Obama vents promised frustration on BP while scientists confirm undersea oil plumes

Publish date: June 4, 2010

NEW YORK – In an apparent effort to vent his frustrations over the BP spill, President Obama today on his third visit to the oil stricken Gulf berated BP for spending some $50 million in advertising to manage its PR image and and planning to pay out $10 million in quarterly dividends to shareholders.

Obama’s assertion is that this funding is better spent on those suffering from the spill and on cleanup efforts resulting from the ever massing slick, now in its 44th day, that resulted from the explosion of the BP-operated Deepwater Horizon rig that killed 11. The accident has produced the largest spill in US history, dumping some 19 million to 29 million gallons of oil into the Gulf of Mexico, according to US Geological Survey figures.

While Obama spoke, scientists with the University of South Florida said laboratory tests have confirmed that oil spewing from the blown-out well has accumulated in at least two extensive plumes deep underwater. The researchers said in Baton Rouge, Louisiana, on Friday that their tests confirmed initial findings based on field instruments.

The findings – which Jane Lubchenco of the National Oceanic and Atmospheric Administration (NOAA) and BP CEO Tony Hayward eschewed when they were initially announced two week ago – are the most conclusive evidence yet in a vigorous scientific debate about where much of the oil is ending up.

The researchers say the extensive layers of oil are sitting far beneath the surface miles from the site of the Deepwater Horizon rig explosion. The university is collecting data for NOAA.

‘Venting’ and ‘yelling’ – in muted tones

In remarks on a nearly surprise visit to the Gulf – his third since the spill began and second in seven days – Obama attacked BP, saying, “My understanding is that BP had contracted for $50 million worth of TV advertising to manage their image in the course of this disaster,” adding, “In addition, there are reports that BP will be paying $10.5 billion in dividend payments this quarter.”

Obama had said last night on CNN’s “Larry King Live” programme that he “would love to just spend a lot of my time venting and yelling at people.” Nonetheless, the President spoke in measured tones, while expressing his annoyance with the London-based oil giant in televised remarks today.

“Now, I don’t have a problem with BP fulfilling its legal obligations,” Obama told reporters.  “But I want BP to be very clear they’ve got moral and legal obligations here in the Gulf with the damage that has been done.”

He continued to day that, “What I don’t want to hear is that they’re spending that kind of money on shareholders and spending that kind of money on TV advertising [but] they’re nickel-and-diming fishermen or small businesses here in the gulf who are having a hard time.”

He added that the six-month moratorium on deepwater drilling could be sped up if the independent commission he tasked with investigating the safety of offshore drilling hastened the release of its report.

“I do not want to see this repeated again,” he said.

Obama’s remarks came after a meeting with officials from Louisiana and other gulf states at Louis Armstrong Airport in Kenner, Louisiana, which serves New Orleans. 

Defraying public pressure – and end suspend BP dividend payments

The President, who has been under public pressure to assume a more forceful role in responding to the spill, spoke to reporters for about 15 minutes. He sat at the head of a horseshoe-shaped table, in a small building on the airport Tarmac, between Admiral Thad Allen and senior White House energy advisor Carol Browner, the Los Angeles Times reported.

In the meeting were Florida Gov. Charlie Crist, Louisiana Gov. Bobby Jindal, Alabama Gov. Bob Riley, Louisiana Sen. David Vitter, New Orleans Mayor Mitch Landrieu, and others.

In apologetic commercials that began airing on national TV Thursday, BP chief executive Tony Hayward says, “The gulf spill is a tragedy that never should have happened,” and adds, “To those affected and your families, I am deeply sorry.”

BP shares have lost around a third of their value since the blowout as investors fear soaring cleanup costs and worry about the company’s ability to pay a dividend – a major concern of British pension funds, according to several London-based fiancial analysts interviewed by Bellona Web today.

Two U.S. senators this week called on BP to suspend its annual dividend until full cleanup and liability costs become clear. Victims’ families and businesses damaged by the oil “deserve to know that BP will fulfill its obligations to them before its shareholders,” Democratic Sens. Ron Wyden of Oregon and Charles Schumer of New York said in a letter to Hayward.

BP has been expected to announce it would maintain dividend payments, but the president’s remarks seemed aimed at changing the company’s mind. Last year, the company had $27 billion in cash flow from operating activities. So far, it has spent roughly $1 billion on response to the spill.

BP encouraged by its containment effort

BP Friday placed a cap on the well’s riser that is siphoning some 1,000, barrels, or 42,000 gallons,  of oil onto a tanker ship on the surface. Hope were dim the operation would get underway when a diamond saw cutting the riser pipe got stuck and became damaged. The job was finished this morning by a 20-foot pair of robotically operated shears, leaving a less than clean cut.

But amid an estimated daily spill rate of at least 19,000 barrels of oil, the 1,000 being collected is a drop in the bucket. All the same, BP Senior Vice President Kent Wells told reporters during a technical briefing he was “encouraged” by current efforts to contain the oil. But he hesitated to call the operation – BP’s eighth attempt in 40 days – a success.

“We’re 12 hours into this. I’m certainly not going to declare it a success,” said Wells. “When we get a few days down the road and are capturing a tremendous amount, then I might say it’s sort of successful.”

Wells said the company would provide daily updates on the amount of oil being transferred from the cap that is attached to the sheared-off riser pipe a mile below the surface of the Gulf.

He said the primary goal is “to capture the most oil that we can.” But he added, “I do think it will take us a few days to get up to peak efficiency.”

The company is banking on the cap’s forming a tight seal with a flange on the riser pipe. Currently, operators are allowing oil to flow out the bottom of the cap and through valves on its surface to keep water from entering the containment device, but they will begin closing those valves and upping containment rates in the coming days.

Wells said BP has six additional caps sitting on the seafloor that can be used if the current one gets clogged with hydrates, as happened during a previous attempt at a nearly identical effort.

Federal officials had warned that the rough cut caused by BP’s effort to cut the riser pipe could derail plans to contain oil, but Wells today dismissed those comments. He said the company had designed a containment system that “works regardless of what cut we get.” He added that the cap will be sealed to a ribbed flange below the cut.

Wells added that he was not aware of any significant increases in flow rate after the company cut the riser pipe, a scenario some federal officials had warned about. But he said there was no way of actually measuring the flow rates at the seafloor.

Coast Guard estimates had said that an extra 100,000 gallons a day – on top of the 210,000 gallons already estimated – would be pumped into Gulf waters when the riser pipe was cut.

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