We will make BP pay, says Obama (but what about everyone else?)

More strong words from the President, ahead of today's BP showdown at the White House...

by
Last Updated: 31 Aug 2010

BP's Carl-Henric Svanberg has his audience with Barack Obama today, and judging by the President's latest tub-thumping, the hitherto-ineffectual chairman shouldn't expect an easy ride. Obama said the US would 'make BP pay for the damage their company has caused', with a $20bn compensation pot the latest idea on the table. But believe it or not, there was no mention of the possible consequences for the US companies involved in the Gulf of Mexico spill - or the regulators who were clearly asleep at the wheel...

The President attempted to show how seriously he's taking the situation in the Gulf by making his first ever televised address from the Oval Office last night. Describing the spill as the 'worst environmental disaster America has ever faced', he attempted to reassure a sceptical US public - the majority of whom think he's handled the situation badly - that he's on top of things, as he detailed the government's various efforts to help BP minimise the impact (though news that the scientists have just upped their estimate of the leak rate, for the second time in a week, won't help his cause).

What's more, Obama also said he would 'inform' Svanberg today that BP must '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' - and that this fund would be independently controlled. By all accounts BP hasn't even agreed to this yet, and we don't know if legally it has any obligation to do so (particularly given some of the potential figures being randomly plucked out of the air). But now he's promised it on prime-time TV, the President is sure to move mountains to make it happen.

You can see why Obama wants to blame it all on BP. Politically, it's much easier than blaming the other companies involved: US-listed Transocean, the rig's owner and operator, or US-based suppliers Halliburton and Cameron. Or, for that matter, the state-controlled regulator - even though it clearly wasn't fit for purpose. When representatives of the four big oil majors appeared before Congress yesterday (where, in the name of self-preservation, they attempted to hang BP out to dry) it emerged that they all had a virtually identical contingency plan for the Gulf - which included the mobile number of a long-dead scientist, and a plan to protect non-existent walruses. A decent regulator probably should have spotted that kind of cut-and-paste job earlier, you'd have thought.

Yet BP continues to carry the can alone: its share price is still sinking, its credit rating has been slashed to two notches above junk status, and its top execs are about to take a very public kicking. Unfair? Maybe - but we suspect any BP protestations to that effect are likely to get very short shrift at the moment.


In today's bulletin:

We will make BP pay, says Obama (but what about everyone else?)
No cause for cheer as unemployment hits 2.47m
Sainsbury positive despite slowest sales growth in five years
A Traveller’s Tale: Recessionary Rome is remarkably robust
Is Tesco right to promote from within?

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