U.S. escalates response as oil spill nears coast

HOUSTON Fri Apr 30, 2010 11:01am IST

Debris and oil from the Deepwater Horizon drilling platform float in the Gulf of Mexico after the rig sank, off Louisiana in this April 22, 2010 handout photo. REUTERS/U.S. Coast Guard/Handout

Debris and oil from the Deepwater Horizon drilling platform float in the Gulf of Mexico after the rig sank, off Louisiana in this April 22, 2010 handout photo.

Credit: Reuters/U.S. Coast Guard/Handout

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HOUSTON (Reuters) - The U.S. government ratcheted up efforts to avert an environmental disaster as a massive oil slick leaking from a ruptured well moved closer to the mouth of the Mississippi River on Thursday, menacing the delicate coastline of Louisiana and three other Gulf states.

President Barack Obama pledged to "use every single available resource" and the U.S. military was mobilizing to help contain the spreading spill from the deepwater leak in the Gulf of Mexico.

It is pouring out crude oil at a rate of up to 5,000 barrels (210,000 gallons) a day, according to the National Oceanic and Atmospheric Administration -- five times more oil than previously estimated.

The rising threat has deepened fears of severe damage to fisheries, wildlife refuges and tourism in Louisiana, Mississippi, Alabama and Florida.

Louisiana Governor Bobby Jindal, whose state is still recovering from the ravages of Hurricane Katrina in 2005, warned the slick "threatens the state's natural resources." He declared a state of emergency and asked the Defense Department for funds to deploy up to 6,000 National Guard troops to help with the expected clean-up.

The spreading oil is about 3 miles (5 km) from a fragile wildlife preserve in marshland at the edge of the Mississippi Delta, which experts said would seriously damage the ecology of the area and could be very difficult to clean up.

Homeland Security Secretary Janet Neopolitano declared it "a spill of national significance," meaning that federal resources from other regions could be used to fight it.

Obama said the London-based energy giant BP Plc was ultimately responsible for the cost of the clean-up, which has pounded BP's share price and those of other companies involved in the project.

But the accident, which happened after a rig leased by BP exploded and sank last week, may also have ramifications for Obama's proposals, some of which are before Congress, to issue new offshore drilling permits.

The Navy said it was supplying the Coast Guard with inflatable booms and seven skimming systems to try to contain the oil.

In Mobile, Alabama, U.S. Coast Guard Captain Steve Poulin, said authorities were preparing for "shoreline impact," although it was not possible to predict exactly when.

"We have a booming strategy for coastal Mississippi, Alabama and the Florida Panhandle," Poulin said, adding that some 500,000 protection and containment booms were stockpiled along the coastline for deployment.

BP and the Coast Guard have mounted what the company called the largest oil spill containment operation in history, involving dozens of ships and aircraft.

BP admitted struggling to control the spill, which is 5,000 feet (1,525 metres) under the sea off Louisiana's coast, and appealed for help. It has asked the Pentagon for access to military imaging technology and remotely operated vehicles to try to help it plug the ruptured well.

Eleven workers are missing and presumed dead after the rig exploded 11 days ago.

PAUSE IN DRILLING?

There are signs the spill may be worse than one in 1969 off Santa Barbara, California, which prompted a moratorium on oil and gas drilling off the Pacific and Atlantic coasts -- a ban Obama has said he wants to modify.

But opponents of Obama's plan are moving to block more drilling.

Bill Nelson, a Democratic senator from Florida, said he was filing a bill to temporarily prohibit the administration from expanding offshore drilling, citing the risk of a potential "environmental and economic disaster" from the spill.

The Obama administration did not rule out imposing a pause in new deepwater drilling until oil companies can show they can control any spills that may happen.

Underwater robots failed to activate a cutoff valve on the ocean floor to stop the leak and BP is hoping a plan to cover the well with a steel cap and capture the leaking oil. But that will take four weeks to put in place, by which stage over 150,000 barrels could have been spilled.

If the steel cap does not work, BP will have to rely on stemming the flow by drilling a relief well, which would take two to three months.

If it takes that long, the spill could be more than 300,000 barrels, larger than the 258,000 barrels leaked in 1989 by the Exxon Valdez in Alaska in the U.S.'s worst oil spill to date.

The White House said Obama had been briefed on how the slick may interfere with shipping channels, which it said could affect tankers delivering petroleum to the U.S. market.

It was not immediately clear to what extent shipping in the Gulf could be affected. While the Mississippi is a major export route for U.S. grains and the region is a significant importer of crude oil, there were no reports of disruptions.

SHARE PRICES TUMBLE

Shares in BP and Swiss-based rig company Transocean Ltd fell by more than 6 percent on Thursday as investors feared a significantly higher cleanup cost. BP is down more than 10 percent and Transocean down nearly 14 percent since the rig explosion on April 20.

Oilfield services companies Cameron International Corp and Halliburton Co saw their shares tumble on fears about their ties to the Deepwater Horizon rig.

Cameron, which supplied the blowout preventer for the rig, said it was insured for $500 million of liability, if needed. Halliburton said it did a variety of work on the rig and was assisting with the investigation.

Shrimp fishermen in Louisiana filed a class-action lawsuit against BP, Transocean, Halliburton and Cameron, accusing them of negligence. None of the companies had an immediate comment on the lawsuit.

The Louisiana Offshore Oil Port, which handles more than one million barrels a day of crude imports and is connected by pipeline to the biggest U.S. refining region, said it did not expect any effect on its operations, which remained normal.

(Additional reporting by Joshua Schnyer and Rebekah Kebede in New York, and Kelli Dugan in Mobile, Alabama; Writing by Christopher Wilson; editing by Peter Cooney)

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