Obama visits Gulf again as crisis from BP oil spill continues to spread

President Barack Obama on Friday used his third visit to the Gulf Coast since the massive oil spill began to bluntly warn oil giant BP against “nickel and diming” the area’s disaster-stricken residents.

“They need to make sure they are following through on these claims in an expeditious and fair way,” Obama said, flanked by U.S. Coast Guard Admiral Thad Allen and other federal, state and local officials.

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“We are already starting to see at the local level folks experiencing problems and we don’t want those problems to build up, we want to nip that in the bud right now,” Obama said.

Obama attacked the company for a $50 million advertising campaign and the possibility of paying billions in dividends to investors while it has “moral and legal obligations in the Gulf.”

“I don’t want them nickel and diming people down here,” he later added. Obama warned the company against “lawyering up.”

Obama met with officials including Louisiana Gov. Bobby Jindal (R), Florida Gov. Charlie Crist (I) and Alabama Gov. Bob Riley (R).

Obama also appeared to offer an olive branch to Jindal and some local parish presidents who allege the six-month moratorium on new deepwater drilling the White House has imposed will have a harmful economic effect.

The ban is in effect while a bipartisan commission headed by former Florida Sen. Bob Graham (D) and former U.S. EPA administrator William Reilly, a Republican, conducts a review of the spill’s causes and safeguards needed to prevent future disasters.

Obama defended the drilling ban while hinting that its duration could be flexible.

“When I made the decision to issue the moratorium, we knew that that would have an economic impact,” Obama said. “But what I also knew is that there is no way that we can go about business as usual while we have discovered that companies like BP who had provided assurances that they had fail-safe, backup, redundant systems, not only didn’t they have fail-safe systems but had no idea what to do when those fail-safe systems broke down.”

But, seated near Jindal, he added: “What I said to them is the same thing I said to Graham and Reilly, which is if they can front-load some of the analysis of what went wrong and how you would solve what has happened and what can happen, and you can do that more quickly than six months, then let me know.”

“What I told the folks in this room was I am not going to cut corners on it, and I am not going to press them to move faster than it would take to do an accurate independent job based on sound science,” he said.

Obama’s latest visit – his second in eight days – comes amid escalating concern for the administration about the six-week-long spill, which is fast becoming one of the worst environmental disasters in history.

Obama expressed fury this week at the “entire situation,” which his administration has been unable to stop from worsening.

It remains unclear whether the latest effort to stop the spill will ultimately be successful. The company has fitted a containment device over the leak to capture oil and funnel it to the surface for collection.

In his Friday afternoon remarks, Obama said that “it does appear that the cap at least for now is holding,” but cautioned, “it is way too early to be optimistic.”


Allen, who is heading the Obama administration’s effort on the spill, told reporters in the morning that progress was being made, but cautioned against over-optimism.

The oil spill is causing huge problems for BP, the company that leased the rig that exploded in April and triggered the undersea leak.

BP executives on Friday insisted the company was strong enough financially to meet the soaring cleanup costs and anticipated penalties, even as they said their costs had now exceeded $1 billion.

The crisis also is a huge political dilemma for BP. As Obama arrived in Louisiana, Florida Gov. Charlie Crist asked BP for $100 million to help monitor the effects of the oil spill in the Gulf of Mexico.

Oil from the spill is approaching Florida’s coast, endangering the state’s tourism business. The oil slick has drifted within 10 miles of Florida's coastline, and tar balls have already been spotted in the Pensacola area.

Florida’s Department of Environmental Protection said Friday that “tar patties and tar balls have been confirmed in widely scattered areas east of Pensacola.”

Crist, who's running for the Senate, wrote Thursday to BP America President Lamar McKay that the spill “is already having an impact on Gulf of Mexico coastal areas, and the threat to our state is real and imminent.”

BP’s market value has dropped by roughly a third since the April 20 explosion of the Deepwater Horizon rig. The company faces massive cleanup costs in addition to damages payments. The Justice Department has launched civil and criminal probes of the spill, and the company faces major exposure to fines under environmental statutes.


BP has punted for now on the politically volatile issue of whether to pay the next round of dividends to shareholders.

“We fully understand the importance of our dividend to our shareholders. Future decisions on the quarterly dividend will be made by the board, as they always have been, on the basis of the circumstances at the time,” said Chairman Carl-Henric Svanberg.

Earlier this week, Sens. Charles Schumer (D-N.Y.) and Ron Wyden (D-Ore.) warned BP not to make the payments to shareholders.

“We find it unfathomable that BP would pay out a dividend to shareholders before the total cost of BP’s oil spill cleanup is estimated,” their letter states. It points to a Credit Suisse Group AG estimate that the costs could be as high as $37 billion.

This story was updated from an earlier version