Thursday PM April 29th, 2010

Gulf of Mexico oil leak threatens coastline; Texas could see tar balls in a few weeks...President sends three cabinet members to oversee effort...Congress focuses energy prices and policy in spill's aftermath...

BP's Chief Operating Officer Doug Suttles says more oil may be leaking from a Gulf of Mexico drilling site than first estimated. Speaking on NBC's Today, Suttles said the leak is more than the 1,000 barrels of day that was originally estimated last week after a deepwater rig exploded and burned off the coast of Louisiana. He said it may be as much as 5,000 barrels a day that the government first provided, and a third leak has been discovered. Suttles said BP and government scientists have to estimate the flow based on what reaches the surface because there is no way to measure the oil pouring out on the seabed. BP is the operator of the drilling rig Deepwater Horizon that exploded, burned and sank last week. Louisiana wildlife officials have said there's a “high probability” that oil could reach sensitive habitats and fisheries along the coast by tomorrow night.

Suttles says the company has asked the Department of Defense if they can help with better underwater equipment than is available commercially. He says the company has specifically asked for imaging techniques and remote operating vehicles. He detailed ongoing efforts to stop the flow of oil at the point of the failed blowout preventer.

“Now we are operating six remote operated vehicles simultaneously around the blowout preventer, both monitoring the blowout preventer and trying to close in the flow of oil. In addition, our collection system fabrication efforts continue, as previously reported. We now are working on a total of three containment chambers--one is complete, two are underway. Our relief well activity also continues. The MMS has approved our drilling permit, and we expect to start drilling the relief well within 48 hours.”

The navy is sending equipment and navy bases are being used as staging areas for the operation. And that's just probably the beginning of a larger Pentagon effort to deal with the environmental disaster. Navy spokesman Lieutenant Myers Vasquez says that 66,000 feet of inflatable boom and seven skimming systems are on their way to the navy base in Gulfport, Mississippi. The help is being provided under an existing pollution cleanup agreement between the navy and Coast Guard. The Pensacola Naval Air Station in Florida will be used as a staging area for equipment used by Coast Guard contractors. The White House has asked the Defense Department to be ready for additional requests.

Louisiana Governor Bobby Jindal has declared a state of emergency as the spill creeps toward shore and threatens the fragile ecosystem along the coastline. The order allows the state to free up resources to begin preparing for the oil to reach the shore, which could happen as soon as Friday.

Texas Governor Rick Perry's office says the state is monitoring the spill and is ready to send help for cleanup if needed. Texans could see some tar balls roll up on their beaches in a few weeks. State Land Commissioner Jerry Patterson says while that may be unsightly, Texas is in little danger of a larger threat from the 5,000 barrels a day poring out of the blown-out well. Patterson says Texas has sent containment booms to help with efforts to burn the growing oil slick. He says Texas will also send special equipment to help clean birds and other wildlife.

President Barack Obama today spoke with five Gulf state governors from Florida to Texas. He’s sending three cabinet members to oversee the effort. Joining Interior Secretary Ken Salazar at the site will be Homeland Security Secretary Janet Napolitano and EPA administrator Lisa Jackson.

The chairman of a House committee has asked the heads of BP and four other oil companies to testify at a hearing on the massive spill. Massachusetts Democrat Edward J. Markey, who chairs the Select Committee on Energy Independence and Global Warming, sent a notice to the nation's five largest oil companies. In addition to the spill, the hearing will look at energy policy and gas prices. BP, the notices were sent to ExxonMobil, ConocoPhillips, Shell and Chevron. Meanwhile, Senator Bill Nelson of Florida introduced legislation blocking the Interior Department from conducting seismic tests in the Atlantic Ocean as part of its plan to expand offshore drilling.

Obama administration officials say the Gulf Coast oil rig spill will be considered in the expansion of offshore drilling and will become part of the debate on climate change in Congress. White House Press Secretary Robert Gibbs says that the cause, still not determined, could impact what areas the government would open for future drilling. But he also said that President Barack Obama remains committed to a process that could open drilling in areas now off limits.


People familiar with the situation tell the Associated Press that Continental Airlines directors meeting to discuss a potential combination with United Airlines could have a deal to announce by early next week. If the two companies strike a deal, they would create the world's largest airline by passenger traffic. United and Continental decline comment. The Continental board meeting was described by two people familiar with the situation but who spoke on condition of anonymity because they were not authorized to comment publicly.


The number of Americans filing claims for unemployment benefits dropped for a second consecutive week, further evidence that the job market is slowing improving. The Labor Department says that initial applications for jobless benefits dropped by 11,000 to 448,000, the lowest level in four weeks. That was slightly higher than economists had expected. The four-week average for claims edged up slightly to 462,500, still above the level that economists believe signals sustained improvements in the job market.


The government is recalling thousands of Simplicity and Graco cribs, warning that babies could suffocate or strangle in them. The Consumer Product Safety Commission says the Simplicity recall is linked to at least one death and involves thousands of cribs, possibly hundreds of thousands, though many had previously been recalled for other defects. The agency says about 217,000 Graco drop-side cribs made by Lajobi are also being recalled. The problem with both types of cribs stems from hardware failures in which a piece of the crib collapses or breaks--creating a dangerous gap between the mattress and crib where a baby can suffocate or strangle.


Abu Dhabi's state-run oil company says it plans to push ahead on developing the shah natural gas field despite a decision by ConocoPhillips to pull out of the project. The Abu Dhabi national oil company says the field represents “a world-class project that will develop a key resource for the emirate.” ADNOC says it awarded a site preparation contract last month, and plans to sign additional building and operating contracts “in the near future.” The site aims to process one billion cubic feet of gas per day. ConocoPhillips gave no reason for dropping its 40 percent stake in the $10 billion project. The move came a week after the Houston-based company pulled out of a multibillion-dollar project refinery project in Saudi Arabia.


Earnings

ConocoPhillips says its first-quarter earnings more than doubled on the back of rising oil prices. The company, based in Houston, said it made $2.1 billion for the quarter ended March 31st, compared with $840 million in the year ago quarter. Oil prices were about twice as high during the quarter as they were year ago, and more than offset the company's losses from its refining business. Refiners have had difficulty passing higher fuel costs on to customers as energy demand continues to be weak from the recession. Revenue totaled $44.8 billion in the quarter, up from $30.7 billion in the year-ago quarter.


ExxonMobil says its quarterly profit increased 38 percent as oil prices rose in the first three months of the year. The Irving oil giant reports a profit of $6.3 billion in the first three months of the year. That compares with $4.55 billion in the same period last year. Revenue jumped 41 percent to $90.25 billion. Analysts had expected revenue of $96.41 billion. Exxon's profit relied heavily on its exploration and production operation. Oil prices surged over the past 12 months, jumping from a low of $33 a barrel in the first quarter of 2009 to more than $80 a barrel this year.


Bio photo of Ed Mayberry

Ed Mayberry

Local Anchor, All Things Considered

Ed Mayberry has worked in radio since 1971, with many of those years spent on the rock 'n' roll disc jockey side of the business...