Executives shift blame as oil gushes into Gulf of Mexico

By Timothy Gardner and Steve Gorman

WASHINGTON/PORT FOURCHON, Louisiana (BestGrowthStock) – Executives from BP Plc and other companies involved in a deadly Gulf of Mexico offshore oil well blowout blamed each other in Washington on Tuesday as troops and prison inmates rushed to shore up Louisiana’s coast against a huge oil slick.

The oil bosses were grilled by members of the Senate Energy Committee in the first of two days of hearings, with committee chairman Jeff Bingaman saying it appeared the April 20 explosion of the Deepwater Horizon rig was due to a “cascade of errors, technical, human and regulatory.

White House spokesman Robert Gibbs said President Barack Obama is “deeply frustrated” that the oil leak in the Gulf has not yet been stopped. The fight to contain the slick went on in Louisiana, Mississippi, Alabama and Florida, whose fishing and tourism industries are already feeling the pinch.

The accident’s fallout is being felt on the regulatory front as the ruptured well keeps spewing at least 5,000 barrels (210,000 gallons/795,000 liters) of crude into the Gulf each day in what threatens to be the worst-ever U.S. oil spill.

In response to the oil spill, U.S. Interior Secretary Ken Salazar announced that the federal agency that oversees offshore drilling will be split to separate the collection of oil royalties from safety inspection duties.

The Minerals Management Service currently carries out both roles, drawing criticism from some U.S. lawmakers and environmental groups that it is a conflict of interest for one agency to be responsible for regulating the safety of offshore oil production while also being charged with keeping the oil flowing so the government can collect royalties.

The explosion of the Transocean Ltd rig, which killed 11 workers and triggered the oil spill that jeopardizes the coast of four U.S. Gulf states, has governments at all levels scrambling to react. Obama has already suspended a plan to open up more waters to oil drilling.

In the congressional hearing, BP America President Lamar McKay, Transocean Chief Executive Steven Newman and Tim Probert, an executive at Halliburton Co, sat through senators’ accusations, then pointed fingers at each other.

McKay said the rig’s blowout preventer, equipment designed to protect workers by cutting flow of crude in the case of sudden changes in pressure, had been modified.

Indeed, modifications to the gear were made in 2005, but at BP’s request, said Transocean’s Newman.

Republican Senator John Barrasso told the executives: “I hear one message and the message is: ‘Don’t blame me.’ Well, shifting this blame does not get us very far.”

Democratic Senator Ron Wyden at one point interrupted McKay, saying, “The culture of this company has been one accident after another.”

Halliburton joins BP and Transocean because it provided a variety of services on the rig and was involved in cementing the well to stabilize its walls and plug it.

Transocean pins the blast on the failure of the cementing to plug the underwater well. BP is operator of the well.

STOCK RECOVERS

BP’s stock recovered after dropping through most of the day, down 0.67 percent in London trading. Its American Depositary Receipts were up 0.5 percent late in the session in New York. The shares have fallen more 15 percent since the rig blast, wiping about $30 billion from its market value.

BP has said it will try covering the leak nearly a mile under the surface with a much smaller funnel than the 98-tonne dome it tried in vain to put in place last weekend.

It aims to have the fix in place in the next two days. Then BP engineers hope to siphon crude up to a tanker.

BP is also drilling a relief well, which could take as long as three months to complete. It plans a second one as well.

Desperate efforts continued to protect the coastline, including fragile wetlands, from the approaching slick.

In Port Fourchon, Louisiana, fatigue-clad Army National Guard troops from the 769th Engineer Battalion of Louisiana sweated alongside prisoners in scarlet red pants and white T-shirts with “Inmate Labor” on the back as they filled giant 1,000-pound (450 kg) sandbags.

Black Hawk helicopters dropped the bags to plug gaps in coastal beaches through which the oil could wash into fragile inland marshes and wetlands. Bulldozers also worked to build up the beach line in areas they could reach.

“We started filling a few bags Sunday evening but the big push came yesterday,” said Sergeant Wesley Melton, 38.

“Just about everybody out here has been deployed in Afghanistan or Iraq, some numerous times,” he added, saying their mission there had been to clear roadside bombs known as IEDs, or improvised explosive devices. “You won’t find anyone out here that will complain about helping.”

BRACING FOR IMPACT

Officials agree that delays in containing the leaking well increase the chances it could become the worst U.S. oil spill ever, surpassing the 1989 Exxon Valdez accident in Alaska.

“We’re in this subsea environment … really you’re talking about robots for the most part that have to do the actual work,” U.S. Environmental Protection Agency Administrator Lisa Jackson told CNN. “There’s a real frustration about wanting to try things and then realizing that the environment that you’re in causes problems.”

The latest forecasts from the U.S. National Oceanic and Atmospheric Administration indicate that southeast winds will persist throughout the week and move the oil westward.

Along the Alabama coastline, residents braced for the impact on their shores, and on their livelihoods.

“It is going to touch everyone whose income relates to the water and recreation,” said Andrew Saunders, owner of Saunders Yachtworks, a boat repair company in Dauphin Island. “Even if the oil doesn’t hit, it will be like 9/11, when people sat on their hands for a couple of months to see what might happen.”

Despite the spreading oil, port operators said shipping lanes and ports on the Gulf of Mexico were open on Tuesday.

Florida Governor Charlie Crist on Tuesday signed an executive order creating a Gulf Oil Spill Economic Recovery Task Force “to facilitate efforts by Florida businesses and industries in recovering from the loss of business and revenues due to the Deepwater Horizon oil spill.”

Crist, running for the U.S. Senate, also said he will call state lawmakers for a special session to weigh a constitutional ban on oil drilling in Florida’s coastal waters.

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(Additional reporting by Tom Doggett in Washington, Pascal Fletcher in Miami, Erwin Seba in Robert, Louisiana, Verna Gates in Dauphin Island and Anna Driver in Houston; Tom Bergin in London; Writing by Deborah Charles and Jeffrey Jones; Editing by Will Dunham)

Executives shift blame as oil gushes into Gulf of Mexico