E2 Round-up: BP struggles with containment options, federal regulators under scrutiny, and Gulf industries brace for big losses


“On Monday, lawyers representing environmental groups, workers from the oil rig and fishermen who have been hurt by the leak leveled fresh accusations against BP, as well as Transocean and Halliburton. BP leased the rig from Transocean. Halliburton was providing several services on the rig, including cementing, which is a method of sealing the well to control pressure from the oil and gas beneath,” their piece adds.

* Interior Department regulators are under scrutiny too

The Wall Street Journal checks in on new questions about the adequacy of regulations imposed by Interior’s Minerals Management Service, which oversees offshore drilling.

The piece follows up on the Journal’s coverage of the apparent absence of requirements that rigs have remote-controlled systems to activate emergency well-capping devices that fail to properly deploy.

“The Journal's article revealed that the Deepwater Horizon oil rig, which caught fire and sank into the Gulf in April, didn't have a remote-control shut-off switch used in two other major oil-producing nations as a last-resort protection against underwater spills,” the paper reports.

“White House Chief of Staff Rahm Emanuel said he brought concerns over the failure of BP to use a remote-control shut-off switch to President Obama, showing him the newspaper's coverage. That suggests one of the administration's focuses is on regulatory lapses and potential technological fixes that would allow drilling expansion to move forward.”

* The fishing and tourism industries face massive losses

The oil is threatening to damage very sensitive ecosystems and species along the Gulf Coast.

The Washington Post on Tuesday notes that there are huge financial stakes for Gulf industries too.

“The economic implications of the disaster are potentially mammoth -- but highly uncertain. The annual commercial seafood harvest in the gulf is $661 million, recreational fishing contributes $757 million and nearly 8,000 jobs, and tourism related to wildlife adds $517 million, according to the Harte Research Institute for Gulf of Mexico Studies,” the Post reports.

“It remained unclear Monday how much damage those industries will incur from the oil spill, and how long that damage will last. The research group estimates that $1.6 billion in annual economic activity is tied to the wetlands directly exposed to the spill.”

The overall economic implications are even greater. The story later adds:

“But some analysts see the potential for even more dire outcomes. David R. Kotok, chief investment officer of Cumberland Advisors, laid out scenarios in a note to clients that range from damages in the tens of billions of dollars and years of cleanup to a cost in the hundreds of billions of dollars that leaves the gulf as a ‘damaged sea’ for a generation.”

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