Hundreds of thousands of gallons of crude oil were befouling the Gulf of Mexico (GOM) last week far faster than 2,000 emergency responders and hundreds of vessels could contain the mess created by the apparent blowout of a deepwater well just 42 miles southeast of Venice, LA.

Last Friday as the oil was reaching the wildlife refuges and seafood fishing grounds of the Louisiana coast -- where shrimp would be just heading out to sea this time of year -- hope of staunching the flow from a ruptured well was possibly weeks away. It was feared that weather over the weekend would push oil into ponds and lakes of southeastern Louisiana. The slick was expected to reach Florida on Monday.

The Obama administration said the spill was of "national significance" and there would not be any new offshore drilling until questions were answered and safety was assured. Governors of Louisiana and Florida declared states of emergency. Top administration officials held a briefing in New Orleans Friday to inform the nation they were doing all that government could do to avert a looming environmental disaster.

There have been several ideas for sealing the well and gathering the oil (see related story) but anything that was working wasn't nearly enough. Friday was to see the undersea application of oil dispersants, possibly a first for the U.S. deepwater. The hope for Saturday was to begin drilling a relief well that might stop the flow but that would take time.

The oil is emanating from a BP plc well on Mississippi Canyon Block 252 (MC252), where the drilling rig Deepwater Horizon, owned by Transocean Ltd. and under contract to BP, experienced an apparent well blowout, burned and sank, taking 11 lives on April 20 (see NGI, April 26).

Anybody who didn't know then what a blowout preventer is, does now. As of press time Friday repeated efforts to close off the flow from the well had failed.

"This particular incident has huge ramifications for what happens with energy development in the oceans all around the world...The oil and gas industry has a tremendous amount to lose in terms of their global economic value here," said Department of Interior Secretary Ken Salazar on Friday.

The secretary last Friday announced the formation of Interior's Outer Continental Shelf (OCS) Safety Oversight Board, which will provide recommendations regarding interim measures that may enhance OCS safety, and recommendations for improving and strengthening the department's overall management, regulation and oversight of OCS operations.

Analysts predicted political pain for the energy industry, which has strived for years to expand drilling access and recently won some ground with the Obama administration (see NGI, April 5).

"...BP continues to be associated with deepwater woes [Thunder Horse (see NGI, Sept. 25, 2006)], and we wonder if this accident impacts BP's ability to attract non-operating partners in future projects," analysts at Tudor, Pickering, Holt & Co. Securities Inc. said in a note last Monday. "...Captain Obvious also points out that the timing was impeccably bad with the Obama administration contemplating expanding offshore drilling."

By last Friday the same analysts were calling the spill "a black eye for the industry that is going to continue to get darker the longer the oil is still leaking."

The man-made disaster is unfolding nearly five years after the Gulf Coast -- as well as the region's energy infrastructure -- were raked by hurricanes Katrina and Rita. The fouling of the GOM also follows by weeks another man-made disaster: the coal mine explosion in West Virginia that left 29 dead -- another reminder that the price for energy can be high indeed.

And the spill is rekindling decades-old memories of the breaching of tanker Exxon Valdez in Prince William Sound, AK, and its spilling of 11 million gallons of oil in 1989.

The GOM well, which last week had at least three leaks, is thought to be releasing about 200,000 gallons/d, a rate that could cause the spill to eclipse the Valdez disaster in less than two months. BP has said it could take up to three months to seal the well if it must rely on a relief well or wells to accomplish the job.

Last week Obama administration officials and Louisiana Gov. Bobby Jindal called on BP to seek more help from the federal government and the industry at large.

"We are concerned and we have encouraged BP strongly to seek even more assistance from the federal government because I do think this response could overwhelm their capabilities," Jindal said.

Salazar expressed more confidence in the giant oil company. "BP has all hands on deck," he said. However, "we have also asked [BP] to reach out to the entire oil and gas industry around the world. I asked BP to put together a swat team to put together the best ideas from other companies.

The current cost estimate for response efforts is $6-7 million a day. Gulf Coast shrimpers are suing; so will many others before it's all over.

BP COO Doug Suttles said ExxonMobil Corp., Royal Dutch Shell plc, Chevron Corp. and Anadarko Petroleum Corp. had all been solicited for advice on how to stop the flow of oil. Oil industry executives, questioned in various first quarter conference calls, have said they have offered help.

It was also feared that the spill could close shipping channels, which could affect tanker deliveries of oil to the United States. Last Thursday afternoon Rear Admiral Mary Landry, who heads the Eighth Coast Guard District, told reporters lessons learned during hurricanes Katrina and Rita would be drawn upon to preserve traffic flow in the GOM and on the Mississippi River.

"It is our goal to not allow the disruption of traffic on the Mississippi River...We cannot disrupt maritime commerce," she said.

In a letter to President Obama on Thursday U.S. Sen. Bill Nelson (D-FL) said he was filing legislation to prohibit Interior from acting on administration plans to expand offshore drilling, including seismic testing and other exploration.

"Such a pause should remain in effect pending the outcome of federal investigations into the cause of this incident and the identification of ways to prevent something similar from happening again," Nelson said in his letter to Obama.

Speaking on the Senate floor last Thursday Sen. Mary Landrieu (D-LA), said the country must react to the disaster in a "measured and right way" rather than in fear. "Retreat is not an option...We must continue to drill."

U.S. Rep. Edward J. Markey (D-MA) last week wrote to the heads of the top five U.S.-based oil companies, telling them to prepare to appear before the House Select Committee on Energy Independence and Global Warming, which Markey chairs.

Last Tuesday House Committee on Energy and Commerce Chairman Henry A. Waxman (D-CA) and House Subcommittee on Oversight and Investigations Chairman Bart Stupak (D-MI) sent letters to BP and Transocean requesting documents for an investigation of the adequacy of their plans for accidental oil and gas releases at the now-sunk Deepwater Horizon drilling rig and other offshore deepwater or ultra-deepwater drilling facilities.

In the meantime, inspectors from the Minerals Management Service (MMS) will be visiting deepwater rigs to review records of blowout preventer testing and determine that if any problems have been found they were corrected, MMS' Michael Saucier, regional supervisor for field operations, told reporters. He said the task should be completed in seven days.

Last Wednesday responders made their first attempt to burn a portion of the spill after more leaks had been discovered at the disabled well. BP along with USCG and MMS used a controlled burn on part of the spill as responders ratchet up attempts to contain it. The burn, for which the USCG had pre-approval, was successful, Suttles said. However, it was on a small scale and consumed about 100 bbl of oil. Suttles said responders were prepared to burn 500-1,000 bbl at a time when the weather permits.

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