June 2, 2010

BP Stock Plummets As Feds Launch Criminal Probe

Shares of BP's stock plunged on Tuesday, wiping out 15 percent, or $21.1 billion, of the company's market value as the federal government announced criminal and civil investigations into the gushing oil spill in the Gulf of Mexico. 

Meanwhile, BP's engineers scrambled to recover from a failed attempt to contain the largest oil spill in U.S. history with an effort that will initially make the six-week-old leak even worse.

An estimated 12,000 to 19,000 barrels of crude oil has been gushing into Gulf waters each day since an explosion that killed eleven workers and sunk the Deep Horizon oil rig two days later. 

More than 20 million gallons of oil are estimated to have flooded into the Gulf since the April 20th explosion.

President Barack Obama threatened legal action against those responsible for unleashing the leak.

"If our laws were broken leading to this death and destruction, my solemn pledge is that we will bring those responsible to justice on behalf of the victims of this catastrophe and the people of the Gulf region," said Obama in a statement in the White House Rose Garden.

Referring to the leak as the "greatest environmental disaster of its kind in our history," Obama said the government had an "obligation" to determine the cause of the explosion.

The president raised the prospect of court action after discussions with a White House panel investigating the spill.  Meanwhile, U.S. Attorney General Eric Holder visited the Gulf to survey the delicate coastline and meet with state and federal prosecutors.

Holder would not say who might be targeted in the probes.

BP chief operating officer Doug Suttles said Tuesday that the company hoped to cap the rig's broken pipe within the next 24 hours by using a new maneuver.

"If everything goes well, within the next 24 hours, we could have this contained," the AFP quoted Suttles as saying.

The latest operation, referred to as the lower marine riser pipe, includes sawing off the fractured edges of the leaking pipe and sealing it with a tight cap.  A tube would then be used to siphon most of the oil to a ship on the surface of the Gulf.

However, in cutting the riser pipe, BP risks unleashing an even greater surge of oil.

If the plan is successful, BP engineers will then lower another dome to capture a second oil flow through a valve known as the blowout preventer, said BP's managing director Bob Dudley.

"By the end of the month, we are engineering a completely separate system that will make it more storm proof with a free standing riser that would allow for quick disconnects if needed," he said during an interview with CNN.

Tuesday began the official start of the hurricane season, worsening an already dismal outlook for residents of Louisiana, Alabama and Mississippi, who are currently under a broad fishing ban and suffering dwindling tourism.

Top White House energy advisor Carole Browner said Tuesday that officials are bracing for the worst amid warnings that the 2010 storm season will be more active than normal, with as many as 14 hurricanes.

BP has attempted, but failed, several times in the past six weeks to cap the leak, fueling a simmering anger as oil washes up on the Gulf shores, threatening animal and plant life.  

BP's plan for drilling two deep relief wells into the seabed to permanently plug the leak will not be ready until August.

According to U.S. officials, 29 dead dolphins and 227 sea turtles had been collected in the southern states to date, a number that is above average for this time of year.

"The deaths of dolphins and sea turtles are particularly tragic, because we know we are only seeing the tip of the iceberg with those that have been washed up onshore and tested," the AFP quoted Doug Inkley, senior scientist at the National Wildlife Federation, as saying.

"Dolphins are unique among wildlife because of their intelligence and the trust they put into people, often wanting to play in the wake of our boats. Obviously, we broke that trust."

Obama's threat of legal action followed his meeting with former U.S. senator Bob Graham and former Environmental Protection Agency administrator William Reilly.  The two will co-chair a presidential commission into the spill.

"If the laws on our books are insufficient to prevent such a spill, the laws must change," said President Obama.

"If oversight was inadequate to enforce these laws, oversight has to be reformed."


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