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Federal government launches civil, criminal investigations into BP Gulf oil spill

Tuesday, June 1, 2010 | 3:31 p.m. CDT; updated 12:59 p.m. CDT, Thursday, June 10, 2010

PORT FOURCHON, La. — Attorney General Eric Holder said Tuesday that federal authorities have opened criminal and civil investigations into the nation's worst oil spill, and BP lost billions in market value when shares dropped in the first trading day since the company failed yet again to plug the gusher.

Investors presumably realized the best chance to stop the leak was months away and there was no end in sight to the cleanup. As BP settled in for the long-term, Holder announced the criminal probe, though he would not specify the companies or individuals that might be targeted.

"We will closely examine the actions of those involved in the spill. If we find evidence of illegal behavior, we will be extremely forceful in our response," Holder said in New Orleans.

With the ambitious "top kill" abandoned over the weekend, BP's hope to stanch the leak lies with two relief wells that won't be finished until at least August. The company is, however, trying another risky temporary fix to contain the oil and siphon it to the surface by sawing through the leaking pipe and putting a cap over the spill.

Eric Smith, an associate director of the Tulane Energy Institute, said the strategy had about a 50 to 70 percent chance to succeed. He likened it to trying to place a tiny cap on a fire hydrant.

"Will they have enough weight to overcome the force of the flow?" he said. "It could create a lot of turbulence, but I do think they'll have enough weight."

BP Chief Operating Officer Doug Suttles said there was no guarantee the cut-and-cap effort would work. He did say the company has learned from past efforts to contain the leak, which gives it a better shot at success.

"I'm very hopeful," Suttles said. "I think we'll find out over the next couple of days."

The cleanup, relief wells and temporary fixes were being watched closely by President Barack Obama's administration.

The president gave the leaders of an independent commission investigating the spill orders to thoroughly examine the disaster and its causes and to follow the facts wherever they lead, without fear or favor.

The president said that if laws are insufficient, they'll be changed. He said that if government oversight wasn't tough enough, that will change, too.

Meanwhile, BP spokesman Graham MacEwen said the company was awaiting analysis of water samples taken in the Gulf before making a final determination on whether huge plumes of oil are suspended underwater. CEO Tony Hayward said Sunday there was "no evidence" of the plumes even though several scientists have made the claims.

Billy Nungesser, president of Plaquemines Parish, fired back at Hayward.

"We ought to take him offshore and dunk him 10 feet underwater and pull him up and ask him 'What's that all over your face?'" said Nungesser.

On the business side of things, the company's share price, which has fallen steadily since the start of the disaster, took a turn for the worse Tuesday, losing 15 percent to $6.13 in early afternoon trading on the London Stock Exchange.

That was the lowest level in more than a year. The shares have now lost more than a third of their value, wiping some $63 billion off BP's value, since the explosion at the Deepwater Horizon oil rig six weeks ago.

BP said early Tuesday it had spent $990 million so far on fighting and cleaning the spill, with multiple lawsuits for damages yet to be tallied.

The Coast Guard also announced that it was replacing the admiral who has been the federal on-scene coordinator since the oil rig exploded, though the agency said the change was previously planned. Rear Adm. Mary Landry will now return to duties as commandant of the 8th Coast Guard District in New Orleans to focus on hurricane season preparations.

BP failed to plug the leak Saturday after several attempts with its top kill, which shot mud and pieces of rubber into the well but couldn't beat back the pressure of the oil.

The spill has already leaked between 20 million and 44 million gallons, according to government estimates.

The National Oceanographic and Atmospheric Administration also announced that almost one-third of federal waters — or nearly 76,000 square miles — in the Gulf were closing to commercial and recreational fishing because of the spill.

 

 


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