Official: 'Not Enough Money in the World' for All Oil Spill Claims

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The Obama appointee managing BP's oil spill disaster fund said Wednesday there's "not enough money in the world" to pay all claims and suggested homeowners with plunging property values could lose out.

And in another blow to the oil giant, animal welfare groups Wednesday sued BP for burning alive endangered sea turtles as part of its efforts to get rid of the leaking oil.

The "not enough money" warning from prominent U.S. lawyer Kenneth Feinberg came as Hurricane Alex disrupted clean-up operations in the Gulf of Mexico and pushed oil deeper into fragile coastal wetlands and once-pristine beaches.

About 423 miles (681 kilometers) of American shorelines have now been oiled -- nearly double the amount sullied just two days earlier -- as oil continues to gush into the sea at an alarming rate 10 weeks into the worst environmental disaster in U.S. history.

Feinberg, tapped by President Barack Obama to administer the $20 billion claims fund, insisted BP will "pay every eligible claim," but cautioned that many perceived damages may not qualify.

"I use that famous example of a restaurant in Boston that says, 'I can't get shrimp from Louisiana, and my menu suffers and my business is off,'" Feinberg told the House of Representatives Committee on Small Business.

"Well, no law is going to recognize that claim."

Feinberg said he was still sorting out how to deal with indirect claims like hotels that lose bookings because tourists think the beaches are covered in oil, or people who see their property values decline but live several blocks away from an oiled beach.

"There's no question that the property value has diminished as a result of the spill. That doesn't mean that every property is entitled to compensation," he said, adding: "There's not enough money in the world to pay everybody who'd like to have money."

Feinberg, who headed a compensation fund for victims of the September 11 attacks, assured lawmakers the fund would be "totally independent" and said BP had agreed to top up the escrow account as needed to meet proper claims.

The British energy giant has already disbursed more than $130 million in emergency payments to fishermen and others affected by the slick. Feinberg said lump sum payments would be offered to claimants once the true extent of the damage is assessed.

"It sure would help if the oil would stop," he told the committee.

Meanwhile the Animal Welfare Institute (AWI) and other groups sued BP over the turtles' deaths and asked a federal court to stop the company's "controlled burns."

"It is horrifying that these innocent creatures whose habitat has already been devastated by the oil spill are now being burned alive," AWI President Cathy Liss told the U.S. District Court for the Eastern District of Louisiana.

The lawsuit filed by AWI, Center for Biological Diversity, Turtle Island Restoration Network and Animal Legal Defense Fund said BP was violating the Endangered Species Act and other laws with their "controlled burns" in the Gulf of Mexico.

They asked the court for a temporary restraining order to stop all burning activities "until... mechanisms are implemented that will prevent any additional sea turtles from being burned alive."

Also on Wednesday, Obama ordered the development of a long-term plan to "restore the unique beauty and bounty" of the Gulf Coast.

The Long-Term Gulf Restoration Support Plan aims to "ensure economic recovery, community planning, science-based restoration of the ecosystem and environment, public health and safety efforts, and support of individuals and businesses who suffered losses due to the spill," a White House memo said.

An estimated 35,000 to 60,000 barrels of oil a day have been gushing out of the ruptured well since the Deepwater Horizon drilling rig sank on April 22 some 50 miles off the coast of Louisiana.

Efforts to permanently plug the leak by drilling relief wells continued despite the rough seas which had forced a halt to skimming operations off the coasts of Louisiana, Mississippi, Alabama and Florida.

Two containment ships continued to capture the oil at a rate of about 25,000 barrels per day despite seven-foot (two-meter) swells.

But the rough seas delayed the deployment of a third ship aimed at doubling the containment capacity.

And officials warned that drilling and containment will be suspended for about 14 days if the spill zone is threatened by a more direct storm hit.

That could delay the completion of the wells until at least September and would dump an additional 490,000 to 840,000 barrels of extra oil into the Gulf.

Senior government officials were set to meet with Obama Thursday to discuss whether a new containment system should be installed in the interim.

That system would further raise capacity, but would require the current cap to be removed and involve careful manipulation some 5,000 feet (1,500 meters) below the surface.