Is It Time for Heads to Roll in BP Oil Spill?

The BP oil spill in the Gulf of Mexico continues to gush a month after the oil rig explosion. Is it time for top brass at BP or from within the government to take the fall?
Publish date:

(BP poll updated for resignation of Obama press conference)



) -- Is it finally time for heads to roll in the


(BP) - Get Report

oil spill?

Thursday was looking like a mixed day for BP in its effort to contain the Gulf of Mexico oil spill.

BP shares were up more than 7% in trading, doubling the gains of an energy sector rally and coming off a 52-week low.

There was no official word from BP on Thursday about the top kill, but U.S. Coast Guard Rear Admiral Thad Allen was quoted in the

Los Angeles Times

as saying that the top kill had worked and would be followed by a permanent cementing of the well.

>>BP Top Kill: Live Video Feed

Previously, the Coast Guard official had been more guarded in his optimism, saying late on Wednesday that the lack of bad news in the top kill effort was encouraging news, and that the top kill plan was proceeding according to plan.

At the same time, though, President Obama is expected to announce on Thursday bad news for oil drillers, as the White House formalizes a six-month ban on what has been an informal moratorium on any new drilling.

The Coast Guard Rear Admiral also delivered some distressing news amid his hopeful comments on the top kill, saying the new estimate for how much oil has been leaking into the Gulf of Mexico is between 12,000 to 25,000 barrels per day, well above the previous, heavily criticized estimate of only 5,000 barrels. This fact was seized upon by Rep. Edward Markey (D. Mass.) as proof that BP had been lowballing its estimate of the oil leak to mitigate the level of government fines it might face.

BP Oil-Spill Poll

Click here to vote on who should be fired for the BP oil spill

Yet regardless of a final verdict on the BP top kill or the ban on offshore drilling, questions will linger for months to come in terms of a final verdict on BP and the federal government response to the oil spill.

The Obama administration stepped up the level of rhetoric aimed at BP for weeks, and last Sunday, Secretary of the Interior Ken Salazar told the press that he was "not completely" confident BP was on top of the oil spill situation in the Gulf of Mexico. Interior Secretary Salazar had some strong words of warning for BP, saying "If we find they're not doing what they're supposed to be doing, we'll push them out of the way appropriately."

Obama environmental advisor Carol Browner said the dreaded words on national television on Tuesday, May 25: the BP oil spill in the Gulf of Mexico will go down as the worst in U.S. history.

>>Oil Spill in Pictures: Gulf of Mexico Impact

Throughout the now month-old oil spill crisis, the Interior Secretary has been "applying a boot to BP's neck" to make sure the oil giant was employing all of its resources in fighting the oil spill. Outside BP headquarters in Houston on Sunday, Salazar again repeated his favorite phrase about the government keeping its boot on BP's neck for results. Now that a month has passed and success has eluded BP's efforts, though, Obama's Interior Secretary seems to be getting ready to move his boot from BP's neck to the oil company's rear-end.

BP chief operating officer Doug Suttles was back on U.S. television on Monday morning, in his now all-too-familiar role balancing frustration with optimism.

BP's television point man turns up several times a week on the circuit of morning shows to express the frustration from BP in terms of its failed efforts to fight the oil spill in the Gulf of Mexico. The BP executive's comments are generally framed within an optimistic long-term outlook for the Gulf, and a reminder that BP is doing all it can, even if it has so far fallen short of the mark.

On Monday morning, BP's COO again said all the customary words, pleading with the public, and responding to the Interior Secretary's comments. "What I do know is, everyone is frustrated. I think the people of the region are frustrated. I know we are, I know the government is.... The fact that it's taken this long is painful to everybody," Suttles said.

The fact that the oil spill is occurring 5,000 feet below the surface of the ocean is the one fact that gives BP a little breathing room, as there is no existing baseline for success or failure.

President Obama used his early afternoon press conference on Thursday to hit home key administration points: the federal government has made the BP oil spill a priority from day one, recognized "the potential enormity" of the oil spill from day one, and will make sure the BP pays for every cent of the oil spill containment and cleanup, and in the end, the government does not have better technology than BP which would allow it to push BP aside in the oil spill cleanup effort.

BP Oil-Spill Poll

Click here to vote on who should be fired for the BP oil spill

President Obama did concede on some mistakes made, saying the government did not have an advanced response team ready for a worst-case scenario oil spill, but also said that there has been a historic complacency about worst-case scenarios.

"Where I was wrong was belief that oil companies have their act together when it comes to worst case scenarios," President Obama said. The President continued that his mistake was not based on "my blind acceptance" of oil company statements, but the fact that there has been deep sea drilling in the Gulf of Mexico for a long time without a record of accidents like this one.

The real damage was not the back-and-forth of words between BP and the government, but the more than 65 miles of Louisiana shoreline that were newly under siege from advanced heavy crude oil over the weekend. Close to 150 miles total of Louisiana coast line were under attack from the oil by the weekend, the state government said.

Louisiana's governor Bobby Jindal was more focused on the state effort than BP's continued failure, saying that it was pushing ahead with a plan of using containment booms, and berms made of sandbags, to stop the oil gushing out of the BP underwater well from contaminating more shore line. Jindal said over the weekend at a press conference that resources from BP and the federal government were still inadequate weeks into the oil spill, and a second Louisiana state official said on Monday morning that it was time for the state to take the situation into its own hands.

Should those hands include an axe and should BP or the federal government, or both, have their heads on the chopping block?

While Louisiana says that the U.S. Coast Guard has fallen short in its assistance, the U.S. Army Corps of Engineers also is considering a broader dredging plan that would construct sand berms across Louisiana barrier islands.

>>BP Top Kill: Live Video Feed

If the top kill doesn't work, BP already has its next strategy on deck and ready to provide another round of short-term optimism. BP would next turn to what it calls a "LMRP cap containment option" which would remove a damaged portion of the well and replace it with a tube meant to siphon oil directly from the leak. This strategy is expected to be ready by the end of the week.

There were photos of pelicans, which had just been removed from the endangered species list six months ago, now covered in oil. More fishing waters and oyster beds were under siege, as BP failed not just the pelicans, but also Louisiana's fishing industry.

BP Oil-Spill Poll

Click here to vote on who should be fired for the BP oil spill

Interior Secretary Ken Salazar, Homeland Security Secretary Janet Napolitano, and Congressional delegation were back in the Gulf region this week, as the Obama administration makes every effort -- at least on the surface -- to show that it is going all out. As the government tries to show that it is anything but an absentee landlord of Gulf waters, the latest government tour of the oil spill scene was also notable for lacking any representative from BP tagging along.

The price tag to BP for its failed efforts to contain the oil spill have now reached the $800 million mark.

BP is not alone among the oil industry players facing scrutiny in the oil spill. The failed blowout preventer manufactured by



continues to be a primary suspect in the oil spill disaster. Deepwater Horizon rig operator


(RIG) - Get Report

has faced the firing line in Washington D.C. right alongside BP -- in fact, both companies have been passing the blame back and forth.

Anadarko Petroleum

(APC) - Get Report

shares were also hit as a result of the company's 25% ownership in the BP well.

The market value loss in these BP oil spill companies has reached the $1 billion mark.


(HAL) - Get Report

officials have also been called to the nation's capitol to provide testimony with regards to its role in cementing BP's underwater well.

Yet it's really come down to BP against the federal government -- or, depending on your point of view, BP and the federal government both failing the American public.

As far as the cost being assigned in the paychecks or power posts of BP or government officials, though, the oil has yet to reach its mark. The government official in charge of the Interior Department's heavily criticized

Minerals Management Service

, Chris Oynes, announced he would resign last week, but government officials would not say if it the resignation was related to mismanagement.

On Thursday morning, Interior Secretary Salazar announced that the head of the Minerals Management Service, Elizabeth Birnbaum, had resigned of her own volition, though unconfirmed reports were circulating in the press that Birnbaum had been fired.

BP Oil-Spill Poll

Click here to vote on who should be fired for the BP oil spill

A report in the

New York Times

on Tuesday, May 25, indicated that Minerals Management Service allowed oil companies to fill out their own safety reports and the government then passed them off as the work of regulators. It was just one of many new examples of a relationship between the MMS and oil companies that makes a mockery of codes of professional and ethical conduct.

President Obama was asked at his Thursday press conference if the MMS head had been fired, and gave a logical reason for why he couldn't answer the question, but one that seemed less than convincing. "You are assuming it was a firing, and if it was a resignation she would have submitted a letter to Secretary Salazar, and I had a whole lot of others things going on this morning, and Salazar has been in testimony on the hill."

Nevertheless, the President said the buck stopped with him. "I take responsibility for MMS shortcomings, in case you are wondering in your reporting who is responsible. I take responsibility. My job is to make sure this is shut down."

BP CEO Tony Hayward has said throughout the oil spill crisis that he knows judgment ultimately rest on his shoulders. BP's share price hit successive 52-week lows in recent trading sessions before rallying on Thursday, as more investors and analysts worried if the oil giant could ever compete successfully for U.S. business after this disaster.

It's not likely that the resignation of Oynes or Birnbaum, at the MMS, or of BP CEO Hayward -- and for that matter, the dismissal of any executive or government official -- would do anything to stop the gushing oil.

And while U.S. Interior Secretary Ken Salazar has said the government could push BP aside and federalize the cleanup, Coast Guard Admiral Thad Allen, said at a White House press conference, "To push BP out of the way would raise the question of 'replace them with what?'"

Indeed, is it time for a big price to be paid in BP's executive board room, or in the ranks of the Obama administration? Take our poll below to see that


has to say.

-- Reported by Eric Rosenbaum in New York.


>>Oil Spill in Pictures: Gulf of Mexico Impact

>>Oil Spill Losers: BP Hits Another 52-Week Low

>>Kevin Costner Joins BP Oil Spill Fight

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