BP Oil Will Pay All Legitimate Claims or Will It?

BP or British Petroleum has said it will pay all “legitimate claims” from the oil spill in the Gulf. But BP’s liability is capped at $75 million. Considering all of the potential “legitimate” claims, it is clear that $75 million will not be sufficient for now and certainly not for down the road as subsequent claims for damage comes in.

Some claims will be able to quantify immediately. If the fishing industry can show their expected revenue from year to year, it will be apparent that this year will be different. Then there are other types of claims. How do you claim that your store in a mall near the beach suffered from a decrease in tourism? The best thing for those people to do is to keep careful records of years past and whatever is happening today to make a claim.

This is the hook BP no doubt will hang its reasoning on when it says it will pay ‘legitimate’ claims. Will the government have to pick up the rest? President Obama said he did not appreciate the “ridiculous spectacle” Halliburton, BP and Transocean trying to blame each other. Taxpayers should not have to pay beyond $75 million.There is an effort within Congress to set aside that cap, but will it be retroactive? Otherwise U.S. taxpayers will have to pick up the enormous claim.

If there is any doubt who is to blame, a 60 Minutes report lays it all out. Mike Williams, the chief electronics technician onboard the Deepwater Horizon oil rig in the Gulf, miraculously swam away from the burning oil rig. He gives a chilling account of the pressure the employees were under to produce for BP because extracting the oil was taking too long. Even when bits of rubber safety equipment started coming up with the drill and he questioned it, he was told not to worry. The blowout prevent didn’t work and a backup called the pod also lost function. Both needed to be reestablished and fixed, but were not. An eruption that had been building for weeks exploded, taking with it 11 crew members.

BP already faced $108 million, the highest U.S. fines for workplace violations in history. And a BP whistleblower says the Atlantis which currently pumps 200,000 barrels a day also has safety violations and should be shut down. BP has made $6 billion so far this year. The Deepwater Horizon has cost $500 million so far. Who should be paying the cost of this disaster?