Oil Execs Quizzed on Safety as BP Tries New Well Fix


Main ImageWASHINGTON/PORT FOURCHON, Louisiana (Reuters) – U.S. lawmakers pressed oil executives about flaws in a well safety device on Wednesday while BP scrambled with its latest deep-sea effort to control the huge Gulf of Mexico spill that threatens environmental disaster.

BP Plc, Transocean Ltd and Halliburton Co are all back in the hot seat in Washington over their responsibility in what could be the worst oil spill in U.S. history.

After a day of hearings on Tuesday where company officials traded blame for the April 20 rig explosion and oil spill, a U.S. House of Representatives panel said it had uncovered significant problems with a safety control mechanism on BP’s oil well that could have contributed to the accident.

Representative Bart Stupak said his panel’s investigation showed the rig’s underwater blowout preventer had a leak and was not powerful enough to cut off the oil flow after the rig exploded, creating a massive unchecked spill.

A desperate race is on to contain the catastrophe with BP preparing another potential subsea fix and troops — in some areas accompanied by prisoners — rushing to limit damage to the coast, where oil has started to reach shorelines.

An attempt to maneuver a “top hat” containment dome over the seabed leak — the second such effort in days — was under way on Wednesday. BP officials have said they cannot be certain it will succeed, given the difficulties of working almost a mile under the ocean surface.

Oil is still gushing unchecked from the sea floor at about 5,000 barrels (210,000 gallons/795,000 liters) per day, with the expanding slick oozing toward land.

Fisheries and tourism, two of the Gulf’s economic mainstays, along with birds, sea turtles and other wildlife, are threatened by the unfolding fiasco that could next month surpass the massive Exxon Valdez disaster in Alaska in 1989.

“Everybody’s scared because … commercial fishing is our way of life in Lafitte and if we ain’t got that, we ain’t got nothing,” said fisherman Lance Lacrose in Venice, Louisiana.

The White House proposed new legislation in response to the spill which foresees $188 million in one-time discretionary spending — most of which will be covered by BP — so the federal government can speed assistance to those affected if the spill worsens.

It would also lift an existing cap on damages liability for the responsible company — in this case BP — relating to economic losses caused by the oil spill. The legislation also calls for a 1 cent-per-barrel increase in the tax that oil companies pay to an existing oil spill liability fund.

Investors have driven the value of BP shares down more than $30 billion since the accident, far exceeding even the worst estimates of the spill’s cost, reflecting uncertainty about how the calamity will play out.

BP shares were down slightly in late trading on the London stock exchange while Transocean was down and Halliburton was slightly higher in New York midday trading.

HARSH INQUISITION

If Tuesday’s hearings are anything to go by, the oil executives should be braced for tough grilling on Wednesday.

In two separate hearings on Tuesday, senators accused executives from the three companies of trying to shift the blame to each other and subjected them to tough questions about safety and how the well was sealed.

Some members also questioned BP’s response to the spill, saying the company seems to be trying various solutions without any certainty of success.

“We’ve seen the most catastrophic possibilities and it seems to me like they’re flailing around going from one thing to another not really knowing what in fact is necessary to stop this, short of that relief well that will just take way too long,” Democratic Senator Robert Menendez said on ABC’s “Good Morning America” on Wednesday.

BP is now trying to cover the leak with a much smaller funnel than the 98-tonne dome it tried in vain to put in place over the weekend. The so-called “top hat” dome has been lowered to the seabed floor and is being readied for deployment by the end of the week, BP spokesman Bryan Ferguson said.

He said BP also is trying to drill a relief well, which could take 80 more days. Within two weeks the company hopes to try to plug the leak by pumping materials like shredded tires and golf balls into the well at high pressure.

PROTESTS PLANNED

Protesters are becoming more active in Washington and the Gulf region. An activist group called Seize BP planned protests at the company’s offices and other sites across the country on Wednesday to demand the government freeze BP’s assets to ensure payment for the cleanup and compensation for those impacted.

Eleven workers were killed in the April 20 explosion that sank the rig.

A new opinion poll showed that despite the oil spill 57 percent of likely voters agree that offshore drilling “is still a safe, reliable and cost-efficient method of producing oil.” The poll also showed 53 percent thought expansion of offshore drilling will lead to increased environmental problems.

Cathy Norman of the Edward Wisner Donation, a land trust that owns the property that makes up the Port of Fourchon, the principal supply harbor for the Gulf’s deepwater oil and gas industry, said the area’s shoreline already is “disappearing at an astronomical rate.”

“The land is holding on by its fingernails. If oil gets in there and the plants all die off, we’re going to have just all water,” she said.

BP spokesman Daren Beaudo, who took reporters on a boat tour, said oil had washed ashore at three locations: Dauphin Island, Alabama; the Chandeleur Islands off Louisiana; and the South Pass-Port Eads area on a remote stretch of Louisiana’s mainland.

The National Oceanic and Atmospheric Administration forecast persistent southeast winds throughout the week, which have the potential to move new oil onshore.

Article by Tom Doggett and Steve Gorman; additional reporting by Ayesha Rascoe and David Alexander in Washington, Shaleem Thompson and Don Pessin in Venice, Louisiana, Verna Gates in Mobile, Alabama and Pascal Fletcher; writing by Deborah Charles; editing by Bill Trott.

Article appearing courtesy Reuters



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