Archive for July, 2010

Signs of oil spill recovery entering new phase (AP)

Friday, July 30th, 2010 | Finance News

BILOXI, Miss. – BP's new boss says it's time for a "scaleback" in cleaning up the Gulf of Mexico oil spill. Federal officials say there is no way the crude could reach the East Coast. And fishing areas are starting to reopen.

There were several signs Friday that the era of thousands of oil-skimming boats and hazmat-suited beach crews is giving way to long-term efforts to clean up, compensate people for their losses and understand the damage wrought. Local fishermen are doubtful, however, and say oil remains a bigger problem than BP and the federal government are letting on.

Other people contend the impact of the spill has been overblown, given that little oil remains on the Gulf surface, but Bob Dudley, who heads BP's oil spill recovery and will take over as CEO in October, rejected those claims.

"Anyone who thinks this wasn't a catastrophe must be far away from it," he said in Biloxi, where he announced that former Federal Emergency Management Agency chief James Lee Witt will be supporting BP's Gulf restoration work.

After an April 20 rig explosion that killed 11 workers, BP's blown-out well gushed an estimated 94 million to 184 million gallons of oil before a temporary cap stopped it July 15. Efforts to permanently plug the gusher had been expected to begin as early as Sunday, but the government's point man for the spill said Friday that those plans hit a snag.

Crews found debris in the bottom of the relief well that ultimately will be used to plug the leak for good, retired Coast Guard Adm. Thad Allen said. The debris must be fished out before crews can begin a procedure known as a static kill that hopefully will make the rest of the job easier.

"It's not a huge problem, but it has to be removed before we can put the pipe casing down," Allen said.

The sediment settled in the relief well last week when crews popped in a plug to keep it safe ahead of Tropical Storm Bonnie. Removing it will take 24 to 36 hours and likely push the kill back to Tuesday, Allen said.

Once the relief well is ready, crews can begin the static kill, in which mud, and possibly cement, are pumped in through the temporary cap. The better that procedure seals the blown-out well, the easier it will be to plug it forever by pumping in cement from below using the relief well. The blown-out well could be killed for good by late August, though a tropical storm could set the timetable back.

As the work of plugging the well appears to reach the homestretch, so does much of the cleanup work. Relatively little oil remains on the surface of the Gulf, leaving less for thousands of oil skimmers to do.

Dudley said it's "not too soon for a scaleback" in the cleanup, and in areas where there is no oil, "you probably don't need to see people in hazmat suits on the beach."

He added, however, that there is "no pullback" in BP's commitment to clean up the spill.

St. Bernard Parish President Craig Taffaro responded with an order forbidding removal of any cleanup equipment from staging areas in his parish. "The response is not over in St. Bernard Parish, and it would be premature to demobilize any assets at this time," a brief announcement said.

There had been fears that the massive spill could reach South Florida and the East Coast through a powerful loop current, but federal officials said Friday that earlier reports that some oil had reached the current were wrong.

A new analysis by the National Oceanic and Atmospheric Administration showed most surface oil in the Gulf had degraded to a thin sheen. What remained on the surface and below was hundreds of miles from the loop current.

NOAA Administrator Jane Lubchenco said a strong eddy is preventing oil from reaching the current.

"So there's no mechanism for oil to get from where it is now at the surface to the Keys, Miami-Dade, to any place along the East Coast," Lubchenco said.

Mississippi, Alabama and the Florida Panhandle will likely be spared any additional major beach oiling, although tar balls could wash ashore, NOAA said. Louisiana's coast was the most likely place where oil could still make landfall.

Lubchenco cautioned that scientists will continue studying the potential effects of the subsurface crude.

"Diluted and out of sight does not mean benign," she said. "But in those concentrations there will be minimal impact to the big things that are out in the ocean, big fish, big marine mammals, birds."

She said scientists still don't know the oil's environmental effect underwater.

For help with the long-term recovery, BP has hired Witt and his public safety and crisis management consulting firm. Witt, who was FEMA director under President Bill Clinton, said he wants to set up teams along the Gulf to work with BP to address long-term restoration and people's needs.

"Our hope is that we can do it as fast as we can," Witt said. "I've seen the anguish and the pain that people have suffered after disaster events. I have seen communities come back better than before."

BP and Witt's firm refused to say how much Witt will be paid for his work.

Commercial fishermen, meanwhile, were allowed back on a section of Louisiana waters east of the Mississippi River on Friday after federal authorities said samples of finfish and shrimp taken from the areas were safe to eat.

About 70 percent of Louisiana waters are now open to some kind of commercial fishing, but state waters in Mississippi and Alabama remain closed and so do nearly a quarter of federal waters in the Gulf.

Reinforcing the state's declaration that Louisiana seafood is safe to eat was U.S. Food and Drug Administration Commissioner Margaret Hamburg. At a news conference in New Orleans, she said fish showed levels of contaminants that were "extremely low, significantly below the threshhold of concern."

Hamburg stressed that testing will continue because of the large volumes of oil spilled and the large amounts of dispersants used to break it up.

Seafood industry representatives hailed the reopening, but Rusty Graybill, a boat captain from Yscloskey, La., who fishes for crab, oysters and shrimp, said "it's a joke."

"I'm pretty sure I'll go out and I'll get oil-covered shrimp. They capped this well and now they're trying to say it's OK," he said.

Graybill, a wiry 28-year-old with a leathery tan, made a 2-inch circle with his thumb and finger. "I'm still finding tar balls this big out there, and the boom is still covered in oil," he said.

Louisiana fisherman Pete Gerica couldn't work up much enthusiasm, either. He noted that it doesn't include crabs or oysters and that shrimp season in most of the area has yet to open.

"If you can't crab in these areas, it's a flop," Gerica said.

Oil rig workers are struggling along with fishermen because a federal moratorium on new deepwater drilling in the Gulf of Mexico. Those workers will be getting $100 million in aid that BP said Friday it will distribute through a Louisiana charity.

There is no official estimate of how many people have been out of work since the Interior Department imposed the moratorium in June. Drilling has since been suspended on 33 exploratory wells.

The fund is focused on people who worked on the rigs drilling those wells, not people who provided support services, such as ferrying supplies to them, said Mukul Verma, a foundation spokesman. Those people might get money if there is any left over after grants are provided to rig workers, BP spokesman Tom Mueller said.


Bluestein reported from New Orleans. Associated Press Writers Jason Dearen in Yscloskey and Kevin McGill and Brian Skoloff in New Orleans contributed to this report.

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Wildlife rescue escalates at Mich. river oil spill (AP)

Friday, July 30th, 2010 | Finance News

MARSHALL, Mich. – Volunteers and government officials scrambled on Friday to save geese and other wildlife damaged by an oil spill in a southern Michigan river as the Canadian company that owns the ruptured pipeline said the crude had been contained.

Enbridge Inc., based in Calgary, Alberta, said it was preparing to remove the damaged section of pipe as its focus shifted to cleaning up the spilled oil in the Kalamazoo River, which it estimates at 820,000 gallons. The Environmental Protection Agency puts the total at more than 1 million gallons.

The oil is contained by boom and other devices that can keep it in place until vacuum equipment can suck it up, company spokesman Alan Roth said. More than 70 vacuum trucks and three dozen boats had been deployed for the task.

"It's been captured, it's not going anywhere," Roth said.

Company and federal officials say they don't believe the oil will reach Lake Michigan, where the river empties about 80 miles from where the oil has been contained. But EPA officials say it could take a couple of months to clean up the spill, and the cause is under investigation.

Gov. Jennifer Granholm, who criticized the containment efforts earlier this week, said that after a Friday helicopter ride over the spill area, she thinks there's been noticeable improvement in recent days. Granholm said she did not see any sheen of oil on Morrow Lake, a key point in Kalamazoo County where officials aim to stop the spread of the oil.

"I can say there's been significant progress," Granholm said at a news conference in Battle Creek.

She added: "I don't want to suggest we are satisfied. We continue to ask for additional resources."

EPA Administrator Lisa Jackson, who was also in the helicopter, said she was "very confident" the oil won't reach Lake Michigan.

Enbridge said Friday it had recovered 100,800 gallons of oil and estimated that 420,000 gallons are in a holding area and will be pumped into tanks.

"No one is sugarcoating it," Roth said. "There's still a tremendous amount of work to do but good progress is being made."

Federal and company officials said they were close to reaching the 40-foot section of pipe containing the break, which has been inaccessible because it's in a marshy, oil-covered area. Only when the pipe is reached will it be certain that the leak has stopped, said Ralph Dollhopf, EPA's on-scene coordinator.

Once removed, the section will be taken to a National Transportation Safety Board lab for tests, said Matt Nicholson, the agency's lead investigator.

A team from NTSB's Office of Pipelines and Hazardous Materials division will be on site for up to 10 days, he said.

Company executives Friday stuck by their timeline of events, saying it took until 11:30 a.m. EDT Monday to confirm the leak was happening and they first attempted to report it at 1 p.m., although it took a half-hour for the call to get through.

Explaining the delay between the discovery and the report, company president Patrick Daniel said Enbridge had tried to determine how much oil had escaped.

"We can't just call and say we have a leak," he said. "We need to be able to give them some idea of the quantity."

U.S. Rep. Mark Schauer, a Democrat from Battle Creek, and local leaders say the spill may have begun Sunday night — when a number of area residents called 911 to report foul odors — and have criticized the company for taking so long to report it.

Michigan Attorney General Mike Cox said his office was investigating the spill. Spokesman John Sellek said Michigan law gives state agencies authority to deal with water quality separately from EPA.

Local officials continued tracking down people living near the spill on Friday and advising them to evacuate. Of 61 households visited, 14 agreed to leave while 27 declined. The others couldn't be reached.

Scientists fear the worst may be yet to come for fish in the river. Jay Wesley, a biologist with the state of Michigan, said the oil spill had killed fish in "very limited numbers" along the affected stretch of the river from Marshall westward into Battle Creek.

The bigger problems for fish may come within a week or so, if the oil spill results in decreased water oxygen levels. Wesley said insects, algae, frogs and turtles along the river have been killed in high numbers — which could hurt the fish food supply.

"The effects are probably going to be more long-term," Wesley said. "We probably won't know the full effects for weeks or months or years."

The Marshall area has been considered a good spot for bass fishing. Recreational anglers also fish the area for northern pike, catfish and suckers. Until the spill occurred, health officials considered fish taken from the waters from Marshall to Battle Creek OK to eat in limited amounts — unlike a downstream, westward stretch from Kalamazoo that is laden with PCBs and is on the federal Superfund list of highly contaminated areas.

A wildlife rehabilitation center staffed and managed by a Enbridge contractor near Marshall had received about 50 injured animals — mostly geese — by midday Friday. During a tour, two white-suited workers were trying to clean up an oil-soaked turtle, one holding and rotating the reptile while the other dabbed it with what appeared to be a cloth.

Veterinarians and biologists said they were waiting up to 48 hours before cleaning some animals.

"It's really hard to see them covered with oil," said Linda Elliott of Focus Wildlife, contracted by Enbridge. "But you don't want to put them through the decontamination process until they are stable enough and strong enough to handle it."

The typical bird might spend up to two weeks at the center until it is banded and released back into the wild. It's not yet known where animals will be released.


Flesher reported from Traverse City, Mich.

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TransCanada: ‘Multiple bids’ for Alaska gas line (AP)

Friday, July 30th, 2010 | Finance News

JUNEAU, Alaska – TransCanada Corp. has received "multiple bids from "major industry players and others" to use its proposed pipeline to transport natural gas from Alaska's North Slope to market, a company official said Friday.

Tony Palmer, TransCanada's vice president of Alaska development, said he's encouraged about the line's prospects moving forward as long as "key conditions" are met.

He didn't specify what those were but said the next step would be for TransCanada to work with potential customers to try to resolve those issues in the months ahead.

It was widely assumed that any bids received would have conditions. For example, oil and gas company officials have previously said they'd be seeking long-term fiscal certainty from the state — a term that would be out of TransCanada's control and likely to stir political debate.

TransCanada ended its 90-day process of seeking shipping commitments for a proposed line Friday and released few details about the bids, as expected. Palmer had cited competition as a reason for the secrecy. Denali-The Alaska Gas Pipeline, a joint venture of BP PLC and ConocoPhillips, began its own open season a few weeks ago.

The stakes are high and the interest is intense: A gas pipeline has been held out for years as important to Alaska's long-term economic future, because the production of oil, which is largely responsible for keeping the state running, continues to decline.

The drama and the political parlor game of "will it or won't it get built" is playing against the backdrop of a campaign for governor, and the gas line has become a leading issue in the GOP race.

Only one project is expected to go forward — if one advances at all.

TransCanada, which is working with Exxon Mobil Corp. to advance its plan, successfully bid for an exclusive state pipeline license and the promise of a $500 million reimbursement under the Alaska Gasline Inducement Act championed by then-Gov. Sarah Palin. The Denali project is getting no such state support and has said it doesn't agree with all the act's terms.

TransCanada and Denali have put forth plans to deliver about 4.5 billion cubic feet of gas per day to North American markets by larger lines to Canada; each has goals of being in service by around 2020. Denali has estimated its project cost at $35 billion, while TransCanada has put its figure at $32 billion to $41 billion.

TransCanada also has offered a shorter, cheaper option: a $20 billion to $26 billion line that would lead to a liquefied natural gas facility that could export fuel by ship. Denali spokesman Dave MacDowell has said Denali would consider such an option if potential customers wanted it.

MacDowell said Friday there have been no negotiations or merger talks between Denali and TransCanada, and the results of TransCanada's open season "won't change what we're doing."

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