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White House Wants $10 Million to Fight Oil-Spill Litigation

13 May 2010 22:43 (UTC +04:00)

Baku-APA. The White House is asking Congress for $10 million so the government can fight any claims related to the Gulf oil disaster that is spewing thousands of gallons of crude off the coast of Louisiana, APA reports quoting The Wall Street Journal.
The request is the first indication that the government might be on the hook to pay for some costs related to the spill despite the Obama administration’s near-daily proclamations that BP PLC will bear the full costs. The administration will "aggressively" pursue full compensation for any litigation expenses, said Kenneth Baer, communications director for the White House’s Office of Management and Budget.
The $10 million is part of a legislative package President Barack Obama sent to House Speaker Nancy Pelosi (D., Calif.) late Wednesday to help respond to the Gulf oil disaster and future spills. The proposed legislation asks Congress for $10 million "for litigation expenses related to affirmative and defensive litigation associated with the Deepwater Horizon oil spill that may not qualify as recoverable from the Responsible Parties or the Oil Spill Liability Trust Fund," according to a copy of the proposal. Deepwater Horizon is the name of the rig that exploded in the Gulf.
The proposal also asks for funds to help people affected by the spill, to boost the existing oil-spill cleanup tax by a penny a barrel and to raise the potential liability of companies responsible for spills.
The money will go to the Department of Justice’s civil and environmental natural resources division to help them prepare for any potential litigation, Mr. Baer said. He said the DOJ is actively preserving evidence for any potential claims.
BP has said it will pay all claims related to the spill. The company has faced intense questioning from lawmakers over what caused an oil rig operated in the Gulf to explode. At Senate and House hearings, BP and the two other main companies involved, Halliburton Co. and Transocean Ltd., have leveled blame at one another.
U.S. senators earlier this week pressed BP about its plans to pay for costs related to the spill. The president of the company’s American operations, Lamar McKay, told lawmakers the company would pay all "legitimate" claims. He added that the "claims have to have some basis, have to have some substantiation."
Although it’s unclear what the full cost of cleaning up the spill will be, it is expected to be large. Local, state and federal personnel and equipment have taken an active role in responding to the crisis. The U.S. military has also been playing an active role. According to the most recent statistics available, there are more than 290 vessels responding to the disaster and 10,000 personnel. The spill has also impacted the fishing industry, critical to many Gulf states such as Louisiana, as fishing has been banned in large areas around the spill.
Meanwhile, BP said Thursday it has spent $450 million since the spill started after the April 20 rig explosion. That’s up by $100 million from the last company update three days ago.
BP plans to deploy a top hat-shaped dome to contain the spill over the next few days, perhaps possibly next week.
Company officials had previously predicted that the dome would be in place by the end of this week. BP spokesman Jon Pack said that the dome, which is about half the size of a barrel of oil, would be in place in the "next few days," which "could get into next week."
"Things are fairly fluid," he added.
The small containment mechanism was proposed after the company’s plan to place a giant dome failed Sunday. A rapidly freezing mix of natural gas and water blocked a 12-inch opening at the top of the large dome, and BP hoped that using a smaller dome would keep that from happening.