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US mounts pressure on BP; Obama heads to Gulf Coast

The US increased pressure on energy giant BP Plc to boost capacity to contain the gushing oil well in the Gulf of Mexico, as President Barack Obama makes a fourth trip to the area on Monday.

world Updated: Jun 14, 2010 11:16 IST

The US increased pressure on energy giant BP Plc to boost capacity to contain the gushing oil well in the Gulf of Mexico, as President Barack Obama makes a fourth trip to the area on Monday.

As public outrage intensifies, Obama will travel to Alabama, Mississippi and Florida, for the first time since the crisis began, on Monday and Tuesday. He is scheduled to address the nation at 8 p.m. Tuesday.

On Saturday, White House adviser David Axelrod told NBC's Meet the Press that BP should set up an escrow account - administered by an independent panel - to pay claims by workers whose livelihoods and businesses have been impacted by the worst oil spill in US history.

"We want to make sure that the money is independently administered so that there won't be a slow walk on these claims," Axelrod said. "There are people there who live from week to week and whose livelihoods have been taken away from them. We want to make sure that they can get through this."

The US had given BP 48 hours to make greater efforts to contain the well after government scientists said the spill could be twice as bad as previously estimated.

US government scientists said last week that anywhere from 20,000 to 40,000 barrels of oil per day could have been leaking out of the ruptured wellhead since the Deepwater Horizon rig sank to the bottom of the ocean April 22, following an explosion in which 11 workers died.

The new flow estimate means BP may only be collecting about half of the oil through a containment cap that was placed earlier this month over the leaking pipe, which lies about 1.6 km below the ocean surface.

BP's current plans don't "provide the needed collection capacity consistent with the revised flow estimates", said Coast Guard Rear Admiral James Watson, in a letter made public Saturday, to Doug Suttles, BP's chief operating officer for exploration and production.

BP was expected to respond Sunday to the Coast Guard's demands. "We wanted them to give us a faster plan with greater redundancy and greater reliability as we move forward," Coast Guard Admiral Thad Allen told CBS' Face the Nation.

Obama will meet with BP chairman Carl-Henric Svanberg in Washington Wednesday. Obama has faced some criticism in the US for choosing not to meet with BP officials since the rig explosion sparked the massive spill.

On Saturday, Obama told British premier David Cameron that his frustration with BP had "nothing to do with national identity", and that he had no interest in undermining BP's value.

British politicians have been uneasy over Obama's anti-BP rhetoric as the company's plunging share price puts a serious dent in the retirement savings of many British households.

Cameron expressed his "sadness" at the ongoing human and ecological damage in the gulf, but also stressed the importance of BP not only to the economy of Britain but also the US and other countries.

As the US debates penalties for BP's culpability, regulatory analysts told Bloomberg financial news that BP could likely lose control of its US oil and natural gas wells and also be barred from doing business with the federal government.

The government "will consider whether BP runs these incredibly complicated systems, where accidents can and sometimes do happen, or whether the company has a culture that disfavours safety and environmental compliance", said Michael Wara, a professor of environmental law at Stanford University.

First Published: Jun 14, 2010 11:15 IST