BP this week deposited the first $3 billion into what will ultimately be a $20 billion escrow account for claims made by Gulf residents affected by the recent oil disaster. After an additional $2 billion later this year, BP will continue to deposit $1.25 billion each quarter until it reaches the magic $20 billion.
This is BP's first baby step into making things right with its record-breaking oil well blowout. But as Associate Attorney General Tom Perrelli noted in a statement, "We have made clear that the company still needs to ensure that the necessary funds will be available if something happens to the subsidiary that established the trust and we look forward to completion of an appropriate security arrangement in the near future." In other words, Gulf residents won't receive checks any time soon.
Once BP is ready to offer up cash, though, it will be a difficult process--just try to imagine how many people have been affected by the disaster. That's why Kenneth Feinberg, the lawyer who dealt with compensation claims for victims of the September 11 terrorist attack, will oversee distribution of funds.
In the meantime, BP may have to fork over cash for an entirely different matter. ProPublica reports that the state of Texas plans to sue BP for releasing 538,000 pounds of toxic chemicals over a 40-day period in a refinery accident last year. According to the Texas Water Code, BP could end up paying up to $25,000 per day for every pollutant it released. A few million dollars is pocket change to a behemoth like BP, of course--but at some point, all that cash starts to add up.