BP finishes pumping cement in final stage of 'static kill'

BP has finished pumping cement into the blown-out Macondo well in the Gulf of Mexico as part of its efforts to permanently plug the source of the nation's worst oil spill, the company said Thursday.

Engineers started the cementing operation at 10:15 a.m. EDT and completed it at 3:15 EDT. It was the second step in the "static kill," in which heavy mud was first pumped into the well from the surface to stop it from leaking crude into the gulf.

BP said in a statement that the static kill procedure will "complement" a separate effort to plug the well through a relief well that is nearing completion in a technique known as the "bottom kill."

Earlier, the company announced that retired Coast Guard Adm. Thad W. Allen, the national incident commander for the disaster, had authorized the cementing operation, which was under consideration following the successful effort to pump mud into the well.

The development comes a day after the Macondo well became an apparently harmless hole in the seafloor, clogged with 13-pound-per-gallon gunk, and barely more of a threat to spew oil into the Gulf of Mexico than to start gushing lemonade.

On the 107th day of the Deepwater Horizon disaster, the well that tormented the nation had flatlined. Federal officials then green-lighted the cementing of the well, already jammed with mud, late Wednesday. Federal waters are reopening gradually to fishing. The oil slick, the once-horrific expanse of red-orange mousse and silver sheen, has largely disappeared, federal scientists said Wednesday, even though the amount of oil left is more than four times that dumped by the Exxon Valdez.

The Obama administration breathed a sigh of relief, holding a midday news conference featuring top officials who claimed credit for guiding BP in getting the well under control. Officials hastened to remind the public that Macondo won't be incontrovertibly dead until a relief well drills into it near its base and plugs it with cement. But even the cautious Allen, the official in charge of the federal response to the disaster, called the static kill a "fairly consequential" event and a "very significant step."

About three-quarters of the nearly 5 million barrels of oil that escaped Macondo has evaporated, dissolved or been dispersed by chemicals, skimmed by boats, burned, weathered and, most important, devoured by the Gulf of Mexico's permanent oil-eating microbial workforce, according to a study released Wednesday by the National Oceanic and Atmospheric Administration and Interior Department.

"Mother Nature is assisting here considerably," said NOAA administrator Jane Lubchenco.

This should terminate, once and for all, the more apocalyptic scenarios for the demise of the gulf and the spread of oil to Atlantic shores. There is no sign that the oil is going to ride the Loop Current onto the beaches of South Florida, the Outer Banks, Bermuda, Ireland and so on.

Just a month ago, the spill was an uncontrolled calamity: Macondo mocked the technological skills of the world's petroleum engineers, and oil was slathering birds and turtles and tar-balling hundreds of miles of coastline. The turning point came when BP put a new tight-fitting cap on the well July 12 and closed the valves three days later, cutting off the ugly geyser of oil that had become a dominant image of the summer.

Federal scientists have said that vigilance would be called for even after the static kill procedure worked, which, according to BP in a 2 a.m. announcement, it did. BP sent out a bulletin declaring success after spending eight hours pumping mud into the well from surface ships.

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Waste from BP oil spill cleanup has gulf residents near landfills concerned

GRAND ISLE, LA. -- The pile of soiled boom sitting more than four feet high and cooking under the summer sun at an abandoned shipyard here will be a part of the oil spill that endures.

As beach cleanup is scaled down, the fate of all the oily trash created and collected along the Gulf Coast is causing a raging debate that BP and federal officials are trying hard to curb.

"We're getting all kinds of complaints from people," said Burnell Tolbert, president of the NAACP branch in nearby Lafourche Parish, a staging area where more than 2,500 tons of waste has been deposited.

People want to know what is in those trash bags, where they will end up and if the workers handling the oily trash are safe, he said.

The answers are leaving important groups unsatisfied. One coastal county threatened to sue BP if it continues to put trash from the spill in a local landfill. Not wanting to get into a tussle with the residents, the company relented, diverting the trash to other landfills. Others are arguing that too much of the trash is going to low-income and minority communities.

The oil from BP's rig explosion in April has already created more than 45,000 tons of garbage -- the solid oil and all the materials used to gather it -- and much more oily liquid waste. The trash is being shipped every day to nine landfills that store household garbage and non-hazardous industrial waste in communities across Louisiana, Alabama, Mississippi and Florida.

The Coast Guard, the Environmental Protection Agency and BP are "working hand in hand" to manage all that trash -- and are reaching out to community groups to try to allay fears that chemicals from the oil-soaked material could seep into the groundwater drinking supply, said BP spokesman Scott Dean.

The federal government issued a 34-page plan directing BP to recycle and reuse as much trash as it can and to post information about the trash it is collecting online. (So far about 50 tons of trash has been recycled, according to BP.) The government also has asked the company to start holding meetings with the communities around the landfills.

Still, contractors working for BP bag tons of trash daily. From Grand Isle alone, anywhere between eight and 16 dump trucks a day carry trash to landfills throughout Louisiana. The oily water is processed for refining.

From the isle, waste is trucked to places such as Venice, La. -- a small strip of land surrounded by bayous in the southernmost reaches of the state. The big landfill there -- with its rolling hills of decaying metal and household trash -- has already received 2,800 tons of oily waste, according to BP.

'A slap in the face'

Kindra Arnesen, who lives about four miles from the landfill, sent her children to live 200 miles inland because she's worried about all that the oil spill has left in its wake.

"I grew up being told not to even throw a Coke bottle in the bayou," she said. "Now look. What are we leaving for our children?"

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BP names Dudley as CEO, announces $17 billion loss

BP gave investors a glimpse of its future Tuesday, one that will feature a new American chief executive, slimmed-down operations, and $32.2 billion or more in payments to clean up and compensate people affected by the massive oil spill in the Gulf of Mexico.

In announcing its second-quarter earnings, the London-based oil giant tried to walk a line between reassuring bankers and investors about its vast assets and financial strength, and avoiding the appearance of being a rich, powerful company insensitive to the plight of the Gulf Coast.

"We have much to do to make it right," BP Chairman Carl-Henric Svanberg said in a conference call with investment analysts Tuesday, referring to the spill. But he added that BP's directors are also "determined to restore value to our shareholders."

In mapping out plans to pay for damage and cleanup, BP said it will sell $25 billion to $30 billion in assets over 18 months, shedding about 10 percent of its oil and natural gas output. That should enable it to shrink its outstanding debt and reinstate dividends next year for shareholders while still covering payments to the massive escrow fund for spill damage claims.

"It's still going to be the second-largest oil and gas producer among international oil companies," said Fadel Gheit, oil analyst with Oppenheimer & Co. "Smaller than Exxon Mobil but bigger than Royal Dutch Shell."

In a sign of how difficult it will be for BP to turn the page on the crisis, however, Rep. Edward J. Markey (D-Mass.) lashed out Tuesday at the company for concealing its estimates of the rate at which oil had flowed into the gulf. Markey released a letter from BP Chief Operating Officer Douglas Suttles to the Coast Guard in early July in which Suttles estimated that oil was pouring forth at a rate of 53,000 barrels (2.23 million gallons) a day.

The BP briefing for investment analysts was a somber one, as Svanberg announced that the board had picked Robert Dudley, a BP managing director and former Amoco executive, to replace chief executive Tony Hayward, a British geologist who had spent his entire career with BP. Dudley, 54, who grew up in Mississippi and spent summers boating with his family in the Gulf of Mexico, will become the first foreigner to lead the century-old company.

"Today is a very sad day for me," Hayward said. "I love the company and everything it stands for." He said, however, he realized that for BP "to move forward, particularly in the United States, it should do so under new leadership."

Hayward's compensation package includes a pension valued at about $17 million and a severance of $1.6 million, or a year's salary.

Without costs from the spill, the company would have declared a profit of $5.6 billion for the second quarter. Spill charges turned that into a $17.2 billion loss.

The appointment of Dudley, who will take charge Oct. 1, comes at a turning point in the calamity. After gushing for three months, the damaged oil well in the Gulf of Mexico has been capped for the past 12 days. Kenneth Feinberg, the master for the $20 billion escrow fund, is taking over the task of scrutinizing and processing claims and proposing settlements.

Still, Dudley's task will be immense. Congress is set to raise liability limits for oil spills and to impose tougher regulations on offshore drilling. Some lawmakers want to prevent BP, the largest producer of oil and gas in the United States, from acquiring new federal leases. The Justice Department is investigating criminal charges against the company, which could complicate its ability to do business with the federal government or bid for leases.

Asked how BP would be viewed in five years, Dudley said in "a perfect world" people would realize that "BP met its commitments to restore the Gulf Coast and as a result of that BP has restored its reputation" and it would be allowed to grow its U.S. business. He said, "Five years from now, I hope that people look back and say that was a quite incredible response to a quite tragic accident."

Although BP's provision for claims and cleanup is unprecedented in size, some analysts questioned whether it is big enough. If found to be "grossly negligent" in the way it was drilling the Macondo well that exploded on April 20, BP could wind up paying an additional $12 billion in fines alone and nearly twice as much overall, said Gheit of Oppenheimer.

BP's chief financial officer, Byron Grote, said that in calculating the size of anticipated federal fines under the Clean Water Act, BP assumed that it was not guilty of negligence. By doing so, it pegged its fines at $1,100 per barrel spilled. If found negligent, BP would have to pay $4,300 a barrel. It would also have to pay 100 percent of the fines, while Anadarko Petroleum and Mitsui, its partners in the lease, would not have to share the cost of the penalties.

Critics in Congress decried the company's failure to say precisely how much oil it thinks has spilled into the gulf. Hayward said only that BP had used a number around the middle of published estimates, which most recently have been 35,000 to 60,000 barrels a day.

In addition, BP's financial statement reflected an offsetting tax benefit from lower earnings. Because the reserve for claims is deducted from profit, BP will not pay $9.9 billion in taxes that it would have otherwise owed.

Bracing for unknown costs, BP also said that it would shrink its outstanding debt to $10 billion to $15 billion, from its current $23.2 billion.

Dudley assumed his new title with modesty. He said he has the "greatest respect" for Hayward.

"I did not seek out this job," he said in a conference call with journalists. "I was asked to step into these shoes."

But in Washington, some people were ready to bid good riddance to Hayward, who had aggravated public anger by saying he wanted his "life back" and by going sailing on his yacht on his return to England after weeks on the gulf coast and in Washington.

"While it's now happy sailing for Tony Hayward, rough conditions will persist in the Gulf of Mexico for years to come because of his failed leadership," Markey said. "The new leaders of BP will have an uphill climb to correct the legacy left by Hayward, indelibly inked by the disaster in the gulf."

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