For many, compensation is big question with oil spill

Lawmakers and Gulf Coast residents began questioning Monday whether BP will take full responsibility for the economic losses stemming from a massive, 2-week-old oil spill.

The prospect of an extended leak has intensified concerns over what compensation BP is willing to pay, since a law passed in the wake of the 1989 Exxon Valdez spill requires companies to pay for cleanup costs but no more than $75 million for other damages.

BP posted a fact sheet on its Web site saying it will take responsibility for the spill cleanup as well as provide compensation for "legitimate and objectively verifiable" claims for property damage, personal injury and commercial losses.

In his daily briefing Monday, White House press secretary Robert Gibbs underscored the Obama administration's "commitment" to affected residents that BP will pay them for economic suffering. "That's part of the law. Absolutely," Gibbs said. "The economic damages that are incurred are part of the cost of this incident. Absolutely."

Also Monday, four members of Obama's Cabinet — Homeland Security Secretary Janet Napolitano, Interior Secretary Ken Salazar, Environmental Protection Agency Administrator Lisa Jackson and Energy Secretary Steven Chu — met with BP Chief Executive Tony Hayward and Lamar McKay, BP America chairman and president, to discuss the ongoing response to the spill.

Meanwhile, a group of Democratic senators including Sens. Robert Menendez of New Jersey and Bill Nelson of Florida introduced legislation Monday to increase oil companies' liability limit retroactively to $10 billion.

The economic implications of the disaster are potentially mammoth — but highly uncertain. The annual commercial seafood harvest in the Gulf is $661 million, recreational fishing contributes $757 million and nearly 8,000 jobs, and wildlife-related tourism adds $517 million, according to the Harte Research Institute for Gulf of Mexico Studies.

It remained unclear Monday how much damage those industries will incur from the oil spill, and how long that damage will last.

The research group estimates that $1.6 billion in annual economic activity is tied to the Gulf Coast wetlands directly exposed to the oil spill.

"The question is if the marshes are impacted and how long they will be impacted," said David Yoskowitz, an economist at the institute. "It's all kind of up in the air right now until we really start to see the oil coming to shore and see what happens. There is no doubt that there will be some economic impact."

The slick also could spread to the busy shipping lanes at the mouth of the Mississippi River, tying up cargo vessels that move millions of tons of fruit, rubber, grain, steel and other commodities and raw materials in and out of the nation's interior.

While a total shutdown of the shipping lanes is unlikely, there could be long delays if vessels are forced to wait to have their oil-coated hulls power washed to avoid contaminating the Mississippi.

Some cargo ships might choose to unload somewhere else. That could drive up costs.

If economic activity were reduced by a few billion dollars, it would be damaging for the regional economies of Louisiana, Mississippi and Alabama, but would be a drop in the bucket of the $14 trillion U.S. economy.

But some analysts see the potential for even more dire outcomes. David Kotok, chief investment officer of Cumberland Advisors, laid out scenarios in a note to clients that range from damages in the tens of billions of dollars and years of cleanup to a cost in the hundreds of billions of dollars that leaves the Gulf of Mexico as a "damaged sea" for a generation.

The spill, he said, has made the likelihood of a dip back into recession higher than it had been. "A 'double-dip' recession probably has been made more likely by this tragedy," Kotok wrote.

Information from The Associated Press is included in this report.