Oil spill makes unlikely partners of BP and the federal government
Tuesday, June 15, 2010; 4:02 PM
It was a marriage of necessity, awkward from the start. The federal government and BP have been forced to work cheek by jowl from the deep sea to the shoreline even as they have increasingly grown to dislike and distrust each other. The question now is whether this marriage can be saved.
There's always the option of turning everything over to the lawyers.
On Wednesday, President Obama will sit down with BP's leadership team in a White House meeting that everyone hopes will be constructive but could conceivably end with a see-you-in-court farewell.
At this precise moment, a complete rupture looks unlikely. The administration is demanding that BP fork over billions for an escrow account to handle claims against the company. BP so far has signaled that it's willing to do so, provided that it has certain assurances. Most importantly, it wants some sense that there's going to be a limit to its liability, and that it won't have to make up the lost wages of every rig worker sidelined by the administration's six-month moratorium on deep-water drilling.
The company's message: We're trying to do everything we can to fix this mess but at some point we have to draw the line. But the administration has congressional Democrats breathing hard over its shoulder: Senate Democrats have demanded $20 billion from BP, an eye-popping sum even by Big Oil standards, and in the House, Rep. Ed Markey, chairman of the energy and environment subcommittee, declared Tuesday morning, "Congress must ensure that there is unlimited liability for oil spills by oil companies."
BP also wants the escrow account administered by someone the company can trust. All this is under negotiation and the fine details are likely to be hammered out before Obama shakes hands with BP chief executive Tony Hayward.
White House spokesman Bill Burton, in a gaggle with reporters Monday on Air Force One, said that the White House was confident that it had the legal authority to compel BP to fund the new account, but that BP had shown no sign of getting legalistic.
"The signs from BP aren't that there is going to be a protracted legal battle over this or anything like that," he said. "I'm not going to get into a line-by-line in the code. But considering BP is going to do this, I don't think we have to go down the road of what lawyers are going to have to compel them to do in a court of law," Burton said.
The company knows that the White House needs to score political points. For example, according to the Wall Street Journal, officials in Alabama wanted BP to pay for sand barriers to protect beaches. BP was willing go to do so but also saw the advantage in letting the White House appear to be ordering BP to do it against the company's will. Hayward was quoted as saying, "Let the White House have the victory of announcing it, but it's the right thing for us to do."
Tuesday morning, White House Press Secretary Robert Gibbs once again claimed that the White House has been bending BP to its will.
"They're drilling not only a relief well to put a permanent end to this crisis in the gulf but they're drilling a second relief well at the cost of $100 million, not because they wanted to but because the government directed them to. They're increasing their containment strategy on the surface so that we can pump more oil up, not because they wanted to but because we directed them to," Gibbs said on CNN.
A BP spokesman said the company had no response.