i spit on your grave
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When Hurricane Katrina swept through St. Bernard Parish, to the east of New Orleans, it hit the aging Murphy Oil refinery hard. The wind and water swept one tank off its foundation, and spilled about a million gallons of crude oil into the surrounding neighborhood.
Two years after Katrina, the neighborhood still isn’t fully cleaned up. Murphy paid to remove the topsoil around the 1,700 contaminated homes, but some residents are still waiting for the replacement sod to arrive. Empty houses bear a faint brown line on their outside walls, marking the level that the contaminated water reached.
The damage suffered by the Murphy Oil Refinery during Hurricane Katrina should serve as a warning, says Anne Rolfes, director of the environmental group Louisiana Bucket Brigade. "They spilled a million gallons of oil – there’s never been such a big oil spill in a residential area," Rolfes says. "The neighbors are basically guinea pigs. You just don’t know what’s going to happen to them," she says. Rolfes says many of the residents around the Murphy refinery have complained of respiratory problems and high cancer rates for years.
But for Louisiana state lawmakers, the spill didn't serve as a warning about the inherent danger of siting a refinery in a flood zone. Rather, they are using a federal recovery program to encourage oil companies to expand their refineries and build new petrochemical facilities.
In the fall of 2005, the U.S. Congress created "Gulf Opportunity Zone" (GO Zone) bonds to encourage businesses to invest along the Gulf Coast. The multi-billion dollar program gave the state governments of Louisiana, Mississippi and Alabama a bundle of tax-free bonds that they could assign to private businesses, which would in turn issue the bonds to finance repairs, new construction or expansions. Because the interest earned on the bonds is tax-free, businesses can get better interest rates from lenders.
The Louisiana State Bond Commission had a $250 million-per-project cap, but waived that limit for both Marathon Oil Corporation and the petrochemical company U.S. TransCarbon LLC. Both companies were approved for $1 billion in GO Zone bonds. Another oil company, Valero Energy Corporation has also applied for $1 billion in bonds, but that application is on hold while the commission tries to round up more money.
Both Marathon and Valero are seeking to expand their oil refineries at a time of skyrocketing demand around the world, and record profits for oil companies. For 2006, Marathon reported $60 billion in revenues. According to Marathon’s CEO, the Louisiana refinery expansion will generate $350 million in new revenue each year, and that’s a conservative estimate.
Meanwhile, U.S. TransCarbon plans to construct a new facility to produce industrial grade carbon dioxide, which is pumped into partially depleted oil fields along the Gulf Coast to force up the "stranded" oil.
Environmental groups are extremely disturbed by the government-aided expansion of refineries across the Gulf South, and say state funds would be better spent developing industries that do less harm to the environment and neighboring communities. "This, to me, is Louisiana and the oil industry at its worst," says Rolfes.
Besides, says Becky Gillette of Sierra Club’s Mississippi Chapter, the oil companies would probably expand even without government aid, because it still makes good business sense. She is opposing the proposed expansion of the Chevron refinery in Pascagoula, which is not being financed by GO Zone bonds. "No one wants a new refinery in their town, so the strategy is to expand them in towns that are already used to breathing the fumes," she says.
NEW ORLEANS - President George W. Bush on Wednesday declared "better days" ahead for New Orleans despite complaints over slow rebuilding and amid lingering political fallout two years after Hurricane Katrina's destruction.
Widely criticized for a slow federal response to the disaster that left buildings in ruins and thousands homeless, Bush made his 15th visit to the region and tried to calm frustration at the pace of relief efforts.
"My attitude is this: New Orleans, better days are ahead. It's sometimes hard for people to see progress when you live in a community all the time," he said following a moment of silence at 9:38 a.m. local time, the time of day when the levees broke and the city began to flood two years ago.
Environmental News Service:
"A strong recovery requires an efficient, effective and expedient government that is not caught in a bureaucratic nightmare," said [Governor Katherine] Blanco.
President Bush received the governor's requests in the form of a letter, but did not respond directly to them today.
Instead he said, "New Orleans, better days are ahead," and "We're still paying attention. We understand."
The president reminded Louisiana that, "The citizens of this country thus far have paid out $114 billion in tax revenues - their money - to help the folks down here."
When pressed on the slow pace of recovery in the Gulf Coast, President Bush insists the federal government has fulfilled its promise to rebuild the region. The proof, he says, is in the big check the federal government signed to underwrite the recovery -- allegedly more than $116 billion. But residents of the still-devastated Gulf Coast are left wondering whether the check bounced.
"$116 billion is not a useful number," says Stanley Czerwinski of the Government Accountability Office, Congress' investigative arm.
For starters, most federal money -- about two-thirds -- was quickly spent for short-term needs like debris removal and Coast Guard rescue. As Czerwinski explains, "There is a significant difference between responding to an emergency and rebuilding post-disaster."
That has left little money for long-term Gulf Coast recovery projects. Although it's tricky to unravel the maze of federal reports, our best estimate of agency data is that only $35 billion has been appropriated for long-term rebuilding.
The fact that, two years later, most federal Katrina funds remain bottled up in bureaucracy is especially shocking considering that the amounts Washington allocated come nowhere near the anticipated costs of Gulf rebuilding.
For example, the $3.4 billion FEMA has available to recover local public infrastructure would only cover about one-eighth of the damage suffered in Louisiana alone. But this money is spread across five states -- Alabama, Florida, Louisiana, Mississippi, and Texas -- and covers damage from three 2005 hurricanes, Katrina, Rita and Wilma.
Congress has acted on some of the money holdups, like changing a requirement in the Stafford Act that mandates local governments pay 10 percent of rebuilding projects up front before receiving federal aid. The Bush administration had refused to waive the rule -- like it did for New York after 9/11 -- grounding countless projects. The effect of the rule was particularly devastating in the hardest-hit places like Mississippi's Hancock County, where communities lost most of their tax base after the storms.
Many in Washington claim that state and local governments are to blame: The money's there, they say, but the locals just aren't using it. And it's true that there have been problems below the federal level. For example, Louisiana's "Road Home" program -- created by Congress but run by the state -- has been so poorly managed that 18 months after the storms only 630 homeowners had received checks. Closings have sped up since then, but administrators admit many won't see money until 2008, if at all -- the program is facing a projected $3 billion shortfall.
But the White House and Congress have done little to exercise oversight of these federally backed programs, much less step in to remove red tape and make sure taxpayer money gets to its intended destination.
This is especially true when it comes to tax breaks and rebuilding contracts. Included in the $116 billion figure is $3.5 billion in tax breaks to jump-start business in Gulf Opportunity Zones -- "GO Zones" -- across 91 parishes and counties in Alabama, Louisiana and Mississippi. But many of the breaks have been of questionable benefit to Katrina survivors, like a $1 million deal to build 10 luxury condos next to the University of Alabama football stadium -- four hours from the Gulf Coast.
Later in Mississippi Bush acknowledged local officials' complaints about bureaucratic hurdles.
In the Bay St. Louis area, which he called the hurricane's "ground zero," Bush said: "There are still obstacles and there's still work to be done, but there's been a lot of progress made."