Monday, May 10, 2010

Gulf slick spreads west, BP tries another cover

ROBERT, Louisiana (Reuters) – The huge slick from the Gulf of Mexico oil spill threatened Louisiana shores west of the Mississippi Delta on Monday as BP Plc said it will again attempt to contain the oil leak, this time with a much smaller funnel than it tried before.

National Guard helicopters in Louisiana's Lafourche Parish were preparing to drop sandbags onto outlying island beaches to try to block oil from getting into fragile marshlands.

"It's easier to clean oil from a beach than from a marsh," parish spokesman Brennan Matherne told Reuters, saying the aim was to try to use a 15-mile barrier beach line as a natural protection for the more vulnerable wetlands inshore.

Fears were growing of a prolonged environmental and economic disaster for the U.S. Gulf Coast after a weekend setback in an initial undersea maneuver by BP to contain the spill, which could become the worst in U.S. history.

The projected westwards spread of the massive slick, swelled by crude gushing unchecked from a ruptured BP-owned seabed well, has raised fears of an impact on rich fisheries areas filled with shrimps, oysters, crabs and crayfish, and even on major shipping channels off the Louisiana coast.

BP, which had contracted the Deepwater Horizon drilling rig that exploded on April 20, killing 11 people and triggering the spill, said it aims to deploy a small "top hat" dome over the leak after an attempt to contain it with a huge metal box was stymied by a buildup of crystallized gas hydrates.

The plan is to have the oil-barrel-sized container at the leak site a mile down from the water surface within 72 hours, BP Chief Executive Tony Hayward said. Then oil would be siphoned up to a tanker.

"There will be less seawater in the smaller dome and therefore less likelihood of hydrate formation," he told reporters at the company's U.S. headquarters in Houston.

On the weekend, the hydrates, essentially slushy methane gas, clogged up the top of the large dome, preventing any crude from being pumped to the surface.

The company is also spraying chemical dispersants at the ruptured well, an operation he said was showing some success. The well is spewing an estimated 5,000 barrels (210,000 gallons/795,000 liters) of oil a day into the Gulf.

It threatens economic and ecological disaster on Gulf Coast tourist beaches, wildlife refuges and fishing grounds across four states. It has forced President Barack Obama to rethink plans to open more waters to drilling.

Other options for stemming the flow include trying to block the well's failed blowout preventer with a "junk shot" of rubber or other materials, or fitting a new valve or preventer. A relief well being drilled to try to finally plug the ruptured well could still take 75 to 80 days to complete.


The company has incurred $350 million in costs so far from response, containment, relief well drilling and payments to Gulf Coast states, suggesting the final bill could be much higher than many analysts predicted.

Hayward said an investigation into the incident will reveal what happened in the moments before the well blew out. It will likely also generate new measures to control blowouts.

He rejected the notion that BP, one of the world's largest oil companies, was ill prepared to deal with such an incident.

"Frankly, it's been far more effective that any spill response hitherto in terms of containment offshore and preventing oil from getting to the shore. That is a fact," he said. "This is the largest, most comprehensive spill response mounted in the United States oil and gas industry by probably two orders of magnitude."

BP shares fell 0.9 percent at 1430 GMT, lagging a 4.8 percent rise in the STOXX Europe 600 Oil and Gas index. The stock dropped as low as 540.7p in London, its lowest since November. BP's American Depositary Receipts were off 1.5 percent in New York late in the session.

It has lost around 15 percent since the rig blast, wiping around $30 billion from BP's market value.

The Louisiana Offshore Oil Port (LOOP), the nation's only deepwater oil terminal located southwest of New Orleans, said vessel movements were unaffected so far, despite the presence of sheen on the water.

The environmental group Greenpeace issued an unconfirmed report late on Sunday that said traces of oil had been found onshore at Port Eads, the southernmost point of Louisiana.

But a spokesman for Louisiana's Plaquemines Parish where Port Eads is located said: "We have no report of oil on land at this point."

The spill's major contact with the shoreline so far has been in the unpopulated Chandeleur Islands off Louisiana, which is a mostly a wildlife reserve and bird sanctuary.


A 24-hour forecast from the National Oceanic and Atmospheric Administration said winds could push oil ashore in the Mississippi Delta, Breton Sound, the Chandeleur Islands and areas directly north.

The two Louisiana parishes directly west of the Mississippi Delta declared states of emergency on Sunday.

Tar balls washed up on Alabama's Dauphin Island, a barrier island and popular beach resort, during the weekend and local tourism operators said vacation traffic had already slowed to a trickle because fears of the spill's impact.

"It makes me so sad. You take so many things for granted: a beautiful beach, fresh shrimp whenever you want it. It is so frustrating there seems to be no answers for it," said Dauphin Island resident Joyce Carroll, a former flight attendant.

Fishing is suspended in parts of the Gulf waters and much of the Louisiana coast. Many tourists have been scared away by reports of reddish, putrid water offshore, even though the coast is currently unaffected.

Top officials from BP and some of the other companies associated with the ruined drilling platform are expected to be grilled at congressional hearings on Tuesday and Wednesday.

The U.S. Coast Guard and the U.S. Minerals Management Service also plan an investigation into the drilling rig's sinking, starting in Kenner, Louisiana, on Tuesday.

Delays in containing the leaking well increase the chances it could become the worst U.S. oil spill, surpassing the 1989 Exxon Valdez disaster in Prince William Sound, Alaska.

(Additional reporting by Anna Driver in Houston; Pascal Fletcher in Miami; Steve Gorman and Verna Gates on Dauphin Island, Alabama; Tom Bergin in London; Haitham Haddadin in New York; Writing by Pascal Fletcher and Jeffrery Jones; Editing by Ed Stoddard and Cynthia Osterman)

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