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$330 million settlement deal in Katrina oil spill

An oil company and plaintiffs affected by the worst environmental disaster during Hurricane Katrina said Monday they had agreed to a $330 million settlement.
/ Source: news services

An oil company and plaintiffs affected by the worst environmental disaster during Hurricane Katrina said Monday they had agreed to a $330 million settlement.

Murphy Oil, based in El Dorado, Ark., said in a statement it had reached an agreement with the plaintiff attorneys over the spill from an oil storage tank at its Meraux refinery in St. Bernard Parish near New Orleans. One million gallons of oil coursed into canals and thousands of homes after storm surge moved the tank off its base.

“Obviously, the community is eager to move forward, and so are we,” said Murphy spokeswoman Mindy West.

The proposed agreement is subject to approval from the U.S. District Court for the Eastern District of Louisiana, which has scheduled a hearing for the matter on Oct. 10.

The proposed settlement includes $80 million paid so far to settle roughly 2,700 household and business claims, said Sidney Torres, the court-appointed liaison for the committee. The class consists of a total of about 6,200 claims, he said.

Another $160 million would go toward property buyouts and paying property owners in the area, while the remaining $90 million would be for cleanup, he said. The latter figure could rise, however, if more cleanup work is needed, Torres said.

Terms of the proposed agreement and benefits would be paid by Murphy and its insurers, according to a news release from the plaintiff attorneys. Torres said attorneys’ fees would be above and beyond the settlement amount, and set by the judge.

Torres said the judge urged all parties to work toward a resolution.

“Everyone down here is struggling to recover, to return home, and this is a very positive step,” he said.

Some have come back
Some homeowners like Eileen Schwartz have already moved back in. Her one-story house has new, blue siding provided by Murphy.

Looking down the street of abandoned houses and overgrown lawns, she explains what it’s like to live where a year ago crude oil covered pavement, grass, porches, floors and furniture.

“It’s like living in the country,” Schwartz, 36, said. ”You’re still in the city, but it’s quiet, like in the country.”

Schwartz’s home is one of 1,800 estimated by the U.S. Environmental Protection Agency to be in the square mile area flooded by 25,110 barrels of crude oil from Murphy's 120 refinery about a mile to the east.

The Murphy oil spill was the worst environmental disaster caused by hurricanes Katrina and Rita, which demolished offshore platforms in the U.S. Gulf of Mexico and shut refineries from Houston to Pascagoula, Miss.

Much of the oil has been scraped and power-washed away, but conspicuously absent from the neighborhoods in the spill area are the white travel trailers the Federal Emergency Management Agency has provided to returning residents and which abound in St. Bernard Parish front yards that weren’t covered by oil.

Some won't return
For Johnny Lewis, who lived a few blocks from Schwartz, the clean-up hasn’t restored what he lost in the spill. He won’t return.

“The neighborhood has disappeared off the face of the earth,” Lewis said. “I’m 70 years old and all I ever had -- my roots -- are gone.”

Lewis was part of a group fighting against air pollution from another nearby refinery operated by Chalmette Refining LLC, a joint venture between Exxon Mobil Corp. and Venezuela’s national oil company, Petroleos de Venezuela SA.

“I was already fighting with the refineries before I left,” he said. “Why I should I go back and fight with them some more?”

Schwartz doesn’t blame those who aren’t returning. She and her husband were planning to build a house north of Lake Pontchartrain until they realized they couldn’t afford to carry two houses at the same time.

“Murphy did live up to their bargain and cleaned up everything,” she said.

“At first, I felt trapped,” Schwartz said. “That’s not how I feel now. This is my home. I’ve lived here all my life. We have Murphy down the street and Chalmette Refining over there and they put chemicals in the air they shouldn’t and I’m still here.”