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EDITORIAL: BP's escrow fund, and moving beyond petroleum

Muscling BP executives to put $20 billion into a fund for victims of the Gulf oil disaster is an encouraging sign that President Barack Obama is moving up the steep learning curve on crisis management.

Now he must use his newfound gumption to deliver more efficient leadership of the cleanup and tougher regulation of the oil industry, and to drive the nation to a sustainable energy future.

The escrow fund is the fruit of the president's first face-to-face meeting with top BP executives, who were summoned to the White House the morning after Obama addressed the nation from the Oval Office. It will be funded by BP but administered by an independent panel. Obama has to make sure that compensation claims are processed swiftly and fairly. That hasn't been the case so far, even though timely help is critical for people who've lost paychecks or business to the encroaching crude.

The $20 billion won't cover all of BP's liability. But it's a start. And setting it aside now is crucial, as the company's value plummets and its financial obligations soar. BP has lost billions in shareholder value. Its corporate image has taken a massive hit. It must pay to cap the well, and contain and clean up the oil fouling the gulf. According to internal BP documents uncovered by Congress, as well as the testimony of other oil company executives, BP may have taken some ill-advised shortcuts to save time and money in its drilling operation. If that's true, BP's liability should increase accordingly.

Obama didn't create this crisis, and he has no choice but to rely on BP to cap the belching, undersea well. But he should have reformed the obviously lax regulation of the oil industry before BP's oil rig exploded. And since the accident on April 20, he has seemed slow to grasp the magnitude of the disaster.

Now that it appears likely that oil will continue gushing throughout the summer, Obama must ensure a more efficient and effective cleanup effort. Local officials and residents on the scene have complained bitterly that their work has been hampered by the lack of a clear chain of command. That has to change. Timely decision-making is essential to success in this race against floating destruction.

In addition, the rules for deepwater drilling must be toughened and rigorously enforced. Appointing an aggressive new head for the Minerals Management Service was a good start.


Obama must also lead the nation away from its addiction to oil and other fossil fuels. If he waits for Congress to do it, it probably won't happen. The president has to point the way, taking a strong hand in driving lawmakers to enact a comprehensive energy policy built around efficiency and sustainability.

That means ignoring critics, like House Republican Leader John Boehner of Ohio, who are already accusing him of exploiting the tragedy in the Gulf to advance a political agenda. Big course corrections like the one the nation needs on energy are possible in times of crisis - that's when the public finally accepts the need for change. This is the moment. Obama has to seize it. hN