The decision by British oil giant BP to set aside $20 billion for a Gulf of Mexico oil claims fund is likely just scratching the surface of the expenses that BP will suffer due to the unprecedented environmental disaster.

Clean-up efforts and litigation are almost certain to cost a lot more than just a mere $20 billion.

The penalties will extend beyond finances as well. Much like the price of its stock, BP’s reputation has plunged as each day passes.

Coastal communities and environmentally sensitive areas in Louisiana, Florida, Mississippi and Alabama have also been damaged, whether it’s from the oil or from the loss of tourists.

When U.S. President Barack Obama snubbed the usual political double-speak, and vowed to “kick ass” on whoever’s responsible for the oil spill, it didn’t take a genius to realize that there are a lot of furious politicians and lawmakers in the U.S. right now, including the president.

BP has been able to prevent some oil from entering the Gulf, but until they completely plug the leak, they won’t be able to silence their critics. Siphoning off a portion of the oil that was spewing into the ocean saw several failed efforts before BP was able to find a working solution.

Stopping all of the oil from leaking into the ocean might be impossible.

It is sad that this has happened to a company with a good reputation. People in southeast Saskatchewan don't have to be told about BP’s positives – the company has a strong history and a lot of employees in the region.

BP isn't a wildcat oilfield company that lacks concern for the environment or the safety of its employees. It's a well-establishment oil giant that rates among the world's largest oil companies. They aren't perfect, but they aren’t a company that has been dogged by controversy.

And that was a testament to BP. One would expect that a major oil company would be a frequent public target for environmentalists and other lobby groups. BP rarely provided that ammunition to potential critics.

Now the name BP will cause people to think of an off-shore drilling rig explosion that killed 11 people, an oil spill that caused extensive damage to the environment, and repeated failed attempts to stop that oil slick. Nobody will believe the feel-good BP television commercials that tout BP's ability to mix good business practices with environmental stewardship.

BP should be able to survive this disaster, thanks to its wealth of financial reserves that they have been able to stash away. But they will never recover, not just from a financial perspective, but in terms of their reputation and the public’s perception.