E2 Round-up: No word yet on ‘top kill’ success as BP gusher tops Exxon Valdez, BP risks losing federal contracts, and feds back part of barrier island plan to slow oil’s march

A federal panel released estimates Thursday that far more oil is gushing into the Gulf than BP had earlier claimed.

“The findings, made public by U.S. Geological Survey Director Marcia McNutt, confirm that more oil has been spilled from BP’s leaking well than the estimated 257,000 barrels that fouled Alaska’s Prince William Sound by the grounding of the Exxon Valdez tanker,” Reuters reports.

Federal government could cut ties with BP

The Wall Street Journal reports BP “could face heavy fines and threats to its lucrative business relations with the U.S. government in the fallout from the Gulf oil spill.”

“White House lawyers are beginning to wrestle with whether BP’s actions leading up to the disaster warrant barring the company from future federal contracts or oil leases, a process called debarment,” their story adds.

“BP is the single biggest supplier of fuel to the Department of Defense, with Pentagon contracts worth $2.2 billion a year, according to government records. BP is also the largest producer of oil on federal waters in the Gulf of Mexico, which makes it a significant contributor of revenue to the government.”

Federal officials partially approve Louisiana plan to build up barrier islands

“The federal government gave partial approval Thursday to Louisiana’s plan to keep oil out of coastal estuaries by dredging up new barrier islands, the official leading the government’s response to the Gulf of Mexico spill said,” reports CNN.

“Coast Guard Adm. Thad Allen called for a prototype project to begin on one of six segments approved by the Army Corps of Engineers,” CNN adds.

“’Implementing this section of the proposal will allow us to assess this strategy’s effectiveness in protecting coastal communities and habitats of the Gulf region as quickly as possible,’ Allen said in a statement announcing the decision.”

Louisiana Gov. Bobby Jindal (R) has accused federal officials of acting too slowly on the state plan, which is aimed at protecting sensitive and ecologically vital wetlands.

Here’s more from The Times-Picayune:

If the state wants to build the other five, including two east of the Mississippi River and three more to the west, it will have to pay for them, with no guarantee of being reimbursed, Allen said.



“There are a lot of doubts whether this is a valid oil spill response technique, given the length of construction and so forth,” Allen said Thursday at Port Fourchon. “But we’re not averse to attempting this as a prototype.”

Gov. Bobby Jindal, also in Port Fourchon, praised the decision but said it didn’t go far enough.

”We’re glad they didn’t turn us down, but had we been given approval earlier, we could have built nearly 10 miles of barriers 6 feet high already,” Jindal said. “We want them to approve the entire plan because our entire coastline is important.” 



Jindal said the state would not build the remaining five barrier islands approved by the corps without a guarantee it would be reimbursed by BP or the federal trust fund.