Amount of Oil Spill Could Escalate, Company Admits

The BP oil spill in the Gulf of Mexico has created an environmental disaster endangering species as well as human ecology. The incident has also become a scandal as the debate escalates over the cause and degree of liability.
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May 4, 2010

Amount of Spill Could Escalate, Company Admits

By JOHN M. BRODER, CAMPBELL ROBERTSON and CLIFFORD KRAUSS
New York Times

WASHINGTON — In a closed-door briefing for members of Congress, a senior BP executive conceded Tuesday that the ruptured oil well in the Gulf of Mexico could conceivably spill as much as 60,000 barrels a day of oil, more than 10 times the estimate of the current flow.

The scope of the problem has grown drastically since the Deepwater Horizon oil rig exploded and sank into the gulf. Now, the discussion with BP on Capitol Hill is certain to intensify pressure on the company, which is facing a crisis similar to what the Toyota Motor Company had with uncontrolled acceleration — despite its efforts to control the damage to its reputation as a corporate citizen, the problem may be worsening.

Amid growing uncertainty about the extent of the leak, and when it might be stanched, pressure on BP intensified on multiple fronts Tuesday, from increasingly frustrated residents of the Gulf Coast to federal, state and local officials demanding more from the company.

The company considered a broad advertising campaign, but top BP executives rejected the idea before planning even started. “In our view, the big glossy expressions of regret don’t have a lot of credibility,” said Andrew Gowers, a BP spokesman.

Instead, the company has dispatched executives to hold town meetings in the affected region, and it has turned to lower-profile social media outlets to trumpet its cleanup efforts and moves to organize volunteers.

The Senate energy committee has summoned executives from BP and Transocean Ltd., the rig operator, as well as a number of oil industry technical experts to a hearing next week. The next day, the oversight and investigations subcommittee of the House Energy and Commerce Committee will hold a hearing, to which top executives of BP, Transocean and Halliburton have been asked to appear, a committee spokeswoman said.

That panel, which will look at the possible problems leading to explosions on the rig as well as the adequacy of containment and cleanup measures, would probably be the first of several, Representative Bart Stupak, Democrat of Michigan, the subcommittee chairman, said in a statement.

A separate federal investigation into the explosion is under way by the Coast Guard and the Minerals Management Service.

At Tuesday’s briefing, David Rainey, the BP vice president for Gulf of Mexico production, said the company was employing a variety of untried techniques to stanch the oil gushing from the well 5,000 feet below the surface.

At the briefing, Mr. Rainey and officials from Transocean and from Halliburton, which was providing cementing services on the platform, also acknowledged that they did not know how likely it was that oil from the spill would be caught up in the so-called loop currents in the gulf and be carried through the Florida Keys into the Atlantic Ocean. “What we heard today from BP, Halliburton and Transocean were a lot of worst-case scenarios without any best-case solutions,” said Representative Edward J. Markey, Democrat of Massachusetts, who leads the Energy and Environment Subcommittee of the House energy panel.

Federal officials have raised the possibility of a leak of more than 100,000 barrels a day if the well were to flow unchecked, but the chances of that situation occurring were unclear.

Also on Tuesday, the company’s chief executive, Tony Hayward, told Senator Bill Nelson, Democrat of Florida, that the spill would clearly cause more than $75 million in economic damage, the current cap on liability for drilling accidents.

Mr. Nelson and the two Democratic senators from New Jersey, Frank R. Lautenberg and Robert Menendez, have introduced legislation to raise that cap to $10 billion, and to make sure that the new limit applies to this spill.

While BP continues to acknowledge its responsibility to shut off and clean up the oil, it is being barraged by government officials and civil lawyers who are redoubling efforts to ensure that the company’s legal obligations are clearly defined and strictly enforced.

Attorneys general from the five Gulf Coast states have been drafting a letter to BP that will lay out demands. In the letter, they are expected to urge BP specifically to define what is meant by its repeated statement that it intends to pay “legitimate” claims, a term Attorney General Troy King of Alabama said was unacceptably nebulous.

They are also expected to press for a fund to begin paying out claims to state and local governments and to residents.

The attorneys general asked for the creation of such a fund in a meeting with BP officials on Sunday, and the next day BP announced that $25 million block grants were going to the four states most likely to be affected to help begin their efforts to prepare. But, Mr. King said, “that’s not going to be enough.”

For now, weather patterns seem to be holding the giant oil slick offshore, and are expected to do so for several more days, temporarily sparing the coast — and sparing BP the renewed criticism that would surely come with oil landfall. A containment dome is being readied to drop over the worst of the leaks.

BP has significantly stepped up its lobbying on Capitol Hill, spending nearly $16 million in 2009, more than triple what it spent just two years before, according to data compiled by the Center for Responsive Politics, a watchdog group.

But that money does not sway public opinion.

The company’s top crisis managers have been dispatched to the gulf. Mr. Gowers, the BP spokesman, said the company was now “considering some targeted advertising in the affected states” to publicize how to make claims and how to sign up to help with the cleanup.

Mr. Hayward also gave a briefing on Tuesday for reporters from Gulf Coast newspapers and The Associated Press in which he said he wanted to “win the hearts and minds” of the people.

Mr. Hayward has been a frequent guest on the morning news shows, with a consistent message: “It wasn’t our accident, but we are absolutely responsible for the oil, for cleaning it up.”

It is a mixed message, advertising experts say.

“It’s a situation laced with irony, and perceived hypocrisy,” said Abbey Klaassen, executive editor of Advertising Age. “It is a fine line between what they want to say for legal reasons and what consumers want to hear which is: ‘Mea culpa. We accept responsibility, we will clean it up, and this will never happen again.’ ”

BP is playing to a particularly skeptical and vigilant audience in the gulf, where people have become accustomed to frustrating clashes with insurance companies and government agencies in the five years since Hurricane Katrina.

“We’re preparing for the worst,” said Jim Hood, the attorney general of Mississippi, referring both to the spill itself and the possibility of fierce legal struggles. The state has been taking photos and video of coastal areas and counting fish and birds, he said, to have a record of what exists before the oil arrives.

Campbell Robertson reported from New Orleans, John M. Broder from Washington, and Clifford Krauss from Houston. Sewell Chan contributed reporting from Washington.