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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Shell diverting LNG to Japan to help offset energy supply drop; lifts oil output targets

AMSTERDAM - Royal Dutch Shell PLC said Tuesday it plans to divert liquefied natural gas and fuel oil to Japan to help replace energy sources damaged in last week's earthquake and tsunami.

Shell, Europe's largest publicly listed oil company, also said it planned to boost its oil production to 3.7 million barrels per day by 2014, with CEO Peter Voser vowing that a "wave of new production" will continue.

Voser said Shell's refining assets in Japan were not damaged in Friday's disaster but it was too early to say how much assistance the government wants and Shell can give. Major LNG companies need to cooperate on rerouting planned shipments and it is not clear how much capacity in Japan can be used to generate electricity from LNG.

The country may in the meantime use fuel oil or crude oil power plants that are only slightly damaged. Voser said LNG diversions could lead to price increases in Europe in the short term.

Shell is not planning for scenarios in which global demand or prices for oil and gas decline on a long-term basis. Growing populations, improving living standards and a lag in investment mean that energy prices are still headed up, Voser said.

Shell's new output target compared with production in 2010 of just 3.34 million barrels of oil and equivalents, which was up from 3.14 million in 2009 thanks to heavy investments in places such as Russia's Sakhalin Island and offshore Qatar, both LNG projects.

Voser said Shell had made mistakes around the turn of the century, when it was pumping more than 4 million barrels of oil per day, not so much because of the major accounting scandal it suffered - in which managers were caught overestimating proven reserves - but instead because executives at the time hadn't spent enough on new capacity.

He warned an oil company can cut costs too far and enter a shrinking phase with limited investment and financing options. That won't happen on his watch, he told reporters during an exposition on the company's strategic plans for the coming year and beyond.

"We're 'back' now, and I can tell you we are not going back to where we were 10 years ago," he said.

Shell's annual report released Tuesday said the company added more to proved reserves than it pumped in 2010, and now has more than 14 billion barrels of proved reserves - enough for an estimated 11 years of operations.

Voser said the company plans $100 billion in capital spending in 2011-2014 to continue growing.

The company cited a list of 20 projects under construction and another 30 under consideration that will take it through 2020.

Chief Financial Officer Simon Henry gave a quick breakdown of some planned investments, including $5 billion into heavy oil projects in places like Canada and Oman, $12 billion in "tight" gas and oil exploration in the U.S. and Brazil, and $20 billion each into deep water development projects and integrated gas facilities.

The company is planning for oil prices of $60-$80 - well below current rates - and said the company would be able to support investment plans of $25-$27 billion per year and still maintain $10 billion in annual dividend payouts with oil at $50 per barrel.

In February Shell reported full year 2010 net profit of $20.1 billion, up from $12.5 billion in 2009, as production rose, inventory values increased, and refining operations improved.

Voser said the company plans to cut $1 billion in costs from its "downstream," or refining and chemicals operations this year, though employment will remain about flat companywide at around 93,000, after 7,000 jobs were cut last year.

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

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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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Gasoline prices hit eight-month low

With the end of the summer driving season just around the corner, traders and investors on Monday drove gasoline prices to an eight-month low on U.S. commodities markets, providing the latest sign of pessimism about the economic recovery.

The sagging commodity market price for gasoline is good news for American motorists, promising a mild easing in pump prices. It also marks the end of a summer of relative stability for retail gasoline prices, which have fluctuated by about 20 cents per gallon since the beginning of the year and have stayed in an 8-cent range for the past 69 days.

Prices have been stuck in neutral because of the continuing weak global economy and fundamental shifts in the U.S. gasoline market, the world's biggest.

The surge in U.S. consumption that many refiners expected earlier this year has not materialized. Last week, the American Petroleum Institute reported that in July, U.S. gasoline deliveries (a measure of demand) were 9.3 million barrels a day, down slightly compared with July 2009. Except for 2008, it was the lowest July gasoline demand number since 2003.

A lack of consumer confidence and continuing high unemployment have kept people cautious about spending and traveling. "With unemployment high and July regular gasoline prices more than 20 cents a gallon above those a year ago, consumers likely have been shopping and vacationing less and trimmed their gasoline purchases accordingly," said John Felmy, the institute's chief economist.

But long-term trends -- such as improvements in the fuel efficiency of American autos -- played a part too, other analysts said. A steady increase in the biofuels component of U.S. motor fuel is another reason; the four week average for ethanol production ending Aug. 13 was 854,000 barrels a day, up nearly 18 percent from a year ago and now more than 9 percent of the volume of motor fuel, according to the Renewable Fuels Association.

With consumption lackluster, U.S. oil companies have been left holding much bigger than usual inventories of gasoline. That, combined with renewed pessimism about U.S. economic prospects, has prompted traders to increase their short selling of gasoline -- betting on a further decline in prices. Short positions jumped 20 percent in the week ended Aug. 17, according to figures compiled by Barclays Capital.

Crude oil prices have also tumbled after a brief surge. The price of a barrel of the benchmark West Texas Intermediate type of crude for delivery next month stood at $72.70 at the end of Monday, down from $82.55 on Aug. 3.

"What is amazing is the degree to which the trading community failed to understand that the gasoline season ended at Memorial Day weekend," said Edward Morse, a veteran oil analyst at Credit Suisse who has been predicting stable prices for months. "All the evidence was in sight that the market was going to be oversupplied."

Morse said that refinery output was "too high, Europe was exporting too much [fuel], biofuel blending components were rising, and the fuel efficiency of the fleet has grown remarkably in the past four years."

The American Automobile Association said Monday that the average retail price of a gallon of regular gasoline eased to just under $2.71 a gallon, down more than 4 cents from a week ago and up only 8 cents from a year earlier, when the economy was more deeply mired in recession.

There have been some signs of economic recovery, however, in petroleum statistics recently. The Petroleum Institute said that there was an 11.6 percent increase in deliveries of low sulfur distillates, which are primarily diesel fuels used in trucking, and a 6.9 percent increase in kerosene jet fuel deliveries. The price of diesel fuel also fell 4 cents a gallon in the past week, but it has climbed 28 cents from a year ago.

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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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BP shuffles top executives

BP's new chief executive, Bob Dudley, has ousted the company's chief of exploration and production in the wake of the massive oil spill in the Gulf of Mexico and divided his responsibilities among three other BP executives.

Dudley, an American who formally takes over the London-based oil giant Friday, also said he would elevate the company's safety chief, Mark Bly, the author of the recent report on the Macondo well blowout, and give him broader powers over the company's worldwide operations.

Andy Inglis, BP's head of global exploration and production, will leave the company at the end of the year and lose his seat on the company's board of directors effective Oct. 31. A graduate of Cambridge University, he joined BP 30 years ago.

The moves are the first management changes since chief executive Tony Hayward announced in late July that he would step down effective Oct. 1. They are designed to address widespread criticism of BP for failing to identify or punish key decision makers in the blowout.

"These are the first and most urgent steps in a program I am putting in place to rebuild trust in BP - the trust of our customers, of governments, of our employees and of the world at large," Dudley said in a statement.

BP has also come under criticism for the Bly report, which a senior executive from another major oil company, speaking on condition of anonymity to protect his business relationships, said was "devoid of the human factor."

The human factor played a key role, experts and oil executives say, because senior people on the rig, including BP and Transocean employees, failed to respond to multiple signs that oil and gas were leaking into the well after it was supposed to have been sealed.

Bly will report directly to Dudley, and his safety division will have employees embedded in all of BP's operations, the company said.

Inglis will be replaced by three executive vice presidents: Mike Daly heading exploration, Bernard Looney in charge of development and Bob Fryar responsible for production. Together with Andy Hopwood, who becomes executive vice president for strategy and integration, they will join an expanded top management team reporting directly to Dudley.

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BP, 8 other firms sued by Justice Dept. over gulf oil spill

The Justice Department sued BP and eight other companies Wednesday over the Gulf of Mexico oil disaster, the federal government's first legal filing in its broad investigation of the worst oil spill in U.S. history.

The lawsuit accuses BP and other firms of violating federal regulations and failing to prevent the April 20 explosion and fire, which destroyed the Deepwater Horizon offshore drilling rig. It seeks civil penalties under the Clean Water Act and a second federal statute for cleanup costs and widespread damage to the environment.

Although the Justice Department did not spell out an amount, legal experts said the case could expose the companies to tens of billions of dollars in fines, under civil environmental laws. Justice officials emphasized that the filing - on the day of a deadline for civil filings - is a first step and that aggressive civil and criminal probes into the disaster are continuing.

"Even though the spill has been contained, even though it is no longer the focus of round-the-clock news coverage and the subject of front-page headlines," said Attorney General Eric H. Holder Jr. at a news conference Wednesday, "the department's focus on investigating this disaster, and preventing future devastation, has not wavered."

Scott Dean, a spokesman for London-based BP, said the government's filing in federal court in New Orleans was expected and "does not in any manner constitute any finding of liability or any judicial finding that the allegations have merit." He said the company - whose stock price dropped sharply during Holder's announcement, then partially recovered by day's end - is cooperating with all government inquiries.

Other companies involved in the spill and named in the lawsuit affixed much of the blame on BP. Brian Kennedy, a spokesman for Transocean, which leased the Deepwater Horizon rig to BP, said: "Responsibility for oil and natural gas discharged from a well lies solely with the well's owner and operator. . . . Transocean is indemnified in this matter."

John Christiansen, a spokesman for Anadarko Petroleum Corp., a minority owner of the well, said the company was "not involved in the operations or decisions that occurred on the drilling rig." MOEX Offshore, another minority owner, said in a statement that it had "no authority or responsibility to direct activities on the Deepwater Horizon."

The Justice Department civil probe is on a parallel track with a criminal investigation that Holder said is "very serious." Law enforcement officials and other sources have said the criminal investigation is focusing on BP, Transocean and engineering giant Halliburton, which was in charge of cementing the well.

Sources said the FBI and other investigators are examining whether, in addition to violating environmental laws, company officials made false statements to regulators, obstructed justice or falsified test results for devices such as the rig's failed blowout preventer. Another line of inquiry, sources said, is whether the companies' cozy relationship with federal regulators contributed to the disaster.

Halliburton, which has declined to comment on the investigation, was not named in the civil lawsuit. The suit is expected to become part of broad civil litigation pending in U.S. District Court in New Orleans. Nearly 400 lawsuits against BP and other companies - filed on behalf of fishermen, environmental groups and others in the Gulf of Mexico region - have been consolidated before the same judge.

Justice Department officials said their participation will give them access to documents and other materials handed over in pretrial discovery, which will aid the government's broader civil and criminal probes. Officials said the timing of their filing was related to Wednesday's deadline set by the judge.

The 27-page document says the companies failed to use the safest drilling technology and to maintain equipment "necessary to ensure the safety and protection of personnel, equipment, natural resources, and the environment." It offers little evidence for those assertions, but officials said additional grounds - and defendants - could be named later.

Roger Marzulla, an environmental lawyer who headed the Justice Department's environment division in the Reagan administration, said it appeared that "the government got rushed by the court's deadline. They filed as generic a complaint as possible and figured 'we'll sort it all out later.' "

Experts said the legal standard to prove liability under the Clean Water Act and the Oil Pollution Act - the other law under which the government sued - is low. "You just have to show that an event occurred and that a particular entity or person is responsible," said William Carter, a former federal environmental prosecutor. "Anything short of an act of God - a lightning bolt hitting something - and that person is going to be responsible for the cleanup."

Under the Clean Water Act, if the government can prove that BP or other companies engaged in "gross negligence," each firm could be fined up to $4,300 per barrel of oil spilled. Nearly 5 million barrels were spilled into the gulf, according to federal estimates.

"Tens of billions of dollars is certainly a legitimate prospect here," Marzulla said.

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Overseer of BP fund gets his hands dirty

In June, President Obama tapped lawyer Kenneth R. Feinberg, 64, to oversee the $20 billion account funded by BP to compensate victims of the Gulf Coast oil spill, making him the nation's most famous mediator.

Every week, Feinberg leaves his Pennsylvania Avenue office, where the walls are adorned with dozens of pictures and news articles chronicling his work, to spend time with fishermen and others who make their living off the coastal waters.

In a recent interview with The Washington Post, the Brockton, Mass., native, who also oversaw the government's Sept. 11 Victim Compensation Fund, talked about the task ahead as he wraps up emergency claim payments and moves on to making final payments to victims. Excerpts follow:

Have you met one-on-one with people who were affected by the spill?

I've sat down personally with hundreds of people. I've had town hall meetings throughout the gulf with thousands of people. You can't do this from Washington. You have to go down there, and that's what I've been doing.

Why have the claims skyrocketed in the past two weeks?

People are getting paid. The payments are generous. People are saying, "Let's file a claim; we might get paid too." We don't know yet how many of them are legitimate.

What problems are you experiencing with processing emergency claims?

There are 25,000 claims with absolutely no documentation. Thousands of them say things like, "My neighbor got paid; pay me too." Or they say, "I fish off the gulf to eat. Send me grocery money." There are 50,000 of them with woefully inadequate documentation.

What was wrong with the BP claim centers? Why did they need to be replaced by your operation?

The BP claim centers served their purpose. It was an emergency bandage approach. Sometimes it went to the right people; sometime it went to the wrong people. I know of situations where they paid people who were in desperate straits. I've seen in many cases BP paid claimants and the payments appear to be fraudulent.

When it comes to final payments, you are counseling people to take the money. Some are suspicious of whether you are looking out for their best interests, since BP is paying your firm [Feinberg Rozen LLP] $850,000 a month to run the program. What do you say?

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BP lawyers say Gulf of Mexico oil spill size is overestimated by government

BP lawyers have said that government estimates of the size of the Gulf of Mexico oil spill are too big, perhaps by as much as 20 to 50 percent, signaling a dispute that will determine how many billions of dollars of fines BP will have to pay under the Clean Water Act.

The BP attorneys made their comments in an Oct. 21 meeting with staff members of the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, Priya Aiyar, one of the commission lawyers, revealed at a hearing Friday.

The oil giant, in a paper submitted to the presidential oil spill commission, also took issue with one of its draft reports. BP said that the assertion that "a consensus is emerging that roughly 5 million barrels of oil were released by the Macondo well is both premature and inaccurate."

BP said that the estimates by the Energy Department and an inter-agency group "appear biased toward the maximum amount of oil that could have been discharged, rather than the amount of oil most likely to have been discharged."

Penalties for spilling oil start at $1,100 a barrel and can rise to $4,300 if negligence is proved.

Rep. Edward J. Markey (D-Mass.), a sharp critic of the company, said in a letter Friday to BP chief executive Bob Dudley that "BP's new claim that the spill is much smaller than previously thought flies in the face of multiple lines of evidence, and raises questions whether this is a scientific finding, or a litigious position."

The oil company said that government and other academic experts did not properly take into account factors such as temperature differences, the amount of natural gas mixed in, and partial blockages from bent pipes, partial closure of the blowout preventer and from debris.

The company said that the flow rate had increased over time as impediments to the oil were cut away or eroded by the tremendous force of the oil and gas.

BP said that it was still too soon to reach a final conclusion about how much oil leaked from the Macondo well after a blowout sank the Deepwater Horizon drilling rig, killing 11 people. While the government's group left a margin of error of 10 percent, BP said it "believes the range of uncertainty is substantially greater."

The government has estimated that 62,000 barrels a day initially gushed from the Macondo well after the blowout, later dropping to 53,000 barrels as the reservoir was depleted. But the flow rate has been a subject of dispute from the early days of the spill, when the government estimated that 5,000 barrels a day were leaking into the gulf. Later, BP was collecting 25,000 barrels a day, and oil was still gushing into the gulf.

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Oil spill dumped 4.9 million barrels into Gulf of Mexico, latest measure shows

The blown-out well in the Gulf of Mexico gushed 12 times faster than the government and BP estimated in the early weeks of the crisis and has spilled a whopping 4.9 million barrels, or 205.8 million gallons, according to a more detailed analysis announced late Monday.

BP's Macondo well spewed 62,000 barrels of oil a day initially, and as the reservoir gradually depleted itself, the flow eased to 53,000 barrels a day until the well was finally capped and sealed July 15, according to scientists in the Flow Rate Technical Group, supervised by the U.S. Geological Survey and the U.S. Department of Energy.

The new numbers once again have nudged upward the statistical scale of the disaster. If correct -- the government allows for a margin of error of 10 percent -- the flow rate would make this spill significantly larger than the Ixtoc I blowout of 1979, which polluted the southern Gulf of Mexico with 138 million gallons over the course of 10 months. That had been the largest unintentional oil spill in history, surpassed only by the intentional spills in 1991 during the Persian Gulf War.

The new flow rate figures came as engineers made final preparations for a "static kill" operation that might plug the well permanently even before a relief well intercepts Macondo at its base. BP announced late Monday that the procedure would be delayed, probably until Tuesday, because of a leak in the hydraulic control system on the well's new cap.

(Photos: Oil spills through history)

Macondo's flow rate has been a major source of controversy since the April 20 explosion on the Deepwater Horizon. Early in the crisis, the Coast Guard and BP pegged the flow at 5,000 barrels a day, sticking with that figure even as outside scientists declared that it low-balled the actual rate. The flow rate team, assembled in May, tried to come up with a more solid figure. Scientists examining the surface slick as well as video taken by submersibles soon upped the estimate; by early June, the government declared the flow to be 35,000 to 60,000 barrels a day.

Even the high end of that estimate did not quite do justice to Macondo when it was at full throttle in the early weeks of the crisis. The new figures reflect more data, including high-definition video, sonar measurements of the oil-gas ratio, and pressure readings in the new capping stack before, and then after, the sealing of the well July 15.

"We may never know the exact answer. But as we get more data, you're able to shrink the uncertainty," said Bill Lehr, senior scientist for the National Oceanic and Atmospheric Administration and a leader of one of the teams.

The new figures indicate that the roughly 800,000 barrels of oil that BP managed to capture with its various containment strategies -- a riser insertion tool, a "top hat," and flaring from a surface rig -- represented only about one-sixth of the crude that surged into the gulf over the course of nearly three months. In all, about 1.2 million barrels of oil have been accounted for, either burned, captured or skimmed off the ocean's surface. That's about a quarter of the new estimate for the total spill.

Where the other three-quarters has gone is unclear. Some has evaporated; some has been consumed by microbes; but scientists remain troubled by the possibility that large amounts of oil remain underwater in cloudlike plumes.

"This further confirms that a lot of the oil is still at sea. And we just don't know the implications of it," said Ron Kendall, director of the Institute of Environmental and Human Health at Texas Tech University. Kendall will testify before Congress on Wednesday about his fears that dispersant chemicals have helped much of this oil sink into deep-sea habitats.

For government lawyers preparing a case against BP, this number could help calculate the maximum civil penalty BP might face for the spill. If BP is not found to have acted with negligence, the penalty would be $1,100 per barrel. About 4.1 million barrels escaped into the gulf, according to the new estimate, so that fine would come to $4.5 billion. If BP is found to have acted with "gross negligence" in the lead-up to the spill, the maximum penalty would be $4,300 a barrel, which would work out to $17.6 billion.

"You've got to go in with a number," said David Uhlmann, a law professor at the University of Michigan and the former chief of the Justic Department's Environmental Crimes Section. "And I think these numbers strengthen the government's hand," compared with previous estimates that produced only a range.

In all, the 4.1 million barrels estimated to have polluted the gulf would be enough to fill the Pentagon to a depth of 18 feet or to fill 260 Olympic swimming pools. The entire Gulf of Mexico, by comparison, would fill 880 million Pentagons, or 973 billion Olympic pools.

John Amos at SkyTruth, an organization that uses satellite imagery to study environmental problems, said that this new figure showed how far off BP and the Coast Guard were in the crucial days at the beginning of the spill.

"When the next spill happens, being in the right order of magnitude with the spill estimate is going to be important," he said.

The well remains pressurized and dangerous, but BP and government officials hope that will change with the static kill attempt. The goal is to inject mud into the well and drive the oil back to the source rock.

First comes what BP calls an injectivity test. Mud will be pumped into the well from a surface ship at a gentle rate of one barrel a minute, then two barrels a minute, then three, as engineers monitor pressures and look for signs that the rogue oil is being forced back into the source rock 2 1/2 miles below the seafloor.

"We want to confirm that we can inject the oil that's in the well bore back into the reservoir," BP Senior Vice President Kent Wells told reporters Monday.

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BP cost-cutting measures are focus of U.S. inquiry into gulf spill

METAIRIE, LA. - There's been a lot of talk about the "safety culture" at BP in the wake of the Deepwater Horizon disaster in the Gulf of Mexico. Now, federal investigators are probing what looks to them like BP's save-money culture.

At a federal hearing this week, an investigator revealed that BP's top manager on a drilling rig is given a performance evaluation that includes the category "Every Dollar Counts and Simplification."

Of 13 employee evaluations reviewed by investigators, 12 had documented ways they had saved the company large sums of money, typically six-figure amounts, and one had put together a spreadsheet showing that he could account for $490,000 in savings, said Jason Mathews, an investigator for the Bureau of Ocean Energy Management, Regulation and Enforcement, which is conducting the joint inquiry with the Coast Guard.

BP witnesses have acknowledged this week and in previous hearings that oil drilling is a business, and costs have to be taken into account. But they've said safety always comes first, and they denied compromising safety to save money.

But the government this week raised the question of whether BP took incremental shortcuts because it felt rushed to finish the problem-plagued Macondo exploration well, a job costing BP about a million dollars a day. Simply leasing the Deepwater Horizon rig from Transocean was costing $525,000 a day. Eleven people died when the mile-deep well blew out April 20, and more than 4 million barrels of oil spewed into the Gulf of Mexico in the nation's worst offshore oil spill.

The hearing at a Holiday Inn conference room was packed with lawyers for oil companies and rig workers. Although not a trial, but rather a fact-finding inquiry, the hearings have had plenty of courtroom theatrics, including turbo-charged lawyers leaping to their feet to belt objections. There has been a smattering of accusations lobbed across the room to the effect that some attorneys are trolling for material for civil lawsuits.

One document introduced into evidence this week showed that the Macondo job, originally projected as a $96 million operation, was on track to cost $58 million more than anticipated.

BP kept track of estimated completion dates for drilling jobs, and tried to figure out where the rig could go next so that it could stay active and have minimal down time. E-mails discussed by attorneys this week showed that BP hoped to squeeze in a quick job in May - plugging a well called Nile - before tackling a more complex job at another site, the Kaskida well, that might take six months.

"I know you all are under pressure to finish Macondo so we can get Nile P&A moving and not jeopardize the Kaskida well," one BP employee, Merrick Kelley, wrote to Macondo well team member Brian Morel a week before the blowout.

On April 9, David Sims, a BP manager, explained to colleagues in an e-mail that the Nile job was a "gap-filler" between Macondo and Kaskida, and that he hoped the government regulatory agency, the Minerals Management Service, would provide some flexibility in its approved date for starting the Kaskida job because of delays in completing Macondo.

The Macondo well had been a "nightmare," in the words of one team member. The widow of a worker killed in the explosion testified this summer that her husband had told her that "Mother Nature just doesn't want to be drilled here." The first rig to drill the well was damaged in a hurricane and had to quit the job. The Deepwater Horizon, drilling fast, suffered a stuck drill pipe March 8 when the hole collapsed. The crew had to start over, drilling a new hole.

Mathews, the investigator, asked John Guide, the BP well team leader for the Macondo job, whether cost-consciousness colored decisions involving safety.

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With BP's know-how and U.S. authority, the Macondo well was plugged

It was awkward from the start, this marriage of necessity between BP and the federal government. The government had ultimate authority; BP had the technology to plug the Macondo well. Something known as the National Contingency Plan called for a "unified command" in which government officials would issue orders and make pronouncements but BP would do the most crucial work and be the "responsible party."

People got confused. Who was in charge, really? The well kept gushing; everyone looked bad. Reporters asked top officials why the government didn't simply take over. But we're in charge already, the officials said.

The fact is, the two sides formed a team, weird as that might be at times. That is true today, still, with the Macondo well looking rather dead -- choked by a mile of cement -- but not yet terminated to everyone's satisfaction.

Government scientists and BP engineers have been devising a complex endgame. Before Macondo receives a conclusive dose of mud and cement at its base via a relief well, engineers want to take the old, damaged blowout preventer off the wellhead and replace it with a new blowout preventer. That will delay the "bottom kill" until after Labor Day, according to retired Coast Guard Adm. Thad Allen, the national incident commander.

BP engineers and the government scientists come from different cultures. In general, the engineers want to plunge ahead, and the scientists want to go slower.

"We helped them see that there are dangers lurking here, and there and everywhere," Energy Secretary Steven Chu told The Washington Post. "The Department of Energy is in charge of the nuclear arsenal. . . . This is no messing around. In our culture, you want to make sure that nothing can go wrong."

The Obama administration has claimed credit for turning an uncontrolled calamity into something managed and mastered. The response to the disaster would have been different, White House press secretary Robert Gibbs said after the well had been plugged with cement, had the administration not "pushed at every step of the way" for BP to "do things more comprehensively and faster."

BP has stayed clear of that debate.

"I've got a philosophy that when you're in the middle of the response, you stay focused on the response. When the response is over, that's a good time to analyze how the response went and decide what could have been done better," Kent Wells, BP senior vice president, said recently.

But the broader truth seems to be that BP and the government have overcome their natural antagonism to create a functioning partnership. The two sides had testy moments, but again and again they found a path to agreement. When Allen was asked whether a recent pressure test was conceived by the government scientists or the BP engineers, he replied: "It's hard to say anymore, we've been together so long. Some of these conversations start around the coffeepot."

The government needed BP because the company had the tools to plug the hole. BP benefited from the outsider perspective of government scientists and needed officials of the Environmental Protection Agency to run interference on such contentious issues as the use of chemical dispersants, a subject on which BP was viewed as having zero credibility.

Keeping everyone moving in the same direction has been Allen, perhaps the least-excitable person in American public life. Allen said in a recent interview that his goal was to "produce unity of effort" and added, "You can't do that by polarizing, or creating conflict, or getting caught up in a personal agenda or getting too excited about things."

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Development in once-rural areas put populations closer to natural gas pipelines

On Sept. 9, a 30-inch natural gas pipeline exploded in the suburban community of San Bruno, Calif., creating a 2,000-degree fireball that killed eight people, destroyed 37 homes and left more than 60 people injured. A gaping crater replaced homes at the center of the blast.

Could it happen here?

A pipeline rupture of approximately the same magnitude did occur not far from the Washington area a couple of years ago, but with less-dire consequences.

On Sept. 14, 2008, a 30-inch span of the Transco pipeline ruptured in Appomattox County, Va., creating a fireball that destroyed two homes and caused five injuries. Twenty-three families were evacuated.

The Appomattox explosion was larger than the explosion in San Bruno, but it occurred in a less-populated area, said Carl Weimer, executive director of the Pipeline Safety Trust, a watchdog organization based in Bellingham, Wash.

The Appomattox rupture was caused by corrosion of the 53-year-old pipeline, which had been inspected three months earlier by a "smart pig," a computerized scanning device that travels through a pipeline searching for dings, dents or corrosion, but had not yet been repaired. Transco's owner, the Williams Cos., paid the U.S. Transportation Department a $952,000 fine, replaced 2,500 feet of the pipeline, "smart pigged" all of its pipelines in Virginia, and performed pressurized water tests to validate the repairs.

Aging pipelines - and growing populations in the once-rural areas where pipelines were routed decades ago - have increased the risks associated with ruptures throughout the United States.

"The average transmission pipe is 50 years old," Weimer said. "If you put a steel pipe in the ground 50 years ago, you can have problems. It's not the same strength as steel today, and it doesn't have the anti-corrosive coating. But the more important factor is how the company has operated and maintained the pipes."

Some of the largest interstate pipelines in the United States run through the Washington area. The massive Transco pipeline, which consists of three and four parallel pipelines of 30 to 42 inches each, runs through Culpeper, Fauquier, Prince William, Fairfax, Montgomery and Howard counties on its way north from the Gulf of Mexico and shale resources in Alabama to supply natural gas up the East Coast to New York City.

One of the largest import facilities for liquefied natural gas in the United States is at Cove Point in Calvert County. Tankers travel up the Chesapeake Bay to deliver gas from abroad; from Cove Point it is distributed via transmission pipelines throughout the region.

Columbia Gas Transmission also runs major gas pipelines across the western edge of the metro area. Washington Gas taps into these resources with 200 miles of high-pressure transmission pipelines, which run through every county in the metro area and even beneath the Mall. The pipelines connect to a 26,000-mile web of smaller distribution pipelines, typically three-quarters of a foot to one foot in diameter, where the pressure is reduced so the fuel can enter homes and businesses.

Digging up trouble

The majority of pipeline incidents in the D.C. metro area, however, are not from the large transmission pipelines. In fact, there haven't been any incidents on the 20 miles of 24-inch transmission pipelines in the District (most of which date to the 1960s) "as far back as anyone can remember," said Betty Ann Kane, chairman of the D.C. Public Service Commission.

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Plagiarism Checker X 4.0.5

Best Plagiarism Detector Ever, Just Try it. Plagiarism Checker X finds the Plagiarism of your content. Whether you are a student, a teacher, a blogger, or a website owner; PlagiarismCheckerX can help you deal with all duplication concerns.

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TouchCopy 12.37

Copy from your iPod to iTunes or your PC View and Copy iPod and iPhone Photos to your computer. View and save photos taken on your iPhone. Copy and manage Notes, Contacts and Calendars on your iPod - all from within TouchCopy.

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Lan-Secure Wireless Protector Enterprise 4.4

Easily protect your office network Wireless auto switch for automatic disable of WiFi adapter on computers with active LAN connection supporting unlimited network computers.

Wireless Protector is windows software that automatically disables wireless and other devices on computers that connected to the company network with LAN cable and re-enable the disabled devices when the LAN cable is disconnected from the protected computers. Wireless Protector is acting as a server to all protected computers and it needs to be installed only once on any active windows platform that connected by LAN cable to the company network.

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Library Manager 7.9.4

A Complete Soln. for all Library Needs Library Manager helps in Managing all Library data such as Student, Staff Books and Digital Media Database. Various Reports for Books, Titles, Subjects, Staff Departments, Students and billing of Magazines and Newspapers can be easily maintained and

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