New Estimates Double Rate of Oil That Flowed Into Gulf


A government panel on Thursday essentially doubled its estimate of how much oil has been spewing from the out-of-control BP well, with the new calculation suggesting that an amount equivalent to the Exxon Valdez disaster could be flowing into the Gulf of Mexico every 8 to 10 days.

The new estimate is 25,000 to 30,000 barrels of oil a day. That range, still preliminary, is far above the previous estimate of 12,000 to 19,000 barrels a day.

These new calculations came as the public wrangling between BP and the White House was reaching new heights, with President Obama asking for a meeting with BP executives next week and his Congressional allies intensifying their pressure on the oil giant to withhold dividend payments to shareholders until it makes clear it can and will pay all its obligations from the spill.

The higher estimates will affect not only assessments of how much environmental damage the spill has done but also how much BP might eventually pay to clean up the mess — and it will most likely increase suspicion among skeptics about how honest and forthcoming the oil company has been throughout the catastrophe.

The new estimate is based on information that was gathered before BP cut a pipe called a riser on the ocean floor last week to install a new capture device, an operation that some scientists have said may have sharply increased the rate of flow. The government panel, called the Flow Rate Technical Group, is preparing yet another estimate that will cover the period after the riser was cut.

The new estimate appears to be a far better match than earlier ones for the reality that Americans can see every day on their televisions. Even though the new capture device is funneling 15,000 barrels of oil a day to a ship at the surface, a robust flow of oil is still gushing from the well a mile beneath the waves.

The question of how much oil is pouring into the gulf has been a nagging one for weeks, especially since early estimates from BP and the government proved woefully low. And the new estimates come as the company, after weeks of failed efforts, is enjoying its first substantial success at preventing a significant volume of oil from entering the gulf.

The new numbers are certain to ratchet up the already intense political pressure on BP.

For days Mr. Obama and his advisers have fended off questions about why he has not spoken with the chief executive of BP, Tony Hayward. The president’s commander for the spill response, Adm. Thad W. Allen of the Coast Guard, wrote on Thursday to the chairman of the BP board, Carl-Henric Svanberg, requesting that he and “any appropriate officials from BP” meet with administration officials next Wednesday. Mr. Obama will participate in part of the meeting, he wrote.

Administration officials suggested that they had no immediate plans to directly block BP from paying the dividend, even as the White House and its allies made clear that they would pressure the company to ensure that it made paying spill-related claims its top financial priority. Nancy Pelosi, the House speaker, told reporters that BP should withhold dividends to shareholders until it paid small-business owners along the gulf for their loss claims. Representative Edward J. Markey, who is chairman of one committee investigating the spill, suggested that the government would take action to block the payments if necessary.

“This company, I think, will stay solvent,” said Mr. Markey, a Democrat from Massachusetts. “And we’re going to make sure that the shareholders wait until the victims are paid first.”

Andrew Gowers, a BP spokesman, said “there is no change in the position” of retaining the dividend. “We intend to meet all our obligations to all our stakeholders,” he said. “We are a very financially strong company.”

In coming weeks, BP hopes to start capturing the vast bulk of the oil emerging from the well. The new high estimate of 30,000 barrels, however, would exceed BP’s current processing capacity, which is expected to reach 25,000 barrels a day by next week. The company plans to move an additional ship into position by early July to improve its ability to manage the flow.

Mr. Gowers said that the flow-rate group was doing “appropriate” work and that the new estimate would not affect the company’s planned containment efforts.

Mr. Gowers noted that BP had supplied the information that allowed the technical group to make its calculation. “It’s their job to produce the estimate, and we have nothing to add,” he said.

As investors have fled BP stock over uncertainties about the company’s future and its ability to pay what it will end up owing, BP has lost nearly half its market capitalization since April, and its bonds are now trading at junk levels.

Credit Suisse estimates the cleanup costs could end up at $15 billion to $23 billion, plus an additional $14 billion of claims. But analysts make much of BP’s financial flexibility: it had net profit of $17 billion last year alone.

Mr. Gowers said the company did not have an estimate of what its potential liability costs would be. But he said that as of Thursday morning, the company had already spent $1.43 billion, including claims payments, the costs of trying to plug and cap the leak, and payments of block grants to gulf states.

On the new estimates of the flow rate, Marcia McNutt, director of the United States Geological Survey and chairwoman of the technical panel, said the new figures were based on a more detailed analysis of information like video of the gushing well. The new range was also based on the first direct measurement of the flow rate, using sonar equipment lowered to the ocean floor.

Two scientists from the Woods Hole Oceanographic Institution, Richard Camilli and Andy Bowen, made that measurement on May 31, Mr. Bowen said.

As with the government’s previous estimate, Dr. McNutt said subgroups of the panel applied various analytical techniques to come up with estimates. The best overlap among the techniques was the range of 25,000 to 30,000 barrels a day, she said, and that became the new official estimate.

Dr. McNutt added, however, that the range of estimates the technical panel considered plausible was actually wider, more like 20,000 to 40,000 barrels a day.

A barrel is 42 gallons, so 30,000 barrels would equate to nearly 1.3 million gallons a day. The Exxon Valdez disaster in 1989 is estimated to have spilled 10.8 million gallons of oil into Prince William Sound in Alaska.

Ira Leifer, a researcher at the University of California, Santa Barbara, and a member of the flow-rate group, said the new figures confirmed a suspicion he had developed, based on looking at satellite data, that the rate of flow for the well was increasing even before BP cut the riser pipe.

“The situation is growing worse,” Dr. Leifer said.

Add comment

Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

Follow Us

© Stuart H Smith, LLC
Share This