As critical as I have been on President Obama for too many misguided efforts in micromanaging America’s worst environmental disaster, on the $20 billion + escrow account, he hit a home run or in terms of his favorite sport, a game-winning three-point basket from half court.
Using the full powers of the federal government, Obama without a legal leg to stand on, bullied the giant energy company into compliance to meet most of our desires.
The “Show Me The Money” account will be administered by Kenneth Feinberg, the mediator who oversaw the 9/11 victims compensation funds.
The fund is important for it squelches speculation that BP is bleeding catastrophically as a result of the April 20 explosion that killed 11 crew, dumped as much as 60,000 barrels of crude per day into the Gulf of Mexico and reached a credibility of -5,000 feet trying ineptly to plug the hole.
The fund will be padded over the years since no company, including BP which is the fourth most profitable in the world, has that much cash on hand for a one-stop deposit at a drive-by window.
White House officials said BP also agreed to add more to the $20 billion down payment if needed..
BP did put its foot down and refused to pay compensation for lost wages of other oil companies whose deep water wells were shut down until at least December by a moratorium Obama slapped on the Gulf operators last month.
A major complaint among fishermen and businessmen in the Gulf states was that BP was slow in processing its claims, usually dispersed in $5,000 increments.
A smaller faction among those effected were the small business owners who had licenses but were paid in cash and lacked IRS returns to prove their income losses.
It now rests with Feinberg to streamline and accelerate the claim process. Lots of luck, fella.
I was slightly concerned that BP might turn corporate enemy No. 1 by filing Chapter 11 bankruptcy to protect its North American subsidiary assets.
They include oil wells in the Gulf of Mexico and Prudhoe Bay in Alaska’s North Slope. Its refineries in Texas City, Tex., and Whiting, Ind., are among the five largest in the country.
But as the Brits would say, BP’s “troubles” in the Gulf were mounting daily.
Many investors panicked, dumping the company’s market valuation down by 48% since the spill began, erasing $91 billion in shareholder value. One Swiss credit agency classified as “junk” BPs bond rating.
From Baird Maritime:
Shares trading closed Tuesday at $31.40, down from $60.48 on April 20. Over time, analysts say that a drop in BP’s market value could turn the company into a target for a takeover by Western rivals or even one of Asia’s national oil companies…
But as long as oil sells for $75 bpd or better they should survive.
Both Obama and BP have maintained all along that BP will pay all damages and claims. BP says it has paid $1 billion so far.
It would be smoother sailing legally if two Republicans — blocking a bill increasing retroactively the $75 million liability set in the 1990 Oil Pollution Act to $10 billion or more — would stop acting as a Big Oil mole posing as U.S. senators.
While the president may have gotten what he wanted with bluster, it goes to show the White House is not alone at that game than Democratic congressmen.
They wanted BP to establish a similar escrow before paying its shareholders dividends amounting to $10.5 billion a year.
BP’s board chairman took that a step further. He announced all dividend payments will be suspended for an unspecified time.
The rich kid got his pockets’ picked and damn well (no pun intended) deserved it for being so greedy.
Cross posted on
Posted comments are welcome and automatically go to my email address at [email protected] Remmers’ varied career spans 26 years in the newspaper business. Read a more thorough resume on The Remmers Report.
Jerry Remmers worked 26 years in the newspaper business. His last 23 years was with the Evening Tribune in San Diego where assignments included reporter, assistant city editor, county and politics editor.