Where Does the Buck Stop in the BP Oil Spill? - TheStreet

Where Does the Buck Stop in the BP Oil Spill?

The showdown this week between BP and the federal government highlights the risk to each of bearing the ultimate blame for the Gulf of Mexico oil spill.
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(BP, President Obama poll question updated for Obama Oval Office speech)

NEW YORK (

TheStreet

) -- For once, the BP oil spill buck is stopping in the same place.

The long-awaited, face-to-face meeting between

BP

(BP) - Get Report

top brass and President Obama is taking place on Wednesday.

BP Chief Executive Officer Tony Hayward, left, BP America Chairman Lamar McKay, center, BP Chairman Carl-Henric Svanberg, second from right, and other BP representatives, arrive at the White House in Washington, Wednesday, June 16, 2010, for a meeting with President Barack Obama

There has been an intensification of the political battle between the Obama administration and BP leading up to the meeting. President Obama's comments first made two weeks ago to protect Gulf coast residents and business from "nickel and diming" by BP have transitioned into a high stakes political poker game.

President Obama has moved back and forth between the cool rationality for which he is known and outbursts of anger, saying he would have fired BP CEO Tony Hayward and was looking for "ass to kick." Yet the rhetorical tricks that have served Obama so well in management of many previous issues and on the campaign trail have not worked their magic with the BP oil spill. It's a matter of actions and not words that matter in the Gulf of Mexico.

The President said as much in his speech from the Oval Office on Tuesday night. It is time for action, Obama said, on comprehensive energy legislation.

>>BP Oil Spill Update: Obama Says BP to Pay

President Obama referred to BP as reckless in his speech on Tuesday night, and assured the public that the oil giant would be made to pay all oil spill claims. However, the speech was less anti-BP rhetoric and more focused on the recovery of the Gulf coast, the federal management of the oil spill crisis, and the future of U.S. energy policy. The President announced the creation of a long-term Gulf coast recovery plan and rehashed all the oil spill response measures already taken by the government.

These are themes that have been layered into all of the comments from the White House through the eight weeks of the BP oil spill crisis, as it tries to focus on its "actions", while also keeping up the attacks on BP, with mixed success.

Back when President Obama held his first press conference on the BP oil spill, he said that the buck stopped with him. The Presidential concession was not too little too late, but it was too little to restore confidence in the federal government response, and it was not a rhetorical card used in the Tuesday night speech.

The White House has been less focused on the "buck" and more focused on on showing it's legal might in the last week. The White House has been pressing BP to suspend its dividend since last week. When it became clear that BP might not proactively make this decision, the White House stepped up the pressure on BP for doing a poor job of paying out claims.

The White House has never said it has the legal means to force BP to suspend its dividend, but in the past three days, through Tuesday, June 15, the Obama Administration has voiced more strongly that it has the legal means to force BP to place billions of dollars into an escrow account, and to turn over management of the BP oil spill damage claims process to an independent agency.

BP CEP Tony Hayward continues to make public missteps. BP's attempt to rescue its public image by spending $50 million on an image advertising campaign were quickly turned into fodder for attacks on the oil giant for not paying Gulf damages in a timely fashion. Hayward continues to be the lead man in a stream of optimistic comments from BP about is management of the oil spill that gush as steadily as oil from the leaking BP well.

In early days of the now-57 day old BP oil spill crisis, Hayward and other BP officials insisted that 5,000 barrels of oil per day was the best estimate for the rate of oil leaking into the Gulf of Mexico. The recent estimate from the government that 35,000 barrels of oil a day might be leaking into the Gulf was quickly replaced late on Tuesday by a new estimate that as much as 60,000 barrels of oil per day might be the right figure. BP has always looked on the bright side -- and often patently false side -- of a worsening oil spill. Now BP is saying that it is working on an improved containment cap method that would be able to handle as much as 80,000 barrels of oil per day, as the estimate for the actual rate of oil flow comes closer and closer to a level that no one predicted.

In his testimony before the House on Tuesday, June 15, BP America President Lamar McKay said that the original 1,000 to 5,000 barrel estimate was the responsibility of the Unified Command of the government. Under tough questioning from Representative Ed Markey (D. Mass.), the BP official refused to apologize for inaccurate oil-flow estimates, passing the buck back to the government, and saying technology to measure the oil spill is still under evaluation by BP (eight weeks into the crisis).

In the early days of the BP oil spill crisis, when Republicans and

Fox News

talking heads began referring to the oil spill as "Obama's Katrina," it was easy to shrug off the comments as just the latest conservative sound bites.

Weeks ago, Obama political guru David Axelrod appeared on national television to downplay claims that the federal government was not on top of the situation in the Gulf of Mexico.

"This is always the case in Washington, that whenever something happens, the political speculation sets in," Axelrod said. "But the truth of the matter is that we had the Coast Guard on the scene almost immediately after this accident, the deputy secretary of the Interior was on the ground the next day, and we've been coordinating closely with the local authorities and with the responsible party, BP, down there to deal with this from the very beginning."

Weeks later, it's clear that even if Axelrod could get Obama elected President, spinning the oil spill as command performance by the Commander in Chief hasn't been a success.

As BP CEO Tony Hayward takes his grilling in Washington D.C. this week, it's clear that he is

The Most Hated Man in America

, at least as far as the headlines are concerned.

President Obama spoke to the U.S. public from the Oval Office for the first time in his presidency on Tuesday night, a decision said to have been made by the President himself. Two years out from re-election, it is going too far to say that Obama's presidency hangs in the balance as a result of the BP oil spill. Though it is not going too far to think that the U.S. public's diminished confidence in the President poses the risk of allowing the Oval Office to sink deeper into the Gulf of Mexico.

Whether BP goes bankrupt -- on Tuesday Fitch Ratings downgraded its debt to two levels above junk status, or President Obama one day is remembered as the leader felled by the BP oil spill -- in the same way that the oil crisis of the 70s killed the Carter presidency -- remain speculative sensations.

Heads have actually rolled at the Interior Department's Minerals Management Service, which attracted a lot of the initial blame for the federal government's suspect and "too cozy" relationship with companies in the energy sector -- though, clearly, the departure of the two top executives at the Minerals Management Agency was the bare minimum of the buck making its round of stops as a result of the widening path of the BP oil spill.

In the battle of public opinion, the federal government is having a harder time distancing itself from BP and the public frustration over the extent of the spill. A recent CBS News poll released found that only 28% of American felts that that federal government was doing all it could to control the oil spill, while 63% of Americans felt the Obama administration should be doing more in response to the spill. Much to the consternation of Obama administration poll watchers, BP only did slightly worse, with 70% of the American public saying that BP should be doing more and 24% thinking that BP had done all it could possibly do.

A Washington Post/ABC poll found that 69% of Americans believe the government had done a "not so good" or "poor" job handling the spill, echoing the increasingly negative poll numbers for the Obama administration.

A Gallup poll from Thursday, May 27, found that 53% of American thought Obama's performance on the BP oil spill was "poor" or "very poor." The president was still comfortably ahead of BP -- which was rated "poor" or "very poor" by 73% of surveyed -- but the margin had even begun diminishing by late May.

Indeed, the showdown this week in Washington D.C. between the federal government and BP raises the question, "Where does the buck stop for you in the BP oil spill?" To see where the buck stops on

TheStreet

, take the poll below. And if you want any of the interested parties where they can stick that buck, feel free to leave a comment.

-- Reported by Eric Rosenbaum in New York.

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