Tropical Storm Alex Threatens More U.S. Oil Spill Chaos

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by
Reuters

Tropical Storm Alex Threatens More U.S. Oil Spill Chaos

by
Ernest Scheyder

Oil pools in between booms in Barataria Bay near Grand Isle, Louisiana, on June 19. A US judge Tuesday ruled against a six-month freeze slapped on deepwater drilling in the Gulf of Mexico, and the White House immediately announced it would appeal the ruling. (AFP/Getty Images/File/Cheryl Gerber)

GRAND ISLE, Louisiana - The first named storm of the Atlantic hurricane season threatened on Saturday to veer toward the Gulf of Mexico within days, posing a new threat to containment and cleanup of the worst U.S. oil spill in history.

Tropical Storm Alex does not currently threaten oil siphoning efforts at BP Plc.'s blown-out Macondo well, the top U.S. oil spill official said on Saturday.

That may change next week but it was too early to say where exactly the storm was headed.

The disaster, as well as implications for London-based BP, was high on the agenda for U.S. President Barack Obama and new British Prime Minister David Cameron who were holding their first meeting later on Saturday.

BP recovered about 24,550 barrels from the leaking well a mile under the ocean's surface on Friday, slightly above Thursday's haul. About two thirds was collected and the rest was flared.

That brought the total recovered from the containment systems to 413,000 barrels, BP said. But many thousands of barrels are still leaking into the sea every day.

The possible approach of Alex threatens to complicate efforts at the site of the leak, some 50 miles off the Louisiana coast, and along hundreds of miles of coastline from Louisiana to Florida.

Early on Saturday Alex had sustained winds of 40 miles per hour (65 km per hour) and was located about 250 miles southeast of Chetumal, Mexico, moving on a track that would ultimately move into the Gulf of Mexico.

"We understand it's moving westerly at this time and does not threaten the site," Coast Guard Admiral Thad Allen, in charge of fighting the disaster, told reporters. BP could be forced to suspend containment efforts if the storm causes gale-force winds at the site off Louisiana.

Heavy, sustained onshore winds could also push the massive oil slick into fragile coastlines with more ferocity than has been seen so far.

In Grand Isle, Louisiana, a tiny village jutting out into the Gulf of Mexico, residents anxiously awaited updates on the path of the storm, now in the western Caribbean.

"If it comes and it's somewhat severe, you might as well say goodbye to Grand Isle," said Pam Brooks, 50. "The oil will get thrown up and coat everything."

Hurricanes have been a looming threat since the Deepwater Horizon drilling rig sunk in 5,000 feet of water on April 22, two days after an explosion and fire killed 11 workers.

The Atlantic hurricane season runs from June 1 to November 30, and meteorologists predict this year will be a very active one -- in part because of warmer than normal sea surface temperatures in the tropical Atlantic.

The ultimate solution to plugging the gusher still lies in a relief well being drilled by BP that is not expected to be finished for a few more weeks.

OBAMA AND CAMERON TO MEET

Fallout from the spill, both on the Gulf Coast region and on BP, is dominating the first meeting between Obama and Cameron since Britain's new leader took office in May. The pair will meet on the sidelines of the G8/G20 summit in Canada.

Shares in BP, the British energy giant, were trading at 14-year lows after falling sharply again on Friday, when Cameron offered his strongest comments yet on the issue.

"It is ... in all our long-term interests that there is some clarity, some finality, to all of this, so that we don't at the same time see the destruction of a company that is important for all our interests," Cameron told Canadian broadcaster CBC.

"This is a vital company for all of our interests. ... BP itself wants to cap the well and clean up the spill and compensate those who have had damages," Cameron said.

Obama has been highly critical of BP while his own poll ratings have fallen, in part because of perceptions that his handling of the crisis has been too slow.

Investors are fretting about the potential costs to BP, which include but are not limited to a $20 billion compensation fund it set up under intense political pressure.

BP has added $5 billion to its available credit to ensure it has enough money to meet the cost of the spill, according to a story on the Wall Street Journal's website.

London's Guardian newspaper reported on Saturday that Tony Hayward, BP's gaffe-prone chief executive, had met with top investors in London to outline plans for the company's future.

One investor said Hayward appeared to have recovered from his disappointing appearance in front of a U.S. Congressional committee and would receive the necessary support.

Meanwhile, news emerged that the U.S. federal judge who overturned a six-month ban on new deepwater drilling in the Gulf sold holdings in U.S. oil major ExxonMobil hours before making the ruling.

Judge Martin Feldman sold stock in Exxon, worth $15,000 or less, before he issued a ruling that called the administration's moratorium "arbitrary and capricious" and likely to cause irreparable harm to companies operating in the Gulf of Mexico's oilfields.

The disaster, now into its 68th day, is taking a mounting toll on fishing and tourist industries in the Gulf and threatens to wreak havoc on a grand scale on coastal ecosystems and wildlife.

About one-third of U.S. federal waters in the Gulf of Mexico remain closed to fishing.

Crews on Grande Isle early on Saturday scraped oil off the beach with tractors and shovels. A wall of rocks right on the water's edge sat coated in a thin brown goo.

"We don't even go to the beach anymore," said Zackery Santiny, 18. "We don't want to see the oil."

(Additional reporting by Matt Bigg in Atlanta, Sumeet Desai in Toronto and Sinead Carew in New York; Writing by Ros Krasny; editing by Alan Elsner)

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