Obama slams oil cos for spill blame game

Last Updated : 15 May 2010, 04:45 IST
Last Updated : 15 May 2010, 04:45 IST

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Obama applied further pressure on the companies involved in the unfolding drama, criticizing them for a "ridiculous spectacle" of publicly trading blame over the accident in his sternest comments yet on the situation.

With oil gushing unchecked from a blown-out well a mile (1.6 km) under the Gulf of Mexico, London-based BP began work on its latest short-term fix -- a tube that undersea robots will try to insert into a pipe to funnel oil to the surface. The device could begin siphoning oil late Friday, BP Chief Operating Officer Doug Suttles said. The energy giant's prior attempt to contain the oil -- a giant containment dome -- failed last week after the appearance of frozen hydrocarbons rendered it useless.

The so-called riser insertion tool is "the best option, the most likely option to combat" the frozen hydrocarbons, Suttles said. If short-term efforts fail, it will take BP about 90 days to permanently cap the leak with a relief well. Shares of companies involved in the disaster, including BP, have taken a big hit in recent days, but now other firms that make a living in the Gulf of Mexico's oil-rich waters are starting to feel financial pain.

The US Department of the Interior issued a moratorium on new drilling permits at least until May 28 when a safety review is due to be completed. But now, analysts and investors are beginning to fret future implications of the ban. In comments after a meeting with his Cabinet to discuss efforts to stop the spill and minimize its impact on US Gulf Coast communities, Obama said he was angry and frustrated about the spill, which threatens an ecological and economic disaster in the Gulf region.

"I did not appreciate what I considered to be a ridiculous spectacle during the congressional hearings into this matter. You had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else," Obama said. Obama was referring to testimony this week in Congress by leaders of the three companies involved in the disaster -- BP, Halliburton and Transocean Ltd. None of them took responsibility for the spill, blaming each other instead.


Fisheries and tourism, two of the Gulf Coast's economic mainstays, along with birds, sea turtles and other wildlife, are threatened by the spreading slick. As National Guard crews pressed on with efforts across southern Louisiana to fill in shoreline breaches to keep oil out of the state's vital marsh system, idled shrimpers continued to look for alternative employment.

"I'm going to try to get a job with my cousin part time," said Michael Gros, 51, a shrimp boat owner and captain. The accident also could cripple attempts in Washington to overhaul U.S. energy policy.

Obama repeated a demand that BP must pay for the spill's cleanup and other economic impact on the Gulf region but said the US government would use "every available resource" to stop oil from coming ashore. He said he would not "rest or be satisfied" until the leak was stopped at its source.

"We absolutely understand and share President Obama's sense of urgency over the length of time this complex task is taking," BP Chief Executive Tony Hayward said in a statement.

The spill began after an April 20 explosion on the Deepwater Horizon rig, which killed 11 workers. It threatens to eclipse the 1989 Exxon Valdez spill off Alaska to become the worst ecological disaster in US history. The tone of Obama's Rose Garden comments were his sternest yet on the catastrophe.

In the aftermath of the spill, the Obama administration was faulted by some for the speed of its response, with some drawing comparisons to Hurricane Katrina in 2005. The White House rejects the criticism, and Obama's visit to Louisiana on May 2 to meet with local officials and residents helped to dampen it.

But as the leak begins to move ashore, the administration wants to head off any potential political fallout, especially with congressional elections looming in November. Obama also said he directed US Interior Secretary Ken Salazar to undertake a "top-to-bottom" review of the Minerals Management Service, the federal agency that oversees offshore drilling. On Tuesday, Salazar announced that the agency will be split in order to separate the collection of oil royalties from safety inspection duties.

"For too long, for a decade or more, there's been a cozy relationship between the oil companies and the federal agency that permits them to drill," Obama said. A US House of Representatives panel on Friday launched an investigation into possible oversight failures by the federal regulator of offshore drilling.

A six-month halt in new drilling would defer as much as 80,000 barrels (3.4 million gallons/15.9 million liters) of oil equivalent per day, or 4 per cent of projected production in the Gulf of Mexico in 2011, according to energy consultancy Wood Mackenzie.

"Longer term, after the moratorium is eventually lifted the cost implications of this accident on future drilling could prove significantly detrimental for the industry," research firm Raymond James said in a note to clients on Friday.

A US lawmaker on Friday urged BP to provide more information about how much oil is gushing from its ruptured well, noting that estimates range from 5,000 barrels per day (210,000 gallons/795,000 liters) to 100,000 barrels (4.2 million gallons/15.9 million liters) per day. Democratic Representative Edward Markey said the public deserves to know exactly how much oil will end up in the ocean and ultimately on US coastlines.

BP, whose shares have tumbled and wiped out $30 billion of market value since the April 20 rig fire, has said the oil spill had cost it $450 million so far. BP shares dropped more than 3 percent in London on Friday. BP defended its lower spill estimate of 5,000 bpd.   "I think that's a good range," Suttles said on CNN. "I don't know the precise number, but I think it's somewhere around that number."

Published 15 May 2010, 03:19 IST

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