BP Inserts Siphon Into Oil Leak, Washington Warns BP; Slick New Videos; Tracking the Spill; Will BP Survive?

In what everyone hopes will be the start of sealing the leak, on its second attempt BP Inserts Siphon Into Oil Leak.

BP PLC successfully inserted a tube into the broken pipe leaking oil into the Gulf of Mexico early Sunday, a person close to the containment operation said, increasing the chances that the company will be able to siphon off much of the oil now gushing into the sea.

The tube is designed to capture a large part of the oil spewing from the pipe and direct it securely to a ship on the surface.

Earlier efforts to contain the spill ran into a series of setbacks. BP made a first attempt to insert the tube late Saturday, but it fell out following a collision between two subsea robots. Before that, a huge dome that was to be lowered onto the leak got clogged up with gas crystals or hydrates.

It's still unclear whether the new siphoning operation will work. Even in the best-case scenario, the tube won't capture all the leaking oil.

Video of Gushing Leak



4 Ways Considered To Stop The Spill

The Wall Street Journal has graphics showing 4 Ways Considered To Stop The Spill

1. Drilling Relief Wells
2. Treading the Needle, inserting a 6-inch vacuum tube inside the riser to suck up oil
3. Junk Shot, placing golf balls and other junk into the bottom of the blowout preventer before cement is injected into the top
4. Top Hat shown below



In regards to "Junk Shot", it seems to me that golf balls are relatively light as are broken pieces of rubber tires that have also been mentioned. If you are going to try this, why not lead balls?

Right now the focus is on threading the needle



Letter from Secretary of Interior to CEO of BP

Inquiring minds are reading the letter from Ken Salazar, Secretary of the Interior, to Dr. Anthony Hayward, Group Chief Executive BP.

The BP Deepwater Horizon oil spill may prove to be one of the most devastating environmental disasters this nation has ever faced. As one of the responsible parties for this event, BP is accountable to the American public for the full clean up of this spill and all the economic loss caused by the spill and related events.
We recognize that, to date, BP has undertaken to promptly pay the damages associated with the Deepwater Horizon events, in addition to all removal costs.

In an interview with Reuters on April 30, 2010, you stated that, "We are taking full responsibility for the spill and we will clean it up, and where people can present legitimate claims for damages we will honor them. We are going to be very, very aggressive in all of that." ...

Based on these statements, we understand that BP will not in any way seek to rely on the potential $75 million statutory cap to refuse to provide compensation to any individuals or others harmed by the oil spill, even if more than $75 million is required to provide full compensation to all claimants, and BP will not seek reimbursement from the American taxpayers, the United States Government, or the Oil Spill Liability Trust Fund for any amount.

The public has a right to a clear understanding of BP's commitment to redress all of the damage that has occurred or that will occur in the future as a result of the oil spill. Therefore, in the event that our understanding is inaccurate, we request immediate public clarification of BP's true intentions. ...

Tracking the Oil Spill

Click here for an Animated Video that Tracks the Progress of the Oil Spill

As of May 15




Slick Videos Showing the Extent of the Problem

The best video to date is by John Wathen, a volunteer pilot.



Quote: For the first time in my environmental career, I find myself using the word 'Hopeless'

Please play that video, it is quite amazing.

Here is one clip.



Volcano of Oil Erupting

Inquiring minds will be interested in the story behind that video.

Please see Volcano of Oil Erupting on PESN.

Inquiring minds will also be interested in Gulf Spill May Far Exceed Official Estimates.

For still coverage, please see Mike Ruppert's From the Wilderness' Peak Oil Blog for a collection of 10 other links on the spill.

Will BP Survive?

A quick check on Yahoo Finance shows the Market Cap of BP is $147 billion.

How big is the cleanup cost, damage to fishing industry, damage to beaches, etc, etc?

Can those costs exceed $100 billion? $500 billion? Does BP have insurance? Would this bankrupt the insurers? There are lots of questions here, but BP is clearly in trouble.

BP will survive just fine, but who will own it and what the shares are worth depends on a lot on questions that cannot be answered until the leak is plugged, an assessment of the damages is made, the lawsuits are filed (the number will be huge), and most importantly whether the courts decide to limit BP's liability.

This can easily drag out for years.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
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