Tuesday, 25 January 2011

Gulf Spill Could Surpass Exxon Valdez as Environmental Disaster

All indications are that the oil spill currently raging from the depths of the Gulf of Mexico will be the worst environmental disaster to hit the U.S. in recent memory - and possibly ever. Comparisons are being made to the Exxon Valdez disaster in Alaska, even though there was a finite amount of oil in place there that eventually leaked into the Puget Sound, killing thousands of animals and contaminating the ecosystem to this day.

With Obama's recent announcement that U.S. was going to allow the ban on coastal drilling to expire, this disaster could not have come at a worse time. The backlash from not just the disaster, but the perceived lack of an appropriate response by the U.S. government is going to likely haunt the administration, especially among moderates and independents would would have assumed that the Obama administration would be more proactive in addressing such a disaster.

Some are speculating that this event could become synonymous with government incompetence and under-responsiveness, in much the same way that Hurricane Katrina haunted the Bush administration. There is no doubt that the U.S. response to this disaster is going to be highly scrutinized, especially in areas that are going to be immediately affected, namely states with coastlines in the Gulf.

Obama Visits Oil Spill, Pledges Resources and Aid for Affected Areas

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"Every American affected by this spill should know this: your government will do whatever it takes for as long as it takes to stop this crisis,"Obama said. "That's a commitment I'm making as President of the United States." Those are strong words, but the unfortunate fact is that they come at a time when no one knows for sure exactly how catastrophic this raging oil spill is going to be. The source of the spill is so far beneath the surface that -- surprisingly -- the technology simply doesn't exist to try to address the oil spill at its source.

Of course, the technology exists to drill at depths of a few miles below the surface, but then there is no technology to address problems with drills or wells? How is that possible. Many in the oil industry will quickly point to the technology required to drill for oil in the depths of the Gulf of Mexico as being greater than anything required for space exploration. Yet there seems to be know equipment or plan in place for this type of contingency.

That seems increasingly shocking when one considers the enormous pressures and other unique factors at play when performing tasks at such depths. How could one not foresee the potential for a large-scale problem? The fact is that it was certainly known to BP and every oil company drilling at those depths that there is always the potential for a disaster. But the potential profits from drilling at those depths likely outweigh the risk that a global-scale oil catastrophe might result.

Many are just now coming to grips with the fact that this oil spill is just beginning and that there is no way to know when or how it is going to end. Ultimately, this catastrophe will likely result in a re-calibration of the risk-reward equations used to justify off-coast drilling.

Gulf Oil Spill to Have Far-Reaching Consequences

While news continues unabated out of the Gulf of Mexico, where an oil spill continues to grow, what many who don’t yet feel directly affected by the spill probably don’t realize is the ripple effect that it will cause. The oil has already shut down massive swaths of the gulf to fishing, as well as shipping lanes at the mouth of the Mississippi River, meaning that cargo vessels can’t pass. While the fishing industry would seem likely to be affected by the spill, things like fruit, rubber, steel, building materials and many other products destined for far flung destinations around the U.S. will also likely rise in price in the coming days.

Said River pilot Michael Lorino, speaking of the plight faced by cargo ships, "Let’s say it gets real bad. It gets blocked off and they don’t let anything in. They lose time, and they are very concerned about that. It’s going to be very costly if they have to unload that cargo in another port and ship it back here because it was destined for here." Several river boat pilots interviewed noted that the oil slick yesterday was about 15 miles off the Southwest Pass, an area where ships headed into New Orleans enter the Mississippi.

BP will lose billions of dollars as a result of the oil spill, but as the third largest oil company in the world, will likely be able to handle it. But from Florida to Texas, other smaller businesses are getting hit hard, including restaurants, hotels, casinos and a wide variety of travel-industry companies around the gulf. One hotel and bar owner who expects an influx of cleanup crews to be staying in her establishment noted, "They won’t be having as much fun, but they might be buying more liquor at the bar, because they’ll be so depressed."

BP’s Subsea Oil Recovery System

Since the explosion and collapse of the Deepwater Horizon oil rig several weeks ago, engineers have been scrambling to come up with a way to staunch the flow, at least temporarily, until a relief well can be drilled. One of the most promising ideas seemed to be the Subsea Oil Recovery System, a tremendous dome intended to be placed over the well head to cap the largest oil geyser in history, 5,000 feet beneath the sea floor in the Gulf of Mexico. The dome was lowered but the operation had to be halted because of ice crystals that formed, blocking the funnel that was supposed to pump the oil up and out of the dome.

The design of the Subsea Oil Recovery System isn’t a new one. BP built the system in Louisiana, and the design was based on similar constructions that were used during the aftermath of Hurricane Katrina. At that time, containment systems were built to protect wellheads, but they were used in shallow water. However, the conditions for this current scenario are quite different because the floor of the sea a mile deep are quite muddy. So engineers had to add mud flaps to the base of the dome, with the intention of sealing off the leak more thoroughly.

The Subsea Oil Recovery System consists of a 40-foot-tall concrete box, designed to be lowered over the leaking well. A funnel coming from the box pumps the oil up to the Deepwater Enterprise, a tanker on the surface of the water, which collects the oil, stores it, and ships it to shore. The oil would then be shipped to a terminal on shore for storage. This process would continue until a more permanent solution could be developed. BP said that the Deepwater Enterprise was capable of storing up to 139,000 barrels of oil, and could process up to 15,000 barrels of oil per day. With this system, BP was hoping that it could collect up to 85% of the oil currently leaking from the sea floor, which would dramatically lessen the growing threat to the coastline.

This approach to temporarily capping a leaking well hasn’t been used since the 1970s, when the oil company called ARCO attempted to do something similar by lowering a rudimentary type of funnel over an oil leak that was occurring naturally in the Santa Barbara Channel. The efforts of ARCO (which was later bought by BP) were successful, and led to the use of similar strategies in shallow water. But the Subsea Oil Recovery System was by far the largest such structure, and the challenges were far greater because of the extreme depth of the water. A BP spokesman said that the company wasn’t sure whether or not the equipment would work at such depths, but they had done extensive modeling and engineering, and they thought it would give them the best chance to corral the oil.

It took about two weeks to build the dome and it took another three days to carry it 50 miles out into the gulf and slowly lower it. But once it was lowered in place, icy hydrates, a sludgy mixture of water and gas, clogged the funnel structure at the top of the box, blocking any chance for the oil to be pumped out. Engineers knew there was a possibility of hydrates forming, but they didn’t know that they would form so quickly and in such large quantities as to plug up an opening 12 inches in diameter.

The containment box was lifted and moved about 600 feet away from the well head while BP reworks its strategy and tries to come up with alternate solutions. One idea under consideration is to build a smaller dome for containment, which might be less vulnerable to the buildup of crystals. This approach would take another two or three days to deploy. Another approach being bandied about involves shooting concrete and mud into the blowout preventer on the well, which is a device designed to shut down the flow of oil during a leak. This technique might help in plugging up the well, but it would take two or three weeks and is not a guaranteed solution. Also, BP is considering trying the Subsea Oil Recovery System again, if they can find a way to keep the crystals from accumulating and blocking the funnel.

In the meantime, small balls of tarry sludge have begun washing ashore onto beaches, and white sea birds are sporting brown oil stains on their feathers. And Gulf Coast residents watch, wait, and pray.

Did Federal Rule Changes Contribute to the BP Disaster?

The federal Minerals Management Service (MMS) is the government office that is responsible for regulating offshore oil rigs. As part of those regulations, oil rig operators are required to submit to the government a "blowout scenario" that details how a company would handle a major spill if a catastrophe occurred on a rig. The type of catastrophe that is now playing itself out in the Gulf of Mexico, where the Deepwater Horizon oil rig exploded in the Gulf of Mexico on April 20, and sank, killing 11 workers.

The blowout scenario plans were supposed to require operators of oil rigs to estimate how much oil would be flowing from a well each day, and the total amount that might leak if there was a single incident. The plans should also explain how a spill would be stopped, what methods would be used, the amount of time it would take to stop a leak, how long the company would need to drill a relief well, and whether or not there was potential for a leak to stop on its own.

However, in 2008, the MMS changed its rules about blowout scenarios, saying that such plans were necessary only if certain conditions applied. For example, if a rig operator was going to install a facility on the surface to drill in water that was more than 1,312 feel deep, a blowout scenario must be filed. But according to BP spokesman William Salvin, the Deepwater Horizon project did not meet the established definition of "surface facility," and the MMS agreed. "The production platform is what’s considered a surface facility," said Salvin. "This was an exploratory well, not a production well." At the time the rules were changed, MMS said that BP met the conditions necessary for being exempted from having to submit a disaster plan, so the company had no specific plan for Deepwater Horizon. Savin has said in interview that despite the lack of a formal plan being submitted, the company was always prepared to handle a problem because of the detail in a 582-page plan they developed for the Gulf region to deal with a disaster on any of their rigs in that region.

However, the MMS has been criticized for a long time for being perceived as being too soft on the industry it is supposed to be regulating. In 2008, disciplinary action was pursued by the Interior Department against 8 employees of the MMS who were given lavish gifts and parties, and in some cases even had sex with some employees at the energy companies they were supposed to be regulating. The investigation found that employees in the Denver office of the MMS were engaged in a "culture of substance abuse and promiscuity," and MMS workers were required to undergo ethics training.

Brendan Cummings, a lawyer for the Center for Biological Diversity, told reporters that the exploration plan that was filed by BP for the Deepwater Horizon project did not analyze the risks of an oil spill in enough detail. On behalf of the Center, Cummings has filed suit against the government for another offshore drilling rig in Alaska, owned by Royal Dutch Shell. "The technology used on the now-sunken Deepwater Horizon oil rig in the Gulf was supposed to be the most advanced in the world, including various mechanisms to prevent or cap a blowout," Cummings said in filing the suit. "None of these mechanisms worked, and the state-of-the-art technology completely failed to stop the spill."

The lack of a plan being on record for the Deepwater Horizon is troubling, to say the least, because the drilling was being done in extremely deep waters and therefore a leak could be a catastrophic event. Many feel that the change in rules by the MMS resulted in an outrageous omission, and they were clearly not doing their job correctly, and that someone fumbled the ball terribly. In an exploration plan created by BP last year, the company discounted the chance of a catastrophic leak. In similar fashion, Shell created an environmental impact analysis regarding its Beaufort Sea underwater drilling plan. That analysis concludes that the possibility of a large spill of liquid hydrocarbon "is regarded as too remote and speculative to be considered a reasonably foreseeable impacting event."

BP Testifies Before Congress, Says Oil Spill Not Company’s Fault

Testifying before Congress about the massive oil spill that brings to mind the Exxon Valdez crisis of the 1980s, BP PLC noted that the spill itself was caused by the failure of a safety device that was manufactured by another company. Of course, no game of finger pointing and scapegoating would be complete without that company, in turn, claiming that BP was responsible for drilling operations and that yet another company that poured the concrete that was to plug the problematic well did not complete the job properly. Executives of all three companies testified before the Senate Energy and Natural Resources Committee, and noted that there isn’t truly a definitive answer for what happened.

Senator Jeff Bingaman, D-New Mexico, opened up the hearing and said that the spill must be investigated so that new measures can be put into place to avoid such a catastrophe in the future. Noted Bingaman, "I don’t believe it is enough to label this catastrophic failure an unpredictable and unforeseeable occurrence." Other senators spoke to the blame game that was going around, and made it clear that they weren’t happy about it.

Said Senator Lisa Murkowski, R-Alaska, "I would suggest to all three of you that we are all in this together, because this incident will have an impact on developing our energy policy for this country." Noted Senator John Barrasso, R-Wyoming, "I hear one message – don’t blame me. Shifting the blame game doesn’t get us very far." Nonetheless, BP executives continued to focus on the failed safety device, a 450-ton blowout protector that was to shut off oil flow on the ocean floor if the well blew out.

BP Tries Smaller Pipe to Contain Oil Flow

BP, Halliburtun, Transocean and the U.S. government are all struggling to come up with a means to stop the massive flow of oil that is likely going to have catastrophic environmental consequences for the Gulf of Mexico and coastal U.S. states. New information is emerging suggesting that safety procedures may not have been followed in the hours leading up to the explosion that killed 11 rig workers and unleashed the oil spillthat is pumping untold thousands of gallons of oil into the Gulf.

Apparently, all records of tests and diagnostics being run on the Deepwater Horizon rig are unavailable after 3PM on April 20, the day of the explosion. The problem is that the rig didn't explode until 10PM that evening, leaving a 7-hour window, during which BP and Transocean claim that it ran tests indicating that the well was stable enough to proceed with its capping activities. Test results from prior to 3PM indicate that problems were developing and that gas leaks had begun in the well.

Some experts are beginning to question current estimates of exactly how much oil is being pumped into the Gulf. Video of the leaking pipe on the sea floor showed a very powerful flow of oil and gas coming from the pipe, which has a diameter of 21 inches. That pipe is only 1 of 3 known leaks at this time. BP officials continue to point to the estimate provided by the NOAA of 210,000 gallons of oil per day, although it is believed that estimate is generated by analyzing only the oil that reaches the surface. At this point, the slick has grown to roughly the size of Delaware and Rhode Island combined.

Oil from Gulf Spill to Reach Florida Keys by Sunday

As lawmakers and oil company executives find themselves under increasing scrutiny, scientists following the growing oil spill in the Gulf of Mexico seem convinced that large amounts of oil are headed for the Florida Keys over the weekend. Authorities have recovered at least 20 tar balls off the coast of Key West in recent days and tests are ongoing to determine whether the balls came from the Deepwater Horizon leak or if they originated elsewhere.

The large plumes of oil that have collected below the surface of the Gulf are becoming the focus of scientists and officials trying to determine where the danger lies from the spill. Satellite imagery and other equipment have detected massive plumes of oil hovering just below the surface of the Gulf, but not visible to boats and aircraft scanning the surface.

It is because of the plumes and the uncertainty surrounding just how much oil has been released from the gushing well, that some worst-case scenario projections are being made. Some expect oil to reach the Florida Keys by Sunday, eventually turning the corner around the southern tip of Florida and soiling the Atlantic coast of Florida in the coming days and weeks.

The Obama administration is now coming under increasing fire from the media and lawmakers as more details emerge about the cozy relationship between the U.S. government and big oil. The fact that there was no contingency plan in place for this type of accident speaks volumes about the lack of oversight and that inability of the oil industry to police itself.

President Obama has appointed a Presidential Commission to investigate the cause of the Deepwater Horizon explosion and how such events may be avoided in the future. Unfortunately, such a measure will most certainly be too little too late.

U.S. Interior Secretary Acknowledges Oil Regulation Problems

Interior Secretary Ken Salazar acknowledged before lawmakers yesterday that his agency had issues with their oversight of offshore drilling activities and that those problems may have helped contribute to the catastrophic oil spill in the Gulf of Mexico. Said Salazar, "There will be tremendous lessons to be learned here." Three Senate panels held hearing yesterday on the oil spill, with Salazar attending two of them. The government also acted yesterday to increase the area of the Gulf where fishing has been shot down, raising that level to a total of 46,000 square miles, which is about 19% of federal waters.

Scientists with the U.S. government also continued to monitor and survey the Gulf to determine if oil had entered a current that would take it to Florida and then eventually up the East Coast of the U.S. Tar balls have already washed up on the shores of Key West, Florida and have been shipped to a lab to determine if they came from the Gulf spill. Salazar, for his part, promised an overhaul of federal regulations relating to oil drilling and exploration activities, and also said that blame for the incident should be shared by both the oil industry and the government, quite a departure from the recent government theme of corporate greed and evil.

Noted Salazar of the Minerals Management Service, "We need to clean up that house," adding that even though most of the employees of the agency are good folks, there were "a few bad apples." Already President Obama has proposed splitting the agency into two parts so that regulatory duties are the responsibility of a different group from that which collects royalty fees from oil and gas companies.

Gulf Oil Catastrophe Underscores Government Impotence

Falling back on the same weak arguments used to attempt to deflect blame for the Hurricane Katrina debacle, the Obama administration now finds itself in the same position as the Bush administration did in 2007. Much as the Bush administration was caught flat-footed by Hurricane Katrina, the current administration now appears to have been woefully unprepared and not in possession of the leadership tools required to handle a catastrophic event that affects a large area of the United States.

With Katrina, the favored argument was that a natural disaster on that scale could not have been foreseen. After all, who knew the levees could break or that the infrastructure in and around New Orleans was not at all in a condition that would allow it to withstand the force of Katrina? As it turns out, quite a few people knew about the dangers and nothing was done about them.

As the investigation into the BP oil spill disaster will eventually reveal, it’s almost certain that many people in the oil industry and in various government agencies have long pointed to the dangers of deep-water drilling in the Gulf of Mexico. Obviously, when drilling at depths of over one mile below sea level, then miles deeper within the seabed itself, there are going to be risks involved. Someone certainly realized that if there are big problems at those depths, it would be almost impossible to stop the flow of oil. The current scenario playing out in the Gulf is likely not much of a surprise to anyone close to the industry.

The surprise may actually be that something like this doesn’t occur much more frequently. With reports surfacing that the U.S. government offers little to no oversight of offshore drilling operations, it’s obvious that everyone has been quite content to allow the oil industry to police itself as it harvests and sells irreplaceable resources produced naturally by the earth over millions of years.

With such incredible technology required to drill at unimaginable depths in order to reach oil embedded in rock, it’s also surprising that there isn’t some peripheral technology available that would allow for at least partial containment of a massive oil pipe break over one mile deep in the ocean. But, apparently, no such technology exists.

In fact, it’s as if no one had ever conceived of this contingency. That may be the most disturbing aspect of the story, that there was absolutely no plan in place to address this type of accident. How could those questions not have been asked over decades of offshore drilling in the Gulf? What happens when a well-head explodes at incredible depths? How do you fix the problem? Neither government nor industry appears to have any answers.

Given the enormity of the oil spill, there seems to be little time at the moment for finger-pointing and the ever-popular blame game. There was a brief run at that in the immediate weeks following the explosion of the rig and the acknowledgment of a growing oil spill. But now the major players are limited to simply trying not to say anything wrong on national television as the oil makes its way to the shores of Louisiana. There is nothing that can be said that is going to appease the people whose homes and livelihoods will forever be tainted by this oil spill.

At the federal level, the U.S. government machine is simply not capable of addressing disasters on the scale of Katrina and the BP oil spill. The events unfold too quickly and the government is not a nimble organism. By design, it is very large, very slow and incredibly dim-witted. But that organism must be capable of using its girth to prevent these types of disasters from occurring.

Just as funding and resources should have been made available to help reinforce the hurricane protection system that failed New Orleans and surrounding areas, government oversight and more stringent safety requirements should have prevented the Gulf Oil Catastrophe. In both instances, the failure occurred well before the tragedies unfolded. Once the hurricane hit and the rig exploded, it was already far too late.

The U.S. government is not built to "respond" to national disasters, regardless of their origin. But the government must be capable of using its massive reach and resources to foresee these events and to create intelligent means of prevention. Without the ability to perform that basic function, the government loses even more of its dwindling credibility.

BP Oil Cap Working, but Large Amounts of Oil Still Spewing into Gulf

The news for the Gulf of Mexico, its residents and BP was mixed over the weekend. The latest attempt to partially cap the oil geyser at the bottom of the Gulf was successful in recent days and BP and the government believe that they are now collecting the majority of the oil that is coming out of the damaged wellhead. That fact, of course, is still in dispute based upon independent scientists' estimates of the amount of oil that is coming out of the pipe. The live video feed from BP shows large amounts of crude still spewing around the new cap, but the company claims that it is gathering over 200,000 gallons of crude per day through the cap.

The drama at the bottom of the ocean is unfolding as massive oil slicks have already soiled fragile marshlands and beaches in Louisiana. Now the oil is headed east and has already made landfall in Pensacola, FL. A large sheen was spotted about 150 miles off the coast of Tampa on Florida's west coast and it is believed that much of the west coast of Florida is in danger of being hit with oil as the slicks and the plumes continue to head east with the currents and the winds.

Even as there is some progress reported on the seabed, officials have been quick to point out that it will likely be into the fall before oil is no longer actively leaking from the seafloor of the Gulf of Mexico. Relief wells are currently being drilled which might be able to intersect the damaged well head by sometime in August, but even then there will likely be residual spillage to be contained with other measures.

On the surface, it is likely that the oil is going to overwhelm any conventional means of containing it. Officials have abandoned the idea of trying to protect the beaches, as the surf makes it impossible and they are ultimately easier to clean up than inland waterways.

Oil Slick in Gulf Proves to be Unwieldy, Highly Damaging

The oil slick that has resulted from the burst underwater oil well in the Gulf has continued to elude cleanup crews and befuddle those studying methods of containing it. In marshes home to sensitive wildlife, the oil is destroying grasses and covering pelicans, with blobs of tar washing ashore in Alabama and the Florida panhandle, with an oily mass floating on top the Gulf west of Tampa. In Mississippi, little seems to have gone awry thus far, though tourism is down drastically. As it turns out, there isn’t just one large oil slick affecting the gulf, but many smaller ones.

Says Coast Guard Admiral Thad Allen, "We’re not longer dealing with a large, monolithic spill. We’re dealing with an aggregation of hundreds or thousands of patches of oil that are going a lot of different directions." And while official reports note that a BP containment cap is removing about one-third of the oil from the gusher, the effects of the spill will most definitely linger for many years to come.

Noted Darlene Kimball, who operates Kimball Seafood in Pass Christian, Mississippi, "Mississippi waters are open, and we’re catching shrimp." Despite that, her operation is being crushed by the mere appearance that things have gone awry. The perception around the nation is that seafood from the Gulf is unsafe. Noted Louisiana Governor Bobby Jindhal, "The daily images of the oil is obviously having an impact. It’s having a heavy, real, very negative impact on our economy." Of course, if Jindhal expects that his comments will stem the television reporting of those images…well, good luck with that.

Gulf Spill Oil to Enter Supply Chain, Profits to go to Charity

Oil from the worst oil spill in U.S. history will soon end up being refined and sold at gas stations as part of an effort by BP to raise money to protect wildlife that would be affected by the spill. BP announced that it will donate the profits from the sales of oil from the spill to a fund that will seek to protect and restore damaged habitat throughout the Gulf region. No specifics were released, but assurances were made that the oil would not differ from other oil being released into the market.

Noted Julius Langlinais, professor emeritus of petroleum engineering at Louisiana State University, "Oil is oil. There’s no stamp or anything on it. It’s all the same molecules." With BPs efforts, quite a bit of oil should enter the market and go towards environmental protection and cleanup. Scientists have thus far estimated that between 40 million and 109 million gallons of oil have rushed into the Gulf from the underwater gusher. BP is still in negotiations to find a buyer for the spilled oil.

Noted BP spokesman Mark Proegler, "There’s nothing special about it, other than everyone’s looking at it. I think it’s an eye opening experience for people who don’t give it much thought when they finally realize how much their lives depend on oil." At present, a drill ship is taking in 756,000 gallons of oil each day from the containment cap that rests atop the well head. That oil will then be transported and refined to enter the market.

BP Engineer Referred to Rig as "Nightmare Well" Before Accident

Even before the now-infamous BP oil rig explosion that killed 11 people, a company engineer referred to the rig as a "nightmare well." Released internal documents from the company indicated that statement as well as other concerns that were put in writing regarding the well. Brian Morel, the engineer in question, made those comments on April 14, just six days before the Deepwater Horizon rig exploded. A letter to BP CEO Tony Haward from Representatives Henry Waxman, D-California and Bart Stupak, D-Michigan, made reference to five decisions made by BP executives that led to the explosions.

Noted the pair, "The common feature of these five decisions is that they posed a trade-off between cost and well safety. Time after time, it appears that BP made decisions that increased the risk of a blowout to save the company time or expense. If this is what happened, BP’s carelessness and complacency have inflicted a heavy toll on the Gulf, its inhabitants, and the workers on the rig."

Hayward will appear before Stupak’s subcommittee tomorrow to discuss these allegations as well as the rig explosion and cleanup effort in general. According to the letter, BP chose a riskier option when it decided to run a single string of steel casing from the seafloor to the bottom of the well rather than using a steel liner with what is called a "tieback" on the top." Noted the two Congressmen, "BP chose the more risky casing option, apparently because the liner option would have cost $7 to $10 million more and taken longer."

BP Withheld Internal Estimates that Well Could Gush 2.5 Million Gallons Per Day

Obviously, BP doesn't know exactly how to handle a crisis the likes of which is unfolding in the Gulf of Mexico. Even a multi-national juggernaut like BP is not equipped to deal with the growing ire of the entire United States of America - still the most powerful and influential nation on earth, even if no longer the most loved or respected. As a result of dealing with this unprecedented disaster, BP has revealed itself to be dis-organized and bumbling when it comes to dealing with PR and exactly what to say and how to say it.

Perhaps the most damning piece of information to surface was the revelation in newly released documents explaining that very soon after the oil rig exploded, BP made internal worst-case estimates of 2.5 million gallons per day leaking from from the well-head. Those numbers were never disseminated and instead BP floated estimates of 60,000 gallons per day for some time and allowed other early government estimates to become mainstream estimates.

Obviously, BP knew every piece of information about the well - the size of the pipes, the pressure of the oil that it had pumped from the well and so on and so forth. So when the well exploded, the company clearly would have very easy access to the numbers necessary to generate accurate estimates of the oil flow. But instead they failed to be forthright about the size of the spill, perhaps gambling that they could stop it before any accurate third-party estimates could be obtained.

Because of the live video feed and the fact that the well has been gushing unabated for nearly two full months, BP was exposed for withholding the key information about the size of the spill. Now everyone has that information, even though that knowledge alone probably doesn't mean much at this point. It simply means that BP knew from the beginning just how bad the spill could be, but they didn't have the integrity to be honest about it.

Congress Accuses BP CEO of "Kicking Can Down the Road"

Lawmakers met with the CEO of BP yesterday, grilling Tony Hayward about his company and the moves it made that led to the Gulf oil spill. Hayward noted before Congress that he was not aware of problems with the well until it actually saw problems and noted, "I’m not stonewalling." Infuriated, members of Congress on both sides of the aisle took turns kicking Hayward around – all for public consumption of course – and shared their sound bites in the process. As for Hayward, he was clearly contrite and said at one point, "I am so devastated with this accident."

At one point, when Hayward claimed he was unaware with problems, he defended himself by noting, "With respect, sir, we drill hundreds of wells a year around the world." Michael Burgess, R-Texas, responded, "Yes, I know. That’s what’s scaring me right now." Rep. Phil Gingrey, R-Georgia noted, "I think you’re copping out. You’re the captain of the ship." Bart Stupak, D-Michigan, was more direct, noting, "BP blew it. You cut corners to save money and time."

Perhaps the most colloquial response, however, came from Rep. Henry Waxman, D-California, who at one point interrupted the CEO to say, "You’re kicking the can down the road and acting as if you had nothing to do with this company and nothing to do with the decisions. I find that irresponsible." Hayward replied, "I’m not stonewalling. I simply was not involved in the decision-making process." In fairness to Hayward, it is highly unlikely that a CEO would make decisions about cement engineering and related nuances of his company’s business, though it was interesting to see members of Congress – liars, cheaters and thieves all – have a field day with someone who at present is even less popular than they are.

BP CEO’s Weekend Yacht Outing Angers Gulf Residents

Having apparently gotten his life back, BP CEO Tony Hayward spent the weekend on a yacht outing, racing around the Isle of Wight in an annual race that the yachting enthusiast rarely misses. White House Chief of Staff Rahm Emanuel, discussing the beleaguered chief’s actions, noted, "Well, to quote Tony Hayward, he’s got his life back, as he would say. Emanuel continued, "And I think we can all conclude that Tony Hayward is not going to have a second career in PR consulting. This has just been part of a long line of PR gaffes and mistakes"

Indeed, Mr. Emanuel, because PR does not make problems go away, as much as you and your boss might like it to be so. Apparently not understanding anything of any real substance, however, Emanuel wanted to point out that BP has bad PR. We can only assume that Emanuel is left to spin things for the administration and is in no way let in on any important talks about how to actually get things done.

A spokesman for BP, responding to criticism over the company chief taking time off for a yacht outing, noted, "Still, no matter where he is, he is always in touch with what is happening within BP." U.S. politicians were less than pleased nonetheless, with Republican Senator Richard Shelby, of Alabama, noting, "I can tell you, that yacht ought to be here skimming and cleaning up a lot of the oil." Indeed, Senator Shelby, just as you and your colleagues in Congress should be working for the American people instead of to promote your own self-interest under the guise of civil service.

BP Says Static Kill Working in Well, Most Spilled Oil Already Gone

Jimmy Buffett Concert to Benefit Gulf Oil Spill Victims

Jimmy Buffett has made a career out of singing of the white sand beaches and blue waters of the Gulf Coast and the Caribbean. The way of life that he glorifies in his songs attracts millions of followers around the world and it is the calling card of all things Buffett.

In response to the oil spill that is currently ravaging the Gulf of Mexico, it's wildlife and its citizens, Jimmy Buffett will host a benefit concert in Gulf Shores, Alabama on July 1. In addition to Buffett, Kenny Chesney and many others are expected to attend and perform at the concert. CMT will air a portion of the concert live from 8PM to 9:30PM. In addition to the television coverage, the concert will stream live on SiriusXM Satellite Radio as well as through the CMT website.

With proceeds going to support the businesses and individuals hit hardest by the oil well leak in the Gulf, it's likely that the concert will attract other stars and performers who have not yet stepped forward to help. At this time, oil continues to spew from a damaged wellhead on the floor of the Gulf of Mexico, with estimates up to 2.5 million gallons of oil per day leaking into the once-pristine waters.

A recent 6-month moratorium on offshore drilling imposed by the Obama administration was overturned by a judge in Louisiana. Recent reports indicate that the judge who made the ruling has substantial investments in oil and natural gas companies in the area, although it's unclear at this time whether that would indicate any conflict of interest, given the specifics of the ruling.

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Oil Gusher Hurting Obama as Hurricane Season Moves In

President Obama and his entire administration are facing a Perfect Storm of sorts - there are several major crises growing at the same time, none of which has an end in site. In the Gulf oil disaster, an accident at the well head forced BP to pull its containment cap from the well, allowing the full flow of oil to resume flowing into the Gulf. It will likely be another day or two before the containment cap can be reinserted.

On top of that setback, the first storms of the hurricane season are taking shape in the Western Caribbean, promising to make a bad situation exponentially worse in the Gulf. The timing of the storms follows immediately on the heels of a court ruling overturning a 6-month ban that the Obama administration had levied on new deep-water oil rigs in the Gulf. At this moment, the oil well is gushing unabated into the Gulf andstorms are on the horizon.

The other fronts of the storm facing Obama include his recent dismissal of General McChrystal and a still-suffering domestic economy, recently hit with some of the worst housing market numbers on record. Fortunately for Obama, his replacement of McChrystal is a proven commodity in General Petraeus, the architect of the Iraq surge that seems to have helped in that war.

The economy is another issue altogether and only time will tell how things shape up there. With the struggles in Europe and general instability at the global level, the U.S. is likely months if not years away from having a firm handle on exactly where things stand. The oil debacle in the Gulf can't get fixed fast enough to save incumbents in the upcoming election and there will likely be substantial changes in government leadership. Summer is barely underway and you have to think that President Obama is longing for it to be over.

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Rough Seas from Tropical Storm Complicates Oil Response

Alex arrived earlier than any Atlantic hurricane in the last 15 years and is perhaps an ominous sign that this hurricane season will be especially active. With clean-up efforts already being overwhelmed by the volume of oil spewing into the Gulf, the arrival of high seas and winds have only made the impossible even more difficult. Fortunately, Alex is far enough from the oil spill zone and the site of the gushing pipe that efforts at the source of the spill are not believed to be impacted.

Of course, it's likely that they are, in fact, being impacted but that BP is choosing not to disclose exactly what is happening with the efforts at the leak in relation to the weather. In BP's official disaster response plans, there is no mention of contingencies involving hurricanes or tropical storms. Again, a massive oversight at both the corporate and government levels, as anyone planning large-scale operations in the Gulf of Mexico would certainly have to account for the potential weather issues in that part of the world.

And as the spill continues to spew oil into the Gulf, the most obvious questions still linger about why the pipe itself can't be capped and shut down entirely. Even with the considerable depths and pressures involved, we're basically looking at a plumbing problem. There are countless available strategies and techniques for capping high-pressure pipes, but none seem to be available to some of the best minds in the world.

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BP Oil Spill Cleanup Hindered by Hurricane Alex

Hurricane Alex made landfall in northeastern Mexico on Wednesday and posed problems for the BP oil spill cleanup work in progress. The oil spill from BP's ruptured deep sea well is well into its 10th week, and is the worst oil spill in US history. It had hit tourism and fishing badly, destroying wildlife and was also the reason for soiled shorelines.

Though a permanent solution by BP seems weeks or months away, Hurricane Alex severely hampered BP's current cleanup process in which they are using means like controlled oil burning, skimming and dispersant chemical spray. It has also delayed BP's big plan to increase the volume of oil it siphons from the ruptured oil well. Alex is a level 2 storm with winds up to 100 mph, and is moving westward at a speed of 10 mph. On Thursday it is expected to continue moving in the same direction over inland Mexico. It is expected to separate and go in different directions over Mexico in about 2 days time.

Very rough seas and winds are prevalent in the Gulf Coast at this point of time. BP, however, continued oil capture and relief well drilling at the accident site even through the bad weather. BP is in the process of drilling 2 relief wells whose aim is to intersect and then plug the leaking oil, but this will take weeks to materialize. BP's market capitalization has diminished by $100 billion besides their shares losing more than half their value since the accident. The oil giant has already pledged to set up a $20 billion fund that is independently administered, which will compensate victims of the oil spill, but environmentalists say this is now where near enough. Nevertheless, the BP oil spill cleanup will go on, and needs to, hurricane or no hurricane.

BP’s Cost of Cleaning Oil Spill Surpasses $3 Billion

The cost of cleaning up the Gulf of Mexico has risen by over half a billion dollars in the past week alone, bringing the total expenditures by the British company BP to over $3 billion and counting. That total includes cleanup, capping the gushing well and paying individuals and businesses for losses and is separate from the $20 billion fund that the company has crated to pay for damages.

Even as the company continued to drill relief wells to assist in trying to plug the problem well, an oil skimming vessel is being tested in the area. The ship, a Taiwanese vessel which has been named "A Whale" was tested for maneuverability in a 25 square-mile area of water north of the problem well, but it is unknown how effective it will be in removing oil from the sea. Bad weather is delaying the ship, which is owned by shipping company TMT.

Bob Grantham, a spokesman for the company, noted, "As was the case yesterday, the sea state, with waves at times in excess of 10 feet, is not permitting optimal testing conditions." U.S. Coast Guard officials are waiting until bad conditions from Hurricane Alex subside before sending out skimming vessels. Noted Courtnee Ferguson, a spokeswoman for the Joint Information Command, "We’ve got our guys out there and they’re docked and ready, but safety is a huge concern for us, especially with the smaller vessels." As for when the weather would get better, meteorologist Mike Efferson noted, "This should remain fairly persistent through the next few days, and maybe get a little worse."

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Oil Now in All Five Gulf States, Plus Lake Pontchartrain

Tar balls rolling up on the shores of Texas have now definitively provided proof that the oil from the BP spill has reached all five states in the Gulf of Mexico. Perhaps more troubling is the fact that oil is also seeping into Lake Pontchartrain, in New Orleans, creating yet another environmental catastrophe for a lake that had just barely recovered from pollution from the 1990s. After being a source of great consternation, the lake was cleaned up to the point that it had once again become a popular destination for boatingswimming and fishing. Now, that may all be in the past.

Noted Pete Gerica, president of the Lake Pontchartrain Fisherman’s Association, "Our universe is getting very small." Apparently, the July 4 weekend saw tar balls and oil rush by lines of barges intended to block the connection from the Gulf to the lake. The oil that was pushed into the lake apparently was aided significantly on its way by winds from Hurricane Alex, though the storm itself was very far away.

At this point, there appears to be very little oil contaminating the 600 square mile lake, though concerns are that the level will rise. Tests of seafood indicate that there has been no oil contamination of wildlife, but many are worried nonetheless. Said Brian Lezina, a biologist for the state of Louisiana, "You won’t hear songs about a lot of the marshes in south Louisiana, but you will hear songs about Lake Pontchartrain." The news is bad for a lake that seemingly overcame impossible odds to be reclaimed. Said John Lopez, a scientist involved in the restoration efforts, "Even the people involved in the restoration didn’t believe it could be restored. It was completely written off. It was thought to be an impossible task. It has been a dramatic turnaround."

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Oil from Gulf Spill Already Buried Under Clean Beach Sand

As teams of workers struggle to try to do something - anything - to prevent oil from contaminating the once pristine beaches of the Gulf, they are starting to realize that there may not be too much for them to do. The oil that washes ashore is often buried under new sand as the waves and tides continually push forward and pull back. This natural action will eventually make the beaches appear somewhat clean rather quickly after the flow of oil is stopped.

The problem is that there will still be large amounts of oil present, they will just be located below the surface of the sand. This natural progression is going to present difficult problems for those in charge of cleaning up the spill. Oil and remnants of oil are also a natural occurrence in the sand of many beaches, especially those of America's coastal waters.

The water and the sand eventually break the oil down and it will no longer pose an immediate health threat to humans. It's impact on the ecosystem will certainly be far greater, though, as the tiny animals and plants that inhabit the depths of the sands will be harmed and killed.

As hurricane season begins to heat up, this phenomenon of increased wave action and more churning of the sand may actually prove beneficial in the long term. It will certainly not eliminate the impact of the oil spill, but it may make things seem to appear better than they actually are in a shorter period of time. The question will remain, however, as to exactly how deep to dig when looking for evidence of the oil spill and exactly how clean people are going to require their beaches to be.

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