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Oil coats homes, water after Katrina

It's a spill second in American history only to the 11 million-gallon Exxon Valdez spill in 1989. NBC's Mike Taibbi reports on the problems presented by oil throughout the hurricane zone.

Tim and Nicole Moody remember their shock at returning home with a video camera for the first time after Katrina.

Tim can be heard crying off camera as he narrates, "This is our bedroom."

The Moodys were shocked not just because of the hurricane's impact, but because their home, like thousands of others along the lower Mississippi, was also soaked in oil. 

"Across the southern part of the state as a whole, in excess of 9 million gallons of oil was spilled," says Dwight Bradshaw with the Louisiana Department of Environmental Quality.

It's a spill second only in American history to the 11 million-gallon Exxon Valdez spill in 1989. Actually, it's more than 40 separate spills from ruptured pipelines and crumpled storage tanks. But because the spills cover a much wider area and are part of the larger Katrina story of disaster and recovery, they're getting much less attention.

Except from homeowners like Jeff Duggan of Chalmette.

"It has to be embedded in my soil, and has to be behind my bricks," he says. "Can it be pressure-washed? Do they have the solution to clean it?"

But the spills from damaged pipelines and tanks inland were only part of the story. Just a few miles from Port Sulphur, out in the Gulf of Mexico, Katrina left plenty of oil on the water.

Satellite images from Sept. 2 show what one geologist describes as a thin oil slick covering hundreds of square miles.

"I've never seen oil slicks covering such a large area in the Gulf of Mexico," says John Amos with

The Coast Guard says there's no evidence of a major spill originating inthe gulf, but that it's too soon to gauge the impact of hurricane damage to sea floor pipelines and drilling platforms.

[We've counted] "approximately 111 severely damaged platforms, 52 totally damaged platforms," says Coast Guard Capt. Frank Paschewicz.

Meanwhile, thousands on land are dealing with the reality, with some suing their oil company neighbors.

"They're gonna pay a lot more than what they're offering," vows Chalmette resident Kenneth Sears.

Others, like the Moodys, are taking the settlement amounts some companies are offering — $23,000 in their case — and agreeing not to sue.

"When you gotta survive, you do what you gotta do," says Tim Moody.

Because right now oil has ruined whatever Katrina left behind.