04 May 2010

America's Litigious Society: a Butt of International Jokes

We’re mastering the oil slick, says BP chief facing flood of lawsuits

A dead Portuguese Man-O-War floats on a blob of oil in the waters  of Chandeleur Sound off of La

(AP Photo/Eric Gay)

A dead Portuguese man-of-war jellyfish floats on the oil in the waters of Chandeleur Sound off Louisiana

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The British executive at the centre of the Gulf Coast oil disaster hit back yesterday against accusations that BP had reacted too slowly, telling The Times that the company would have a giant steel hood in place over the worst leak by tomorrow.

For the first time since the fatal explosion on the Deepwater Horizon rig two weeks ago, Tony Hayward, BP’s chief executive, claimed that the company was winning the race to contain the spill and indicated that it was ready to fight some of the lawsuits heading its way.

Even as the first pictures emerged of oil breaking through protective booms and pooling round a string of islands off the Louisiana coast, Mr Hayward said the main slick had not yet made landfall “because we’ve contained it”.

He urged the US Government to pursue a policy of “absolute co-operation” with BP. “We will only succeed if we work together,” he said — a day after President Obama’s press secretary promised that the White House would “keep a boot to the throat of BP” to ensure that it fulfilled its responsibilities. Mr Hayward, 53, a geologist, projects a youthful image at the top of Britain’s biggest company. At times, however, he has struggled to appear in full control of the effort to protect hundreds of miles of coastline. But at BP’s Washington offices yesterday he gave a strikingly upbeat assessment of the operation, at odds with forecasts of environmental catastrophe.

“Let’s be very clear,” he said of the slick. “The reason it’s not getting to the beaches is because we’re containing it. We don’t know if we can continue to contain it, but for the moment we are.”

The unprecedented use of dispersant chemicals at the source of the leak a mile under water “seems to be working very effectively”, he said, describing an armada of surface ships working with an “air force” of aircraft spraying similar chemicals. “I’m using military rhetoric because that’s what we’re fighting, a battle, and we’re going to win,” he said.

An army of lawyers has descended on the Gulf Coast, determined to cripple BP with lawsuits on behalf of property owners and fishermen whose livelihoods they say could be ruined. Robert Kennedy Jr, son of the former presidential candidate and a prominent environmental lawyer, is suing BP.

Mr Hayward reiterated a promise that BP “will honour all legitimate claims for business interruption”. Asked for examples of illegitimate claims, he said: “I could give you lots of examples. This is America — come on. We’re going to have lots of illegitimate claims. We all know that.”

BP’s share price fell 3.5 per cent amid estimates that the clean-up bill could reach $16 billion (£10.5 billion). Mr Hayward declined to say whether a US law capping liability in some spills to $75 million would apply. He said: “We’re a big company. We’re absolutely good for the cost of this.”

He dismissed claims that the rig should have activated the blowout preventer at the well head with an “acoustic switch” — they were useless at 5,000ft, he said — and that fire booms should have been used to ignite the slick. “We couldn’t keep the fire alight because the sheen is too thin,” he said.

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