Obama begins tour of gulf coast states

US President Barack Obama is today embarking on a tour of three Gulf-coast states tainted by oil before speaking to the public about what to expect in the weeks ahead.

Before the start of a two-day trip to Mississippi, Alabama and Florida, the White House announced Mr Obama would order BP to establish a major victims' compensation fund.

When he returns to Washington tomorrow evening Mr Obama will use his first Oval Office speech as president to address the catastrophe.

The steps add up to Mr Obama's most concerted efforts so far to assert leadership in the face of the calamity, with the White House exercising every tool at its disposal, including an on-scene visit by the president, a speech from the Oval Office, and the use of the power of the presidency to extract concessions from BP.

The White House hopes it will be enough to win back the confidence of a sceptical public.

BP said in a statement its costs for responding to the spill have risen to 1.6 billion dollars (€1.92bn), including new $25m (€30.1m) grants to Florida, Alabama and Mississippi.

It also includes the first $60m (€72.3m) for a project to build barrier islands off the Louisiana coast. The estimate does not include future costs for scores of damage lawsuits already filed.

Mr Obama's first three trips to the Gulf took him to the hardest-hit state, Louisiana.

Today, day 56 since BP's leased Deepwater Horizon drilling rig exploded and unleashed a fury of oil into the Gulf, he will fly to Gulfport, Mississippi.

From there he will travel along the coast to Alabama, where oil was washing up in heavy amounts along the shores yesterday in the eastern part of the state.

He will be met by state and local officials eager for him to show command, provide manpower and supplies and also tell the public that despite the catastrophe which is crippling the fishing and tourist trades, many beaches are still open.

The day includes a speech and a ferry ride to view barrier islands in Alabama where oil has come ashore. Mr Obama has not taken to the water in his previous Gulf visits.

The administration said today that BP has responded to a letter sent over the weekend asking the company to speed up its ability to capture the spewing oil.

In its response, BP said it would target containing more than two million gallons of oil a day by the end of June, up from about 630,000 gallons of crude a day now.

The government's high-range estimates say as much as 2.1 million gallons a day could be billowing from BP's runaway well.

Alabama governor Bob Riley planned to ask the president for more leadership and co-ordination.

"Essentially we're trying to manage this through a committee form, and it's a committee where any one member has absolute veto power," Mr Riley said on CBS' Face the Nation.

"I don't think you can do that. I think we're going to have to set priorities. We're going to have to implement a plan to achieve those goals if we're going to get through this."

Although BP is now siphoning off significant amounts of oil from its well 5,000 feet below the ocean's surface, the leak will not be killed for good until relief wells are completed in August.

At the same time more accurate estimates of the spill have brought the enormity of the disaster into focus. Already potentially more than 100 million gallons of crude expelled into the Gulf, far outstripping the Exxon Valdez disaster.

On Wednesday, Mr Obama will convene his first meeting with BP executives, expected to include the company's much-criticised CEO, Tony Hayward.

The president will tell company officials he expects them to establish a multibillion-dollar compensation fund for people and companies damaged by the spill, to be administered by an independent panel, and that he will use his legal authority to ensure BP complies, White House officials said.

BP was convening a board meeting today to discuss deferring its second-quarter dividend and putting the money into escrow until the company's liabilities from the spill are known.

BP spokeswoman Sheila Williams in London said the company was aware of the White House's demand for a compensation fund, but declined to comment further.