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U.S. Pressures BP over Gulf Oil Spill; No Easy Fix

Sun, 05/02/2010 - 7:25pm
Reuters

VENICE, Louisiana (Reuters) - A vast oil slick moved closer to the Gulf Coast on Sunday, threatening an economic and ecological disaster as President Barack Obama sharpened his criticism of BP Plc and pressed the energy giant to find a way to stem the oil gushing from its ruptured well.

"Let me be clear: BP is responsible for this leak. BP will be paying the bill," said Obama as he visited the area and pledged a "fully coordinated, relentless relief effort" in the region where the coastlines of four Gulf states are being menaced.

The British oil firm said it was doing its best to shut off the well nearly one mile underwater on the floor of the Gulf of Mexico, but described an extraordinarily complicated operation that could take weeks or months.

It was like performing "open heart surgery at 5,000 feet in the dark with robot-controlled submarines," BP America Chairman and President Lamar McKay told ABC News.

The swelling black tide threatens wildlife, beaches and one of the nation's most fertile fishing grounds stretching across the Mississippi Delta from Louisiana to Florida. Air quality could also become an issue.

"We a dealing with a massive and potentially unprecedented environmental disaster," Obama said.

The president toured wetlands in Louisiana at risk from the oil spill, and flew over the coastal areas containing fisheries that could be most affected by the slick.

Many of the coastal communities in the path of the oil slick, including Venice on the west bank of the Mississippi River, were devastated by Hurricane Katrina in 2005.

"It's just like Katrina, catastrophic," Frances Lacross, a local resident, told Reuters.

Desperate efforts above and below the ocean surface -- using boats, planes and even an underwater robotic vehicle -- to check the oil flow and disperse and contain the spreading slick were being hampered by high winds and rough seas.

The government suspended fishing across a wide swath of Gulf waters, amid concern about contamination of seafood.

"Boot on the Neck" of BP

A team of government agencies is working on relief, but Obama and his deputies made it clear BP would be on the hook for what could be billions of dollars in cleanup costs.

"Our job basically is to keep the boot on the neck of British Petroleum," Interior Secretary Ken Salazar said on CNN.

The final bill for cleaning up the spill could be $7 billion, said Neil McMahon, analyst at investment firm Bernstein in London. Analysts at Morgan Stanley put the figure at $3.5 billion.

Since the Deepwater Horizon rig exploded and sank last month, claiming 11 lives, hundreds of thousands of gallons of crude have been gushing into the Gulf with no quick or easy solution.

BP is simultaneously working on five plans to stop the flow of oil, including installing domes to collect the oil on the seabed and bring it to the surface. It is also installing a new blow-out preventer to replace the equipment that failed.

The first of two domes will be deployed in the next six days. BP said it is also preparing to drill two relief wells, but rough weather has hampered its efforts. Underwater dispersants are in use to break up the crude before its reaches the surface.

Shares of BP and other companies involved in operating the lost rig plummeted last week as fears mounted of growing financial costs and legal liability from the accident.

The looming disaster threatens to eclipse the 1989 Exxon Valdez catastrophe in Alaska, the worst previous U.S. oil spill to date. The Valdez spill, caused by a wrecked oil tanker, spilled an estimated 10.8 million gallons (40.9 million liters) of crude oil into Alaska's remote Prince William Sound.

Attorneys-general from five U.S. Gulf states met in Mobile, Alabama on Sunday and said they would draft letters to Obama and to BP, seeking the swiftest possible delivery of federal aid and compensation to those affected.

The officials said they wanted clarification from BP on the firm's commitment to cover the cost of the cleanup and paying legitimate compensation to those affected.

"We need to make sure if BP is picking up the check, they do so in a pretty big hurry," said Louisiana Attorney General Buddy Caldwell.

Worst-Case Scenario

Government officials are having difficulty guessing how much oil is spilling from the deepwater well, but have raised their initial estimate of 5,000 barrels a day.

"The worst case scenario is we could have 100,000 barrels (4.2 million gallons, or 15.9 million liters) flowing out (per day)," Salazar said.

"The actual amount is impossible to estimate," Doug Suttles, chief operating officer of BP's exploration and production unit, said on CBS News.

The Coast Guard has laid hundreds of thousands of feet of protective booms to try to halt the encroaching oil, but high winds and rough seas were hampering deployment of the barriers and efforts by boats and planes to spray chemical dispersant on the oil.

The National Oceanic and Atmospheric Administration announced it was closing commercial and recreational fishing for at least 10 days in affected waters between Louisiana at the mouth of the Mississippi River to Florida's Pensacola Bay.

The area accounts for the bulk of U.S. production of oysters and shrimp. The Gulf supports a seafood industry that is second only to Alaska within the United States.

In 2008, commercial fishermen harvested more than 1 billion pounds of fish and shellfish in the Gulf of Mexico, out of total U.S. production of 8.3 billion pounds, NOAA said.

NOAA is considering the need to declare a fisheries disaster, as the states of Louisiana and Mississippi have requested, to get federal aid flowing.

The agency's administrator, Jane Lubchenco, met with more than 100 fishermen in Plaquemines Parish, Louisiana.

"The whole end of the parish depends on getting on the water in some shape or form. Whether it's oysters, crab, shrimp, charter fishing, it could affect everybody. It could cripple the parish pretty much," said fisherman Dwayne Vahal.

The Gulf Coast is home to hundreds of species of wildlife, including manatees, sea turtles, dolphins, porpoises, whales, otters, pelicans and other birds.

(Additional reporting by Paul Simao in Washington, Kelli Dugan in Mobile, Alabama, and Anna Driver and Kristen Haysin Houston. Writing by Ros Krasny; editing by Chris Wilson)

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