Originally published May 11, 2010 at 5:21 AM | Page modified May 12, 2010 at 2:16 AM
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Political patience wanes as Gulf oil spill grows
Political patience was whittling away for BP executives who can't stop a broken underwater well from pouring oil into the Gulf where crews tried the latest solution - submerging a second containment box designed to funnel the gusher to a waiting tanker.
Associated Press Writer
MARK WILSON / GETTY IMAGES
Lamar McKay, left, president and chairman of BP America, Steven Newman, president and chief executive of Transocean, and Tim Probert, president of global business lines and chief health, safety and environmental officer for Halliburton, participate in a Senate Energy and Natural Resources Committee hearing Monday in Washington.
BP and the oil spill: costs vs. profits
For now, at least, BP's prodigious costs combating the Gulf of Mexico oil spill are outweighed by prodigious profits. BP said Monday it spent $350 million in the first 20 days of the spill response, about $17.5 million a day. It has paid 295 of the 4,700 claims received, for a total of $3.5 million. By contrast, in the first quarter of the year, the London-based oil giant's profits averaged $93 million a day.The Washington Post
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Political patience was whittling away for BP executives who can't stop a broken underwater well from pouring oil into the Gulf where crews tried the latest solution - submerging a second containment box designed to funnel the gusher to a waiting tanker.
In back-to-back U.S. Senate inquiries on Tuesday, lawmakers chastised officials from BP PLC and its drilling partners over attempts to shift blame to each other. They were asked to explain a "cascade of failures" that led to the catastrophic explosion on aboard a drilling rig and the blown-out wellhead that has spewed at least 4 million gallons of oil into the Gulf over three weeks.
"If this is like other catastrophic failures of technological systems in modern history, whether it was the sinking of the Titanic, Three Mile Island, or the loss of the Challenger, we will likely discover that there was a cascade of failures and technical and human and regulatory errors," said Sen. Jeff Bingaman, D-N.M., chairman of the Energy and Natural Resources Committee.
Later Tuesday, a crane lifted the new box from the deck of the Viking Poseidon, one of the more than a dozen boats helping the containment effort, and lowered it into the sea about 50 miles off the Louisiana coast, a process expected to last several hours or more.
The first box sunk last week weighed 100 tons and company officials had hoped it could contain 85 percent of the oil. However, it was never tried at such depths - about a mile below the surface - and in 40-degree water. A slushy mixture of gas and water clogged the opening in the top of the peaked box and it was cast aside.
The latest box is much smaller - just 2 tons. It won't be placed over the spewing well right away because engineers want to make sure everything is configured correctly and avoid the same buildup, BP spokesman Bill Salvin said. Crews also planned to pump in heated water and methanol so ice won't amass. It could be in place by Thursday.
Lawmakers' focus was on what failures may have led to the disaster. The corporate finger pointing prompted an admonishment from Republican Sen. Lisa Murkowski of oil-rich Alaska that "we are all in this together" in trying to shut off the oil and find a safer way to exploit vital energy.
"This accident has reminded us of a cold reality, that the production of energy will never be without risk or environmental consequence," she said. Still, she said, "there will be no excuse" if operators are found to have violated the law.
"Let me be really clear," Lamar McKay, chairman of BP America, told the hearing. "Liability, blame, fault - put it over here." He said: "Our obligation is to deal with the spill, clean it up and make sure the impacts of that spill are compensated, and we're going to do that."
By "over here," McKay meant the witness table at which BP, Transocean and Halliburton executives sat shoulder to shoulder. And despite his acknowledgment of responsibility, each company defended its own operations and raised questions about its partners in the project gone awry.
In the crowded hearing room, eight young activists sat in quiet protest, with black T-shirts saying, "Energy Shouldn't Cost Lives." Several wore black painted spots near their eyes to symbolize tear drops made from oil.
The spreading disaster in the Gulf intensified the political impatience all the way to the White House.
"The president is frustrated with everything, the president is frustrated with everybody, in the sense that we still have an oil leak," spokesman Robert Gibbs said.
Uncertainty over what was happening a mile underwater seemed to confuse Homeland Security Secretary Janet Napolitano, who was touring the Alabama coast. While admitting it had not been verified, she said there was cause for hope that the spill was slowing down because tests indicated less oil and more natural gas was coming out.
But BP spokesman Mark Proegler said there has always been a mixture of gas and oil coming up and that scientists haven't noticed any significant change in the leak.
Senators sought assurances that BP PLC will pay what could amount to billions of dollars in economic and environmental damages. McKay repeatedly said his company would pay for cleanup costs and all "legitimate" claims for damages, and not try to limit itself to an existing federal limit of $75 million on such damages.
BP was the exploratory well's owner and overall operator, Transocean, the rig's owner and Halliburton, a subcontractor that was encasing the well pipe in cement before plugging it in anticipation of future production.
The April 20 explosion is thought to have begun with a surge of methane gas from deep within the well, and while the cause is still under early investigation, testimony provided some insight into what might have been involved.
Republican Sen. Jeff Sessions of Alabama grew frustrated grilling the executives on why engineers replaced a heavy "mud" compound in the well with much lighter sea water when they were temporarily capping the site for future exploitation.
"I'm not familiar with the individual procedure on that well," McKay said.
Steven Newman, Transocean's president and CEO, and Halliburton executive Tim Probert repeatedly told Sessions they did not know how often sea water instead of the compound was used to seal Gulf wells.
"Well, you do this business, do you not?" the senator demanded. "You're under oath. I'm just asking you a simple question."
New Jersey Democrat Frank Lautenberg remarked in the day's other hearing: "The conclusion that I draw is that nobody assumes the responsibility."
McKay said that a key piece of safety equipment, the aptly named blowout preventer, had failed to work and made it clear it was owned by Transocean. "That was the fail safe in case of an accident," said McKay.
But Transocean's Newman said offshore production projects "begin and end with the operator, in this case BP" and that his company's drilling job was completed three days before the explosion and there's "no reason to believe" the blowout protector mechanics failed.
Halliburton's Probert said his company followed BP's drilling plan, federal regulations and industry practices.
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Hebert reported from Washington, Weber from the sit of the oil leak on the Gulf of Mexico. Associated Press writers Matthew Daly and Frederic J. Frommer in Washington contributed to this report.
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