Oil spill could be up to 60,000 barrels a day
The number keeps changing, and the news keeps getting worse: Now the oil spewing into the Gulf of Mexico could be flowing at 60,000 barrels a day.
Hours before President Obama took to the airwaves to speak to Americans about the gulf oil spill, the government group whose task it is to assess the flow rate from BP’s undersea well came up with a revised estimate of 35,000 to 60,000 barrels a day.
A previous revision from the federal Flow Rate Technical Group, delivered Friday, pegged the flow at 20,000 to 40,000 barrels.
If the new high number is accurate, that means that a disaster the size of the 1989 Exxon Valdez spill, which dumped 257,000 barrels, has been occurring about every week since April 20, when the Deepwater Horizon erupted in flames, killing 11 people.
For a disaster originating a mile undersea, such figures can seem like an abstraction. But the consistent upward revision of the numbers has undermined confidence in BP, which controls access to the spill site.
The original estimate shortly after the rig explosion was 1,000 barrels a day, but was quickly revised to 5,000 after an environmental group challenged the figure. A government panel began studying videotape and other data, issuing an estimate of 12,000 to 19,000, then raising it last week to 20,000 to 40,000.
The new numbers also undermine the oil company’s recent news that it has put in place a containment plan to collect most of the oil. The company told the Coast Guard on Sunday that it would be able to collect up to 53,000 gallons of oil a day by the end of June. The plan, BP Chief Operating Officer Doug Suttles said in a letter to the government, offered “sufficient capacity to cover the upper end” of the government estimate.
That may not be the case anymore, although the company has said it could increase its daily collection capacity to 60,000 to 80,000 barrels, perhaps by mid-July.
On Tuesday, BP spokesman Toby Odone said the company remained confident that it could eventually collect all of the oil.
“Yeah, absolutely,” Odone said. “We’ve always said that we will build capacity to deal with whatever the volume of oil is that’s flowing.”
BP suffered a temporary setback in its existing containment plan Tuesday morning, when lightning struck the ship that has been collecting about 16,000 barrels of oil a day. No one was injured, but the fire halted the oil containment program for about five hours, and delayed the implementation of a complementary collection system that had been scheduled to go online today and add a 5,000- to 10,000-barrel-a-day capacity to the effort, Odone said.
Even before the new numbers came out, the ever-increasing estimates about the size of the spill were taking a toll on BP’s financial health. Fitch Ratings analysts Tuesday downgraded the rating on the company’s long-term debt to just above junk status.
Fitch analysts Jeffrey Woodruff in London and Erwin Van Lumich in Barcelona said in their report that the downgrades reflected the risks that BP might face from unexpectedly large costs if the company is forced by the Obama administration to place billions of dollars in an escrow account for damage claims. The Obama administration has indicated that it will try to force the company to create such an account.
But the analysts also factored in indications that significantly more oil may have leaked from the crippled well than previously anticipated, which, they said, could increase the likelihood of “BP’s exposure to Justice Department fines payable in the near to medium term.”
BP was also subjected to a tongue-lashing on Capitol Hill on Tuesday during a five-hour hearing by a House Energy and Commerce subcommittee. The heated hearing, attended by BP America President Lamar McKay, and other top oil industry executives, was a likely preview of the treatment awaiting BP Chief Executive Tony Hayward when he testifies at his first congressional hearing Thursday.
Rep. Edward J. Markey (D-Mass.) asked McKay to “apologize to the American people” for his company’s underestimation of the amount of oil spewing into the gulf. Markey contended that “BP’s low-balling” was “either deliberate deception or gross incompetence.”
“We are sorry for everything the Gulf Coast is going through,” McKay said, though he disputed that his company was responsible for the earlier estimates.
Rep. Cliff Stearns (R-Fla.) went further, calling on McKay to resign.
“I really think in light of the performance of you as the CEO and what has occurred, I really think you should be resigning as chairman of BP America,” Stearns said.
McKay did not respond.
The executive also came in for uncharacteristically stinging words from Rep. Anh “Joseph” Cao (R-La.), a former seminarian who is one of the most soft-spoken members of Congress.
“Mr. Stearns asked Mr. McKay to resign,” Cao said during the hearing. “Well, in the Asian culture we do things differently. During the samurai days, we just give you a knife and ask to you commit hara-kiri.”
Cao told the BP executive: “My constituents are still debating on what they want me to ask you to do.”
Simon reported from Washington, White from Los Angeles and Fausset from Atlanta.