Political India: Engaging America

From The Hindu

Additional analysis of the procedure to test the wells was necessary before the actual well integrity testing begins, Admiral Thad Allen, National Incident Commander in charge of the Gulf of Mexico oil spill response announced.

The testing of the well’s integrity, an essential step following the installation of the “capping stack” by BP on Monday was postponed until Wednesday night, and will continue into Thursday, Admiral Allen said, instead of beginning on July 13 as initially planned.

BP said that during that period it would “continue to ramp up containment operations on the Helix Producer as well as continue to optimise the Q4000 operations”, the two skimming and flaring vessels deployed in the Gulf by the oil major. The company noted that the Helix Producer has the capacity to capture “approximately 20,000 – 25,000 barrels of oil per day… [and] historically, the Q4000 has flared an average of approximately 8,000 barrels of oil per day.”

However, the company also cautioned that success was not guaranteed in this latest capping operation given that “the sealing cap system, the Q4000 system, the flexible riser system, and the planned additional containment systems never before have been deployed at these depths or under these conditions, and their efficiency and ability to contain or flare the oil and gas cannot be assured”.

Meanwhile operations aimed at “permanent” containment continued with regard to the first relief well; however operations on the second relief well have been temporarily suspended at 15,963 feet to ensure that there is no interference with the first relief well. BP noted, “The relief wells remain the sole means to permanently seal and isolate the well.”

Obama sends fourth bill to BP

In parallel, the administration announced that President Barack Obama on Tuesday “sent a fourth bill for $99.7 million to BP and other responsible parties for response and recovery operations relating to the spill”. In a statement, the disaster response team said the administration would continue to bill BP “regularly for all associated costs” to ensure the Oil Spill Liability Trust Fund is reimbursed on an ongoing basis. It added that BP and other responsible parties have paid the first three bills in full — totalling $122.3 million.

Labels: British Petroleum, Gulf of Mexico, oil spill

From The Hindu

A rare public exchange of letters between National Incident Commander in charge of the Gulf of Mexico oil spill Thad Allen and Robert Dudley, who is leading the mop-up operations at BP, showed the government has been pressing the oil major to come up with plans to accelerate its collection of the oil.

It began on Thursday when Admiral Allen wrote to Mr. Dudley saying, “We are entering a critical stage in the Deepwater Horizon response where key decisions will be made in executing plans for total collection of oil at the wellhead and for potentially securing the well completely.”

Not mincing his words, Admiral Allen on Thursday demanded that Mr. Dudley provide him, within 24 hours, with a detailed timeline outlining BP's plans to affix onto the well a second cap — called a “capping stack” — that could significantly increase the containment capacity of the system. Paradoxically, the process for deployment of the capping stack would, Admiral Allen acknowledged, increase amount oil leaking temporarily. To mitigate this heightened flow, the Admiral asked Mr. Dudley to explain his plans to use a third containment ship, the Helix Producer. “I must have knowledge of the steps and decision points involved; mitigation efforts to be implemented; and contingency plans if these efforts are not successful,” he emphasised.

After scrambling to provide the Admiral with a response within the deadline, Mr. Dudley said in his letter that though BP had initially scheduled the capping stack installation to follow the Helix Producer beginning containment operations, “as weather has impacted our ability to execute these activities in series we … have proposed that the capping stack procedure be implemented in parallel with the start-up of the Helix Producer.”

After review Admiral Allen approved the plan, saying later to media: “After reviewing Bob Dudley's response to my July 8 letter … I approved BP's plan to simultaneously install the Helix Producer and ‘capping stack' containment mechanisms, which will require temporary suspension of the current top hat containment system.”

The Admiral added that he had validated this plan because the capacity for oil containment when the installations were complete would be “far greater than the capabilities we have achieved using current systems”. He also noted that weather forecasts had turned more favourable over the last few days and “will provide the working conditions necessary for these transitions to be successfully completed without delays”.

Admiral Allen said the transition to the new containment infrastructure could begin “in the next days but will take seven to ten days to complete”. He also said the entire process, “once we start unbolting until we're in a position to put the new cap on, could be three to four days”.

The Admiral conceded that there would be a spike in the outflow volume, saying: “There will be a period of time where the Discover Enterprise will have to move off station to allow us to put the new capping device on. So the amount they've been able to recover which is roughly around let's say 15,000 barrels a day will have to be released while we're putting the new cap on.”

Labels: British Petroleum, capping stack, Gulf of Mexico, oil spill, Robert Dudley, Thad Allen

From The Hindu

In a desperate bid to stave-off a surge off public anger that has now been engulfing oil major British Petroleum for nearly two months, the company’s CEO Tony Howard today said he was “deeply sorry.”

Facing a grilling during a hearing by the Committee on Energy and Commerce of the House of Representatives, Mr. Hayward said, “I want to speak directly to the people who live and work in the Gulf region: I know that this incident has profoundly impacted lives and caused turmoil, and I deeply regret that.”

Even as the Obama administration cranked up the heat on BP, the company announced that it would commit around $20 billion to an escrow account that would be used to help mitigate the costs of cleaning up the enormous spill from the BP-run Deepwater Horizon offshore rig.

On Wednesday President Barack Obama and senior White House staff met with Mr. Hayward and top BP executives to lay out their demands regarding the escrow account and the costs that they expected BP would make good.

According to reports Representative Henry Waxman of California said, “BP cut corner after corner...and they were apparently oblivious as to what was happening,” during the hearing which was conducted by the Subcommittee on Oversight and Investigations. “Now the whole Gulf Coast is paying the price,” he reportedly said.

Further Representative Joe Barton of Texas noted, “The picture emerging in this investigation is not one of technological limits, but of unsafe industry practices… It is BP's decision making that was a critical factor in this incident.”

Regarding the escrow fund, BP said in statement that an agreement was reached to create a $20 billion claims fund over the next three and a half years on the basis that BP would initially make payments of $3 billion in the third quarter of 2010 and $2 billion in the fourth quarter of 2010. “These will be followed by a payment of $1.25bn per quarter until a total of $20bn has been paid in,” the company noted.

Settling claims

The fund would be available to satisfy claims such as natural resource damages and state and local response costs and fines and penalties would be excluded from the fund and paid separately. Payments from the fund would be made as they are adjudicated, whether by the Independent Claims Facility (ICF) or by a court, or as agreed by BP, the company said. It added that the ICF would be administered by Kenneth Feinberg, who also served as President Obama’s “pay tsar” in the aftermath of the global financial crisis.

Labels: Barack Obama, British Petroleum, claims fund, Gulf Coast, oil spill

From The Hindu

Even as British Petroleum (BP) reported tentative signs of success in its latest attempt to slow the powerful gush of oil from the Deepwater Horizon rig in the Gulf of Mexico, Coast Guard Admiral Thad Allen, leading the federal government's response to the spill, said this was a “siege that is going to go on for a long time”.

He added that the mop-up operations were spread from south-central Louisiana to Port Saint Joe, Florida and they were “not going to end soon”. He went on to describe the situation in the Gulf as a “very, very, very tough problem”.

The Deepwater Horizon rig operated by BP, sank on April 22 following an explosion that killed 11 workers.

Speaking to CBS news channel, Admiral Allen said the effort would be a long-term campaign that would last for several more months. “This will only end when we intercept the well bore, pump mud down it to overcome the pressure of the oil coming up from the reservoir and put a cement plug in,” he said.

Further Admiral Allen warned that even after such a procedure, there would be oil on the water and along the coastline for “months to come”. This would be well into the fall, he noted. In earlier statements he had also indicated that the digging of relief wells, to take the pressure off the damaged rig, could take until August.

Admiral Allen’s comments came as BP reported it had started drawing the oil to a ship on the surface by deploying a containment cap on the lower marine riser package. The company said the cap, installed on June 3, had collected a total of 10,500 barrels of oil by June 5 and transported them to the Discoverer Enterprise drillship. However official estimates place the leak somewhere between 12,000 and 25,000 barrels of oil a day.

In a statement BP added that 22 million standard cubic feet of natural gas had been flared.

Costs and liabilities

BP also announced that the cost of the response to date amounted to approximately $1.25 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs. This did not include its costs for a Louisiana barrier construction project, which was estimated to be $ 360 million. "It is too early to quantify other potential costs and liabilities associated with the incident," BP said.

Visiting fishermen and others in local communities in Louisiana recently, President Obama had reiterated his administration’s commitment to get BP to compensate them for their loss of income and damage to their livelihoods.

Yet BP’s share price actually rose 2.7 per cent on Monday morning, reportedly in response to statements by its Chairman Carl-Henric Svanberg late last week that the company would aim "always to strike the right balance for shareholders between current returns through the dividend, sustained investment for long term growth and maintaining a prudent gearing level".

He said, "We will do all we can to protect and grow the value of the company in which you have invested," and added, "We fully understand the importance of our dividend to our shareholders."

Labels: Admiral Thad Allen, British Petroleum, Deepwater Horizon spill, Gulf Coast oil spill

From The Hindu

After 37 days of failure to halt the torrent of oil spilling from its damaged offshore rig into the Gulf of Mexico, engineers from rig owner British Petroleum (BP) and other agencies reportedly stemmed the flow using a “top kill” operation that choked off the leaking pipe with drilling fluids.

Quoting United States Coast Guard Admiral Thad Allen, leading the effort to curtail the spill, the LA Times newspaper reported on Thursday morning that “industry and government engineers had pumped enough drilling fluid to block oil and gas spewing from the well… [and the] pressure from the well was very low but persisting”.

The next step in the operation would be to pump cement into the hole to entomb the well, in preparation for which, Admiral Allen said, engineers were also pumping some debris into the blowout preventer at the top of the well.

However, neither the administration nor BP has yet commented on whether or not the flow of over 5,000 barrels of oil per day from the damaged MC252 offshore well had been stopped.

Earlier U.S. Secretary of the Interior Ken Salazar had said, “We will keep our boot on their neck until the job gets done. And… we will make sure that all of their responsibilities are fulfilled to the people of the Gulf Coast and to the U.S. government.”

The early reports of success surfaced even as the Obama administration came under a barrage of criticism for failing to act decisively to stop the leak and clean up the massive environmental damage that has already occurred. Significant loss of animal and plant life as well as the livelihoods of shrimp farmers among others has been widely reported for weeks now along the fragile coastal marshlands of Louisiana.

Under rapidly mounting political pressure, the President was poised to announce an extension of a moratorium on deep-water offshore drilling for a further six months, according to reports that quoted the White House.

Enhanced safety standards

As stated by Reuters, President Obama “will announce standards to strengthen oversight of the industry and enhance safety, a first step in a process that the independent Presidential Commission will continue”.

The White House was further reported to have indicated that Mr. Obama would announce the cancellation of drilling leases for projects off the coast of Virginia and delays in both exploration and drilling off the coasts of Alaska.

In a further fallout from the crisis, it was reported that Elizabeth Birnbaum, Director, U.S. Minerals Management Service overseeing offshore drilling, had been fired.

Labels: Barack Obama, BP, British Petroleum, Gulf Coast oil spill, top kill operation

From The Hindu

President Barack Obama today announced the establishment of a bipartisan National Commission to investigate the oil spill from British Petroleum’s Deepwater Horizon rig. The rig exploded on April 20 and has since been spewing massive amounts of oil into the Gulf of Mexico seriously endangering its marine life and the coastlands of Louisiana.

As per an executive order signed by the President, the Commission, which will also closely examine the activities the offshore drilling industry, will be co-chaired by former two-term Florida Governor and former Senator Bob Graham and also former Administrator of the Environmental Protection Agency William Reilly

In essence, the Commission is tasked with “providing recommendations on how we can prevent – and mitigate the impact of – any future spills that result from offshore drilling”. It will focus on the necessary environmental and safety precautions that must be built into regulatory frameworks in order to ensure an accident like “never happens again,” Mr. Obama said in his weekly televised speech.

Emphasising his administrations efforts to contain the spill Mr. Obama said the government has deployed over 1,100 vessels, around 24,000 personnel, and more than 2 million total feet of boom to help contain it. “And we’re doing all we can to assist struggling fishermen, and the small businesses and communities that depend on them,” he noted.

Breakdown of responsibility

Apportioning the blame for the spill between its operators and owners, the President said, “First and foremost, what led to this disaster was a breakdown of responsibility on the part of BP and perhaps others, including Transocean and Halliburton. And we will continue to hold the relevant companies accountable not only for being forthcoming and transparent about the facts surrounding the leak, but for shutting it down, repairing the damage it does.”

He noted, however that even as they continued to hold BP accountable, his administration also needs to hold Washington accountable: “If the laws on our books are inadequate to prevent such an oil spill, or if we didn’t enforce those laws – I want to know it. I want to know what worked and what didn’t work in our response to the disaster, and where oversight of the oil and gas industry broke down.”

Reiterating his earlier criticism of the regulatory framework for the industry he said that there was a “cosy” relationship between oil and gas companies and agencies that regulate them, which has long been a source of concern.

Labels: Barack Obama, British Petroleum, oil spill

From The Hindu

A long “tendril” of the oil spill from the Deepwater Horizon offshore rig that exploded last month has entered the Gulf loop current and this could carry the oil to the Florida Keys and even up the Atlantic Coast, the National Oceanic and Atmospheric Administration (NOAA) said today.

Meanwhile even as the spill reached the fragile marshes and wetlands on the Louisiana coast the state’s governor, Bobby Jindal, said, “It is past time to act,” and reportedly rebuked the Army Corps of Engineers, the Coast Guard and rig owner British Petroleum for delays in finalising proposals to construct over 80 miles of sand berms along the coastline.

Speaking to reporters Mr. Jindal was quoted to have held up a plastic bag full of sticky brownish liquid, and said, “What we are seeing yesterday and today is literally this heavy oil coming into our wetlands… These are not tar balls, this is not sheen, this is heavy oil.”

NOAA meanwhile said that it had extended the boundaries of the closed fishing area in the Gulf of Mexico into the northern portion of the loop current as a “precautionary measure” to ensure that seafood from the Gulf would remain safe.

In a statement, Jane Lubchenco, Under Secretary of Commerce for Oceans and Atmosphere and NOAA administrator, said, “The BP oil spill is unprecedented and quickly changing. The administration’s response since the beginning has been aggressive, strategic, and science-based.”

She noted that as NOAA expanded the fishing-closed area, they were doing what science demanded and were acting with caution. NOAA stood shoulder-to-shoulder with Gulf coast fishermen and their families during these challenging times, she added.

Her comments came even as media reports of tensions between the White House and the scientific community over the gulf oil spill heightened, with key oceanography experts faulting the Obama administration for conducting an inadequate scientific analysis of the impact of the spill.

According to a report in the New York Times, scientists were especially concerned about “getting a better handle on problems that may be occurring from large plumes of oil droplets that appear to be spreading beneath the ocean surface”. The report further stated that in the one month since the Deepwater Horizon oil rig exploded, the government has “failed to make public a single test result on water from the deep ocean”.

Further, it noted that scientists say the administration has been too reluctant to demand an accurate analysis of how many gallons of oil are flowing into the sea from the gushing oil well. The report quoted Sylvia Earle, a reputed oceanographer as saying on Wednesday from Capitol Hill, “It seems baffling that we don’t know how much oil is being spilled… [and] where the oil is in the water column.”

Labels: British Petroleum, Deepwater Horizon, NOAA, oil spill

From The Hindu

Scientists have discovered enormous plumes of oils lurking beneath the surface of the water after leaking out of the critically damaged Deepwater Horizon rig. The plumes, which scientists said measured ten miles long and over a mile wide, were noticed even as British Petroleum's latest attempts to stem the flow of oil from the rig into the Gulf of Mexico failed yet again.

The discovery of the plumes may embarrass British Petroleum CEO Tony Hayward, who recently argued that given the size of the Gulf of Mexico the “amount of volume of oil and dispersant we are putting into it is tiny in relation to the total water volume.”

The plumes suggest that it is in fact the oil visible on the surface which is a tiny fraction of all the oil that spilled since the rig blew up on April 20, according to an assessment by the National Institute for Undersea Science and Technology. The NIUST report said that significant amounts of oil were spreading at various levels throughout the water column.

On its blog the NIUST reported on its scouting trip in the spill area, noting that scientists “started seeing an increase in fluorescence just below the surface and this was related to a marked increase in oil on and near the surface.”

The latest attempts by BP to stop oil from gushing into the sea failed on Saturday, as the company tried to fit a narrow tube into the damaged oil pipe a mile beneath the surface. The tube would have siphoned the oil directly to a ship on the surface and sealed the pipe as well.

According to government estimates the spill has so far caused 210,000 gallons, or 5,000 barrels, of oil per day to leak into the ocean. President Barack Obama earlier underscored his determination to end the “cosy relationship” between regulators and oil companies and to ensure that BP mopped up the cost of the clean-up.

Labels: Barack Obama, British Petroleum, Gulf of Mexico, oil spill