Market News

 June 01, 2010
Gulf oil spill - worst environmental disaster the US has ever faced

 BP is beginning preparations for a new attempt to curb the massive spill from its leaking well in the Gulf of Mexico.

The firm plans to lower a containment cap over the well in the hope that most of the oil can be piped to the surface.

The attempt - in which undersea robots will cut a pipe and position the device - could initially increase the flow and success is not guaranteed, BP has said.

The fresh tactic follows the failure of BP's so-called "top kill" bid to stem the leak by pumping mud into the well.

It comes a day after White House energy adviser Carol Browner said the spill was the worst environmental disaster the US had ever faced.

She also said the US was "prepared for the worst scenario" that the leak might not be stopped before August.

Meanwhile, the National Oceanic and Atmospheric Administration warned that winds forecast later this week could move the spill towards the Mississippi and Alabama coasts, which have been less badly affected than Louisiana's shores.

The hurricane season is also due to begin on Tuesday, raising fears that high winds may whip the spill on to the nation's shores at a greater rate.

At least 20 million gallons (76 million litres) have now spilled into the Gulf, affecting more than 70 miles (110km) of Louisiana's coastline.

Reuters news agency reported that Attorney General Eric Holder is to visit the affected region on Tuesday to see the damage for the first time.

He is expected to meet legal officials from Louisiana, Alabama and Mississippi, prompting speculation over what future legal action may be faced by BP and other firms involved.

Eleven rig workers died when the Deepwater Horizon rig exploded and sank six weeks ago.

Undersea robots

BP is now preparing a containment device - known as a Lower Marine Riser Package - to be lowered over the damaged well.

As a first step, it will use undersea robots to slice through a damaged riser pipe to make a clean cut.

The containment cap will then be placed over the top and a new pipe will carry the captured oil to a ship on the surface.

Preparations were getting under way on Monday, with the attempt expected to take four days to set up.

However, BP said the operation had never been carried out at a depth of 5,000ft (1,500m) and "the successful deployment of the containment system cannot be assured".

BP official Doug Suttles said at the weekend that if it worked it would capture a majority of the spill, but would not stop it entirely.

The White House said the president had been informed that the flow rate could increase by as much as 20% until the containment device was applied over the leak.

The system is similar to a previous containment-dome plan that failed.

BP managing director Robert Dudley said the company would know by the end of the week if the latest attempt had succeeded.

Responding to calls for the US military to take the lead instead of BP, Adm Mike Mullen, chairman of the Joint Chiefs of Staff, told US media that the military was not as well equipped as the oil industry to deal with the spill.

The Obama administration has come under increasing pressure to find a way to mitigate the environmental and economic impact on the Gulf area.

On what would normally be a busy holiday weekend, fishing boats sat idle in marinas along the Louisiana coast, as many fishing areas remain closed as a health precaution.

Several hundred protesters gathered in New Orleans on Sunday for a rally in which they denounced the response by BP and the government.

BP has spent more than $940m (£645m) so far in trying to contain the disaster.

BBC News.