BP Says It Will Pay for Gulf Oil Spill Cleanup

May 3, 2010 - 5:06 AM
At BP's Houston offices, dozens of engineers and technicians were cloistered on the third floor, working 12-hour shifts round-the-clock to come up with a solution.
oil spill

A sign on the side of a road in Boothville, La., on Sunday, May 2, 2010. President Barack Obama on Sunday warned of a

Venice, La. (AP) - BP PLC said Monday that it will pay for all the cleanup costs from a massive oil spill in the Gulf of Mexico that could continue spewing crude for at least another week.
 
Meanwhile, chief executive Tony Hayward said Monday that chemical dispersants have worked to some degree to keep oil from flowing to the surface, though he did not elaborate. He said on ABC's "Good Morning America" that the new approach seemed to be having a significant impact.
 
The company posted a fact sheet on its Web site saying it took responsibility for the response to the Deepwater Horizon spill and would pay compensation for legitimate claims for property damage, personal injury and commercial losses.
 
"We are responsible, not for the accident, but we are responsible for the oil and for dealing with it and cleaning the situation up," Hayward said. He said the equipment that failed on the rig and led to the spill belonged to owner Transocean Ltd., not BP, which operated the rig.
 
The update on the dispersants came as BP was preparing a system never tried nearly a mile under water to siphon away the geyser of crude from a blown-out well a mile under Gulf of Mexico waters. However, the plan to lower 74-ton, concrete-and-metal boxes being built to capture the oil and siphon it to a barge waiting at the surface will need at least another six to eight days to get it in place.
 
Crews continued to lay boom in what increasingly feels like a futile effort to slow down the spill, with all ideas to contain the flow failing so far.
 
"I've been in Pensacola and I am very, very concerned about this filth in the Gulf of Mexico," Florida Gov. Charlie Crist said at a fundraiser for his U.S. Senate campaign Sunday night. "It's not a spill, it's a flow. Envision sort of an underground volcano of oil and it keeps spewing over 200,000 gallons every single day, if not more."
 
Fishermen from the mouth of the Mississippi River to the Florida Panhandle got the news that more than 6,800 square miles of federal fishing areas were closed, fracturing their livelihood for at least 10 days and likely more just as the prime spring season was kicking in. The slick also was precariously close to a key shipping lane that feeds goods and materials to the interior of the U.S. by the Mississippi River.
 
Even if the well is shut off in a week, fishermen and wildlife officials wonder how long it will take for the Gulf to recover. Some compare it to Hurricane Katrina, which Louisiana is still recovering from after nearly five years.
 
"My kids will be talking about the effect of this when they're my age," said 41-year-old Venice charter boat captain Bob Kenney.
 
At BP's Houston offices, dozens of engineers and technicians were cloistered on the third floor, working 12-hour shifts round-the-clock to come up with a solution.
 
"It's probably easier to fly in space than do some of this," Charlie Holt, BP's drilling and completion operations manager in the Gulf of Mexico, said Sunday.
 
Everything engineers have tried so far has failed. After the April 20 oil rig explosion, which killed 11 people, the flow of oil should have been stopped by a blowout preventer, but the mechanism failed. Efforts to remotely activate it continue to prove fruitless. On the surface, windy weather and waves have hampered plans to burn the oil and made booms all along the coast ineffective.
 
The oil probably could keep gushing for months until a second well can be dug to relieve pressure from the first.
 
Besides the immediate impact on Gulf industries, shipping along the Mississippi River could soon be limited. Ships carrying food, oil, rubber and much more come through the Southwest Pass to enter the vital waterway.
 
Shipment delays -- either because oil-splattered ships need to be cleaned off at sea before docking or because water lanes are shut down for a time -- would raise the cost of transporting those goods.
 
"We saw that during Hurricane Katrina for a period of time -- we saw some prices go up for food and other goods because they couldn't move some fruit down the shipping channels and it got spoiled," PFGBest analyst Phil Flynn said.
 
The Port of New Orleans said projections suggest the pass will be clear through Tuesday.
 
President Barack Obama toured the region Sunday, deflecting criticism that his administration was too slow to respond and did too little to stave off the catastrophe.
 
A piece of plywood along a Louisiana highway had these words painted on it: "OBAMA SEND HELP!!!!"
 
The blessing of the boats is normally a joyous kickoff to the spring fishing season in St. Bernard Parish. But this year, it had more the air of a funeral.
 
Some years, as many as 200 craft, most of them working boats, lined up at the Gulf Outlet Marina to be sprinkled with holy water by a priest. On Sunday, only four boats floated by -- and not one a commercial vessel.
 
Capt. Doogie Robin, 84, sat at a bar, sipping a Budweiser from the jaws of an alligator-head beer cozy. He runs eight oyster boats.
 
"Katrina really hit us hard," he said. "And this here, I think this is going to finish us now. I think this will wipe us off the map."
 
The Coast Guard and BP have said it's nearly impossible to know exactly how much oil has gushed since the blast, though it has been roughly estimated to be at least 200,000 gallons a day.
 
At that rate, it would eclipse the 1989 Exxon Valdez tanker spill -- which dumped 11 million gallons off the Alaska coast -- as the worst U.S. oil disaster in history in a matter of weeks.
 
"None of us have ever had experience at this level before. It ain't good," said Bob Love, coastal and nongame resources administrator with the Louisiana Department of Wildlife and Fisheries.
 
Even if the oil stays mostly offshore, the consequences could be dire for sea turtles, dolphins and other deepwater marine life -- and microscopic plankton and tiny creatures that are a staple of larger animals' diets.
 
Moby Solangi, director of the Institute for Marine Mammal Studies in Gulfport, Miss., said at least 20 dead sea turtles were found on the state's beaches. He said it's too soon to say whether oil contamination killed them but that it is unusual to have them turning up across such a wide stretch of coast, nearly 30 miles.
 
None of the turtles have oil on them, but Solangi said they could have ingested oily fish or breathed in oil on the surface.
 
The situation could become even more grave if the oil gets into the Gulf Stream and flows to the beaches of Florida -- and potentially whips around the state's southern tip and up the Eastern Seaboard. Tourist-magnet beaches and countless wildlife could be ruined.
 
Crist has declared a state of emergency for six counties in Florida. Louisiana also has declared an emergency.
 
Obama has halted any new offshore drilling projects unless rigs have new safeguards to prevent another disaster. On Sunday he called the spill a "massive and potentially unprecedented environmental disaster," and made clear that he was not accepting blame.
 
"BP is responsible for this leak. BP will be paying the bill," he said.
 
The containment boxes being built were not part of BP's original response plan. The approach has been used previously only for spills in relatively shallow water. Coast Guard Adm. Thad Allen said engineers are still examining whether the valves and other systems that feed oil to a ship on the surface can withstand the extra pressures of the deep.
 
If the boxes don't work, BP also has begun work on its only other backup plan: two relief wells that will take as long as three months to drill.
 
BP has not said how much oil is beneath the seabed the Deepwater Horizon rig was tapping when it exploded. A company official, speaking on condition of anonymity because he was not authorized to discuss the volume of reserves, confirmed reports that it was tens of millions of barrels. Fryar said any numbers being thrown out are just estimates at best.
 
Peter Young has spent the better part of 18 years earning a living as fishing guide and he's afraid his way of life may be slipping away. The government has overreacted by shutting down vital fishing areas in the marshes before the oil has posed a threat, he said.
 
Until he sees oil himself, Young will keep fishing the closed areas.
 
"They can take me to jail," he said. "This is our livelihood. I'm not going to take customers into oil, but until I see it, I can't sit home and not work.
 
"I've got customers that are canceling because they're scared, and I don't know what to tell them."
 
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Associated Press writers Harry R. Weber, Jay Reeves, Mike Graczyk, Tamara Lush, Brian Skoloff, Melissa Nelson, Mary Foster, Chris Kahn, Vicki Smith, John Flesher, Holbrook Mohr and AP Photographer Dave Martin contributed to this report.