President Obama met today with top executives from BP to discuss the ongoing response to the oil spill in the Gulf of Mexico. He secured several immediate concessions from the oil giant. Here's what he's walked away with and what it means.
- $20 Billion Compensation Fund Time's Bryan Walsh writes, "White House officials and BP executives have tentatively agreed that the energy company will set up a fund worth about $20 billion over the next several years to compensate residents and businesses in the Gulf of Mexico affected by the oil spill. The escrow account will be independently administered by Kenneth Feinberg, the lawyer who ran the compensation fund for victims of the Sept. 11 attacks, which the BP fund may be modeled on. ... The establishment of the independent fund at least gives Obama a clear political win after weeks of struggles against the oil spill, and gives some substance to the promise the President made last night to build back the battered Gulf region over the long term."
- BP Halting Dividend Payments The New York Times' Jackie Calmes and Helene Cooper write, "To make sure that all claims are paid, the administration had demanded that BP set aside money to pay for future liabilities before paying dividends to shareholders, which now amount to about $10.5 billion a year. ...With oil trading above $75 a barrel, the company has torrents of money flowing in and says it will be able to use that revenue to pay for the cleanup as well as many of the penalties it will face. Last year, BP operations generated $27.7 billion in cash."
- Understanding That $75 Million Liability Cap Is 'Insufficient' NBC's Athena Jones and Mark Murray dispel concerns that the liability cap would remain in place. "Obama called today's meeting -- his first with BP officials -- 'constructive' and said the current $75 million cap on oil companies' liability in the case of oil spills under federal law would 'obviously be insufficient' and that therefore the escrow account would provide 'substantial assurance' that claims would be honored." In addition, liability is not capped at $20 billion by the compensation fund.
- $100 Million Oil Worker Unemployment Fund The Associated Press reports, "President Barack Obama says BP has agreed to establish a $100 million fund to compensate unemployed oil rig workers affected by a six-month moratorium on deepwater drilling imposed in the wake of the Gulf oil spill. ... Obama imposed a six-month moratorium on new deepwater drilling last month while a commission reviews the April 20 explosion of the Deepwater Horizon rig."
- Opportunity to Push for Making BP Pay Full Cost Talking Points Memo's Brian Beutler explains, "Democrats are asking House Minority Leader John Boehner to put his money (or at least his signature) where his mouth is. Boehner took to the Sunday shows this weekend to say he supports forcing BP to pay for the full cost of damages in the Gulf, but has been largely mum on how, legislatively, he proposes to do that. Now, Reps. Rush Holt (D-NJ) and Jay Inslee (D-WA), authors of a bill that would retroactively and permanently remove the $75 million liability cap on BP and other oil companies, are inviting him to join their efforts."