Monday, June 7, 2010
ALMOST EVERYTHING YOU SHOULD KNOW ABOUT THE CURRENT GULF OIL SPILL
On May 1, 11 days after the Deepwater Horizon exploded, burned and crashed in the Gulf of Mexico, my Daily Blog provided a summary. I said that the total amount of oil spilled already equalled the Exxon Valdez disaster of 11 million gallons. At this rate, then, Day 47 (today), would mean 47 million gallons. How convenient, a million gallons/day, a rate reinforced today. That posting also indicated that the worst oil spill was 420 million gallons in 1991 when Saddam Hussein's troops purposely destroyed wells in Kuwait, sending crude into that other Gulf.
But what is the reality today in the Gulf of Mexico? It depends on who you ask.
Here, then, is the latest summary on Day 47:
1. The average consensus is a total leak at least three times the Exxon Valdez Alaska spill, but only 10% of that 1991 Kuwait total.
2. BP has partially capped the well, and is recovering a portion (on June 6, maybe 60% of the consensus average, which is 770,000 gallons/day, or slightly less than half if the bottom hole outflow is at a million gallons/day) of the leaking crude.
3. A complete ban on offshore oil drilling is now being discussed in the U.S. Senate.
4. While the U.S. House is considering raising the $75 million cap on liability, independent sources report that BP's liability could well go up to $40 billion. Huh? The Congress is dealing at a level more than 500 times lower than the reality!
5. The following liable companies have experienced a stock value drop from their 52 week high of:
a. BP 40%
b. Transocean 48%
c. Halliburton 35%
6. The Department of Interior's Mineral Management Service head was fired and the office is being overhauled.
World markets all took a beating today, with the Japan Nikkei sinking 380 to 9521. The Dow Jones Industrials fell 116 to 9816. Gold rose $24/toz to $1244 and crude oil is at $71/barrel. You can add Hungary to the PIIGS, or in other words, European pork has become a fruit: PHIIGS. Double dip coming?