Louisianans of all political stripes are generally advocates of offshore drilling, even after this disastrous spill. But many feel that the state
should reap more of the benefits, whether by taking a percentage of the royalties that the oil companies pay to the federal government or receiving money from the companies outright to rebuild and restore the state's coastal wetlands.

In Alabama and Mississippi, many beaches remain open, and the oil for the moment seems to be moving east, away from them. On good days it is difficult
to see any evidence of the spill -- except for the empty beaches, the idle fishermen and seafood processors, and the worry and anger on the brows here.

But tourist bookings in Alabama and Mississippi are down 40 to 75 percent,
with cancellations accelerating as the summer begins, say hotels,
condominium owners and real estate agents. Researchers at the University of Southern Mississippi estimated the state's tourism losses at $119 million
for May through August.

With federal and some state fishing waters closed, a seafood business that
had hoped to recover this season from a series of cold years and the
lingering effects of Hurricane Katrina has been brought to its knees. In
Bayou la Batre, the center of Alabama's seafood industry, a food bank has
been giving out 10,000 pounds of food a week -- a grim anomaly in a town
where residents had always counted on the sea to feed them.

Florida looks especially vulnerable -- partly because it is such a large
state with an economy as tied its coastline as Detroit's is to automobiles. Tourism is Florida's biggest industry, generating about $60 billion a year,
and the Gulf Coast counties alone stand to lose $11 billion and 200,000 jobs
if visitor numbers decline 50 percent, according to a recent study from the University of South Florida.

But that might be a conservative estimate. Even without oil on beaches in
South Florida, hotels in Miami are reporting that bookings are down as
families cancel trips because of uncertainty about where the spill will show up. Charter fishermen from Panama City to the Keys are already reporting
that advance bookings are nonexistent, and as long as the spill churns in
the gulf, this will be the case. Who wants to book a vacation when the loop current in the gulf could shift direction and send oil around Florida and up the East Coast?

And that's just tourism. Since the 1950s, Florida's population has become increasingly concentrated by the coast. Millions of homes and condos already devalued by the recession and foreclosure crisis could face further downward pressure on prices because of the spill. State and local budgets that depend
on the sales tax -- Florida has no state income tax -- may have to be cut
even further, adding to an unemployment rate that already hovers around 12 percent.

But here's the comparison that really scares Floridians: Moody's recently
found the spill could do more damage to the state's economy than the 2004 hurricane season -- when four large storms slammed the state -- and more
damage than the global recession, which has already brought Florida to its knees.

Political Fallout

Q. Will the spill help generate support for energy and climate legislation
now before the Senate? (Will promoters of renewable energy like wind and
solar benefit from this new evidence of the dangers of fossil fuels?)

A. President Obama and some Democratic leaders hope that the gulf disaster
will build public and political support for a bill to tighten oil drilling regulations, reduce dependence on imported oil and limit emissions of gases contributing to global warming. There is likely to be a debate in the Senate
in July on some new oil drilling rules and incentives for energy
conservation. There may be movement toward new subsidies for clean energy sources like wind, solar and biofuels.

But there is little evidence of growing support for a more ambitious effort
to address climate change by putting a price on carbon dioxide emissions or creating a cap-and-trade style market for pollution permits. Deep divisions remain within the Democratic Party over climate change, and they are
unlikely to be bridged in the busy weeks that Congress has left before
breaking for the fall election season.

Q. What federal agencies have regulatory oversight over offshore drilling?
Will any heads roll at a cabinet or agency level because of the spill?

A. In some respects, offshore work has been overseen by a patchwork of
federal bodies, including the Coast Guard, which regulates the seaworthiness
of oceangoing rigs, and the Environmental Protection Agency, which reviews drilling plans for the potential impact on marine life and the surrounding ecosystem.

But the principal agency charged with oversight of offshore drilling is --
or was -- the Minerals Management Service, a division of the Interior Department formed in 1982. Among other responsibilities, the agency was
charged with leasing oil and gas formations in the Gulf of Mexico, approving driller permits and plans, monitoring the safety of offshore drilling operations and -- in what quickly drew allegations of conflict of interest after the Deepwater Horizon explosion -- collecting royalties from oil companies doing work in federal waters.

Since the accident, the downside of vesting one regulatory division with all
of those disparate responsibilities has been brought into stark relief.

Documents have revealed, for example, that the agency sidestepped rules requiring it to obtain other federal permits before allowing BP -- and
dozens of other oil companies -- to drill in areas that might harm
endangered species or other marine mammals. Current and former scientists of the agency have also stated that they were routinely overruled when they
raised concerns about the safety and environmental impact of certain
drilling proposals.

And investigators have also charged that the minerals service was lax in approving drilling proposals -- including those developed by BP for the Deepwater Horizon -- despite lacking any realistic plan to respond to a
blowout of the magnitude now polluting the gulf.

Of course, the precise combination of factors leading to the unchecked
gusher is still being sorted out -- including what measure of blame will be assigned to BP, to human error and to a failure of federal oversight.

Nonetheless, in an effort to dissolve a relationship between industry and regulators that many critics say had become far too cozy and permissive, the Obama administration announced plans to break up the Minerals Management Service on May 11. The idea is to divide the agency into three parts -- one responsible for leasing, another for fee collections and a separate division for environmental oversight.

The agency also gets a new name: the Bureau of Ocean Energy Management, Regulation and Enforcement. Michael R. Bromwich, a former Justice Department inspector general under the Clinton administration, was named last week to
head it up.

He succeeds the most prominent official to depart in connection with the
gulf disaster: S. Elizabeth Birnbaum, the former director of the minerals service, who resigned on May 27. Mr. Obama suggested that Ms. Birnbaum had failed to change her troubled agency with "sufficient urgency."

Mr. Bromwich told a Senate panel on Wednesday that he would create an investigative unit to root out corruption and speed reorganization of the office.

Liability

Q. Is anyone investigating what caused the spill? Is there any mechanism for prosecution, should wrongdoing be discovered?

A. This accident will be the most closely studied domestic event since the Sept. 11, 2001, terrorist attacks. A formal Marine Board investigation has
been under way since shortly after the April 20 explosion, jointly conducted
by the United States Coast Guard and the Interior Department's Minerals Management Service, the agency responsible for policing offshore drilling.

President Obama has appointed a seven-member commission to study the
accident and make recommendations on strengthening regulation, led by
William K. Reilly, a former administrator of the Environmental Protection Agency, and Bob Graham, a former governor and senator from Florida.

Many congressional committees are looking into various aspects of the
explosion and leak; among the most aggressive are the House Energy and
Commerce Committee, the House Natural Resources Committee and the Senate
Energy and Natural Resources Committee. The Justice Department has
dispatched civil and criminal investigators to the Gulf Coast to determine whether damage suits or criminal charges can be brought.

The National Academy of Engineering is looking into the technical failures
that contributed to the disaster. BP is carrying out an internal
investigation into the causes of the blast. The American Petroleum Institute and other industry groups are conducting their own inquiries to determine whether BP followed accepted industry practices, or if those practices need
to be changed.

Q. Who is legally liable for the effects of the oil spill?

A. Under the Oil Pollution Act of 1990, BP, the owner of the well, has been named the "responsible party" and bears the brunt of liability for the
spill. That means the company must foot the bill for the cleanup efforts and pay claims for economic damage, as well as penalties under the law. Other companies involved with the well could find themselves drawn into
litigation.

Q. Has BP paid out any claims to people who have suffered from the spill?
How much so far?

A. From the beginning of the disaster, BP has said it will pay all
"legitimate claims" of economic loss related to the spill and so far has
paid out more than $100 million. It has issued more than 31,000 checks since the accident to residents along the Gulf Coast. It has received 64,000
claims and says it has a claims team of 1,000 working on claims at 33 field offices.



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