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BP, Feds Clash Over Whether to Keep Gushing Oil Well Shut Off

Jul 19, 2010 | Parker Waichman LLP

It appears BP and the US government disagree over what should be the next step for the BP oil spill. BP wants to keep the leaking well shut off, following three days of pressure tests on a new containment cap it says were encouraging.

However, according to a report in The New York Times, the US Government wants to proceed with more caution, after “undetermined anomalies” were discovered on the seafloor nearby. The pressure tests have also detected a seep – usually a flow of hydrocarbons from the seafloor – “a distance from the well”. Federal officials have since ordered BP to step up monitoring of the well, the Times said.

The seepage was announced last night by Retired Coast Guard Adm. Thad Allen, who is heading up the federal response in the Gulf of Mexico. In a letter to BP, he said testing would be allowed to continue for now, but that the discovery of both the seepage and anomalies suggest that the well could be damaged. If this is the case, the well may have to be reopened soon to avoid making the situation worse, the letter said.

“When seeps are detected, you are directed to marshal resources, quickly investigate, and report findings to the government in no more than four hours. I direct you to provide me a written procedure for opening the choke valve as quickly as possible without damaging the well should hydrocarbon seepage near the well head be confirmed,” Allen wrote.

A report from MSNBC said pressure readings on the cap weren’t as high as expected. This could be an indication that there is a leak somewhere else in the wellbore, or deep down in bedrock, which could make the seabed unstable. To prevent further damage, the oil flow would need to resumed to relieve pressure and allow crews to hook up containment ships to siphon out the oil.

BP, on the other hand, wants to allow the cap to remain closed until relief wells, which would put an end to the oil spill once and for all, are finished. BP has also asserted that the seep may not be related to its blown well.

There are some who are questioning BP’s motives for wanting to keep the well shut off. Representative Edward Markey, a Massachusetts Democrat, expressed concern over the weekend that doing so was part of a strategy to prevent the US government from accurately measuring how much oil and natural gas spewed into the Gulf of Mexico over the course of the last three months.

If the oil spill is found to be the result of gross negligence, the federal government would be able to fine BP $4,300 for each barrel of oil that leaked into the sea during the disaster. For that reason, it’s vital that an accurate measurement of the flow rate be obtained.

“If the well remains fully shut in until the relief well is completed, we may never have a fully accurate determination of the flow rate from this well,” Markey said in a letter to Allen.

Markey’s letter pointed out that BP has “consistently underestimated the flow rate” from the damaged well, and suggested that the company was trying to “evade billions of dollars in fines.”

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