Oil Spill Disaster: BP Is Refining Much of Its Recovered Gulf Oil
Business + Economy

Oil Spill Disaster: BP Is Refining Much of Its Recovered Gulf Oil

To date, BP has recovered 731,100 barrels of oil from the spilled mess in the Gulf of Mexico through its skimming and capping methods, the company said on Friday morning — 709,100 barrels of which have been offloaded and sent to refineries, to be processed as petroleum products and sold. The remainder of the recovered oil “that has lost a lot of its energy properties” is being burned off, or “faired.”

The price of a barrel of light crude oil stood at $75 in New York on Friday at midday. That’s up 4.75 percent in the past month, as optimism about a European recovery will likely drive an increased demand for oil. BP has pledged that any money made from the sale of the recovered oil will go toward the National Fish and Wildlife Foundation. They have already made a $5 million donation toward that fund.

BP spokesperson Daren Beaudo told The Fiscal Times in a telephone interview that the unusable tar balls — those ugly, awkward clumps of crude that have been marring Gulf shores — are being disposed of, in most cases, by independent contractors. “The vendor, an expert in waste handling, takes it to regulated waste sites, depending on what the classification of the material is and how it needs to be handled,” Beaudo said.

There’s concern, however, that most of the tar balls are winding up in common landfills. “The Environmental Protection Agency hasn’t classified the oily waste as hazardous material, so it can be put in the same dumps that accept common household garbage,” the AP reported on Friday. “Some of the waste-handling work has been haphazard, with bin liners coming apart and some material being placed in unlined containers. Contractors like Waste Management Inc., a major BP PLC contractor and the nation’s largest trash hauler, say they are trying to do better.”

Sold, For a Price
BP says it’s been capturing approximately 10,000 to 15,000 barrels of oil a day through its cap methods near the blown out well. “Today, for example,” said Beaudo, “in the last 24-hour period, our number was 24,000 barrels collected, of which the majority of that is captured, put in tanks, offloaded, and sold to a refinery.”

He added, “We’re progressing several plans to increase the capture. We’ve got two different kinds of capture elements going into place this weekend. We have what’s called the Helix Producer, which we’re hoping to begin putting online. [The ship] has the ability to capture 25,000 barrels a day. And with a sealing cap that we’re discussing right now with the government, we would have containment capacity of between 60,000 and 80,000 barrels, total.” 

The AP reports that by the beginning of next week, “all of the oil flowing from the blown out well could start being contained.” That reflects an assessment made Friday afternoon from Thad Allen, the National Incident Commander who has been leading cleanup efforts in the Gulf. Allen, however, also said that the leak won’t be stopped until the well is plugged.

And on that point, as far as relief wells go, “we’re still targeting August,” said Beaudo. “What’s been said the last couple of days [regarding a possible earlier finish date] has been heavily caveated as a best case scenario.” It does not take into account weather problems or any other unexpected issues, he noted. “What we said from the beginning is that it takes about three months” to create relief wells.

Other numbers BP shared on Friday: The company now has 1,400 claims officers processing claims from out-of-work or disenfranchised business people in the Gulf. The company has set up 30 claims offices along the Gulf coast. “The program continues to grow apace, with over $162 million paid out,” to date. BP also has ships in place equipped with the heavy mud that will be used to kill the spewing well when the relief wells are ready, said Beaudo.

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