Thursday, July 1, 2010

BP oil spill cleanup work hampered by hurricane

VENICE (Louisiana): Hurricane Alex is slowing cleanup and oil containment efforts at the site of BP Plc's Gulf of Mexico oil spill even as a potential permanent fix for the leak remains weeks away.

Rough seas and winds spawned by the hurricane, which made landfall over northeastern Mexico late on Wednesday, June 30 and moved inland, delayed the British energy giant's plans to expand the amount of oil it siphons from the ruptured deep-sea well.

Alex is forecast to dissipate over Mexico in one to two days.

The bad weather also threatened to push more oil-polluted water onto the shoreline of the US Gulf Coast and forced the halting of skimming, spraying of dispersant chemicals and controlled burns of oil on the ocean surface, officials said.

The worst oil spill in US history is in its 73rd day. It has caused an environmental and economic disaster along the US Gulf Coast, hurting fishing and tourism industries, soiling shorelines and killing wildlife.

President Barack Obama was scheduled to meet with senior US officials on Thursday to review the spill situation and oil containment plans, the US Coast Guard said.

Interior Secretary Ken Salazar said on Wednesday one of two relief wells being drilled by BP in a bid to stop the leak from the ruptured well will take several weeks to reach the spewing oil pipe. The relief wells are intended to intersect and then plug the leak.

BP kept oil-capture and relief well drilling operations going at the leak site through the bad weather.

BP's market capitalisation has shrunk by about US$100 billion (RM325 billion) and its shares have lost more than half their value since the spill began on April 20 but are showing signs of stabilising. The shares rose for a third straight day in New York trading on Wednesday, rallying 4% following sharp gains in London.

Alex, a Category 2 hurricane when it made landfall late on Wednesday, packed maximum sustained winds near 105 miles (169km) per hour. It hit the coast of Tamaulipas state in northeastern Mexico, about 100 miles (160km) south of Brownsville, Texas, the US National Hurricane Centre said.

In Washington, the Senate Environment and Public Works Committee voted on Wednesday to eliminate limits on liability that oil companies would face for oil spill damages.

The measure, which would apply retroactively to the BP spill, must be passed by the full Senate and the House of Representatives before going to President Barack Obama to sign into law. Oil companies currently have a US$75 million cap for compensating local communities for economic losses and cleaning up environmental damage.

BP already has agreed to set up a US$20 billion independently administered fund to compensate victims of the spill.

The Interior Department, focused on the BP spill, said on Wednesday it was postponing until later this year planned public hearings on a proposal from Obama ' made before the BP spill began ' to expand offshore oil drilling.

Florida Governor Charlie Crist on Wednesday asked BP for US$50 million to fund a tourism advertising campaign, on top of a US$25 million grant already received.

"Every dollar spent allows Florida businesses to stay open, Floridians to keep their jobs, and families to worry less about how to pay their bills," Crist wrote in a letter to Doug Suttles, BP's chief operating officer.

Some clean-up workers along the coast expressed anxiety about the time lost to the storm.

"If you have to move all this equipment out and then back in again, how much time is lost there?" said Phil Ramon, a disaster management consultant in Belle Chasse, Louisiana.

In Mississippi, clean up crews contracted by BP were forced to temporarily pack up their gear, taking time away from cleaning the oil off tourist beaches.

"We are getting out of the storm right now but we will be back," said Bill Sigler, working to clean up the oil.

The weather delayed BP's plans to boost containment capacity at the undersea well.

US government officials estimate 35,000 barrels (1.47 million gallons/5.56 million liters) to 60,000 barrels (2.5 million gallons/9.5 million liters) are gushing from the blown-out well each day. BP's current containment systems can handle up to 28,000 barrels daily and its planned addition could raise that to 53,000.

The Deepwater Horizon drilling rig sank in 5,000 feet (1,525 metres) of water after an April 20 explosion and fire killed 11 workers. ' Reuters


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