E2 Round-up: BP altered well plan prior to accident, White House downplays permit review flexibility, BP’s market value plummets, and oil creates undersea ‘disaster’

“The unusual rapid-fire requests to modify permits reveal that BP was tweaking a crucial aspect of the well's design up until its final days.”

“One of the design decisions outlined in the revised permits, drilling experts say, may have left the well more vulnerable to the blowout that occurred April 20, killing 11 workers and leaving crude oil gushing into the Gulf of Mexico.”

“The Minerals Management Service approved all the changes quickly, in one instance within five minutes of submission.”

Federal drilling regulators have downplayed their flexibility to extend permit reviews

The White House has recently called on Congress to extend what’s now a 30-day deadline for regulators to review oil companies’ exploration plans. The administration wants at least 90 days, with the ability to extend environmental reviews further.

But the Washington Post reports that a 2008 federal appellate court ruling “suggests they have far more discretion to extend the deadline for drilling decisions than they've suggested.”

The level of existing discretion led one activist to allege the administration has downplayed the scope of its authority to carefully scrutinize oil companies.

"There's no legal reason whatsoever to exempt oil drilling from environmental review," said Kieran Suckling, executive director of the Center for Biological Diversity, in the Post account. "The Department of Interior has been murky and misleading at every stage of its description of the environmental review and moratorium process since this explosion."

BP’s market value dropping sharply due to the spill

“Fears oil may continue spewing into the Gulf of Mexico for another two months into the hurricane season wiped $23 billion (15.8 billion pounds) off BP's (BP.L) market value on Tuesday and sent the cost of protecting its debt soaring,” Reuters reports.

“Once Britain's biggest company and one of the largest oil firms in the world, BP's debt is AA rated -- close to the highest rating given to non-sovereign bonds. However, traders of debt derivatives pushed the perceived risk of default out to a level similar to that of a much smaller oil company, such as Spain's Repsol (REP.MC), or one of Europe's weakened banks,” their story adds.

“Analysts also cited rising takeover speculation, although they said reputational damage and the unknown financial cost of the spill would deter suitors for the moment.”

Fears of major damage to undersea ecosystems mounting

“Independent scientists and government officials say there's a disaster we can't see in the Gulf of Mexico's mysterious depths, the ruin of a world inhabited by enormous sperm whales and tiny, invisible plankton,” the Associated Press reports.

“Researchers have said they have found at least two massive underwater plumes of what appears to be oil, each hundreds of feet deep and stretching for miles. Yet the chief executive of BP PLC — which has for weeks downplayed everything from the amount of oil spewing into the Gulf to the environmental impact — said there is 'no evidence' that huge amounts of oil are suspended undersea,” their story adds.

“BP CEO Tony Hayward said the oil naturally gravitates to the surface — and any oil below was just making its way up. However, researchers say the disaster in waters where light doesn't shine through could ripple across the food chain.”