As scientists served cruel notice that more than twice as much crude oil than previously thought may have been leaking from the sea bed in the Gulf of Mexico, the BP oil crisis was threatening last night to overwhelm the so-called "special relationship" between Britain and the United States.
David Cameron will telephone President Barack Obama this morning in a risky attempt to heal the rift. He is unlikely to find a sympathetic ear, however. Mr Obama will offer no apologies for his harsh treatment of BP. Any whining by British political leaders – or by BP – will not be well received, White House aides indicated.
Rather, anger at BP in the United States is intensifying. Scientists with the US Geological Survey said they were raising drastically their top estimate of the volume of oil that was escaping prior to the current siphoning effort to 40,000 barrels a day, twice its previous high estimate. Thad Allen, the US point man on the response, said BP would not be ready to collect that quantity of oil at least until mid-July.
"This is a nightmare that keeps getting worse every week," said Michael Brune, executive director of the Sierra Club, America's most influential environmental lobby group.
Just as the ecological crisis deepens – more tar balls and oil sludge are washing up on Florida beaches amid warnings of a move by Florida hoteliers to sue the energy giant – so too the human and political dramas around it. At the epicentre remains Tony Hayward, the CEO of BP, who next week will be grilled by what promises to be an extremely unsympathetic panel of US congressmen on Capitol Hill.
While BP managed to step up the quantities of oil being captured in Gulf waters – to roughly 15,000 barrels a day – this week brought the company unprecedented political misery. The worst came on Wednesday when US Interior Secretary, Ken Salazar, suggested that on top of everything else it might have to compensate workers for lost salaries in the oil industry because of the government's six-month ban on new deep-water drilling. "This demand is chilling," one BP executive was quoted as saying. "The administration keeps pushing the boundaries on what we are responsible for."
That the Anglo-US "special relationship" was in jeopardy became clear after Boris Johnson, the Mayor of London, complained about anti-UK rhetoric in the US. Other political and business leaders in the UK voiced concern about the tone being adopted by the White House, notably after Mr Obama earlier last week said he would have "fired" Mr Hayward by now if he was his employee.
This growing dismay with the treatment of the company – an icon of British industry – coincided with the realisation in London that demands by members of the US Senate that BP cancel or at least suspend dividend payments was going to have a detrimental effect on millions of British savings and pension accounts.
The White House, on the other hand, is doing everything but ease off. Instead it has now sent an "invitation" – more like a summons – to the board chairman Carl-Henric Svanberg to be at the White House on Wednesday. He and other executives, possibly including Mr Hayward, are expected at a meeting with top administration officials, including, for a while anyway, Mr Obama. It is likely to be a workmanlike but also chilly affair.
At the behest of Mr Cameron, we now learn, the Chancellor, George Osborne, called Mr Hayward on Thursday to discuss the pressure the company was coming under in the US. Mr Hayward is also seeking to speak to Mr Cameron, a BP spokesman said. Yesterday, Mr Svanberg met Mr Osborne and spoke with the Prime Minister. "It is in everyone's interests that BP continues to be a financially strong and stable company," Mr Cameron said, according to Downing Street.
That the White House is not minded to loosen the noose on BP was clear from remarks from top adviser David Axelrod in the Wall Street Journal. "My advice to Mr Hayward is that he spend a lot less time on hyperbole and a lot more time on trying to solve the problem," he said. "It's going to be hard, given the damage that's been inflicted on the people, the ecology of that region, the economy of that region ... for him to play the victim."
The Deputy Prime Minister, Nick Clegg, urged a cooling of transatlantic tensions. "I don't frankly think we will reach a solution to stopping release of oil into the ocean any quicker by allowing this to spiral into a tit-for-tat political diplomatic spat," he said.
Mr Hayward can expect little real help from London. Analysts continued to predict meanwhile BP's board will have little choice but to cancel or defer quarterly dividend payments for fear of a fierce reaction from American political leaders if it does not. The market has factored a suspension which also helped explain BP stock's rebound yesterday. "We are considering all options on the dividend. But no decision has been made," Mr Hayward said last night. The decision is likely to come on 20 June.
Asked whether the inescapable operational relationship between the government and BP remained one of trust, Admiral Allen was elliptical. "We have to have a co-operative, productive relationship for this thing to work, moving forward. This has to be a unified effort moving forward if we are to get this thing solved. If you call that trust, yes."
With some hotels in the Florida Panhandle complaining that bookings for June will be down by 60 per cent, the state has now asked BP to park $2.5bn in a ring-fenced account to cover more costs should the state be hit by heavier quantities of oil. Mexico meanwhile predicted that its beaches might be affected later in the season – perhaps not until December – and that it may also sue BP for associated costs.Reuse content