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Klobuchar Calls on BP to Establish $20 Billion Fund for Oil Spill Damages, Clean-Up

Klobuchar and senators make demand of BP President

June 14, 2010

Washington, DC – U.S. Senator Amy Klobuchar and other senators sent a letter to BP Chief Executive Officer Tony Hayward Sunday asking that the company establish a special $20 billion account to be used for payment of economic damages and clean-up costs in response to the ongoing oil spill in the Gulf of Mexico. The account would ensure that there will be no delay in payments or attempts to evade responsibility for damages.

In the letter, the senators cite the lessons of history from past spills and the need to ensure financial security for those persons and industries whose lives have been harmed.  The senators requested a response to this letter no later than Friday, June 18 in light of the urgency of the matter. 

The Obama Administration has indicated support for the measure, and President Obama is expected to formally announce his push for the account during his Oval Office address Tuesday night.

As a member of the Environment and Public Works, Judiciary, and Commerce committees, Klobuchar has participated in several key Senate oversight hearings since the spill began and has called for BP to be held accountable, increased safety measures to prevent future oil spills, greater scrutiny of the relationships between the oil companies and the federal agencies that regulate them, and fair compensation for the families of the 11 workers killed in the explosion of the Deepwater Horizon rig on April 20. On May 7, Klobuchar visited the Gulf Coast as part of a bipartisan delegation to assess the oil spill and met with federal officials and local leaders about ongoing recovery efforts.   

Key Excerpts of the Letter:

 “While we are pleased that BP has admitted liability for these damages and vowed to provide full remuneration for economic losses and clean-up costs, history has taught us that corporations often fail to live up to their initial promises.” 
 
“Although legislative action is forthcoming, the damages are immediate.  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 clean-up costs.  Establishment of this account would serve as an act of good faith and as a first step towards ensuring that there will be no delay in payments or attempt to evade responsibility for damages.”

Klobuchar also cosponsored legislation that would ensure that the families of the 11 workers killed in explosion of the BP oil rig that caused the ongoing oil spill in the Gulf of Mexico have access to the same compensation rights as those granted in other wrongful death cases at sea.
 

Full Text of the Letter:
 
June 14, 2010
 
Mr. Tony Hayward
Group Chief Executive, BP p.l.c
c/o BP America Inc.
4101 Winfield Road
Warrenville, IL 60555
 
Dear Mr. Hayward:
 
We are writing to express our profound concern over the Deepwater Horizon oil disaster and our deep regret for the severe consequences the continued outflow of oil into the Gulf of Mexico is having on our nation and the way of life for millions of Americans.  This tragedy has already taken the lives of 11 men, injured 17 others, and caused billions of dollars in damages.  The oil slick resulting from the spill stretches across 2,500 square miles and has damaged miles of environmentally sensitive beaches and marshes stretching across four states. Although this disaster continues to unfold, it is already very clear we are facing a catastrophe of historic proportions that will take decades to fully rectify.
 
The damages caused by your company are far reaching.  While much is already visible today, history informs us that the full extent of the destruction may not be discovered for months or even years.  For example, it is already evident that fishermen, shrimpers, the tourist industry, and the secondary industries that support them will sustain billions of dollars in losses.  It is also possible that marine and wildlife habitats will be destroyed, estuaries and wetlands will be decimated, and bird, fish, and animal populations will be devastated.

While we are pleased that BP has admitted liability for such damages and vowed to provide full remuneration for economic losses and clean-up costs, history has taught us that corporations often fail to live up to their initial promises.  After the Exxon Valdez tanker spilled more than 11 million gallons of oil into Alaska’s Prince William Sound, damages totaled more than $7 billion; although Exxon continued making massive profits after the accident, it fought liability at every step and ultimately paid far less than the billions of dollars worth of damages it had caused many, many years later.
 
Congress is currently gathering information and holding hearings in order to develop evidence-based legislative solutions to address the Deepwater Horizon disaster.  Although legislative action is forthcoming, the damages are immediate.  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 clean-up costs.  Establishment of this account would serve as an act of good faith and as a first step towards ensuring that there will be no delay in payments or attempt to evade responsibility for damages.  Although creating this account at this level in no way limits BP’s liability, we believe it will do more to improve BP’s public image than the costly public relations campaign your company has launched.
 
We appreciate your interest in fully and quickly reimbursing those who have been injured by your actions.  We believe the establishment of the $20 billion account to compensate victims and provide for clean-up is a useful first step for demonstrating that BP intends to meet its commitments.  In light of the urgency of this matter we ask the courtesy of your response no later than June 18, 2010.
 

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