Spill Relief Well Weeks Away, Hurricane Hinders Cleanup
A relief well that might divert the gushing Gulf of Mexico oil leak is still weeks from completion, a top U.S. official said on Wednesday, as the season's first Atlantic hurricane disrupted cleanup efforts.
U.S. lawmakers also took a step toward making oil companies face unlimited liabilities from offshore spills like the one devastating the Gulf coast. Hurricane Alex was delaying BP's plans to boost containment capacity at its leaking undersea well and threatening to push more oil-polluted water onto U.S. shores. A relief well, one of two being drilled, is less than 1,000 feet (330 meters) from its target but will still take several weeks to reach the spewing oil pipe, U.S. Interior Secretary Ken Salazar told U.S. lawmakers.
Speaking at a House of Representatives Resources Committee hearing, Salazar said the relief well was now just over 17,000 feet deep and it had a target depth of almost 18,000 feet. Salazar's timetable was in line with BP's own statements, but there had been speculation earlier this week that the relief well link could be established earlier.
The Gulf oil spill disaster is in its 73rd day, with environmental and economic costs to tourism, wildlife, fishing and other industries mounting and the future of BP, the London-based energy giant, far from clear. Salazar said he is working hard to finalize a new offshore drilling moratorium after a federal court struck down the administration's initial six-month ban, but he would not say when the new moratorium would be issued.
"We believe the moratorium was correct when we put it in place. We believe it is still correct," he said, and suggested drilling would be allowed in well-known offshore fields.
International Help
With strong winds, waves as high as 12 feet and heavy rains on the way, officials said controlled burns of oil on the ocean, flights spraying dispersant chemicals and booming operations were on hold. The State Department said it would accept offers of help from a dozen countries and international agencies to contain and clean up the spill, including two high-speed skimmers and a fire containment boom from Japan.
A U.S. Senate committee voted on Wednesday to eliminate limits on liability that oil companies would face for oil spill damages. Companies currently enjoy a $75 million cap for compensating local communities for economic losses and for cleaning up environmental damage. The change, if approved and enacted into law, would apply retroactively to BP.
Democrats in both the Senate and House of Representatives have made the legislation a top priority. Some Republicans, however, say it will stop small U.S. companies from drilling and open the door to more big foreign operators. BP has said it will cover all costs of its Gulf oil spill. It has agreed to establish a $20 billion fund, but claims are expected to easily eclipse that sum.
Separately, Michael Bromwich, the new head of the U.S. agency overseeing offshore drilling, told lawmakers a record of "bad performance, deadly performance" by an oil company should be considered "a relevant factor" when the government was deciding whether to award drilling leases. Bromwich heads the the Interior Department's Bureau of Ocean Energy Management, Regulation and Enforcement, formerly known as the Minerals Management Service. Bromwich did not specifically refer to BP. However, his comments followed a strong denunciation of BP by Representative George Miller, who said the company should be barred from offshore drilling because of its poor safety record.
"What I'm worried about is the ethics of this company," he said. "They have killed their workers before."
Tougher Approach?
In what may signal a generally tougher approach to BP and other oil companies, the Interior Department said on Wednesday it fined BP a civil penalty of $5.2 million for submitting "false, inaccurate, or misleading" reports for energy output on Native American tribal lands in Colorado.
"It is simply unacceptable for companies to repeatedly misreport production, particularly when it interferes with the auditing process," Bromwich said. BP's market capitalization has shrunk by about $100 billion since its Deepwater Horizon drilling rig sank in 5,000 feet (1,525 metres) of water on April 22, two days after an explosion and fire killed 11 workers.
The company's shares have lost more than half their value but have seen bargain-hunting this week as well as buying sparked by talk of takeover bids, reflecting a view that its massive global energy assets provide long-term value despite its current problems.
