To Drill, Not To Drill

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June 24, 2010

Key decision on deepwater drilling could come Thursday

Posted: 09:19 AM ET

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CNN Wire Staff

New Orleans, Louisiana (CNN) -- A New Orleans judge could decide Thursday whether a government ban on deepwater drilling will continue.

The Obama administration has asked U.S. District Judge Martin Feldman to delay his decision to lift the ban until an appeals court reviews the case later in the summer.

Earlier this week, Feldman struck down the deepwater drilling ban, declaring it "arbitrary and capricious."

Obama administration lawyers filed the paperwork Wednesday signaling their intention to appeal Feldman's decision. Feldman could rule on the government's request as early as Thursday, government officials said.

As the deepwater drilling debate intensified, BP struggled to contain the undersea gusher in the Gulf and control its public relations message.


An offshore oil rig sits this month in the Gulf of Mexico
near Grand Isle, Louisiana.
A containment cap over the underwater gusher in the Gulf of Mexico resumed siphoning oil and gas to a surface vessel Wednesday night after BP had to stop part of the operation earlier in the day.

The cap was removed Wednesday morning after an undersea robot accidentally bumped a vent on the device, shutting it off and forcing the company to remove it at 9:45 a.m.

BP said the device was reinstalled and functioning again by 8 p.m.

The delay in containment efforts came after a day of record crude collection from the cap system.

After the underwater collision Wednesday morning, BP noticed "a discharge of liquids" rising through the vent that prohibits hydrates or ice-like crystals from forming in the cap, said Adm. Thad Allen, the government's response manager.

Allen said BP removed the cap at 9:45 a.m. to analyze the liquids and to check for hydrates, which could block oil from reaching the surface vessel collecting the gushing crude.

Also Wednesday, BP put on a new public face by tapping its managing director to lead a new and permanent Gulf of Mexico oil disaster organization.

Bob Dudley, a native of Mississippi, was appointed president and chief executive officer of BP's Gulf Coast Restoration Organization, BP said in a statement.

Dudley said the new organization was designed to enable BP to push more of the company's resources toward the overall recovery effort and to make sure the claims process is transferred smoothly to Kenneth Feinberg, the independent director of BP's $20 billion compensation fund.

"Meantime, we'll continue to write the checks, pay the claims and make sure that we're there for a long time, many years, not only after the well is stopped, but the clean-up," Dudley said. "This is the first step."

Some have speculated that BP's top executive, Tony Hayward, would step aside after a grilling in Congress last week and criticism over public relations gaffes.

Hayward angered Gulf Coast residents when he was quoted as saying he wanted his life back. He didn't do himself any favors by attending a yacht race over the weekend, just two days after testifying before a congressional panel that he was not responsible for well design and operation decisions made before the April 20 explosion aboard the Deepwater Horizon drilling platform.

Dudley will still report to Hayward, who remains as BP's group chief executive.

But even as BP tried to change its public perception Wednesday, a report was released that indicated that the company showed a lack of cooperation with agencies trying to help get an accurate flow-rate of the oil spill.

The document, released by the Coast Guard, is a sole-source contract seeking to secure the services of the Woods Hole Oceanographic Institution, an agency known in the oil spill field.

Woods Hole submitted proposed technology to BP in May designed to provide an accurate flow-rate estimate from the ruptured undersea well after the oil company provided its own numbers inconsistent with those of scientific experts, the document shows.

The institution's technological capabilities at the site include sonar, optical, Doppler and mass spectrometer varieties of sensors, according to the Coast Guard.

However, the document quotes BP America CEO Lamar McKay from his congressional hearing testimony as saying, "this leak is not measurable through technology we know."

According to the Coast Guard, BP delayed acting on the institute's technology proposal "under the premise that BP would soon implement successful recovery techniques."

"Previous efforts to apply sensors to the site for determination of flow rate have been delayed under the assumptions that the oil leak would be stopped by pending mitigation efforts, which have not been successful to date," the document says.

BP had initially put the rate of oil flowing from the well at 1,000 barrels a day (42,000 gallons), then 5,000 barrels (210,000 gallons), before conceding the actual rate could be much higher.