Energy Correspondent
Tom's Feed
May 25, 2010

Congress can stick BP with bigger liability cap

WASHINGTON, May 25 (Reuters) – The U.S. Justice Department
said on Tuesday that Congress could retroactively impose a
higher liability cap on BP <BP.L> to pay for the damage from
its growing oil spill, and the company would likely lose if it
challenged the higher cap in court.

Current law imposes a $75 million liability cap on economic
damage. Since the BP spill in the Gulf of Mexico in late April,
legislation has been introduced in Congress to raise the cap to
$10 billion.

May 25, 2010

Raising liability cap on BP legal: Justice Dept

WASHINGTON (Reuters) – The U.S. Justice Department said on Tuesday that Congress could retroactively impose a higher liability cap on BP to pay for the damage from its growing oil spill, and the company would likely lose if it challenged the higher cap in court.

“Our view is that there is a strong chance to defeat any constitutional plaintiff if Congress were to lift the caps,” U.S. Associate Attorney General Thomas Perrelli told a Senate committee hearing on the oil spill.

May 18, 2010

U.S. probes another BP rig

WASHINGTON (Reuters) – Interior Secretary Ken Salazar said on Tuesday the U.S. government was investigating another big BP oil rig while admitting his agency came up short in preventing the massive Gulf of Mexico oil spill.

Salazar testified at a Senate Energy and Natural Resources Committee hearing about the explosion on the Deepwater Horizon, BP Plc a drilling rig, four weeks ago that caused a massive oil spill deep in the Gulf. He said offshore drilling was vital to meeting U.S. energy needs but that additional safety measures were required.

May 18, 2010

US probes another BP rig, seeks MMS shakeup

WASHINGTON, May 18 (Reuters) – Interior Secretary Ken Salazar said on Tuesday the U.S. government was investigating another big BP oil rig while admitting his agency came up short in preventing the massive Gulf of Mexico oil spill.

Salazar testified at a Senate Energy and Natural Resources Committee hearing about the explosion on the Deepwater Horizon, BP Plc <BP.L> a drilling rig, four weeks ago that caused a massive oil spill deep in the Gulf. [ID:nN1880093] He said offshore drilling was vital to meeting U.S. energy needs but that additional safety measures were required.

Salazar told the committee the government was now investigating safety concerns at BP’s Atlantis oil production platform in the Gulf after the April 20 explosion on the Deepwater Horizon killed 11 people and spilled vast amounts of crude.

Salazar gave no further details but an Interior spokeswoman confirmed the department’s Minerals Management Service — the agency that has come under criticism from Congress and President Barack Obama for being too "cozy" with oil companies — was investigating the BP platform.

Atlantis is one of the largest production facilities, producing about 200,000 barrels of oil per day. BP owns 56 percent of the field while BHP <BHP.AX> holds the rest.

About 30 percent of U.S. oil production comes from the Gulf of Mexico.

A consumer group and a whistle-blower asked a U.S. court to stop production at Atlantis until safety documents are produced. The lawsuit accuses the MMS of failing to enforce its own regulations.

MMS NEEDS "CLEAN UP"

Salazar, who has ordered the MMS to separate its oil royalty collection and safety inspection roles, admitted the MMS fell short in preventing the explosion oil spill.

"Responsibility starts first at the Department of Interior and the Minerals Management Service. We have to clean up that house," he said.

Democratic Senator Ron Wyden said the MMS has been in denial over its safety problems for years. "It is long past time to drain this safety and environmental swamp," he told the hearing.

But despite the problems with offshore drilling, Salazar also said it still was a necessary part of meeting U.S. energy needs.

Senate Commerce Committee chairman Senator Jay Rockefeller said it would be difficult for him to support future offshore drilling until the Deepwater Horizon accident is fully investigated.

"If left unchecked and uncorrected, we may very well see another terrible disaster of this magnitude," he said.

Election-year politics made their way into the oil spill debate on Tuesday when Democrats for the second time in a week tried to force a Senate vote on a bill to increase oil companies’ liability for accidents. The move was blocked by Republicans as expected.

Senator Robert Menendez, one of the Democrats seeking approval for the bill that would increase the liability cap per company per incident to $10 billion from $75 million, said Democratic senators were considering pushing legislation that would place no limits on the liability.

Salazar said the Obama administration agreed that the liability cap needed to be lifted though he would not give a specific number for how high it should be. (Additional reporting by Richard Cowan; writing by Deborah Charles; Editing by Bill Trott)




May 17, 2010

Coast Guard prepares for oil in south Florida

WASHINGTON (Reuters) – The Coast Guard is preparing for the possibility that tar balls from the massive Gulf Coast oil spill might be swept up in a current and reach the southern Florida coast, a top official said on Monday.

Rear Admiral Peter Neffenger, deputy national incident commander with the Coast Guard, said in testimony before a Senate committee that the government was closely watching whether the oil would be swept up into the “loop current” that moves around Florida.

May 13, 2010

House panel blames rig device in BP oil spill

WASHINGTON (Reuters) – The device designed to cut the oil flow after BP’s oil rig exploded was faulty, the head of a congressional committee said on Wednesday as executives in the unfolding Gulf of Mexico disaster were lambasted over shoddy practices in the second day of hearings.

The chairman of a House of Representatives subcommittee said on Wednesday its investigators uncovered significant problems with the blowout preventer device, including the failure of several emergency backup switches to stop the flow.

May 13, 2010

Congress quizzes oil executives

WASHINGTON/PORT FOURCHON, Louisiana (Reuters) – Lawmakers on Wednesday pressed oil executives about flaws in an important safety device on a blown-out Gulf of Mexico well as BP pushed another effort to control a huge oil spill that threatens an environmental disaster.

BP Plc, operator of the oil well off Louisiana’s coast, said it hoped to have a small containment dome in place by late Thursday, its latest attempt to staunch the roughly 5,000 barrels (210,000 gallons/795,000 liters) of crude gushing from the well per day.

May 13, 2010

Congress quizzes oil executives, BP tries new fix

, May 12 (Reuters) – U.S.
lawmakers on Wednesday pressed oil executives about flaws in an
important safety device on a blown-out Gulf of Mexico well as
BP pushed another effort to control a huge oil spill that
threatens an environmental disaster.

BP Plc <BP.L>, operator of the oil well off Louisiana’s
coast, said it hoped to have a small containment dome in place
by late Thursday, its latest attempt to staunch the roughly
5,000 barrels (210,000 gallons/795,000 litres) of crude gushing
from the well per day.

May 12, 2010

Oil execs quizzed on safety as BP tries new well fix

WASHINGTON/PORT FOURCHON, Louisiana (Reuters) – U.S. lawmakers pressed oil executives about flaws in a well safety device on Wednesday while BP scrambled with its latest deep-sea effort to control the huge Gulf of Mexico spill that threatens environmental disaster.

BP Plc, Transocean Ltd and Halliburton Co are all back in the hot seat in Washington over their responsibility in what could be the worst oil spill in U.S. history.

May 12, 2010

House panel says rig’s blowout preventer was faulty

WASHINGTON, May 12 (Reuters) – The chairman of a
congressional subcommittee said on Wednesday it uncovered
significant problems with the device that was supposed to cut
the oil flow after BP’s <BP.L> oil rig exploded, creating a
massive unchecked spill.

Representative Bart Stupak, head of the House Subcommittee
on Oversight and Investigations, said the rig’s underwater
blowout preventer had a leak in its hydraulic system and the
device was not powerful enough to cut through joints to seal
the drill pipe.

    • About Tom

      "I have covered energy issues from the Reuters Washington bureau since 1997. These days I'm writing about the Obama administration's overhaul of U.S. energy policy, which focuses on developing alternative energy sources like wind and solar power and seeks to reduce petroleum use. However, the United States and the rest of world will rely on oil as a major energy source for the forseeable future. That's why much of my reporting still looks at legislation, regulations and White House policies that affect the oil industry, petroleum supplies and fuel demand."
    • Follow Tom