BP reaffirms vow to pay for oil spill cleanup, damages

by

Published: May 3,2010

Tags: offshore drilling, oil and gas, oil spill

GULF OF MEXICO — BP PLC said today that it would pay for all the cleanup costs from a massive oil spill in the Gulf of Mexico that could continue spewing crude for at least another week.

The company posted a fact sheet on its Web site saying it took responsibility for the response to the Deepwater Horizon spill and would pay compensation for legitimate claims for property damage, personal injury and commercial losses.

“We are responsible, not for the accident, but we are responsible for the oil and for dealing with it and cleaning the situation up,” chief executive Tony Hayward said today on ABC’s “Good Morning America.” He said the equipment that failed on the rig and led to the spill belonged to owner Transocean Ltd., not BP, which operated the rig.

Meanwhile, Hayward said chemical dispersants seem to be having a significant impact keeping oil from flowing to the surface, though he did not elaborate.

The update on the dispersants came as BP was preparing a system never tried nearly a mile under water to siphon away the geyser of crude from a blown-out well a mile underwater. However, the plan to lower 74-ton, concrete-and-metal boxes being built to capture the oil and siphon it to a barge waiting at the surface will need at least another six to eight days to get it in place.

Officials also were trying to cap one of the three leaks to make it easier to place the first box one the sea floor.

Crews continued to lay boom in what increasingly feels like a futile effort to slow down the spill, though choppy seas have made that difficult and rendered much of the oil-containing gear useless.

“I’ve been in Pensacola and I am very, very concerned about this filth in the Gulf of Mexico,” Florida Gov. Charlie Crist said at a fundraiser for his U.S. Senate campaign Sunday night. “It’s not a spill, it’s a flow. Envision sort of an underground volcano of oil and it keeps spewing over 200,000 gallons every single day, if not more.”

Fishermen from the mouth of the Mississippi River to the Florida Panhandle got the news that more than 6,800 square miles of federal fishing areas were closed, fracturing their livelihood for at least 10 days and likely more just as the prime spring season was kicking in. The slick also was precariously close to a key shipping lane that feeds goods and materials to the interior of the U.S. by the Mississippi River.

Even if the well is shut off in a week, fishermen and wildlife officials wonder how long it will take for the Gulf to recover. Some compare it to Hurricane Katrina, which Louisiana is still recovering from after nearly five years.

“My kids will be talking about the effect of this when they’re my age,” said 41-year-old Venice charter boat captain Bob Kenney.

Everything engineers have tried so far has failed. After the April 20 oil rig explosion, which killed 11 people, the flow of oil should have been stopped by a blowout preventer, but the mechanism failed. Efforts to remotely activate it have proven fruitless.

The manufacturer of the fail-safe device on the oil well has $500 million in liability insurance for legal claims.

Cameron International Corp. says in a statement that authorities are still investigating and it has already been named in several lawsuits. It said it cannot predict if it has liability for the accident that is threatening the U.S. coast from Louisiana to Florida.

The Houston-based company said in a release to investors and regulators that it manufactured the blowout preventer used on the undersea oil well when an explosion and fire destroyed the rig, which was owned by Transocean, Ltd. and was drilling for BP PLC.

Cameron has been named among other companies in a first rush of lawsuits seeking damages for the rig accident and oil spill.

Still, the oil keeps spewing, and could keep gushing for months until a second well can be dug to relieve pressure from the first.

Besides the immediate impact on Gulf industries, shipping along the Mississippi River could soon be limited. Ships carrying food, oil, rubber and much more come through the Southwest Pass to enter the vital waterway.

Shipment delays — either because oil-splattered ships need to be cleaned off at sea before docking or because water lanes are shut down for a time — would raise the cost of transporting those goods.

“We saw that during Hurricane Katrina for a period of time — we saw some prices go up for food and other goods because they couldn’t move some fruit down the shipping channels and it got spoiled,” PFGBest analyst Phil Flynn said.

The Port of New Orleans said projections suggest the pass will be clear through Tuesday.

President Barack Obama toured the region Sunday, deflecting criticism that his administration was too slow to respond and did too little to stave off the catastrophe.

A piece of plywood along a Louisiana highway had these words painted on it: “OBAMA SEND HELP!!!!”

The blessing of the boats is normally a joyous kickoff to the spring fishing season in St. Bernard Parish. But this year, it had more the air of a funeral.

Some years, as many as 200 craft, most of them working boats, lined up at the Gulf Outlet Marina to be sprinkled with holy water by a priest. On Sunday, only four boats floated by — and not one a commercial vessel.

Capt. Doogie Robin, 84, sat at a bar, sipping a Budweiser from the jaws of an alligator-head beer cozy. He runs eight oyster boats.

“Katrina really hit us hard,” he said. “And this here, I think this is going to finish us now. I think this will wipe us off the map.”

The Coast Guard and BP have said it’s nearly impossible to know exactly how much oil has gushed since the blast, though it has been roughly estimated to be at least 200,000 gallons a day.

At that rate, it would eclipse the 1989 Exxon Valdez tanker spill — which dumped 11 million gallons off the Alaska coast — as the worst U.S. oil disaster in history in a matter of weeks.

Even if the oil stays mostly offshore, the consequences could be dire for sea turtles, dolphins and other deepwater marine life — and microscopic plankton and tiny creatures that are a staple of larger animals’ diets.

Moby Solangi, director of the Institute for Marine Mammal Studies in Gulfport, Miss., said at least 20 dead sea turtles were found on the state’s beaches. He said it’s too soon to say whether oil contamination killed them but that it is unusual to have them turning up across such a wide stretch of coast, nearly 30 miles.

Some experts also have said oil could get into the Gulf Stream and flow to the beaches of Florida — and potentially whip around the state’s southern tip and up the Eastern Seaboard. Tourist-magnet beaches and countless wildlife could be ruined.

Obama has halted any new offshore drilling projects unless rigs have new safeguards to prevent another disaster.

The containment boxes being built were not part of BP’s original response plan. The approach has been used previously only for spills in relatively shallow water. Coast Guard Adm. Thad Allen said engineers are still examining whether the valves and other systems that feed oil to a ship on the surface can withstand the extra pressures of the deep.

BP was trying to cap the smallest of three leaks with underwater robots in the hope it will make it easier to place a single oil-siphoning container over the wreck. One of the robots cut the damaged end off a pipe at the smallest leak Sunday and officials were hoping to cap it with a sleeve and valve, Coast Guard spokesman Brandon Blackwell said Monday. He did not know how much oil was coming from that leak.

“We see this as an opportunity to simplify the seafloor mission a little bit, so we’re working this aggressively,” BP spokesman Steve Rinehart said.

BP has not said how much oil is beneath the seabed the Deepwater Horizon rig was tapping when it exploded. A company official, speaking on condition of anonymity because he was not authorized to discuss the volume of reserves, confirmed reports that it was tens of millions of barrels. Bob Fryar, senior vice president for BP in Angola, said any numbers being thrown out are just estimates at best.

Peter Young has worked nearly 18 years as a fishing guide and said he’s afraid his way of life may be slipping away. The government has overreacted by shutting down vital fishing areas in the marshes, he said.

Until he sees oil himself, Young will keep fishing the closed areas.

“They can take me to jail,” he said. “This is our livelihood. I’m not going to take customers into oil, but until I see it, I can’t sit home and not work.”

[RSS Feed] [del.icio.us]



To sign up for Mississippi Business Daily Updates, click here.

POST A COMMENT

 

Twang & Tourism: The Country Music Trail

Our annual "Come See Us" magazine offers ideas for spots in Mississippi ranging from golf to culture to history to food. Click the photo for ideas, stories and access to the digital edition of this year's magazine.

FOLLOW THE MBJ ON TWITTER

Top Posts & Pages

%d bloggers like this: