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BP Agrees To $20 Billion Fund To Help Gulf Victims

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BP Agrees To $20 Billion Fund To Help Gulf Victims


BP Agrees To $20 Billion Fund To Help Gulf Victims

BP Agrees To $20 Billion Fund To Help Gulf Victims

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President Obama and BP's chairman have announced the creation of a $20 billion escrow fund that will be used to compensate victims of the Gulf oil spill. BP also announced it is canceling 2010 dividend payments.


It's MORNING EDITION from NPR News. Im Deborah Amos.


And Im Steve Inskeep. Good morning.

The escrow fund for taking care of Gulf Coast damages brings to mind the government's fund for the financial bailout. Nobody really knows how much it will cost to fix the problem so theyve chosen a very large number to start.

AMOS: BP says it will put $20 billion in that fund. That is by no means the total payment. But the president says BP has the financial strength to meet its obligations.

NPR's John Ydstie reports.

JOHN YDSTIE: BP has said all along it will compensate businesses and individuals harmed by the oil spill. President Obama says the escrow fund provides a financial and legal framework to make sure that happens.

President BARACK OBAMA: This $20 billion will provide substantial assurance that the claims people and businesses have will be honored. It's also important to emphasize this is not a cap. The people of the Gulf have my commitment that BP will meet its obligations to them.

YDSTIE: BP chairman Carl-Henric Svanberg, speaking in the White House driveway after the meeting, said the agreement should give the American people confidence that BP means what it says.

Mr. CARL-HENRIC SVANBERG (Chairman, BP America): We will look after the people affected. And we will repair the environmental damage to this region and to the economy.

YDSTIE: The president said that during their meeting, he told the BP chairman to keep in mind that many individuals and businesses on the Gulf Coast, decimated by Hurricanes Rita and Katrina, and the deep economic recession, had no financial cushion to fall back on.

In his post-meeting remarks, the president addressed those people directly.

President OBAMA: So if you or your business has suffered an economic loss as a result of this spill, you'll be eligible to file a claim for part of this $20 billion.

YDSTIE: The two sides agreed that an independent administrator would determine the legitimacy of the claims and distribute the funds. Kenneth Feinberg, who oversaw payments to the families of the 9/11 victims, will serve in that role. More recently, Feinberg has been the administration's pay czar, limiting salaries at companies that got extraordinary government aid during the financial crisis.

During his Oval Office speech Tuesday night, President Obama said he was going to essentially order BP executives to set up the escrow account, begging the question as to whether the president had the legal authority to do that.

Steve Roady, an attorney at Earthjustice, a public interest law firm, says the president does.

Mr. STEVE ROADY (Earthjustice): I think the government has a very strong case that they have the authority to require the responsible party to pay all the costs, especially with a disaster like this.

YDSTIE: Roady says the president's power flows from a 1990 amendment to the Clean Water Act called the Oil Pollution Act. He acknowledges the act doesnt specifically mention economic compensation to individuals. But Roady says another law, the Outer Continental Shelf Lands Act, discusses restitution for harm to property and the human environment.

Mark Cohen, vice president for research at Resources for the Future, an energy, environment and natural resources think-tank, says in disasters like this, presidents often assume authority and justify it later. But he said President Obama could also wield a big stick. For instance, he could make it very difficult for BP to access U.S. oil reserves or do business in the United States.

But, says Cohen, BP had other reasons to acquiesce to the president's call for an escrow fund.

Professor MARK COHEN (Vice President, Resources for the Future): You know, they have an enormous public relations problem. They're trying very hard to work through that. Realistically, they're looking at $20 billion and saying, we're going to have to pay one way or the other. And I think they're acting - you know, it's just an attempt for them to show some good faith.

YDSTIE: In response to another request from the president, BP set up a much smaller, $100 million fund to compensate oil rig workers laid off as a result of the president's six-month moratorium on new deepwater drilling. A BP legal advisor called it a goodwill gesture, but said the company does not accept any legal liability for the effects of the moratorium.

John Ydstie, NPR News, Washington.

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Miami's Seaquarium: No Oil Yet, But Worries Aplenty

Miami's Seaquarium: No Oil Yet, But Worries Aplenty

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A killer whale reaches for the sky at the Miami Seaquarium. courtsey of Miami Seaquarium hide caption

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courtsey of Miami Seaquarium

A killer whale reaches for the sky at the Miami Seaquarium.

courtsey of Miami Seaquarium

The Gulf oil spill is hundreds of miles away, but the Seaquarium — Miami's 55-year-old home to dancing dolphins and killer whales — is preparing for the worst.

Several times a day, visitors can watch shows starring dolphins, killer whales and sea lions. General manager Andrew Hertz says the Seaquarium's location — perched on Virginia Key in the middle of Biscayne Bay — gives it an edge over other aquariums and marine parks like Central Florida's Sea World.

"We pull our water for our animals straight out of the bay. And we filter it and we give them clean water. But the quality of our water is only as good as the quality of the bay," Hertz says.

The Threat's Far Away — For Now

Lately, concerns have diminished that the Gulf’s loop current could bring oil from the Deepwater Horizon spill around the Florida peninsula and into the Atlantic. The oil is in a circular eddy that so far has kept it in the Gulf.

But Seaquarium officials say a change in current or wind patterns — or a hurricane — could instantly change that — polluting the water that the marine park’s 1,000 birds, mammals and fish depend on.

"I take in 10,000 gallons a minute, 24 hours a day," says Einar Gustafson, who is Seaquarium’s park services director and the man scrambling to develop a plan to safeguard the cleanliness of its seawater.

"We’re looking at wells to augment our water supply. We’re looking at oil/water separators. There are a lot of different options in there," says Gustafson.

And none of them are cheap. A few years ago, Seaquarium invested $3 million on a new filtration system. Now it looks like the marine park will need millions more to ensure its water remains free of petrochemicals.

Fish At Risk

Hertz says the park’s most vulnerable animals are its fish — and he points to the rays swimming in one of its outside tanks.

"We’ve got spotted eagle ray right here coming by and then we’ve got some Southern sting rays in here. And they look like fairly hardy animals. But these guys are reliant on the cleanliness of this water for their oxygen," he says.

And unless the water remains perfectly oil-free, they’ll suffer.

The Seaquarium is now working on a multimillion-dollar funding proposal that it plans to take to the state and eventually BP.

It’s those kind of unforeseen and far-flung expenses that will continue to bubble up in the months ahead and the seem likely to make the Deepwater Horizon the nation’s most expensive oil spill yet.

Oil Imperils Native American Town, And Way Of Life

Oil Imperils Native American Town, And Way Of Life

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Rosina Phillipe on a flatboat in Grand Bayou, La. She is the spokeswoman for the tiny Native American community that is struggling to hold on to its livelihood since the oil spill. John Burnett/NPR hide caption

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Rosina Phillipe on a flatboat in Grand Bayou, La. She is the spokeswoman for the tiny Native American community that is struggling to hold on to its livelihood since the oil spill.

John Burnett/NPR

Grand Bayou, La., is a tiny fishing village of Native Americans in the vast wetlands south of New Orleans. You can only get there by boat. Before the Cajuns, Spanish, French and Americans came, the ancestors of the people of Grand Bayou were living in the marsh, catching seafood. And the folks there today are still doing the same thing.

But now they’re scared, because the Gulf oil catastrophe is encroaching.

The Roots Are Deep

The people of Grand Bayou tend to stay put. Like 66-year-old fisherman Raymond Reyes, with his shaggy white hair and a cross tattooed on his leathery, brown biceps.

"Why leave heaven and go to hell? This is heaven here. Y'know?" Reyes says. "I tried in Texas and I can't make it. All I seen was cement and Mexicans. I can't understand Mexican and I don’t like cement. I like water."

For the surviving members of the Atakapa-Ishak people, water is their identity. They're one of the small Native American tribes that still live on the bayous and marshes of southeast Louisiana. While other marsh residents have taken jobs in the oil and chemical industries, the people of Grand Bayou resolutely try to live as their forebears did — fishing, shrimping, oystering, crabbing and trapping.

"Welcome to summertime in Louisiana," says Rosina Phillipe, the 54-year-old spokeswoman for the village. She's in her flatboat, wearing colorful jewelry and her hair in a long black braid.

"This is Grand Bayou, the village. And these are some of the homes damaged during Hurricane Katrina," Phillipe says.

Before Katrina, 23 extended families lived in Grand Bayou. The hurricane’s epic tide and wind decimated the little fishing outpost.

By this spring, Grand Bayou was just beginning to get back on its feet. In the past five years, volunteers from Mennonite Disaster Services have rebuilt homes for nine families, with more planned.

But the oil spill has jeopardized the village’s recovery. Residents who've been gone since Katrina are questioning whether it's worth moving back if they can't fish the bayou.

The Next Challenge

Phillipe moved into her newly built house on stilts last August. She climbs the stairs to a simply furnished living room cooled by ceiling fans.

She's pressed for time. Phillipe was planning to fly to Washington, D.C., in the afternoon to impress upon Louisiana's members of Congress and anyone else who'll listen that the oil slick threatens the very existence of her indigenous community.

"Grand Bayou for us is our place in the universe. This is where since time began the Creator saw fit to set our feet here. And we're going to do whatever we have to do to remain," Phillipe says.

But what can they do? Fishermen say the oil slick is merely 35 minutes away from Grand Bayou by boat. Like the people of other coastal communities, they don’t know how long their shrimp and oyster grounds will be off-limits or whether their waterways will be poisoned.

The Marsh Is Their Provider

But unlike other coastal communities, Grand Bayou depends on the water not just for its livelihood, but for its daily sustenance.

"We've never faced this before. No matter what happened before, at the very least we were able to feed ourselves. That’s been taken away from us. That’s serious, that’s real serious," Phillipe says.

This is an American community whose residents have not grown accustomed to running to the supermarket to buy ingredients for supper. As village elder Ruby Ancar says, the marsh is their provider. "One of the things my dad told me, the only thing that a Grand Bayou person needed from the grocery store was sugar, coffee and milk — oh, and rice, yes," Ancar says.

The waters of Grand Bayou have also traditionally provided recreation for the Atakapa-Ishak people — who are, today, a mixture of Native American, black and Cajun. Some still speak French at home.

Phillipe's 18-year-old daughter, Ani, a budding environmentalist, says she never wants to leave this bayou. "You just go out in the marsh and it's freedom. We were out chasing the porpoises in boat, we were alongside the boat and we were just riding with them up the whole way just up and down the bayou. I mean stuff like that you can’t do anywhere else," Ani says.

Though the village has dwindled in size, it has hung on despite a host of threats — violent ones like hurricanes, and gradual ones like cultural dispersion. Rosina Phillipe cannot imagine living anywhere else.

"We are who we are because of where we are. We are Grand Bayou people, and you can’t be a Grand Bayou person if you’re living in Ohio," Phillipe says, letting out a slight laugh.

She’s going to Washington because she believes the Atakapa-Ishak have to find a way to survive this latest calamity. She says she owes it to her ancestors.