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BP Faces Scrutiny on Oil Spill Estimate

Pressure mounts on BP to face up to the actual rate of oil leaking from the underwater well in the Gulf of Mexico.

WASHINGTON, D.C. (

TheStreet

) -- Rep. Edward J. Markey (D-Mass.) has sent an investigatory letter to

BP

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asking BP to come clean on the actual amount of oil flowing daily out of the leaking underwater wells in the Gulf of Mexico, one of several pressure points on Friday being applied to BP about the wide-ranging estimates.

Early on Friday morning,

National Public Radio

reported that the actual daily flow of the oil spill was upwards of 70,000 barrels of oil. NPR quoted research done by a Purdue University professor, utilizing a technique called particle image velocimetry to determine the volume of the flow. Even taking into account the technique's margin of error of 20%, the oil leak would range between 56,000 barrels a day and 84,000 barrels a day.

The

New York Times

added to the attacks on BP's estimates on Friday morning also, quoting a Florida State University scientist who has estimated that the Gulf of Mexico oil spill could easily be "four or five times" larger than the 5,000 barrel a day estimate that has been the conventional wisdom. The

Times

also reported that specialists in measuring underwater flow from the Woods Hole Oceanographic Institution were contacted by BP but ultimately told not to come to the Gulf of Mexico to do the work in which they specialize.

BP itself told a closed-door meeting with government officials last week that in a worst-case scenario, the oil well could be leaking up to 60,000 gallons a day into the Gulf of Mexico. However, at the time, BP CEO Tony Hayward sought to downplay that estimate, saying it was only a worst-case scenario. Additional, the BP CEO was quoted as saying last Wednesday, "A guesstimate is a guesstimate. And the guesstimate remains 5,000 barrels a day."

Guesstimates were fast-becoming not nearly good enough on Friday. The Obama administration feared that it was losing control of the oil spill crisis management, as successive BP's efforts failed and additional charges were levied against the Minerals Management Service of the Department of the Interior for being, more or less, "in bed" with the oil industry.

BP continues to say that an estimate of the rate of leaking from the well would have no impact on its efforts to contain the oil spill, but that PR line was also fast-becoming not good enough on Friday.

In the first major polls released on the oil spill in the court of public opinion, Obama is doing better than BP, but not by as much as the President would probably prefer. A poll released by NBC and the Wall Street Journal on Thursday showed that approximately 45% of Americans think the government hasn't done enough in response to the spill, while 43% think the government has done all it can. Approximately 50% of survey takers said BP has not done enough, while only 37% think BP has made good on its claims to aggressively attack the oil spill.

The percentage of those surveyed who strongly felt that BP had not done enough was much higher than the percentage of survey takers who indicated a strong disapproval of the government's efforts.

Even so, President Obama felt the need to give a midday speech to the American public on Friday about the oil spill and what he called the "relentless" approach to containing the spill. The President also helped BP's PR line by saying stopping the leak is more important than measuring the exact rate of leakage from the underwater well.

President Obama also took the opportunity during his midday speech to chastise BP,

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and

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for passing around the buck during their testimony before House and Senate committees earlier this week.

Congressman Markey wrote in his investigative letter sent to BP on Friday, "The public needs to know the answers to very basic questions: how much oil is leaking into the Gulf and how much oil can be expected to end up on our shores and our ocean environment? ... I am concerned that an underestimation of the flow may be impeding the ability to solve the leak and handle management of the disaster. We have already had one estimate that grossly underestimated the amount of oil being released and we cannot afford to have another."

In a House hearing earlier this week on the oil spill, BP officials responded to a question from Rep. Markey about a worst-case scenario, saying that a maximum estimated flow would be 60,000 barrels a day, with a mid-range estimate of 40,000 barrels a day.

Yet on Wednesday, testimony from the companies before the Energy and Commerce Committee focused on an estimate of 5,000 barrels a day.

The full text of

Rep. Markey's letter to BP was sent to president and CEO of BP America, Lamar McKay, who had represented BP in the hearings earlier this week.

Among the questions asked by Rep. Markey are:

Is it accurate to suggest, as BP Vice President Kent Wells did recently, that "There's just no way to measure it?" If so, then does BP stand behind the current estimates of the amount of oil flowing or not?

Could an increased flow from the riser pipe affect proposed or attempted efforts to stop the flow of oil, such as the failed containment dome strategy, the so called "junk shot" strategy, attempts to place an additional pipe into the riser, and the drilling of relief wells for plugging the well bore?

BP has suggested in press reports that it is focused on closing the leak, rather than in measuring it. Are efforts to close the leak inconsistent with efforts to measure its volume? Why wouldn't such efforts actually be complementary?

Shares of BP were down more than 4% at midday Friday, a decline that was 1% greater than the 3% slump in the energy sector on Friday, as all the markets suffered another day of euro-related selling.

-- Reported by Eric Rosenbaum in New York.

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