Gulf last April, Alabama has seen a nearly 50 percent drop in tourism-generated dollars and substantial loss of jobs. Tourism revenues lost to Alabama’s coastal economies as a direct result of the oil spill are estimated at between $850 million and $1 billion, a figure that does not include the additional losses to the fishing industry and shipyard repair and maintenance operations.

“The federally-mandated fishery closures have resulted in a significant loss of income for the entire seafood industry – fishermen, shrimpers, bait & tackle shops, and processors.

“Alabama’s fishing industry represents one of the largest economic engines in the State – accounting for more than $800 million in sales annually and nearly 18,000 jobs. The economic impact on the commercial and recreational fishing industry already is severe and extensive.

“We must ensure that individuals and businesses are compensated now, but also put in place mechanisms to assist them with rebuilding and restoration efforts as the Gulf continues to recover from this disaster.

“I have met with Mr. Feinberg several times since the Gulf Coast Claims Facility was created. Yet I continue to have serious concerns regarding the claims determinations made by this organization.

“Like the entire Gulf Coast, Alabama is at a critical juncture. The Gulf Coast Claims Facility is not acting with appropriate urgency.

“Nine months since the oil spill, 57 percent of claims in Alabama remain unpaid. This amounts to 38,604 individual and business claims that have not received one penny in funding. That is a startling statistic.

“Further, from January 12 to January 24 in Baldwin County, the hardest hit region in Alabama, only 28 claims were processed. That is less than 3 claims a day.

“Let me reiterate – Alabama has 38,604 outstanding claims, and the Gulf Coast Claims Facility is currently only processing 3 Alabama claims a day.

“Moreover, there is no distinction given by the Gulf Coast Claims Facility in their statistics between how many claims were paid and how many claims were underpaid. I am sure that this is not an insignificant figure.

“When Mr. Feinberg and I met in both November and December, I relayed this issue to him – that one of the largest issues that needed to be addressed was the lack of a clear formula on how a claim is determined.

“Filers deserve clarification as to why their claims were denied or why their payments were less than expected.

“On December 16th, Mr. Feinberg told me the formula for claim payments would be made publicly available on the Gulf Coast Claims Facility website. Six weeks later, this information is still not available. This is unacceptable. Those affected by the spill need to know that there is transparency, clarity, and consistency in the payment process.

“Finally, as we continue with the recovery efforts along the Gulf Coast, Congress needs to swiftly address the allocation of the Clean Water Act fines from the BP oil spill.

“The entire Gulf Coast faces an enormous ecological and economic disaster – with an estimated impact of as much as $3 billion in Alabama alone. Under the Act, BP could be liable for penalties up to $20 billion.

“Congress needs to ensure that all five affected Gulf States are treated equitably when these fines are dispersed. Each State should have the ability to use these funds how they see fit to restore the economic and ecological damage caused by the spill. The impacts to each State are unique and there needs to be flexibility in spending the Clean Water fines in the manner which best meets their needs.

“While the national press has moved on, the Gulf Coast continues to face the challenges from one of the largest disasters in our nation’s history. The damages caused by the oil spill could last years. Our residents and businesses are severely hurting and we need a commitment by all stakeholders to the Gulf Coast’s full recovery. In particular, it is my expectation that the Gulf Coast Claims Facility will uphold and follow through on its obligation to the people of the Gulf Coast.

“Thank you, Madame Chairman.”