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Big oil to get more grilling as oil gushes in Gulf

2010-05-12 08:14:25

By Timothy Gardner and Steve Gorman Timothy Gardner And Steve Gorman 34 mins

ago

WASHINGTON/PORT FOURCHON, Louisiana (Reuters) Top oil executives face a

second day of grilling by U.S. lawmakers on Wednesday over a deadly well

rupture that unleashed a huge oil slick and the specter of environmental

disaster in the Gulf of Mexico.

BP Plc, Transocean Ltd and Halliburton Co are all in the hot seat for their

roles in what could be the worst oil spill in U.S. history. A desperate race is

on to contain the catastrophe, with BP readying a potential subsea fix and

troops and prisoners rushing to limit damage to the coast, where crude has

started to reach shorelines.

Investors have driven the value of BP shares down more than $30 billion, far

exceeding even the worst estimates of the spill's cost, reflecting uncertainty

about how the calamity will play out, with an unprecedented and shifting

situation.

BP shares were up about 0.3 percent in early trading on the London stock

exchange.

With oil gushing unchecked from the sea floor at an estimated daily rate of

least 5,000 barrels (210,000 gallons/795,000 liters), and the expanding slick

oozing across the surface, Wednesday was shaping up to be another rough one for

the oil industry and its soiled reputation.

The scheduled U.S. House of Representatives hearing and a series of panels in

coming weeks could spawn new legislation on offshore drilling, an issue which

has been thrust onto the crowded domestic agenda of President Barack Obama.

If Tuesday's hearings are anything to go by, Wednesday's congressional grilling

is likely to be harsh.

In hearings before two Senate committees, lawmakers accused executives from BP

America Inc, Transocean, and Halliburton of trying to shift the blame to each

other, and subjected them to tough questions about safety and how the well was

sealed.

Senator Ron Wyden, a Democrat, at one point interrupted BP America's president,

saying, "The culture of this company has been one accident after another." BP

had been trying to repair its image since a 2005 explosion at its Texas City

refinery killed 15.

Also on Wednesday, an activist group called Seize BP plans protests at the

company's offices and other sites across the United States to demand the

government freeze its assets to ensure payment for the cleanup and compensation

for those hurt by the spill.

Eleven workers were killed in the April 20 explosion that sank the rig.

Fisheries and tourism, two of the Gulf's economic mainstays, and birds, sea

turtles and other wildlife, are all threatened by the unfolding fiasco that

could next month exceed the Titanic-sized Exxon Valdez disaster in Alaska in

1989.

Cathy Norman of the Edward Wisner Donation, a land trust that owns the property

that makes up the Port of Fourchon, the principal supply harbor for the Gulf's

deepwater oil and gas industry, said the area's shoreline already is

"disappearing at an astronomical rate."

"The land is holding on by its fingernails. If oil gets in there and the plants

all die off, we're going to have just all water," she said.

BP spokesman Daren Beaudo, who took reporters on a boat tour, said oil had

already washed ashore at three locations: Dauphin Island, Alabama; the

Chandeleur Islands off Louisiana; and the South Pass-Port Eads area on a remote

stretch of Louisiana's mainland.

Louisiana Governor Bobby Jindal on Tuesday urged the National Guard to expand

efforts to reinforce the state's storm-battered shoreline as a buffer against

the slick.

Jindal's call for additional helicopter sand-bagging operations along stretches

of beach, and crews to fill in other shoreline breaches with sand hauled in

with dump trucks, came just as the state ran short of oil containment booms for

newly menaced coastal areas west of the Mississippi River.

The Unified Command for spill response operations said the U.S. Air Force was

flying in additional boom to Louisiana from Alaska. But Jindal said time was

growing short.

Besides an expansion of emergency coastal restoration work, Jindal sought

approval from federal authorities for plans to dredge sand from the Gulf floor

to build artificial barrier islands in three zones off southeastern Louisiana.

He said such an operation could start to produce new land within 10 days.

The U.S. government is also concerned about whether enough protective booms are

being provided to adequately defend the U.S. Gulf Coast shoreline, Homeland

Security Secretary Janet Napolitano said on Tuesday.

"We have some concerns about getting adequate boom," she told reporters during

a visit to Mobile, Alabama, referring to the plastic barriers that are being

strung along the coast to keep the oil off the shore.

BP will try covering the leak with a much smaller funnel than the 98-tonne dome

it tried in vain to put in place over the weekend. The so-called "top hat" dome

is expected to be placed over the relentless leak on Thursday.

In Port Fourchon, Louisiana, fatigue-clad Army National Guard troops from the

769th Engineer Battalion of Louisiana sweated alongside prisoners in scarlet

red pants and white T-shirts with "Inmate Labor" on the back as they filled

giant 1,000-pound (450-kg) sandbags.

Black Hawk helicopters dropped the sandbags to plug gaps in coastal beaches

through which the oil could seep.

U.S. Interior Secretary Ken Salazar and U.S. Energy Secretary Steven Chu were

to meet with scientists and engineers from both industry and the federal

government at the BP Command Center in Houston to discuss ways to stem the

disaster.

(Additional reporting by Tom Doggett in Washington, Greg Savoy in Venice,

Louisiana, Verna Gates in Mobile, Alabama, and Tom Bergin in London; Writing by

Ed Stoddard; Editing by Eric Walsh)