WASHINGTON (Reuters) - President Barack Obama on Tuesday laid out what he called a battle plan to tackle the BP oil spill and exhorted Americans in warlike terms to embark on a mission to reduce their reliance on fossil fuels.
The president used the solemn setting of the Oval Office for a televised address to counter criticism he has not shown enough leadership in America's worst environmental crisis but offered few specifics on how he intended to get the job done.
Obama vowed that BP Plc would pay the price for its "recklessness" in the Gulf of Mexico oil spill and sought to harness public outrage over the disaster to build momentum for his goals of a "greener" energy future.
"We will fight this spill with everything we've got for as long as it takes. We will make BP pay for the damage their company has caused," Obama said in a speech aimed at restoring confidence in his handling of the crisis before it further tarnishes his presidency.
Obama's stern message for BP was a centerpiece of his high-stakes speech on the oil spill, which threatens to distract from his domestic agenda of reducing nearly double-digit U.S. unemployment and reforming Wall Street.
How forcefully Obama responds to America's worst ecological disaster will have implications not only for the British energy giant but also for the future of U.S. offshore drilling and any hopes he has of reviving climate change legislation stalled in Congress.
Adding a fresh sense of urgency, a team of U.S. scientists on Tuesday raised their high-end estimate of the amount of crude oil flowing from the well by 50 percent, to a range of 35,000 to 60,000 barrels (1.47 million to 2.52 million gallons/5.57 million to 9.54 million liters) per day.
Obama spoke in a measured tone devoid of anger as he assured Americans the stricken Gulf region would recover. He predicted containment efforts should succeed in capturing up to 90 percent of the oil gushing from the well in coming weeks.
Obama also sought to rally them by casting his effort in the language of war. He described the onslaught of oil as a "siege" and warned the public to gird itself for the long haul. "Tonight I'd like to lay out for you what our battle plan is going forward," Obama said.
While urging Americans to "seize the moment" to break their addiction to fossil fuels, he spoke in mostly vague terms, offering no detailed prescription or timetable for passing comprehensive energy legislation.
"Now is the moment for this generation to embark on a national mission to unleash American innovation and seize control of our own destiny," he said.
Obama has made clear he supports a comprehensive energy bill that would reduce greenhouse gas emissions, and a senior administration official said the president still believed that putting a price on carbon pollution was essential.
But he stopped short of talking specifically about the climate change component in his speech, perhaps mindful of the political obstacles during a stuttering economic recovery.
"Basically, a non-event here. It was really backwards looking. When he talked about alternative energy, he talked about what he already did -- and not what he needed to do. I don't think it's going to do too much for the alternative energy sector tomorrow, that's for sure," said Ben Pang, an analyst at Caris & Company in San Francisco.
Obama's choice of the Oval Office setting underscored the gravity of the situation. Presidents in the past have used it to respond to national tragedies, as Ronald Reagan did after the 1986 explosion of the space shuttle Challenger and George W. Bush after the attacks of September 11, 2001.
ELECTION YEAR
Another crucial question is whether Obama can placate angry voters in a congressional election year when his Democratic party's grip on legislative power is at risk.
Opinion polls show most Americans believe Obama has been too detached in dealing with the crisis and has not been tough enough in dealing with BP.
Seeking to counter criticism that he has not shown enough leadership in the nearly two-month-old crisis, Obama took a hard line with BP but did not go as far as reiterating an earlier assertion that he was looking for an "ass to kick."
"Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company's recklessness," he said.
"And this fund will not be controlled by BP. In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent, third party."
Congressional leaders have called for the fund to start off with at least $20 billion, a figure BP has not endorsed. Obama made no mention on how much money should be allocated.
Ahead of the televised speech, major oil company executives told a U.S. congressional hearing that BP had not adhered to industry standards in building its deep-sea well that blew out on April 20, unleashing a torrent of crude that has caused the biggest environmental disaster in U.S. history.
But their efforts to distance themselves from BP did not stop Democratic lawmakers from criticizing as "virtually worthless" industry plans to handle deepwater oil disasters.
Millions of gallons have poured into the Gulf, fouling 120 miles of U.S. coastline, imperiling multibillion-dollar fishing and tourism industries and killing birds, sea turtles and dolphins.
BP SHARES
During BP's congressional testimony, its U.S.-listed shares jumped and trading volumes spiked. They rose 4 percent at one point in afternoon trading before closing up 2.35 percent. They had plunged 9 percent on Monday. In London, shares of BP, which could face billions of dollars in damage claims from the spill, closed down 3.78 percent on Tuesday.
Rating agency Fitch smacked BP with a hefty six-notch downgrade on its debt rating. That puts BP's debt just two notches above junk, which would mean a significant boost in the company's cost of borrowing. BP has lost about half of its market value since the spill began two months ago.
Bank of America Merrill Lynch has ordered its traders not to enter into oil trades with BP that extend beyond June 2011, a market source familiar with the directive told Reuters.
Investors in solar energy company stocks might be disappointed that Obama offered few concrete plans on clean energy, after bidding the share up on Tuesday.
Ahead of his speech, Obama was in Florida finishing a two-day tour of Gulf communities hit by the 57-day-old spill.
It is a critical week for BP -- top executives including chairman Carl-Henric Svanberg are due to meet Obama at the White House on Wednesday.
"We share the president's goal of shutting off the well as quickly as possible, cleaning up the oil and mitigating the impact on the people and environment of the Gulf Coast," BP said in a statement after Obama's address.
"We look forward to meeting with President Obama tomorrow for a constructive discussion about how best to achieve these mutual goals," it said.
Chief Executive Tony Hayward, the public face of BP's response to the spill, is due to testify for the first time at a U.S. congressional hearing on Thursday.