BP says a mile-long tube is drawing some of the oil away from a well that's spewed millions of gallons of crude into the Gulf of Mexico. BP spokesman Mark Proegler said Sunday that the contraption was hooked up successfully to a tanker at the surface as crews gained partial control on the leak for the first time. Proegler said it was sucking most of the oil from the leak. The tube was carefully placed into the 21-inch piping at the seafloor by engineers gingerly steering deep-sea robots. Speaking on NBC's Today show, BP Chief Operating Officer Doug Suttles said the tube has been siphoning more than 1,000 barrels a day, or 42,000 gallons. BP has estimated about 5,000 barrels a day, or 210,000 gallons a day, has been leaking out. He says they hope to be able to collect more oil as they ramp up the effort but they won't be able to get all of it. The company has spent three weeks trying to contain the leak that's been fouling the Gulf, and the latest effort had several setbacks.
Scientists say the oil spill has already spewed plumes over ecologically sensitive reefs that are part of a stalled marine sanctuary proposal that would restrict oil drilling in a large swath of the northern Gulf. Marine scientists fear two powerful Gulf currents will carry the oil to other reefs. The eastward flowing loop current could spread it about 450 miles to the Florida Keys, while the Louisiana coastal current could move the oil as far west as the Central Texas coastline. Marine scientists say dispersing and sinking the oil as is being done helps protect the surface species and the Gulf Coast shoreline. But it increases the chance of harming deep-sea reefs, which are seen as bellwethers for sea health.
It looks like the oil spill may already be on its way to the Florida Keys and up the East Coast. A researcher tells the Associated Press that computer models show the oil may have already seeped into the loop current. A boat will be sent later this week to collect samples. William Hogarth is the dean of the University of South Florida's College of Marine Science. He says one model shows the oil already in loop current, while another shows the slick three miles away.
A federal judge has been asked to shut down a BP oil and gas platform that operated with incomplete and inaccurate engineering documents in the same part of the Gulf as the massive Deepwater Horizon oil spill. A lawsuit filed in U.S. district court says the U.S. Interior Department failed to investigate warnings of possible safety problems with BP's Atlantis platform. Atlantis is stationed in 7,070 feet of water more than 150 miles south of New Orleans. In 2009, an independent firm hired by BP found that the giant petroleum company was violating its own policies by not having completed engineering documents on board the Atlantis when it began operating in 2007. The lawsuit was filed by Washington, D.C.-based food and water watch.
President Barack Obama is sending cabinet chiefs to Capitol Hill this week to defend the response to the oil spill. A usually measured president has been publicly furious, not just with BP and the other companies bickering over who caused the spill, but with federal regulators who were supposed to ensure rig safety. He says it's clear the system "failed badly" and has to change. That's one reason he's ordered a shakeup in the Minerals Management Service, which oversees well leasing and operation. He says its enjoyed a "cozy" relationship for too long with the industry it was supposed to ride herd on.
A Washington-based research group says two BP refineries in the U.S. account for 97 percent of "egregious willful" violations given by the Occupational Safety and Health Administration. The study by the Center for Public Integrity says the violations were found in the last three years in BP's Texas City refinery and another plant in Toledo, Ohio. In 2005, 15 people were killed in an explosion at the Texas City refinery. Deputy Assistant Secretary of Labor for OSHA Jordan Barab says BP has a "systemic safety problem." He told the Associated Press BP has not adequately addressed the issues, despite being fined more than $87 million. Assistant Secretary of Labor for OSHA David Michaels says similar problems are pervasive throughout the U.S. petroleum industry.
Washington Mutual has filed an amended Chapter 11 reorganization plan. The plan filed Sunday in Delaware Bankruptcy Court is based on a settlement involving WMI, the Federal Deposit Insurance Corporation and JPMorgan Chase Bank, which filed lawsuits against one another after the FDIC seized Washington Mutual's flagship bank in 2008 and sold its assets to JPMorgan for $1.9 billion. The FDIC objected to the initial settlement plan, resulting in negotiations that led to the amended plan. In addition distributing some $7 billion in funds among various parties as part of the settlement, the plan allows certain creditors to buy new shares in the reorganized company. Holders of existing shares would receive nothing. A hearing in the case is scheduled for Tuesday.
A new tax credit created for small firms under the health overhaul is explained today by the Internal Revenue Service, even as opponents of the law plan legal action. The IRS is announcing ground rules to skeptical business owners, whose lobbying group has joined a lawsuit arguing that Congress exceeded its authority by requiring most Americans to have coverage. This year, small business can take advantage of a tax credit covering up to 35 percent of premiums some firms pay on behalf of their workers. The IRS also will clarify that the credit applies to vision and dental, along with medical. The number of firms eligible for the credit is unclear, though the White House has estimated the tax credit might affect up to four million firms.
With the economy still struggling, states are having to cut services to the one population they've long protected--children. All over the country, the financial crisis has forced states to make historic cuts to close what the National Conference of State Legislatures found was an overall budget gap of $174.1 billion this fiscal year. And lawmakers are looking to trim another $89 billion next year. Advocates say the scope of the cuts to services that help children is unprecedented. Hit are programs that addressed everything from childhood obesity to child abuse and from prenatal care to preschool inspections. Some can't serve as many kids, while others are forced to deal with months-long delays and many programs simply disappear.
Some western farmers are being paid to let their fields be temporarily flooded with a few inches of water to help migratory shorebirds and improve the productivity of the land. Organizers say early studies of the efforts in the Skagit River Delta north of Seattle and Klamath Basin of Southern Oregon and Northern California have been positive. Hundreds of birds have fattened up in the soggy fields, and tests show increased nutrients that should pay off for farmers when the land is drained in a few years. Researchers say flooding also should help farmers switch to organic production. The preservation group The Nature Conservancy is behind the Washington project. Julie Morse, a group ecologist, says they'll try to replicate it elsewhere.
Inflation isn't thought to be a threat in the near-term for the U.S. economy. We'll get a look at fresh data on that in the days ahead. The government reports tomorrow on the producer price index, with the key gauge of consumer prices due the following day. Also tomorrow, the government's reading on housing starts is due. Later in the week, readings on new unemployment claims and leading indicators are scheduled for release.
General Motors says it rode cost cuts and strong sales of new models to its first quarterly profit in nearly three years. The Detroit automaker says it earned $865 million from January through March, a strong sign GM has reversed course from staggering losses that nearly caused its death. The $1.66-per-share profit was far better than a loss of $6 billion for the same period last year. It's also a sign that GM may be able to back up CEO Ed Whitacre's forecast of a full-year profit. The U.S. government loaned GM about $50 billion to stay in business. GM has repaid $6.7 billion and hopes to pay back the rest with a stock sale. The government now owns 61 percent of the company.