Monday, November 29, 1999

Gulf spill damages may hit $100 bln - La. Treasurer

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Louisiana's state treasurer estimated environmental and economic damages from the Gulf of Mexico oil spill could range from $40 billion to $100 billion, and that the BP $20 billion escrow fund was not enough.Louisiana is eager to learn the details of a special fund BP Plc agreed to create to compensate those affected by the oil gushing into the Gulf of Mexico from an accident at one of the company's oil wells, Louisiana Treasurer John Kennedy told Reuters Insider on Thursday.BP has announced it will put $20 billion into an escrow account, an amount that Kennedy called a good start, but not large enough to pay for the biggest oil spill in U.S. history."We're still trying to find out the terms, frankly, of the escrow agreement," Kennedy told Reuters Insider television. "I particularly want to know whether the money can be called back into the registry of the court in the event of a BP bankruptcy."Kennedy has told leaders in the state, which has an economy that strongly relies on the oil industry, they should prepare for the possibility of the British oil giant filing for bankruptcy while the Gulf coast recovers from the disaster.When asked if Louisiana might find a way to float bonds off funds it receives from BP's escrow account or issue debt to help restore the coastline, Kennedy said: "We're looking at all those different options."Members of the U.S. House of Representatives spent much of the day grilling BP Chief Executive Tony Hayward about the catastrophe that has coated wildlife in oil and littered Gulf Coast beaches with tarballs.They frequently mentioned concerns about workers and fishers displaced by the explosion and also by a federal moratorium on drilling.A little more than a week after the April 20 explosion, U.S. President Barack Obama said no drilling would be allowed in new areas in the Gulf.But Kennedy called for that moratorium to be lifted and said Louisiana is losing $100 million to $150 million in wages each month because of the spill.
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