Oil spilling from a damaged BP Plc well in the Gulf of Mexico may complicate President Barack Obama’s five-year plan to open new offshore tracts to energy exploration.
The leak, which is five times bigger than previously estimated, prompted Louisiana Governor Bobby Jindal to declare a state of emergency, and led Senator Bill Nelson, a Florida Democrat, to ask Obama to indefinitely suspend plans to expand offshore drilling for oil and natural gas.
“Obviously, what’s occurring now will also be taken into consideration as the administration looks to how to advance that plan and what makes sense and what might need to be adjusted,”Carol Browner, Obama’s adviser for energy and climate change, said at a White House briefing yesterday.
Administration officials escalated the federal response, declaring the spill of “national significance,” announcing immediate inspections of all deep-water drilling rigs in the Gulf of Mexico and convening at the Department of Interior a meeting between government agencies and representatives from more than a dozen companies including BP,Chevron Corp.,ConocoPhillips,Exxon Mobil Corp. and Halliburton Co.
Interior Secretary Ken Salazar, who also met with BP officials at their command center in Houston yesterday, urged the companies and technical experts “to get all hands on deck” to deal with the spill, a statement from the department said.
“We expect industry to be fully complying with the law and to be taking aggressive measures to ensure that this type of incident does not happen again,” Salazar said in the statement.
Federal Response
The government response involves the Departments of Defense, Homeland Security, Commerce and Interior. Obama has directed the military to consult with BP on whether the Pentagon has technology better than that available in the private sector.
The U.S. Navy is sending equipment to the Gulf, including 66,000 feet of inflatable booms for containing the oil and seven systems for skimming the crude off the water. That is in addition to the 76 skimmers, tugs, barges and recovery vehicles already deployed to the spill.
At the current rate oil is spilling from the well, by the third week of June the spill will exceed the volume dumped after the Exxon Valdez ran aground in Alaska’s Prince William Sound in 1989. BP is required to cover the costs of the spill under the 1990 Oil Pollution Act, drafted after the Exxon Valdez incident.
Every Resource
“While BP is ultimately responsible for funding the cost of response and cleanup operations, my administration will continue to use every single available resource at our disposal,” Obama said in remarks yesterday at the White House.
Obama said he is dispatching Salazar, Homeland Security Secretary Janet Napolitano and Environmental Protection Agency Administrator Lisa Jackson to the Gulf today “to ensure that BP and the entire U.S. government is doing everything possible, not just to respond to this incident, but also to determine its cause.”
The leak, which followed an explosion on a drilling rig April 20 that left 11 workers missing, is costing BP and its partners in the well $6 million a day.
BP’s costs of operation “are ramping up” as they bring more people and equipment,Neil Chapman, company spokesman, said in an interview in Robert, Louisiana.
American depositary receipts of BP, which vies with Royal Dutch Shell Plc for the title of Europe’s biggest oil company,plunged 8.3 percent to $52.56 yesterday in New York.
Gulf Production
The well is in a portion of the Gulf of Mexico off the Louisiana, Mississippi and Alabama coasts that is already open to energy exploration. The area produces an estimated 1.7 million barrels of oil a day, about 30 percent of domestic production, according to Interior Department figures.
Obama last month proposed expanding that area into portions of the Gulf off the coast of Florida as well as opening territory along portions of the East Coast.
While the energy industry welcomed the decision, which Obama pitched as necessary to help wean the U.S. off foreign energy sources, it was criticized by environmental groups and some Florida politicians. Some lawmakers expressed skepticism yesterday.
House Speaker Nancy Pelosi said yesterday Congress should “look at the danger to the coastline” posed by the oil slick when lawmakers “review the plan the president put forth.”
White House press secretary Robert Gibbs said the president will reserve judgment on going forward with new exploration plans until the cause of the rig’s explosion is determined.
Start of Process
Browner said Obama’s decision “doesn’t automatically open up an area to drilling. It starts a process, and an area may or may not become open to drilling.”
When asked whether the administration would support a pause in new deep-water oil drilling, Deputy Interior Secretary David Hayes said, “Everything’s on the table.”
Nelson, the Florida Senator, said the possibility of an economic and environmental disaster caused by the spill required an immediate halt to Obama’s plans.
“The questions about the practices of the oil industry raised in the wake of this still-unfolding incident require that you postpone indefinitely plans for expanded offshore drilling operations,” Nelson wrote in a letter to the president.