http://wallstcheatsheet.com/stocks/oil-still-washing-ashore-one-year-after-bp-capped-the-gulf-spill.html/
By Emily Knapp
July 17 2011
It’s been a year since BP (NYSE:BP) stopped the flow of its damaged Macondo well in the Gulf of Mexico and crude oil is still washing ashore. As of July 9, roughly 491 miles of Louisiana, Mississippi, Alabama and Florida coastline were contaminated by BP oil, slightly less than half of the total number of miles oiled since the the U.S.’s worst offshore spill began.
Estimates have 4.9 million barrels of oil spilled into the Gulf after the Deepwater Horizon (NYSE:RIG) drilling rig exploded on April 20, 2010. It wasn’t until July 15, 2010 – a year ago today and almost three months after oil first began flowing freely into the ocean – that BP was able to cap the flow.
While Tim Zink, a spokesman for the National Oceanic and Atmospheric Administration characterizes current oiling as having a light sheen with tar balls of all shapes and sizes, compared to heavy and moderate oiling experienced in the past, a recent Louisiana survey found that 5 miles of beaches and 8 miles of marsh were still heavily oiled.
BP has chosen today to announce that it has so improved Gulf drilling operating standards that they exceed U.S. regulatory requirements. “BP’s commitment in the wake of the Deepwater Horizon (NYSE:RIG) incident is not only to restore the economic and environmental conditions among the affected areas of the Gulf Coast, but also to apply what we have learned to improve the way we operate,” said Chief Executive Officer Bob Dudley. The fact that BP shares remain about 30% below their pre-spill price might also have something to do with it.
Of course, nothing can reverse the effects of BP’s (NYSE:BP) negligence that led to last year’s disastrous oil spill. Eleven workers were killed and seventeen were injured when the $385 million rig exploded, with the spill shutting down thousands of square miles of fishing grounds for months and killing off scores of local wildlife. Seafood coming from the Gulf wasn’t officially declared safe by the government until March 4, 2011.
The U.S. government estimates that 4.9 million barrels worth of oil were poured into the ocean over the course of the 87-day spill. BP estimates that the spill was probably closer to 4 million barrels, of which only 850,000 were captured, burned, or skimmed off the water, according to a 2010 annual report. As of July 7, damage claims and cleanup cost BP $6.57 billion, $500 million of which will go to the Gulf of Mexico Research Initiative over the next 10 years, which will take samples and analyze different aspects of the spill in order to aid clean-up efforts and act to prevent another such catastrophe in the future.
Meanwhile, the government has collected 44,800 samples as evidence in a damage assessment in order to determine BP’s fines. In April, BP agreed to give $1 billion to restoration projects.
1
Tweet
3
Share http://wallstcheatsheet.com/stocks/oil-still-washing-ashore-one-year-after-bp-capped-the-gulf-spill.html/ on Twitter
The URL http://wallstcheatsheet.com/stocks/oil-still-washing-ashore-one-year-after-bp-capped-the-gulf-spill.html/ has been shared 3 times.View these Tweets.
in
__________________
http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/15/bloomberg1376-LOC9D21A1I4H01-4GLC6GRP0EJ62BVIL8U3C3SGV0.DTL
San Francisco Chronicle
BP Oil Still Washing Ashore One Year After End of Gulf Spill
Friday, July 15, 2011
July 15 (Bloomberg) — Crude oil continues to wash ashore along the Gulf of Mexico coast a year after BP Plc stopped the flow from its damaged Macondo well, which caused the worst U.S. offshore spill, the National Oceanic and Atmospheric Administration said.
On June 4, the last available tally from field inspections, 530 miles of coastline in Louisiana, Mississippi, Alabama, and Florida remained contaminated by oil, said Tim Zink, a spokesman for the agency. That’s down from a high of 1,074 miles. The U.S. government estimates that 4.9 million barrels were spilled into the Gulf from Macondo before London-based BP succeeded in capping the flow a year ago today.
“I’d characterize it as a light sheen and tar balls of all shapes and sizes,” Zink said in an interview yesterday. “For roughly the first year, it was heavy, moderate to light oiling. This is light.”
The pollution of Gulf coast beaches is one of several headwinds BP faces as Europe’s second-largest oil company seeks to rebuild its business and reputation in the U.S. The U.K. oil producer’s share price remains about 30 percent below its pre- spill level and has gained 13 percent since the spill ended.
How long the oiling will persist, the extent of damage it has caused and how much it may yet inflict it still being studied. A November estimate by NOAA, disputed by BP, found about 1.1 million barrels of oil unaccounted for after adjusting for amounts that were recovered, dispersed into the sea, burned and evaporated into the air. NOAA is investigating a surge in deaths of baby dolphins along the Gulf coast during the spring calving season, Zink said.
Cleanup Workers
As of June 7, 1,162 people were still employed in spill clean-up, the U.S. Coast Guard reported. That’s down from a peak of 48,200 staff a year ago. William Benson, a Coast Guard spokesman in New Orleans, said officials weren’t available to discuss the details of the clean-up efforts.
Compounding the difficulty of calculating how much oil may remain to wash ashore or harm wildlife is a dispute between BP and NOAA over how much escaped from the well during the 87-day spill. The Macondo well began spilling into the Gulf April 20, 2010, after Transocean Ltd.’s Deepwater Horizon drilling rig exploded and sank 40 miles (62 kilometers) off the Louisiana coast. After stopping the leak on July 15, 2010, the well was plugged by cement and declared dead by the government Sept. 19.
The volume of oil spilled into the Gulf is key to determining the size of penalties that could be levied against the company for violations of U.S. environmental laws. The catastrophe killed 11 rig workers, injured 17, destroyed a $365 million drilling vessel and shut thousands of square miles of fishing grounds for months.
Spill Estimate Disputed
BP has said the U.S. government’s estimate of 4.9 million barrels overstated the spill. BP said in its 2010 annual report that the spill probably was closer to 4 million barrels, of which 850,000 barrels were captured, burned or skimmed off the water.
The 23 percent of the oil NOAA can’t account for may have settled to the bottom of the sea or remain suspended in the water as tar balls that currents may eventually wash ashore, the agency said. The estimate hasn’t been revised, agency spokesman John Ewald said.
“We really didn’t mount the comprehensive kinds of sampling studies or mappings required to better assess where the oil was distributed initially and where it eventually ended up,” Robert Weisberg, a professor of Physical Oceanography at the University of South Florida, said yesterday in an interview.
Mounting Bills
BP spokesman Tom Mueller didn’t respond to questions about the company’s estimate of spillage or damage. Payments for damage claims and cleanup costs reached $6.57 billion as of July 7, according to a BP website.
The Gulf of Mexico Research Initiative, funded with $500 million from BP in payments spread over 10 years, announced $1.5 million of “stop-gap” grants for oil sampling June 30. The Initiative is reviewing another round of proposals for work to be done beginning in September, according to its website.
“There will be additional work done,” Weisberg said. “These monies will do more to prepare us for some subsequent environmental assault than shed much light on the Deepwater Horizon event. It’s a little too late.”
NOAA has collected 44,800 samples as evidence for a National Resource Damage Assessment, Zink said. The NRDA is an official determination of the damage BP caused, which will be the basis for fines to be levied. The samples include 17,365 from sediment and 12,647 from water, he said. About half have been validated by third parties, he said.
‘Get a Picture’
“We’re starting to get a picture of the damage that was done,” Zink said. “At the end of the day, it’s a legal case.”
BP in April agreed to fund $1 billion of restoration projects, and an initial restoration plan may be released this year after consultation with the trustee council for the oil spill, comprised of two federal agencies and representatives of the affected states, Zink said.
Seafood harvested in the Gulf of Mexico is safe, NOAA declared in a March 4 statement. A third of the Gulf was closed to fishing at the height of the spill.
–With assistance from Brian Swint in London. Editors: Susan Warren, Will Kennedy.
Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/g/a/2011/07/15/bloomberg1376-LOC9D21A1I4H01-4GLC6GRP0EJ62BVIL8U3C3SGV0.DTL#ixzz1SQ5u5qi
Special thanks to Richard Charter