By Matthew Bigg - Reuters - May 25, 2010
GALLIANO, La., May 24 (Reuters) - The U.S. government piled pressure on BP Plc on Monday to clean up a "massive environmental mess" in the Gulf of Mexico, and a top official said fines would definitely be imposed on the energy giant for the spreading oil spill.
The company insisted it was doing all it could to try to seal a blown-out oil well spewing hundreds of thousands of gallons (litres) of oil into the Gulf every day, a disaster that threatens to become the worst U.S. oil spill in history.
BP said it would make another attempt to plug the five-week-old leak on Wednesday, but gave it only a 60-70 percent chance of success.
BP's shares fell nearly 3 percent in London as investors waited to see whether BP's latest attempt would work. The company has now lost about 25 percent of its market value -- almost $50 billion -- since the spill began.
The head of the U.S. Environmental Protection Agency, Lisa Jackson, said the government would "absolutely" levy fines on BP over the spill.
Three of President Barack Obama's cabinet secretaries traveled to the Gulf Coast on Monday to survey what could eclipse the 1989 Exxon Valdez spill off Alaska as the worst U.S. ecological disaster.
"The potential damages in this case are much greater than the Exxon Valdez," said Brent Coon, an attorney who represents a survivor of the deadly April 20 offshore rig explosion.
Coon, who was speaking at a Reuters Global Energy Summit in Houston, estimated BP's potential liability in the "hundreds of billions of dollars."
Heavy oil is already washing into fragile marshlands and wildlife refuges in Louisiana and threatening the livelihoods of Gulf Coast residents.
More than 300 seabirds have been found dead and the spewing oil is now invading teeming, vulnerable marshes and endangering sea turtles, dolphins and whales.
The government declared a "fishery disaster" in the seafood-producing states of Louisiana, Mississippi and Alabama on Monday. The seafood industry in the U.S. Gulf is worth $6.5 billion a year and is only second to the fishing industry in Alaska.
The U.S. government is pushing BP to try to contain or seal the leak as soon as possible but residents are beginning to lose heart.
"BP should be doing more," Marion Black said while attending a bingo game at a church in Port Sulfur, Louisiana. "It is still affecting a lot of people and all of the oyster people and the shrimp people, they are losing money."
There appeared, however, to be signs of disagreement among U.S. officials about just how aggressively the administration should be pressing BP over what Obama has called an unprecedented environmental catastrophe for the United States.
The administration's response chief for the disaster, Coast Guard Admiral Thad Allen, seemed to take issue with Interior Secretary Ken Salazar's threat a day earlier to push BP "out of the way" if it did not do enough to stop the leak.
"To push BP out of the way would raise the question of 'replace them with what?'" Allen said at a White House news conference.
BP was "exhausting every technical means possible" to meet its legal responsibility to cap the well and contain the spreading oil, he said.
POLITICAL HOT POTATO
The company was on the defensive on Monday against the harsh criticism from the Obama administration.
"I don't know of anything else we could do, but if the government felt there were other things to do it is clearly within their power to do that," BP Chief Operations Officer Doug Suttles told reporters.
The oil spill is a political hot potato for the Obama administration ahead of a November election that is widely expected to erode Democrats' control of the U.S. Congress. Analysts warn that voters may punish Democrats regardless of who is ultimately deemed responsible for the mess.
The latest CNN/Opinion Research Corporation poll found that 51 percent of Americans were unhappy with Obama's handling of the spill that was sparked by an explosion on April 20. The poll was based on telephone interviews with just over 1,000 people between May 21-23.
Louisiana Governor Bobby Jindal, who has been critical of the federal government's response, again called for more equipment, especially booms, to help stop the oil from making landfall. He said 70 miles (113 km) of his state's coastline had been affected by the oil spill.
Louisiana's marshes are nurseries for shrimp, oysters, crabs and fish. Fishing is now banned in a large swath of the Gulf because of the spill.
During a tour of affected areas of the Gulf coast, Salazar assured residents the government would hold BP accountable for the economic hardship the spill had imposed on them.
"We will keep our boot on their neck until the job gets done," Salazar told reporters. "This is a BP mess, it is a horrible mess and it is a massive environmental mess."
Salazar said an ongoing investigation by U.S. authorities would hold the company accountable "both civilly and in whatever way is necessary," appearing to leave open the possibility of a criminal inquiry.
Asked about the possibility of a criminal investigation, BP CEO Tony Hayward said: "There will be all sorts of investigations following this. Rightly, and we will deal with them as they come."
"TOP KILL" PLANNED FOR WEDNESDAY
A report on the disaster that will influence whether the Interior Department resumes issuing offshore drilling permits will be sent to Obama on Thursday, the White House said.
BP said the spill, triggered by an April 20 explosion that sank the Deepwater Horizon rig and killed 11 workers, had cost it $760 million so far. It also pledged up to $500 million on Monday toward studying the impact of the spill.
In its latest attempt to plug the leak, BP plans to inject heavy fluids and then cement into the seabed well to block oil flow in a so-called "top kill" operation on Wednesday.
BP executives have warned there is "no certainty" that the containment efforts will be successful, because they have never been attempted at the depths -- a mile (1.6 km) down -- where the well is located.
The company has estimated that about 5,000 barrels (210,000 gallons/795,000 litres) have been leaking every day, although some scientists have given much higher numbers for the size of the leak -- up to 70,000 and even 100,000 barrels (4.2 million gallons/15.9 million litres) per day.
Suttles said if the "top kill" operation did not work, the company would attempt to put a "top hat" containment device over the larger leak to try to capture most of the oil and pipe it up to a tanker on the surface. (Additional reporting by Sarah Young in London, Susan Heavey, Alister Bull, Steve Holland and Matt Spetalnick in Washington; Pascal Fletcher in Miami, Tom Bergin and Chris Baltimore in Houston; Sharon Reich in Port Sulfur, Louisiana; Writing by Pascal Fletcher and Ross Colvin; Editing by Sandra Maler)