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Tab For Gulf Oil Disaster Tops $2.3 Billion


Costs associated with the Gulf oil disaster have gone up more than $300 million in less than a week, BP said Friday.

“The cost of the response to date amounts to approximately $2.35 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid and federal costs,” a company statement said. BP put the tab at $2 billion on Monday.

The company previously agreed to set aside $20 billion in an escrow account for spill-related costs, a sum that does not cover fees and penalties that could be imposed by the federal government.

“To date, almost 74,000 claims have been filed and more than 39,000 payments have been made, totaling almost $126 million,” the company said.

According to BP, approximately 37,000 personnel, more than 4,500 vessels and some 100 aircraft are involved in the response effort.

The news came a day after BP’s stock price hit a new low. The troubled oil giant’s stock closed Thursday at $28.74 a share — down 52 percent since April 20, when its Deepwater Horizon oil rig exploded off the coast of Louisiana, killing 11 workers.

Paving the way for drilling to resume, a federal judge Thursday denied a request to keep a six-month moratorium in place pending a government appeal.

U.S. District Judge Martin Feldman in New Orleans, Louisiana, issued a preliminary injunction against the ban Tuesday. The government had asked Feldman to delay lifting the ban until an appeals court reviewed the issue later this summer.

The moratorium was imposed by President Obama on May 27. The moratorium prohibited drilling in more than 500 feet of water and prevented new permits from being issued.

In an emergency hearing Thursday, the judge denied the government’s motion to stay his decision pending appeal “for the same reasons given” Tuesday for issuing the injunction.

Government lawyers did not file an appeal to the Fifth Circuit Court of Appeals Thursday, though the expected move could come as soon as Friday.

In Tuesday’s ruling, Feldman wrote, “An invalid agency decision to suspend drilling of wells in depths of over 500 feet simply cannot justify the immeasurable effect on the plaintiffs (oil drilling support companies), the local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.”

The government has 30 days to show it is beginning to comply with Feldman’s order and start issuing permits. The appeals process can continue, but until the appeal, the government must act as if Feldman’s order will be upheld.

Meanwhile, the full Senate Energy and Natural Resources committee met Thursday to consider bills related to Minerals Management Service reform and to offshore drilling. Committee member Sen. John Barrasso, R-Wyoming, said the Obama administration is putting ideology over scientific integrity.

“The administration put together a group of experts to review safety recommendations for offshore oil and gas exploration,” Barrasso said. “The administration proudly stated that the safety recommendations were peer reviewed. Well, afterwards, the American people found out that the most significant recommendation — which was the moratorium — was not actually peer reviewed. The moratorium was added after the experts had been consulted. The majority of the experts consulted say that their names were used to justify a political decision made by the administration.”

Sen. Mary Landrieu, D-Louisiana, responded, “When your team was in charge, which would be under the previous administration, you didn’t leave a very clear instruction book as to how to do this. And in defense of this administration … the president is trying to rise above partisanship. And I think we all have to make our best effort to do this. This is not a time to try to take what I would consider a cheap shot.”

(Source: CNN)



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