BP Agrees to Create $20 Billion Cleanup Fund; Oil Spill Estimate Now at 60,000 Barrels per Day
In today's meeting at the White House, BP has "tentatively" agreed to create a $20 billion fund to pay claims for the oil spill, now being called "the worst in American history," reports the New York Times. Kenneth Feinberg, who oversaw the 9/11 victims compensation fund, will run this one as well. BP would have a few years to deposit the full $20 billion in the fund, so as not to freak out investors, and/or tank completely. BP shares have dropped by half since this whole thing started, though news of the escrow seem to be helping to some degree.
Of course, no one knows how much the cleanup will actually cost -- as of now, BP has spent more than $1 billion on cleanup, containment, and other costs -- and there's a lot more to go, especially since the well is still leaking, and estimates keep veering upward.
Per the Times,
The new estimate said that as much as 60,000 barrels of crude could now be spewing into the Gulf of Mexico each day, a sharp increase over the estimate last week of 25,000 to 30,000 barrels a day.
BP is capturing roughly 15,000 barrels a day through the containment cap, which means...well, even we can do that math. However, in accordance with their slow roll-out of actually fixing this thing, BP has plans to deploy new equipment to capture 40,000 barrels a day by the end of June, and at least 60,000 barrels a day by mid-July.
If the new range of flow estimates proves correct, and if BP is ultimately found guilty of gross negligence in actions it took that led to the Deepwater Horizon disaster, that would mean the company could be assessed fines of up to $258 million a day. Those fines could come on top of payments for cleanup costs and economic damage to Gulf Coast businesses.
With all these numbers, a $20 billion escrow suddenly seems "relatively tiny" compared to the "very big ocean," eh?
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