* Salazar: weeks before relief well reaches gushing pipe
* US administration working on new deep-water moratorium
* Senate panel moves to remove oil spill liability cap
* BP shares up about 4 pct in New York; 3rd day of gains
* Hurricane Alex makes landfall in northeastern Mexico
(Adds hurricane making landfall, paragraph 8)
By Kristen Hays and Tom Doggett
HOUSTON/WASHINGTON, June 30 Waves and wind
spawned by Hurricane Alex disrupted cleanup of the Gulf of
Mexico oil spill on Wednesday while a senior U.S. official said
a relief well intended to plug BP Plc's (BP.L) (BP.N) gushing
deep-sea well remained weeks from completion.
In Washington, lawmakers took a step toward making oil
companies face unlimited liabilities from offshore spills like
the one sullying the U.S. Gulf Coast.
The relief well, one of two being drilled, will still take
several weeks to reach the spewing oil pipe, Interior Secretary
Ken Salazar told U.S. lawmakers. The relief wells are intended
to intersect and then plug the ruptured deep-sea well.
The Interior Department, focused on the BP spill, announced
it was postponing until later this year planned public hearings
on President Barack Obama's proposal -- announced before the BP
spill began on April 20 -- to expand offshore oil drilling.
Rough weather associated with Alex, 2010's first Atlantic
hurricane, threatened to push more oil-polluted water onto U.S.
shores and delayed BP's plans to boost oil containment capacity
at its leaking well.
BP has been siphoning some oil from the spewing well but an
unknown amount continues to spurt into the sea.
Alex strengthened into a Category 2 hurricane on Wednesday,
with maximum sustained winds near 105 miles (169 km) per hour.
The hurricane made landfall late on Wednesday on the coast
of Tamaulipas state in northeastern Mexico, about 100 miles
(160 km) south of Brownsville, Texas, the U.S. National
Hurricane Center said. [ID:nN30192989]
For full spill coverage link.reuters.com/hed87k
Special Report: Oil spill gushes for lawyers[ID:nN29258627]
Insider TV link.reuters.com/ned73m
The weather conditions forced the halting of skimming,
spraying of dispersant chemicals and controlled burns of oil on
the ocean surface, the Coast Guard said.
Some 50 miles (80 km) off Louisiana's coast, British energy
giant BP kept oil-capture and relief well drilling operations
going at the leak site. Oil collection volumes were lower on
Wednesday as the storm raged, BP said.
Salazar's timetable regarding the relief well was in line
with BP's own statements, but there had been speculation
earlier this week that the relief well link could be
Thad Allen, the U.S. government's point man on the spill
response, said one of the relief wells was within 16 feet (4.9
metres) of the side of the blown-out well. Allen retired as a
U.S. Coast Guard admiral on Wednesday.
The oil spill disaster, in its 72nd day, is causing
economic and environmental havoc along the Gulf Coast, hurting
tourism, fishing and other industries, harming wildlife, and
leaving the future of BP far from clear.
NEW MORATORIUM PLANNED
Salazar said he is working hard to finalize a new
moratorium on deep-water offshore drilling that would affect
exploratory wells at 500 feet (152 metres) or deeper after a
federal court blocked the Obama administration's previously
announced six-month ban. Salazar would not say when the new
moratorium would be issued.
The administration wants the moratorium in order to give a
presidential commission enough time to investigate the cause of
the rig explosion that led to this disaster and see what new
safety regulations may be needed to prevent future oil spills.
The U.S. Senate Environment and Public Works Committee
voted on Wednesday to eliminate limits on liability that oil
companies would face for oil spill damages. The measure now
goes before the full Senate. It also would need to win passage
in the House of Representatives before becoming law.
Oil companies currently have a $75 million cap for
compensating local communities for economic losses and cleaning
up environmental damage. The change, if approved and enacted
into law, would apply retroactively to BP.
The Gulf of Mexico holds the most promising untapped crude
oil reserves in the United States, and a string of major
discoveries over the past decade by companies including BP have
rejuvenated investment in deeper and more difficult waters.
BP's market capitalization has shrunk by about $100 billion
since the drilling rig exploded.
BP shares have lost more than half their value since the
spill but show signs of stabilizing. The shares rose for a
third straight day in New York trading on Wednesday, rallying
4 percent following sharp gains in London.
"The stock prices had really discounted a very negative
scenario. ... The reality is not as bad as what the market has
priced in," said Eric Marshall, director of research at Hodges
Capital Management in Dallas.
BP has said it will cover all costs of its Gulf oil spill.
It has agreed to establish a $20 billion fund, but claims are
expected to easily eclipse that sum. [ID:nWBT014025]
A steady flow of tar balls, sticky brown patches of oil and
black sludge have been making landfall on major tourist
beaches, inland marsh areas and fishing inlets along the coast
Small armies of cleanup crews contracted by BP were forced
to temporarily pack up their gear due to the weather, taking
precious time away from cleaning the oil off tourist beaches in
Mississippi. "We are getting out of the storm right now but we
will be back," said Bill Sigler, working to clean up the oil.
The Deepwater Horizon drilling rig sank in 5,000 feet
(1,525 metres) of water after an April 20 explosion and fire
killed 11 workers, touching off the worst oil spill in U.S.
The new head of the U.S. agency overseeing offshore
drilling told lawmakers a record of "bad performance, deadly
performance" by an oil company should be considered relevant
when the government decides on drilling lease awards.
"It is simply unacceptable for companies to repeatedly
misreport production, particularly when it interferes with the
auditing process," said Michael Bromwich, who heads the
Interior Department's Bureau of Ocean Energy Management,
Regulation and Enforcement. [ID:nN30360458]
Environmental groups sued BP in federal court in New
Orleans on Wednesday, seeking to halt controlled burning of
spilled oil on the surface of the Gulf that has taken place
regularly since late April. Endangered sea turtles are being
burned alive, they said, accusing BP of violating the U.S.
Endangered Species Act. [ID:nN30248285]
(Additional reporting by Steve Gorman in Los Angeles,
Ernest Scheyder in Buras, Louisiana; Richard Cowan in
Washington; Chuck Mikolajczak in New York; Writing by Ros
Krasny; Editing by Will Dunham)