BP official admits to damage beneath the sea floor

Naked Capitalism cites WaPo, Bloomberg, and WSJ stories quoting reliable sources that the well casing under the sea floor is broken and damaged.

The evidence is growing stronger and stronger that there is substantial damage beneath the sea floor. Indeed, it appears that BP officials themselves have admitted to such damage. This has enormous impacts on both the amount of oil leaking into the Gulf, and the prospects for quickly stopping the leak this summer.

Not only did a BP official acknowledge that Top Hat didn’t work because the mud was going out breaks in the underground casing, it is quite possible that oil is now gushing out of multiple areas on the ocean floor. This is precisely what Matt Simmons warned about days ago, and what Sen. Bill Nelson is essentially now in agreement with.

Retired Shell Oil president John Hofmeister

If the casing is compromised the well is that much more difficult to shut down, including the risk that the relief wells may not be enough. If the relief wells do not result in stopping the flow, the next and drastic step is to implode the well on top of itself, which carries other risks as well.

Why do we continually have to piece together what’s happening? The federal government and BP need to be upfront and transparent about what’s happening.

Louisana Treasurer: BP may not have assets to cover liabilities. Bankruptcy possible.