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Gulf Oil Spill: Feds Halt New Drilling In Gulf

MATTHEW DALY   06/ 4/10 12:57 AM ET   AP

Gulf Oil Spill

WASHINGTON — The federal government slapped BP with a $69 million bill Thursday to cover initial costs of responding to the largest oil spill in U.S. history. An angry President Barack Obama said he was convinced that BP has not moved quickly enough to stop the flow of oil and clean up the mess.

Obama, who on Friday planned to make his second visit in a week to the battered Gulf Coast, used his strongest language to date in assailing BP.

"I am furious at this entire situation because this is an example where somebody didn't think through the consequences of their actions," Obama told CNN's Larry King. "This is imperiling an entire way of life and an entire region for potentially years."

Obama said BP has felt his anger, but added that "venting and yelling at people" won't solve the problem. His remarks aired Thursday night.

Obama had not previously voiced such sweeping criticisms of BP. But he said Thursday he had not seen the kind of "rapid response" from the British company that he'd like.

The $69 million bill being sent to BP is the first of what are likely to be many bills sent to the oil company to cover expenses incurred by the government in responding to the spill, which has dumped at least 21 million gallons of oil into the Gulf, according to government estimates. A White House official said BP has until July 1 to pay the bill.

Meanwhile, the Minerals Management Service stopped issuing permits for new oil and gas drilling in the Gulf, even as an administration official denied a formal freeze had been decreed on drilling in shallow water.

"There is no moratorium on shallow water drilling," said Kendra Barkoff, a spokeswoman for Interior Secretary Ken Salazar. "Shallow-water drilling may continue as long as oil and gas operations satisfy the environmental and safety requirements Secretary Salazar outlined in his report to the president and have exploration plans that meet those requirements."

Barkoff's comments appeared to contradict an e-mail sent out earlier in the day by a top official in the Gulf Coast office of the Minerals Management Service, the federal agency that oversees offshore drilling.

Michael J. Saucier, regional supervisor of field operations for the MMS Gulf of Mexico region, told a company seeking a permit that "until further notice" no new drilling is being allowed in the Gulf, no matter the water depth. A copy of the e-mail was obtained by The Associated Press.

The e-mail came a day after the minerals agency granted a new drilling permit sought by Bandon Oil and Gas for a site about 50 miles off the Louisiana coast and 115 feet below the ocean surface. Environmental groups accused the administration of misleading the public by allowing work to resume in waters up to 500 feet deep while maintaining a moratorium on deepwater drilling

Obama announced the moratorium last week as part of the administration's response to the April 20 explosion of the Deepwater Horizon oil rig, which triggered the massive oil spill that is gushing millions of gallons in the Gulf.

The contradictory messages frustrated drilling critics and supporters alike.

"Every single MMS reform and moratorium announcement since the explosion has gone through this same process of announcement, confusion, seeming violations, reinterpretation and reconfiguration," said Kieran Suckling, executive director of Arizona-based Center for Biological Diversity and an outspoken drilling opponent. "I've never seen such a confused, uncertain response to crisis."

A group of Louisiana lawmakers said the drilling bans could further devastate the state's economy, which is struggling with job losses and business shutdowns tied to the oil spill.

"Katrina hurt us temporarily, but this will wipe us out altogether," said state Rep. Nita Hutter, a Republican who represents a district that was wrecked by Hurricane Katrina.

Republican Rep. Gordon Dove said it was unfair to penalize Exxon, Chevron and other oil companies "if BP did something that was careless." He said the shutdown of offshore drilling could force thousands of people out of work.

While details of the president's trip were still being worked out, White House spokesman Robert Gibbs said Obama will likely meet with governors of the affected states, local business leaders and Coast Guard Adm. Thad Allen, who is overseeing the government's response. Obama traveled to the Gulf twice last month, including a visit on May 28.

With the administration warning that the spill could continue through the summer, Gibbs said Obama plans to travel to the region "as often as the situation dictates."

Gibbs deflected criticism that Obama hasn't expressed enough anger or frustration over the failed attempts to stop the leak, insisting that the president would ultimately be judged on the effectiveness of the response, not his emotions.

"Pounding on a podium isn't going to fix a hole in the ocean," Gibbs said.

The $69 million tab being sent to BP is the first of what are likely to be many bills sent to the oil company to cover expenses incurred by the government in responding to the spill. A White House official said BP has until July 1 to pay the bill.

Confusion over shallow-water drilling appeared to stem from new restrictions on offshore drilling announced Wednesday night.

Bob Abbey, the acting director of the Minerals Management Service, said operators will be required to submit additional information about potential risks and safety considerations before being allowed to drill. The rule applies even to those plans that have already been approved or received a waiver exempting them from detailed environmental scrutiny, Abbey said.

The new information must be submitted before any drilling of new wells begins, Abbey said, adding that the rule should tighten safety standards and improve consideration of risks in drilling plans.

Jim Noe, senior vice president at Hercules Offshore Inc., a leading Gulf Coast oil rig company, said it's unclear what the Interior Department wants before allowing shallow-water drilling to continue – or how long the approval process will take.

"What we do know is that we've been told that additional safety information will be required in order for us to commence drilling," Noe said. "We're hoping it's something that can be done quickly."

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Associated Press writers Ben Evans and Julie Pace in Washington and Melinda Deslatte in Baton Rouge, La., contributed to this report.

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Filed by Nick Graham  |