Get Savvy Investor
Stock Alerts

Gulf of Mexico oil spill creates environmental and political dilemmas

4/27/10

The ripple effects of last week’s offshore drilling rig explosion widened Monday as crude oil continued to spill into the Gulf of Mexico at a rate of about a thousand barrels a day and oil company officials said it would take at least two to four weeks to get it under control.

The growing spill also threatened to churn political waters as lawmakers weigh what buffer zones to establish between rigs and shorelines in the wake of President Obama’s decision to open up new regions to offshore drilling. It could also alter details of a climate bill that three leading senators were trying to restart after postponing plans for a rollout that would have featured leading oil company executives.

The Deepwater Horizon, owned by Transocean and leased to BP, caught fire April 20 after an explosion and sank. Eleven oil rig workers are missing and presumed dead. The rig, with a platform bigger than a football field and insured for $560 million, was one of the most modern and was drilling in 5,000 feet of water.

Remotely operated vehicles located two places where oil was leaking from the well pipe, the U.S. Coast Guard said. The Coast Guard said there was an area 42 miles by 80 miles with a rainbow sheen of emulsified crude located less than 40 miles offshore. An oil rig 10 miles away from the Deepwater Horizon was evacuated as a precaution.

Environmentalists noted that although the sunken rig’s distance from shore gives oil companies more time to keep the spill from reaching U.S. coastlines, it also means that the water is deeper, making it harder to get the spill under control. “It’s good because it gives you the chance to intercept it before it reaches the coast, but it is harder to cap a well the deeper the water you’re drilling in,” said Aitan Manuel, an expert on offshore drilling at the Sierra Club. “It’s presenting a lot of challenges to the companies.”

Some lawmakers called for an inquiry into safety regulation. “This may be the worst disaster in recent years, but it’s certainly not an isolated incident,” Sens. Bill Nelson (D-Fla.), Frank R. Lautenberg (D-N.J.) and Robert Menendez (D-N.J.), all foes of expanded offshore drilling, wrote to the heads of the Energy and Commerce committees. They said that before the Deepwater Horizon accident, the Minerals Management Service had reported 509 fires, resulting in at least two fatalities and 12 serious injuries, on rigs in the Gulf since 2006.

Some former federal oil safety regulators suggested that MMS, which runs lease sales, should transfer rig safety oversight to a separate agency.

Meanwhile, BP and U.S. Coast Guard vessels rushed to contain the spill. A similar spill off the western Australia coast last year took 10 weeks to bring under control.

BP said it would attempt to drill two relief wells to intercept the oil flow and divert it to new pipes and storage vessels. It said it was also working to fabricate a dome to cover the leak area and channel it into a new pipe to storage facilities. Such a technique has been used in shallower water but not at these depths, Doug Suttles, BP’s chief operating officer, said in a conference call. The company continued to try to activate the blowout preventer, a 450-ton piece of equipment on the sea floor that is supposed to seal the well to prevent the type of accident that took place.

Charlie Henry, the lead science coordinator for the National Oceanic and Atmospheric Administration, said that three sperm whales were seen swimming near the spill but that they appeared unaffected.

But other environmentalists warned of damage. “Oil spills are extremely harmful to marine life when they occur and often for years or even decades later,” said Jacqueline Savitz, a marine scientist and climate campaign director at Oceana, an environmental group. She said spills could coat sea birds and limit their flying ability and damage fisheries by injuring marine organism’s systems related to respiration, vision and reproduction.

Savitz said that the Gulf of Mexico is host to four species of endangered sea turtles and bluefin tuna, snapper and grouper. “Each of these can be affected,” she said. “Turtles have to come to the surface to breathe and can be coated with oil or may swallow it.” And, she added, the Gulf is one of only two nurseries for bluefin tuna, more than 90 percent of which return to their place of birth to spawn.

rss icon

If you enjoyed this post then Subscribe to Savvy Investor via RSS

2 Comments

  1. The recent Deepwater Horizon oil rig explosion in the Gulf of Mexico is spilling massive amounts of crude oil into the sea and is threatening the environment and those people who depend on the wetlands for their livelihood, such as fishermen and lobstermen. There is also the issue of a possible loss of revenue for the hospitality industry and other industries in which people are affected and wages could be lost, all of which lead to potential damage claims. Sadly, other oil rig workers are leaving the site and losing wages, but they have valid fears that the spill will catch fire. The tragedy is also raising very serious environmental concerns, and could threaten the fragile ecosystem of the Louisiana and Mississippi coasts, which serve as nurseries for fish and shrimp and habitat for birds. The disaster is in violation of a number of environmental acts, including the Clean Water Act and the Oil Pollution Act and is among the worst offshore drilling disasters in recent U.S. history, and could be the deadliest. More information on this tragedy and its devastating effects on our environment can be found at http://www.oil-rig-explosions.com/

  2. BP vs. the people takes place in New Orleans in Sept., that will tell the tale. Follow the money

Leave a Response

Disclaimer:
This site includes facts, views, opinions and recommendations of individuals and organizations deemed of interest. savvyinvestor.com and its information providers do not guarantee the accuracy, completeness or timeliness of, or otherwise endorse, these views, opinions or recommendations, give investment advice, or advocate the purchase or sale of any security or investment or any particular investment trading strategy.