Storm threat to U.S. oil spill efforts; US, UK discuss BP

GRANDE ISLE, Louisiana (Reuters) - The first named storm of the Atlantic hurricane season was on track on Saturday to reach the Gulf of Mexico within days, a potential threat to containment and cleanup of the worst ever U.S. oil spill.

For now, Tropical Storm Alex is not expected to pass close to BP Plc.’s blown-out well off the Louisiana coast, but the storm’s path is being watched closely.

The Gulf disaster, now into its 68th day, and its impact on London-based energy giant BP, was on the agenda on Saturday when President Barack Obama and new British Prime Minister David Cameron held their first face-to-face meeting.

Shares of BP, a staple holding of many U.K. pension funds, have been savaged since the oil leak started and fell 6 percent to a 14-year low on Friday. The company has lost some $100 billion from its market value since the oil started spilling.

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.

Obama and Cameron “agreed that there was nothing to be gained from damaging BP as a going concern,” a UK official said after the leaders met at the G8/G20 summit in Canada.

The pair agreed BP must meet its obligations to cap the leak, clean up the damage and meet legitimate compensation costs, the official said.

The potential for a major storm has been a worry 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.

That threat has become a reality as Alex gathers steam off in the western Caribbean, off Mexico’s Yucatan Peninsula.

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U.S. Coast Guard Admiral Thad Allen said BP would be forced to suspend oil containment efforts if a storm with gale-force winds were expected within five days at the leak site.

For now, Alex does not pose such a risk, said Allen, who is coordinating the U.S. oil spill response.

“We understand it’s moving westerly at this time and does not threaten the site,” said Allen, adding however, “we all know that the weather is unpredictable.”

Separately, Shell Oil Co said it would evacuate 300 non-essential workers from its Gulf of Mexico platforms and rigs as a precaution.

BP said it recovered about 24,550 barrels from the leaking well a mile under the ocean’s surface on Friday.

Current official estimates suggest the leak is between 35,000 to 60,000 barrels a day. New equipment being moved to the site of the leak could raise the daily collection rate to 53,000 barrels a day, Allen said.

U.S. Energy Secretary Steven Chu and U.S. Interior Secretary Kenneth Salazar are scheduled to review plans on Wednesday for a new containment system that could boost collection to 80,000 barrels per day.

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Even if it poses no direct threat to containment efforts, Tropical Storm Alex could complicate cleanup along hundreds of miles of coastline from Louisiana to Florida.

Late on Saturday afternoon, Alex had sustained winds of 65 miles per hour (104 km per hour) and was about 30 miles east-southeast of Belize City, Belize.

Most hurricanes span a huge area, and heavy, sustained winds could push the oil slick toward fragile coastlines with more ferocity than has been seen so far.

The National Atmospheric and Oceanic Administration said that because a hurricane’s winds rotate counterclockwise, a storm passing to the west of the oil slick could drive oil toward the coast.

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In Grand Isle, Louisiana, a tiny village jutting out into the Gulf of Mexico and a haven for commercial and recreational fishing, residents anxiously awaited updates on the storm.

“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.”

The Atlantic hurricane season runs from June 1 to November 30. Meteorologists predict 2010 will be an active year for storms, in part because of warmer than normal sea surface temperatures in the tropical Atlantic.

“God forbid if we have another (Hurricane) Katrina, we’ll be picking oil off Bourbon Street” in New Orleans, Plaquemines Parish President Billy Nungesser said during a tour of Louisiana’s Barataria Bay off Grande Terre Island.

The island is circled by both soft and hard containment booms designed to keep the oil slick offshore.

In a positive sign of life for the region, two dolphins swam nearby, playfully following boats.

But the U.S. Fish and Wildlife Service reports a growing toll of birds, sea turtles and marine mammals, mostly dolphins, found dead or debilitated along the Gulf Coast.

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


The Obama administration on Friday asked a U.S. appeals court to stay a ruling from a federal judge that overturned a six-month ban on new deepwater drilling in the Gulf.

On Saturday, the state of Louisiana filed a brief with the U.S. Appeals Court for the Fifth Circuit opposing the administration’s request.

Each day the ban is in place, “millions of dollars of income are lost to the citizens of Louisiana, and by the state,” the brief said. The oil and gas industry is worth some $3 billion a year to Louisiana’s economy.

The disaster is taking a mounting toll on fishing, tourism and the environment. About one-third of U.S. federal waters in the Gulf of Mexico remain closed to fishing.

Crews on Grande Isle on Saturday scraped oil off the beach with tractors and shovels. A wall of rocks 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 Erwin Seba in Houston, Sumeet Desai in Toronto, Jose Cortazar in Cancun, Cyntia Barrera Diaz in Mexico City, Steve Gorman in Los Angeles and Jeremy Pelofsky in Washington; Writing by Ros Krasny; editing by Todd Eastham