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00378811
A Dirty Job: Using Mud to Plug Well
By
GUY CHAZAN
The Wall Street Journal, Online Edition, Tuesday, May 18, 2010.


One of the ways
BP PLC hopes to permanently plug the huge oil leak in the Gulf of Mexico is to fill the well with "mud" and then encase it with cement, a maneuver that will be attempted in about a week.

But this isn't the kind of mud that might cover a backyard after a rainy night. In oil parlance, kill mud is a dense fluid used to stanch the flow of oil or natural gas into a well from the reservoir being tapped.

Clogging the Pipes

How 'top kill' is supposed to stop the flow. View chart



It usually is made up of water, a dense sulfate mineral called barite, and polymers or salt. The barite, a particularly heavy substance, adds weight to the fluid mixture.

BP will shoot the mud from a vessel on the ocean's surface that has about 50,000 barrels of the stuff ready to be blasted with 30,000-horsepower pumps. The mud will be pumped at a rate of 40 barrels a minute through pipes—called "choke and kill lines"—that enter the lower part of the blowout preventer, the huge shut-off valve sitting on the seabed. From there it will surge down into the well.

The heavy mud mixture weighs more than oil or gas, and when pumped into the well it exerts more pressure than the hydrocarbons escaping from the reservoir. Once the kill mud has stopped the flow of oil and gas, the well will be entombed in cement.



Write to Guy Chazan at guy.chazan@wsj.com

©2010 Dow Jones & Company. All Rights Reserved.






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00378912
Officials Fear Slick Will Flow Up Coast
By
JEFFREY BALL And COREY DADE
The Wall Street Journal, Online Edition, Wednesday, May 19, 2010.

An ocean current could carry oil leaking into the Gulf of Mexico around Florida and up the East Coast, federal officials said Tuesday.

Officials also announced they were closing one-fifth of federal waters in the Gulf to fishing—a major blow to the seafood industry—due to the threat of oil still leaking from a well opened by the Deepwater Horizon drilling rig, which burned and sank late last month.

A thread of oil from the spill already may have entered a movement of water in the Gulf known as the Loop Current, said Jane Lubchenco, administrator of the National Oceanic and Atmospheric Administration.

Oil in the Loop Current could reach Florida within 10 days and then start heading up the East Coast, she said.

As the slick spreads, government officials on Tuesday more than doubled the swath of the Gulf where fishing is prohibited.

As of Tuesday afternoon, about 45,700 square miles, accounting for about 19% of federal Gulf waters, were closed to fishing, up from the roughly 9% that was closed as of Monday.

Concerns about the spill's effect on wildlife are mounting. Government officials said Tuesday that they have documented 156 dead sea turtles, 12 dead bottlenose dolphins, and 35 oiled birds—23 of them dead—since the spill.

The number of dead sea turtles is significantly above historical levels, they said, though they haven't yet determined whether the deaths resulted from the oil spill, which started April 20.

Wildlife experts are particularly worried about ecological impacts that aren't yet visible—including how the oil, and chemicals sprayed to break it up, may be harming deepwater corals as well as whales and birds that live miles offshore.

"What concerns us most is what we can't see," said Rowan Gould, acting director of the U.S. Fish and Wildlife Service. "This spill, in all likelihood, will affect fish and wildlife resources in the gulf and across North America for years, and maybe for decades."

In an attempt at ecological triage, those fighting the spill are applying hundreds of thousands of gallons of chemical "dispersants" onto the slick, aiming to break it into tiny particles that then can be digested by naturally occurring bacteria in the water.

But scientists say they don't know how that much dispersant, combined with the thousands of barrels oil that officials estimate are continuing to gush out of the well every day, will affect sea life from the Gulf's floor to its surface. To answer those questions, government officials and scientists are scrambling to dispatch research ships to collect information.

"There is going to be groundbreaking science to really get a handle on the total impact," said Roger Helm, chief of the U.S. Fish and Wildlife Service's division of environmental quality. "But we all feel very strongly that the impact is very significant."

Oil picked up by the Loop Current could wash ashore along the southern portion of the East Coast as clumps known as tar balls, Ms. Lubchenco said.

Coast Guard and NOAA officials began surveying the shores off Key West by boat and helicopter on Tuesday, after 20 tar balls, each measuring three inches to eight inches in diameter, washed up on a state-park beach there Monday.

The Coast Guard said the globs could be oil remnants from a ship; laboratory tests are under way to determine their origin. The Loop Current runs from the Gulf through the Florida Straits, which divide the Florida Keys from Cuba.

The current then turns into the Gulf Stream, which runs up the East Coast roughly to Cape Hatteras, N.C., where it moves further out to sea.

NOAA models suggest that by the time any oil picked up by the Loop Current were to make landfall along the East Coast, it would have lost most of its toxicity, Ms. Lubchenco said.

But, she added, "A lot of that will depend on local conditions and local winds."

©2010 Dow Jones & Company. All Rights Reserved.


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00378913


Salazar Says Regulatory Oversight of Industry Is Lax
By
SIOBHAN HUGHES And STEPHEN POWER
The Wall Street Journal, Online Edition, Wednesday, May 19, 2010.


WASHINGTON—Interior Secretary Ken Salazar said Tuesday that federal regulation of offshore drilling had been too lax but that it was premature to say watchdogs underestimated the risks when they approved such projects.

The testimony, his first on Capitol Hill since a deadly Gulf of Mexico oil-rig explosion on April 20, came amid the release of a video suggesting that BP PLC's latest effort to control a leaking underwater pipe didn't meet expectations.

The disclosure of the video added fuel to lawmakers' questions about whether the Minerals Management Service, a unit of the Interior Department, has delegated too much responsibility for setting safety policies to the industry it regulates.

"The conclusion that this is an unregulated industry is not correct," Mr. Salazar told the Senate Energy and Natural Resources Committee. "It is a very highly regulated industry. That doesn't mean there isn't room for improvement."

He acknowledged the MMS hadn't adequately overseen fail-safe devices known as "blowout preventers" that are a last resort for oil companies in the event of a catastrophic blowout. The blowout preventer on the Deepwater Horizon oil rig failed to shut down the well, contributing to the spill, which authorities say is leaking thousands of barrels of oil into the Gulf each day.

But Mr. Salazar said that while "many things went wrong" on the Deepwater Horizon rig, it "would be premature for me today to put the finger on exactly what went wrong."

Also Tuesday, President Barack Obama accused Senate Republicans of "playing special-interest politics" for blocking legislation, opposed by the oil industry, that would raise the liability cap on oil companies involved in spills to $10 billion from $75 million.

Republicans responded by noting that Mr. Salazar, in his testimony, had expressed concern that raising the cap too high would put energy companies "of lesser economic robustness" at a disadvantage compared with large firms such as BP. A spokeswoman for Mr. Salazar said administration officials would "work with Congress to set the appropriate cap."

BP, which was leasing the Deepwater Horizon oil rig, is at least two and a half months away from completing two relief wells to stop oil from leaking and has meanwhile inserted one end of a mile-long tube into the broken pipe to siphon off crude oil.

Sen. Barbara Boxer (D., Calif.), on Tuesday displayed a video of oil gushing out of an underwater pipe that she said was taken after the siphon had been implemented. The procedure is "not doing what a lot of us were hoping," she said. Mr. Salazar said that the video might not be representative and that the technique was capturing 2,000 of the 5,000 barrels of oil a day estimated to be gushing.

Separately, the Center for Biological Diversity, an environmental group, said it filed a lawsuit Tuesday against the Interior Department, accusing the department of approving offshore drilling plans in the Gulf without subjecting the plans to environmental scrutiny.

The Sierra Club and the Gulf Restoration Network also filed a lawsuit Tuesday accusing the MMS of allowing oil companies to avoid complying with federal environmental and safety requirements in permits it issued for offshore oil and gas exploration in the Gulf.

In another legal action, a former subcontractor to BP and an environmental group on Monday sued the federal government to force the shutdown of BP's Atlantis oil platform in the Gulf of Mexico, alleging the facility lacked thousands of engineering documents required for safe operation. BP has said that it "thoroughly investigated" the claims when they were first made in 2009 "and found them to be without substance."

An Interior spokeswoman declined to comment on the litigation. Interior has said it was reviewing the MMS's process for using "categorical exclusions" to approve an exploration plan that included the drilling of the Deepwater Horizon well.

Mr. Salazar told Congress that Interior's use of such exemptions has been driven by a congressional mandate to act on drilling permit applications within 30 days. He has asked Congress to extend that to 90 days.

Mr. Salazar on Tuesday told reporters that his department was evaluating whether to go forward with a planned auction in August of new leases to drill in the western Gulf of Mexico.

©2010 Dow Jones & Company. All Rights Reserved.





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00378914


Shell Outlines Steps to Make Its Planned Arctic Ocean Project Safer
By
JIM CARLTON
The Wall Street Journal, Online Edition, Wednesday, May 19, 2010.


Royal Dutch Shell PLC, seeking to reassure nervous U.S. officials, said it would heighten safety measures for its planned exploratory drilling in Alaska's Arctic Ocean.

After the Deepwater Horizon oil spill in the Gulf of Mexico, Interior Department officials said they would subject Shell's drilling plan to a new safety review before deciding whether to issue final permits.

Shell now plans to test a critical piece of safety equipment, the blowout preventer, every seven days instead of every 14 days, said Marvin Odum, president of the Shell Oil Co. division, in a lette r to Minerals Management Service Director Elizabeth Birnbaum released Tuesday.

A blowout—an uncontrolled surge of oil and natural gas—has been blamed for April 20 explosion on the Deepwater Horizon rig, which left 11 dead and oil gushing into the Gulf of Mexico. BP PLC, which hired the rig and is responsible for stopping the spill and cleaning it up, has complained the blowout preventer didn't work.

Shell's proposed drilling in the Chukchi and Beaufort seas this summer would be in a less risky area for blowouts, Mr. Odum said, because the wells would be situated in relatively shallow waters of about 150 feet; BP's well is 5,000 feet below the surface of the Gulf.

Mr. Odum outlined a number of other new safety measures that Shell plans to add to the Alaska drilling.

Shell will have on hand the kind of giant inverted funnel that BP built and tried to use without success to corral the flow of oil gushing into the Gulf. Mr. Odum said Shell's dome would be able to cope with the problem of slushy hydrate crystals, which stymied BP's efforts.

Shell is also evaluating putting in a backup set of "shear rams," or knife-like devices that are used as a last resort to regain pressure in a well by cutting and sealing drill pipe. Officials are looking at whether the shear rams in BP's well failed.

"I am confident that we are ready to conduct the 2010 Arctic exploratory program safely, and, I want to be clear, the accountability for this program rests with Shell," Mr. Odum told Ms. Birnbaum, who on May 6 had sent him a letter asking what added safety procedures Shell was proposing in light of the Gulf spill.

Environmentalist critics of the Arctic drilling say Shell still hasn't addressed how it could ensure a rapid oil-spill response in a place as remote as the Arctic, nor how it would safeguard against the human failures they say result in many spills.

©2010 Dow Jones & Company. All Rights Reserved.




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00379010
Coast Guard's Role Scrutinized
By
MIGUEL BUSTILLO And REBECCA SMITH
The Wall Street Journal, Online Edition, Thursday, May 20, 2010.


Last month's explosion of an offshore oil rig in the Gulf of Mexico has prompted scrutiny of the U.S. Coast Guard's ability to carry out even its limited role in preventing disaster on rigs.

Federal authorities have challenged the Coast Guard, the country's chief marine safety regulator, in hearings in the past two weeks over whether it has used all its powers to ensure that mobile offshore drilling rigs are seaworthy and prepared for fires.

The Coast Guard says its investigation into the explosion and evacuation of the Deepwater Horizon on April 20 is continuing. But the agency—and some legislators—say that its role needs to be expanded and that it needs more resources to ensure worker safety on these rigs.

Lt. Cmdr. Michael Odom, the Coast Guard officer who oversaw the last inspection of the rig, last week told a federal panel investigating the disaster that the service's oversight of offshore drilling rigs probably should be more rigorous.

"The pace of the technology has outrun the current regulations," he said. Coast Guard regulations for the massive moving rigs date back to 1978, when they were generally smaller and operated closer to shore.

Even so, Coast Guard officials say, much of their inspections work is perfunctory—signing off on checks done by others and ensuring that paperwork is in order. Moreover, regulation of the rigs' drilling operations, the most dangerous part, lies with a different agency, the Interior Department's Minerals Management Service.

Several experts, including maritime attorneys and Coast Guard officials, say that the regulatory split between the Coast Guard, which has authority over the traditional seagoing part of the rig, and the MMS, which has jurisdiction over the oil-drilling operation, will need to be reexamined in light of the disaster.

In addition, the majority of the offshore-drilling rigs are under foreign flags, leaving their home countries with primary responsibility for their safety. That was the case with the Deepwater Horizon, the Transocean Ltd. rig that exploded in an inferno last month, killing 11 workers and sending crude oil gushing into the sea from the BP PLC well on the ocean floor. It was registered in the Republic of the Marshall Islands, which has 116 offshore rigs flying its flag.

When Coast Guard inspectors board foreign vessels, "we still look at everything, but the level of detail and scope changes" from the level accorded inspections of U.S.-flagged vessels, said Lt. Cmdr. Brian Khey, supervisor for the Coast Guard's National Center of Expertise, which develops training aids for inspectors.

"If the ship appears well maintained, we branch out and do random spot checks," he said.

Coast Guard examinations of foreign-flagged mobile rigs typically take hours, while checks of U.S. flag vessels often last days, guard officials said during a House transportation committee hearing.

In its last annual inspection of the Deepwater Horizon, last July, the Coast Guard didn't ask crew members to lower lifeboats to the water due to concerns that the test itself was too dangerous, Lt. Cmdr. Odom told a federal panel investigating the disaster last week.

The Coast Guard also ran only a limited fire drill on the rig's helipad, excusing some workers who were normally supposed to take part because they were busy exploring for oil on the rig, according to the testimony.

Workers who spoke to The Wall Street Journal after the accident have described mass confusion after explosions rocked the rig, including trouble lowering the lifeboats to the water and lifeboats being lowered before all personnel were aboard. That raises questions about whether the crew and rig were adequately prepared for a fire.

Coast Guard Commandant Thad W. Allen told a Senate committee on Tuesday that the Guard already had identified five areas where tougher oversight of offshore drilling was needed, including standards to ensure fire safety and orderly evacuations.

The Marshall Islands had not been directly inspecting the Deepwater Horizon, a maritime administrator for the country said in an interview. Instead, the country hired a private organization known as a classification society to do the work, a common industry practice.

While rigs are required to have gas-detection and alarm systems, actual firefighting requirements are "of a general nature," said William Gallagher, the Marshall Islands' senior deputy commissioner. There are no special firefighting capabilities required for mobile rigs even though the drilling deck is at risk of sudden ignition.

While the Gulf oil disaster is raising new questions about whether the Coast Guard needs more power to do its job, the service has also faced criticism in recent years for not taking its existing responsibilities seriously enough.

A stinging independent assessment in 2007 by former Coast Guard Vice Admiral James C. Card found that guard officials "no longer considered marine safety an important mission," after becoming part of the Dept. of Homeland Security in 2003, and were no longer devoting sufficient resources to the task. Rather, they were focusing more on anti-terrorist activity.

A report last year by a research arm of the Homeland Security Department raised similar concerns about an erosion of quality in Coast Guard inspections, finding that "Coast Guard inspectors and marine casualty investigators have approximately one rank (four to six years) less experience than those in similar positions a decade ago."

Commandant Allen has since launched a five-year plan to boost the Coast Guard's marine safety capabilities that includes adding hundreds of new safety inspectors, including civilians, and boosting training programs. More than 300 additional inspectors have been added in the past two years, a Coast Guard spokesman said.

In House testimony Wednesday, Coast Guard Rear Admiral Brian M. Salerno, deputy commandant for operations, said there is "a lot of room for improvement" in how mobile rigs are regulated.

©2010 Dow Jones & Company. All Rights Reserved.





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00379011
Dispersants Debated, as Oil Hits Land
By
JEFFREY BALL And STEPHEN POWER
The Wall Street Journal, Online Edition, Thursday, May 20, 2010.


WASHINGTON—BP PLC came under fire in Congress for the chemicals it is using to disperse the oil gushing into the Gulf of Mexico from the Deepwater Horizon site, as Louisiana officials announced that heavy oil has washed up along the coast of their state.

"Our worst nightmare came true today—it's thick black stuff," said Billy Nungesser, president of Plaquemines Parish, who toured the coast by boat with Gov. Bobby Jindal. "If we continue to let this happen it will destroy all the marshes in southern Louisiana."

Most of the oil has remained offshore, though both tar balls and the thin layer of oil called sheen have made landfall before.

In Washington, legislators criticized BP's use of a chemical called Corexit 9500 to break up the leaking oil into small bits that can be further broken down by bacteria.

"There are others that EPA measures as more effective on this grade of oil and less toxic," Rep. Peter DeFazio, an Oregon Democrat, told BP America Chief Executive Lamar McKay at the House panel's hearing.

"If there are better ones to use we will definitely use it," Mr. McKay responded.

BP said it was studying four alternative chemicals, including one called Sea Brat 4, and hadn't yet decided which it might use. The manufacturer of Sea Brat 4, Alabaster Corp., said BP ordered about 100,000 gallons.

BP officials said Wednesday that they were siphoning off about 3,000 barrels of oil a day from a tube they had inserted into a pipe leaking oil from the Deepwater Horizon site. But the officials cautioned they didn't know how much oil still was pouring from the well, a figure that by most estimates topped 5,000 barrels a day.

At the same hearing before the House Transportation Committee, the chief executive of Transocean Ltd, whose company owned and operated the rig leased by BP, told lawmakers he was aware of reports that a vessel alongside the rig reported cement-like debris on its decks after the explosion. Cement is used to keep natural gas from leaking into oil wells and surging up to the surface.

The CEO, Steve Newman, also said that a blowout preventer, a last-resort mechanism to close off a well in the event of a catastrophic pressure surge, had been "fully tested," most recently on April 10 and April 17. But he said those tests didn't occur in the presence of the Coast Guard or the Interior Department's Minerals Management Service, both of which oversee offshore oil drilling.

Also Wednesday, Senate Majority Leader Harry Reid (D., Nev.) and other Senate Democrats urged the Obama administration to inspect all oil rigs operating in federal waters and to review all inspection and testing procedures used to evaluate offshore drilling equipment. The lawmakers said previous inspections of the Deepwater Horizon rig "appear to have failed to reveal multiple, critical problems with the blow-out preventer." An Interior Department spokeswoman couldn't immediately be reached for comment.

Separately, Interior Secretary Ken Salazar formally ordered the breakup of the Minerals Management Service, which in addition to regulating offshore oil and gas operations also decides where drilling is permitted and collects royalties from companies that produce petroleum in federal waters.

Those three functions will be split up and assigned to different Interior Department branches.

Mr. Salazar, who had telegraphed his intentions a week ago, said the reorganization was aimed at ending the "conflicting missions" of the MMS.

He is also evaluating whether the agency should continue to derive part of its funding from fees on oil and gas companies.

—Siobhan Hughes contributed to this article.

©2010 Dow Jones & Company. All Rights Reserved.






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00379113
Industry Weighs New Safeguards for Offshore Drilling
By
BEN CASSELMAN
The Wall Street Journal, Online Edition, Friday, May 21, 2010.


An oil-industry task force is planning to recommend major changes to offshore safety procedures in the wake of the disastrous blowout of a
BP PLC oil well in the Gulf of Mexico last month, according to a draft report.

The recommendations, which are not final, include several safeguards that weren't in place aboard the Deepwater Horizon, the drilling rig that exploded in the Gulf. Industry experts have said those safeguards might have prevented the disaster.

Among the draft recommendations were remedies to several problems raised by The Wall Street Journal in recent articles. For example, the task force recommends the creation of a new group to study the use of acoustic switches, devices that can shut off the well via remote control in a disaster. The Journal reported that such switches routinely are used on rigs in Norway and Brazil but aren't standard in the Gulf of Mexico.

The industry convened two task forces after the April 20 disaster, one to look at industry procedures and the other to look at equipment. Both groups included major oil producers and contractors, including Exxon Mobil Corp., Chevron Corp. and Royal Dutch Shell PLC.

Several companies involved in the Deepwater Horizon incident also serve on the task forces, including BP, which leased the rig; Transocean Ltd., which owned it; and Halliburton Co., which performed cementing and other services.

The Deepwater Horizon explosion, which killed 11 workers and has left millions of barrels of oil spewing into the Gulf of Mexico, has renewed scrutiny of the industry and its safety practices. The Obama administration has promised increased regulation of offshore drilling; some Democrats in Congress have called for a halt to drilling in new areas.

"Ultimately, what this spill shows is that offshore oil drilling simply cannot be done safely," Sen. Frank Lautenberg, a New Jersey Democrat, said last week.

American Petroleum Institute President Jack Gerard said companies had "brought together the best minds in the industry" to study the lessons of the Deepwater Horizon disaster and to make recommendations to the Secretary of the Interior.

Mr. Gerard declined to discuss the task force's recommendations in detail.

The draft report, dated May 17, cautions that the task force is not criticizing BP or its contractors. However, many of the changes recommended by the task force echo criticisms made by other industry experts and by Congressional investigators.

For example, the task force recommends that companies deploy redundant barriers against gas flow before workers remove the heavy fluid that helps keep a well from flowing out of control during drilling.

On the Deepwater Horizon, workers had set at least one cement plug as a barrier but had not yet set a final plug before starting to remove the mud. Shortly after they began removing the fluid and replacing it with lighter seawater, the well exploded.

The task force also recommends that companies run a special test known as a negative pressure test to make sure that those barriers have worked before removing the fluid.

The crew of the Deepwater Horizon ran two such tests, but the results of both were inconclusive or not satisfactory. Results of further tests run before the drilling fluid was removed have not been made public.

Other recommendations relate to the blowout preventer, the series of valves on the sea floor meant to shut off the well in an emergency. The task force recommends increased testing of the devices and new procedures to ensure that the blowout preventers can successfully cut through drilling pipe and shut down the well in a last-ditch attempt to stop a blowout.

©2010 Dow Jones & Company. All Rights Reserved.






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00379114


BP Criticized for Inability to Assess Oil Flow
EPA Orders Use of Milder Dispersant; Scientists Fear Extensive Damage
By
JEFFREY BALL,
ISABEL ORDONEZ
and SIOBHAN HUGHES
The Wall Street Journal, Online Edition, Friday, May 21, 2010.


NEW ORLEANS—Federal and local officials stepped up their criticism of BP PLC Thursday as the oil company's own data suggested that far more than 5,000 barrels a day of crude is leaking into the Gulf of Mexico from a well damaged by the destruction of the Deepwater Horizon rig.

Scientists, meanwhile, warned of environmental damage that could rival that caused by the 1989 Exxon Valdez oil-tanker spill in Alaska as globs of oil washed up for a second day in Louisiana's fragile marshes.

"It's a very intimidating sight, the stark reality of black goop all over everything," said Ralph Portier, a professor of environmental sciences at Louisiana State University.

The oil spill could cause more of Louisiana's retreating marshland revert to open water, some scientists said.

"Louisiana has been losing wetlands for a century," said Christopher Craft, a wetlands ecologist at Indiana University in Bloomington, Ind. If a large amount of oil comes ashore and can't be quickly cleaned up, he added, "it could accelerate the rate of coastal loss."

Oil is reaching the shore despite frantic efforts to prevent its landfall: chemicals called dispersants sprayed to break up the spill; plastic piping, known as boom, laid along the shoreline; controlled burns of the slick at sea; and machines that skim the crude from the water's surface.

"I think most of the oil is being captured," said Doug Helton, an official with the National Oceanic and Atmospheric Administration (NOAA) who is monitoring the spill. "But if you get 99% of it, you still have a lot of oil that could come ashore."

Exactly how much oil is gushing from the ocean floor remained a point of contention. For weeks, BP and government officials have said they didn't know the amount, but pointed to a joint official estimate of 5,000 barrels a day.

But on Thursday, a BP spokesman said 5,000 barrels of oil a day are being diverted to a tanker through a mile-long tube the company inserted during the weekend into a shattered oil pipe called a rise. Yet more oil continues to spew into the Gulf.

Some scientists have estimated the leak could actually be 10 times the 5,000 barrel-a-day estimate. BP said the amount of oil escaping remains unclear, but is decreasing.

The federal government is trying to come up with its own estimate, said Jane Lubchenco, the NOAA's administrator. But efforts have been delayed in part because they would require more robots to collect data on the sea floor, raising concerns about an accident, she said.

Lawmakers posted on the Internet BP's videos of the leak—shot by the robots—showing a dark cloud of oil continuing to billow toward the surface.

The Obama administration on Thursday said BP isn't doing enough to keep the government and public informed about the spill, which occurred after the Deepwater Horizon rig exploded April 20, killing 11, and then sank some 50 miles offshore.

Environmental Protection Agency Administrator Lisa Jackson and Homeland Security Secretary Janet Napolitano said in a letter to the company's chief executive that BP's "efforts, to date, have fallen short in both their scope and effectiveness."

The EPA also said Thursday that it had ordered BP to find "a less toxic and more effective" chemical to break up the oil slick. The EPA ordered the British company to find an alternative to the chemical, Corexit 9500 made by Nalco Co. of Naperville, Ill., by late Thursday night and to begin using it by late Sunday night.

Of all the chemicals approved by the agency for use on oil spills, Corexit 9500 is among the most toxic to certain organisms, according to EPA tests. It also is among the least effective in breaking up the kind of oil that is prevalent in the area around the spill site, EPA tests concluded. Corexit 9500 was available in large quantities at the time of the accident, however, and was on the EPA's list of approved dispersants.

Earlier this month, BP placed an order for Sea Brat 4, another dispersant that is made by Alabaster Corp., of Pasadena, Texas. BP said Thursday afternoon it was studying Sea Brat 4 and other dispersants to decide which to choose as alternatives to Corexit.

The NOAA projects that oil will continue to wash ashore over the next few days, particularly in Louisiana's Plaquemines and Lafourche parishes, the two coastal areas that have borne the brunt of the onslaught in recent days.

The officials overseeing the spill response are sending cleanup crews to certain oiled areas before others, making judgments about which are more ecologically sensitive and which are likely to continue to be hit.

In the places most heavily affected by the oil, frustration flared at what many local leaders called an insufficient response to the spill by BP, which legally is responsible for the cleanup.

"This thing is not organized," said Billy Nungesser, president of Plaquemines Parish, where the Mississippi River empties into the Gulf and globs of oil have been found in the marshes. "They're trying," he said of BP officials, but "every day it keeps getting worse."

BP's response to the spill has been "unprecedented," said Toby Odone, a company spokesman. "The testimony to that is that very little oil has reached shore and that we have done everything in our powers to contain the oil out in the ocean and recover as much oil as possible."

The Department of Homeland Security said U.S. Coast Guard Adm. Thad Allen will continue to lead the federal government's response to the disaster after his appointment as Coast Guard commandant ends this month.

—Jared A. Favole
and Gautam Naik
contributed to this article.

©2010 Dow Jones & Company. All Rights Reserved.






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00379204
BP Tries to Shift Blame to Transocean
By
RUSSELL GOLD And GUY CHAZAN
The Wall Street Journal, Online Edition, Saturday, May 22, 2010.

HOUSTON—BP PLC has stepped up efforts to shift the blame for the giant oil spill in the Gulf of Mexico onto rig owner Transocean Ltd., as the relationship between these longtime business partners continued to sour.

In an interview with The Wall Street Journal, two BP executives who declined to be publicly identified claimed that Transocean's own documents specify that its workers aboard the Deepwater Horizon rig were in charge of operations and monitoring the oil well. The rig caught fire and sank last month, killing 11 people and unleashing one of the worst oil spills in U.S. history.

A spokesman for Transocean responded: "As the operator of the well, BP has repeatedly acknowledged—under oath and in advertisements—that it is assuming full responsibility for this matter."

Since a May 11 congressional hearing, BP and Transocean have traded accusations about who was responsible for the April 20 explosion and oil spill. At stake: possibly billions of dollars in liability and cleanup costs.

The two BP executives read from a part of Transocean's Emergency Response Manual for the rig, emphasizing sections that stated that Transocean's offshore installation manager was "fully responsible" for activities onboard the rig, and BP's representative was there to "assist." "For obvious reasons," the manual said, "only one person can be in charge at any one time."

The manual also said it was the responsibility of Transocean's driller to shut in the well upon detecting an intrusion of oil or natural gas.

In response to BP's claims, Transocean provided The Wall Street Journal with a complete copy of the manual's well-control section. The document suggested the responsibility for decision-making was less clear-cut than what BP highlighted.

The well-control section stated that top managers on the rig for both BP and Transocean were supposed to jointly decide whether the situation was deteriorating to a point where they might lose control of the well. Moreover, while Transocean's top official was atop the chain of command, BP's senior representative was supposed to consult with shore-based management in Houston to "decide appropriate well control procedures" if rig crews had trouble handling a serious problem.

BP declined to answer follow-up questions about the manual.

Determining which company bore ultimate responsibility for control of the well could become hugely significant in determining legal liability for the deaths and pollution caused by the oil spill. Already, the disaster has spawned a flurry of lawsuits that could tie up both BP and Transocean in the courts for years.

The interview with the BP executives came as the company is under continuing fire for failing to stop the oil spill or provide an accurate estimate of how much crude is leaking from the well. The pressure on BP has grown since oil started to make landfall in Louisiana this week.

The BP executives took specific issue with Transocean Chief Executive Steven Newman's recent testimony before congressional committees that the Deepwater Horizon disaster was caused by a "sudden catastrophic failure" of the well construction, and that "the drill crew had very little, if any, time to react."

The BP executives said that 50 minutes before the blowout, there were signs that something was wrong. More fluid was coming out of the well than was going in, a sign that natural gas might have been intruding into the well bore. About 39 minutes before the explosion, pressure was building in the well. "Clearly, when it's rising, that's a signal," one BP executive said.

He said in such a situation, normal procedure would be for the contractor's crew to secure the well by closing off the huge valve sitting on the seabed known as a blowout preventer. It is not clear if there was any attempt to activate the blowout preventer before the explosion.

The Transocean spokesman said: "Any attempt to prejudge the outcome of [continuing] investigations is inherently speculative and undermines the transparent and cooperative spirit with which the investigations must be conducted."

Regardless of who is ultimately deemed responsible for the accident, BP acknowledges it is responsible for stopping the spill. BP said Friday it was now collecting less oil from the leak on the floor of the Gulf than it collected Thursday.

BP has been challenging the accuracy of some third-party estimates that have put the amount of oil spewing from the well, located nearly a mile below the surface of the ocean, at 50,000 barrels a day or higher, not the official estimate of 5,000 barrels.

BP has been widely accused of trying to cover up the true extent of the spill.

Next week, the company plans to attempt to clog up the well through an operation known as a "top kill." The strategy involves infusing the wellhead with heavyweight fluids.

The environmental impact of the spill continues to be seen. Globs of wet, sticky brown oil stretched Friday morning along Fourchon Beach, one of the parts of the Louisiana Gulf coast heaviest hit by the spill so far. The oil washed up even though workers on the beach have been laying boom along the waterline and replacing it as it gets soaked with incoming oil.

Meanwhile, the White House is preparing to name leaders of a commission investigating the spill, according to people familiar with the matter. Former Florida Sen. Bob Graham, a Democrat, and former Environmental Protection Agency Administrator William Reilly, who served under a Republican, are the picks, the people said.

A White House spokesman didn't respond to a request for comment.

—Jeffrey Ball, Isabel Ordonez and Siobhan Hughes contributed to this article.

©2010 Dow Jones & Company. All Rights Reserved.







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00379205
Sensitive Wetlands Pose Special Oil-Cleanup Challenges
By
GAUTAM NAIK
The Wall Street Journal, Online Edition, Saturday, May 22, 2010.

As oil from the Deepwater Horizon spill washes up on the Louisiana coast, scientists are gearing up for a potentially massive cleanup job of the shoreline.

One factor that would make this task especially challenging: Wetlands, which make up a large part of Louisiana's coast, are one of the trickiest terrains to clean. On top of that, the region's ecology is already weakened by the pummeling it took from Hurricane Katrina in 2005 and and subsequent storms.

The oil has traveled across some 110 miles of water to make landfall in Louisiana; it is now threatening Florida and Cuba as well.

Nearly 50 miles of Louisiana's shoreline has been affected and Gov. Bobby Jindal said he expects the area to increase. While cleanup operations have started in some locations, they are still in the early stages.

The area threatened by oil includes seagrass beds, an important nursery habitat for various wildlife, and salt marshes, which occur in back bays and act as a buffer for the mainland against storms and hurricanes. Some 600 species of land and sea creatures are at risk from the spill, according to the Louisiana Department of Wildlife and Fisheries.

Oil cleanups on land can be notoriously inefficient. Typically, only about one-tenth of the liquid that washes ashore ever gets sopped up.

And coastal marshes, unlike beaches or rocky shores, pose special dilemmas for cleanup crews. It is easy to inadvertently stomp on and kill the vegetation. And oil sitting on the surface can get pushed into the soft ground where, in the absence of oxygen, it biodegrades much less quickly.

"With marshes, if you're not careful you can cause more harm," said Doug Helton of the National Oceanic and Atmospheric Administration, who oversees a team of scientists who respond to oil spills.

Of all the environments that can be affected by an oil spill, marshes are deemed to be the "most sensitive," according to a ranking system compiled by the NOAA.

Various cleanup techniques could be employed, scientists familiar with past spills said. One is to use low-pressure water hoses to flush out some of the onshore oil and vacuum it off. In marshland, though, more effective high-pressure spraying would likely kill the vegetation.

A technique called in situ burning can also be applied. When the tide floods the base of marsh plants in a soiled area, their upper stalks are set on fire along with any floating oil. Since the root structure and part of the stem survive underwater, the plant can grow back, according to researchers. The approach has been used in Louisiana and Texas previously.

The cleanup effort is also affected by the state of the oil when it hits land. When a slick floats on the water's surface, its physical characteristics change as some of the oil evaporates and the rest is exposed to sunlight. Such "weathered" oil can wash ashore as gooey tar balls, usually ranging in size from a pea to a softball.

"They're distinct blobs, so they're easier to pick up on the land because they're not coating everything," said Nancy Kinner, co-director of the Coastal Response Research Center at the University of New Hampshire. Such tar balls—some eight inches across—have already washed up on the beach at Port Fourchon, La.

If the oil isn't weathered, it can come ashore as a floating mat, typically coating the marsh vegetation and making it harder to remove. Some scientists have tried "bioremediation," whereby special bacteria are sprinkled on the oil to break it down faster. But Dr. Kinner said the results have been mixed, and that naturally occurring bacteria often do the job just as well.

©2010 Dow Jones & Company. All Rights Reserved.




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00379310
U.S. Was Not Ready for Major Oil Spill
Despite Mature Offshore Operations,


Gulf Crews Are Improvising With Chemicals, Protective Boom and Outdated Maps
By
JEFFREY BALL, STEPHEN POWER and NEIL KING
The Wall Street Journal, Online Edition, Monday, May 24, 2010.


Crude gushing into the Gulf of Mexico and washing ashore in Louisiana is exposing how ill-prepared the U.S. has been to respond to a major offshore oil spill.

In the fight to limit environmental damage from the month-old spill—which is on track to rival the 1989 Exxon Valdez disaster in size—BP PLC executives, government officials, and scientists are learning as they go, even though the industry has been drilling in the Gulf for decades and has 77 rigs operating there, according to ODS-Petrodata, a research firm.

The Environmental Protection Agency says it is still assessing the ecological effect of the 600,000 gallons of chemicals that BP has sprayed into the Gulf to break up the oil so far. As of Sunday, the agency and BP were locked in a standoff over whether to continue using the same chemical dispersant.

Some scientists researching the spill don't have the right instruments to measure the spill or to study its impact. Maps that federal officials are using to identify priority areas to protect from spreading oil are outdated. And the Coast Guard says the country lacks enough plastic piping, or "boom," to keep the incoming oil away from the coast.

"The national system did not contemplate you would have to do all that at once," Coast Guard Commandant Thad Allen told a Senate committee last week, referring to laying boom across a coastline as big as the Gulf's.

On CNN's "State of the Nation" Sunday, Mr. Allen likened the effort to address the spill to fighting a multifront war, as officials work to respond to oil coming ashore in southern Louisiana, tar balls in Alabama and Mississippi and the still-leaking well. He said BP had the means to cap the spill and that "our responsibility is to conduct proper oversight to make sure they do that."

But Interior Department Secretary Ken Salazar said in Houston Sunday that the U.S. would "push BP out of the way" if it didn't stop the leak and adequately clean up. Mr. Salazar and Secretary of Homeland Security Janet Napolitano will visit Louisiana on Monday to inspect the response to the BP oil spill.

BP Chief Executive Tony Hayward told his staff Friday that he was frustrated by the company's failure to stop the leak and warned an attempt to do so as early as Tuesday could fail. Mr. Hayward said that BP's plan to cap the well using heavy drilling fluids, a process known as "top kill," would be "another first for this technology at these water depths and so, we cannot take its success for granted."

And a BP spokesman said Sunday that the amount of oil BP now is siphoning from the leak has declined to 1,360 barrels a day, compared with 5,000 barrels BP said it had been collecting last week, as more of the oil evades the insertion pipe.

The White House insists it is doing everything possible to fight the spill, which began with an explosion April 20 on the Deepwater Horizon rig as it was drilling a subsea well for BP.

Yet, signs that the spill is overwhelming the U.S. environmental infrastructure can be seen in the dispute between BP and the EPA over the chemicals BP is using to break up the slick.

BP has been spraying unprecedented quantities of Corexit 9500, which the EPA approved for use on oil spills although EPA tests show it is more toxic to certain sea life than some other dispersants. BP has been spraying the chemicals on the Gulf's surface and in smaller amounts directly at the well on the sea floor, a tactic never before tried at these depths.

Then, last Thursday, amid mounting questions in the media and on Capitol Hill, the EPA changed course. It told BP to switch to less-toxic dispersants by Sunday night. But, according to a letter from BP that the EPA released over the weekend, the oil company wants to keep using Corexit. BP says alternatives raise other environmental questions and are not available in sufficient volume for this spill.

The EPA said Sunday that it would "continue to review and discuss the science" through the Sunday-night deadline.

Some scientists fault the federal government for not having investigated dispersants more fully earlier. Knowledge of dispersants' environmental effect is limited because the government "had virtually no money to put into that research," Nancy Kinner, a professor of civil and environmental engineering at the University of New Hampshire, said at a congressional hearing last week.

Although thousands of people are working to fight the spill, basic questions about its environmental impact remain. One is how much oil is spewing into the gulf. Scientists' estimates vary widely—from some 5,000 barrels a day to more than 50,000 barrels a day. A government team spent the weekend crunching reams of existing data—from video footage and pressure readings to overhead imagery—to come up with a better estimate.

Equally unclear is how the leaking oil is affecting undersea life. Earlier this month, a research vessel sponsored by the National Oceanic and Atmospheric Administration produced water samples from the Gulf that researchers said suggested oil was collecting in a plume deep below the water's surface. But scientists analyzing the samples say they are of limited value because they were taken with equipment not designed for oil.

Additional research ships are heading out to study the water.

Onshore, authorities are responding to the spill with more than a decade-old maps that assess the environmental sensitivity of U.S. coastal areas. NOAA said last week that it would cost $11 million to update the environmental-sensitivity maps.

—Victoria McGrane, Elizabeth Williamson and Isabel Ordonez contributed to this report.

©2010 Dow Jones & Company. All Rights Reserved.






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00379311
Louisiana Shrimpers Caught in a Net of Woe
By
JEFFREY BALL
The Wall Street Journal, Online Edition, Monday, May 24, 2010.

CUT OFF, La.—Oil or no oil, shutting down shrimping in Cajun country isn't easy.

Late Saturday night, patches of oil were washing into the marshes and beaches on Louisiana's Gulf of Mexico coast. Per state orders, many of the local waters were newly closed to fishing.

But Isadore Dardar, who like four of his brothers has shrimped here in Lafourche Parish since he was a boy, was still out on the water, a net sticking out butterfly-style from each side of his boat and trawling the bayou.

Other shrimping boats were too, their lights twinkling and their diesel engines rumbling as they eked out what their owners figured might be their last significant catch for a long time.

Mr. Dardar said he understood why state officials, supported by shrimp-industry leaders, have been closing various patches of local waters, intent on preventing tainted shrimp from entering the market. But shrimping pays his bills, and from what he could tell, the shrimp still looked healthy. So, like most of his friends, he continued plying his normal trawling routes through early Sunday morning, even when his boat's GPS screen made clear he was doing so in shut-down waters.

The practice is so common here that it has taken on a name: "crossing the line."

"It's still good," Mr. Dardar, a compact 43-year-old with a deep tan and a close-cropped goatee, said of the shrimping. Earlier that day, he had seen a faint sheen on the water that he figured was oil. But that night, he was catching shrimp that he said still looked oil-free. "No telling when I'll be back again," he said at about 11 p.m., adding that he would keep this catch for his family. "I'm going to fill up my freezer."

Shrimp prices here have jumped in the month since a deep-water rig exploded far out in the Gulf and began spewing crude into the water. Gulf seafood processors have rushed to lock in loads of shrimp, pushing the prices paid to shrimpers above $3 a pound for the biggest specimens.

Martin Bourgeois, a biologist with the Louisiana Department and Wildlife and Fisheries who helps decide which waters to close, sympathizes with the shrimpers' plight. And given the tidal flow in and out of the Louisiana coast, he noted, it was "ridiculous" to think that the concentration of pollutants right on one side of a government-drawn line is much different than right on the other.

"It's the same water," he said, adding that officials would "use their discretion" in deciding how to discipline shrimpers found crossing the line.

Officials said they were aggressively testing the Gulf seafood being sold into the market—and that those tests continued to show the seafood was safe. They said they were closing fishing areas along the coast at the slightest hint of oil's approach—long before any seafood in those waters could be tainted. "Ensuring seafood safety is paramount," Mr. Bourgeois said.

Some shrimpers are concerned. Daniel Bruce, who also keeps his boat in the village of Leeville, said he was out in his boat Thursday night with his deckhand—his wife, Mary—when they saw a slick of oil in an area open to fishing. "I could see the tar balls on top of the oil," he said. "It was bad." The couple didn't lower their nets into the water; instead, they moved to an area that appeared to be oil-free.

The next morning, Mrs. Bruce said, she called state officials to ask them to close the oiled area. "I said, 'Lady, you better close it. We went out last night, and it was full of oil.' "

After dinner one evening this month, Mr. Dardar—as he does virtually every evening during shrimp season—climbed into his truck, bought a bottle of red sports drink, and drove some 20 miles south to Leeville, where his two-decade-old boat is docked. He and his deckhand loaded coolers of ice onto the boat's back deck, fired up the engine and the TV in the wheelhouse, and untied the boat from the dock. Then they headed down the bayou.

Eyeing the small GPS screen mounted in front of the steering wheel, Mr. Dardar piloted the boat over the same routes he has trawled for years—paths shown on the screen as bright pink lines. Like a farmer plowing his best fields, Mr. Dardar was trawling the places where he has found the largest shrimp.

The paths led into shut-down waters. "As you can see, nobody listens," he said, having crossed into an area where the state had barred shrimping. Nearby were a dozen boats doing the same thing. "This is where the shrimp are," he said.

Every few hours, he walked back to the deck and raised the twin nets he had sewn himself, a skill passed down by his father, who also shrimped these waters. Each time, the nets bulged with glistening gray crustaceans, as well as with myriad fish he didn't want. Mr. Dardar pulled a string and emptied the nets.

By dawn, it was clear it had been a good night. In about eight hours on the water, Mr. Dardar had harvested more than $500 worth of shrimp.

Told about the panoply of shrimping boats plying closed waters in recent days, Mr. Bourgeois, the state fisheries official, shook his head and chuckled. He uttered the phrase that translates roughly as "let it be" in the French that's part of the culture here. "South Louisiana," he said. "Laissez-faire."

But Mr. Dardar said late Saturday night that he wouldn't do any more shrimping until the waters re-opened. "This is it," he said. "It's the end of the line, I guess."

©2010 Dow Jones & Company. All Rights Reserved.




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00379408
U.S. Turns Up Heat on BP
Oil Giant Warns Effort to Plug Well Not a Sure Shot; Finger-Pointing Picks Up
By
JONATHAN WEISMAN in Washinton and JEFFREY BALL in Port Fourchon, La.
The Wall Street Journal, Online Edition, Tuesday, May 25, 2010.

Frustration among federal and state officials over the handling of the Gulf oil spill boiled over Monday, even as the government's lead crisis manager said there was little that federal authorities could do but let BP Plc try to stop the gusher.

While some critics have asked why the White House doesn't take control of the cleanup, Coast Guard Admiral Thad Allen, speaking at the White House Monday, said he wouldn't recommend it. He said the government doesn't have more technology or expertise than the oil giant to deal with the leaking well, anyway.

"To push BP out of the way, it would raise a question: Replace them with what?" said Mr. Allen, who's leading the federal disaster teams in the Gulf. He said he had consulted with leaders of rival oil companies, who told him that BP appears to be doing what they would do.

Even so, political leaders traded barbs over the response to the spill by BP and the government, amid a rising tide of criticism from left and right.

Interior Secretary Ken Salazar, speaking to reporters in Louisiana, vowed that the government "will keep our boot on their neck until the job gets done," repeating a phrase that the White House has used previously to characterize its pressure on BP.

But Louisiana's Republican Gov. Bobby Jindal, speaking at the same press conference, in turn blasted the federal response. "We need more boom. We need more resources. We need the materials we requested to fight this spill," Mr. Jindal said.

For its part, BP has said it aims to try again Wednesday to plug the gushing well. But Chief Executive Tony Hayward warned Monday in Louisiana that the operation may not work.

The pressure on both the government and the company is growing as oil washes into coastal wetlands and fisheries along the Louisiana coast. Liberal allies of President Barack Obama have accused him of acting like a passive bystander as the company responsible for the disaster appears unable to fix it.

Former Alaska Gov. Sarah Palin accused the president of being in the pocket of Big Oil, a charge usually leveled by Democrats at the GOP.

"You've got to have a license to drive a car in this country, but, regrettably, you can get on a TV show and say virtually anything," White House press secretary Robert Gibbs said.

Mr. Allen's extensive briefing at the White House underscored how difficult the task facing the president is and how ill-prepared the industry and government are to stem the oil gushing 5,000 feet below the ocean surface. Mr. Allen said C17 cargo planes are flying protective booms from Alaska to the Gulf coast. Air Force aircraft are delivering chemical dispersants. The Navy is using advanced imaging to track the spill. He personally has delayed a retirement that was to begin Tuesday.

But, he said, "the government doesn't have everything we need to solve this problem."

"I've been dealing with oil spills for 30 years. This is an unprecedented, anomalous event," he said.

How far to bend the rules to respond to such an event has become a point of dispute between Louisiana officials and the Obama administration.

Mr. Jindal again called on the Obama administration to approve a proposal to build sand berms offshore to protect sensitive wetlands from oil. The administration has balked at the plan.

Mr. Jindal said state and local officials have "taken matters into our own hands" to start some sand barriers, and that more wetlands are put at risk every day the federal government delays action. But Mr. Allen said the Army Corps of Engineers had to look at feasibility, environmental impact, where the sand would come from, and how quickly the artificial islands could be built. His estimate: six to nine months.

The so-called permanent solution—two relief wells being drilled to pull oil from the billowing well head—isn't a sure thing, Mr. Allen said, The government is now looking at whether a third relief well should be started.

Mr. Hayward said it was necessary to be realistic about the likelihood that the company will succeed later this week in using a so-called "top-kill" procedure to stem the leak. He put its chance of success at 60% to 70%.

"It has never been tried in 5,000 feet of water," he told reporters Monday afternoon, standing in a blue shirt and khaki pants on a beach, as workers in white protective suits and green gloves shoveled up pools of gooey oil that were sitting on the sand.

Responding to increasingly angry criticism from Obama administration officials, Mr. Hayward said the spill "is clearly a major reputational issue for BP."

The administration is also feeling the heat as Congress steps up investigations of the spill. On Tuesday, senior administration officials will testify before the Senate Energy and Natural Resources Committee on how high to raise the current $75 million liability cap on economic damages should be set in the event of an oil spill.

Mr. Obama has said he wants it raised, but Mr. Salazar has said a high cap could hurt less robust firms.

©2010 Dow Jones & Company. All Rights Reserved.





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