Day 72 BP Oil Spill Update: Dispersant Analyses; Foreign Assistance

Jun 30: Even though hurricane Alex is not a direct threat to the immediate oil spill area in the Gulf, it continues to cause problems for the recovery and cleanup operations due to rough waters with waves up 5-7 feet. Alex is predicted to reach landfall in Mexico overnight. Skimming operations have been very limited the last two days and will likely extend to the weekend.

    BP reports that for the last 12 hours on June 29 (noon to midnight), approximately 8,545 barrels of oil were collected and approximately 4,065 barrels of oil and 28.7 million cubic feet of natural gas were flared. On June 29, total oil recovered was approx. 25,220 barrels (17,025 barrels of oil were collected; 8,195 barrels of oil were flared; and 57.4 million cubic feet of natural gas were flared). Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 486,700 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 508,700 barrels.

    On June 30, U.S. EPA released peer reviewed results from the first round of its own independent toxicity testing on eight oil dispersants. EPA conducted testing to ensure that decisions about ongoing dispersant use in the Gulf of Mexico continue to be grounded in the best available science. EPA's says the results indicated that none of the eight dispersants tested, including the product in use in the Gulf, displayed biologically significant endocrine disrupting activity. While the dispersant products alone -- not mixed with oil -- have roughly the same impact on aquatic life, JD-2000 and Corexit 9500 were generally less toxic to small fish and JD-2000 and SAF-RON GOLD were least toxic to mysid shrimp. EPA indicated that while this is important information to have, additional testing is needed to further inform the use of dispersants.
 
    EPA Administrator Lisa Jackson said, "EPA is performing independent tests to determine the potential impacts of various dispersants. We will continue to conduct additional research before providing a final recommendation. We want to ensure that every tool is available to mitigate the impact of the BP spill and protect our fragile wetlands. But we continue to direct BP to use dispersants responsibly and in as limited an amount as possible." 
 
    EPA said it continues to carefully monitor BP's use of dispersant in the Gulf. Dispersants are generally less toxic than oil and can prevent some oil from impacting sensitive areas along the Gulf Coast. EPA believes BP should use as little dispersant as necessary and, on May 23, Administrator Jackson and then-Federal On-Scene Coordinator Rear Admiral Mary Landry directed BP to reduce dispersant usage by 75 percent from peak usage. EPA and the Coast Guard formalized that order in a directive to BP on May 26. Over the next month BP reduced dispersant use 68 percent from that peak.
 
    Before directing BP to ramp down dispersant use, EPA directed BP to analyze potential alternative dispersants for toxicity and effectiveness. BP reported to EPA that they were unable to find a dispersant that is less toxic than Corexit 9500, the product currently in use. Following that, EPA began its own scientific testing of eight dispersant products on the National Contingency Plan Product Schedule (NCP-PS). Those dispersant products are: Dispersit SPC 1000, Nokomis 3-F4, Nokomis 3-AA, ZI-400, SAF-RON Gold, Sea Brat #4, Corexit 9500 A and JD 2000. Today's results represent the first stage of that effort. EPA tested these eight products for endocrine disrupting activity and potential impacts on small fish and mysid shrimp.

    On June 29, the National Incident Command and the Federal On Scene Coordinator indicated that they had determined that there is a resource need for boom and skimmers that can be met by offers of assistance from foreign governments and international bodies. The U.S. State Department (DOS) indicated that the U.S. will accept 22 offers of assistance from 12 countries and international bodies, including two high speed skimmers and fire containment boom from Japan. DOS said, "We are currently working out the particular modalities of delivering the offered assistance. Further details will be forthcoming once these arrangements are complete."

 

    The 27 countries which have offered the U.S. Government assistance are: the Governments of Belgium, Canada, China, Croatia, Denmark, El Salvador, France, Germany, Ireland, Israel, Italy, Japan, Kenya, the Republic of Korea, Mexico, the Netherlands, Norway, Portugal, Qatar, Romania, Russia, Spain, Sweden, Tunisia, the United Arab Emirates, the United Kingdom, and Vietnam. The international bodies offering assistance are: the European Maritime Safety Agency, the European Commission's Monitoring and Information Centre, the International Maritime Organization, and the Environment Unit of the United Nations Office for the Coordination of Humanitarian Affairs and the United Nations Environment Program. DOS has released a chart of offers of assistance that the U.S. has received from other governments and international bodies.

 

    Access additional information on BP activities from the BP response website (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access a release from EPA on the dispersant analyses (click here). Access the first round of dispersant test results (click here). Access a release from DOS and link to the chart of foreign assistance (click here).

White House Calls For Energy Bill Including Climate Provisions

Jun 29: Following President Obama meeting with key Republican and Democratic Senators on the subject of comprehensive energy and climate legislation, Carol Browner, Assistant to the President for Energy and Climate Change issued a call to the public via a White House email list and blog posting saying  the Gulf oil spill disaster is a "wake-up call" for a "new strategy for a clean energy future, including passing comprehensive energy and climate legislation." She said, "I joined the President at a meeting with Senators from both parties to discuss how to move forward. We also want to hear from you. . ."

 

    She said, "A lot of Americans are asking what this comprehensive energy reform will look like and whether we can really move towards a clean energy future. This afternoon at 4 PM EDT, Heather Zichal, Deputy Assistant to the President for Energy and Climate Change, will host a live chat on WhiteHouse.gov to talk about this issue. . . Shifting to a clean energy economy won't be easy. For decades, we have grappled with the issue of how to end our addiction to fossil fuels. And for decades, we have lacked the political will and courage to take this important step towards securing our environment, our economy and our security.

    "To anyone who thinks this can't be done, take a look at President Obama's track record of working with Congress to deliver the change that our country needs. Here are three examples: The health care reforms of the Affordable Care Act bring the stability and security for American families that seven Presidents tried -- and failed -- to deliver; The Recovery Act is widely regarded as a critical measure that prevented another depression and saved or created more than 2 million jobs; Reform of student loans makes higher education more affordable, allowing students to get loans without relying on large banks as unnecessary middlemen. Now is the time to work with the same determination on comprehensive energy reform. . ."

    A brief statement from the White House regarding the meeting with Senators indicated, "The meeting the President hosted with a bipartisan group of Senators was a constructive exchange about the need to pass energy and climate legislation this year that lasted more than an hour-and-a-half. The President made clear his view that a full transition to clean energy will require more than just the government action we've taken so far. It will require a national effort from all of us to change the way we produce and use energy. The President told the Senators that he still believes the best way for us to transition to a clean energy economy is with a bill that makes clean energy the profitable kind of energy for America's businesses by putting a price on pollution -- because when companies pollute, they should be responsible for the costs to the environment and their contribution to climate change. Not all of the Senators agreed with this approach, and the President welcomed other approaches and ideas that would take real steps to reduce our dependence on oil, create jobs, strengthen our national security and reduce the pollution in our atmosphere. The President said that there was a strong foundation and consensus on some key policies and the President urged the Senators to come together based on that foundation. There was agreement on the sense of urgency required to move forward with legislation and the President is confident that we will be able to get something done this year."

    Fred Krupp, President of Environmental Defense Fund (EDF) issued a statement on the White House meeting and said, "Today's White House meeting begins the final push toward passage of strong clean energy and climate legislation. Passing a bill that finally deals with our oil addiction will require strong presidential leadership – and that's just what we saw today. Every president since Richard Nixon has called for energy independence; now it looks like we have one who is willing to roll up his sleeves to get it done. The President's call today for clean energy legislation with limits on carbon pollution was a clear sign that he wants a strong bill.

    "Transitioning America to clean energy won't be easy -- Big Oil and their allies have a lot of money and a lot of power -- but we believe the situation is now urgent enough that Washington has no choice but to act. With millions of gallons of crude spilled in the Gulf, and a billion dollars a day going overseas for imported oil, the moment for real action has arrived. We believe that with continued active involvement by the President himself, and Senators from both parties engaged in serious talks about what's best for the country, we can pass a strong clean energy and climate bill in the weeks ahead."

    Access the blog posting from Browner (click here). Access the White House statement on the meeting (click here). Access the statement from EDF (click here). Access the White House live chat on energy and climate legislation today at 4 PM EDT (click here).

Day 70 BP Oil Spill Update: Alex Veers West; BP Spends $2.65 Bln

Jun 28: It now appears that the Gulf recovery and cleanup operations have dodged a big bullet as the tropical storm, now hurricane Alex, is predicted to reach landfall in Mexico or southern Texas. However, precautions are still being taken as high waves may reach the recovery and cleanup area and could disrupt or delay operations.

 

    BP reports that for the last 12 hours on June 27 (noon to midnight), approximately 8,340 barrels of oil were collected and approximately 4,100 barrels of oil and 28.8 million cubic feet of natural gas were flared. On June 27, total oil recovered was approx. 24,450 barrels (16,275 barrels of oil were collected; 8,175 barrels of oil were flared; and 56.2 million cubic feet of natural gas were flared). Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 438,000 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 460,000 barrels.

 

    BP indicates that preparations continue for the next step in containment operations. Work on the first floating riser containment system, which will be connected to the Helix Producer vessel, remains on schedule. It is currently anticipated that this system will be available to begin first operations at the end of June or in early July. The system is intended to provide additional oil containment capacity of approximately 20,000-25,000 barrels a day. Together with the LMRP cap and Q4000 systems, the addition of this new system should increase total oil containment capacity to 40,000-50,000 barrels a day. The floating riser system is designed to allow more rapid disconnection and reconnection of the system, reducing the time that collection may be impacted in the case of, for example, inclement weather.

 

    Plans also are being developed for potential additional containment capacity and flexibility, including a second floating riser system and additional capacity through a new cap on the BOP. These projects are currently anticipated to be available to begin operations around mid-July.

 

    The first relief well, which started drilling May 2, has reached a measured depth of 16,546 feet and has successfully completed a second "ranging" run using specialist equipment inserted into the well to help more precisely locate the MC252 well. Drilling and ranging operations will continue over the next few weeks as the well progresses towards the target intercept depth of approximately 18,000 feet. Once intercept has occurred, operations are expected to begin to kill the flow of oil and gas from the reservoir by pumping specialized heavy fluids down the relief well.The second relief well, which started May 16, is at a measured depth of 12,038 feet. Both wells are still estimated to take approximately three months to complete from commencement of drilling.

 

    To date, more than 80,000 claims have been submitted and almost 41,000 payments have been made, totaling more than $128 million. BP reports that the cost of the response to date amounts to approximately $2.65 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs. The company stock is now trading at around $28 per share and the current market value has dropped to $87 billion -- Down about $100 billion since the tragedy began on April 20.

 

    Access the latest status update from BP (click here). Access slides on technical update from June 28 on the Subsea Containment & Relief Wells (click here). Access additional information on BP activities from the BP response website (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here).

Day 67 BP Oil Spill Update: Browner & BP; Possible Tropical Storm

Jun 25: A statement from the White House indicates that, "Assistant to the President for Energy and Climate Change Carol Browner met with BP executives Bob Dudley, Lamar McKay, David Nagel and Karen St. John earlier today to discuss a number of key issues including containment, redundancy, claims and scientific monitoring. The meeting with Dudley was important to do given his new role for BP in the Gulf restoration. Browner reiterated the President's commitment to the people of the Gulf, that we are not going to rest or be satisfied until the leak is stopped at the source, the oil in the Gulf is contained and cleaned up, and the people of the Gulf are able to go back to their lives and their livelihoods. Browner reminded them that we will be judging their work and response based on that bar, no exceptions."

    BP reported that for the last 12 hours on June 24 (noon to midnight), approximately 8,570 barrels of oil were collected and approximately 3,905 barrels of oil and 27.5 million cubic feet of natural gas were flared. On June 24, total oil recovered was approx. 23,725 barrels (15,785 barrels of oil were collected; 7,940 barrels of oil were flared; and 54.7 million cubic feet of natural gas were flared). Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 366,000 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 388,000 barrels.

    BP also reported that work on the first relief well, which started May 2, continues. The well reached a depth of 16,275 feet on June 23 before the drillstring was removed from the well to carry out the first "ranging' run" using wireline. During the ranging run, the MC252 well was successfully detected. Subsequent ranging runs will be needed to more precisely locate the well. Drilling and ranging operations will continue over the next few weeks towards the target intercept depth of approximately 18,000 feet, when "kill" operations are expected to begin. The second relief well, which started May 16, is drilling ahead at a measured depth of 10,500 feet. Both wells are still estimated to take approximately three months to complete from commencement of drilling.

    The Unified Command (UC) reported that SBA has approved 101 economic injury assistance loans to date, totaling more than $6 million for small businesses in the Gulf Coast impacted by the BP oil spill. Additionally, the Agency has granted deferments on 481 existing SBA disaster loans in the region, totaling more than $2.2 million per month in payments. Additionally, UC reported that to date, 75,106 claims have been opened, from which more than $125.9 million have been disbursed. No claims have been denied to date. There are 787 claims adjusters on the ground.

    The latest concern for the oil spill recovery and cleanup operation is the possibility of a tropical storm. The UC reported it needed 5 days notice to began preparation of a shutdown of operations. Weather forecasters are indicating that a tropical storm may be developing and could affect the spill area in about 5-7 days. The storm would require curtailing the oil recovery and cleanup operations for several days which would leave up to 60,000 barrels of oil per day flowing into the Gulf and could create havoc with boom placements and skimming operations. Currently, more than 6,200 vessels are responding on site, including skimmers, tugs, barges, and recovery vessels to assist in containment and cleanup efforts -- in addition to dozens of aircraft, remotely operated vehicles, and multiple mobile offshore drilling units. Approximately 2.6 million feet of containment boom and 4.24 million feet of sorbent boom have been deployed to contain the spill.

    On June 23, Michael Bromwich, the former Department of Justice Inspector General who now leads Interior Department (DOI) reform initiatives to strengthen oversight and policing of offshore oil and gas development, announced that he will establish an investigations and review unit that will help to expedite his oversight, enforcement and re-organization mandates. Bromwich, who is the director of the newly established Bureau of Ocean Energy Management, Regulation and Enforcement (Bureau of Ocean Energy or BOE) said, "The new unit will provide us the capacity to investigate allegations of misconduct, to provide unified and coordinated monitoring of compliance with laws and regulations, and to respond swiftly to emerging and urgent issues on a Bureau-wide level and in the industry." said

    The new Bureau, established by Secretarial Order, replaced the former Minerals Management Service (MMS) which was responsible for overseeing oil and gas development on the U.S. Outer Continental Shelf. Bromwich said, "In light of the response to the Deepwater Horizon disaster, the impending reorganization of Interior's offshore oil and gas management and enforcement missions and the new Bureau's mandate to implement broad reforms, it is critical that we have an internal compliance and investigations team that can act quickly and report directly to me."

 

     Access a statement from the White House on the Browner meeting (click here). Access several release on BP activities from the BP response website (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access a release from DOI with additional details and link to the Secretarial Order (click here).

Day 66 BP Oil Spill Update: Recovery Resumes; Pensacola Hit

Jun 24: Over night, reports are that extensive oil globs rolled on to the white sand beaches of Pensacola, FL. BP reports that for the last 12 hours on June 23 (noon to midnight), approximately 2,800 barrels of oil were collected and approximately 3,910 barrels of oil and 16.9 million cubic feet of natural gas were flared. The LMRP cap was successfully reinstalled on the Deepwater Horizon's failed blow-out preventer at approximately 1830 CDT on June 23. On June 23, total oil recovered was approx. 16,830 barrels (8,300 barrels of oil were collected; 8,530 barrels of oil were flared; and 36.7 million cubic feet of natural gas were flared). Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 342,500 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 364,500 barrels.

 

     Coast Guard Adm. Thad Allen, the National Incident Commander indicated in his June 23 briefing that "an incident" earlier in the day was discovered when BP noticed that there was some kind of a gas rising through the vent that carries the warm water down that prohibits hydrates from forming. Out of abundance of caution the Discover Enterprise removed the containment cap with the riser pipe and moved away until they could assess the condition. BP later indicated that the problem was a Remotely Operated Vehicle that had bumped into one of the vents that allows the excess oil to come out and actually closed it thereby creating pressure and the backflow potentially off the water vent. The cap was off for approximately 11 hours

 

    Allen also reported that the first freestanding riser pipe has been installed that will allow increase oil recovery. BP is testing it for pressure leaks and will look at putting an anchoring system down. Allen said by potentially next Tuesday an additional production vessel may be online that is expected to increase recovery to 53,000 barrels/day.

 

    Jordan Barab, Deputy to Secretary of Labor for OSHA reported on OSHA's efforts in assuring that BP, the contractors, everyone working on the response activities are complying with health and safety standards, and with any kind of safe working conditions.  Including being supplied with the appropriate personal protective equipment, which may include gloves, coveralls, and in certain cases respirators. He said, "We have been taking samples again, of worker chemical exposures.  Again, on the beaches, in the swamps, on the boats, everywhere that workers are. And I will just let you know. . . that we have found no exposure levels to any chemicals that are of any concern."

 

    NOAA announced that it had opened more than 8,000 square miles of previously closed fishing area in the Gulf of Mexico, because the agency has not observed oil in the area. The most significant opening is an area due south of Mississippi which was closed Monday, June 21. Additionally, some smaller areas were opened off the Louisiana and central Florida coasts. The closed area now represents 78,597 square miles, which is approximately 32.5 percent of Gulf of Mexico federal waters -- down from 36 percent on June 21.

 

    Access several release on BP activities from the BP response website (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access a release from NOAA (click here).

Administration Will Appeal Deepwater Drilling Moratorium Ruling

Jun 22: Department of Interior (DOI) Secretary Ken Salazar issued a statement regarding the decision in U.S. District Court in New Orleans lifting the deepwater drilling moratorium. Salazar said, "The decision to impose a moratorium on deepwater drilling was and is the right decision. The moratorium is needed to protect the communities and the environment of the Gulf Coast, and DOJ is therefore appealing today's court ruling.

    "We see clear evidence every day, as oil spills from BP's well, of the need for a pause on deepwater drilling. That evidence mounts as BP continues to be unable to stop its blowout, notwithstanding the huge efforts and help from the federal scientific team and most major oil companies operating in the Gulf of Mexico. The evidence also continues to mount that industry needs to raise the bar on blowout prevention, containment, and response planning before deepwater drilling should continue. Based on this ever-growing evidence, I will issue a new order in the coming days that eliminates any doubt that a moratorium is needed, appropriate, and within our authorities."

    On June 22, U.S. District Judge Martin Feldman, for the Eastern District of Louisiana in New Orleans issued an opinion and order lifting the moratorium on deepwater offshore drilling (Hornbeck v. Salazar CA 10-1663) [See WIMS 6/22/10]. The Moratorium, entitled "Suspension of Outer Continental Shelf (OCS) Drilling of New Deepwater Wells," was issued by DOI on May 28, 2010, and NTL No. 2010-N04 [See WIMS 5/28/10]. The six-month moratorium applied to all drilling on the Outer Continental Shelf in water at depths greater than 500 feet."

    The Administration's decision to appeal will not be popular among many public officials and business interests in the Gulf Coast states. The American Petroleum Institute (API) immediately issued a release supporting the Judge's decision. U.S. Senator Mary Landrieu (D-LA) praised the decision and said "the Obama Administration's arbitrary six-month deepwater drilling moratorium that threatens to put 33 drilling rigs and thousands of Louisianians indirectly employed by service companies out of work."

    Senator Landrieu said, "Judge Feldman made the right decision. I strongly urge the Obama Administration not to appeal his ruling. The Administration should instead implement the recommendations that I and numerous other leaders and experts from the Gulf Coast have proposed -- all of which would result in demonstrably safer offshore practices, without the devastating impact of this blanket moratorium on new drilling. As I have already communicated to President Obama, the arbitrary moratorium is likely to have a greater negative effect on Gulf Coast families and businesses than the spill itself. Preventing new offshore drilling is far more likely to worsen, and not improve, the impacts of this spill upon both the economy and the environment of the Gulf Coast." Rather than endorsing a six-month "pause" for deepwater drilling operations in Federal waters, Sen. Landrieu identified eight recommendations in her letter to President Obama that she said could achieve the Administration's safety and oversight goals without crippling Gulf states' economies.

    Louisiana Governor Bobby Jindal (R) had filed an amicus brief in the District Court, in support of the removal of the moratorium. The brief argues that states are entitled to participate in the policy and decision-making process by the Federal government on issues relating to the exploration and development of Outer Continental Shelf minerals and requires the Secretary of Interior to cooperate with affected states. The brief states, "Inasmuch as the State of Louisiana was completely ignored by defendants in the establishment of this moratorium for alleged safety reasons, the question arises whether that failure renders Defendants' action invalid." 

    Mississippi Governor Haley Barbour (R) issued a brief statement saying, "Hopefully, the judge's ruling will go into effect quickly and be upheld on appeal. The moratorium is bad policy." Alaska Governor Sean Parnell (R) issued a statement saying, "Today's ruling by Judge Feldman is good for the nation. Unfortunately, legal action isn't going to put Alaskans to work this summer, but this decision indicates that the courts are going to uphold the law and operators can expect to be treated fairly or be able to seek recourse. We hope this sends a clear message to federal agencies to grant the permits that Shell will need to drill in the Outer Continental Shelf in 2011."

    The Center for Biological Diversity (CBD) and several other environmental groups including Sierra Club, Florida Wildlife Federation, Defenders of Wildlife and Natural Resources Defense Council said they plan to appeal a Judge's decision. CBD's Miyoko Sakashita said, "The judge's decision to lift the moratorium trades oil-industry profits for the safety of offshore workers, the long-term health of the Gulf Coast economy, and the environment. The ongoing BP catastrophe in the Gulf should be enough to justify putting an end to all new offshore drilling. It is obvious that the entire system is broken, and Big Oil lied about the risks of oil spills and its ability to respond to them."

    CBD indicated in a release that ". . .contrary to Hornbeck's claims and the judge's order, the moratorium was actually very narrowly tailored to fix regulatory problems identified by the government that lead to the BP oil spill. In fact, the moratorium only affected 33 deepwater drilling rigs, leaving the production of approximately 3,600 platforms unaffected.

    Access the statement from DOI (click here). Access a release from Sen. Landrieu and link to the letter to the President (click here). Access a fact sheet on DOI's OCS policy with links to related documents (click here). Access a release and link to the LA amicus brief (click here). Access the statement from AK Governor (click here). Access a release from CBD (click here). Access Judge Feldman's 22-page opinion (click here). Access the 3-page Order (click here). 

Day 64: BP Oil Spill: Federal Judge Lifts Drilling Ban

Jun 22: U.S. District Judge Martin Feldman in New Orleans has ruled to lift the moratorium on deepwater offshore drilling ((Hornbeck v. Salazar CA 10-1663). In his Order the Judge said, ". . .after receiving evidence at a hearing on June 21, 2010, hereby finds: (1) that plaintiffs are substantially likely to prevail on the merits of their claim for the government defendants' violations of the Outer Continental Shelf Lands Act and its implementing regulations; (2) that, in the absence of the relief requested, plaintiffs will incur immediate and irreparable harm to business including the irretrievable loss of vessels' useful life, loss of crews that have long been associated with their particular vessels, loss of shore-side teams and disruption of longstanding contractual relationships with offshore service vendors and other satellite services for the operation of its fleet, all of which is not subject to calculation; (3) that the irreparable harm to plaintiffs should the Court decline to grant the application for the relief requested outweighs the harm which the granting of such relief may cause to any legitimate interests of defendants; and (4) that the entry of this Order will serve the interests of justice and the public interest."

 

    The Court's Order requires the Department of Interior, "until a full trial on the merits is had, are hereby immediately prohibited from enforcing the Moratorium, entitled "Suspension of Outer Continental Shelf (OCS) Drilling of New Deepwater Wells," dated May 28, 2010, and NTL No. 2010-N04. . . as applied to all drilling on the OCS in water at depths greater than 500 feet. . ."

 

    The American Petroleum Institute (API) issued a statement regarding the decision and said, "We welcome Judge Feldman's decision to lift the moratorium on deepwater operations in the Gulf of Mexico. The administration acted appropriately in its immediate steps to inspect every rig in the Gulf following the Deepwater Horizon explosion. Those inspections were necessary to assure Americans that offshore operations were safe and subject to appropriate oversight. In addition, the oil and natural gas industry took immediate steps to review practices and equipment to ensure safety and environmental protection, through the formation of two industry-wide task forces. The task forces provided important insights to the Department of Interior during its earliest examination of Gulf operations.

 

    "Those task forces, and two recently created ones, are actively working to find ways to improve the safety of offshore operations, subsea well control and oil spill response. They should prove invaluable to the independent commission established by the president to investigate the Deepwater Horizon incident. Their work, and the work of the commission, will help ensure that deepwater oil and natural gas exploration and production is the safest and cleanest in the world. The moratorium was an initial reaction to concerns about the safety of offshore oil and natural gas operations. However, an extended moratorium would have a tremendous impact on the nation's energy security -- and cause significant harm to the region of the country that was already suffering from the spill -- without raising safety or improving industry procedures. With this ruling, our industry and its people can get back to work to provide Americans with the energy they need, and do it safely and without harming the environment."

 

    In other news, the Obama Administration sent a third bill for $51.4 million to BP and other responsible parties. The Federal government bills BP and the other responsible parties regularly. BP and other responsible parties have paid the first two bills in full -- totaling $70.89 million.

 

    According to information from BP, for the last 12 hours on June 21st (noon to midnight), approximately 7,150 barrels of oil were collected and approximately 5,250 barrels of oil and 27 million cubic feet of natural gas were flared. On June 21st, total oil recovered was approx. 25,830 barrels (15,560 barrels of oil were collected; 10,270 barrels of oil were flared; and 52.2 million cubic feet of natural gas were flared). Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 298,600 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 320,000 barrels. BP will provide the next update at 6:00 PMCDT on June 22, 2010.

 

    In a speech to the World National Oil Companies Congress in London describing the spill and response, BP said, "We continue to make progress. We are now containing and collecting up to 25,000 barrels of oil a day, and additional systems we are putting in place should have the capacity to contain up to 50,000 bbl/day and beyond in the coming weeks. Ultimately, we believe that the relief wells we are drilling will enable us to kill the well." In a response update, BP indicated on June 21, that work on the first relief well, which started May 2, continues and has currently reached a measured depth of 15,936 feet. The second relief well, which started May 16, is at a measured depth of 10,000 feet. Both wells are still estimated to take approximately three months to complete from commencement of drilling.

 

    To date, BP reports that over 65,000 claims have been submitted and more than 32,000 payments have been made, totaling over $105 million. The cost of the response to date amounts to approximately $2.0 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and Federal costs. Additionally, NOAA expanded the no fishing zone to 36 % of the Gulf (See related article below).

 

    Access Judge Feldman's 22-page opinion (click here). Access the 3-page Order (click here). Access various media reports on the decision (click here). Access a release from API (click here). Access the complete and lengthy speech from BP at the Oil Congress (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access the BP response website for links to visuals more information on the recovery work (click here).

Day 63: Deepwater Horizon/BP Oil Spill Update

Jun 21: Information from BP indicates that for the last 12 hours on June 20th (noon to midnight), approximately 7,780 barrels of oil were collected and approximately 4,430 barrels of oil and 25.1 million cubic feet of natural gas were flared. On June 20th, total oil recovered was approx. 23,290 barrels: (approx. 14,570 barrels of oil were collected; approx. 8,720 barrels of oil were flared & approx. 48.3 million cubic feet of natural gas were flared). BP said total recovery was slightly down on June 20th due to "shut-ins" from a lightning storm in the area of the Enterprise and Q4000 heading changes to accommodate wind shifts.

 

    In a release from BP today, the company reports that two systems continue to collect oil and gas flowing from the MC252 well and transport them to vessels on the surface. The first is the lower marine riser package (LMRP) containment cap located on top of the Deepwater Horizon's failed blow-out preventer (BOP). This system, which was installed on June 3, takes oil and gas to the Discoverer Enterprise. A second system, which started on June 16, is connected directly to the BOP and carries oil and gas through a manifold and hoses to the Q4000 vessel on the surface. The Q4000 uses a specialized clean-burning system to flare both oil and gas captured by this second system.

    On June 19, a total of approximately 11,050 barrels of oil was collected and 25.6 million cubic feet of natural gas was flared on the Discoverer Enterprise. This is less than recent averages because process facilities were shutdown for part of the day. In the same 24-hour period, 9,990 barrels of oil and 17.8 million cubic feet of natural gas were flared on the Q4000. The total volume of oil recovered from both the LMRP containment cap system and the Q4000 since they became operational is approximately 249,500 barrels. Approximately 103,000 barrels of collected oil were transferred from storage on the Discoverer Enterprise to the Overseas Cascade tanker on June 17 and June 18. The Overseas Cascade left the MC252 site on June 18.

 

    On June 20, the Unified Command reported that The Development Driller III continues to drill the first relief well to a depth of approximately 11,000 feet below the sea floor, and crews have begun the process of cementing and casing the well liner. The Development Driller II has drilled the second relief well -- a redundancy measure taken at the direction of the administration -- to a depth of approximately 5,000 feet below the sea floor.

   

    The Unified Command also reported that the Administration will continue to hold the responsible parties accountable for repairing the damage, and repaying Americans who've suffered a financial loss as a result of the BP oil spill. To date, 65,703 claims have been opened, from which more than $107.4 million have been disbursed. No claims have been denied to date. There are 720 claims adjusters on the ground.

 

    NOAA announced some preliminary finding on the extent of subsurface oil from the Deepwater Horizon/BP oil spill [See article below]. The NOAA Ship Thomas Jefferson returned to Galveston, Texas, on June 11 from an eight-day research mission which began in New Orleans on June 3, to investigate the presence and distribution of subsurface oil from and collected water samples for chemical analysis and tested the feasibility of using acoustic and flourometric scanning to help find potential pockets of subsurface oil clouds. The science team onboard included researchers from NOAA, U.S. EPA, the University of New Hampshire and the Woods Hole Oceanographic Institution.

 

    Politically, following Representative Joe Barton (R-TX) now very public apology to BP and comments characterizing the $20 billion oil spill claims fund agreement as an Administration "shakedown," the Democratic National Committee has now broadened its criticism to what they are calling the "BP 114" -- i.e. the member of the House Republican Study Committee (RSC). On June 16, one day before Rep. Barton comments, the RSC, chaired by Representative Tom Price (R-GA), issued a release calling the $20 billion agreement "Chicago-style shakedown politics." Ironically, many of the Republican members criticizing Barton's comments and some calling for him to resign his leadership position on the Energy and Commerce Committee, are members of the RSC and many are Gulf Coast Representatives [See WIMS 6/18/10].

 

    Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access the BP response website for links to visuals more information on the recovery work (click here). Access a report on the BP 114 from The Hill blog (click here).

Rep. Barton May Be Fall Guy For Republican "Shakedown" Comments

Jun 17: Representative Joe Barton (R-TX), former Chairman of the House Energy & Commerce Committee and now Ranking Member, could be stripped of his powerful Committee assignments for his widely publicized public apology to BP and his comments about being "ashamed" of the $20 billion oil spill claims fund agreement which the White House negotiated with BP. In his opening statement at the Energy and Commerce, Subcommittee on Oversight and Investigations hearing with BP CEO Tony Hayward, Barton apologized to BP and called the agreement a "shakedown."

 

    Rep. Barton issued a release with his original complete statement [now withdrawn] and said, "Now I'm going to speak totally for myself. I'm not speaking for the Republican party, I'm not speaking for anyone in the House of Representatives but myself -- I'm ashamed at what happened in the White House yesterday. I think it is a tragedy in the first proportion that a private corporation can be subjected to what I would characterize as a shakedown – in this case a $20 billion shakedown. The attorney general of the United States, who is legitimately conducting a criminal investigation and has every right to do so to protect the interests of the American people, participated in what amounts to a $20 billion slush fund. That's unprecedented in our nation's history, has no legal standing and which sets, I think, a terrible precedent for the future. . ."

 

    House Minority Leader John Boehner (R-OH) and other Republican leaders Eric Cantor (R-VA) and Mike Pence (R-IN), immediately issued a statement responding directly to Barton's comments. They said, "The oil spill in the Gulf is this nation's largest natural disaster and stopping the leak and cleaning up the region is our top priority. Congressman Barton's statements this morning were wrong. BP itself has acknowledged that responsibility for the economic damages lies with them and has offered an initial pledge of $20 billion dollars for that purpose. The families and businesspeople in the Gulf region want leadership, accountability and action from BP and the Administration. It is unacceptable that, 59  days after this crisis began, no solution is forthcoming. Simply put, the American people want all of our resources, time and focus to be directed toward stopping the spill and cleaning up the mess."

 

    Rep. Barton, widely regarded as the House Republican point-man on energy and environmental issues, returned to the hearing in the afternoon and issued a statement retract his apology and withdrawing his previous statement and issuing a replacement statement saying, "I apologize for using the term 'shakedown' with regard to yesterday's actions at the White House in my opening statement this morning, and I retract my apology to BP. As I told my colleagues yesterday and said again this morning, BP should bear the full financial responsibility for the accident on their lease in the Gulf of Mexico. BP should fully compensate those families and businesses that have been hurt by this accident. BP and the federal government need to stop the leak, clean up the damage, and take whatever steps necessary to prevent a similar accident in the future. I regret the impact that my statement this morning implied that BP should not pay for the consequences of their decisions and actions in this incident."

 

    Democrats reacted immediately to Barton's comments. In a blog posting, the White House indicated, "some in Congress have attacked this common sense step, including Congressman Joe Barton who called the agreement 'shameful' and a 'tragedy,' and apologized to BP for it during a Congressional hearing today." White House Press Secretary Robert Gibbs responded, What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small business owners and communities whose lives have been devastated by the destruction. Congressman Barton may think that a fund to compensate these Americans is a 'tragedy', but most Americans know that the real tragedy is what the men and women of the Gulf Coast are going through right now. Members from both parties should repudiate his comments. . ."

 

    Jim Manley, spokesman for Senate Majority Leader Harry Reid (D-NV), issued a statement saying, "It takes an appalling amount of chutzpah for Congressman Barton to apologize to the BP CEO this morning about Democrats' efforts to hold BP accountable. Where is his apology for the families of the 11 men who lost their lives and the industries along the Gulf that have been devastated because of this disaster? Where is his sympathy for the ecosystem in the Gulf of Mexico that will be damaged for generations because of BP's negligence? And shouldn't he be apologizing to the people of the Gulf Coast for decades of Republican policies that ignored oversight and accountability for the oil industry? Republicans should get their priorities straight:  are they going to keep protecting and apologizing for Big Oil or will they finally stand up for families and businesses whose lives have been upended by the BP oil spill?"

 

    While Rep. Barton said he was only speaking for himself, House Speaker Nancy Pelosi (D-CA) pointed out in a blog posting that Representative Tom Price (R-GA), Chairman of the Republican Study Committee (Representing over 100 Republicans in the House) said, "BP's reported willingness to go along with the White House's new fund suggests that the Obama Administration is hard at work exerting its brand of Chicago-style shakedown politics."

 

    Pelosi reported that, "Gulf Coast citizens literally applauded this announcement and a new CNN poll shows that an overwhelming majority of Americans -- 82 percent -- support the BP disaster compensation fund."

 

    In the June 16 release from the Republican Study Committee entitled, "Chicago-Style Political Shakedown," responding to the BP agreement, Rep. Price said further, ". . .in an administration that appears not to respect fundamental American principles, it is important to note that there is no legal authority for the President to compel a private company to set up or contribute to an escrow account. BP's reported willingness to go along with the White House's new fund suggests that the Obama Administration is hard at work exerting its brand of Chicago-style shakedown politics. These actions are emblematic of a politicization of our economy that has been borne out of this Administration's drive for greater power and control.  It is the same mentality that believes an economic crisis or an environmental disaster is the best opportunity to pursue a failed liberal agenda. The American people know much better."

    Access the statement from House Republican leaders (click here). Access the replacement statement from Rep. Barton (click here). Access the White House blog post and comments (click here). Access the blog posting from Speaker Pelosi (click here). Access the release from Rep. Price (click here). Access the Republican Study Committee website for a list of members (click here).

Day 59 BP Oil Spill: More On $20bn Agreement

Jun 17: Following yesterday's meeting with President Obama, BP issued a release providing further details on the agreed package of measures to meet its obligations as a responsible party arising from the Deepwater Horizon spill [See WIMS 6/16/10]. According to the release, agreement was reached to create a $20bn claims fund over the next three and a half years on the following basis:

• BP will initially make payments of $3bn in Q3 of 2010 and $2bn in Q4 of 2010. These will be followed by a payment of $1.25bn per quarter until a total of $20bn has been paid in.
• While the fund is building, BP's commitments will be assured by the setting aside of U.S. assets with a value of $20bn. The intention is that this level of assets will decline as cash contributions are made to the fund.
• The fund will be available to satisfy legitimate claims including natural resource damages and state and local response costs. Fines and penalties will be excluded from the fund and paid separately. Payments from the fund will be made as they are adjudicated, whether by the Independent Claims Facility (ICF) referred to below, or by a court, or as agreed by BP.
• The ICF will be administered by Ken Feinberg. The ICF will adjudicate on all Oil Pollution Act and tort claims excluding all Federal and state claims.
• Any money left in the fund once all legitimate claims have been resolved and paid will revert to BP.

    The fund does not represent a cap on BP liabilities, but will be available to satisfy legitimate claims. Further and more detailed terms regarding the establishment and operation of the claims fund and the ICF will be finalized and announced as soon as possible.

    BP said, "As a consequence of this agreement, the BP Board has reviewed its dividend policy. Notwithstanding BP's strong financial and asset position, the current circumstances require the Board to be prudent and it has therefore decided to cancel the previously declared first quarter dividend scheduled for payment on 21st June, and that no interim dividends will be declared in respect of the second and third quarters of 2010. The Board remains strongly committed to the payment of future dividends and delivering long term value to shareholders. The Board will consider resumption of dividend payments in 2011 at the time of issuance of the fourth quarter 2010 results, by which time it expects to have a clearer picture of the longer term impact of the Deepwater Horizon incident."

    BP said further, "The Board believes that it is right and prudent to take a conservative financial position given the current uncertainty over the extent and timing of costs and liabilities relating to the spill. BP's businesses continue to perform well, with cash flows from operations expected to exceed $30bn in 2010 at current prices and margins before taking into consideration costs related to the Deepwater Horizon spill. BP's gearing level remains at the bottom of its targeted band of 20-30 per cent. In addition, the Company has over $10bn of committed banking facilities. To further increase the Company's available cash resources, the Board intends to implement a significant reduction in organic capital spending and to increase planned divestments to approximately $10bn over the next twelve months."

 

    BP Chairman Carl-Henric Svanberg said, "We appreciated the constructive meeting conducted by the President and his senior advisers and are confident that the agreement announced today will provide greater comfort to the citizens of the Gulf coast and greater clarity to BP and its shareholders. We welcome the administration's statements acknowledging that BP is a strong company and that the administration has no interest in undermining the financial stability of BP. This agreement is a very significant step in clarifying and confirming our commitment to meet our obligations. We regret the cancellation and suspension of the dividends, but we concluded it was in the best interests of the Company and its shareholders." 

   

    In other matters, BP reported on June 17, that optimization of the dual system, LMRP Cap and the Q4000 Direct Connect, will continue over the next few days. For the last 12 hours on June 16th (noon to midnight), approximately 7,710 barrels of oil were collected and approximately 2,600 barrels of oil and 22 million cubic feet of natural gas were flared. On June 16th, a total of approximately 14,750 barrels of oil were collected and approximately 3,850 barrels of oil and 40 million cubic feet of natural gas were flared. Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approximately 179,000 barrels. In testimony before the Energy and Commerce, Subcommittee on Oversight and Investigations today, Tony Hayward, Chief Executive Officer, BP PLC said, "We expect to optimize collection over the next few days to levels well above what was previously accomplished."

 

    Also, NOAA has expanded the closed fishing area in the Gulf of Mexico to capture portions of the oil slick moving beyond the area's current northern boundary, off the Florida panhandle's federal-state waterline. The boundary was moved to Panama City Beach.The Federal closure does not apply to any state waters. Closing fishing in these areas is a precautionary measure to ensure that seafood from the Gulf will remain safe for consumers. The closed area now represents 80,806 square miles, which is approximately 33.4 percent of Gulf of Mexico federal waters. 

 

Note: In our daily report to subscribers we also reported on Three BP Gulf Oil Congressional Hearings Today; GAO's Report On Effective Independent Oversight Of Oil & Gas; and Groups Issue Statement On Climate-Energy Legislation -- all related to the BP Oil Spill.

    Access a release from BP on the $20bn commitment (click here). Access the White House fact sheet on the $20 billion funding and other funds (click here). Access a White House blog posting on the BP meeting with links to the President's remarks (click here). Access a June 16, Investor Briefing from BP (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access the BP response website for links to visuals more information on the recovery work (click here). Access details on the NOAA fish closing area (click here).

 

 

Day 58 BP Oil Spill: 60,000 Bbl/day; Oval Office Address; $20b Fund

Jun 16: At approximately 2:30 PM this afternoon, the President announced that the Administration and BP executives had reached an agreement on establishing a $20 billion dollar fund to be administered by an impartial third party to begin processing claims for damages and losses as a result of the Gulf oil spill. The President said the $20 billion is not a cap and does not limit BP's liability, responsibility or legal challenges. The funding would be provided over a four-year period at a rate of $5 billion per year, including $5 billion within 2010. Additionally, a $100 million fund will be established for unemployed oil workers (See link below for details).

 

    On June 15, in his first Oval Office address of his presidency, President Obama outlined his commitment to fighting the full impacts of the BP oil spill with everything we've got for as long as it takes. In his prime time address the President said, "The millions of gallons of oil that have spilled into the Gulf of Mexico are more like an epidemic, one that we will be fighting for months and even years. But make no mistake: We will fight this spill with everything we've got for as long as it takes. We will make BP pay for the damage their company has caused. And we will do whatever's necessary to help the Gulf Coast and its people recover from this tragedy. . ."

 

    On the cleanup efforts the President said, "We now have nearly 30,000 personnel who are working across four states to contain and clean up the oil.  Thousands of ships and other vessels are responding in the Gulf.  And I've authorized the deployment of over 17,000 National Guard members along the coast. . . millions of gallons of oil have already been removed from the water through burning, skimming and other collection methods. Over five and a half million feet of boom has been laid across the water to block and absorb the approaching oil. We've approved the construction of new barrier islands in Louisiana to try to stop the oil before it reaches the shore, and we're working with Alabama, Mississippi and Florida to implement creative approaches to their unique coastlines. 

 

    He said secondly, the government is focused on is the recovery and restoration of the Gulf Coast. He said, "Tomorrow, I will meet with the chairman of BP and inform him that he is to set aside whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company's recklessness.  And this fund will not be controlled by BP.  In order to ensure that all legitimate claims are paid out in a fair and timely manner, the account must and will be administered by an independent third party. Beyond compensating the people of the Gulf in the short term, it's also clear we need a long-term plan to restore the unique beauty and bounty of this region." He announced that he asked Ray Mabus, the Secretary of the Navy, and a former Governor of Mississippi and a son of the Gulf Coast, to develop a long-term Gulf Coast Restoration Plan as soon as possible.

 

    Thirdly, the President said, we're taking steps to ensure that a disaster like this does not happen again." He reminded that a few months ago [See WIMS 3/31/10], he approved a proposal to consider new, limited offshore drilling under the assurance that it would be "absolutely safe." He said, "That obviously was not the case in the Deepwater Horizon rig, and I want to know why. . . "I've established a National Commission to understand the causes of this disaster and offer recommendations on what additional safety and environmental standards we need to put in place. Already, I've issued a six-month moratorium on deepwater drilling.  I know this creates difficulty for the people who work on these rigs, but for the sake of their safety, and for the sake of the entire region, we need to know the facts before we allow deepwater drilling to continue."

 

    He announced that Michael Bromwich, who was a tough Federal prosecutor and Inspector General, has been charged to over the next few months, overhaul the Minerals Management Service within the Department of Interior and "build an organization that acts as the oil industry's watchdog -- not its partner."  He said, ". . .one of the lessons we've learned from this spill is that we need better regulations, better safety standards, and better enforcement when it comes to offshore drilling. But a larger lesson is that no matter how much we improve our regulation of the industry, drilling for oil these days entails greater risk."

 

    His final point focused on the need to accelerate efforts to develop alternatives to fossil fuels. He said, "The tragedy unfolding on our coast is the most painful and powerful reminder yet that the time to embrace a clean energy future is now. Now is the moment for this generation to embark on a national mission to unleash America's innovation and seize control of our own destiny. This is not some distant vision for America. The transition away from fossil fuels is going to take some time, but over the last year and a half, we've already taken unprecedented action to jumpstart the clean energy industry."

 

    He reminded that last year, the House of Representatives acted and passed what he called "a strong and comprehensive energy and climate bill -- a bill that finally makes clean energy the profitable kind of energy for America's businesses." He continued, "Now, there are costs associated with this transition. And there are some who believe that we can't afford those costs right now. I say we can't afford not to change how we produce and use energy -- because the long-term costs to our economy, our national security, and our environment are far greater.

 

    In a major new development the researchers working on the critical question of how much oil is leaking into the Gulf released their latest estimates. Based on updated information and scientific assessments, Department of Energy (DOE) Secretary Steven Chu, Secretary of the Interior Ken Salazar, and Chair of the National Incident Command's Flow Rate Technical Group (FRTG) Dr. Marcia McNutt (Director of the U.S. Geological Survey) announced an improved estimate of how much oil is flowing from the leaking BP well [See WIMS 6/15/10]. Working together, U.S. government and independent scientists estimate that the most likely flow rate of oil today is between 35,000 and 60,000 barrels per day (bbl/day). The improved estimate is based on more and better data that is now available and that helps increase the scientific confidence in the accuracy of the estimate.  

    At the direction of the Federal government, BP is implementing multiple strategies to significantly expand the leak containment capabilities at the sea floor even beyond the upper level of the latest flow rate estimate. The Lower Marine Riser Package (LMRP) cap that is currently in place can capture up to 18,000 bbl/day. At the direction of the Federal government, BP is deploying a second containment option, called the Q4000, which could expand total leak containment capacity to 20,000-28,000 bbl/day.   Overall, the leak containment strategy that BP was required to develop projects containment capacity expanding to 40,000-53,000 barrels per day by the end of June and 60,000-80,000 barrels per day by mid-July. 

    Energy Secretary Steven Chu said, "This estimate brings together several scientific methodologies and the latest information from the sea floor, and represents a significant step forward in our effort to put a number on the oil that is escaping from BP's well. As we continue to collect additional data and refine these estimates, it is important to realize that the numbers can change.  In particular, the upper number is less certain -- which is exactly why we have been planning for the worst case scenario at every stage and why we are continuing to focus on responding to the upper end of the estimate, plus additional contingencies." Over the weekend, at the insistence of Secretary Chu and the science team, pressure meters were added to the top hat to assist with these estimates.  

    The scientists stressed the need for continued and refined pressure measurement, but emphasized that the "improved" estimates have a greater degree of confidence than estimates that were possible prior to the riser cut. They said the estimates are better because of more and different kinds of data that is available now and a single flow is easier to estimate versus prior to the riser cut, when oil was flowing both from the end of the riser and from several different holes in the riser kink. 

    The FRTG was assembled at the direction of National Incident Commander Admiral Thad Allen, and is led by United States Geological Survey Director Dr. Marcia McNutt.  The FRTG, and a scientific team led by Energy Secretary Steven Chu, continue to analyze new data and use several scientific methodologies to develop updated estimates of how much oil is flowing from BP's leaking oil well in the Gulf of Mexico. 

    Its important to note that over a month ago, Purdue University mechanical engineering professor Steven Wereley, the researcher that testified before Representative Markey's hearing on May 19, that the BP leak was much larger than previously estimated. Wereley indicated that the flow rate was at least "an order of magnitude higher" than the 5,000 bbl/day being reported by BP and the Unified Command. Wereley, who is now one of the researchers on the FRTG, used an initial 30-second video clip of the oil gushing from the 21.5-inch pipe that was released by BP on May 12, Wereley deployed a technique called particle image velocimetry (PIV) to create freeze-frame shots of the video. From his calculation, Wereley determined that 56,000-84,000 barrels of oil, plus gas, had been leaking daily into the Gulf -- a flow that was nearly 10 times higher than other estimates at that time [See WIMS 5/29/10].

    On June 15, 2010, the President signed into law S. 3473 - Amending the Oil Pollution Act of 1990 to authorize advances from Oil Spill Liability Trust Fund for the Deepwater Horizon oil spill. The bill authorizes the Coast Guard to obtain multiple advances (up to $100 million each), with the total amount of all advances not to exceed the incident cap under current law ($1 billion), from the Oil Spill Liability Trust Fund to underwrite Federal response activities with regard to the discharge of oil that began in connection with the explosion on, and sinking of, the mobile offshore oil unit Deepwater Horizon. The bill was introduced on June 9, by Senate Majority Leader Harry Reid (D-NV) and passed the Senate by unanimous consent and received a 410-0 vote in the House.

    In other activities NOAA and Coast Guard seized shrimp taken from the closed fishing area in Gulf; Administration officials met with BP officials on the containment and recovery plans; established three Deputy Incident Commanders under Incident Commander Admiral Thad Allen, to lead oil impact mitigation and cleanup efforts in Alabama, Mississippi and Florida; the Administration continued its oversight over the BP claims process; and more (See link below).

   Access a fact sheet on the $20 billion funding and other funds (click here). Access the complete Presidential address (click here). Access links to a video of the address (click here). Access a release on the updated flow rate estimate (click here). Access legislative details on S.3473 (click here). Access a White House summary of the last 24 hours of oil spill activities with extensive links to more information (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access the BP response website for links to visuals more information on the recovery work (click here). 

Day 57 BP Oil Spill: Calls For Increased Recovery & Funding

Jun 15: Potential cost estimates for the overall BP oil spill disaster continue to climb, with talk in the $50 billion range (up from $20-30 billion); the company's market price holds at about $98 billion (down about $80 billion); and the company's credit rating was cut to BBB from AA by Fitch, one of the three big credit agencies. The President will speak to the nation this evening from the Oval Office following his two day visit to the Gulf. Then, tomorrow he will meet directly with BP officials. Media reports are beginning to surface over a possible lever the Administration may have over BP -- i.e. mineral leases valued at $55 billion which the government controls. The New York Post is reporting on a possible tradeoff where BP keeps its leases and agrees to some sort of $50 billion Gulf Oil cleanup fund including payments to businesses and individuals that have suffered economically.

 

    BP indicates that it has spent some $1.6 billion to date on the cleanup and compensation. BP announced that it has approved initial payments toward 90% of commercial large loss claims that have been filed as a result of financial losses of the Deepwater Horizon incident and spill. Using an accelerated process BP approved payments of 337 checks for a total amount of $16 million to businesses that have filed claims in excess of $5,000. Initial payments began over the weekend and will be completed this week. The remaining outstanding commercial large loss claims are awaiting documentation and are continuing through the process.

 

    BP indicated that the acceleration of commercial large claims payments will help ease the burden on impacted businesses by providing access to money in a short period of time. Improvements to the commercial large claims process have been made as a result of applying learning from the existing individual claims process, as well as consultations with local, state, Department of Homeland Security and United States Coast Guard officials. BP also announced a number of future process improvements.

 

    BP's Claims Team said, "We hope that these changes will help those whose businesses and livelihood have been hurt by the oil spill. "We are working hard to fine-tune our claims process so that it's as simple, straightforward and effective as possible. We will keep doing everything we can to address the impact of the spill on the Gulf region." The company said to date, it has opened 25 claims offices and issued approximately 25,000 claims checks totaling $63 million. By the end of the week it expects to have paid out $85 million inclusive of these initial large loss claims payments.

 

    The lower marine riser package (LMRP) containment cap, installed on June 3, continues to collect oil and gas flowing from the MC252 well and transport them to the Discoverer Enterprise drillship on the surface. In the first 12 hours of June 13 (midnight to noon), approximately 7,720 barrels of oil were collected and 16.9 million cubic feet of natural gas were flared. On June 12, a total of approximately 15,000 barrels of oil were collected and 32.9 million cubic feet of natural gas were flared. The total volume of oil collected by the LMRP cap system since it began operation is approximately 127,000 barrels. A further approximately 22,000 barrels of oil previously had been collected through use of the Riser Insertion Tube Tool and stored in the Discoverer Enterprise.

 

    In the early evening of June 10, the Flow Rate Technical Group (FRTG), which is led by United States Geological Survey Director Dr. Marcia McNutt, and a scientific team led by Energy Secretary Steven Chu provided an update on their analysis of new data and bringing together several scientific methodologies to develop an updated estimate of how much oil is flowing from BP's leaking oil well in the Gulf of Mexico. Dr. McNutt announced that three of the scientific teams analyzing flow rates have reached updated assessments, based on new data or analysis, of flow rates from BP's well before the riser was cut on June 3. [Note: most experts have commented that the flow rate would increase following the riser cut, e.g. +10-20%).

 

    The FRTG reported that the Plume Modeling Team which has originally estimated 12,000 to 25,000 barrels of oil per day updated its estimate to between 25,000 to 30,000 barrels per day, but could be as low as 20,000 barrels per day or as high as 40,000 barrels per day. The Mass Balance Team which had originally estimated 12,000 to 19,000 barrels of oil per day refined its estimate and has concluded that the best estimate for the average flow rate was in the range of 12,600 to 21,500 barrels of oil per day. The Reservoir Modeling Team and the Nodal Analysis Team are continuing to work on independent estimates that will be completed later this month (See link below for details on estimates).

 

    On June 9, BP submitted a plan to the Unified Area Command outlining a plan to build additional capacity and redundancy for the containment of oil. In summary the plan called for various elements that might result in recovery of 20-28,000 bbl/day by mid-June and 25-38,000 bbl/day by mid-July. Another "permanent riser system" is proposed to recover as much as 40-50,000 bbl/day. On June 11, Federal On-Scene Coordinator Rear Adm. James Watson's issued a letter directive to BP to build greater capacity and redundancy for oil containment to address the revised and "substantially higher flow of oil from the well." Watson said, ". . .your current plans do not provide for maximum mobilization of resources to provide the needed collection capacity consistent with the revised flow estimates." Watson requested a response from BP within 48 hours.

 

    On June 15, BP also announced that it was making its first round of funding for a half-billion dollar pledge to the Gulf of Mexico Research Initiative (GRI). Three research institutions in the Gulf region will receive a total of $25 million in fast-track funding for high-priority studies of the distribution, composition and ecological interactions of oil and dispersant. Three initial studies will help establish critical baseline data as the foundation for subsequent research. In this first round of funding, GRI is providing: $5 million to Louisiana State University; $10 million to the Florida Institute of Oceanography (FIO) hosted by the University of South Florida; and $10 million to the Northern Gulf Institute (NGI), a consortium led by Mississippi State University (NGI). 

   

    Access a report on BP credit rating (click here). Access NYP report on the $50 billion deal (click here). Access a BP release on recent response progress (click here). Access a release on the new FRTG flow estimates with links to details on each method (click here). Access links to the exchange of letters on increasing the recovery capacity (click here). Access a BP release on the GRI (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here). Access the BP response website for links to visuals more information on the recovery work (click here).