21
Jun
10

Oil firms challenge drilling ban

NEWS
Oil firms challenge drilling ban

Monday, June 21, 2010

••• Oil firms have gone to court seeking to lift a six-month freeze on deepwater drilling, as BP documents reveal 100,000 barrels of crude may be spewing into the Gulf of Mexico.

The British energy giant also says it has spent $2 billion on cleaning up the spill and compensating residents and businesses facing ruin nine weeks into the nation’s worst ever environmental disaster.

U.S. firms, whose crews and equipment have been idled since U.S. President Barack Obama imposed a moratorium on deep water drilling and exploration in the Gulf, have urged a judge to ease the restrictions.

The government stand “is effectively a moratorium on all drilling because it may take months if not years for the industry to come into compliance with the standards, some of which have not yet been determined,” the plaintiffs argued on Monday.

Delaware-based Hornbeck Offshore Services, which first lodged the case, said in court documents the moratorium was “arbitrary, capricious, an abuse of discretion” and inconsistent with industry regulations.

In a deal hammered out with the White House last week, BP agreed to set up a $20 billion compensation fund over the next four years to pay for the damage wrought by the spill.

It also set aside $100 million to compensate oil workers laid off as a result of the spill, triggered by an April 20 explosion on a BP-leased rig off Louisiana.

Kenneth Feinberg, named to run the fund, said Obama told him: ‘Get these claims paid. Get them paid quickly.’
“We want to get these claims out quicker and we want to get these claims out with more transparency so people have more certainty as to what they are going to receive,” Feinberg told the ABC network on Sunday.

“We want to do it in the next couple of weeks so that people who are down in the Gulf, who are in desperate financial straits as a result of this spill, are receiving financial compensation.”

But The Wall Street Journal reported BP’s additional sum for unemployed workers was a goodwill drop in the ocean compared with the estimated $300 million being lost every month as rigs are mothballed.

BP had successfully argued in the negotiations that the moratorium was a U.S. administration policy decision, for which they were not responsible.

“You won’t find many lawyers who will say when the government imposes a moratorium it’s the company’s obligation to help the workers impacted,” a BP negotiator told the business daily.

BP had also managed to fend off White House demands to pay to restore and improve the Gulf marshes and waterways – already blighted since the 2005 Hurricane Katrina – to leave them in a better condition than before the spill.

In a statement to the London Stock Exchange, the embattled British energy giant – which has seen its credit ratings downgraded and share prices plunge – said it had spent $2 billion on the spill.

The costs included paying for containment, relief well drilling, grants to Gulf states, claims paid to those affected and costs incurred by the U.S. government.
Meanwhile, a worker on the Deepwater Horizon rig revealed he had alerted BP and Transocean, the rig’s owners, to a leak found in the control pod of the blowout preventer – a system of valves which failed to shut down the oil flow when the explosion happened.

“We saw a leak on the pod, so by seeing the leak we informed the company men,” Tyrone Benton told the BBC.

“They have a control room where they could turn off that pod and turn on the other one, so that they don’t have to stop production… they just shut it down and worked off another pod.”

The news came as internal BP documents suggested in the worst case scenario about 100,000 barrels per day of crude could be spilling into the Gulf – way higher than U.S. official estimates of 35,000 to 60,000 bpd.

BP says it is containing about 25,000 barrels a day, and has called in more ships and equipment to boost the effort.

But a key U.S. congressman, Ed Markey, tore into the firm after releasing the document. “‘First they said it was only 1000 barrels, then they said it was 5000 barrels; now we’re up to 100,000 barrels,” Markey told NBC television.

BP rejected Markey’s charge. The estimate “has nothing (to do) with the amount of oil that’s actually escaping at the moment,” spokesman Robert Wine said.

BP has said the spill will not be permanently capped until they have completed two relief wells, with the first set to be finished in August.
• Latest News & Headlines » Home «
Share

Advertisements

0 Responses to “Oil firms challenge drilling ban”



  1. Leave a Comment

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


Calendar

June 2010
M T W T F S S
« May   Jul »
 123456
78910111213
14151617181920
21222324252627
282930  

Archives

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 3 other followers

© Copyright 2010 Dominic Stoughton. All Rights reserved.

Dominic Stoughton's Blog

%d bloggers like this: