Democratic Senators Urge BP to|Create $20 Billion Fund for Spill

     WASHINGTON (CN) – Fifty-seven senators sent BP a letter Monday urging the company to set up a $20 billion escrow fund to pay for damages and cleanup efforts surrounding the massive Gulf oil spill. “[W]e are facing a catastrophe of historic proportions that will take decades to fully rectify,” the letter states. “While we are pleased that BP has admitted liability for such damages and vowed to provide full remuneration for economic losses and cleanup costs, history has taught us that corporations often fail to live up to their initial promises.”

     The letter continues: “In order to ensure BP fully and quickly covers the costs of this disaster, we are calling on BP to immediately establish a special account of $20 billion, administered by an independent trustee, to be used for payment of economic damages and cleanup costs,” the senators wrote.
     So far, BP has paid $1.6 billion in response costs and more than $62 million in claims. It has paid more than half of the 51,000 claims received to date.
     The senators said the $20 billion fund is not intended to limit BP’s liability for the spill.
      “The damages caused by your company are far-reaching,” the letter states. The senators predicted “billions of dollars in losses” to fishermen, shrimpers and the tourism industry in the Gulf, and the possibility that “marine and wildlife habitats will be destroyed, estuaries and wetlands will be decimated, and bird, fish and animal populations will be devastated.”
     The letter is signed by nearly the entire 59-member Democratic caucus.
     The senators requested a response from the company by Friday, June 18.
     White House officials say President Obama supports creation of the fund, though he has not named a dollar amount. Obama is expected to outline his ideas for the fund in a speech Tuesday night from the Oval Office.
     Obama is visiting the Gulf coast Monday, his fourth visit to the devastated region since the April 20 explosion triggering the largest spill in U.S. history. He will make stops in Gulfport, Miss., Theodore, Ala., and Fort Morgan, Ala. on Monday and will spend the night in Pensacola, Fla.
     After returning to Washington Tuesday, Obama will address the nation Tuesday night and meet with top BP executives Wednesday, including BP board president Carl-Henric Svanberg and BP CEO Tony Hayward. Hayward is scheduled to testify before the House Energy and Commerce Committee on Thursday.
     BP said Monday that the containment cap placed on the broken wellhead June 3 is continuing to collect oil flowing from the well and funnel it to the Discoverer Enterprise drillship on the surface.
     The containment system collected approximately 30,000 barrels of oil over the weekend and has collected 127,000 barrels since it was installed, according to a statement issued by BP.
     On Friday, a barge transported 115,000 barrels to be discharged at a terminal in Mobile, Ala. Once it is emptied, it will return to the spill site.
     “The lower marine riser package containment cap has never before been deployed at these depths and conditions, and its efficiency and ability to contain the oil and gas cannot be assured,” BP states.
     BP says it expects to start funneling oil and gas through the choke line of the failed Deepwater Horizon blowout preventer to the Q4000 vessel on the surface in the next few days. BP plans to burn off the oil and gas at the surface in order to increase the amount of material that can be captured from the well.
     BP is also planning to make adjustments to the containment system to start using flexible tubes for collecting oil and gas to prepare for hurricane season. BP says the new system will be ready in late June or early July.
     After estimates of the amount of oil flowing from the well jumped from 12,000 to 25,000 barrels a day to up to 40,000 barrels a day last week, the Coast Guard requested that the company beef up capacity for capturing the leaking oil.
     “Plans are being developed to further develop these systems and also for further options to provide additional containment capacity and flexibility, in line with requests made by the U.S. Coast Guard,” BP said.

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