$20 billion to fund escrow account for oil spill claims
Under a deal reached between BP and the White House today, BP will pay $5 billion annually for the next four years into an escrow account to cover damage claims related to the oil spill; $3 billion will be paid this summer and $2 billion in the fall, followed by $1.25 billion each quarter until the full amount is reached. Additionally, they must set aside an equivalent amount in US assets as collateral until the account is fully funded. BP also agreed to donate $100 million to support unemployed oil industry employees during the six-month moratorium on deep-water drilling. Although Congress has not yet overturned the $75 million cap on damages, BP has already paid $81 million in claims, and the new escrow account does not come with a liability waiver; the final cost of damages from the oil spill could reach as $40 billion.
BP also agreed to suspend approximately $7.5 billion in dividend payments over the next three quarters. By giving them several years to deposit the $20 billion, President Obama avoids chasing off investors in BP and potentially bankrupting the company; by agreeing, BP is able to improve their image and avoid a prolonged fight with the US government. The $100 million fund should take pressure off of newly unemployed oil workers. Meanwhile, the $20 billion fund will be managed by Kenneth Feinberg, who oversaw the 9/11 victim’s compensation fund, and it is expected that it will be more efficient at handling individual claims than the current process handled by BP.
[...] before Congress today, Rep Joe Barton (R-Texas)[1] apologized to the BP CEO, calling the $20 bailout fund set up to pay for BP’s mistake a shakedown[2] and a [...]
It seems like there is finally some good news with the spill. The Houston Chronicle reports, U.S. ships were being outfitted earlier this month with four pairs of skimming booms airlifted from the Netherlands and should be deployed within days.” Better than never, I guess.
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BP oil’s profits last year were nearly 14 billion and yet they will only commit a fraction of that to help clean up a mess they are responsible, I hate the way the world works some times. That oil that spilt out could have paid for countless more productive things, hopefully this will usher in a new era of enviromental controls that help gaurentee our safety, and protect wildlife form us.
Phil
[...] big stories today, of course, is how BP finally stopped the oil leak; I previously talked about it here and [...]
How long can we go watching the governments be run by the money big oil companies throw at them. They get all the tax breaks, make all the money and then get to not be resonsible or held accountable for the mess they make in the first place. It was there fault they should have to clean it up.
Tom