Day 79 BP Oil Spill Update: New Gov Website; VoO Revisions

Jul 7: National Incident Commander Admiral Thad Allen announced the launch of a new Federal web portal -- RestoreTheGulf --  which he said is "dedicated to providing the American people with clear and accessible information and resources related to the BP Deepwater Horizon oil spill response and recovery." The RestoreTheGulf website is designed to serve as a one-stop repository for news, data and operational updates related to administration-wide efforts to stop the BP oil leak and mitigate its impact on the environment, the economy and public health -- unifying web resources across the administration and increasing public access to the latest information.

    Admiral Allen said, "We are committed to providing the American people access to complete and accurate information about our response to the BP oil spill and the resources available to assist those directly impacted. RestoreTheGulf.gov will provide even greater transparency and openness about the BP oil spill, our historic response, the tools available to assist Gulf Coast communities, and plans for the region's long-term recovery and restoration." A release indicates that the site offers easy-to-navigate information about the claims and appeals process -- as well as other types of assistance available from Federal, state, local and non-government sources -- for individuals, businesses and communities who have been affected by the spill. It will also contain information about plans for the long-term economic and environmental restoration in the Gulf Coast region.

    The public can view details about current operations, resources in specific states and localities, mapping and data resources, and ongoing investigations as well as oil spill data collected throughout the federal government. In addition, users can find information about ways to get involved -- including volunteer opportunities, how to submit a suggestion and how to report concerns about oiled shoreline or wildlife -- and a comprehensive list of all hotline numbers related to the oil spill. Content for the site will be gathered from a wide variety of sources, including the Unified Area Command's Joint Information Center in New Orleans, all Federal agencies involved in the spill response and recovery efforts, and independent scientists and members of academia who are contributing their expertise. While certain information will remain available on various agency websites and the White House blog, the new portal will link all resources together.

 

    BP reported that for the last 12 hours on July 6 (noon to midnight), approximately 8,425 barrels of oil were collected and approximately 4,115 barrels of oil and 28.7 million cubic feet of natural gas were flared. On July 6, total oil recovered was approx. 24,760 barrels (16,535 barrels of oil were collected; 8,225 barrels of oil were flared, and 57.5 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. 660,000 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 682,000 barrels.

 

    Doug Suttles, Chief Operating Officer of BP Exploration and Production, met with Vessels of Opportunity (VoO) participants to view operations and discuss a number of enhancements made to the VoO program. Through these modifications, the program will more effectively deploy boats to oil recovery activity and better utilize local commercial and charter fishing vessels to advance the effectiveness of the Gulf of Mexico response. Suttles said, "The enhancements announced today will further strengthen the Vessels of Opportunity program, getting the right vessels into the fight in the fairest way possible. We've listened carefully to those working on this important effort, and we appreciate the changes they've recommended. This program is an important piece of our efforts to make things right in the Gulf of Mexico. The hard work of those within the program continues to make a significant contribution to the response."

 

    The Vessels of Opportunity program employs local commercial fishing vessels to assist in the company's response in the Gulf of Mexico and minimize the impact of the spill on the region's people, environment and economy. To date, over 3,000 vessels have been activated for duty through the program across four states - Louisiana, Alabama, Mississippi and Florida.

 

    The National Wildlife Federation (NWF) and partners have signed up and trained hundreds of volunteers to be part of our Gulf Coast Surveillance Teams. The volunteer observers play a critical role in spotting distressed and dead wildlife and helping to document the effects of the oil spill on waters, wetlands and beaches. Importantly, NWF says as more teams are formed along the thousands of miles of the Gulf coast, they can help identify new places where signs of the oil spill appear.

    Access the new RestoreTheGulf website for links to the latest Unified Command updates and more (click here). Access the latest BP update (click here). Access BP's release on the VoO program with additional details (click here). Access a release and sample report from NWF on the Surveillance Teams (click here). 

EPA Proposes New Air Transport Rule For Eastern States

Jul 6: U.S. EPA announced it is proposing regulations to cut air pollution that impairs air quality and harms the health of people living downwind of pollution sources. The regulation will target power plant pollution that drifts across the borders of 31 eastern states and the District of Columbia. Along with local and state air pollution controls, the new proposal, called the transport rule, is designed to help areas in the eastern United States meet existing national air quality health standards.

    EPA Administrator Lisa Jackson said, "This rule is designed to cut pollution that spreads hundreds of miles and has enormous negative impacts on millions of Americans. We're working to limit pollution at its source, rather than waiting for it to move across the country. The reductions we're proposing will save billions in health costs, help increase American educational and economic productivity, and -- most importantly -- save lives." EPA said the transport rule would reduce power plant emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx) to meet state-by-state emission reductions. By 2014, the rule and other state and EPA actions would reduce SO2 emissions by 71 percent over 2005 levels. NOx emissions would drop by 52 percent.

    EPA said it is using the "good neighbor" provision of the Clean Air Act to reduce interstate transport, which is the upwind state emissions that contribute to air quality problems in downwind states. The proposed rule sets in place a new approach that can and will be applied again as further pollution reductions are needed to help areas meet air quality health standards. SO2 and NOx react in the atmosphere to form fine particle pollution and ground-level ozone (smog), which are linked to widespread illnesses and premature deaths. The pollutants are carried on the wind to other states, contributing to health problems for their residents and interfering with states' ability to meet air quality standards.

    EPA said the action would yield more than $120 billion in annual health benefits in 2014, including avoiding an estimated 14,000 to 36,000 premature deaths, 23,000 nonfatal heart attacks, 21,000 cases of acute bronchitis, 240,000 cases of aggravated asthma, and 1.9 million days when people miss school or work due to ozone- and particle pollution-related symptoms. These benefits would far outweigh the annual cost of compliance with the proposed rule, which EPA estimates at $2.8 billion in 2014. EPA said it expects that the emission reductions will be accomplished by proven and readily available pollution control technologies already in place at many power plants across the country.

    The transport rule also would help improve visibility in state and national parks and would increase protection for ecosystems that are sensitive to pollution, including streams in the Appalachians, lakes in the Adirondacks, estuaries and coastal waters, and red maple forests. The proposal would replace and improve upon the 2005 Clean Air Interstate Rule (CAIR), which the U.S. Court of Appeals for the D.C. Circuit ordered EPA to revise in 2008. The court allowed CAIR to remain in place temporarily while EPA works to finalize the replacement rule that it is now proposing. EPA will take public comment on the proposal for 60 days after the rule is published in the Federal Register soon. The Agency also will hold public hearings. Dates and locations for the hearings will be announced shortly.

 

    Sen. Tom Carper (D-DE), Chairman of the Senate Environment and Public Works, Clean Air Subcommittee released a statement saying, "As those of us who live in Delaware and other so-called "tail pipe" states on the East Coast know all too well, air pollution knows no boundaries. Even as Delaware has worked to clean our air, air pollution from neighboring states has adversely affected the health of Delawareans for too long just by virtue of our location. Given the difficulty of the assignment, the Environmental Protection Agency has done as great job considering the requirements demanded of them by recent court decisions in crafting this new rule. There's no doubt the new rule will help clean the air. Unfortunately, for the EPA to meet previous court rulings, the regulation is complicated [1,361 pages] and open to further lawsuits, which would likely cause even more delays in meeting our public health targets."     

    Carper continued, "For me, and I hope for my colleagues, today's transport rule underscores the need for Congress to step up to the plate and pass legislation that adequately addresses this complex and critical issue. Legislation that I have sponsored with my Republican colleague Sen. Lamar Alexander (R-TN), the Clean Air Act Amendments of 2010 [S.2995, See WIMS 2/5/10], would effectively accomplish many of the goals of this new rule -- cutting mercury emissions by 90 percent from coal-fired power plants and tightening national limits on emissions of sulfur dioxide (SO2) and nitrogen oxides (NOx). My bill, which has broad bipartisan support with 15 cosponsors, would set even greater reductions that what EPA has put forth today, while at the same time giving flexibility to businesses and states to meet those targets. Just as important, my legislation provides certainty for the business community and the public. To me, the path forward is clear -- Congress must pass legislation to address the serious threat posed by air pollution this year."

 

    Access a release from EPA (click here). Access a release from Sen. Carper (click here). Access the Proposed Rule, Fact Sheet, Overview Presentation, Table: Impacts of the Proposed Transport Rule on Counties, and the Regulatory Impact Analysis (click here). Access more information on Air Transport (click here).

Day 74 BP Oil Spill Update: Oil Threat Models; 550 Skimmers

Note: WIMS will not be publishing on Monday, July 5, which is the official Federal holiday for observance of Independence Day.

 

Jul 2: BP reported that for the last 12 hours on July 1 (noon to midnight), approximately 9,515 barrels of oil were collected and approximately 4,150 barrels of oil and 28.6 million cubic feet of natural gas were flared. On July 1, total oil recovered was approx. 25,150 barrels (16,915 barrels of oil were collected; 8,235 barrels of oil were flared; and 57 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. 534,900 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 556,900 barrels.

 

    NOAA released an announcement discussing a report on, "Models Long-Term Oil Threat to Gulf and East Coast Shoreline." According to the announcement, NOAA has used modeling of historical wind and ocean currents to project the likelihood that surface oil from the Deepwater Horizon/BP oil spill will impact additional U.S. coastline. This modeling, part of NOAA's comprehensive response to the unprecedented Gulf oil disaster, can help guide the ongoing preparedness, response and cleanup efforts.

    In the NOAA technical report, the model's results aggregate information from 500 distinct scenarios (model outcomes). Each assumes a 90-day oil flow rate of 33,000 barrels per day -- the net amount from the flow rate ceiling of 60,000 barrels per day (the lower bound is 35,000 barrels/day) minus the daily estimated amount being skimmed, burned, and/or collected by the Top Hat mechanism. The model also accounts for the natural process of oil "weathering" or breaking down, and considers oil a threat to the shoreline if there is enough to cause a dull sheen within 20 miles of the coast. If, for example, 250 of the 500 scenarios indicated a shoreline threat for a particular area, the overall threat for that area would be a 50 percent probability.

    Considering these factors, the NOAA model indicates: (1) The coastlines with the highest probability for impact (81 to 100 percent) extend from the Mississippi River Delta to the western panhandle of Florida where there has been and will likely continue to be oil impacts. (2) Along U.S. Gulf of Mexico shorelines, the oil is more likely to move east than west, with much of the coast of Texas showing a relatively low probability of oiling (ranging from less than one percent in southern Texas to up to 40 percent near the Louisiana border).

    (4) Much of the west coast of Florida has a low probability (20 percent down to less than one percent) of oiling, but the Florida Keys, Miami and Fort Lauderdale areas have a greater probability (61 to 80 percent) due to the potential influence of the Loop Current. Any oil reaching this area would have spent considerable time degrading and dispersing and would be in the form of scattered tar balls and not a large surface slick of oil. (5) There is a low probability of shoreline impacts from eastern central Florida up the Eastern Seaboard (20 percent diminishing to less than one percent). Potential impacts become increasingly unlikely north of North Carolina as the Gulf Stream moves away from the continental U.S. at Cape Hatteras. If oil does reach these areas, it will be in the form of tar balls or highly weathered oil.

    National Incident Commander Admiral Thad Allen provided an update on the Federal government's "aggressive skimming strategy" -- specifically addressing efforts to increase the number of skimmers in the Gulf of Mexico. He said since the beginning of June, skimming capability in the Gulf has increased more than fivefold -- from approximately 100 large skimmers at the beginning of June, to 550 skimming vessels of various sizes working to collect oil in all parts of the Gulf of Mexico as of today. To date, 28.2 million gallons of an oil-water mix has been skimmed from the Gulf surface. Skimming, as with many other response activities, can be impacted by weather conditions.

    Admiral Allen said, "From the beginning our response has been dynamic to match the ever shifting threat posed by this disaster, and that is why in early June we aggressively increased our focus on skimmers to combat the oil leaking from BP's well. We will continue to fight oil with as many skimmers as we can bring to bear on the water, while looking at every possible option for marshalling additional assets to impacted areas along the entire Gulf Coast. We will not rest until BP's well has stopped leaking, the oil is cleaned up, and our communities are made whole."

    At the request of the Coast Guard, the U.S. Navy is in the process of providing 22 additional shallow-water skimmers, 35 tow boats and three harbor buster skimmers normally stationed around the country -- expected to arrive in the coming days. As of July 1, seven shallow-water skimmers, two harbor buster skimmers and eleven tow boats are in the area, in addition to 23 skimming systems provided by the Navy to the Coast Guard under an existing agreement. The Unified Command (UC) will continue ramping up skimmer capability throughout the coming weeks, with a baseline target of more than 750 skimmers collecting oil in Gulf waters by mid July, and more by the beginning of August.

    To meet the various areas that are impacted by oil -- including oil far off shore, near shore, and even in beach, bay and marsh areas -- the Coast Guard has deployed several different types of skimmers and skimming technology to meet these unique conditions. The Coast Guards goal is to ensure the responders have the right tools for the various challenges that are faced, and will continue to surge the resources necessary.

    In the UC daily briefing Admiral Allen reported on the relief well operations, indicating that Development Driller III, which is leading the relief, the first relief well, is now at 11,817 feet below the sea floor. At this point, BP is conducting ranging operations and they drill 15 feet, stop, and do a position vis-à-vis the well bore. This is in anticipation of slowly closing and being able to get to a point where they've exactly located the well for the purpose of an intercept.The second well, Development Driller II is 7,775 feet below the sea floor and proceeding on pace as well.

    Allen said BP hopes to hook up the connection to the Helix Producer around the 7th of July to begin production which is expected to bring the oil recovery to a total of 53,000 barrels a day and provide a better assessment of how much oil is actually escaping. The current flow rate range is 35 to 60,000 barrels a day. He said "We should get an idea on the accuracy of that flow rate, but just by the visual evidence of how much oil is actually coming out around that cap once the Helix Producer is in place." He also said there is a second vertical riser being installed that by the 15th of July would go to another production platform and expand recovery to between 60 and 80 thousand barrels.  

    Access information on BP activities from the BP response website (click here). Access the NOAA Model announcement and link to the extensive modeling report (click here). Access the release on the status of skimmers (click here). Access the latest July 2 UC briefing transcript including Q&As  (click here). Access the UC website for further updates as they become available (click here). Access the latest operations and response statistics (click here).

Day 73 BP Oil Spill Update: Alex Weather Slows Recovery Plan

Jul 1: BP reports that for the last 12 hours on June 30 (noon to midnight), approximately 8,790 barrels of oil were collected and approximately 4,055 barrels of oil and 28.3 million cubic feet of natural gas were flared. On June 30, total oil recovered was approx. 23,080 barrels (14,875 barrels of oil were collected; 8,200 barrels of oil were flared; and 53.2 million cubic feet of natural gas were flared). Oil collection volumes were lower on the Enterprise on June 30 due to lightening storms from 9 AM until 11.45 AM CDT. Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 509,810 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 531,810 barrels.

    In another development, BP issued a release indicating that, "Everyone involved in the response effort should 'feel free to talk' to media about their experiences." BP offered additional guidance and clarification to all personnel to ensure that members of the response team -- including, but not limited to, all government, BP, and contract personnel -- know they are free to talk to the media. Doug Suttles, COO of BP said, "I want to thank everyone for their tremendous commitment to lead and support the response and cleanup efforts," said I really cannot say this enough: BP wants all individuals to feel free to share their thoughts and experiences with journalists, if they so choose. BP has not and will not prevent anyone from sharing his or her own experiences, opinions, or views." BP has provided guidelines and "media access cards" to be distributed at all levels of operations. The cards include "helpful tips" and a 1-800 number personnel can call for more information.

 

    Hurricane Alex made landfall in Mexico last evening and weather condition, primarily wave action (some reaching 7 feet) and winds between 17 and 22 knots have caused problems with skimming and booming operations. Wind was expected to diminish slightly to 12 to 14 knots and over the next day or so with wave 4-6 feet. A major impact on the operations was the hooking up the third producing vessel the Helix Producer, which was anticipated to have been finished, but has been delayed because of the inability to hook up to the flexible hoses because of high waves. That operation is expected to increase recovery to over 50,000 barrels per day. Near calm seas are necessary to complete the operation.

 

    The Development Driller III has drilled the first relief well to a depth of approximately 16,900 feet below the surface. The Development Driller II has drilled the second relief well to a depth of more than 12,000 feet below the Gulf surface. BP continues the "ranging" process -- which involves periodically withdrawing the drill pipe and sending an electrical signal down to determine how close they are getting to the wellbore. Finally, to date, 87,416 claims have been opened, from which more than $132.3 million have been disbursed. No claims have been denied to date. There are 952 claims adjusters on the ground.

 

    Access information on BP activities from the BP response website (click here). Access BP release on media access and link to the guidelines and cards (click here). Access the latest June 30 briefing from the Unified Command (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 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).