Obama leadership on BP spill faces testing week

Barack Obama's leadership of the Gulf of Mexico oil spill faces key tests this week as the U.S. president gives his first national address on the disaster and meets top BP executives for the first time.

With America's largest-ever environmental disaster nearing the two-month mark, Obama will press BP executives to set up an escrow account to pay damage claims by individuals and businesses hurt by the oil spill disaster.

The crisis enters its 56th day on Monday as Obama makes his fourth trip to the Gulf -- visiting Alabama, Mississippi and Florida for the first time since the well blew out.

He will stay overnight in the region on Monday and return to Washington on Tuesday and make a nationally televised address at 8 p.m. (0000 GMT).

After being briefed on Monday morning by U.S. Coast Guard Admiral Thad Allen, his point person on relief efforts, Obama will host a round-table discussion and meet local residents in Gulfport, Mississippi.

Obama then plans to travel to Theodore, Alabama, where he will see how the clean-up operations are going and make remarks before traveling by ferry in Alabama from Dauphin Island to Fort Morgan. He will spend the night in Pensacola, Florida, home to some of America's most famous beaches.

Millions of gallons of oil have poured into the Gulf since an April 20 offshore rig blast killed 11 workers and blew out the well.

Obama also will call for an independent panel to administer the payments and to ensure cash is disbursed in a timely fashion when he meets Chairman Carl-Henric Svanberg and other BP officials at the White House on Wednesday.

U.S. Senate Democrats have written to BP urging them to make a $20 billion initial deposit to such a fund as a good faith showing that they will not shirk their responsibility.

BP declined to comment on the proposals to create an arms-length oil spill damages fund. A spokesman said on Monday: "We're looking forward to having constructive discussions with the administration later in the week."

The company's shares traded down 2.5 percent, against a flat European oil and gas sector, at 3:49 a.m. EDT. The company has lost over 40 percent of its market value since the crisis began.

BP's board meets on Monday and while the dividend -- which U.S. politicians have called on the company to cancel -- is expected to be discussed, no decision is likely to be made this week, a spokeswoman said.

A source told Reuters on Sunday BP was not planning to scrap the dividend, currently valued at about $10.5 billion annually but was considering deferring it, paying it in shares or paying into a ring-fenced account for investors.

The stock dividend is a big deal in Britain because BP accounts for 12 percent of all dividends paid by UK companies.

Obama on Defensive

Oysterman Marko Dekovic, who has been unable to fish for three weeks, said fishermen in southern Louisiana feel caught in the middle between BP and the Obama administration.

The 24-year old was preparing his vessel on Sunday to head out laying booms to help contain the spill and said he has grown tired of the "blame game" between BP and Obama.

"Just fix the problem," Dekovic said. "Everything depends on oysters. If you don't make any money on that you lose your house and everything else."

The Obama administration has delayed plans to permit new offshore drilling as a result of the spill. The crisis has put Obama on the defensive and distracted his team from the domestic agenda -- a new energy policy, reform of Wall Street and bolstering a struggling American economy.

People in the Gulf of Mexico are frustrated with BP for the spill but also at Obama's drilling moratorium because many families have members who work in oil and others who fish.

The disaster comes ahead of November's congressional elections in which Democrats are expected to struggle to keep majorities in the House of Representatives and Senate.

U.S. public anger is high as the crisis drags on and news is marked by images of polluted beaches, oil-covered birds and fishermen anxious about their precarious situation. Democrats want Obama to tap that mood to press for development of alternative energy such as solar and wind power.

BP placed a containment cap on its blown-out seabed well this month after a series of failures to stem the flow but oil continues to gush.

The partly contained leak is estimated at up to 40,000 barrels (1.68 million gallons/6.36 million liters) a day.

U.S. lawmakers have called on Obama to take a harder line with BP. But senior British officials have warned about the economic impact of destabilizing a company that is a staple holding of British pension funds.

On Tuesday, lawmakers hold a hearing in Washington with all the big oil companies including the head of BP's U.S. operation. On Thursday BP Chief Executive Tony Hayward, who is expected to attend Wednesday's White House meeting, will testify to the U.S. House Energy and Commerce subcommittee.

BP expects its cost for the Gulf oil clean-up to be $3 billion to $6 billion. Many analysts expect a higher cost. The company said on Monday it had spent $1.6 billion so far and had committed another $300 million to build offshore barriers in Louisiana.

[Source: By Caren Bohan and Tom Bergin, Reuters, Washington an London, 14Jun10]

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