US sets deadline for BP as mistrust grows

(RAW STORY)   The US tightened pressure Wednesday on BP, setting a 72-hour deadline for the battered British energy titan to present updated plans for battling the Gulf of Mexico oil spill.

Coast Guard Admiral Thad Allen, charged with leading the government’s response to the nation’s worst environmental disaster, demanded BP produce records of compensation claims filed by individuals and businesses.

The orders in official letters betrayed a sense of growing mistrust between BP and President Barack Obama’s administration more than seven weeks after a blowout on the Deepwater Horizon offshore rig sparked the disaster.

Fueled by 24/7 media coverage of oiled birds and tides of toxic crude washing up on US shores, Obama’s administration is under increasing pressure to hold BP accountable.

Allen was to meet with executives from the company, which has been accused of intentionally underestimating the scale of the disaster in order to reduce its liability, later Wednesday to discuss compensation.

Allen ordered BP CEO Tony Hayward to produce details about how compensation to Louisiana’s devastated fisheries and tourism industries was being calculated and how quickly claims were being processed.

“Access to this level of detail is critical in informing the public as to how BP is meeting its obligations as a responsible corporation,” Allen said. “I expect a response from BP on this critical issue as soon as possible.”

A separate letter ordered BP to produce contingency planning for its “top hat” containment system and explain how it intends to recover an undetermined amount of crude and natural gas still leaking.

“BP shall provide the plans for these parallel, continuous, and contingency collection processes, including an implementation timeline, within 72 hours of receiving this letter,” said the missive, dated Tuesday.

A device placed last week over the blown out well, which is located 50 miles (80 kilometers) off the coast of the southern US state of Louisiana, is capturing almost 15,000 barrels, or 630,000 gallons, of oil a day.

It remains unclear how much oil is still spewing out, but Allen said modifications next week to the containment system “could take leakage almost down to zero.”

Facing a grilling from Senate lawmakers on Wednesday, Interior Secretary Ken Salazar admitted that cutting the leaking riser pipe to allow the containment device to be fitted had likely increased the flow rate.

“The range of increase may have been between four percent and five percent of what it was before,” Salazar told the Senate Energy and Natural Resources Committee.

Allen told a press briefing he had ordered a “flow rate task group” led by the United States Geological Survey (USGS) to go back to the drawing board and work up new estimates on how much oil is gushing from the wellhead.

“We’ll just continue to refine the estimates. I’m not going to declare victory on anything until I have the numbers,” he said. “Show me the numbers,” he declared.

Amid the growing public frustration, Obama lashed out Tuesday at media “talking heads” who have criticized his response and said if it was up to him, he would fire Hayward over several flippant public comments.

Hayward has been summoned to testify before US lawmakers for the first time next week, as investors fear that intense political pressure from Washington over the spill could force the group to axe its prized shareholder dividend.

The group’s share price sank by 5.42 percent to 386.75 pence in late afternoon London trade Wednesday.

BP’s market value has plunged by billions of dollars since the Deepwater Horizon oil rig, operated by BP and owned by US contractor Transocean, sank on April 22 — two days after a huge explosion killed 11 workers.

Shares have now collapsed by around 40 percent since the accident, which sparked an enormous oil spill from a leaking well head on the ocean floor.

Obama heads to the Gulf of Mexico next week for a fourth visit since the disaster.

On Monday and Tuesday he will visit Mississippi, Alabama and Florida, all of which have coastlines, fishing industries and tourist beaches damaged or threatened by the oil slick.

BP is meanwhile plowing on with the drilling of two relief wells that should be ready by August to enable the company to permanently plug the leak.

http://rawstory.com/news/afp/US_sets_deadline_for_BP_as_mistrust_06092010.html

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