Remember when you were kids playing front yard football? There was always somebody who enjoyed yelling dog pile after a tackle and everyone in the group would jump on the downed player. Now you know how BP feels this weekend.
Ahead of the meeting with BP management on Wednesday President Obama is making a two-day spin through three more gulf states in his "I feel your pain" tour. Then on Tuesday night he will televise a speech to the nation from the oval office on Tuesday night. In that speech he will demand BP put billions of dollars in an escrow account that will be administered by an independent committee responsible for reimbursing people for claims due to the oil spill. Basically it will be a checking account but BP can't write or control the checks. Obama said he will use "every legal device at his disposal" to force BP to escrow the money. David Axelrod said the administration has been advised they have the legal authority to compel compliance. The fund will be appropriately titled the "Gulf Victims Fund." Now who could complain about that? The name alone conjures up images of women and children standing in line for food.
All of this will happen BEFORE Obama sits down with BP management on Wednesday. So much for getting all the facts before acting. Do you think it is strange that Obama has never talked to Tony Hayward and the oil spill is nearly two months old? What kind of crisis management is that? When BP management including Tony Hayward walk into the meeting with Obama on Wednesday it will have the depressing atmosphere of condemned men walking up to the gallows.
Coast Guard Admiral Thad Allen said on Sunday that the escrow account was required because they had no faith in BP's ability to handle the claims project. "We have been concerned about the claims process. This is not a core function of an oil-producing company." Also, "BP is a company that have a lot of wealth inside it and we believe it can handle the bill for damages."
Thad Allen also told BP they were not moving fast enough to totally contain the spill and he wanted new options in place and executed by the end of this week. BP expects to be up to 25,000 bpd of containment this week by using a second rig as a flare point and actually burn the oil that will be extracted by the second rig. BP added 14,000 feet of tubing in order to move the Q4000 far enough away from the other ships to avoid another disaster should the oil flaring fail.
Democratic Senators led by Harry Reid, plan to send BP a letter on Monday demanding the escrow account be initially funded with $20 billion. Harry Reid is fighting a tough reelection campaign and attacking big oil and especially BP today is always good for some votes.
Don't get me wrong, I believe BP should and will pay for the cleanup. I just object to the heavy-handed political way it is being handled. The president is behind the curve and powerless to stop the leak so he is trying to recover his sinking popularity by blanketing the media this week with appearances and stern faced demands.
Remember Piper Alpha? When the Occidental (OXY) rig blew up in the North Sea and killed 167 workers there was no attack on Occidental by the U.K. or Margret Thatcher. The London Daily Telegraph noted on Thursday that "Margret Thatcher did not indulge in such xenophobic ranting against the American company Occidental Petroleum after the Piper Alpha disaster in which more than ten times as many people died." The platform accounted for 10% of the oil and gas produced in the North Sea at the time.
The U.K. implemented more than 100 new maintenance and safety procedures after the 1988 accident and separated the regulatory functions of field licensing and operational safety. It only took 22 years for America to take the same steps after the Horizon accident.
The Piper Alpha did not spew oil for months but you would think losing 167 lives would also cause some serious U.K. - U.S. hostility but it did not happen. Throwing temper tantrums and blistering companies responsible in the daily press does not resolve the problem any faster. It only creates ill will and promotes a combative environment where BP will be forced to raise their defenses and assume a posture of rigidity in order to save face at home and protect themselves against the administrations rampage. What is that old saying? "You catch more flies with honey than vinegar."
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