This article is over 13 years old


Tuesday PM June 1st, 2010

BP’s latest attempt to stop the oil leak gets underway with pipe cutting…U.S. manufacturing sector expands…Construction activity surges by largest amount in nearly a decade…


Coast Guard Admiral Thad Allen is saying that BP is in the middle of its first major pipe cut in the company’s latest bid to contain the oil spewing into the Gulf of Mexico. Allen, the national incident commander, says that it could be as many as three days before oil can be contained and siphoned to the surface. BP has another major cut to do before a cap can be lowered on to the leak. It’s the company’s latest attempt to contain the leak. The effort to plug the spill failed over the weekend and the best chance to stop the gusher is now at least two months away.

President Barack Obama says an independent commission investigating the Gulf oil spill will thoroughly examine the disaster and its causes to ensure that the nation never faces such a catastrophe again. Obama spoke in the Rose Garden after the group’s first meeting and pledged that necessary changes will be made. The president says that if laws are insufficient, they’ll be changed. He says that if government oversight wasn’t tough enough, that will change too. And Obama said if laws were broken, those who were responsible will be prosecuted. Obama says the leaders of the commission have his support to follow the facts wherever they lead.

A top adviser to President Barack Obama says she doesn’t want to guess the prospects for success when BP again tries to use a containment cap to control the Gulf Coast oil spill. Interviewed on ABC’s Good Morning America, White House Energy and Global Warming Czar Carol Browner says she doesn’t want to put odds on it. BP could attempt another temporary fix–an effort to saw through the pipe leaking the oil and cap it–as soon as Wednesday. Browner says “everyone, I think, is hoping for the best, but we continue to plan for the worst.” She said she’s concerned about the impact the hurricane season could have on ending the environmental crisis.

A spokesman for BP says the company needs more proof to support claims by scientists that huge plumes of oil are suspended underwater in the Gulf of Mexico. CEO Tony Hayward said there was “no evidence” of the plumes and that all the oil from the spill was floating to the surface. Spokesman Graham Macewen says that BP is awaiting analysis of water samples taken in the Gulf before making a final determination. Since an April 20th blowout aboard the Deepwater Horizon drilling platform, researchers from universities in Florida, Georgia, Louisiana and Mississippi have reported plumes. Representative Edward Markey, a Democrat from Massachusetts, has asked BP to back up Hayward’s claim that they do not exist.

Shares in BP are plunging in London after the oil company’s failed attempts to block the oil leak. BP also said that costs for the spill have reached $990 million. The company is now attempting to use remote-controlled submarines to cut pipes before placing a containment cap over the leak. The spill, which has dumped between 18 and 40 million gallons into the Gulf, is the biggest in U.S. history.

A private trade group says the U.S. manufacturing sector expanded in May, marking the tenth consecutive month of growth. The Institute for Supply Management, a trade group of purchasing executives, says its manufacturing index dipped to 59.7 in May from 60.4 in April. A level above 50 indicates expansion. Economists polled by Thomson Reuters had expected the index to dip slightly to a reading of 59. New orders, a gauge of future production, were unchanged at 65.7. ISM says its employment index, which measures employers’ willingness to hire, rose 1.3 percentage points to 59.8.

Construction activity surged in April by the largest amount in nearly a decade, as all the major building sectors from housing to government projects showed strength. The unexpected surge could mean that the hardest-hit sector of the economy is starting to recover. The Commerce Department says that construction shot up 2.7 percent last month compared to March. It was the biggest one-month improvement since August 2000. The increase was led by a 4.4 percent jump in private residential construction, the first positive gain in this category since March 2009.

Hewlett-Packard says it will lay off about 9,000 workers in the unit that provides technology services to other businesses. The company is consolidating and automating commercial data centers. The cuts will be made over about three years and amount to some three percent of HP’s global work force of 304,000 employees as of October 2009, the most recent figure available. The company says it plans to replace two-thirds of those jobs, hiring 6,000 people to boost its global sales and delivery staff. HP said the job cuts will result from productivity gains and automation in the data centers, which are clusters of computers that HP’s business customers tap into to store data, run software and perform other tasks. Like most companies that offer such services, HP has data centers around the world. HP did not specify the locations of its planned cuts. Once it completes the restructuring, hp said it will see savings of about $500 million to $700 million a year.

The Supreme Court will decide whether student doctors are students or employees when it comes to collecting social security taxes. The high court agreed to hear an appeal from the Mayo Clinic, which says the IRS shouldn’t have made it collect the taxes. Medical residents, who are studying to be doctors, routinely work in hospitals and pay income taxes. But Mayo Clinic officials say residents fall under a social security tax exemption for student employees whose work is part of their education.