Dorgan calls on BP to pay $10 billion into a recovery fund

BP should pay $10 billion into a Gulf Coast Recovery Fund to ensure damages caused by the oil spill are covered. 

Sen. Byron Dorgan (D-N.D.) called on the Justice Department to "enter into a formal agreement" with BP that would be jointly managed by the federal government and BP, or legislation may be needed to ensure they pay for the damages, he said. 

"BP has averaged $15 billion a year in profits over the past 10 years," Dorgan said Tuesday on the Senate floor. "Asking them to make a payment of much less than one year's profits into a Gulf Coast Recovery Fund that will be jointly managed with public as well as the private sector management will be a start to nailing down the commitment that I believe is necessary to respond to the growing costs of this disaster."

Dorgan, a senior member of the Senate Energy and Natural Resources Committee, said Justice Department officials have said that BP's pledge to pay for the damages isn't binding. 

Estimated costs for the oil spill — containment, cleanup and the economic effects on businesses — are expected to exceed the $10 billion proposed for a recovery fund. 

"For now there needs to be more certainty to the BP pledge, and this approach is the first step in determining whether the BP pledge is going to be met in full," Dorgan said.  

Legislation may be needed if BP is unwilling to voluntarily help create the account. 

So far, BP has paid $48 million on 18,000 claims and $1.25 billion for all costs associated with the spill. That amount excludes $360 million for the Louisiana barrier islands construction project, according to BP's website. 

BP made its first payment of $60 million for the barrier island project on Monday.