WRAPUP 5-Obama blames Gulf oil spill on ‘breakdown’ at BP

* Obama says future offshore drilling depends on safety

* Makes first reference to possibility of a criminal probe

* BP chief welcomes commission, says shares Obama’s goals
(Adds BP response on dispersants, weather outlook)

By Matt Spetalnick and Matthew Bigg

WASHINGTON/VENICE, La., May 22 (BestGrowthStock) – U.S. President
Barack Obama on Saturday blamed the massive Gulf of Mexico oil
spill on “a breakdown of responsibility” at energy giant BP Plc
as he unveiled a commission to investigate the disaster.

Obama, in his weekly radio and Internet address, also said
offshore oil drilling could only go forward if there were
assurances that such accidents would not happen again.

While ramping up pressure on companies linked to the still
uncapped spill — BP (BP.L: ), Halliburton (HAL.N: ) and Transocean
Ltd (RIG.N: ) — he said he would also hold Washington
accountable for mending its ways.

“First and foremost, what led to this disaster was a
breakdown of responsibility on the part of BP and perhaps
others, including Transocean and Halliburton,” Obama said in
his toughest remarks yet on companies linked to the spill.

“And we will continue to hold the relevant companies
accountable not only for being forthcoming and transparent
about the facts surrounding the leak, but for shutting it down,
repairing the damage it does, and repaying Americans who’ve
suffered a financial loss,” he said.

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Graphic: http://link.reuters.com/ken64k

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A month after the well blowout and rig explosion that
killed 11 workers, sheets of rust-colored heavy oil are
clogging fragile marshlands on the fringes of the Mississippi
Delta, damaging fishing grounds and wildlife.

In his executive order announcing former Democratic Senator
Bob Graham and and former Environmental Protection Agency chief
William Reilly would co-chair the commission, Obama made his
first reference to the possibility of a criminal probe.

“The commission shall ensure that it does not interfere
with or disrupt any ongoing or anticipated civil or criminal
investigation or law enforcement activities or any effort to
recover response costs or damages arising out of the Deepwater
Horizon explosion, fire and oil spill,” the order stated.

The administration is keeping the pressure on BP on many
fronts as it strives to show it is being resolute in the face
of what many believe is already the worst U.S. oil spill,
eclipsing the 1989 Exxon Valdez accident in Alaska.

The U.S. Environmental Protection Agency expressed
frustration on Saturday when it released BP’s response to its
directive on dispersants instructing the company to evaluate
pre-approved dispersants for toxicity and effectiveness.

It accused BP and some of the manufacturers involved of
withholding information by invoking business confidentiality.

“EPA continues to strongly urge these companies to
voluntarily make this information public so Americans can get a
full picture of the potential environmental impact of these
alternative dispersants,” it said. It did not name the
companies.

In its response released by the EPA, BP said Corexit, a
dispersant manufactured by Nalco Holding Co (NLC.N: ) that it has
been using, was the only one immediately available in
sufficient quantities to tackle the spill and “remains the best
option for subsea application.”

It also said that “within 28 days of application it does
not persist in the environment” and asked to discuss the
situation with the Coast Guard and the EPA before they issue
“directives requiring a change in dispersant products.”

Some environmentalists worry the chemicals in dispersants
may have a lasting harmful impact.

EPA Administrator Lisa Jackson will return to the Gulf
Coast on Sunday to monitor its response while Secretary of the
Interior Ken Salazar travels to the BP Command Center in
Houston to get an update from the federal science team working
on the problem.

NO COMMENT ON BLAME

BP made no immediate comment on Obama’s suggestion that it
was to blame for the deep-sea disaster. But the company’s chief
executive, Tony Hayward, said he welcomed the establishment of
the commission and pledged to work with its co-chairmen.

“We share the goal of the president and the public to know
what happened to cause this accident and what regulatory and
industry changes are needed to help prevent something like this
from happening again,” Hayward said in a statement.

BP on Friday revised downward an earlier estimate that one
of its containment solutions, a 1-mile (1.6 km)-long siphon
tube inserted into the larger of two seabed leaks, was catching
5,000 barrels (210,000 gallons/795,000 litres) of oil per day.

BP captured 2,200 barrels in the 24 hours to midnight,
according to the incident response team, the same figure it had
for the previous 24-hour period.

“To me from the very beginning with BP it was nothing but
public relations,” said Roger Halphen, a south Louisiana school
teacher who has worked both in the oil industry and as a
commercial fisherman.

“It’s just a disaster. Everybody was sleeping on this and
all of a sudden here it is,” he said of oil fouling the coast.

The weather at least was cooperating.

“There’s very little chance of rain and plenty of
visibility with low winds and fairly smooth seas,” said Ken
Graham, head of the National Weather Service office in New
Orleans. “For things they need to do out there, they’ve got a
pretty good window of opportunity.

Favorable conditions are expected through the weekend, he
said. High winds and rough seas can hinder efforts to burn off
or skim oil from the surface.

Louisiana authorities are desperate to start building sand
levees to keep the spill from swamping their coast, but experts
have serious doubts about the $350 million project.
[ID:nN22225344]

The company’s next planned step is a “top kill” — pumping
heavy fluids and then cement into the gushing well to plug it.

Many scientists dismiss an original 5,000 bpd estimate of
the total leaking oil — often defended by BP executives — as
ridiculously low and say it could be 70,000 barrels (2.9
million gallons/11 million litres) per day or more.

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(Additional reporting by Anna Driver in Houston and Lisa
Richwine in Washington; writing by Ed Stoddard and Tom Brown;
editing by Mohammad Zargham)

WRAPUP 5-Obama blames Gulf oil spill on ‘breakdown’ at BP