Thursday, June 17, 2010

It’s A Start

After a meeting at the White House between President Obama and the head honchos at BP, the oil company announced that it will put $20 billion — that’s $20,000,000,000.00 — in escrow for the clean-up and restoration of the Gulf of Mexico.

Under the deal, BP will pay $5 billion annually over the next four years into an escrow account for damage claims from the gulf, setting aside an equivalent amount of U.S. assets as collateral until the fund reaches $20 billion. The figure is not a cap on the potential damages, and the company received no liability waiver as part of the agreement.

The thorniest issue in recent days, however, appears to have been resolved with a compromise. Since last week, administration officials have said that BP should pay the lost wages of oil industry workers sidelined by the administration’s six-month moratorium on deep-water drilling. That stance put BP’s stock price in a nose dive, and BP officials made clear that such claims would be beyond the pale.

Instead, the president Wednesday asked BP for a voluntary contribution to a foundation that will support unemployed oil industry employees. BP agreed, offering $100 million.

Say what you will about the speech the other night, this is a huge win. To be sure, this doesn’t mean that all is well and the money will flow like, er, a gusher, and you can bet that there are those in BP’s legal department who are drafting up some complex and frustrating procedures for the victims to follow before they cut a check. But BP also knows it’s over a barrel, so to speak, so any complaints about slow payment or red tape will not help them in the PR department. Of course, they’ve got that part of it down pat.

Meanwhile, the usual suspects (including Mississippi Gov. Haley Barbour, who used to lobby for oil industry) are defending BP against this assault on their treasury, including some idiots in the GOP who called it a “Chicago-style shakedown.” And of course what would it be like without the comic stylings of Rep. Michele Bachmann (R-MN), who said that if she was the head of BP, “I would let the signal get out there — ‘We’re not going to be chumps, and we’re not going to be fleeced.'” Of course, she would be opposed to solar energy research because it’s unreliable: it gets dark at night. These would be the same people who just a few weeks ago were saying that the Obama administration was doing nothing about the damage, including Ms. Bachmann, who recently wondered why the federal government wasn’t “commandeering boats” in the Gulf. (Don’t try to make any sense out of her. Just enjoy the show.)

Now if they could just get the oil to stop flowing into the water and onto the beaches.