Gulf Coast Disaster - Tuesday News Roundup, July 13

Gulf Coast Disaster – July 13, 2010 – Tuesday – Day 85

Highlights in this issue:

- New BP cap undergoing tests
- BP shares jump after cap installed
- People, businesses wary of filing Gulf claims
- Avalanche of hearings coming on Gulf oil spill
- BP sells a unit for $289 million
- Obama administration sends BP a bill for $99.7 million

This afternoon’s summary:
The runaway well in the Gulf of Mexico may not be running away much longer. BP successfully attached a tighter-fitting cap Monday night to the broken wellhead at the bottom of the Gulf of Mexico. Today, BP is beginning to shut off valves to test how much pressure the new containment cap can handle. The oil giant hopes that the cap will completely stop the flow of oil until two relief wells are finished and more permanent measures put in place. But there are plenty of reasons to hold your breath. It could be the first time in 3 months that the spill has been stopped. It’s a complicated operation that may not be fully evaluated until Wednesday. And if it fails, it will force BP back to the drawing boards to try once again. In the meantime, there are some good signs for BP. It just sold a unit for $289 million in its quest for cash. And its shares on the market are getting stronger today in the wake of the success in maneuvering a new cap on top of the broken well.

Quotable Quote:
“I think we're going to see oil out in the Gulf of Mexico, roaming around, taking shots at us, for the next year, maybe two," Billy Nungesser, president of Louisiana's oil-stained Plaquemines Parish, said. "If you told me today no more oil was coming ashore, we've still got a massive cleanup ahead."


National News:

Washington Post: Gulf coast holds breath as BP tests new well cap
Talk about a little pressure! The newly recapped Gulf oil well will undergo an "integrity test" Tuesday that could temporarily halt the flow of the oil, for the first time in 85 days, and possibly allow BP engineers to "shut in" the well permanently. It could take from 6 to 48 hours, but it will tell engineers if the fix is working. Even if that happens, the Gulf crisis wouldn't be over, because huge quantities of oil already remain in the water and on beaches and marshes, affecting the ecology of the region for what might be generations.

Read more:
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/13/AR2010071302967.html?hpid=topnews

Check this one out, too
http://www.cbsnews.com/stories/2010/07/13/national/main6673457.shtml


Associated Press: Obama administration sends BP a bill for $99.7 million
Another day, another oil spill bill. This time, the administration sent a fourth bill to BP and other parties seeking nearly $100 million related to cleaning up the Gulf oil spill. BP has already paid $122.2 million for three earlier bills.

Read more:
http://www.latimes.com/business/nationworld/wire/sns-ap-us-gulf-oil-spill-bill,0,6770244.story

Also see:
http://ht.ly/2aUag


Pensacola News Journal: People, businesses wary of filing Gulf claims
Kenneth Feinberg, the government’s pay master in the Gulf oil spill, said one of his biggest challenges is getting residents to take the steps to file claims paperwork and apply for claims from BP’s $20 billion oil spill escrow account. “You may think everybody will file a claim, but in my experience, that has not been the case ... It is not easy to get people to file a claim,” he said. Feinberg said many businesses are leery of turning over business records and other paperwork necessary to prove their financial losses due to the oil spill.

Read more:
http://www.pnj.com/article/20100712/NEWS10/100712010


MSN.com: BP shares jump after cap installed
BP stock has risen six days in a row, and one expert thinks it will continue to rise. And Tuesday morning was no exception as news that the new well cap had been placed on the spewing oil well. Shares of BP were up 61 cents, or 1.7 percent, to $37.37 this morning. "You have got the fact that this stock, if left alone, could potentially recover. It's talking about selling assets. It's pulling a huge defense together to fend off any potential takeover targets," Yusuf Heusen, a sales trader at IG Index in London, told Thomson Reuters.

Read more:
http://articles.moneycentral.msn.com/Investing/Dispatch/market-dispatches.aspx?post=1781209&_blg=1,1781209


Wall Street Journal: Avalanche of hearings coming on Gulf oil spill
Michael Bromwich, the new head of the agency that regulates offshore drilling, said Tuesday he plans to hold a series of public hearings over the next 60 days on what additional safety measures are needed before deepwater oil and gas exploration should be allowed to resume. "Clearly the industry - and they've acknowledged as such before Congress and the Department of Interior—they don't have a fix on what the most effective containment strategies for dealing with oil spills are," Bromwich said.

Read more by Steven Power:
http://online.wsj.com/article/SB10001424052748704518904575364964035683000.html?mod=WSJ_hpp_MIDDLETopStories


Business

Reuters: U.S. oil production dropping this year
The disaster in the Gulf of Mexico and the likely oil drilling moratorium in the Gulf are not helping U.S. oil production this year. The International Energy Agency predicted Tuesday that delays have trimmed 30,000 barrels per day (bpd) from estimated United States crude production this year and next.

Read more:
http://www.reuters.com/article/idUSLDE66C0Q320100713


Bloomberg: BP sells a unit for $289 million
BP has signaled it’s looking for money as it tries to raise cash to cover the growing cost of the Gulf oil spill disaster. And Tuesday, it announced it was selling a unit for $289 million, hardly touching the mega-billions it’s expected to be spending on the spill. Magellan Midstream Partners LP, the owner of fuel pipelines stretching from the U.S. Gulf Coast to Minnesota, agreed to buy systems that link Texas refineries, along with 7.8 million barrels of Oklahoma oil storage, from a BP Plc unit.

Read more:
http://www.businessweek.com/news/2010-07-13/magellan-to-buy-bp-pipelines-tanks-for-289-million.html

Poilitics

DNC: New website launched attaching GOP and Big Oil
The DNC has put up a new website telling it like it is “because Big Oil can never have too many friends in Congress.” It highlights a number of Republicans who have show that oil is their favorite issue. Among them, Rep. Joe Barton, described as “the apologist,” and Rep. Michelle Bachman, described as the “defender of the big guy.” The site says, “These BP Republicans are the politicians who will be guiding U.S. policy if Republicans regain control of Congress in November – and they’re Big Oil’s best friends.”

Read more:
www.bpRepublicans.com


Feature:

Washington Post: Some fishermen face an emotional crisis
There’s a new reality for many on the Gulf coast. Working for BP can bring good pay and the pride of fighting the spill hand-to-hand. But for some it comes at a psychological cost: They have given up control of their lives in exchange for hot days, bewildering bureaucracy and a nagging sense that the oil is still winning. The toll for a few individuals has been extreme, as illustrated last month, when a charter-boat captain working for BP committed suicide in Alabama.

Read more:
http://www.washingtonpost.com/wp-dyn/content/article/2010/07/12/AR2010071203405.html?hpid=topnews


Regional

Propublica: Cleanup workers missing protective gear
New Coast Guard pictures show workers along the beach in Galveston hard at work cleaning up tar balls. But one thing is missing: Protective gear. The pictures show workers without the required coveralls, rubber boots, and in one case, gloves.

Read more:
http://www.propublica.org/article/coast-guard-photos-show-spill-workers-without-protective-gear


Washington Post: National zoo vets to the rescue
The first of four veterinarians from the National Zoo in Washington, D.C., is on the way to Louisiana to help clean, rehabilitate and release animals affected by the oil spill in the Gulf of Mexico.

Read more:
http://voices.washingtonpost.com/local-breaking-news/dc/national-zoo-to-aid-with-oil-s.html


USA Today: Gulf coast hotels roll out the red carpet
Hotels along the Gulf Coast of Mexico are in full courtship. In addition to widely advertising their white-sand beaches to travelers skittish about the effects of the BP oil spill, hotels are easing cancellation policies and offering guarantees to lure guests.

Read more:
http://www.usatoday.com/travel/hotels/2010-07-13-oilspilltourism13_ST_N.htm


AP: Crude oil found on second Texas beach
Texas beaches may be far away from the Gulf oil spill, but not that far. U.S. Coast Guard officials said Tuesday test results have confirmed that tar balls found on a second Texas beach were from the massive Gulf oil spill.

Read more:
http://www.businessweek.com/ap/financialnews/D9GU9UMG0.htm


Graphic:

Gusher in the Gulf
http://online.wsj.com/article/SB10001424052748703315404575250110035290130.html