By Clifford Krauss and Matthew L. Wald, The New York Times
With frustration growing in the Gulf region over BP’s inability to contain the oil spill, the company on Tuesday morning outlined its next plan for stopping the underwater leak.
BP said equipment was in place for what is known as a top kill procedure, in which heavy drilling fluids twice the density of water are pumped through two narrow lines into the blowout preventer to essentially plug the runaway well. Depending on pressure readings taken Tuesday, officials said they might start the procedure as early as Wednesday morning — but they left open the possibility of more delays.
Officials also said that it could take 12 hours to 48 hours once the procedure begins to determine whether it is effective.
If the top kill does not work, they will move toward placing another containment dome over the leak, possibly to be installed after several days.
If the top kill works, BP officials said the well would be sealed with cement and they would also consider installing a new blowout preventer on the wellhead, as a safeguard. They said they had no intention of ever producing oil from the well.
The effort to stanch the vast oil spill in the Gulf of Mexico has been mired by setbacks as state and federal officials feuded with BP over its failure to meet deadlines.
BP was locked in a tense standoff with the Environmental Protection Agency, which had ordered the company last week to find a “less toxic” chemical dispersant than the one it was using and to make the switch by Sunday evening. But BP has continued spraying the chemical after informing the agency why it believed that the dispersant it has been using, called Corexit, was the safest available.
The Governor’s Office of Homeland Security and Emergency in Louisiana announced Tuesday that, at the request of Gov. Bobby Jindal, the federal Department of Commerce had declared a commercial fisheries failure for the state, allowing commercial fishermen to receive aid from the Economic Development Administration.
In Washington on Tuesday morning, the Senate Energy and Natural Resources committee held a hearing that addressed the federal system for allocating costs and liabilities in oil spills. The committee’s chairman, Senator Jeff Bingaman, Democrat of New Mexico, said the system was antiquated not only because Congress has not modernized it in 20 years, but also because government officials whom the law instructed to adjust financial caps to reflect inflation have failed to do so.
“We have a broken system,” Mr. Bingaman said. He said the need for repair was “dire.”
Administration officials testifying before the committee agreed that for deepwater drilling, liability caps should be lifted.
The 1990 Oil Pollution Act made the responsible party liable for unlimited costs in cleanup but set the liability for third-party damages, like lost income for fishermen and hotel owners, at $75 million, unless the courts find gross negligence or determine that the company violated a rule that led directly to the spill.
BP has promised that in the Deepwater Horizon case, it will pay all legitimate damages.
Several members of Congress have introduced legislation to raise the cap; Senator Robert Menendez of New Jersey has proposed $10 billion. But some members of the committee said they were not sure what the limit should be.
“Ten billion, is that the right figure?” said Senator Lisa Murkowski, the Alaska Republican who is the ranking minority member of the committee. She said her colleagues should “take the time to assure we’re building good policy on this.”
Senator Robert F. Bennett, Republican of Utah, asked if setting aside all liability limits would preclude drilling by small operators, who could not afford enough insurance, or perhaps eliminate offshore drilling all together. “What are the chances that they will be able to get sufficient insurance if the cap is set so high, or the cap is lifted all together, so that a business decision will be made by the boards of these companies, ‘the risk is too great, we will drop all activities.’ ”
But the consensus in Congress is probably closer to the position articulated by Senator Bernard Sanders, independent of Vermont, who said that it was “beyond comprehension” that at a time of record federal deficits and quarterly profits for BP in the billions, “that taxpayers should spend one nickel.”
He and other senators were skeptical that BP would waive all caps on liability, and said they thought Congress should raise the cap retroactively. A witness, Thomas J. Perrelli, associate attorney general of the Justice Department, said companies might try to file suit against that but they would probably not be successful. “Congress legislates retroactively all the time,” he said.
Another witness, Craig A. Bennett, director of the National Pollution Funds Center, an office established by the 1990 law, said federal response costs so far are about $72.4 million, and his office has disbursed $7 million to state agencies. BP is obligated to reimburse the fund for those expenditures, he said. BP, he noted, has reported spending more than $760 million directly.
Mr. Bennett writes checks from a fund gathered mainly from an eight-cents-a-barrel tax on oil produced offshore or imported, and which has in it more than $1.5 billion, but only $1 billion is available for any single spill. He has $100 million to spend immediately without Congressional authorization, but said he might run through that by June 5, “much earlier than previously though.”
Reimbursement goes into the oil spill liability fund, but he needs Congressional action to tap that beyond $100 million, he said.
Mr. Bennett said BP had told him it had 432 people working at claims centers to take claims from fishermen and others, and that they could accept up to 6,000 claims per day, but were only receiving about 2,000. He said he had told BP it would have to advertise the claim centers in Spanish, Vietnamese and Croatian, the language of some fishermen, and that the company had promptly hired translators and placed ads in the appropriate media.
The 1990 law set civil penalties for oil spills at $20,000 a day, later raised to $35,000, but either amount that now seems like an asterisk, given that BP is reporting daily costs is reporting daily spending in the range of $20 million.
Senator Bingaman said that by law, the secretary of the interior was supposed to adjust the $75 million liability cap every three years based on the Consumer Price Index, but had not done so.
“Twenty years of inflation have been ignored,” he said.
Administration witnesses did not address that issue, but they did seek to clarify what drilling activities they have suspended and what they are allowing to go forward.
David J. Hayes, deputy secretary of the interior, said that applications for permits to drill, known as APDs, or “the authority to put a new hole in the ground,” had been suspended. But some companies that hold APDs want to drill a second well in the same location, for safety reasons, he said, and that was being allowed.
“That’s the reason for the lack of clarity,” Mr. Hayes said.
A moratorium on new shallow-water drilling was put in place for 30 days, while the secretary of the interior prepared a preliminary report on the blowout. That report is expected this week, and what happens next is not clear.
