BP Making Second Attempt to Funnel Oil to Gulf Recovery Ship

(Bloomberg) -- BP Plc, the largest oil and natural- gas producer in the Gulf of Mexico, hopes to see results today from a second effort to funnel oil to a surface recovery ship as it tries to reduce spillage from a well off Louisiana.

Yesterday, BP failed to maneuver a tube into a leaking pipe that’s gushing oil from the seafloor. The frame that holds the tube shifted, Doug Suttles, BP’s chief operating officer for exploration and production, said.

Substantial safety concerns raised about the Atlantis, another BP oil rig

The company most closely linked to the Gulf of Mexico oil spill also owns a rig that operated with incomplete and inaccurate engineering documents, according to records and interviews, a deficiency that one company official warned could "lead to catastrophic operator errors."

An independent firm hired by BP wrote in an April letter that it had substantiated allegations by a former contractor that the petroleum company was violating its own policies on the Atlantis, which is stationed more than 150 miles from New Orleans in 7,070 feet of water. Billie Pirner Garde, a deputy ombudsman, wrote to contractor Kenneth Abbott and stated that multiple workers on the Atlantis had raised similar safety concerns.

Giant Plumes of Oil Found Forming Under Gulf of Mexico

Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given.

“There’s a shocking amount of oil in the deep water, relative to what you see in the surface water,” said Samantha Joye, a researcher at the University of Georgia who is involved in one of the first scientific missions to gather details about what is happening in the gulf. “There’s a tremendous amount of oil in multiple layers, three or four or five layers deep in the water column.”

A Looming Shortage of Oil Boom?

As a vast oil slick threatens waterfront from western Louisiana to the Florida Panhandle, BP and the Coast Guard are engaged in a frantic effort to secure millions of additional feet of oil-containment boom, supplies of which are spread thin across the coast of the Gulf of Mexico.

Adequate boom is on hand to protect the most immediately endangered areas, but more is needed, said Adm. Thad Allen of the Coast Guard, who was appointed by President Obama to lead the spill response.

NOAA's projection of oil spill path impacts openings, closures of fishing waters

Barham had been trying to find ways of reopening the long-closed but never-contaminated east bank. He achieved that Friday -- but there is a possible fly in this healing ointment.

The dispersants BP has been using to break up the spill can be as toxic as crude oil. And for several days beginning a week ago, the company injected the chemicals on the sea floor -- the idea being, it said, to begin the break-up sooner.

Oil Spill Washing Ashore Angers Gulf Residents

In Port Fourchon, La., southwest of New Orleans, clean-up crews had to scrape beaches and hauled away 300 trash bags filled with tarballs that had washed ashore.

"It kind of gave you a pit in your stomach - oh lord here we go," said LaFource Parish resident Chett Chiasson.

As more oil spills onto the coast, many people here grow more frustrated, more angry. They're afraid waves of oil coming ashore could soon kill their livelihoods.

"BP did this," said one fisherman. "They destroyed us."

Odd Smells in New Orleans, Thoughts of the Gulf

NEW ORLEANS — At almost 300 years old, somewhat moldy from the remnants of Hurricane Katrina and surrounded by muddy water and swamps, this city is not exactly known for being lemony fresh.

The signature scent around Bourbon Street, after all, is the smell of spilled liquor.

But from the French Quarter to New Orleans East, people here have been complaining about a tinge to the air that is unsettling even by local standards.

Many suspect that it has something to do with the oil disaster in the Gulf of Mexico, which has already leaked millions of gallons of crude about 50 miles off the Louisiana coast. The authorities involved in the cleanup of the fallen Deepwater Horizon oil rig have been burning oil on the surface of the gulf and using chemical dispersants around the leak.

After Spill, an Economy on Pause (slideshow)

The oil spill in the Gulf of Mexico is disrupting the area's economy and the lives of its people.

U.S. Seeks BP Clarification of Plan to Pay for Gulf Oil Spill

(Bloomberg) -- The U.S. government is seeking assurances from BP Plc that the company will pay for all damage relating to the oil spill off the coast of Louisiana.

“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,” a letter to BP Chief Executive Anthony Hayward from U.S. Interior Secretary Ken Salazar and Homeland Security Secretary Janet Napolitano said. The letter was dated May 15 and released by the White House yesterday.

The Call in the Middle of the Night

As I reported in Friday’s paper, serious questions are being raised about the government’s estimate of the oil spill in the Gulf of Mexico. The estimate of 5,000 barrels per day has not changed since April 28, and many scientists and environmental groups argue that it cannot be right, given the seemingly rapid flow from the undersea well, as seen in this video of the gushing fluid released on Wednesday.

It turns out that in the early days after the explosion of the Deepwater Horizon, the government entertained a far higher number than 5,000 barrels a day. Video shot in Seattle at the spill response unit of the National Oceanic and Atmospheric Administration includes notes made on a white board as government workers discussed how to respond to the disaster. The estimated flow rate: 64,000 to 110,000 barrels per day.

White House message machinery spinning faster than ever

WASHINGTON -- In the days after an oil rig exploded last month in the Gulf of Mexico, the White House faced not only a looming environmental catastrophe but also a potential public relations disaster.

Aides feared a story line would take hold that President Barack Obama had responded too slowly to the spreading oil slick, damaging him politically much as the slow federal response to Hurricane Katrina in 2005 discredited former President George W. Bush.

Debate over cross-border pipeline poised to heat up at U.S. town halls

Public hearings in Montana are being held this week to discuss a plan to build a pipeline through eastern Montana to move crude extracted from Alberta’s oil sands to refineries in the United States.

Oman oil output up 8.7 pct in Q1 2010

MUSCAT - Oman’s average oil production rose 8.7 percent to 855,400 barrels per day (bpd) in the first quarter of this year compared to the same period in 2009, the Ministry of National Economy Bulletin said on Sunday.

Tax Uncertainty Hurts Australia Gas Projects, Lobby Group Says

(Bloomberg) -- Proposed natural gas ventures in Australia’s Queensland state estimated to cost as much as A$80 billion ($72 billion) need certainty over taxes to start on schedule, the industry’s lobby group says.

Australia’s proposed 40 percent tax on resource profits is “destabilizing” the country’s liquefied natural gas industry at a time when energy producers are advancing toward making final investment decisions, the Australian Petroleum Production and Exploration Association said in an e-mailed statement today.

Why the United States Crude Oil ETF Is Getting Crushed

The United States Crude Oil ETF is getting crushed right now, but if you want to know where it’s heading, it’s important to understand what it holds and what’s going on in the futures market.

USO has become investors’ proxy for oil. When you hear people talk about oil on CNBC, they’ll often mention USO. The fund has $1.8 billion in assets and trades 11 million shares per day.

Chart of the Day: Drill, Baby, Drill

This chart comes from Glen Sweetnam of the Department of Energy (he's the director of the EIA's International, Economic and Greenhouse Gas division). The black line represents the year 2011. After that, oil production diverges sharply from projected demand, and no one knows how we're going to make up the difference.

Sweetnam, by the way, is not talking about peak oil here. DOE subscribes to an "undulating plateau" theory, where oil production peaks and then stays more or less flat for a decade or so. Rather, Sweetnam attributes the production decline to a lack of investment. However, since new projects take years to come on line after they're funded, this is a fairly thin distinction in the medium run. If investment is lacking today, then Sweetnam's chart is probably accurate for at least the next few years.

Energy and Capital's Weekend Edition

Socialism just hit the oil industry.

And I'm not referring to Venezuelan President Chavez wresting oil fields away from foreign companies...

No. This time, it's hitting much closer to home.

Obama recently took his plan to Congress. In order to pay for the clean-up efforts in the Gulf of Mexico, he's proposing a penny tax on oil companies.

Although a penny tax seems trivial, it's a foot in the door for Obama.

Peak Oil: The Changes

The following is a transcript of the conversation I had with Paul Michael Wihbey on the May 4 episode of Turning Hard Times into Good Times. The previous week, Simmons presented his continuing thesis that the lights on western civilization are about to go out. Contrasting that notion is Paul Michael Wihbey, who provides a much more optimistic view of prospects for keeping the lights on, not from foreign imported oil, but from abundant sources right here in North America.

Colliding tragedies and the missing pie slice

Few are admitting that the amount of oil from offshore drilling, which could offer up to 15 years of American supply, is swallowed in the shadow of financial uncertainty in producing such oil. The capital risk of exploring and tapping those fields cause great pause to energy companies. Oil companies should be even more hesitant now that deep-sea operations have proven to be like space adventures requiring ceaseless dedication and accountability. That sterling standard is not a great match for companies which have been earning billions per quarter after getting what they want from regulators by having their lobbyists literally sleep with them.

While oil companies have great access to government regulators paid with public funds, they do seem to enjoy great privacy concealing the many strategic vulnerabilities of our oil-based life.

It's The End of the World (As We Know It)

A storm is quickly approaching, and the world is not ready for it.

The permanent end of the era of cheap oil is coming as soon as next year, according to a raft of official reports that have made their way into energy media over the last few months. Governments are now beginning to acknowledge the looming crisis. Yet, perhaps because they waited too long to prevent it, leaders are not yet alerting the public.

The entire world economy is built on cheap oil, A permanent oil production shortage will thus lead to The End of The World (As We Know It). What will come on the other side of this -- will it be good or bad?

Making the transition

Because of the process of economic globalization, our communities — which have been ravaged by what we call “affluence” — are now at the end of very long and fragile supply chain upon which we depend for even our most essential needs. Our community is vulnerable, exposed and at risk.

Here’s why: We now are facing three major converging global crises — Peak Oil, global warming and economic instability — that together represent a “perfect global storm,” bringing with it massive waves of change. James Howard Kunstler has called this “The Long Emergency.”

Oil spill a boost to alternative energies

The Gulf oil-spill catastrophe calls for immediate teamwork, as various entities work to end this spill, clean up damages, preserve the environment and prevent re-occurrences.

Longer term, this devastating accident is a reminder that we’re far too dependent on oil and we’re only drilling a mile below the surface because other sources are tapped out. We’ve known this for decades, but we’re still without a viable national energy plan to wean us off oil and onto energy independence.

The world’s energy challenge is beyond enormous. We are very close to “peak oil” — where the world’s daily demand begins exceeding the world’s maximum daily supply. China and India use only 5 percent per capita of what we do, and their combined populations are eight times ours. Their energy appetites and others worldwide are growing at alarming rates. Meanwhile, with only 5 percent of the world’s population, we’re consuming 25 percent of the world’s oil, largely setting global prices, indirectly bankrolling even nations like Iran.

Brideshead reheated

Heating Castle Howard in North Yorkshire has never been easy. When the stately home was built in 1699, it took 30 open fires to do the job. Even after the arrival of central heating, it was still a tough task.

“We were using 85,000 litres of oil a year at a cost of almost £40,000,” said Simon Howard — a descendant of the Earl of Carlisle, for whom the house was built — who lives on the picturesque estate with his wife and two children.

Two years ago, faced with escalating fuel prices, Howard decided enough was enough. Now the 142,000 sq ft house, used in the filming of Brideshead Revisited, is being heated by its lake.

The Climate Bills, Side by Side

One of the more concrete differences lies in the floor and ceiling that each bill sets for the price that companies will have to pay for permits to emit greenhouse gases under a proposed cap and trade system. The House bill, approved last June, says the permit cost would be $10 to $28 per ton, while the proposed Senate bill, unveiled on Wednesday, calls for a range of $12 to $25 per ton.

That disparity may seem slight to the layman. But the potential range in costs, $18 in the House bill and $13 in the Senate bill, is of great interest to investors, who might prefer a narrow band so they can better understand and predict the permits’ potential effects on the market, said Paul Bledsoe, a spokesman and strategist for the energy policy commission.

A cooling trend

They were friends as global warming skeptics, but then their minds and lives diverged. That these MIT experts now see the facts, and each other, so differently shows how hard climate consensus will be.