BP 'agrees to finance $20bn oil spill fund'

BP has agreed to finance a $20bn (€16bn) fund to pay the claims of people whose jobs and way of life have been damaged by the devastating oil spill in the Gulf of Mexico, senior US officials said today.

The independent fund will be led by lawyer Kenneth Feinberg, who oversaw payments to families of victims of the September 11 2001 terrorist attacks, the officials said.

President Barack Obama was to announce the deal in a Rose Garden statement later today after wrapping up a meeting with BP executives at the White House.

The meeting took place a day after Mr Obama’s first, and some say disappointing, Oval Office address to the nation last night when he laid out what his administration has done and will do to overcome the country’s worst environmental crisis.

The high-stakes address to the nation was yet another attempt by Mr Obama not only to confront the Gulf tragedy but also to ward off a robust political challenge from opposition Republicans who are poised to diminish or even undo the president’s Democratic majorities in Congress this November.

The outcome of the elections could have a profound effect on Mr Obama’s legislative agenda in the final two years of his term.

Millions upon millions of gallons of polluting crude oil continue to spew into the Gulf nearly two months after the British-based company’s Deep Horizon drilling platform exploded, killing 11 workers and setting in motion an environmental and economic catastrophe.

Responding to critics who said Mr Obama was too moderate in the Oval Office speech, a forum saved by presidents for national crises, senior adviser David Axelrod said today that Americans “were not asking him to get angry. They were asking him to get results”.

BP chief executive Tony Hayward and other company officials arrived at the White House at mid-morning.

At about the same time, BP announced it had begun early today burning oil siphoned from the ruptured well as part of its plans to more than triple the amount of crude it can stop from reaching the sea.

In Mr Obama’s 18-minute speech last night, he promised not only relentless pressure on BP but also pressed Congress to quickly pass a law that would put the United States on an environmentally friendly course towards energy independence.

“You have to stick to your knitting,” Mr Axelrod said of Mr Obama’s use of the speech to press yet again for one of his signature legislative goals.

It remains to be seen on the political front whether Mr Obama overcame the sense among a majority of Americans that he is powerless to stem the leak and late to muster the country’s full arsenal against the ever-increasing environmental disaster.

The president acknowledged there would be more damage before the spill is contained. He said the country could be tied up with the oil and its aftermath for months or years.

“We will make BP pay for the damage their company has caused,” Mr Obama declared.

That said, Mr Obama refused to set aside his vision for the country’s energy future.

“Countries like China are investing in clean-energy jobs and industries that should be right here in America. Each day, we send nearly $1bn of our wealth to foreign countries for their oil,” he said.

“The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now.”

Mr Obama has been scrambling to show he is doing everything he can to stop the massive environmental and financial damage from the oil leak. But the government does not have the technology to stop a spill at a depth of one mile, forcing Mr Obama to rely on BP to fix it.

Even so, Mr Obama said: “We will fight this spill with everything we’ve got for as long it takes.”

The president’s address capped a two-day inspection tour of the stricken Gulf of Mexico region, and was lent new urgency as scientists announced the spill could be worse than previously thought.

Yesterday, a government panel of scientists said the oil spill was leaking between 1.47 million gallons and 2.52 million gallons a day – an increase over previous estimates that put the maximum size of the spill at 2.2 million gallons per day.

As of yesterday, the maximum amount of oil that has gushed out of the well since the April 20 explosion is 116 million gallons, according to the estimates by scientists advising the federal government.