Sheila McNulty BP spill moves closer to shore, raising profile in Administration

// US administration officials met today with BP’s top leadership – including group chief executive Tony Hayward – to discuss the response to the growing crisis from the oil well leak in the Gulf of Mexico. BP has been pulling out all the stops to contain the leak from the rig that caught fire and sunk last week, but officials said it could be 90 days before it is stopped. A few soundbites from the press conference today with US Coast Guard Rear Admiral Mary Landry:

If we don’t secure the well, this could be one of the most significant spills in US history…The risks are serious….We have not had success in securing the source…We don’t know of another spill this deep…This is quite unique.

Indeed, BP has been spending $6m per day to contain the leak, estimated at about 1,000 barrels per day, as it moves closer to shore. The authorities said it was about 20 miles from the shore on Tuesday. For the next few days, given wind and current patterns, the spill should not hit the shoreline, but the authorities are not sure what will happen after that. And they are clearly getting nervous. The meeting with BP was a signal. But the authorities did not stop there.

Secretary of Homeland Security Janet Napolitano and Secretary of the Interior Ken Salazar today said they have launched a full investigation. In the words of Mr Salazar:

We will remain focused on providing every resource we can to support the massive response effort underway at the Deepwater Horizon, but we are also aggressively and quickly investigating what happened and what can be done to prevent this type of incident in the future.

The joint investigation will have the power to issue subpoenas, hold public hearings, call witnesses, and take other steps that may be needed to determine the cause of the incident. The Obama Administration is intent upon limiting the fallout from this spill. Not only for environmental reasons, but also, analysts say, for political reasons. President Barack Obama has proposed opening more areas offshore to drilling. But an oil spill that takes too long to contain and has the potential to impact marine and wildlife will not help his cause any. Amy Myers Jaffe, energy expert at Rice University, believes that is unfortunate:

It will definitely affect the debate. It’s a shame. The industry, for the last 15 years, has had a stellar record. How unfortunate that will be to push that aside because we have had one catastrophic accident. If the industry can show, even in the face of a large catastrophe, it has the capability and the means to protect the shoreline, it will have a favorable impact.

BP gets that the stakes are high. Not only for the administration, but itself. A few years had passed since the company was under the spotlight for a string of troubles in its US operations – a fatal explosion at its biggest refinery – in Texas; leaks at Prudhoe Bay in Alaska – the US’ biggest oilfield; and a propane scandal. After several years of quiet, people had begun to forget about those things. If this accident gets out of control, those previous blights on BP’s record will resurface. And it also knows the industry will be upset if the critics of offshore drilling use this accident to rollback efforts by the Obama Administration to open more areas to drilling.

And so it has pledged to do all it can to limit the fallout, even considering starting a contained fire to burn up the oil. Here is what Doug Suttles, BP’s chief operation officer of exploration and production, had to say:

We will not stop until we have exhausted every single option…We continue to work multiple streams, but we don’t know which will be successful…People are literally working 24 hours a day coming up with new methods.

The Coast Guard’s Ms Landry noted that the industry is much more prepared to handle an accident like this than it was when the Exxon Valdez oil spill occurred. Indeed, Robin West, chairman of PFC Energy, the consultancy, notes that the industry is always saying it can contain any accidents and, therefore, should be permitted more access:

It’s up to the industry to prove that they can meet this challenge, which they always said they could.

It seems fair to say everyone is holding their breath.