Archive for June 13th, 2010

13
Jun
10

Barack Obama tells BP to set up multi-billion claims fund

NEWS
Barack Obama tells BP to set up multi-billion claims fund

Sunday, June 13, 2010

••• The White House and at least two Gulf states have demanded that BP create special accounts that would set aside billions of dollars to pay for the mounting claims related to the massive oil spill in the Gulf of Mexico.

President Barack Obama wants an independent, third party to administer the escrow account and compensate those with ‘legitimate’ claims for damages, Obama’s top political adviser said on Sunday. The amount of money set aside will be discussed during talks this week between the White House and BP, but Axelrod said it should be ‘substantial’.

Gulf states also were putting the squeeze on BP. The attorney-general in Florida and the state treasurer in Louisiana want BP to put a total of $7.5 billion in escrow accounts to compensate the states and their residents for damages now and in the future.

‘At the end of the day, my concern is Louisiana,’ state treasurer John Kennedy told AP on Saturday. ‘BP ultimately will do what BP thinks is best for BP.’

The tough talk from the White House comes a day after the Coast Guard made public a testy letter sent to BP demanding the energy giant pick up its pace and present a better plan to contain the spill by the time Obama arrives at the beleaguered coast for a two-day visit on Monday.

BP’s chief operating officer, Doug Suttles, said on Saturday the company would respond to the letter by Sunday night. Its board also was to meet on Monday to discuss deferring its second-quarter dividend and putting the money into escrow until BP’s liabilities from the spill are known.

BP’s public image has taken a beating and its stock price has plunged since the April 20 explosion of a deep-sea rig that killed 11 people and triggered a massive oil spill that has coated parts of the Gulf Coast with stinking, dark piles of crude and created environmental and economic devastation.

At the same time, tensions between BP and the federal government have ramped up as the public outrage over the spill has grown. Obama has come under increasing criticism for his response to the disaster, with even some of his strongest admirers feeling his response at times has been hesitant and aloof.

Obama will meet BP executives, including the company’s chairman, on Wednesday, a day after he returns from the Gulf. The president also plans an Oval Office address to the American public on Tuesday night.

Louisiana and Florida want BP to set aside the money in escrow accounts to protect their interests amid talk of the possibility that BP may eventually file for bankruptcy. Alabama doesn’t plan to take such action, and Mississippi and Texas haven’t said what they will do.
But even with Florida and Louisiana, BP might have a hard time complying, and if it did, it could hasten the company’s spiral downward.

That’s because as of March 31, BP had $6.8 billion in cash and cash equivalents available.

Experts say BP wouldn’t necessarily need to use cash to fund the accounts the states are asking for. Instead, the company could borrow money to comply. That, however, presents a potential problem because the company’s borrowing costs are likely to be a lot higher due to investor concerns.

The company said in a statement to AP it’s considering the Florida request. It didn’t address the comments by Kennedy.

‘We have received a variety of funding requests from different states and have been responding to them in due course based on the particular issues raised in each,’ BP said, adding that it already has made grants totaling $245 million to four Gulf states and is committed to spending up to $360 million to fund construction of six barrier island berms in Louisiana.

As to the concerns raised about a possible bankruptcy filing, BP said only that as of Saturday it was ‘not in discussions with’ and had ‘not engaged any bankruptcy experts’.

Along the Gulf coast, ominous new signs of the tragedy emerged on the beaches of Alabama. Clean-up crews worked throughout the night to clear the oil from the white sand in Orange Beach. On Sunday, plastic bags filled with oil and sand sat along the beach where oil was caked the night before. The remaining sand was stained dark brown.

‘This is awful,’ said Shelley Booker of Shreveport, Louisiana, who was staying in a condominium with her teenage daughter and her friends near the deserted beach about 160km from the site of the spill.

Scientists have estimated that anywhere from about 950,000 barrels to more than 2.4 million barrels of oil have spewed into the Gulf since the drilling rig exploded.

BP said a containment cap sitting atop a leaking pipe in the Gulf of Mexico captured about 15,000 barrels of oil on Saturday, preventing that discharge from flowing into the ocean. The system has collected more than 120,000 barrels of oil to date.

BP is hard at work trying to find new ways to capture more oil. To boost its capacity, BP also plans to trap oil using lines that will suck oil and gas from the well to a drilling rig where it will be burned. Suttles said this system could be working by early next week. Another ship should be in place by mid-July to process even more oil.
• Latest News & Headlines » Home «
Share

13
Jun
10

Obama stand on oil spill is tough and temperate

NEWS
Obama stand on oil spill is tough and temperate

Sunday, June 13, 2010

••• U.S. President Barack Obama has been forced to adapt his agenda to the endless challenge of the Gulf of Mexico oil spill, which threatens to sully him politically as experts struggle round-the-clock to find a fix.

Obama on Monday and Tuesday will make his fourth visit to U.S. states facing the worst environmental catastrophe in U.S. history.

On his return to Washington, Obama on Wednesday will meet with British Petroleum chairman Carl-Henric Svanberg for the first time since the Deepwater Horizon oil rig blew up and sank April 20-22 killing 11 workers and triggering a massive oil gusher.

Obama has spared BP no criticism on how it is handling the oil spill, to the detriment of the special U.S.-British relationship.

On Saturday, however, he reassured British Prime Minister David Cameron that all was well between their two nations.

In a call to Cameron, Obama said his criticism of BP was not aimed at Britain and that ‘frustrations about the oil spill had nothing to do with national identity,’ a spokesman for the prime minister’s Downing Street office said.
As the bad news from the oil spill keeps coming the estimated daily oil leak recently doubled up to 40,000 barrels, the Obama administration’s ‘hands are to some degree tied’, said Fordham University’s political science department chairman Jeffrey Cohen.

‘Nobody seems to have a good idea about how to stop this leak, and now we’re waiting months before a relief well’ reaches the broken pipe to divert the oil to surface ships and plug up the leak with cement – expected at the earliest in August, Cohen said.

‘This is a long time for this kind of issue to persist,’ he added.

More than 50 days into the crisis, Obama is stung by criticism as he appears powerless to stop the gusher 1 mile below the sea.

The spill is lapping the shores of four states with long-term economic and environmental damage.

‘As best as I can tell, the federal government response has been timely and competent,’ but this is a problem it cannot resolve, said Brookings Institution think tank analyst Thomas Mann.

‘But the media and political (Republican) opposition demand more personal engagement by the president, even if it is purely symbolic,’ he added.

During his first two visits to the oil-stricken region, Obama met with local and response effort officials, but not with fishermen and business people whose livelihoods are directly threatened by the environmental catastrophe.

Intellectually, Obama has no problem grasping the situation, ‘but in terms of really feeling people’s issues, he doesn’t seem to do a very good job of that’, Cohen argued.

That all changed during his third trip to Louisiana on June 4, when Obama spoke at length with local people hard hit by the crisis. More of that is expected during his upcoming two-day trip.

In terms of his relation with BP and its response effort, however, Obama is having a tough time in keeping just the right distance, Cohen said.

‘People will attack him for not showing much concern, but if he associates himself too closely with what’s going on, he begins to take some of the blame for the screw-ups.’
During the call it was also agreed that Mr Cameron will visit the U.S. for the first time as Prime Minister on July 20, 2010.
• Latest News & Headlines » Home «
• Source(s): The White House & 10 Downing Street
Share




Calendar

June 2010
M T W T F S S
« May   Jul »
 123456
78910111213
14151617181920
21222324252627
282930  

Archives

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 2 other followers

© Copyright 2010 Dominic Stoughton. All Rights reserved.

Dominic Stoughton's Blog