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BP has put out signs that funding for relief in Gulf could be compromised if Congress puts limits on the company’s ability to obtain new drilling permits for Gulf wells.
Gulf drilling is a significant source of BP revenue, and BP claims Gulf oil production is needed so it can fund relief and claims efforts, whether required by law or voluntary.
While BP isn’t denying the obligation to fund the $20 billion claims fund, it has made it clear to Congress it is trying to go further, such as funding foundations for unemployed rig workers to research and economic recovery projects. The company claims those efforts can’t be funded without ongoing oil production. Others say the company can raise needed funds by selling assets, if need be.
The depth and spread of the BP oil spill grows broader every day, leading President Obama to address the nation from the Oval Office. BP has a claims process in place, and has made payments on claims caused by the spill. However, be on the watch for changes as the federal government steps up and takes on managing funds for Deepwater Horizon Spill claims.
Whether an individual or business owner, be familiar with how claims for disasters are handled. The source of claim payment may differ – government, insurer or a third party – but the same proof is likely needed. Knowing what to do is an important part of having a disaster or emergency response plan.
Ramping Up Federal Action
Typically, an Oval Office address is reserved for the most serious matters, such as the September 11 attacks. Many noted the choice of an Oval Office address, and the implication of how serious the spill is. A major step is the creation of the Independent Claims Facility (ICF) to take over the damage claim process, removing BP from claims decisions. BP is to pay $20 billion into a claims fund. The ICF will decide Oil Pollution Act (OPA) and tort claims. Federal and state claims are excluded.
Kenneth Feinberg, the arbitration attorney who managed claims funds for 9/11 victims and bank bailout payouts, leads the ICF. Strong and effective leadership is needed in running the ICF; success is a must to calm an angry and frustrated public.
ICF set up and claims procedures should be in place as soon as possible. An administrator decides on claims; if you don’t agree on your claim, a three-judge panel reviews the claim. The extent and impact of claims won’t be fully known for years; those affected might have multiple claims. The government and BP have stated all legitimate claims will be paid. BP funding will come in quarterly payments, until the $20 billion level is reached. US assets are pledged by BP to secure the fund until all payments are made.