Friday, April 30, 2010

BP Gulf Oil Spill May Be Environmental & Economic Disaster

Apr 30: At a press conference on the current economic conditions, President Obama delivered an update on the worsening conditions at what may develop to be the largest U.S oil spill ever [See WIMS 4/26/10]. The Gulf of Mexico BP oil spill, leaking 5,000 barrels of oils per day, is beginning to come ashore in Louisiana and is nearing the coast of Mississippi, Alabama and the panhandle of Florida. Winds blowing from south to north, which are expected to last all weekend, are making the situation worse.
    President Obama said, "I have dispatched the Secretaries of Interior and Homeland Security, as well as the Administrator of the EPA, my Assistant for Energy and Climate Change Policy, and the NOAA Administrator to the Gulf Coast to ensure that we continue to do everything necessary to respond to this event. And I expect their reports from the ground today.

    "As I said yesterday, BP is ultimately responsible under the law for paying the costs of response and cleanup operations, but we are fully prepared to meet our responsibilities to any and all affected communities. And that's why we've been working closely with state and local authorities since the day of the explosion. There are now five staging areas to protect sensitive shorelines; approximately 1,900 federal response personnel are in the area; and more than 300 response vessels and aircraft on the scene 24/7. We've also laid approximately 217,000 feet of protective boom, and there are more on the way.

    "I've order Secretary Salazar to conduct a thorough review of this incident and report back to me in 30 days on what, if any, additional precautions and technologies should be required to prevent accidents like this from happening again. And we're going to make sure that any leases going forward have those safeguards. We've also dispatched teams to the Gulf to inspect all deepwater rigs and platforms to address safety concerns.

    "So, let me be clear. I continue to believe that domestic oil production is an important part of our overall strategy for energy security, but I've always said it must be done responsibly, for the safety of our workers and our environment. The local economies and livelihoods of the people of the Gulf Coast as well as the ecology of the region are at stake. And we're going to continue to update the American people on the situation in the Gulf going forward."

    According to an April 30, update from the unified command a comprehensive oil well intervention and spill-response plan continues following the April 22 sinking of the Transocean Deepwater Horizon drilling rig 130 miles southeast of New Orleans. Nearly 2,000 personnel are involved in the response effort with additional resources being mobilized as needed. The Federal government has been fully engaged in the response since the incident occurred April 20. The Minerals Management Service remains in contact with all oil and gas operators in the sheen area. Currently, no production has been curtailed as a result of the response effort.
    Incident Facts include: More than 217,000 feet of boom (barrier) has been assigned to contain the spill.  An additional 305,760 feet is available; To date, the oil spill response team has recovered 20,313 barrels (853,146 gallons) of an oil-water mix and are continuing recovery operations; 75 response vessels are being used including skimmers, tugs, barges and recovery vessels; 139,459 gallons of dispersant have been deployed and an additional 51,000 gallons are available; Five staging areas are in place and ready to protect sensitive shorelines -- BiloxiMS, PensacolaFL, Venice, LA, PascagoulaMS, and TheodoreAL; A sixth staging area is being set up in Port Sulphur, LA; Weather conditions for April 30 - Winds from the southeast at 20 knots, 5 - 7 seas with slight chance of Friday afternoon showers; 126 people were on the Deepwater Horizon drilling rig when the incident occurred; 11 remain unaccounted for; 17 were injured, 3 of them critically; 1 injured person remains in the hospital.
    In further Congressional developments, Representative Edward Markey (D-MA) sent a formal notice to the heads of America's top five oil companies requesting them to appear soon before his Select Committee on Energy Independence and Global Warming. The exact date and time of the hearing will be announced soon. Representative Markey said, "From the health of our economy to the health of our environment, it's time for the American public to hear from the oil companies. Their opinions and answers on the issues of energy policy are vital given the push in Congress to construct a comprehensive energy independence strategy for our nation."
    Markey indicated in a release that the Gulf of Mexico oil spill, which is now leaking at a rate of 5,000 barrels of oil per day, could by next week exceed the size of the Santa Barbara oil spill of 1969. This accident follows the release of thousands of miles of coastline by the Obama administration for potential new offshore drilling. Meanwhile, Markey indicated that gas and oil prices have continued to rise, even as American families and businesses are beginning to recover from a recession. The average price of gasoline has now crept towards three dollars, averaging nearly $2.90 per gallon, an increase of about 85 cents compared to this time last year.
    Markey said, "Four dollar gasoline helped break our economy's back. And now, just as we are starting a recovery, the price of gas is creeping back towards three dollars, threatening the budgets of families and small businesses across the nation. We need to craft a comprehensive strategy that protects consumers, and our nation's oil companies must join us in that effort."
    Markey also indicated that oil profits are also up for the top five oil companies -- Exxon Mobil, BP, ConocoPhillips, Shell and Chevron. Exxon Mobil reported a quarterly profit increase of 38 percent, or $6.3 billion. BP, which owns the sunken rig, reported a first quarter net profit of $6.08 billion, an increase of 137 percent. ConocoPhillips reported increased earnings of $2.1 billion for the first quarter. Shell announced profits of $4.8 billion, rising by 60 percent. Chevron will announce its earnings report April 30.
    On April 28, Representative Henry Waxman (D-CA), Chair of the House Energy & Commerce Committee, and Oversight and Investigations Subcommittee Chairman Bart Stupak (D-MI) sent letters to BP America and Transocean Ltd., the two companies involved in the explosion and oil spill. The Committee is investigating the adequacy of the companies' risk management and emergency response plans for accidental oil and gas releases at the Deepwater Horizon drilling rig and other offshore deep water or ultra-deep water drilling facilities. The Committee has requested that the companies provide a number of documents and plans by May 14, 2010, and to advise the Committee by May 4, as to whether they will comply with the request on a voluntary basis [See WIMS 4/28/10].
    In an April 29 letter to President Obama, Florida Democratic Senator Bill Nelson said, ". . .if the spill continues for a month it may be nearly as large as the Exxon Valdez. If the crude leaking from the well starts washing ashore in the coming days, it may be an environmental and economic disaster that wreaks havoc for commercial fishing and tourism along the Gulf of Mexico coast. . . I'm asking that you also call for an immediate halt to test wells and all other exploratory operations in coastal waters. Such a pause should remain in effect pending the outcome of federal investigations into the cause of this incident and the identification of ways to prevent something similar fro happening again. . ."
    Nelson's letter indicates that the Interior Department (DOI) in 2000 issued an alert calling for "reliable backup systems" in the event of a rig blowout. He said a decision was made in 2003 not to call for the "additional line of defense" and he has requested the DOI Inspector General to investigate the matter.
    The Senate Energy and Natural Resources Committee, Chaired by Senator Jeff Bingaman (D-NM) with Ranking Member Lisa Murkowski (R-AK), which has jurisdiction over offshore energy development, will hold a hearing May 6 to review current issues related to offshore oil and natural gas development, including the Department of the Interior's recent five-year planning announcements and the accident in the Gulf of Mexico. Interior Secretary Ken Salazar will testify.
    Access the President's statement (click here). Access further updates on a joint companies and government unified command website (click here). Access official updates on Twitter (click here). Access official updates on Facebook (click here). Access a release from Markey (click here). Access links to the letter from Waxman and Stupak (click here). Access the letter from Senator Nelson (click here). Access extensive links to additional information on Senator Nelson actions related to offshore drilling (click here). Access the Presidential press briefing on 4/29 with statements from various agency heads and Q&A (click here).

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