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Archive for Wednesday, June 2, 2010

BP stock tumbles as feds announce oil-spill probes

June 2, 2010

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— BP’s stock plummeted and took much of the market down with it Tuesday as the federal government announced criminal and civil investigations into the Gulf of Mexico oil spill. BP engineers, meanwhile, tried to recover from a failed attempt to stop the gusher with an effort that will initially make the leak worse.

Attorney General Eric Holder, who was visiting the Gulf to survey the fragile coastline and meet with state and federal prosecutors, would not say who might be targeted in the probes into the largest oil spill in U.S. history.

“We will closely examine the actions of those involved in the spill. If we find evidence of illegal behavior, we will be extremely forceful in our response,” Holder said in New Orleans.

BP’s stock nose-dived on Tuesday, losing nearly 15 percent of its value on the first trading day since the previous best option — the so-called “top kill” — failed and was aborted at the government’s direction. It dipped steeply with Holder’s late-afternoon announcement, which also sent other energy stocks tumbling, ultimately causing the Dow Jones industrial average to tumble 112.

After six weeks of failures to block the well or divert the oil, BP was using robotic machines to carve into the twisted appendages of the crippled well. The latest attempt involved using tools resembling an oversized deli slicer and garden shears to break away the broken riser pipe so engineers can then position a cap over the well’s opening.

Even if it succeeds, it will temporarily increase the flow of an already massive leak by 20 percent — at least 100,000 gallons more a day. And it is far from certain that BP will be able to cap a well that one expert compared to an out-of-control fire hydrant.

“It is an engineer’s nightmare,” said Ed Overton, a Louisiana State University professor of environmental sciences. “They’re trying to fit a 21-inch cap over a 20-inch pipe a mile away. That’s just horrendously hard to do. It’s not like you and I standing on the ground pushing — they’re using little robots to do this.”

The operation has never been performed in such deep water, and is similar to an earlier failed attempt that used a larger cap that quickly froze up. BP PLC officials said they were applying lessons learned from the earlier effort, and plan to pump warm water through pipes into the smaller dome to prevent any icing problems.

“If all goes as planned, within about 24 hours we could have this contained,” BP’s Doug Suttles said Tuesday after touring a temporary housing facility set up for cleanup workers in Grand Isle. “But we can’t guarantee success.”

Since the Deepwater Horizon rig exploded on April 20, killing 11 workers and eventually collapsing into the Gulf of Mexico, an estimated 20 million to 40 million gallons of oil has spewed, eclipsing the 11 million that leaked from the Exxon Valdez disaster.

Oil has fouled many fishing areas and miles of ecologically sensitive coastline. Mississippi Gov. Haley Barbour said oil from the spill was found in his state for the first time, on a barrier island, and newly expanded federal restrictions mean that nearly a third of federal waters are closed to fishing.

President Barack Obama on Tuesday ordered the co-chairmen of an independent commission investigating the spill to thoroughly examine the disaster, “to follow the facts wherever they lead, without fear or favor.” The commission is led by Bob Graham, a former Florida governor and U.S. senator, and William K. Reilly, a former head of the Environmental Protection Agency.

Holder said the laws under review for the criminal and civil probes include the Clean Water Act, the Oil Pollution Act of 1990, the Migratory Bird Treaty Act and the Endangered Species Act.

Comments

whats_going_on 4 years, 6 months ago

For anyone who holds stock in BP, WOW...that sucks. :\

Flap Doodle 4 years, 6 months ago

Bet that BP wishes their employees had ponied up even higher donations to Dear Leader's campaign now.

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