* Loop Current may carry oil to Florida Keys, maybe Miami
* Worries of impact on multibillion-dollar Florida tourism
* Obama disappointed in setback to raise liability cap
* BP sees higher cleanup costs, shares slightly up
(Adds Obama, Florida lawmaker, Salazar quotes, details)
By Michael Haskins
KEY WEST, Fla., May 18 Fears that oil from a
massive Gulf of Mexico spill was drifting to U.S. shorelines
rose on Tuesday after tar balls were found in Florida, while BP
(BP.L) faced mounting pressure to stem its leaking well.
In a sign of the spill's widening environmental impact, the
United States nearly doubled a no-fishing zone in waters seen
affected by the oil gushing from the blown well, extending it
to 19 percent of U.S. waters in the Gulf. [ID:nN18155760]
But President Barack Obama, whose administration has taken
a tough line on BP and other companies sullied by the disaster,
saw his drive to increase corporate liability limits for those
responsible for oil spills, halted in Congress.
"I am disappointed that an effort to ensure that oil
companies pay fully for disasters they cause has stalled in the
United States Senate on a partisan basis," said the Democratic
president, who blamed Republicans for the impasse.
TAKE A LOOK on the spill [ID:nSPILL]
INSIDER TV: link.reuters.com/wuw64k
Breakingviews column [ID:nLDE64C1D1]
London-based BP, which has seen $30 billion wiped from its
market value, said it was capturing an estimated 2,000 barrels
per day (84,000 gallons/318,000 liters) after inserting a
siphon tube into the well, which began gushing after an April
20 oil rig explosion that killed 11 workers.
That was about 40 percent of the 5,000 barrels (210,000
gallons/795,000 liters) BP estimated was leaking each day. The
energy giant said it hoped to increase the amount of contained
oil, and its shares closed up about 1 percent on Tuesday.
But a new video of the well showed what appeared to be vast
amounts of oil continuing to spew into the ocean.
While officials have stressed the slick's limited impact on
prized Gulf beaches, fisheries and wildlife, the discovery of
tar balls on a Key West island resort late Monday stoked
concern that currents were greatly expanding the oil's reach.
Oil debris and tar balls have been reported in Louisiana,
Alabama and Mississippi, and miles of protective booms are
being used to defend the shore.
The appearance of new tar balls on a beach is often an
indication of an oil spill, the National Oceanic and
Atmospheric Administration (NOAA) says on its website.
Tests were being done to confirm whether the 20 new tar
balls -- they ranged from three to eight inches (7.6 -20 cm) in
diameter -- came from the BP spill, which threatens to eclipse
the 1989 Exxon Valdez spill off Alaska to become the worst
ecological disaster in U.S. history.
"We believe it is unlikely (the tar balls) are from the
Gulf oil spill, but we'll know for sure in a couple of days,"
Key West Mayor Craig Cates said. The Florida Keys are a major
hub for the state's $60 billion-a-year tourism industry.
U.S Representative Ileana Ros-Lehtinen, whose district
includes the Keys, said the tar balls, if confirmed as coming
from the spill, would mean that Florida had entered
"unchartered territory, with serious ramifications on our
environment and economy."
Florida Democrat Senator Bill Nelson released a forecast by
University of South Florida College of Marine Science experts
who said part of the oil slick may reach the Keys in five to
six days, and possibly Miami five days after that.
"While I always hope for the best, this is looking like
really out-of-control bad," Nelson said in a statement before
another round of congressional hearings on Tuesday that were to
grill senior officials and BP executives about the spill.
The company, which has offered to pay spill-related
damages, estimated the bill for the cleanup at $625 million,
$175 million higher than a few days ago. Analysts say costs
could reach into the billions.
Signaling further woes for the firm, Interior Secretary Ken
Salazar told a Senate panel the government was investigating
its Atlantis oil production platform in the Gulf, a day after a
consumer group asked a U.S. federal court to stop production.
Salazar also admitted that the Minerals Management Service
fell short in preventing the explosion and oil spill. "We have
to clean up that house," he said, referring to the federal
Many experts believe oil from the Gulf of Mexico spill may
have already been caught up in the powerful Loop Current
curling around the Florida Peninsula, which could take it into
the Keys and possibly up the East Coast.
NOAA chief Jane Lubchenco said it was likely that some oil
would be swept up in the current, if not so already. "When that
occurs, oil could reach the Florida Straits in eight to 10
days," she said.
A Coast Guard helicopter and NOAA experts planned to scour
the area for signs of additional pollution.
WAY OF LIFE
Key West, the southernmost tip of the popular Straits of
Florida island chain, is a famous beach, diving and fishing
resort which counted writer Ernest Hemingway among its fans.
Although residents there are used to storms and hurricanes,
the oil slick represents a different kind of threat.
"The county hasn't called for an evacuation of tourists as
they often do during a hurricane, but if the oil spill affects
our waters there won't be any visitors to evacuate. No one
knows where the tar balls are from, but they predict doom and
gloom," said resident Charlie Bauer.
BP Chief Executive Tony Hayward was quoted by Sky News as
saying he believed the ecological impact from the spill would
be light. "I think the environmental impact of this disaster is
likely to have been very, very modest," he said.
But with oil creeping into rich fishing grounds and oyster
beds along the Gulf Coast, and commercial and sports fishing
suspended across parts of the region, local residents are
worried for their way of life.
"They're not only taking our income, they're taking our
livelihood. They're taking the food straight out of our mouths,
because the food we eat come out of this bayou," said Cajun
fisherman Randy Arceneaux, 28, of Cocodrie, Louisiana.
Obama plans a presidential commission to probe the disaster
as the oil industry and its practices come under scrutiny.
Salazar told Congress the United States still needs
offshore oil drilling to meet its energy needs.
(Additional reporting by Matthew Bigg and Steve Gorman in
Louisiana, Anna Driver in Houston, Tom Brown and Jane Sutton in
Miami, Richard Cowan, Tom Doggett and Ayesha Rascoe in
Washington, and Sarah Young in London, Writing by Pascal
Fletcher and Jeff Mason; Editing by Ed Stoddard and Paul