March 30, 2011

Deadline for Suing Transocean Puts Oil Spill Claimants in Quandary The Times-Picayune

As Louisianians know all too well, first anniversaries of traumatic events are more than emotional milestones: They tend to mark legal deadlines as well.  Such a deadline looms April 20 on the first anniversary of the BP oil spill.

The deadline applies to what appears to be a sideline case involving a BP contractor, Transocean, the owner of the Deepwater Horizon rig that blew up last April 20.

Transocean is trying to limit its liability in the case. But because of an obscure 19th century law governing the proceeding, some legal experts believe that people and businesses who suffered damages from the spill should add their name to the case, to protect their right to collect what could be a sizable portion of their damages.

But should people sign up for the Transocean suit if they expect to settle their claims through the Gulf Coast Claims Facility, the entity supervised by Kenneth Feinberg that is handing out $20 billion from BP?

Yes, say lawyers involved in the suit, because Transocean, unlike BP and the other defendants, is shielded by the April 20 deadline. The lawyers expect that courts will assign the firm at least some of the legal blame for the Macondo blowout and subsequent oil spill.

No, say other plaintiff attorneys who are working with Feinberg to settle claims out of court, because signing on to the Transocean lawsuit may mean paying legal fees to the lawyers working on the case even if a claimant ultimately takes an offer from Feinberg.

Feinberg's charge is to settle as many claims against BP as possible out of court. He says he expects to settle more than 90 percent of the claims. He's already succeeded in closing about 100,000 claims, mostly smaller ones. He's offered another 20,000 settlements, and if those claimants want their money, they would have to swear off any other claims against BP or the other companies involved in the oil spill, including Transocean.

But there are another roughly 100,000 claims still under review by Feinberg's Gulf Coast Claims Facility, and 65,000 who want to be paid on an interim basis, which preserves their right to settle later or still sue in court.

Plaintiffs lawyers, meanwhile, have already filed more than 350 cases against BP and the other responsible parties. They've all been consolidated into a central case before U.S. District Judge Carl Barbier. The plaintiffs have a chance in the Transocean liability case to draw in thousands of new clients to the larger case.

The opportunity owes to Barbier's approval of a "short form joinder," a three-page document with the most basic information. Whoever signs it is automatically added to the plaintiffs' claims against Transocean, and, Barbier has ruled, to the larger case against all of the defendants. There's no filing fee, and people can file without a lawyer.

The lead plaintiff lawyers say signing the form is the only way for a claimants to be sure they will be able to collect the portion of damages for which Transocean is found liable. As of last week, some 27,000 people had signed up.

Plaintiff attorneys argue they are better positioned than Feinberg to get claimants the compensatory damages they deserve. And they hope that if the court finds the spill resulted from gross negligence, they'll be able to collect punitive damages as well -- up to four times what they get in compensation.

"The possibility of punitive damages is the only way to ensure that BP, Transocean, Halliburton, et al. are held fully accountable for their conduct," said Stephen Herman, one of two lead plaintiff attorneys in the case.

Punitive damages aren't available under the Oil Pollution Act of 1990, the post-Exxon Valdez law governing many oil spill claims. But they are available under maritime law, which governs the Transocean liability trial that will take place in February 2012.

Herman and his fellow attorneys say that signing up for the Transocean case does not tie claimants down if they wind up liking Feinberg's offer. They say anyone who settles with Feinberg will sign a release removing them from the Transocean case.

They are endorsed in that view by a group of lawyers hired by the state of Louisiana to advise claimants. The lawyers were hired with money from BP, but the state picks them.

But a separate group of plaintiff attorneys is warning claimants that it won't be so easy to drop out of the court case, and they might have to pay a percentage of their award to the lawyers who filed suit.

"I'm concerned that once they file this paper, they're entangled in the lawsuit," said Stuart Smith, a lawyer who has promised dozens of clients that he would work to get them a fair settlement through Feinberg's process.

* * * * *

March 1, 2011

BP Says Spill Settlement Terms Are Too Generous

In the eight months since Kenneth R. Feinberg took over the $20 billion fund to compensate victims of the Gulf of Mexico oil spill, he has been attacked by many of those filing claims and by coastal state politicians who argue that the process is opaque, arbitrary and slow. Many of them have also argued that Mr. Feinberg’s recently published estimates of future damage to those in the gulf are too optimistic, and thus his offer of compensation in a final settlement is too low.

Now he is getting complaints from another quarter: BP.

The oil giant is arguing that, if anything, Mr. Feinberg’s proposed settlements are too generous. The planned payments far exceed the extent of likely future damages because they overstate the potential for future losses, the company insists in a strongly worded, 25-page document that was posted on the fund’s Web site Thursday morning.

Basing its estimates on much of the same data Mr. Feinberg used, the company concluded that there was “no credible support for adopting an artificially high future loss factor based purely on the inherent degree of uncertainty in predicting the future and on the mere possibility that future harm might occur.”

Mr. Feinberg released the rules that will govern final settlements this month. In general, the program announced, damages paid out by the fund would be double the 2010 losses for most of those filing claims, less any money previously paid by the fund.

That payout plan is based on estimates of environmental and economic recovery for the region commissioned by Mr. Feinberg that were published with the new rules: while the fund stated “prediction is not an exact science,” it suggested a gulf recovery by the end of 2012.

BP argues in its filing that the Feinberg estimate vastly overstates the likely damage, which it places in the range of just 25 percent to 50 percent of a claimants’ 2010 losses. The company noted that almost all of the closed fishing grounds had reopened, and economic recovery in tourism was well under way, with hotel and sales tax revenues in the fall of 2010 similar to those from the same period in the year before.

Mr. Feinberg, appointed last June by BP and approved by the Obama administration, has given out more than $3.5 billion so far in emergency money to those affected by the spill, most of that in emergency payments. So far, some 100,000 people have filed for a final settlement. An additional 90,000 have opted to take a quick-pay process that settles all claims with a payment of $5,000 to individuals and $25,000 to businesses. Final payments will begin after the two-week public comment period, which ended Wednesday.

The comments can be read on the fund’s Web site, www.gulfcoastclaimsfacility.com. Many are detailed critiques of the fund methodology, while others are raw cries for aid, like the one filed on Feb. 16 that reads, in its entirety: “We need help now! We have not been paid in 8 months. I have a mortgage, car payment, utilities, and a child. I’m close to losing my home and I pray that you figure out everything before I lose everything. We are people with real lives! This has been a horror for my family.”

The BP filing notes that uncertainty about the persistence of damage to the gulf can be handled through mechanisms already in place. Those who believe that Mr. Feinberg’s methodology underestimates future losses can wait and see how well or poorly the gulf recovers over time, and can continue to file for quarterly reimbursement for documented losses. BP noted that Mr. Feinberg pledged to review the likelihood of future losses on a regular basis and the ability of those filing claims to receive interim payments that “amply protect claimants against any risk that the future losses factor may ultimately turn out to have underestimated the time to full recovery.”

This very public disagreement between BP and the administrator of its fund would seem to undercut the other major attack on Mr. Feinberg. Lawyers for those suing BP have alleged that Mr. Feinberg, while claiming to be independent of BP, is actually working in the oil company’s interests.

In a response this month to a complaint filed by those lawyers, Judge Carl J. Barbier of Federal District Court in New Orleans, who is overseeing the federal suits, wrote that Mr. Feinberg should not refer to himself as fully independent of BP, that he must make clear to potential litigants that he is “acting for and on behalf of BP in fulfilling its legal obligations.” Judge Barbier suggested that the relationship between Mr. Feinberg and the company should be thought of as a kind of hybrid, with Mr. Feinberg neither an employee nor fully neutral. The company, he noted, does not control the evaluation of individual claims, but did appoint Mr. Feinberg and pays him a flat fee. The judge did not order any substantive change in the way Mr. Feinberg conducts the work of the fund.

And neither, in its filing, does BP. The statement, while strongly worded, gives no indication that BP plans to intercede in the process it handed off to Mr. Feinberg, and BP is expected to abide by his decision, albeit grudgingly. Instead, it concludes, using the abbreviation for the Gulf Coast Claims Facility, “BP respectfully requests that the G.C.C.F. revise the Proposed G.C.C.F. Methodology consistent with the comments set forth above.”

When asked about BP’s statement, Mr. Feinberg said, “We read every submission and take them all under advisement.”

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December 14, 2010

Fraudulent claims in Gulf oil spill investigated by feds Times-Picayune

As oil spill claims czar Kenneth Feinberg wraps up emergency payments and begins processing final claims in the Gulf oil spill, the government's fight against fraudulent BP claims is kicking into high gear, with a former Gretna restaurateur the latest to be caught in the dragnet.

Feinberg said this week that he considers from 2,000 to 3,000 of the 460,000 claims he has received to be "very suspicious" and "will send any claims that appear to be fraudulent to the (U.S.) Department of Justice."

The FBI and Gulf Coast U.S. attorneys' offices are encouraging people to call the federal toll-free disaster fraud hotline at 877.623.3423 or to report suspected cases of fraud by e-mailing tips to disaster@leo.gov.

Federal prosecutors, the FBI, the U.S. Secret Service and the U.S. Postal Inspection Service are cooperating in the effort, which is similar to disaster fraud investigation efforts established after Hurricane Katrina.

The anti-fraud effort is already paying dividends. The Justice Department announced last week that seven people have been indicted for trying to defraud BP or Feinberg's Gulf Coast Claims Facility, which took over the administration of the claims process from BP on Aug. 23.

"The charges ... send a strong message that we will not tolerate any fraudulent activity designed to profit from this tragic oil spill," said Assistant U.S. Attorney General Lanny Breuer of the Justice Department's Criminal Division. "The Department of Justice and federal law enforcement agencies are placing a high priority on the prompt investigation and prosecution of all forms of fraud related to this disaster."

Federal prosecutors in New Orleans filed an indictment Friday charging Cam T. Hang of Gretna with one count of mail fraud, alleging she fraudulently collected a $42,000 emergency payment by claiming losses from a seafood restaurant called C.H. Food Mart Inc. In fact, she sold the business in April 2009, more than a year before the oil spill, according to the indictment.

Hang is scheduled to be arraigned in federal court Monday.

Also last week, an Alabama man was indicted after submitting allegedly false pay stubs for a $13,000 claim; an Alabama woman was charged with filing fraudulent documents to collect $20,000 from Gulf Coast Claims Facility; a criminal complaint was unsealed against a Michigan man who collected $9,000 from BP; and a Mississippi man was accused of filing a false tax identification number, false state and federal tax returns, a false business permit and false sales receipts to get $180,000 from BP and the Gulf Coast Claims Facility.

Two other indictments for allegedly false spill claims were filed in Texas and North Carolina in November.

Feinberg said he has staff members who are responsible for checking the legitimacy of documents such as fishing licenses and tax returns, and has brought in forensic accountants to analyze files. He also said his office was responsible for alerting federal authorities to the cases that led to indictments last week.

Among claims he has investigated is one by an alleged boat owner who had "no such boat," Feinberg said. In another case, someone in another Gulf Coast state "hung a shingle claiming to be GCCF ... trying to bilk individuals" of their rightful claims.

But Feinberg said he's careful to distinguish between possible fraud and overreaching claims that simply try to "beat the system." He said that when thousands of Plaquemines Parish claimants filed the same mass-produced letter claiming losses of subsistence fishing it was illegitimate, but not fraudulent.

"I think it's one thing if people simply try to take advantage of the program to get more money" than they deserve, Feinberg said. "But I don't think that's fraud." 

* * * * *

December 8, 2010

More than 100,000 emergency oil spill claims denied in 10 days Press Register

Ken Feinberg’s operation has denied more than 100,000 emergency spill claims in the past 10 days as it nears a Dec. 15 deadline to process all 455,000 such claims.

As of Saturday night, the Gulf Coast Claims Facility had denied more than 173,000 claims from businesses and individuals, including 24,000 from Mississippi and 22,000 from Alabama. Only 67,000 claimants had been turned down as of Nov. 24.

Feinberg, the top claims administrator, said many claimants were denied because they lacked proper records to document their losses. They can refile for final or interim payments with better documentation, he said.

Denied claimants can also appeal to the U.S. Coast Guard’s claims process or sue BP PLC.

“The number of denied claimants continues to soar for two reasons,” Feinberg said in an e-mail Monday. “1) Thousands and thousands of claimants, who were asked over the past few months to submit additional documentation have not done so; so they are now being denied. 2) Claimants who filed in the past few weeks with insufficient documentation have automatically been denied.”

Feinberg on Aug. 23 took over the process of compensating individuals and businesses damaged by the BP oil spill. Until Nov. 23, he allowed people to file for emergency claims, which covered up to six months of lost earnings and did not force anyone to sign away their rights to sue BP.

Now people can file for final settlements, which require waiving legal rights against BP or they can file for interim payments, which cover three months of lost earnings at a time but do not require a legal waiver.

To date, Feinberg’s operation has paid out more than $2.3 billion to nearly 158,000 individuals and businesses.

His claims facility, however, has been the source of repeated criticisms that larger businesses were being treated unfairly, and big business claims were often paid at just a small percentage of the total loss.

Many of the large businesses along the coast — such as hotels, condo-rental companies, restaurants and retailers — have described severe losses when the spill wrecked the summer tourism season.

Feinberg and his associates have responded to the criticism by meeting with several large claimants and have promised supplemental payments to some.

In Mississippi, nearly 50,000 claims have been filed. More than 14,000 have been paid for a total of about $200 million. About 7,000 require more documentation, and 3,000 are under review.

More than 66,000 claims have been filed in Alabama. Thus far, nearly $427 million has been paid out to about 27,000 claims. Nearly 11,000 claims need more documentation before they can be approved, and another 4,500 are still under review.

Overall, there are about 80,000 emergency claims remaining that do not have enough documentation to be approved.

Feinberg said he plans to either approve or deny all emergency claims by Dec. 15, at which point his operation will begin processing final and interim claims. 

* * * * *

August 11, 2010

Obama administration releases fund agreement with BP in Gulf oil spill Times-Picayune

The Obama administration today released a 40-page agreement with BP that requires the company to set aside revenue from its U.S. oil and natural gas production as collateral for a $20 billion fund to pay victims of the massive Gulf oil spill.

The document makes it clear that the fines the administration plans to assess against BP can't be paid from that account.

It says the fund, for which BP made its first $3 billion deposit Monday, will be used to pay claims adjudicated by Kenneth Feinberg, the administrator of the Gulf Coast Claims Facility. It also will be tapped to cover natural resource damage costs and state and local response reimbursement.

Environmental groups quickly raised objections about using BP oil and gas production as collateral.
David Pettit of the Natural Resources Defense Council said that while those depending on the fund need BP "to remain solvent," the dependence on continued BP drilling operations "casts a shadow on the legitimacy of future regulatory authority."

Associate U.S. Attorney General Tom Perrelli, who helped negotiate the deal, earlier this week said demanding collateral from BP was important to "ensure that the necessary" funds will be available should the oil giant run into financial problems.

The escrow agreement released Wednesday details the responsibility of BP and two trustees who will oversee the distribution of money from the company to Feinberg.

"It was clearly written by a room full of lawyers," said Mitchell Crusto, who teaches business law at Loyola University Law School.
The administration has said the fund amount is not a ceiling and that the company could be required to pay more depending on the size of compensation awards.

Still, Rep. Steve Scalise, R-Jefferson, raised concerns that the escrow account could be quickly diminished by payouts to help restore natural resources damaged by the spill.

"While BP should absolutely pay these costs to restore our valuable natural resources they should make those payments separate from this fund which is intended to compensate Gulf Coast families and small businesses impacted by this disaster," Scalise said.

The use of the fund to restore environmental damage was laid out from the first day the Obama administration announced its agreement with BP on June 16.

An administration fact sheet said the fund would be used to pay for natural resource damage costs, claims adjudicated by the head of the Gulf Coast Claims Facility, state and local response costs, as well as any judgments and settlements reached with those who decide to bypass the Claims Facility and file damage claims with the courts.

Crusto, the Loyola law professor, said he found no specific mention in the escrow agreement of whether payments from the fund could be used to finance damages imposed by the courts or in out-of-court negotiated settlements, just one of a "number of questions" left unanswered.

White House spokesman Robert Gibbs said that the escrow documents call for BP to pay $5 billion before the end of this year and then $5 billion each in 2011, 2012 and 2013, for a total of $20 billion.

Crusto said the agreement to make the payment over four years will help BP with its cash flow, and might help reassure investors.
Feinberg is expected to announce next week the process by which people and businesses impacted by the spill can apply for payments to cover their losses.

Gibbs, during his White House briefing, said that President Barack Obama, who will be making a one-day vacation stop Saturday at Panama Beach, Fla., plans to meet with business leaders, and will be accompanied by Ray Mabus, the Navy secretary who is developing a coastal restoration plan for the Gulf. Gibbs said the president wants the visit to help make the point that Gulf beach communities and resorts are open for business.

"Even as the president talks about what our next steps are in our response, obviously part of this will be highlighting the tremendous economic toll that has taken place, as I said, even on places that didn't necessarily see a large amount of oil wash up," Gibbs said.

* * * * *

August 8, 2010

Cement plug on oil well secure, says BP  The Associated Press

BP says the cement sealing the busted oil well in the Gulf of Mexico has hardened as crews prepare for the final phase of drilling a relief well.

The oil giant said Sunday that pressure tests on the cement plug poured down the throat of the blown-out well show the seal is solidly in place.  That means BP engineers can begin drilling the final 100 feet of a relief well meant to permanently seal the blowout.

Crews will carefully drill about 30 feet at a time, and BP says it will likely be next weekend before the two wells meet. BP didn't make it clear Sunday if workers had begun drilling.  Engineers will use the relief well for a "bottom kill," pumping more mud and cement into the busted well in what is expected to completely seal the well for good.

* * * * *

August 7, 2010

VOO-do or don't? BP disputes claims it will shut down Vessels of Opportunity soon  Press-Register

On Wednesday it sounded like a restructuring of BP PLC's Vessels of Opportunity program was in the offing.

With fewer boats needed now that the leaking well is plugged, BP PLC executive Kris Sliger told Orange Beach officials and a couple hundred residents that he would meet with city officials on Friday to come up with a consistent work rotation and slimmed down fleet. Doing so would free unneeded captains to find new jobs and proceed with loss of income claims with the oil giant.

But after the town hall session, Orange Beach Mayor Tony Kennon said Sliger told him the meeting wouldn't be necessary because BP was planning to within weeks disband its program for captains and deckhands put out of work this summer by the company's runaway well.

"No one has shared their demobilization plan with us," the mayor said Friday morning. "But to me it sounds like they're packing up their little red wagon and getting out of town as fast as they can."

Sliger said Friday afternoon that BP officials canceled the Friday meeting simply because of scheduling conflicts and were prepared to talk with local officials about the future of the Vessels of Opportunity program as early as Monday. And while the fleet will continue to be trimmed there are no immediate plans to scrap the program in its entirety, he said.

"It's basically trying to right-size the operations to what's out there now," said BP spokeswoman Dawn Patience. "The goal going forward will be getting the right boats for the right tasks."

Those tasks include uprooting hundreds of miles of oil containment boom along Alabama's coast, searching for oil and looking for distressed wildlife.

Patience said 152 Alabama boats worked Friday. That's down from the 1,500 or so that Sliger said plied the waters off the state's coast at the height of the spill response in early July. All told, owners of about 4,000 vessels applied to participate in the program through the spill response center in Mobile, Sliger said.

"The probability of going back to 600 boats or 1,500 boats realistically is zero," Sliger said Wednesday. "I suspect we'll release the majority of boats, but there will be a small Vessels of Opportunity program consistent with the threat."

While praised for quickly putting to work fishermen and others who earn their living on the water, the Vessels of Opportunity program has not been without criticism.

Early on there were complaints that out-of-town boat owners were flooding the ranks and taking work from the local captains who needed it. Later, as some captains sat waiting fruitlessly for the call to work, others were hauling in five-figure paydays without ever getting on the water.

"Some people were getting work, some weren't getting any at all," Kennon said. "It's seemed arbitrary."

At a late-July forum in Orange Beach one man who identified himself as a marine contractor, sour because he had been cut off by BP, admitted he had already collected $40,000 from the company though his boat never left the dock, Orange Beach Councilman Jeff Silvers said.

The next man in line to speak, Silvers said, was a longtime resident and boat captain who told city officials he had waited for months to get on BP's payroll and now faced losing his home.

Bryan Watts is captain of a 43-foot charter fishing boat and has for several weeks acted as the liaison between the local fleet, City Hall and BP. Watts said that owners of larger boats like his were told two weeks ago to stand by for assignments. Early this week a call came, but it was to inform them that they were no longer needed. It was the fourth time Watts had been deactivated since May 1.

"I've only worked 30 days," Watts said. "That's not enough to get me through this month, let alone the rest of the year."

To make matters worse, Watts said, he's waited since June 26 to be paid on an invoice for about $30,000 that he sent to the company handling the Vessels of Opportunity payroll.

"You try to understand," Watts said. "They've had a lot of boats. They've had a lot of fraud. But you'd think over time they'd get more organized. That didn't happen."

* * * * *

july 31, 2010

NOAA: Surface oil no longer a threat to Florida (Submerged oil still might wash ashore, however) Pensacola News Journal

Surface oil no longer poses a threat to Florida coastlines, federal officials said Friday, but submerged oil could continue to wash onto Pensacola beaches for some time.

The National Oceanic and Atmospheric Administration announced Friday that only scattered patches of light oil sheen remain on the surface of the Gulf near the Mississippi River Delta.

The flow of oil from the ruptured Deepwater Horizon well has been stopped since the well was temporarily capped July 15. If the well remains capped, NOAA Administrator Jane Lubchenco said Northwest Florida beaches are past the worst of the oil contamination.

"Northwest Florida has seen the worst. It will taper off and diminish considerably, but we will continue to see it at some level for some time," Lubchenco said.

The latest analysis is based on aerial and satellite observations of surface oil and by monitoring the loop current.

"For southern Florida, the Florida Keys, and the Eastern Seaboard, the coast remains clear," Lubchenco said. "With the flow stopped and the loop current a considerable distance away, the light sheen remaining on the Gulf's surface will continue to biodegrade and disperse but will not travel far."

Not all of the oil in the Gulf can be seen from above, and Lubchenco said submerged oil could continue to wash ashore sporadically near Pensacola.

"The oil that is just below the surface is harder to see remotely. It clearly is there, both in the form of tar balls as well as emulsified oil. We certainly expect some oil to continue to come ashore, but in more limited quantities, in the northern Gulf," Lubchenco said.

The analysis found that large loop current eddy has pinched off and detached from the main current, which cuts off the oil's path to southern Florida and East Coast beaches.

"Until the loop current fully reforms, there is no clear way for oil to be transported to southern Florida or beyond," according to the NOAA release.

The current is not expected to reform for several months. If the well remains capped, almost all of the surface oil will have dissipated by that time, officials said.

NOAA Administrator Jane Lubchenco cautioned that scientists will continue studying the potential effects of the subsurface crude.

"Diluted and out of sight does not mean benign," she said. "But in those concentrations, there will be minimal impact to the big things that are out in the ocean: big fish, big marine mammals, birds."

She said scientists still don't know the oil's environmental effect underwater.

* * * * *

July 25, 2010

Relief Well Rig & Vessels Return to Oil Cleanup as Bonnie Breaks Up Over Gulf  FoxNews.com

BP says the relief well rig and other vessels are returning to the blown-out oil well site after Tropical Depression Bonnie begins to break apart, and with winds near 30 mph the storm could soon weaken to an area of low pressure.

Forecasters with the U.S. National Hurricane Center said Saturday that it was less likely that Bonnie would strengthen as the storm heads toward the site of the oil spill in the Gulf.

"The Development Driller 3 (DD3) is on its way back," BP spokesman Bryan Ferguson said. "It's the one that's drilling the first relief well, and it's the most critical one and it is turned around and is headed back right now."

The rig was disconnected from the spill site ahead of Tropical Storm Bonnie, which later weakened to a tropical depression.

"The assessment was made that the storm intensity has decreased," Ferguson said. "So the decision was made overnight to return the DD3."

In anticipation of the storm, ships working at the oil spill site moved to safer waters and coastal workers packed up oil removal operations.

The storm now seems a less likely threat to cleanup, but is expected to bring periods of heavy rainfall, strong winds, and dangerous surf to the Gulf states. Bonnie could reach the northern Gulf Coast tonight or early tomorrow after passing over the oil spill midday Saturday.

The center of Bonnie came ashore Friday near Cutler Bay, about 20 miles south of Miami. It moved into the eastern Gulf and was about 215 miles east-southeast of the mouth of the Mississippi River at 8 a.m. EDT Saturday.

Though officials along the coast expressed frustration at the sudden halt to cleanup and containment, several said they saw no choice, given the looming arrival of bad weather.

The mechanical cap that has mostly contained the oil for eight days was left closed, and there was no worry the storm could cause any problems with the plug because it's nearly a mile below the ocean's surface.

"Preservation of life and preservation of equipment are our highest priorities," said Allen, the federal government's spill chief who ordered the evacuation of most ships 40 miles from the Louisiana coast

With many of the protective barriers that had been shielding Louisiana's coastal marshes locked away in warehouses, oil began to seep into fragile ecosystems that had been relatively unscathed; the black blotches were visible in the waters off St. Bernard Parish, just east of New Orleans's French Quarter, The Wall Street Journal reported.

"We can't do anything about it," said parish spokeswoman Jennifer Belsom about current skimming operations. But she expects them to resume Monday.

Workers on land readied for a possible storm surge that could push oil into the sensitive marsh areas along the coast.

On the tiny resort island of Grand Isle off the southeast Louisiana coast, workers packed up the oil removal operation, tearing down tents, tying down clean boom and loading oil-soaked boom into large containers so it won't pollute the area if the storm causes flooding.

"We're planning for a 2-to-3-foot storm surge so anything that would be affected by that is being moved or stored," said Big Joe Kramer, 55, who is working on his fourth large spill for Miller Environmental Services, Inc.

At the spill site, the water no longer looks thick with gooey tar. But the oil is still there beneath the surface, staining the hulls of boats motoring around in it.

The evacuation could delay the relief well for as long as two weeks, pushing back the attempt to definitively shut down the leak by intercepting the well to late August, BP officials said. But an attempt to flood the well with drilling mud and cement could be tried shortly after the ships get back to the drilling site, Allen said.

Before the cap was attached and closed a week ago, the broken well spewed 94 million gallons (355 million liters) to 184 million gallons (696 million liters) into the Gulf after the BP-leased Deepwater Horizon rig exploded April 20, killing 11 workers.

The plug is so far beneath the ocean surface, scientists say even a severe storm shouldn't damage it.

"There's almost no chance it'll have any impact on the well head or the cap because it's right around 5,000 feet (1,500 meters) deep and even the largest waves won't get down that far," said Don Van Nieuwenhuise, director of professional geoscience programs at the University of Houston.

* * * * *

July 22, 2010

Well will remain sealed, even in a storm Houston Chronicle

The Macondo well will remain sealed indefinitely, even if observation and drilling ships have to evacuate from the well site, said the head of the federal spill response.

Federal scientists are comfortable enough with the protocol developed for investigating possible leaks around BP's troubled well that they will no longer need to renew the well testing effort ever 24 hours, said Admiral Thad Allen in a media call from the Mobile, Ala.

And while they have yet to decide if the weather system threatening the well site will lead to an evacuation of all vessels (decision expected at 8 p.m. tonight) the well will remain shut in if the site is abandoned.

The storm could put well-killing efforts behind by as much as twelve days, depending on how long it takes to get ships back on the scene after the storm passes and equipment hooked-up. Prior to the storm BP's next step was to install another section of casing the primary relief well and then -- pending federal approval -- try a static kill of the well by pumping heavy mud through the top of the well.

BP Vice President Kent Wells said it's possible a turn in the storm course could allow the company to keep one or some of the ROV vessels on site to keep monitoring, even if the drilling rigs need to move fully disconnect from the sea floor and move away. The teams are also looking at ways to monitor data from the well remotely or continue to capture data when the site is abandoned that can later be reviewed when ships return.

Wells said the pressure in the well continued to rise slowly, to 6,863 pounds per square in Thursday afternoon.

"There's no evidence that says we don't have integrity in the wellbore," Wells said, including regular seismic data gathered that is watching for any leaks of oil and gas below the sea floor.

Prior to the storm threat federal officials had given approval to begin preparing for the static kill, Wells said, but there would need to be a final go-ahead from the feds before the static kill were to proceed.

Storm-force winds could hit the site by Saturday, and that could create waves that are larger than is considered safe for most of the vessels involved in well operations. If an evacuation of the area is called the ships with the remote controlled submarines monitoring the well and sea floor would most likely be the last to leave given the speed at which they can stop operations.

The current forecast track brings the depression across the central Gulf of Mexico, right across the center of the spill. As the Chronicle's Eric Berger notes: If the depression does unexpectedly strengthen into a reasonably large hurricane and develops a surge, the oil would likely be pushed inland toward the southeastern Louisiana, Mississippi and Alabama coasts, which have already borne the brunt of the spill effects.

The analysts with Gimme Credit called the decision to keep the well shut-in good news, "both in terms of the confidence it implies in well integrity and in terms of reducing BP's overall prospective liability for oil released into the Gulf of Mexico."

* * * * *

July 21, 2010

Work on oil leak stopped by developing storm; cap may have to be opened  Associated Press

A storm brewing in the Caribbean brought the deep-sea effort to plug the ruptured oil well to a near standstill Wednesday just as BP was getting tantalizingly close to going in for the kill.

Work on the relief well -- now just days from completion -- was suspended, and the cap that has been keeping the oil bottled up since last week may have to be reopened, allowing crude to gush into the sea again for days, said retired Coast Guard Adm. Thad Allen, the government's point man on the crisis.

"This is necessarily going to be a judgment call," said Allen, who was waiting to see how the storm developed before deciding whether to order any of the ships and crews stationed some 50 miles out in the Gulf of Mexico to head for safety.

The cluster of thunderstorms passed over Haiti and the Dominican Republic on Wednesday, and forecasters said the system would probably move into the Gulf over the weekend. They gave it a 50 percent chance of becoming a tropical depression or a tropical storm by Friday.

Crews had planned to spend Wednesday and Thursday reinforcing with cement the last few feet of the relief tunnel that will be used to pump mud into the gusher and kill it once and for all. But BP put the task on hold and instead placed a temporary plug called a storm packer deep inside the tunnel, in case it has to be abandoned until the storm passes.

"What we didn't want to do is be in the middle of an operation and potentially put the relief well at some risk," BP vice president Kent Wells said.

If the work crews are evacuated, it could be two weeks before they can resume the effort to kill the well. That would upset BP's timetable, which called for finishing the relief tunnel by the end of July and plugging the blown-out well by early August.

Scientists have been scrutinizing underwater video and pressure data for days, trying to determine if the capped well is holding tight or in danger of rupturing and causing an even bigger disaster. If the storm prevents BP from monitoring the well, the cap may simply be reopened, allowing oil to spill into the water, Allen said.

BP and government scientists were meeting to discuss whether the cap could be monitored from shore.

As the storm drew closer, boat captains hired by BP for skimming duty were sent home and told they wouldn't be going back out for five or six days, said Tom Ard, president of the Orange Beach Fishing Association in Alabama.

In Florida, crews removed booms intended to protect waterways in the Panhandle from oil. High winds and storm surge could carry the booms into sensitive wetlands.

Also, Shell Oil began evacuating employees out in the Gulf.

Even if the storm does not hit the area directly, it could affect the effort to contain the oil and clean it up. Hurricane Alex stayed 500 miles away last month, yet skimming in Alabama, Mississippi and Florida was curtailed for nearly a week.

The relief tunnel extends about two miles under the seabed and is about 50 to 60 feet vertically and four feet horizontally from the ruptured well. BP plans to insert a final string of casing, or drilling pipe, cement it into place, and give it up to a week to set, before attempting to punch through to the blown-out well and kill it.

In other spill-related news:

Four oil giants -- BP was not among them -- agreed to pool $1 billion to form a new company that would respond to offshore oil spills. The company would be able to mobilize within 24 hours to capture and contain spills at depths of up to 10,000 feet, according to the American Petroleum Institute.

The Times of London quoted unidentified BP sources as saying the company's beleaguered CEO, Tony Hayward, planned to step down by September after a series of PR blunders, including yacht racing during the spill and saying he wanted his life back. But BP said Hayward still had the full support of its board.

BP's broken well spewed somewhere between 94 million and 184 million gallons into the Gulf before the cap was attached. The crisis -- the biggest offshore oil spill in U.S. history -- unfolded after the BP-leased Deepwater Horizon rig exploded April 20, killing 11 workers.

* * * * *

July 19, 2010

Gas seeps not necessarily a problem, because pressure in oil well rising, officials say The Times-Picayune

Scientists have discovered four gas "seeps" at or near BP's blown-out Macondo well since Saturday, but at this point, the federal government doesn't believe they're a problem and will allow BP to leave the cap on the well for another 24 hours while it watches for signs of ruptures in the underground portion of the well.

Bubbles have been spotted on the seabed about three kilometers away from the well, a few hundred meters from the well, at the base of the original blowout preventer on the well, and coming out of a gasket in the flange on the capping stack that was installed last week.

Retired Coast Guard Admiral Thad Allen, the National Incident Commander, said he doesn't believe that the faraway bubbles are related to the Macondo well, and the capping stack bubbles simply indicate that the new device doesn't have a good seal in one spot, so that leaves the nearby spot on the seabed and the base of the blowout preventer as areas of concern.

Bubbles can indicate pathways where oil could soon follow. But Allen said BP and federal officials don't believe the bubbles are problematic at this point because the pressure continues to rise in the well -- albeit slowly -- and seismic, acoustic and sonar monitoring in the area aren't detecting any sudden shifts that would indicate the well blowing out underground.

"The small seepages, at least at this point, do not indicate that there is any threat to the well bore," Allen said.

Allen's comments Monday afternoon capped what seems to have been a tense period between BP and the federal government, which is overseeing its response. On Sunday, Allen sent BP a terse letter ordering the company to disclose any signs of trouble within four hours of finding them and to have a plan ready for how to relieve pressure in the well immediately. Late Sunday night, BP canceled the 7:30 a.m. briefing it had been holding for the past week, and on Monday morning, refused to acknowledge the seeps that Allen had written about in his letter. The first real descriptions of the seeps Monday came not from the Coast Guard or BP, but from a White House briefing.

While Allen's tone was optimistic Monday afternoon, the fact that the government is granting BP permission to keep the cap in place that has been preventing oil from escaping into the Gulf of Mexico since last Thursday in 24-hour increments is a sign that scientists still aren't fully comfortable that they understand what's going on with the well. Pressure has been rising in the well, which is a good sign, indicating that the well may be sealed. But the readings are much lower than expected -- 6,811 pounds per square inch and rising an inch an hour -- igniting a debate over whether the well may have a leak somewhere or has simply lost its initial oomph after flowing for 81 days.

Bill Gale, a California engineer and industrial explosion expert who is a member of the Deepwater Horizon Study Group, said that BP probably wants the cap to remain in place since it eliminates the PR problem of oil billowing through the water on the ROV cameras, and stops oil that eventually will be tallied as the basis for fines. The government, it appears, is only granting continued use of the cap on a short-term basis while it waits to see if it can become more comfortable with the situation, Gale speculated.

Although Allen is optimistic, engineers say it's too early to conclude that the cap is working.

Now that the reservoir of the Macondo well is flowing, the pressure could be rising because the temperature could be rising in the chamber, Gale said. Although later in the day, BP Senior Vice President Kent Wells said the temperature of the well has been consistent.

It's also possible, Gale said, that gas hydrate crystals could be plugging any holes in the underground portion of the well, and they could get dislodged as pressure builds.

"The increase in pressure could be a total red herring," Gale said.

Meanwhile, Gale's mentor, Berkeley engineering professor Bob Bea, has very little confidence in what's been said publicly about the seeps.

He's troubled that we're just now hearing about seeps three kilometers away, because a survey of the seabed conducted before BP drilled its well didn't indicate anything like that.

"There was nothing that indicated the presence of such a seep," Bea said. "I wonder why we're just now finding that out?"

BP has yet to release other ROV video that Bea's study group requested more than a month ago about what may have been shots of nearby seeps.

And Bea is especially concerned about the bubbles at the base of the blowout preventer. He said that BP does not appear to have installed a casing hanger lock, opening the possibility that gas and liquids could make their way up through the casing to the seabed.

Also, the mysterious second pipe that was revealed to be stuck in the blowout preventer when BP cut off the riser pipe a few weeks ago could have actually been a section of the liner material from the bottom part of the well, leaving open the possibility that an entire section of the well could be missing down below, Bea said. At this point, we don't know because the mysterious second pipe fell back down into the well last week when BP was removing equipment in preparation for the capping stack.

"I wish we had more information overall," Bea said, adding that the uncertain situation with the cap puts even more importance on the relief wells to permanently shut down the renegade Macondo well.

Wells, the BP official, said Monday afternoon that the first relief well is at a depth of 17,862 feet. It's four feet to the side of the original well, and is "perfectly positioned" at the right angle to intercept it. On Wednesday and Thursday, Wells said, BP will run the casing and then will cement it. After it cures, the company will be ready to drill the final feet to intercept the well, hopefully by the end of July.

Meanwhile, Allen and Wells, in their separate conference calls, introduced a new option for keeping the well under control until the relief wells are completed: a static kill.

In May, BP tried a dynamic "top kill," whereby it pumped massive amounts of drilling mud at high rates of speed into the blowout preventer to try to suppress the flow of oil. Now that the well is at least temporarily contained with the cap, the company may try a "static kill," in which it can get away with pumping mud at lower pressures and rates of speed because it doesn't have to work as hard to gain control of the oil.

Wells said his company will decide whether or not to pursue the static kill in the next few days. Even if it is successful, it would move forward with plans to cement the well through the relief well, but the static kill would make that job easier.

* * * * *

July 19, 2010

No new oil detected at BP well site despite concern over possible leak, official says  Press-Register 

While the government's top oil response official continues to express concern about possible leaks near the well site, the federal on-scene coordinator said signs of leaking oil haven't reached the surface of Gulf waters above the broken well.

"We've had no indication of oil being released at the site, and at the same time, there are measurements being taken, constantly monitoring for ... volatile organic compounds," Adm. Paul Zukunft said in a conference call today.

In a news release sent early Monday morning, retired Coast Guard Adm. Thad Allen, the national incident commander, said he gave approval to keep the cap on BP PLC's gusher closed for a fourth day despite leakage concerns, following a conference call with the company and government scientists.

"During the conversation, the federal science team got the answers they were seeking and the commitment from BP to meet their monitoring and notification obligations," Allen said in a written statement.

Allen said a "seep" was detected near the well, as well as "the possible observation of methane over the well."  With the well still capped, cleanup officials are moving oil cleanup vessels from the well site closer to Gulf Coast shorelines to prevent further damage on land, Zukunft said.  "All of that fleet of skimmers ... is now moving to recover this oil before it makes impact," he said.

Alabama shores may need the help in coming days.

A National Oceanic and Atmospheric Administration forecast shows oil moving north, near Louisiana's Chandeleur Sound, by Wednesday. While moving closer to Alabama, the oil is projected to still be many miles for Alabama shores by midweek.

"Oil is now approaching the Mississippi river delta region," Zukunft said.

* * * * *

July 17, 2010

Length of reprieve from Gulf of Mexico oil spill remains uncertain Associated Press
 

The Gulf Coast found itself in an odd moment of limbo Saturday: The flow of oil into the Gulf of Mexico has been stopped, but no one knows whether it's corked for good.

The clock expired on BP's critical 48-hour observation period, and it appeared scientists were still contemplating what to do next. Scientists and engineers were optimistic that the well showed no obvious signs of leaks, but were still struggling to understand puzzling data emerging from the bottom of the sea.

It's possible the past three days will be only a brief reprieve from the flow of oil bleeding into the Gulf. BP and government scientists could decide at any time to reopen the well and bring in containment ships to suck up the oil. Or, if scientists are confident in what they see, the cap might stay closed.

That leaves three options: They can keep the well shut, they can open it temporarily or permanently, or they can do nothing and continue to keep vigil over the bandaged well for some new sign that convinces them it is stable enough to deem the cap a success.

BP began the day saying they were feeling "more comfortable," though Kent Wells, a BP PLC vice president, cautioned the 48-hour test was not over. Then, as the deadline passed Saturday afternoon, the company made no further statement.

Even if the well stays plugged, it will take months, or possibly years for the Gulf to recover. But if the coast was on edge about the impending decision, it wasn't apparent.

In fact, there were signs that people were trying to get life -- or at least a small part of it -- back to normal.

In coastal Alabama, lounge chairs for rent outside of hotels were full and swimmers bobbed in emerald green water virtually oil-free, save for a few small tar balls.

Calls started flooding into the reservations switchboard at Kaiser Realty Inc. in Gulf Shores, Ala., almost as soon as BP confirmed Thursday that oil had stopped flowing into the Gulf, said marketing director Emily Gonzales.

"Are they what what we want them to be? No, but it is far better than it was," she said.

People also were fishing again, off piers and in boats, after most of the recreational waters in Louisiana were reopened late this week. More than a third of federal waters are still closed and off-limits to commercial fishers.

"I love to fish," said Brittany Lawson, hanging her line off a pier beside the Grand Isle Bridge. "I love to come out here."

Lawson and her boyfriend's family were catching redfish, mullet and flounder, but mostly hard-head catfish, a throwback fish. They planned to keep the catches they could take home.

"It is encouraging. We're getting bites. I mean, it's catfish. But it's bites. It's something," she said.

And even though it was only days since the oil was turned off, the naked eye could spot improvements on the water. The crude appeared to be dissipating quickly on the surface of the Gulf around the Deepwater Horizon site.

Members of a Coast Guard crew that flew over the wellhead Saturday said far less oil was visible than a day earlier. Only a colorful sheen and a few long streams of rust-colored, weathered oil were apparent in an area that was covered by huge patches of black crude weeks earlier. Somewhere between 94 million and 184 million gallons have spilled into the Gulf, according to government estimates.

Kendra Sanders was buying Creole tomatoes at a produce stand in Jesuite Bend. "At least we still got these. Until a hurricane comes along and blows the oil in here. Then it'll be no shrimp and no vegetables," she said.

The one certainty is this: No new oil has been added to the mess for two days now since BP's experimental cap was holding, at least for now.

Wells said engineers glued to an array of pressure, temperature, sonar and other sensors were seeing no evidence of oil escaping into the water or the sea floor. Undersea robots were also patrolling the well site for signs of trouble.

The cameras showed some activity midday Saturday. The robots passed a wand-like object back and forth, and appeared to be digging dirt-like debris out of a pipe. Meanwhile, a glowing globe appeared on the sea floor as bubbles swirled around. BP didn't explain what they were doing, and to a viewer, it was like watching a foreign film without subtitles.

A new breach underground was a major concern going into the cap evaluation, because oil breaking out of pipes in the bedrock would be harder to control and could endanger plans for a permanent plug. That's seeming less likely, BP said.

BP shut valves in the cap Thursday, stopping the flow of oil into the Gulf for the first time since the April 20 explosion on the leased oil rig Deepwater Horizon killed 11 workers and unleashed the spill 5,000 feet below the sea.

Pressure readings Saturday morning were 6,745 pounds per square inch and rising slowly, Wells said. The figure was on the lower range, below the 7,500 psi that would have meant the well was not leaking, but still high enough that it could be all right. He said pressure continued to rise by around 2 psi per hour. A low pressure reading, or a falling one, could mean the oil is escaping.

The most likely scenario is that more oil has been bled out than estimated, experts say. Last week, when an old cap was removed allowing oil to flow unimpeded into the water, the spew wasn't as violent as it had been, which likely means it's already drained partially out.

"Depletion is actually pretty normal," said Don Van Nieuwenhuise, Director of Professional Geoscience Programs at the University of Houston. "At first it flowed very powerfully, and when you're producing too much too fast for too long, it takes longer to pull oil the oil."

Either way, the cap is a temporary measure until a relief well can be completed and mud and cement can be pumped into the broken well deep underground to seal it more securely than the cap. That means the best fix still won't be completed until later this summer.

BP is drilling two relief wells, one of them as a backup. Wells said work on the first one was far enough along that they expect to reach the broken well's casing, or pipes, deep underground by late this month. Then the job of jamming it with mud and cement could take "a number of days through a few weeks."

Until then, the limbo may continue.

* * * * *

July 12, 2010

New sealing cap being lowered The Times-Picayune

BP crews were about 300 feet away from placing a new sealing cap on top of the runaway Maconodo well in the Gulf of Mexico this morning, the company's Chief Executive Officer Doug Suttles said.

The cap, which is essentially a small blow out preventer with a cap on top, has the potential to completely shut in the flow of oil from the well. It will be lowered into place sometime today, Suttles said.

 After it is in place, BP along with government scientists will conduct a series of "well integrity" tests to determine if the condition of the well. If it is not compromised and oil is not escaping from holes beneath the surface, the well will be shut in until a relief well is completed next month to permanently stop the flow. If the well is compromised, crews will resume sucking oil to ships on the surface. The tests could take 48 hours or longer.

Suttles also said the Helix Producer, a vessel with the capacity to suck up as much as 25,000 barrels of oil per day, will begin producing today. BP had said the vessel would be introduced Sunday night but there were two complications in its hookup, Suttles said. A leak in a methanol line needed to be repaired as did a hydraulic valve.

* * * * *

July 11, 2010

For now, oil spews unchecked into Gulf in effort to cap well The Associated Press

Hundreds of thousands of gallons of oil are being allowed to spew into the fouled waters of the Gulf of Mexico while BP engineers prepare to install a new containment system they hope will catch it all in the coming days.

There's no guarantee for such a delicate operation nearly a mile below the water's surface, officials said, and the permanent fix of plugging the well from the bottom remains slated for mid-August.

"It's not just going to be, you put the cap on, it's done. It's not like putting a cap on a tube of toothpaste," Coast Guard spokesman Capt. James McPherson said.

Robotic submarines removed the cap that had been placed on top of the leak in early June to collect the oil and send it to surface ships for collection or burning. BP aims to have the new, tighter cap in place as early as Monday and said that, as of Saturday night, the work was going according to plan.

If tests show it can withstand the pressure of the oil and is working, the Gulf region could get its most significant piece of good news since the April 20 explosion on the BP-leased Deepwater Horizon rig, which killed 11 workers.

"Over the next four to seven days, depending on how things go, we should get that sealing cap on. That's our plan," said Kent Wells, a BP senior vice president, of the round-the-clock operation.

It would be only a temporary solution to the catastrophe the federal government estimates has poured between 87 million and 172 million gallons of oil into the Gulf as of Saturday. Hope for permanently plugging the leak lies with two relief wells, the first of which should be finished by mid-August.

With the cap removed Saturday at 12:37 p.m. CDT, oil flowed freely into the water, collected only by the Q4000 surface vessel, with a capacity of about 378,000 gallons. That vessel should be joined Sunday by the Helix Producer, which has more than double the Q4000's capacity.

But the lag could be long enough for as much as 5 million gallons to gush into already fouled waters. Officials said a fleet of large skimmers was scraping oil from the surface above the well site.

The process begun Saturday has two major phases: removing equipment currently on top of the leak and installing new gear designed to fully contain the flow of oil.

BP began trying Saturday afternoon to remove the bolted top flange that only partially completed the seal with the old cap. Video images showed robotic arms working to unscrew its bolts. Wells said that could last into Monday depending on whether the flange can be pulled off from above, as BP hopes. If not, a specially designed tool will be used to pry apart the top and bottom flanges.

Once the top flange is removed, BP has to bind together two sections of drill pipe that are in the gushing well head. Then a 12-foot-long piece of equipment called a flange transition spool will be lowered and bolted over it.

The second piece of pipe inside the well head came as something of a surprise, and raises the possibility that one of the sections of pipe became jammed in the Deepwater Horizon's blowout preventer, through which the well pipes run. The failure of the blowout preventer, a massive piece of equipment designed to stop the unchecked flow of oil, is partly to blame for the size of the spill.

"That will be an important question to ask when we pull the blowout preventer up to the surface and we'll figure out where that pipe ultimately landed," Wells said.

After the flange transition spool is bolted in place, the new cap -- called a capping stack or "Top Hat 10" -- can be lowered. The equipment, weighing some 150,000 pounds, is designed to fully seal the leak and provide connections for new vessels on the surface to collect oil. The cap has valves that can restrict the flow of oil and shut it in, if it can withstand the enormous pressure.

That will be one of the key items for officials to monitor, said Paul Bommer, a professor of petroleum engineering at the University of Texas at Austin.

"If the new cap does work and they shut the well in, it is possible that part of the well could rupture if the pressure inside builds to an unacceptable value," Bommer wrote in an e-mail Saturday.

Ultimately, BP wants to have four vessels collecting oil within two or three weeks of the new cap's installation. If the new cap doesn't work, BP is ready to place a backup similar to the old one on top of the leak.

The government estimates 1.5 million to 2.5 million gallons of oil a day are spewing from the well, and the previous cap collected about 1 million gallons of that. With the new cap and the new containment vessel, the system will be capable of capturing 2.5 million to 3.4 million gallons -- essentially all the leaking oil, officials said.

The plan, which was accelerated to take advantage of a window of good weather lasting seven to 10 days, didn't inspire confidence in residents of the oil-slicked coast.

"I want to believe it and I'm going to take them at their word because it's good news," Mayor Tony Kennon of Orange Beach, Ala., said Saturday.

But for the popular tourist destination, any halt to the leak comes too late to save the season, Kennon said.

Louisiana State University environmental sciences professor Ed Overton said he's less concerned with the strategy than with the unknown. As long as the cap is put on properly, the plan should work, he said.

"The problem is that almost everything they've done, there's been some unknown about it," he said. "I don't see why this is all that much different."

* * * * *

July 09, 2010

Discovery of second pipe in Deepwater Horizon riser stirs debate among The Times-Picayune experts

For the first time Friday, the Coast Guard and BP acknowledged that a mysterious second pipe, wedged next to the drill pipe in what remains of the Deepwater Horizon's riser, is fouling up the works where the well is spewing hundreds of millions of gallons of crude oil into the Gulf of Mexico. 

BP PLC via The Houston ChronicleTwo pipes are seen in this view of the riser just above the Macondo well's blowout preventer, captured on BP video in June, just after it was cut.

"We used a diamond saw and we got inside. We found there was actually two sets of drill pipe there," said retired Adm. Thad Allen, the top U.S. Coast Guard official overseeing the response to America's worst-ever oil spill.

Some experts say a second piece of drill pipe in the riser could have prevented shear rams on the rig's blowout preventer from sealing the well and permanently cutting off the flow of oil after the April 20 explosion. The presence of two pipes could have also contributed to BP's failure to make a clean cut on the riser when securing the existing containment dome, inhibiting its ability to collect the maximum amount of oil.

It "presumably fell down beside it as a result of the explosion and the riser pipe being bent over," Allen said. He noted that the second pipe does not have oil shooting from it.

BP officials said late Friday that they believe the second pipe is drill pipe. Pictures show it is similar in diameter to the known drill pipe.

While Allen said he believes the second pipe fell from above, some experts have advanced another explanation. They believe poorly cemented casings -- tubes that are supposed to form solid walls down thousands of feet of the well bore -- may have been dislodged by the blast of natural gas that shot up out of the well and above the sea floor.

If that's what happened, the piece of pipe would have gone into the blowout preventer, the 450-ton tower of valves and pistons that sits on top of the well head and is supposed to shut off the well in an emergency. The Deepwater Horizon's blowout preventer failed to cut through the pipe that ran through it, and subsequent efforts to shut the so-called shear rams using remote-control submarine robots also failed.

Preliminary investigations have shown that other questionable decisions and well-design choices precipitated the blowout of a well that had been considered a "nightmare" by BP engineers. But the blowout preventer was the last-ditch way to save the rig from the explosions that killed 11 men and eventually led to the interminable leak.

The idea that a loose pipe shot up from deeper in the well and prevented the shear ram from closing has been espoused by such experts as oil industry investment banker Matt Simmons and Bob Bea, a University of California at Berkeley engineer leading a scientific investigation into the blowout. But others have wondered if the mystery pipe isn't just a section of the same drill pipe that came loose, or even a pipe that fell down the riser from the rig 5,000 feet above.

The Coast Guard's acknowledgement of the two metal tubes Friday -- and a subsequent reference by BP to its plans to tie the two pipes together as the company installs a new oil collection system over the shaved-off riser -- actually comes more than a month after the Department of Energy noted the existence of two pipes using special imaging technology. At the time, BP dismissed the Energy findings as "impossible" because only one pipe in sections was used for drilling, a Tribune News Service story reported last month.

Video images of the riser when it was cut in early June clearly showed the two pipes, raising speculation on blogs. Allen said the second pipe also led to a jagged cut on the larger riser pipe, forcing the response team to use the loose cap with a rubber seal. And now, the two pieces are forcing the team to spend several days tying them together and clearing the way for a new, hopefully more solid connection.

* * * * *

July 8, 2010

Appeals court rejects US request to restore drilling moratorium The Times-Picayune

The 5th U.S. Circuit Court of Appeals swiftly denied the U.S. government's request to restore the ban on deepwater drilling while the case is on appeal in a 2-to-1 decision shortly after oral arguments Thursday afternoon.

The ruling came as a surprise, because at the conclusion of the hour long hearing Thursday afternoon, Judge W. Eugene Davis of Lafayette, who was appointed by President Ronald Reagan in 1983, said the three-judge panel would rule by early next week.

Though the ruling technically allows the industry to continue drilling, the uncertainty created by the case and the threat that the federal government may impose a second moratorium will likely keep drilling activity at a standstill.

In a posting on the court's website, Davis and judges Jerry Edwin Smith, a 1987 Reagan appointee, and James L. Dennis, who was appointed by President Bill Clinton in 1995, said U.S. Department of Interior Secretary Ken Salazar failed to make the case that a stay was necessary.

"The secretary has failed to demonstrate a likelihood of irreparable injury if the stay is not granted; he has made no showing that there is any likelihood that drilling activities will be resumed pending appeal," the decision reads.

The ruling, however, did say that the Interior Department can apply for "emergency relief" if it can show that drilling has begun or is about to begin.

The court also announced that although the Interior Department has not asked for the case to be heard on an expedited basis -- something that has been interpreted to mean that the federal government sought to maintain a de facto moratorium by extending the legal limbo of the appeal for as long as possible -- it will hear the full appeal of the merits of the case on an accelerated basis the week of Aug. 30.

Thursday's court hearing emanates from the May 28 ban that the Interior Department issued in the wake of the April Deepwater Horizon rig explosion and on-going oil gusher in the Gulf of Mexico. The Interior Department banned oil prospecting in more than 500 feet of water for six months to buy time to figure out how to make sure that offshore drilling is safe and figure out a new way to regulate the oil industry.

Several Louisiana marine services and ship-building companies -- Hornbeck Offshore Services Inc., Bollinger Shipyards Inc., Edison Chouest Offshore and Bee Mar LLC -- challenged the ban because of the economic damage it caused. On June 22, U.S. District Court Judge Martin Feldman overturned the ban, deeming it arbitrary and capricious, and denied a request by the government the next day to stay his injunction pending appeal. On Thursday, the 5th Circuit upheld Feldman's denial of the government's stay request.

Judges Davis and Smith opted to deny the government's request; Dennis dissented and said that he would have granted the stay.

The case has been hotly contested with the state of Louisiana and business associations supporting Hornbeck, and five environmental groups supporting the government in its quest to maintain a moratorium on drilling. Gov. Bobby Jindal and Lt. Gov. Scott Angelle attended the packed proceedings to demonstrate the importance of the case to the state's economy, and sat with company heads Boysie Bollinger, Todd Hornbeck and Dino Chouest during the hearing.

Thursday's hearing involved spirited questioning by all three judges on matters of the risk of economic harm to drillers if the stay was granted; the risk of harm to the environment,
seafood and tourism businesses if the stay was denied; matters of congressional intent and executive authority; and less sweeping questions of whether the government met four required criteria to win a stay of Feldman's order.

Earlier in the day Thursday, White House spokesman Bill Burton said the Obama administration was watching the appeal hearing "closely" and expected to issue a new drilling moratorium "sooner than later."

Justice Department attorney Michael Gray, arguing on behalf of the Interior Department, told the 5th Circuit panel that the revised moratorium would be issued regardless of the court's decision. Hornbeck attorney Carl Rosenblum referred to plans for a revised moratorium as a "threat" and "an attempt to intimidate this court."

The interior and justice departments did not respond to requests for comment Thursday evening.

Rosenblum, the Hornbeck attorney, called the decision "a wonderful victory."

Jindal said he was pleased with the court's decision, but concerned about the economic uncertainty that continues to face the state because of the drilling ban. "We have very serious concerns that the Department of Interior is going to announce a second moratorium.....despite the injunction against the original moratorium, we currently have a de facto moratorium because of uncertainty from the Department of Interior," he said.

Catherine Wannamaker, an attorney for the Southern Environmental Law Center who argued on behalf of the Florida Wildlife Federation, the Center for Biological Diversity, the Natural Resources Defense Council, Defenders of Wildlife and Sierra Club was also surprised at the speed of the ruling, but took consolation that the court left the door open to an emergency stay if drilling resumed.

* * * * *

July 8, 2010

Relief well timing depends on oil's spread through multiple rings in original well pipe  The Associated Press

A relief well being drilled deep into the seafloor of the Gulf of Mexico to shut down the gushing oil well could be completed ahead of a long-set deadline of mid-August only if conditions are ideal, government and BP officials said Thursday.

National Incident Commander and retired Coast Guard Adm. Thad Allen said Thursday that the relief well is expected to intercept and penetrate the Deepwater Horizon well pipe about 18,000 feet below sea level within seven to 10 days.

But they won't know how long it will take to stop the oil until they get there. The gushing well has several rings, and oil could be coming up through multiple rings, Allen said.

The plan is to pump heavy mud and then cement into the well to overcome the upward pressure of the huge oil reservoir below.

If the oil is coming through the outer ring of the well, then they will have to pump in mud and cement to stop that layer first. Then they would have to drill through the hardened cement and repeat the process in each ring until they reach the center pipe and do it again.

That scenario would push into the middle of August, which is the timeline the company and government officials have held to for weeks, despite repeated reports that the drilling was ahead of schedule and the oil could be stopped as soon as late July.

"If you have to exhaust all means for the ways that hydrocarbons are coming up the pipe, then that puts you into middle August," Allen said.

If the oil is only coming up the center pipe, then it's possible to stop the leak sooner. BP spokesman Scott Dean said late July has been suggested as a completion time if everything is ideal. A single major storm is enough to cause delays. That's why the company is sticking with mid-August.

The relief well is currently the best hope for stanching the oil leak sparked by the April 20 explosion aboard the Deepwater Horizon drilling rig, which killed 11 workers and began an environmental catastrophe for the region.

Shaving even days off the mid-August timeline would stop millions of gallons of oil from escaping into the Gulf. The broken well has spewed between 86 and 169 million gallons of oil, according to federal estimates. That's enough oil to fill about 3.4 million standard bathtubs.

The weather will have to cooperate. Lingering tropical weather that began last week with the faraway Hurricane Alex halted offshore skimming operations and caused high seas that have delayed the hookup of a third vessel expected to suck oil from the gushing well head.

Another tropical depression formed in the Gulf on Wednesday and was closely following the path of Alex to the coast at the border of Texas and Mexico. It was expected to have a minimal effect on the eastern Gulf.

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July 5, 2010

Fishermen caught in a quandary HOUSTON CHRONICLE

For as long as many can remember, the Gulf fishing industry has operated on a mostly cash-only basis. Shrimp and crab are purchased on the dock with cash and deckhands who help on the boats are paid in cash.

"It's an industry that goes back seven and eight generations," said Ewell Smith, executive director of the Louisiana Seafood Promotion and Marketing Board. "It's based on relationships and handshakes, and it doesn't change much."

Fishermen are supposed to keep records of what they sell and pay taxes on their income, but many sell under the table and skirt the law. The scofflaws now may lose a chance to get a share of the $20 billion BP oil compensation fund set up to help individuals and businesses hurt by the largest-ever oil spill in the Gulf of Mexico. Without verifiable proof of income, they cannot access the fund to recoup any financial losses.

St. Bernard Parish President Craig Taffaro said he would like to see a federal tax amnesty for those fishermen who have not paid their taxes and has shared his idea with a U.S. senator. Any compensation fishermen receive will be taxed, and for those who have not followed the law, that could trigger IRS scrutiny and, possibly, retroactive tax payments, he said.

"These are people who are not used to operating in a corporate world," Taffaro said. "There needs to be a separation between tax obligation and the ability to validate appropriate compensation to these fishermen."

Not everyone supports the idea, especially some fishermen who have lived by the industry's honor system and abide by state and federal laws. About 40 percent to 50 percent of what a fisherman catches is sold for cash, said Peter Gerica, a third-generation fisherman from New Orleans.

"I don't think you should reward people for doing wrong," Gerica said. "I feel like, if you play, you gotta pay."

Smith, whose organization represents 13,000 fishermen and processors, said he understands Taffaro's compassion. No one wants to see any hard-working fishermen miss out on assistance, he said, "but that's what happens when you don't pay your taxes."

Forms of documentation

BP, which has been paying claims since shortly after the April 20 oil rig explosion, requires proof of income for monthly short-term emergency assistance. Tax returns, W-2s, wage loss statements, deposit slips, boat registration, copies of current fishing licenses and trip tickets have been acceptable forms of documentation.

The same documentation will be required under the $20 billion compensation fund, which should be operational in two to three weeks, said Ken Feinberg, who was appointed by President Barack Obama to administer the fund. He will be responsible for claims from individuals and businesses.

"We won't be requiring much documentation," said Feinberg, of the Washington, D.C.-based Feinberg Rozen law firm. "I will continue BP's policy of minimal corroborate."

Those documents will be verified, and individuals without them will be out of luck if they do not have some way to verify their claims, he said. People who work in a cash industry can bring in their employer, their priest or a public official for verification, he said.

"We have to be very vigilant against fraud," said Feinberg, who oversaw a similar fund for victims of the Sept. 11 terror attacks. "We just can't give away money without corroboration. That's just unacceptable."

Feinberg said he has advised BP to continue its existing claims process, which includes 35 claim offices, so the transition to the new Gulf Coast compensation fund will be seamless. "We won't reinvent the wheel," he said. "They've done a good job and we'll build on that going forward."

No denials

So far, BP has paid nearly $138 million on about 91,000 claims. Claims are being processed within 30 days and none has been denied, said BP spokesman Robert Wine.

Gerica said he keeps track of his income with trip tickets and uses them to file his annual income taxes. He used them in May to receive a $5,000 emergency assistance check from BP.

In Louisiana, fishermen are required by the state to use trip tickets, which help the Louisiana Department of Wildlife and Fisheries to capture landing information to manage fisheries. But a side benefit of the tickets has been a tracking system for compensation for hurricanes and other disasters. The ticket is filled out when a fisherman sells to a dock or dealer and it includes the name of the seller, the date of the sale and price per pound of the product sold. They are filed with the state agency every month.

Could be user-friendly

However, trip tickets and wage loss statements will not be enough three to four months from now when Feinberg begins to consider lump sum claims. More detailed documentation will be required to prove a claim is warranted, Feinberg said. He still is working out the criteria for those claims.

He said the claims process for the compensation fund will be just as user-friendly as other victim funds he has handled. He said he is willing to change the rules for the BP fund by offering 6 months of emergency assistance up front instead of requiring claimants to file for assistance every month.

"I'm there not as an adversary but to help them get some help," Feinberg said.

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July 3, 2010

Exec says BP could plug well by end of July HOUSTON CHRONICLE

BP could plug its gushing Gulf oil well by the end of July, ahead of a projected target of August, if weather conditions permit and the drilling of relief wells keeps going smoothly, the newly appointed executive in charge of the company's response said Friday.

"We are ahead of schedule, but all it takes is one storm, and we have to move off of station," Bob Dudley, CEO of BP's newly created Gulf Coast Restoration Organization, said in an interview with the Houston Chronicle. "I think it's not unreasonable to think one of those might happen, and then we're into August again. That's why August is probably a higher probability."

Still, even the hint of an earlier-than-expected capping of BP's Macondo well comes as a rare bit of good news to a national crisis in dire need of it — and Dudley's job is to make sure there's more such news to come.

In the nearly two weeks since he took over responsibility for the spill from embattled BP CEO Tony Hayward, Dudley has moved swiftly to improve the British oil giant's handling of all aspects of the Gulf disaster, from trying to speed up payment of claims to out-of-work fisherman to making sure the requests of local Gulf officials are being heard.

"I am from the U.S. I grew up on the Gulf Coast. I've got a passion for it, and I think people saw that. I hope I can help," said Dudley, sitting in a small conference room at BP's sprawling office complex in west Houston.

Dudley, a board member and former head of BP's joint venture in Russia, TNK-BP, had been selected for the job early in the crisis. An engineer with 30 years experience in the oil and gas industry, who grew up in Hattiesburg, Miss., he seemed a perfect fit. And he was supposed to take over once the well was capped.

But on June 23, BP announced Dudley was stepping in immediately and Hayward would return to London - fueling speculation that Hayward is on his way out and Dudley could be the next CEO.

Relief wells progressing

Thad Allen, the retired Coast Guard admiral leading the federal spill response, said Friday that while the first of two relief wells is about a week ahead of schedule, he is sticking with his original mid-August prediction for completion of the drilling and plugging of the Macondo well.

Dudley said whatever the timing, the relief wells - through which BP will pump drilling mud and cement to plug the ruptured one - have a high chance of working and bringing an end to one phase of a disaster that will take much longer to fully mend.

"It doesn't really feel realistic now," he said, "but if I had a hope, it would be that a year or two from now that we've cleaned up the Gulf and people say, 'That was a really unusual corporate response on a massive scale, and they did a fair job at it.'