GLOBAL MARKETS-OPEC disappointment hits oil, stocks; sterling down on UK vote jitters
* Sterling tumbles on PM May's shrinking election lead, UK GDP
* Backup plan features golf balls, shredded tires
* Areas further west threatened in next few days
* BP CEO says containment may be weeks, months away
(Updates with slick moving westward)
By Erwin Seba
ROBERT, La., May 9 BP Plc engineers desperately explored options on Sunday to control oil gushing from a ruptured well deep under the Gulf of Mexico after a setback with a huge undersea containment dome fueled fears of a prolonged and growing environmental disaster.
The spill is spreading west, further from Florida but toward the important shipping channels and rich seafood areas of the Louisiana shoreline, where fishing, shrimping and oyster harvesting bans have been widened.
A state of emergency was declared in Lafourche Parish, Louisiana, with sheen, the leading edge of the oil slick, forecast to come ashore near Port Fourchon within days.
BP (BP.L) is exploring several new options to control the spill after a buildup of crystallized gas in the dome forced engineers to delay efforts to place a massive four-story containment chamber over the rupture on Saturday.
"We're gathering some data to help us with two things. One is another way to do containment, the second is other ways to actually stop the flow," BP chief operating officer Doug Suttles told Reuters in Venice, Louisiana.
BP was also exploring ways to overcome the containment dome's problem with gas hydrates -- slushy methane gas that would block the oil from being siphoned up to a waiting ship.
"People are working around the clock at BP headquarters," U.S. Coast Guard Admiral Thad Allen told National Public Radio. But conducting operations at depths of one mile (1.6 km) below the surface was complicating the challenge.
"We're actually dealing with a source that doesn't have human access," Allen said.
At least 5,000 barrels (210,000 gallons/795,000 litres) of oil a day have been gushing unchecked into the Gulf since the Deepwater Horizon rig exploded on April 20, rupturing the well and killing 11 crew members.
On Dauphin Island, Alabama, a barrier island and beach resort, sunbathers found tar balls along a short stretch of beach. Experts were testing the tar to determine if it came from the Gulf spill.
TAKE A LOOK on the spill [ID:nSPILL]
Breakingviews column [ID:nN07274242]
INSIDER TV: link.reuters.com/gen92k
The spill, which could become the worst in U.S. history, threatens economic and ecological disaster on Gulf Coast tourist beaches, wildlife refuges and fishing grounds. It has forced President Barack Obama to rethink plans to open more waters to drilling.
The disaster could slow the exploration and development of offshore oil projects worldwide, the head of the International Energy Agency warned.
"The future potential is offshore in deeper water and in the Arctic, so if offshore investment is going to be slowed down, that is a concern," IEA Executive Director Nobuo Tanaka told Reuters. [ID:nnWEA1101]
BP Chief Executive Tony Hayward told London's Sunday Telegraph it could be weeks or months before the spill is brought under control. He said the company could spend $10 million a day on clean-up efforts. [ID:nLDE64807W]
BP may next try to plug the damaged blowout preventer on the underwater well by pumping debris into it at high pressure, a technique called a "junk shot," or attaching a new preventer on top of it.
"They are actually going to take a bunch of debris -- some shredded up tires, golf balls and things like that -- and under very high pressure shoot it into the preventer itself and see if they can clog it up to stop the leak," Allen told CBS News. BP also is drilling a relief well to halt the leak but that could take three months.
Hundreds of boats deployed protective booms and used dispersants to break up the oil again on Sunday. Crews have laid more than 900,000 feet (270,000 metres) of boom and spread 290,000 gallons (1.1 million litres) of chemical dispersant.
Latest government forecasts show possible effects of the spill moving further west, toward Texas.
"With continued winds from the east, potential oil contacts could reach as far west as Point Au Fer Island by Wednesday," the National Oceanic and Atmospheric Administration said.
Sheen is about eight miles off the coast of Port Fourchon, with heavy oil still some 28 miles offshore, said Charlotte Randolph, president of Lafourche Parish. "We're keeping a very close watch, deploying boom and closing some beaches," she said.
Truckloads of sand are being delivered to Port Fourchon to fill large sandbags, which will be dropped by National Guard helicopters in five areas along the coast.
Chett Chiasson, executive director of the Greater Lafourche Port Commission, said access to the port is a major concern.
"If necessary, our current strategy is to place boom along Belle Pass in Bayou Lafourche to create a 'decontamination station' for ingress and egress through the port," he said.
In Alabama, BP-contracted workers in rubber boots and gloves laid down clusters of oil-absorbing synthetic fibers called pom-poms, erected storm fencing along the Dauphin Island beach and collected samples of the tar and water for testing.
Gary Bratt, owner of Chaise N' Rays Rentals, which rents recreational equipment on Dauphin Island, said the threat of the spill reaching shore was ruining his business. "Our business is off 70 percent at this point," with potential vacationers canceling "right and left," he said.
Gulf Coast politicians echoed the public's fears.
"If this gusher continues for several months, it's going to cover up the Gulf Coast and it's going to get down into the Loop Current and that's going to take it down into the Florida Keys and up the east coast of Florida," Florida Democratic Senator Bill Nelson told CNN.
"You're talking about massive economic loss to our tourism, our beaches, our fisheries, very possibly disruption of our military testing and training which is in the Gulf of Mexico."
Crews labored to cordon off the entrance to Alabama's Mobile Bay with a containment boom fence to try to safeguard America's ninth-largest seaport.
Ships arriving at Southwest Pass, the deepwater entrance to the Mississippi River and New Orleans will be inspected to determine if they need cleaning.
The spill's only major contact with the shoreline so far has been in the Chandeleur Islands off Louisiana, mostly a wildlife reserve. The next few days threatens wider contact.
Louisiana officials closed more waters to fishing and shrimp and oyster harvesting as the slick edged westward.
Shrimp harvesting is now banned from Freshwater Bayou on the central coast to Louisiana's border with Mississippi. Some oyster beds west of the Mississippi River also are shut.
Seafood is a $2.4 billion industry in Louisiana, which produces more than 30 percent of the seafood originating in the continental United States. (Additional reporting by Anna Driver in Houston; Tom Brown and Pascal Fletcher in Miami; Steve Gorman, Verna Gates and Kelli Dugan in Dauphin Island, Alabama; Eric Beech in Washington; Writing by John Whitesides and Ros Krasny; Editing by Chris Wilson)
* Sterling tumbles on PM May's shrinking election lead, UK GDP
TOKYO, May 26 St. Louis Federal Reserve President James Bullard said on Friday that he sees minimal impact on long-term bond yields from reductions in the Fed's balance sheet, which he hopes will start in the second half of this year.
TOKYO, May 26 St. Louis Federal Reserve President James Bullard said on Friday that the Bank of Japan must communicate carefully with markets if it decides to taper its purchases of Japanese government bonds.