President Obama made it clear Tuesday night that he expects BP to fully compensate the Gulf Coast for its losses from a massive oil spill. “Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness,” he said. It was a message that all Americans needed to hear.
The president provided needed reassurance that missteps prior to and following the April 20 tragedy would not be repeated. To emphasize his point, he noted that he had fired the head of the agency in charge of regulating oil drilling, the Minerals Management Service.
The slow effort to stop the leaking oil since the explosion that left 11 rig workers dead has left Americans justifiably frustrated. Two months after the blowout, cleanup crews still lack enough equipment to do the job effectively. Many Gulf coast communities are still clamoring for help with the oil assaulting their shores. Obama finally laid out a comprehensive plan Tuesday — including appointment of an independent investigating commission — but it is very late in coming.
Meanwhile, BP’s efforts have not instilled confidence. It hasn’t procured enough of the floating shields to guard all of the coastline threatened by its negligence. It also has been slow to supply sand-sifting machines that can clean a beach more quickly than crews using shovels. Most importantly, BP still hasn’t been able to stop the undersea gusher — a solution that might not be completed until August, when a relief well has been drilled.
Obama is right to pressure BP to create an escrow fund to compensate those affected by the spill. “We will make BP pay for the damage their company has caused,” he said.
There is evidence that the oil company has been slow to pay legitimate claims. But BP certainly can afford to meet its obligations. The company earned $17 billion last year alone, and finished the year with $8 billion in cash reserves. There’s concern among its shareholders that BP won’t pay upcoming dividends, due to the spill. But shareholder profits must take a back seat to the firm’s liabilities from what Obama called “the worst environmental disaster America has ever faced.”
Obama said the compensation fund would not be controlled by BP. That’s appropriate. To ensure legitimate claims are paid out in a fair and timely manner, the account should be administered by an independent, third party.