An Important Meeting

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No cap on BP's $20 billion compensation fund, Obama says

June 16, 2010 -- 3:55 p.m. EDT


On "AC360°," Anderson Cooper reports live from New Orleans with reaction from people most affected by the oil disaster. Watch "AC360°" at 10 p.m. ET Wednesday.

Washington (CNN) -- President Obama sought to assure victims of the Gulf of Mexico oil disaster Wednesday that BP's $20 billion escrow account set up for compensations would not cap the amount the company may be responsible for paying.

Obama announced the compensation plans after a meeting between his response team and BP's leadership. He said he told BP Chairman Carl-Henric Svanberg that for small businessmen, fishermen and shrimpers, it wasn't just a matter of dollars and cents. It was about accountability.

"At the end of the day, that's what every American wants and expects," Obama said. "The people of the Gulf have my commitment that BP will meet its obligations to them."

An additional $100 million fund will be established to help support oil rig workers now unemployed as a result of the April 20 accident, Obama said.

Svanberg apologized to the American people for the oil disaster. He said he hoped the company could earn back the trust of the American people, because "we care about the small people."

"We appreciated the constructive meeting conducted by the president and his senior advisers and are confident that the agreement announced today will provide greater comfort to the citizens of the Gulf Coast and greater clarity to BP and its shareholders," Svanberg said.

The agreement to set up the escrow account was worked out ahead of the meetings between the administration's oil response team and BP's leadership, a senior administration official said.

CNNMoney.com: BP agrees to $20 billion fund for spill costs

Obama said the fund will be controlled not by BP, but by an independent, third party and the claims process will be mediated by attorney Kenneth Feinberg, who administered claims for victims of the September 11, 2001, attacks on New York and Washington.

Under the terms of the agreement, the $20 billion fund would not cap the amount BP is responsible to pay. In addition, the $20 billion figure could be revisited, Obama said, adding the fund may need to be replenished if there were more claims made for further damage.

BP has been under intense political pressure to ensure that it can cover all costs related to the catastrophic oil spill, the largest in U.S. history and one that Obama described as an "unprecedented environmental disaster."

The highly anticipated White House session Wednesday also was attended by Vice President Joe Biden, Homeland Security Secretary Janet Napolitano, Attorney General Eric Holder, White House Chief of Staff Rahm Emanuel, Interior Secretary Ken Salazar, Energy Secretary Steven Chu, Commerce Secretary Gary Locke and Labor Secretary Hilda Solis, among others, according to an administration official.

In addition to Svanberg, Chief Executive Officer Tony Hayward and Managing Director Bob Dudley and BP America CEO Lamar McKay represented the oil giant.

Day 58: The latest on the oil disaster

On Tuesday, government scientists increased their estimate of oil flowing into the Gulf of Mexico by 50 percent -- to between 35,000 and 60,000 barrels per day. That translates into 1.5 million gallons to 2.5 million gallons per day.

The government's previous estimate, issued last week, was 20,000 to 40,000 barrels per day.

The change was "based on updated information and scientific assessments," and was reached by Chu, Salazar and Marcia McNutt, the head of the U.S. Geological Survey, who leads the government's Flow Rate Technical Group.

Obama said Wednesday that BP assured him that recovery efforts should capture up to 90 percent of the gushing oil in the coming days and weeks.

"That is still not good enough," Obama said. "We will continue to press BP and draw on our best minds and resources to capture the rest of the oil until the company finishes drilling a relief well later in the summer that is expected to stop the leak completely."

BP is in the process of drilling a relief well, which will provide a more permanent solution to stopping the undersea gusher, but it won't be completed until August.

BP spokesman Toby Odone called measurement of the flow rate "extremely challenging," given the fact that the leak is a mile below the surface of the water. BP spokesman John Curry said the analysis included data provided by BP.

"We want what everyone wants," he said. "We want to do whatever we can to capture all the oil we can to minimize the impact."

iReport: Share your views, solutions on Gulf oil spill

The spill dwarfs the 11 million gallons that were dumped into Alaska's Prince William Sound in 1989 when the tanker Exxon Valdez ran aground, and oil in varying amounts and consistencies has hit the shores of Louisiana, Mississippi, Alabama and Florida.

Crews cleaning up the oil in one Louisiana parish have trampled the nests and eggs of birds, Plaquemines Parish President Billy Nungesser said Wednesday. Among them was the brown pelican, which came off the endangered species list last year.

Nungesser said the parish doesn't want to turn away contractors, but he called for more care when crews work in the sensitive wetlands.

He said officials recently found broken eggs and crushed chicks on Queen Bess Island, near Grand Isle.

The latest wildlife report said 634 oiled birds have been collected alive while 783 have been found dead, and 96 sea turtles have been collected alive while 353 have been found dead.

BP has been siphoning oil from a containment cap placed atop the ruptured well.

About 10,440 barrels of oil -- or nearly 440,000 gallons -- were collected Tuesday from the ruptured well, according to BP, a drop from the day before.

A total of 15,420 barrels of oil were collected Monday. The overall oil collection rate declined Tuesday due to a lightning strike that caused a fire to break out aboard the drilling ship Discover Enterprise. Oil collection was temporarily suspended until the fire was extinguished.

BP said Wednesday that it had started collecting oil through a second containment system attached to the ruptured well. The new system is connected directly to the blowout preventer and carries oil up to a second ship, the Q4000.