Archive for Thursday, June 17, 2010

BP guarantees $20 billion for Gulf

Company chairman apologizes for ‘small people’ remark

June 17, 2010


— President Barack Obama wrested a $20 billion compensation guarantee and an apology to the nation from British oil giant BP Wednesday, announcing the company would set up a major claims fund for shrimpers, restaurateurs and others whose lives and livelihoods are being wrecked by the oil flooding into the Gulf of Mexico.

Applause broke out during a community meeting in Orange Beach, Ala., on the news.

“We asked for that two weeks ago and they laughed at us,” Mayor Tony Kennon said. “Thank you, President Obama, for taking a bunch of rednecks’ suggestion and making it happen.”

Obama had said he would “make BP pay,” and the company’s chairman said after four hours of intense White House negotiations that BP was ready.

The unending oil spill saga had yielded almost no good news before this. Creation of the fund — to be run by an administrator with a proven track record — is the first big success Obama has been able to give to Gulf residents and the nation in the eight weeks since the explosion, a period during which the spill has taken ever more of the public’s attention, threatening anything else the president hoped to focus on or accomplish.

Huge as the $20 billion seems, both Obama and London-based BP PLC said it was by no means a cap.

The deal also adhered to what Obama had said was his non-negotiable demand: that the fund and the claims process be administered independently from BP. It won’t be a government fund, either, but will be led by the administration’s “pay czar,” Kenneth Feinberg, better known as the man who oversaw the $7 billion government fund for families of victims of the Sept. 11, 2001, terrorist attacks.

The April 20 explosion of an offshore oil rig killed 11 workers and sent millions of gallons of crude spewing into the water from the broken well a mile below the ocean’s surface — as much as 118 million gallons so far and still flowing. More wildlife, beaches and marshlands are fouled every day, jeopardizing not just the region’s fragile ecology but a prized Gulf way of life that is built on fishing and tourism.

On Wednesday, BP began burning oil siphoned from the ruptured well as part of its plans to more than triple the amount of crude it can stop from reaching the sea by the end of the month, the company said. It’s the first time this particular burner has been deployed in the Gulf.

Though the company hopes to install equipment soon to capture as much as 90 percent of the escaping oil, the leak is expected to continue at least until relief wells are finished in August.

The use of the BP escrow fund is intended to avoid a repeat of the painful aftermath of 1989 Exxon Valdez oil disaster in Alaska, when the fight over money dragged out in courts over roughly two decades.

“What this is about is accountability,” said Obama in brief remarks in the State Dining Room after a four-hour, on-again, off-again White House negotiation session with BP executives. “For the small-business owners, for the fishermen, for the shrimpers, this is not just a matter of dollars and cents. ... A lot of these folks don’t have a cushion.”

BP Chief Executive Officer Tony Hayward, left, BP America Chairman Lamar McKay, center, BP Chairman Carl-Henric Svanberg, second from right, and other BP representatives, arrive Wednesday at the White House for a meeting with President Barack Obama.

BP Chief Executive Officer Tony Hayward, left, BP America Chairman Lamar McKay, center, BP Chairman Carl-Henric Svanberg, second from right, and other BP representatives, arrive Wednesday at the White House for a meeting with President Barack Obama.

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‘The small people’

On the driveway outside, BP Chairman Carl-Henric Svanberg apologized for “this tragic accident that should never have happened.”

“We care about the small people,” he said.

That comment wasn’t as well-received as the promise of compensation.

“We’re not small people,” said Justin Taffinder of New Orleans. “We’re human beings. They’re no greater than us. We don’t bow down to them.”

Added Terry Hanners, who has a small construction company in Gulf Shores, Ala.: “These BP people I’ve met are good folks. I’ve got a good rapport with them. But BP does not care about us. They are so far above us. We are the nickel-and-dime folks of this world.”

By evening Svanberg was apologizing again. “I spoke clumsily this afternoon, and for that, I am very sorry,” he said in a statement. “What I was trying to say — that BP understands how deeply this affects the lives of people who live along the Gulf and depend on it for their livelihood — will best be conveyed not by any words but by the work we do to put things right for the families and businesses who’ve been hurt.”

The apologetic talk was expected to continue today when company CEO Tony Hayward will face sharp questions from lawmakers on Capitol Hill.

In prepared testimony obtained by The Associated Press, Hayward expressed contrition for the spill and its effects and said he was “personally devastated” by “these tragic events.” He pledged, “We will not rest until the well is under control, and we will meet all our obligations to clean up the spill and address its environmental and economic impacts.”


tomatogrower 8 years ago

What arrogance. He might as well say, "Let them eat cake." I don't think his slip was a language problem. I've actually heard people say that maybe these fishermen and marina owners should just go get a job at Walmart or do something else. No big deal. If they had just gotten the right education, instead of becoming fishermen, then there wouldn't be a problem and they'd be rich like us. To many of the rich working class people are no better than the stereotypical welfare moms. These people really don't want BP's "charity". They are working people. They want their live back. BP owes them much more than 20 billion dollars. They need to get on the ground and grovel. These BP executives are low class people; I don't care how much money they have.

Danielle Brunin 8 years ago

Well said. This is about a way of life, not just money. Of course, BP couldn't possibly understand this because everything is about money to them.

mr_right_wing 8 years ago

The situation in the gulf is made worse (at least in one instance) by environmentalists. We can't use oil skimmers because environmental lobbyists pushed Congress to make that illegal. The water these things return still has some oil residue. So, I guess in the eyes of environmentalists it's better for there to be a thick layer of oil floating in the gulf. (and why not, this event will be an incredible opportunity for their non-profit fundraising!!)

Is BP also willing to give a huge slice of the $$ pie to environmentalists to look good??

mr_right_wing 8 years ago

What an 'environmentalist' has become today is quite different from the way it started out. Many of today's 'environmentalists' are lawyers for Greenpeace & The Sierra Club that live extravagant lifestyles as they go around suing companies and the government for obscene amounts of money that are more times than not settled out of court. I truly believe that some of the richest people in this country are the executives of the non-profit environmental movement; who are telling you and I that we must live green, but aren't doing it themselves. These are the folks that pushed our government/the EPA to make oil skimmers illegal in US waters. (...and secretly, this kind of disaster is a dream come true as far as fundraising goes!)

Now. we do still have some 'old-school' environmentalists who are living what they preach; Ed Begley Jr., Patrick Moore. Many of these folks are coming around and willing to consider nuclear power as a clean and safe alternative. These are the people I respect. The rest (from the paragraph above) are just a worthless bunch of greedy methane producers. They only believe in one kind of green; and that only comes from dead trees, not live ones.

You can disagree all you like...I've researched this to my satisfaction, so any argument you may have will fall on deaf ears, but go ahead.....

Corey Williams 8 years ago

"They only believe in one kind of green; and that only comes from dead trees, not live ones."

American currency is made of linen and cotton.

One thing wrong, it's all wrong.

Liberty275 8 years ago

I don't get the anger over the "little people" remark. Most of us consider ourselves "the little guy" when comparing ourselves to government or corporations. The outrage reeks of lie.

As for "environmentalists", I think most of them are little more than anti-corporate posers that have hijacked environmental issues to forward their idiotic liberal/progressive/socialist/marxist ideology of compulsive agrarian nirvana. That's why most of America ignores them until one of the nutcases they spawn burns down a car dealer or housing development.

The only environmentalists that matter are those that work to integrate the needs of our capitalist society with the protection of the environment.

notajayhawk 8 years ago

"BP guarantees $20 billion for Gulf"

In other news, the price of gasoline is scheduled to rise by $1.00/gallon next week ...

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