BP lobbyist pledges to ‘do the right thing’ in paying for Gulf oil spill damages

As pressure mounted on and off Capitol Hill to contain the massive oil spill threatening Gulf coasts, a BP executive said the company would pay more than legally required to cover economic damages.

David Nagel, executive vice president of BP America, told reporters Monday that BP planned to voluntarily exceed the $75 million liability cap and pledged to do “everything we can” to stop the spill and “minimize the environmental and economic damage.”

He said the company had already paid $3.5 million to cover 295 claims, out of 4,700 filed.

“We want to do the right thing,” Nagel said.

The company has also paid $25 million in block grants to each of four states — Louisiana, Alabama, Mississippi and Florida — to mitigate the potential for damage from the spill, Nagel said.

If some in Congress have their way, spending more on economic damages won’t be voluntary: Lawmakers in both chambers have written legislation that would raise to $10 billion the liability cap on companies responsible for offshore spills, with some suggesting even that ceiling may not be high enough.

Lawmakers want to apply the law retroactively so that BP and other responsible parties would have to pay vastly more to cover losses incurred by fishermen, hotel and business owners and other interests harmed. There is no cap on cleanup costs, which the responsible party also must pay.

Nagel did not say how BP would lobby on the liability bill. Nagel’s comments come a day before two Senate committees look into the causes of the oil spill and the response by industry to stem the 5,000 barrels a day thought to be leaking into the Gulf.

BP has been criticized on Capitol Hill and elsewhere for being unprepared for such a catastrophic accident. But in a briefing for reporters,

Nagel painted a picture of a company that is contrite and doing everything it can to fix the problem.

“I’m confident that one way or another, we’ll shut off this well,” Nagel said.

Lamar McKay, president and chairman of BP America; Steven Newman, president and chief executive of Transocean; and Tim Probert, chief health, safety and environmental officer at Halliburton, are expected to testify before the Senate Energy and Natural Resources and Environment and Public Works committees on Tuesday.

BP leased the drilling rig from Transocean. Halliburton supplied workers on the rig.

Efforts over the weekend to place a large steel-and-concrete dome over the main leak failed when gas and water formed a crystal-like sludge that clogged a spout attached to a pipe to tankers on the surface.

The crystals also made the 100-ton structure buoyant, hampering attempts to seal the leak.

As BP has worked to contain the spill, company executives have been wary of the political damage the disaster has caused. Nagel and BP CEO Tony Hayward have held several meetings with members of Congress, but so far have been unable to stanch the criticism.

Nagel described for reporters how the company is trying to stop the spill.

Engineers are studying whether pieces of rubber can be injected into the well to plug the leak, a process called a “junk shot.”

The company is also drilling two relief wells to provide another path to pour mud and concrete into the existing drill hole to stop the flow of oil. The relief wells would intercept the main drill hole at 18,000 feet; the process could take as long as 90 days to complete.

In addition, the company is spraying chemicals on the slick to break up the oil. It was awaiting approval from the Environmental Protection Agency on Monday to spray chemicals directly on the leak on the sea floor.

Most of the chemicals have been spread on oil on the surface, but Nagel said initial tests showed that spraying underwater “seemed to work.”

Last week, Nagel told members of Congress that, in a worst-case scenario, as many as 60,000 barrels of oil a day could spout from the ruptured well.

In trying to stop the leak, one thing officials fear is doing something that would worsen the spill. A blow-out preventer that was supposed to be failsafe was partially effective in that it is constricting some of the flow, Nagel said.

The preventer is a large structure of valves designed to close if pressures get too high and the threat of an accident grows. The mechanism includes giant shearing rams that are designed to pinch shut the thick pipes used to withstand the pressure of deep water.

Nagel said electricity holds the rams apart when a well is operating. A worker shut off power on the rig, which should have automatically closed the ram shears. Power would have also been lost as the rig sank below the surface.

A BP official said it appears the shears had partially closed the pipes. But Nagel said workers have not been able to get a clear look inside the blowout preventer.

“Something didn’t work in this system,” Nagel said.

The danger is that in the push to stop the well, officials could loosen the restriction and more oil could flow into the Gulf.

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