BP plc Liability Rises As Oil Moves East

The BP plc (NYSE: BP) Deepwater Horizon spill is quickly moving east. The NOAA now reports what a number of scientists have already said–the oil slick will move into powerful currents that flow toward Florida. The currents are referred to as the Loop

The NOAA reports:

The Loop Current is an area of warm water that comes up from the Caribbean, flowing past the Yucatan Peninsula and into the Gulf of Mexico. From there, it generally curves east across the Gulf and then flows south parallel to the west coast of Florida. As it flows between Florida and Cuba it becomes the Florida Current which moves through the Florida Straits, where it finally joins the Gulf Stream to travel up the Atlantic Coast.

Satellite imagery on May 17 indicates that the main bulk of the oil is dozens of miles away from the Loop Current, but that a tendril of light oil has been transported close to the Loop Current. NOAA is conducting aerial observations today to determine whether oil has actually entered the Loop Current.

It has become clear within the last few days that BP and NOAA had underestimated the rate of the leak which had been put at 5,000 barrels a day. Some scientists put the number at six times that.

The size and range of the spill do not necessarily mean that it will do a great deal of environmental damage, at least according to BP. The chief executive of BP tells Sky News he believes the massive Gulf of Mexico oil spill will end up having only a “very, very modest” environmental impact. If that is not the case, BP faces billions of dollars of liability suits from fishermen and states that rely heavily on tourism in the region.

The environmental issues aside, the Deepwater Horizon leak now has the potential of blanketing the entire Gulf coast from Texas to Florida  OilPrice.com reports that a massive frozen oil blob has formed beneath the spill at 3,000 to 4,000 feet below the surface. The website also report that “WMR sources also report that the oil mass has resulted in dead zones in the Gulf of Mexico that have cut off oxygen and killed massive numbers of marine creatures and plant life.”

Other than that, everything is fine.

Douglas A. McIntyre