President Obama made it clear Tuesday night that the government would make BP pay for the massive Gulf oil cleanup, but another battle on Wall Streets could send BP into bankruptcy as early as next week.
Next Monday is the deadline for a scheduled $10 billion dividend BP has already promised its shareholders. Failure to pay it could result in a massive exodus, as shareholders sell off BP’s already tattered stock – which is now down 48 percent since the accident.
And if BP does agree to pay those dividends, outraged Americans will eat their own heads after the media sensationalizes it into: “BP pays out massive dividends to shareholders as Gulf residents suffer.”
The United States – already facing a massive debt, signs of a second upcoming recession, and the longest troop-deployment in U.S. history – now needs as much money as it can legally pump out of BP before the company inevitably flat lines. The Gulf’s restoration will be impossibly expensive, and experts now fear that the ever-growing oil plume will eradicate the North American food web – species by species.
President Obama now faces the challenge of keeping BP on life support long enough for the government to collect what it can; while simultaneously appeasing angry Americans who belligerently want to see BP burned to the ground for its negligence (and for lobbying regulators to turn a blind eye to its more than 670 safety violations, over the past three years).
President Obama called last night for BP to set aside “whatever resources are required” to set up a Gulf compensation fund.
“I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness,” Obama said. “And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent, third party.”
The U.S. government cannot legally force BP to set up a restoration fund, but it can ban BP from operating in the U.S. and seize all of BP’s assets (gas stations and pumps) if BP does not comply.
Government scientists now estimate that 60,000 barrels of oil per day could be gushing from the underwater well.