US sets deadline for BP

June 10, 2010 12:00 am

, NEW ORLEANS, Jun 10 – The US tightened pressure on BP, setting a 72-hour deadline for the battered British energy titan to present updated plans for battling the Gulf of Mexico oil spill.

Coast Guard Admiral Thad Allen, who is leading the government response to the disaster, met with BP officials in Washington and ordered them to produce records of compensation claims filed in four stricken southern US states.

"BP, as a responsible party, is accountable for making the communities, individuals and business impacted by this spill whole again," said Allen.

"We need more detail and openness from BP to fulfill our oversight responsibilities to the American people and ensure that BP is meeting its commitment to restore the Gulf coast."

The stringent demands for greater transparency betrayed the growing mistrust between BP and President Barack Obama\’s administration more than seven weeks into the nation\’s worst ever environmental catastrophe.

Fueled by 24/7 media coverage of oiled birds and tides of toxic crude washing up on US shores, American public anger is growing and Obama\’s administration is under increasing pressure to hold BP accountable.

Before meeting with BP officials, Allen sent a letter to BP CEO Tony Hayward, asking him to explain how compensation packages to devastated local industries were being calculated and why they were taking so long to process. Related article: Oil rigs leaving Gulf of Mexico over drill ban

A separate letter ordered BP to let the government know what contingency planning was in place for its "top hat" containment system.

It said there must be no pause in the recovery effort if new vessels were needed to increase the capacity to process the oil being collected and asked what plans had been laid out in case operations were derailed by hurricanes.

The device, placed last week over the blown out well, located 50 miles (80 kilometers) off Louisiana, is capturing almost 15,000 barrels, or 630,000 gallons, of oil a day.

Allen said modifications next week "could take leakage almost down to zero" and added that he had ordered a special task group to work up new estimates on how much oil is still gushing out.

"I\’m not going to declare victory on anything until I have the numbers," he told a press conference. "Show me the numbers."

Facing a grilling from Senate lawmakers, Interior Secretary Ken Salazar admitted that cutting the leaking riser pipe to construct the system could have increased the flow rate by between four and five percent. Related article: Gulf oil spill sickens more than 70 people

His hearing was disrupted as a protester poured an oily-looking liquid on herself before being arrested.

"This is what it feels like to have oil dumped on you," shouted the woman, who later issued an angry statement saying she was a fourth-generation shrimper from the Gulf.

Fear and frustration was palpable in the bayou, where people have counted on the sea for their meals and their livelihoods for generations.

"No one can tell us how long this is going to take," said Clarice Friloux, who\’s been shrimping with her family her whole life.

Related article: New poll shows huge swing in US views on offshore drilling

"They can\’t guarantee we\’ll be back at work in five years."

The host of a popular talk show on regional station WWL devoted hours to the question "who can you trust."

Garland Robinette questioned whether the federal government could properly regulate the industry and repeatedly raised concerns that BP will manage to get out of paying for the response efforts through a takeover or bankruptcy

Amid growing public frustration, Obama lashed out Tuesday at critics of his response and said that if it was up to him, he would fire Hayward over a series of flippant public remarks.

Hayward will testify before US lawmakers for the first time next week, as BP investors fear intense political pressure from Washington over the spill could force the group to axe its prized shareholder dividend.

The share price sank Wednesday by 4.24 percent to close at 391.55 pence, having earlier touched a low point of 380.50.

Related article: BP shares tumble on dividend fears

The company\’s market value has plunged by billions of dollars since the Deepwater Horizon rig, operated by BP and owned by US contractor Transocean, sank on April 22 — two days after a huge explosion killed 11 workers.

"There remains an intense amount of uncertainty over future dividend payments to shareholders, with senior politicians in the US applying strong pressure to delay any payment until legal and clean up costs have been covered," City Index analyst Joshua Raymond told AFP.

Obama heads to the Gulf of Mexico next week for his fourth visit since the disaster.

BP is meanwhile plowing on with the drilling of two relief wells that should be ready by August to enable the company to permanently plug the massive leak.


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