Oil spill panel calls for tighter federal rules, new fees for drilling

The presidential oil spill commission said Tuesday that the federal government should require tougher regulation, stiffer fines and a new industry-run safety organization, recommendations that face an uncertain future in the new Congress.

Former senator Bob Graham (D-Fla.), one of the commission's co-chairmen, said that the Deepwater Horizon accident was "both foreseeable and preventable," and that Congress and the administration needed to enact reforms in order to prevent a repeat of the massive BP oil spill in the Gulf of Mexico last year.

"I am sad to say that part of the answer is the fact that our government helped let it happen," Graham said. "Our regulators were consistently outmatched."

The panel proposed several safeguards aimed at strengthening regulators' control over the oil and gas industry, including establishing an independent safety agency within the Interior Department that would be headed by someone for a fixed term in order to insulate the appointee from political interference. Graham said such a person should have "a background of both science and management."

It also called for funding the regulatory agency that oversees offshore drilling, the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE), with fees from the companies who are tapping into the nation's petroleum resource.

William K. Reilly, the commission's other co-chairman, emphasized that it would be a mistake to focus just on the three companies involved in last year's accident. "The solution to the problem has to be industry-wide."

Graham, who along with Reilly will testify before both the Senate Committee on Energy and Natural Resources and the House Natural Resources Committee on Jan. 26, said he hoped the "searing impact" of the Deepwater Horizon explosion and its aftermath would "override an ideological preference for less government, less government intrusion and less government cost" that could impede legislative action.

Both Louisiana Sens. Mary Landrieu (D) and David Vitter (R) endorsed the panel's recommendation that 80 percent of the Clean Water Act fines and penalties linked to the Gulf of Mexico oil spill go to environmental restoration. Landrieu said it would give "added ammunition" to a proposal that already has White House support.

But in a sign of how the two parties remain divided on how to regulate drilling, Landrieu said the report found a path forward for deepwater drilling while Vitter criticized it for failing to do so.

"The report could have easily said 'end of deepwater drilling,' but it doesn't," Landrieu told reporters in a conference call. "I think that's the really big takeaway - that this commission, having examined a horrible incident that occurred, has basically concluded that deepwater can be done safely."

In an interview, Vitter said he was concerned the report "didn't make any statement, any observation about the gulf still almost being shut down, nine months after the fact."

He added that although he was open to creating a new safety office within Interior, and didn't object outright to the idea of imposing fees to help regulate offshore energy exploration, he lacked confidence in the administration's ability to oversee drilling operations.

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International Energy Agency says Libyan oil exports halted, production down to a 'trickle'

CAIRO - Libya's oil exports have "ground to a halt" because of the fighting between rebels and pro-government forces, and it could be months before the country's crude resurfaces on world markets, the International Energy Agency said Tuesday.

The Paris-based group, whose members are mainly oil-consuming industrial nations such as the United States, also said that production from the North African nation appeared to have "slowed to a trickle" as the fighting and mounting unrest prompted an exodus of foreign oil workers and led international companies to halt their operations in the country.

The IEA said that while the rebellion against Libyan leader Moammar Gadhafi continues, "what is becoming clearer is the country's oil production and exports could be off the market for many months due to both war-inflicted damage on oil infrastructure and international sanctions."

The fighting in Libya, which has served as the stage for the most violent of the anti-regime protests sweeping the Middle East, drove oil prices as high as almost $107 per barrel last week on the New York Mercantile Exchange before they quickly cooled after the massive earthquake that ravaged Japan. The U.S. benchmark crude futures contract was around $99 per barrel in electronic trading on the Merc on Tuesday.

The assessment, presented in the IEA's latest month oil market report, reaffirms the belief of many in the market that Libya's vital oil industry was all-but-shuttered amid the fighting. The country sits atop Africa's largest proven reserves of conventional crude, and had produced about 1.6 million barrels per day. Most of its exports went to Europe.

At least three of the major ports in the east are no longer exporting, and an official with the Arabian Gulf Oil Co. in the east said Monday that they were not expecting another tanker until mid-April from the terminal in Tobruk, near the Egyptian border.

Other ports have been shut down, with the Ras Lanouf facility suffering a fire at a kerosene storage facility. Even if they are open, tankers have steered clear because of the shelling by pro-Gadhafi forces.

Similarly, analysts believe that what little production remains is likely to have been shut in, or will be shut down, given that the net outcome of shipping oil through pipelines during a military campaign could easily be a major explosion.

Gadhafi's forces have been pushing to recapture the eastern ports, which represent at least 65 percent of the country's export capacity. The country's oil minister has said output is down by about two-thirds of its normal level, but the fighting, communication cuts and other challenges have made it impossible to independently verify the figures put forward both by the government or the rebels.

Many analysts believe that they may try to restart the fields with what limited oil labor force available to the state-run National Oil Co., but that such a step would be essentially irrelevant given that there appear to be few willing buyers of Libyan oil because of the mounting international sanctions on the country.

"While approximately half the country's output was halted in the first few weeks of the rebellion, by 11 March it appeared that production had slowed to a trickle, not least because of the fighting," the IEA said. "Indeed, it is understood that most oil field operations have been shut-in or sharply curtailed, with transport routes choked off."

Other members of the 12-nation Organization of the Petroleum Exporting Countries - most notably Saudi Arabia - have ramped up production to offset the loss of Libyan oil. Several minister have said there are informal discussions about whether there was a need to meet ahead of their June gathering to determine whether their output quotas needed to be revised to cool surging prices.

The IEA said OPEC crude oil output was down slightly less than 100,000 barrels per day in February, with increases from other members of the producer bloc largely offsetting the drop in Libya's production.

Copyright 2011 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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Increase in oil revenue amid unrest in Arab world gives Russia some breathing room

MOSCOW - With the price of oil climbing to more than $100 a barrel, Russia has a little more weight to throw around on the world stage, and it is doing just that.

The stepped-up flow of petrodollars into the government's coffers relieves what had been a worrisome budget deficit and lessens the urgency of reform. Good relations with the West - and especially the "reset" with Washington - are not quite so pressing when the economy here is in good shape.

Russia is benefiting tangibly from the turmoil in the Middle East and North Africa. Urals crude sold for $113 this week, up from $75 a year ago. Of that, $76.50 goes into the Russian treasury. And the spike in oil income has compensated for growing weakness elsewhere. It arrived just as Gazprom - the natural-gas giant that until recently was a potent weapon in Russia's foreign policy - has seen its clout in Europe washing away amid a flood of competition.

An emboldened Prime Minister Vladimir Putin was in Brussels in late February angrily lecturing the Europeans on energy policy and the uprisings in the Arab world. After months in which Moscow and Washington have tried to put their differences over Georgia on a back burner, President Dmitry Medvedev two weeks ago accused the country of threatening the security of the 2014 Winter Olympics, to be held in Sochi, near the border of a breakaway region of Georgia.

Earlier this year, Russia's warming relations with Poland went sour over the handling of the investigation into the plane crash that killed Poland's president and other top leaders this past spring.

But with increased oil revenue also comes the danger of complacency. Bureaucrats, defense contractors, pensioners and workers in construction and finance all stand to gain from the money coming in, along with the oil companies. But the cash also feeds corruption, encourages increased financial opacity and discourages attempts to shake up the system - all of which could spell trouble for Russia down the road.

"All of the dominant groups in Russia get a share of the increased oil revenue," said Alexander Auzan, an economist and adviser to Medvedev. "Yet it contradicts their long-term interests."

Largest oil producer

It's a powerful prop for the status quo - which Auzan and others say is unsustainable.

But as Sergei Guriev, head of the New Economic School in Moscow, pointed out, any change is going to involve a cost for someone, so why take the risk if the money is flowing in?

Russia is currently the world's largest oil producer. When the price last spiked, in 2007, Moscow was flooded with money and people close to Putin were suggesting that Russia was genuinely self-sufficient and had no need to engage more deeply with the West. The economic crisis the following year brought that talk to an abrupt end, and Medvedev began pushing for a Western-oriented program of modernization and diversification away from dependence on energy exports.

The Kremlin moved to stimulate the economy in 2008 by increasing government salaries and hiking pensions by 35 percent. Now it is stuck with those increases. With oil revenue providing 40 percent of the Russian budget, the Gaidar Institute for Economic Policy here has calculated that at any price less than $105 a barrel the government will be in the red.

That tempers any inclination toward hubris, said Daniel Treisman, a political scientist at UCLA who follows Russian developments. The Kremlin was looking at a difficult financial crunch, with parliamentary elections coming late this year and a presidential election next March, so the timing of this rise in revenue is more a relief than a goad to aggressive behavior.

"We don't need high prices," said Leonid Grigoriev, an economist and former World Bank adviser. "We need good relations, a long-term market and reasonable prices," which he put in the $70-to-$90 range.

Russia will not turn its back on the West, by any means, he said. But, especially in an election year, its leaders may be more vocal in pointing up differences with the West. In 2010, Russia had enough problems at home that it was actively trying to avoid them abroad; now, with money to address domestic issues, that caution may not be so evident.

Treisman, like many others, did not think much would ever come of Medvedev's modernization plans - it's not the sort of change, he said, that can be ordered from the top down. But the oil bulge makes the Westernization of the Russian economy less likely. It helps big companies - which, Grigoriev said, already dominate the economy to a much greater extent than in other developed countries - and it hurts small ones, where jobs and creativity tend to be nurtured.

Information technology firms, with high labor costs, will suffer, Guriev said, and they are central to Medvedev's vision for the future of Russia.

Gazprom loses clout

Part of what got Putin so riled up in Brussels was Europe's treatment of Gazprom, a gigantic state-owned operation that at one time had unchallenged sway in the European energy market. Gazprom was a powerful tool in the Kremlin's hands, useful when threatening Ukraine and a reminder to the rest of Europe that Russia had to be given its due.

But that was before American companies began extracting cheap natural gas from shale deposits, and before developments in liquefied natural gas (LNG) technology made inexpensive transportation by ship possible.

Qatar set up a new LNG port to ship gas to the United States, but when it couldn't compete there it turned to Europe instead. Today, Europe can buy gas cheaper from Qatar than it can get by pipeline from Russia. European companies have been renegotiating their contracts with Gazprom - downward - and the European Union has insisted that Gazprom divest itself of its pipelines.

Russia will still sell gas to Europe, said Pierre Noel, an energy expert at England's University of Cambridge, "but the pricing regime is changing." Gazprom, he said, will eventually have to change with it.

But the turmoil in North Africa has temporarily masked even Gazprom's difficulties. When the Libyan gas pipeline across the Mediterranean was shut down, Italy, which is Gazprom's second-biggest customer, relented for now in trying to renegotiate its contract.

If production in Algeria, a much bigger supplier than Libya, were to be disrupted, that would make Gazprom a power to be reckoned with again.

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BP to sell $7.06 billion in Argentina assets to help cover gulf oil spill costs

BP has agreed to sell its share of an Argentina-based oil and gas company for $7.06 billion in cash, bringing to about $21 billion its total sales of assets to help cover costs stemming from the Gulf of Mexico oil spill.

After the sale, BP will be most of the way toward its goal of selling as much as $30 billion in assets by the end of 2011 to help cover spill costs and bolster cash holdings to assure investors and lenders of the oil giant's financial stability. The sales are expected to reduce BP's assets by 10 to 15 percent.

The price of the Argentina operations fell $2 billion to $3 billion short of what many analysts expected. Nonetheless, the latest sale of what is considered a non-core asset for BP demonstrates the huge scale of the London-based oil firm's operations. In addition to asset sales, BP is raising more than $2.5 billion a quarter for spill costs from the suspension of its dividend.

BP announced Sunday that it would sell its 60 percent interest in Pan American Energy's oil and gas operations in Argentina to Bridas Corp., which already owns the other 40 percent.

BP acquired the interest when it bought Amoco in 1999. Since then, BP has revived output from the aging Argentine fields, which now produce about 100,000 barrels of oil a day and 450 million cubic feet of natural gas per day. The vast bulk of that production comes from one field, Cerro Dragon, about 900 miles south of Buenos Aires.

But Argentina's tax policies have diminished the attractiveness of operating there, analysts said.

Bridas was founded by the Bulgheroni family of Argentina. In May, the China National Offshore Oil Corp., which has been expanding its worldwide operations, bought 50 percent of Bridas for $3.1 billion. CNOOC's deep pockets helped make the BP sale possible; it will provide much of the cash for the transaction.

The price CNOOC paid earlier this year for its share of Bridas led many analysts to believe that BP would get more for its interests. The CNOOC purchase of Bridas implied a value of $15.5 billion for the entire Pan American Energy operation. That would have translated into a price of $9.3 billion for BP's share.

The sale does not include Pan American's operations in Bolivia.

"Today's agreement further demonstrates both the high quality and attractiveness of the assets throughout BP's global portfolio and also the company's ability to meet our significant financial commitments arising from the Gulf of Mexico tragedy," BP chief executive Bob Dudley said in a statement.

At the end of the third quarter, BP had incurred costs of $11.6 billion as a result of the oil spill, not counting the $3 billion first installment it had paid into a $20 billion escrow fund. Even after those payments, the company had nearly $13 billion in cash and $17 billion of bank facilities it could draw down. The company expects the total cost of the oil spill to ultimately reach $40 billion.

Dudley said BP would seek to sell other assets that might be "strategically more valuable to others than to BP."

Under the terms of the agreement, Bridas will pay BP a cash deposit of $3.53 billion, with the balance of the proceeds due on completion of the sale, which is expected to be completed by Dec. 28.

In China, CNOOC announced that it would join with Bridas's Argentine shareholders to provide $4.94 billion, or 70 percent, of the purchase price. The remaining 30 percent will be covered by loans, or additional cash contributions if necessary.

As of Dec. 31, 2009, BP's 60 percent interest in Pan American accounted for 917 million barrels of oil equivalent reserves, about 5 percent of the company's overall reserves. Production from Pan American accounted for 3.6 percent of BP's global output.

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When oil prices rise, Russia has freedom over a barrel

The judge had already postponed the verdict without explanation ("The court does not explain itself," said a spokesman). Before reading it, he barred journalists and the defendant's family from the courtroom. No one should have been surprised, therefore, when Mikhail Khodorkovsky - the Russian oil baron who once defied the Kremlin - received a further six years in prison last week, on top of the eight he's served. This time, he was sentenced for "stealing" an impossible quantity of oil, the same oil he has already been accused of selling without paying taxes.

In fact, nobody pretended that the Khodorkovsky verdict was anything but a political statement, one of a series of gestures the Russian government has made to its own public and to the rest of the world in recent weeks. The blocking of corruption investigations; the expressions of support for the brutal and violent "elections" in neighboring Belarus; the deaths of journalists; all of these seem designed to contradict the distinctly friendlier, reformist language that the Russian president, Dmitry Medvedev, was using until recently. A mere two years ago, Medvedev had even denounced Russia's culture of "legal nihilism" - a phrase some construed as a reference to the Khodorkovsky case.

Why the change of tone? Why now? Many complex theories have been hatched to explain it. This being Russia, none can be proved. But perhaps the explanation is very simple: Oil is once again above $90 a barrel - and the price is rising. And if that's the reason, it's nothing new. In fact, if one were to plot the rise and fall of Soviet and Russian foreign and domestic reforms over the past 40 years on a graph, it would match the fall and rise of the international oil price (for which domestic crude oil prices are a reasonable proxy) with astonishing precision.

To see what I mean, begin at the beginning: In the 1970s, oil prices began to rise significantly, along with the then-Soviet Union's resistance to change. The previous decade (with oil prices at $2 or $3 a barrel, not adjusted for inflation) had been one of flux and experimentation. But after OPEC pushed prices up in the 1970s, oil revenue poured in - and the Soviet Union entered a period of internal "stagnation" and external aggression. Soviet leader Leonid Brezhnev invested heavily in the military, halted internal reforms and in 1979 (when oil was at $25 a barrel) - invaded Afghanistan.

Brezhnev was eventually followed by Yuri Andropov, who had the good fortune to run the Soviet Union when oil prices were still high (at his death, in 1984, they averaged $28 a barrel). Andropov could thus afford both an internal crackdown on dissidents and a continued tense relationship with the West. But Andropov was followed by Mikhail Gorbachev, who took over just as prices plunged. In 1986 (with oil down to $14 a barrel), he launched his reform programs, perestroika and glasnost. By 1989 (when oil was still only at $18) he allowed the Berlin Wall to fall, freed Central Europe and ended the Cold War.

Prices fluctuated, but they did not really rise again in the 1990s (plunging as low as $11 in 1998), the years when Boris Yeltsin was still trying to be best friends with Bill Clinton, the Russian media were relatively free and there was still talk, at least, of major economic reforms. But in 1999 (when oil prices rose to $16 a barrel), Yeltsin's prime minister, Vladimir Putin, launched the second Chechen war, the West bombed Belgrade, and the mood in Russia turned distinctly anti-Western once again.

The fortunate Putin took over as president in 2000, at the start of a long and seemingly inexorable rise in oil prices. Indeed, Gorbachev's calls for internal reform were long forgotten by 2003 (when oil prices were creeping up to $27 a barrel). The days when Yeltsin pushed for Russia to join Western institutions were a distant memory by 2008, when Russia invaded Georgia (and oil was at $91 a barrel).

The new Russian president, Dmitry Medvedev, did try to sound nicer in 2009 (when oil prices averaged about $53 a barrel), leaving Putin, now the prime minister again, grumbling in the background. Medvedev locked a draconian treason law, invited democracy activists to the Kremlin, denounced the Belarusan dictator and even seemed to some to have liberalized Russian television just a bit.

But now it is 2011, Putin is very much in the foreground, and Khodorkovsky has just been sentenced by a kangaroo court. As I write these words, oil is at $92.25 a barrel.

Is this analysis too simplistic? Sure it is. But I haven't yet heard a better explanation.

applebaumletters@washpost.com

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Three books on the gulf oil spill

Just six months after BP stopped the oil that had been flowing into the Gulf of Mexico, a gusher of books about the spill has begun to wash ashore. The first wave includes three very different approaches to the disaster that riveted the nation most of last summer.

How we interpret the spill is important. A 1969 spill off Santa Barbara soiled the shores, killed birds and helped give rise to the modern environmental movement. Exxon's tanker accident in Valdez, Alaska, 20 years later became another symbol of reckless disregard for the environment. What makes the BP oil spill not just shocking but also dispiriting is that it might have relatively little impact on ocean-drilling policy beyond a retooling of the regulatory bureaucracy and the imposition of a few more technological safeguards. The spill has had no effect on the world's appetite for oil, and drilling will continue because the best prospects are offshore in the Gulf of Mexico, off Africa and Brazil, in the Caspian Sea, and in the Arctic.

The recent spill received massive coverage. At the Associated Press alone, more than 40 reporters and editors were thrown into the fray; teams of reporters were mobilized at papers such as The Washington Post, the Times Picayune in New Orleans, the New York Times and the Wall Street Journal. But even though the books under review present little if anything new, readers seeking overviews between two neat covers might find them useful.

"In Too Deep," by Bloomberg News journalists Stanley Reed and Alison Fitzgerald, opens with a brief account of the blowout, then moves on to BP's history, starting in Iran during the 1950s, when the U.S. and British governments overthrew the democratically elected regime for fear that it would hurt foreign oil interests. The authors shift quickly into more recent BP history, describing the enormous and lasting impact of former chief executive John Browne. Browne not only engineered giant mergers with Arco and Amoco, he also helped lead BP into post-Soviet Russia, Alaska and the Gulf of Mexico.

An intellectual, an engineer and a politically savvy executive with passions for art and opera, Browne guided the company into deep-water exploration in the gulf. He is credited with recognizing that the size of the discoveries in deeper water was increasing, not leveling off.

The book also profiles lower-level BP geologists who figured out where to find the likeliest prospects. A striking chart shows that BP's average cost to add a barrel of oil to its proven reserves was lower than any other major oil company's, and a tiny fraction of current prices.

Yet Browne was also a relentless cost-cutter who squeezed money out of operations that should have invested more in maintenance and equipment. The authors blame BP culture for a focus on personal rather than process safety, for leaks in the company's Alaska pipeline, for an explosion at its Texas City refinery and for the gulf blowout.

In this account, Browne's successor, Tony Hayward, who resigned in the wake of the spill last year, was the unfortunate inheritor of the company Browne built. Chosen in part because he wasn't flashy - the board of directors was weary of Browne's celebrity - Hayward lacked the skills to manage this environmental and public relations disaster.

In "Blowout in the Gulf," William R. Freudenburg, a professor of environmental studies at the University of California at Santa Barbara who died late last year, and Robert Gramling, a sociology professor at the University of Louisiana at Lafayette, concentrate on the regulatory framework that failed to prevent the accident. They compare offshore-drilling regulation to airline regulation and discuss whether regulation might be better handled by the Occupational Safety and Health Administration. They examine cleanup techniques and the prolonged and futile efforts made in Valdez. A sign of how their perspective differs from that of Reed and Fitzgerald: The two reporters write that Hayward's parting pay package was not "huge" so that "there would be no reward for failure." Freudenburg and Gramling call Hayward's $17 million package a "golden parachute."

The authors make solid points about the way the U.S. government has allowed big oil companies to march into public waters, about how the much-admired interstate highway system contributed to a fateful boom in U.S. oil consumption and about the way Americans ravenously consume oil and gas today. "Despite our habit of referring to oil 'production,' the reality is that the twentieth century was an unprecedented exercise in oil 'destruction,' " they write. "The oil was actually produced during the time of the dinosaurs."

Bob Cavnar brings an insider's view to "Disaster on the Horizon," but not one the industry will like. Cavnar has spent three decades, first on a rig and later as a chief executive, working for drilling companies in Texas, Louisiana and offshore areas. But he has a dim view of many industry practices and blogs about them for the Huffington Post.

Here, he focuses on the oil rig disaster itself and what caused it, constructing a narrative based on extensive testimony at hearings, newspaper accounts and his own experience. He makes a strong case that the spill was caused by human error. "An older engineer taught me, years ago, that wells actually talk to you," he writes. "In the hours leading up to the disaster, the Well from Hell was screaming at the crew that it was going to blow out, but nobody could understand the language it was speaking." And he notes that in deep water, "bad situations can escalate very quickly into catastrophes."

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Extensive corrosion threatens BP pipelines in Alaska, risking explosions, spills

The extensive pipeline system that moves oil, gas and waste throughout BP's operations in Alaska is plagued by severe corrosion, according to an internal maintenance report generated four weeks ago.

The document, obtained by the journalism group ProPublica, shows that as of Oct. 1, at least 148 BP pipelines on Alaska's North Slope received an "F-rank'' from the company. According to BP oil workers, that means inspections have determined that more than 80 percent of the pipe wall is corroded and could rupture. Most of those lines carry toxic or flammable substances. Many of the metal walls of the F-ranked pipes are worn to within a few thousandths of an inch of bursting, according to the document, risking an explosion or spills.

BP oil workers also say that the company's fire and gas warning systems are unreliable, that the giant turbines that pump oil and gas through the system are aging and that some oil and waste holding tanks are verging on collapse.

In an e-mail, BP Alaska spokesman Steve Rinehart said the company has "an aggressive and comprehensive pipeline inspection and maintenance program," which includes pouring millions of dollars into the system and regularly testing for safety, reliability and corrosion. He said that although an F-rank is serious, it does not necessarily mean there is a current safety risk.

Rinehart added that the company will immediately reduce the operating pressure in worrisome lines until it completes repairs. "We will not operate equipment or facilities that we believe are unsafe," he said.

Rinehart did not respond to questions about what portion of its extensive pipeline system was affected or whether 148 F-ranks were more or less than normal, except to say that the company has more than 1,600 miles of pipelines and does more than 100,000 inspections a year.

In 2006, two spills from corroded pipes in Alaska placed the company's maintenance problems in the national spotlight. At the time, BP temporarily shut down all transmission of oil from the North Slope to the continental United States, cutting off about 8 percent of the nation's oil supply, while it examined its pipeline system.

Photos taken by employees in the Prudhoe Bay drilling field this summer, and viewed by ProPublica, show sagging and rusted pipelines, some dipping in gentle U-shapes into pools of water and others sinking deeply into thawing permafrost. Marc Kovac, a BP mechanic and welder, said that some of the pipes have hundreds of patches on them and that BP's efforts to rehabilitate the lines were not funded well enough to keep up with their rate of decline.

"They're going to run this out as far as they can without leaving one dollar on the table when they leave," Kovac said.

BP Alaska's operating budget is private, so the picture of its maintenance program is incomplete. But documents obtained by ProPublica show that BP has pumped hundreds of millions of dollars into maintenance and equipment upgrades on the North Slope since the 2006 spills. In 2007, BP's maintenance budget in Alaska was nearly $195 million, four times what it was in 2004, according to a company presentation. In 2009, $49 million was budgeted to replace and upgrade systems that detect fires and gas leaks alone.

Despite the investment, workers say that the capabilities of equipment of all types continue to be stretched and that maintenance plans set years ago remain incomplete.

BP employees told ProPublica that several of the 120 turbines used to compress gas and push it through the pipelines have been modified to run at higher stress levels and higher temperatures than they were originally designed to handle. They also said giant tanks that hold hundreds of thousands of gallons of toxic fluids and waste are sagging under the load of corrosive sediment and could collapse.

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Lawyers taking center stage in oil-spill investigation

HOUSTON - The Macondo well gushes no more, but the lawyers are just getting started.

They go wall to wall in a Hilton hotel conference room, sitting at long tables that face the outnumbered investigators assigned to find the cause of the April 20 Deepwater Horizon disaster. The thermometer may be hitting 100 outside, but the room is kept perfect for the men and women in power suits, many from Washington, Chicago, New Orleans and Dallas.

The investigation, a joint operation by the Coast Guard and the Bureau of Ocean Energy Management, is supposed to help the government determine what went wrong and recommend reforms. But the hearings have largely been taken over by lawyers for the major players in the disaster - including BP, rig owner Transocean and the contractor for the cement job, Halliburton - who are trying to prepare for what are sure to be many civil trials to come.

They are generally civil to one another, but their clients have conflicting interests, with billions of dollars at stake and a Justice Department probe shadowing everything.

"The 900-pound gorilla in the room is the criminal investigation," said Pat Fanning, the attorney for one of the top Transocean managers on the rig.

Testimony this week has focused on usual suspects: the construction of the well and maintenance of the blowout preventer. But who's to blame, what piece of equipment or procedure proved fatally deficient, or to what degree the calamity could have been foreseen are issues the lawyers will likely tangle over for years to come.

In a new twist, BP has declared that a Halliburton employee, Jesse Gagliano, who warned that the cement job on the Macondo well might not function properly, should have stopped the operation outright if he had real doubts about safety.

Gagliano testified Tuesday that he told BP engineers on April 15 that if BP proceeded with the cement job as designed, it would have a gas-flow problem. Three days later, he wrote that, with only seven centralizers to center the casing, "this well is considered to have a SEVERE gas flow problem."

Gagliano said he and the BP engineers worked together, late into the night of April 15, trying to resolve the problem. He recommended that BP use 21 centralizers to keep the casing properly positioned. But even though an additional 15 were flown to the rig, BP chose not to use them. The cementing job proceeded with six.

Under cross-examination by BP lawyer Rick Godfrey, Gagliano acknowledged that in some documents, as well as during several conference calls with BP and Transocean managers, he did not cite the gas-flow potential or raise other alarms.

"BP had made their decision," Gagliano said. "They had decided not to follow my recommendation."

After he testified, BP released a pointed statement: "If Halliburton had significant concerns about its ability to provide a safe and high-quality cement job in the Macondo well, then it had the responsibility and obligation to refuse to perform the job. To do otherwise would have been morally repugnant."

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E.U. rules let Iran import, export oil, creating possible split from U.S. policy

TEHRAN - The United States and Europe have worked cooperatively on Iran policy since President Obama took office, but a small crack might have begun to open over sanctions that are beginning to pinch ordinary Iranians.

The European Union issued regulations this week that went well beyond a U.N. Security Council resolution passed in June, outlining tough restrictions on the sale of equipment and technology to the Iranian oil and gas industry, as well as on investment in those sectors. But the regulations - unlike legislation passed by the U.S. Congress - allow for the import and export of oil and gas to the Islamic republic.

"If you want to send a tanker filled with refined petrol to Iran, and you have proved that you are not carrying any other goods that we deem illegal, Europe has no problem," said a European official who specializes in sanction policies and spoke on the condition of anonymity because of the sensitivity of the subject. "We don't want any negative effect on the Iranian population or to deprive them of energy, so we do not follow U.S. measures that go beyond United Nations sanctions."

The E.U. will also permit financial transactions needed to import of oil and gas to Iran. The United States, by contrast, penalizes companies if they sell gasoline to Iran, and has increased pressure on international oil companies and refineries to cancel their contracts with the country.

The practical effect of the European action might be minimal because European oil giants might still refuse to supply Iran with fuel for fear of appearing to thwart U.S. sanctions.

U.S. officials said Wednesday that they were broadly pleased with the European regulations, which they said could devastate Iran's oil and gas industry. "We are going at the supply, while they are going at the back end," said a senior administration official who handles the Iran portfolio. "We have had the kind of cooperation and coordination with the Europeans that has been unprecedented."

The U.S. official said he had never heard any concerns raised by his European interlocutors about the effect of the sanctions on ordinary Iranians. "The regulations turned out to be pretty solid," he said. "At each stage, when they have faced a choice between going soft or going heavy, they have gone heavy."

U.S. officials have in the past said that if the increased pressure is hurting ordinary Iranians, they should blame their leaders for the Islamic republic's increasing isolation.

But E.U. officials said Wednesday that they specifically allowed fuel sales to ease the burden on average Iranians.

According to June statistics, Iran needs to import 4.7 million gallons of refined petroleum each day because of the country's low refining capacity. After U.S. sanctions were implemented in July, Iranian leaders announced that they had started an emergency plan to increase local production by mixing oil with high-octane products.

At several European airports, planes belonging to Iran's national carrier, Iran Air, are being refused refueling services by representatives of major oil companies. According to the European Union, there is no legal basis for denying the airline services.

Iran Air has been able to refuel at only three European airports since a Sept. 30 agreement among the State Department and European oil firms Total of France, Statoil of Norway, Eni of Italy and Royal Dutch Shell of Britain and the Netherlands.

They pledged to end their investments in Iran and avoid new activity in the country's energy sector. In turn, U.S. officials said, the companies would be protected from possible U.S. penalties for doing business with Iran.

"We have complained to the U.S. about the extraterritorial effects of their measures on European companies," the European official said. "If those companies submit to U.S. wishes, it is their decision, but we are against these policies. This is a major issue for us."

There have been complaints in the European parliament over U.S. pressure on E.U. companies regarding Iran.

"If Europe accepts U.S. interference through pressure on its businesses, it is giving up independence," said Marietje Schaake, an influential parliament member who represents a liberal party. "The influence of U.S. interference beyond our own sanctions harms the E.U.'s credibility as a global player.

Kessler reported from Washington.

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Prices of crude oil and gasoline rise as violence in Libya upsets markets

Crude oil prices in New York broke through the $100-a-barrel threshold Thursday as violence in Libya continued to shake world financial markets and threatened to sidetrack the U.S. economic recovery.

But prices fell back later in the day, after a Saudi official said the kingdom would make up for any Libyan production lost as a result of upheaval there and the International Energy Agency said it was ready to release emergency stockpiles. President Obama also said the United States would be able to "ride out" the disruption in oil supplies.

After touching $103.41 a barrel, crude oil for April delivery ended up down slightly for the day, at $97.28 on the New York Mercantile Exchange. In Europe, the price of Brent grade crude oil, another important benchmark, hit $119 a barrel before dropping back to $114.

But the triple-digit petroleum price weighed heavily on stock markets for much of the day and heightened fears that high fuel costs could be a drain on consumers. Thursday's closing price was still about 50 percent higher than the price nine months ago and the higest level since September 2008.

For U.S. consumers, higher oil prices most directly affect drivers and truckers, who devour the vast majority of U.S. petroleum products. U.S. pump prices for regular gasoline jumped 4 cents a gallon overnight, to $3.23, an eight-cent increase in the past week and 55 cents more than a year ago.

"Coming just before springtime, the timing of the latest crude oil price spike is foreboding. If crude prices were to stay around $100 per barrel, we could expect to see the price for a gallon of unleaded regular rise to about $3.40 in the not-too-distant future," said John B. Townsend II, AAA Mid-Atlantic's manager of public and government affairs. "Motorists across the country are already spending in excess of$1.2 billion a day on fuel purchases, and that's likely to increase in coming weeks."

But oil is a component in the price of a vast variety of goods, including air tickets and food. Higher prices hit big users such as Wal-Mart, petrochemical firms and the U.S. military.

At FedEx, which every month adjusts its fuel surcharge on customers, chief executive Fred Smith said that higher fuel prices would have "not an enormous effect" but that "what's of much greater concern is the effect on the economy overall." He said high fuel prices were like a "tax imposed on the American economy" that would hurt people's buying power.

Because most U.S. oil is imported, money from gasoline sales is largely flowing overseas, inflating the U.S. trade deficit.

Adam E. Sieminski, chief energy economist at Deutsche Bank, said every $5 increase in oil prices could shave two-tenths ofa percent off global economic growth. "If growth was supposed to be 4 percent and ends up being 3 percent, that would be a nasty surprise," he said.

The price of crude oil has surged since Libyans began a revolt against leader Moammar Gaddafi last week, although it has been climbing for most of the past year.

Goldman Sachs analysts warned in a report that Libya's unrest created "significant upside risk" and reduced the ability of the Organization of Petroleum Exporting Countries to respond to further supply disruptions.

Some analysts argued, however, that the spike in oil prices was an overreaction to the political upheaval in North Africa and the Middle East. Michael Kouri, an analyst with UBS Securities Canada, said it was "a dramatic reaction since current disruption to crude supply at present is minimal."

Libya produces about 1.5 million barrels a day, or nearly2 percent of the world's supplies. Some of that oil is still moving, companies said. Repsol, a Spanish oil company, said production in the Libyan fields in which it is a partner was running at 160,000 barrels a day, down from 360,000. Eni chief executive Paolo Scaroni said in Rome that Eni's net production was 120,000, down from 280,000 barrels. Analysts also said more than 350,000 barrels a day of production comes directly from offshore platforms.

Moreover, world stockpiles of crude oil are substantial. The Goldman report noted that spare production capacity and inventories could cover more than 100 days of consumption even if Libya halted all exports.

But a trader at one major U.S. refiner said traders were worried about unrest spreading to Algeria or some other major oil-exporting country.

"What we don't want is for another oil producer to get involved in this," Sieminski said.

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Afghan government awards oil contract in first phase of revenue-generation plan

KABUL - The Afghan government on Monday awarded a small but potentially path-breaking crude oil contract, marking the first phase of an effort that U.S. and Afghan officials say could bring the cash-strapped government significant revenue.

The six-month deal for crude from the Angot field in Sar-i-Pol province in Afghanistan's north was designed as a confidence-building venture for one of the world's least-attractive foreign-investment markets.

If successful, Afghan and U.S. officials hope the deal will put Afghanistan on the hydrocarbon industry map and attract direly needed private investment to this landlocked country, which is kept solvent by international donors.

"This is just the beginning," Afghanistan's Minister of Mines Waheedullah Shahrani said in an interview. "But the potential is great."

Angot is among a handful of developed fields in the Amu Darya Basin, which straddles Afghanistan and Turkmenistan. The Afghan side of the basin has an estimated 80 million barrels of proven crude reserves, according to the U.S. Geological Survey. The nearby Afghan-Tajik Basin could hold as much as 1.5 billion barrels worth of crude, according to a study the agency commissioned in 2006. Together, the two areas have the potential to generate hundreds of millions of dollars per year in government revenue over the next two decades, U.S. officials estimate.

If the Afghan government manages to attract energy companies to develop its oil sector over the next few years, the country could meet its own fuel needs and perhaps export oil sometime in the next decade, U.S. officials said.

"This step means that Afghanistan is now an oil-producing nation, creating jobs for Afghans and an environment that will enable future investment in developing the oil sector," said U.S. Deputy Under Secretary of Defense Paul A. Brinkley, who oversees the Pentagon's business stabilization efforts in Iraq and Afghanistan.

Brinkley's office has invested nearly $1.5 million dollars in devising the strategy to revive Afghanistan's oil sector, which has been paralyzed for decades because of war and poor governance.

American officials acknowledge the challenges are huge. The country remains mired in a nearly decade-long war. Its entrenched culture of corruption has long dissuaded foreign investors. Its politics remain volatile. And its regulatory and legal sectors are arbitrary and vulnerable to cronyism.

"There's huge room for error," said a senior American official involved in the effort who spoke candidly on the condition of anonymity. "The whole thing could fall flat on its face."

Ben Lando, who runs the Iraq Oil Report and has studied emerging oil markets, said, too, that oil wealth can be destabilizing in the short term.

"There's a good chance Afghanistan could be stricken by the resource curse rather than come to use its oil for the benefit of its citizens," Lando said. "Oil wealth has a history of having a deteriorating effect on unstable governments with underdeveloped institutions and institutionalized corruption."

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As the green economy grows, the 'dirty rich' are fading away

So the blown-out oil well in the gulf has finally stopped gushing, plugged with heavy mud and awaiting the ultimate "kill" by a relief well. Yet, even with the largest oil spill in the nation's history in the background, what seems to have been killed much more quickly is Washington's will to take meaningful action on the environment. After axing climate-change legislation in late July, the Senate is now taking up a modest energy bill -- and even that effort may go nowhere.

Hopes for a pivotal BP-driven eco-moment -- remember President Obama's call in June for a new "national mission" to get America off fossil fuels? -- have dissipated, seemingly confirming the common view that powerful energy firms, and corporate America more broadly, stand as the sworn enemies of any bold new environmental rules and that they have the clout to get their way.

Except that old view is no longer quite right. In fact, big business is more divided on energy and the environment than ever before, and the growing rift reflects major power shifts in the economy. On one side are business leaders and shareholders who derive their wealth from resource extraction, fossil-fuel-based power generation and energy-intensive manufacturing -- they are the "dirty rich." On the other are business leaders who run knowledge or service companies that generate very little pollution -- the "clean rich."

The dirty rich are dying off, and the clean rich are coming of age.

Of course, the dirty rich still have enough juice on Capitol Hill to kill bills they don't like, or to neuter the federal watchdogs who oversee deepwater drilling in the Gulf of Mexico and coal mining in West Virginia. ExxonMobil, for example, is not just the second-largest American corporation; it also has the some of the deepest pockets for lobbying, spending $27.4 million on such activities in 2009, more than any other company.

But the larger transition is clear: America is witnessing the twilight of the dirty rich and the inexorable move of economic power to the clean rich. What's more, environmental values are spreading fast through affluent America, with more super-wealthy individuals putting their money behind green causes and more upscale voters expecting government action to protect the planet. Climate legislation may be dead for now, but if big money really talks in America, the long-term prospects for tougher environmental rules would seem quite good.

It is hard to understate how dramatically the sources of business wealth have shifted in the past half-century. Of the top 20 companies on the Fortune 500 list in 1960, 16 were engaged in heavy industry, such as U.S. Steel and DuPont, or resource extraction, such as Texaco and Mobil. This year's list includes just six such companies in the top 20. And two of them, GM and Ford, have been in decline for years.

Meanwhile, the dirty rich are fading from the Forbes 400 list of the wealthiest individuals. When the list was first published in 1982, 38 percent of its members had made their fortunes in oil and manufacturing, and 12 percent in finance and technology. By 2006, those ratios had nearly flipped: 36 percent of the richest Americans made their wealth from finance and tech, while 17 percent earned it from manufacturing and oil.

The dirty-rich billionaires on the Forbes list are mostly on the older side -- such as industrialists David and Charles Koch, both in their 70s. In March, one of the nation's richest oilmen, pipeline magnate Dan Duncan, died at the age of 77. Among recent newcomers to the list, few have been from dirty industries. More typical is Facebook founder Mark Zuckerberg, who made the list in 2008 at age 24.

Even Texas doesn't have as many dirty rich as it used to. Fewer than half of the state's billionaires made their money in oil or energy, a major departure from earlier patterns. The two wealthiest Texans today are not oilmen; they are Alice Walton, an heir to the Wal-Mart fortune, followed by Michael Dell, a computer entrepreneur. Dell doesn't live in either of the traditional oil-money cities, Houston and Dallas; he resides in Austin, which has grown more influential in the state's cultural and political life as it has become home to numerous high-tech entrepreneurs. Dallas still has plenty of conservative oil money, but the city's economy is now powered by tech, finance and services. If the primetime soap opera "Dallas" were remade today, J.R. Ewing would probably be a telecom magnate.

The same pattern holds elsewhere. The great fortunes of Colorado used to be made from oil or mining, and the state's politicians were often creatures of these industries and unfriendly to environmentalists. Now the state's super-rich are a very different breed, including satellite TV mogul Charles Ergen and Quark founder Tim Gill. In the early 1980s, the only Forbes 400 member from the Pacific Northwest was a timber baron. Today a half-dozen billionaires live in the region, and most made their money in technology. California's Santa Clara County, which covers Silicon Valley, now has more millionaires than Manhattan.

This seismic shift in who gets rich is fast changing where politicians get their money and whom they listen to. A torrent of new cash has flowed into politics from the finance, tech and entertainment industries, and especially from the legal profession, which gave twice as much to national candidates in 2008 as any other sector. Dirty industries that once wielded enormous clout on Capitol Hill -- such as autos, steel and mining -- aren't the players they once were. Political contributions from the entire coal industry amounted to $3.5 million in 2008, while Microsoft employees contributed $3.3 million.

In 2008, John McCain far outraised Obama among employees of energy and natural resources companies, pulling in $4 million from this group. Not bad, except that Obama bested McCain in the communications and electronics sector five to one, raising $25.5 million. Until the 2002 election, the oil and gas industry -- long a deep well of GOP cash -- was consistently among the top 10 sources of money for federal candidates, according to the Center for Responsive Politics. In 2008, it ranked 16th. That same year, the entire energy and natural resources sector gave $77 million in campaign donations -- compared with $234 million given by lawyers.

The picture looks quite different when it comes to money for lobbying, with dirty industries still among the biggest spenders in Washington. But the winds may be shifting in this area as well: The once-feared automotive industry is now so weak that Detroit could barely swing a bailout last year and watched helplessly in late 2008 as its greatest champion in Congress, Rep. John Dingell (D-Mich.), was ousted from a powerful chairmanship by Rep. Henry Waxman (D-Calif.), a strong environmentalist.

Of course, new-economy giants such as Hewlett-Packard have faced withering criticism of their environmental records, and the pollution from high-tech products can certainly be serious. The difference, however, is scale. While Google's servers gobble up vast amounts of energy, its products exist mainly as pixels on a screen. BlackBerrys and iPhones are pocket-size, and desktop computers, which are among the larger products of the Information Age, weigh a few hundred times less than an automobile.

Other knowledge industries, such as the legal profession, are about monetizing cognitive skills and have little to do with the old-economy model of converting natural resources into wealth. So some of the fastest-growing and richest parts of the economy aren't much affected by environmental laws -- which is why a growing slice of America's business elite has little incentive to battle them.

What's more, an ever-larger contingent of clean-tech entrepreneurs and investors will score big if Congress acts to push up the price of carbon. Last year, George Soros pledged to make $1 billion in renewable-energy investments. Other billionaires, including Warren Buffett, Bill Gates, John Doerr and Vinod Khosla, are also placing major bets in this sector.

Apart from self-interest, many of the clean rich care about the environment. They tend to be highly educated, and quite a few have scientific training. They understand that climate change is real and must be addressed now. Google, which is run by three computer scientists, set out to be carbon-neutral several years ago and says it has achieved that goal. The company even helps employees to buy hybrid vehicles. Intel co-founder Gordon Moore -- a chemist by training -- is giving hundreds of millions of dollars to help preserve fragile ecosystems.

But the roots of the clean rich go deeper. The modern environmental movement emerged in the 1960s, fueled in large part by the spread of affluence and education. There is a logic to that link: Once your material needs are met, you can turn your attention to other concerns, whether saving polar bears or the Amazon. "Postmodern values give priority to environmental protection and cultural issues," University of Michigan political scientist Ronald Inglehart has written, "even when these goals conflict with maximizing economic growth."

Inglehart bases this conclusion on decades of research through the World Values Survey, which has tracked changing attitudes in 97 countries. His findings consistently show that rising incomes and more wealth lead to environmentalism. That certainly seemed the case in 2006, when Californians voted on Proposition 87, which would have taxed oil companies to fund alternative fuels. The initiative, which failed overall, passed in higher-income counties, such as Marin and Alameda, while losing by huge margins in some of the state's poorest counties. In Modoc County, a rural area with the one of the lowest household income levels in California, only 24 percent of voters supported the initiative, compared with 72 percent in prosperous San Francisco County.

It is hardly news that affluent liberals often fret more about the environment than working-class voters. But this class divide is poised to have a larger political impact. One reason the Republican Party can blithely block attempts to address climate change, one of the gravest threats facing humanity, is that its political base is heavily weighted with less-educated and less affluent voters who live in rural areas and small towns -- and who aren't keen on government activism to protect the planet. A poll last year by the Pew Research Center for the People and the Press, for instance, found that support for legislation to limit carbon emissions was 16 points higher among college graduates than those with a high school diploma or less.

Yet if the GOP is to build a durable majority, it will have to move beyond this constituency. Even if Republicans take control of the House this fall, that won't change the fact that the Palin and Limbaugh wing of the party has badly hurt GOP fortunes by alienating affluent and educated donors and voters -- as witnessed most dramatically by Obama's crushing fundraising edge over McCain. Wooing back these natural allies, especially the clean rich, will require tacking to the center. And climate change, an issue driven by scientific evidence and with appeal in this newly influential community, is a great candidate for a softened stance. Its time will come soon -- and could come even faster if a few far-sighted Republicans recognize their plight and decide to hasten that transformation.

dcallahan@demos.org

David Callahan is a senior fellow at Demos, a nonprofit public policy group, and the author of "Fortunes of Change: The Rise of the Liberal Rich and the Remaking of America."

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As offshore drilling moratorium nears an end, questions about what's next

Interior Secretary Ken Salazar is getting ready to take his finger off what he has called the "pause" button on deepwater oil drilling, with environmentalists and oil industry executives alike worried about what comes next.

Salazar received recommendations Thursday from Michael Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement, based on information gathered at public forums and private meetings in the wake of the BP oil spill. Salazar could act on the BOEMRE report well before the drilling ban's expiration date, Nov. 30.

While many Gulf Coast lawmakers and residents have been badgering the Obama administration to lift the deepwater moratorium, key industry and administration officials are struggling with the larger questions: not when drilling will resume, but how and where.

"We're stuck between 'drill, baby, drill' and the 'BP drilling disaster,' and no one knows which argument will win," said Athan Manuel, director of the Sierra Club's lands protection program.

Separate from Bromwich's report, Salazar on Thursday announced the federal government was adopting two new regulations for offshore drilling, including a drilling safety rule and a workplace safety rule. Both would impose new requirements on operators in the gulf and elsewhere.

The drilling rule dictates specific procedures aimed at preventing a blowout, including cementing and casing practices and the appropriate use of drilling fluids. It also increases oversight of mechanisms--such as the blowout preventer--that would shut off the flow of oil and gas in an accident, and requires operators to secure independent and expert reviews of their well design, construction and flow intervention mechanisms.

The workplace safety rule forces offshore operators to have what an Interior Department statement describes as "clear programs in place to identify potential hazards when they drill, clear protocol for addressing those hazards, and strong procedures and risk-reduction strategies for all phases of activity, from well design and construction to operation, maintenance, and decommissioning."

Energy industry officials said they would review the regulations and offer comments as part of the rule-making process. The drilling safety rule will take effect immediately on publication. Erik Milito, upstream director for the American Petroleum Institute, said, "Getting a good offshore safety rule in place is critical to the nation's energy future. The gulf and other parts of the nation's offshore areas are vitally important to helping meet the nation's future energy needs. The rule will affect every offshore energy project for years to come. It has to be right."

In the report Bromwich submitted to Salazar Thursday, he proposed new rules for drilling, as well as contingency measures to bolster the industry's response to any future spills.

Oil and gas executives are steeling for a slower and more costly permitting process that could hinder drilling even after the moratorium is lifted. And they worry that they won't be able to develop new areas - from Alaska to the East Coast - that President Obama outlined when he unveiled his five-year leasing plan on March 31, a few weeks before the BP blowout.

Environmentalists, in contrast, are hoping that the congressional limits on offshore drilling that expired two years ago are reimposed, or at least that the pace of development is slowed.

And the administration faces difficult questions about whether - and under what circumstances - it will allow leasing in areas from Alaska to off the coast of Virginia before Obama's first term ends.

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'Culture of complacency' at BP set stage for oil spill, commission chief says

Monday was a relatively good day for BP in the glare of oil spill inquiries. Tuesday was a bad day.

Drilling experts and corporate rivals testifying before a presidential oil spill commission blasted BP Tuesday for decisions about the Deepwater Horizon drilling rig that might have removed obstacles to the April 20 blowout that led to the massive Gulf of Mexico oil spill.

BP's final well designs were "deficient in detail," said Steve Lewis, a drilling engineer with Seldovia Marine Services, who later added that the "the operational detail in my mind was totally deficient" and "totally inadequate."

Shell Oil's chief well scientist Charlie Williams said his company typically uses three to five plugs when temporarily abandoning a well. BP used one. And John Rogers Smith, associate professor of petroleum engineering at Louisiana State University, said the way BP replaced drilling mud with seawater was "not prudent."

The commission's co-chairman William K. Reilly opened the day saying that a "suite of bad decisions" revealed "a culture of complacency" at BP as well as its main contractors Transocean and Halliburton. He concluded the day saying that the deepwater drilling disaster was the result of systemic problems, not isolated ones.

The renewed criticism of BP came one day after Fred H. Bartlit Jr., the general counsel of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, seemed to absolve BP of allegations that it let cost worries trump safety concerns. Bartlit said Monday that "to date, we have not seen a single instance where a human being made a conscious decision to favor dollars over safety."

The commission members backpedaled from that assessment and even Bartlit sought to explain himself. Reilly said that the commission staff "did not ascribe motive to any of those decisions." Bartlit said the commission was still investigating and could draw inferences about whether time- and money-saving measures had increased risks on the Deepwater Horizon, where 11 workers died in the April 20 explosion.

But the question of motive - whether BP was rushing to finish a costly and tardy well - hung over the entire day. A representative of a plaintiffs' attorney group noted that several lawyers at Bartlit's firm are doing work for Halliburton.

Lewis said he had seen copies of internal BP communications suggesting that the London-based oil giant was worried about finishing the Macondo oil well and moving the drilling rig to Kaskida, another Gulf of Mexico location, where a BP lease would expire by May 16 if certain work weren't done there.

"They had commitments to wells, regulatory commitments, that were required to maintain in the one case a viable lease that required well work," Lewis said.

Commission staff attempted to rebut Lewis later. Bartlit said that "we have more facts than Mr. Lewis" and that "it does not appear to us that there was a rush to get to another lease."

Commission sources and those close to BP later added that by early April BP had weighed the option of dropping a plan for work that was originally to have been done after Macondo but before Kaskida. That intermediate job would have permanently plugged the Nile well, not far from Macondo, and would have taken about a month.

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TDSSKiller 3.0.0.22

Remove the family Rootkit.Win32.TDSS Allows users to broaden or restrict the scan, depending on their choices. For instance, if users suspect that the rootkit is hidden within the drivers on their computer, they can set TDSSKiller to scan the driver digital signatures as well.

TDSSKiller is a utility that was created in order to provide you with a simple means of disinfecting any system that suffers from an infection from the malware family Rootkit.Win32.TDSS. For Windows operating systems, the term rootkit stands for a program that infiltrates the system and hooks system functions (Windows API).

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Mumble 1.2.5

High-quality voice communication for gamers. Low-latency, high-quality voice communication for gamers. Includes game linking, so voice from other players comes from the direction of their characters, and has echo cancellation so the sound from your loudspeakers won't be audible to other players

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