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BP loses credibility as efforts fail, oil flow grows

At nearly every step since the Deepwater Horizon exploded more than a month ago, causing the worst oil spill in U.S. history, rig operator BP PLC has downplayed the severity of the catastrophe in the Gulf of Mexico.

On almost every issue — the amount of gushing oil, the environmental impact, even how to stop the leak — BP's statements have proved wrong. The erosion of the company's credibility may prove as difficult to stop as the oil spewing from the sea floor.

"They keep making one mistake after another. That gives the impression that they're hiding things," said Florida Sen. Bill Nelson, who has been critical of BP's reluctance to publicly release videos of the underwater gusher. "These guys either do not have any sense of accountability to the public, or they are Neanderthals when it comes to public relations."

Take one of the most obvious questions since the April 20 explosion: How much oil is leaking? Official estimates have grown steadily — first the word was none, then it was 42,000 gallons a day, then 210,000 gallons. And now a team of scientists say the leak may well be five times that, making the spill worse than the Exxon Valdez.

All the while, BP has been slow to acknowledge the leak was likely much worse than the public had been told.

The oil giant's behavior has led to accusations that it has been motivated to keep the leak estimate low because under federal law the size of eventual fines is tied to the size of the leak.

Nelson said that he believes BP has delayed release of everything from the actual flow rate to the videos because of a federal law that allows the government to seek penalties of $1,000 to $4,300 per barrel — 42 gallons — of oil spilled in U.S. waters. "And so naturally they want to minimize what people were thinking they were going to spill."

High-end estimates by BP, the Coast Guard and the National Oceanic and Atmospheric Administration reached 588,000 gallons per day in late April, BP spokesman David Nicholas acknowledged Friday to the Associated Press after weeks of the company sticking with the lower estimate. But it wasn't until Thursday that officials had conceded that the leak was considerably larger than the 210,000-gallon-a-day figure that had been floated as the best estimate for the previous four weeks.

Even President Barack Obama has voiced his frustration, laying the blame squarely on BP for the often incorrect assessment of the spill's size.

"Their interest may be to minimize the damage and, to the extent that they have better information than anybody else, to not be fully forthcoming," Obama told reporters Thursday.

Experts say there's no easy way to measure a leak 5,000 feet deep. Some estimates were based on satellite images or flyovers. The federal government has worked closely with BP, and Obama has acknowledged shortcomings, but it's BP that controls much of the technology, like underwater robots that capture video of the leak.

Obama noted that BP kept video of the leak and didn't make it public.

"At that point, BP already had a camera down there but wasn't fully forthcoming in terms of what did those pictures look like. And when you set it up in time-lapse photography, experts could then make a more accurate determination. The administration pushed them to release it," Obama said. "But they should have pushed them sooner. But there was a lag of several weeks that I think shouldn't have happened."

'Unconscionable' request: A request by Transocean, owner of the Deepwater Horizon oil drilling rig, that its liability in connection with what may be the largest oil spill in U.S. history be limited to $26.7 million is "simply unconscionable," the Justice Department said. U.S. Assistant Attorney General Tony West, in a May 24 letter to Transocean attorney Frank Piccolo, questioned the company's legal argument that the 150-year-old Limitation of Liability Act caps its damages. Transocean spokesman Guy Cantwell said he had no immediate response to West's letter. Geneva-based Transocean, the world's largest deep-water driller, filed its request for limited liability on May 13 in federal court in Houston. The company's petition, written by Piccolo, denied responsibility for the explosion that killed 11 workers and the subsequent oil spill.

Liability limit questioned: U.S. House Speaker Nancy Pelosi said Congress should consider eliminating the cap on damages that companies such as BP have to pay for harm from oil spills. "There is a movement afoot in Congress for that," Pelosi said in an interview on Bloomberg Television's Political Capital airing this weekend. "Why have a cap?" Pelosi had previously voiced support for a proposal to raise to $10 billion the existing $75 million cap for economic damages caused by each environmental disaster.

News media complaints: News organizations say they are being allowed only limited access to areas impacted by the gulf oil spill through restrictions on plane and boat traffic. The Associated Press, CBS and others have reported coverage problems because of the restrictions. U.S. Coast Guard and Federal Aviation Administration officials said that BP, the company responsible for cleaning up the spill, was not controlling access, and that there was no intent to conceal the scope of the disaster. Vessels responding to the spill are surrounded by a 500 yard "standoff area" with restricted access, Coast Guard Lt. Commander Rob Wyman said. "If we see anybody impeding operations, we're going to ask you to move. We're going to ask you to back up and move away," he said.

Information from Bloomberg News was used in this report.

BP loses credibility as efforts fail, oil flow grows 05/29/10 [Last modified: Wednesday, June 2, 2010 2:01pm]

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