U.S. fights to protect shore from massive oil spill

VENICE, Louisiana (Reuters) - The U.S. government scrambled on Friday to ward off an environmental disaster that could cost billions of dollars as a huge oil spill reached coastal Louisiana, imperilling wildlife, shellfish beds and beaches.

With oil gushing unchecked from a ruptured undersea well off Louisiana, President Barack Obama's administration heaped pressure on London-based BP, the majority owner of the blown-out well, to do more to stem the flow and contain the spreading slick.

Crude oil is pouring out at a rate of up to 5,000 barrels (210,000 gallons or 955,000 litres) a day. Forecasters predict the spill will soon invade the coastlines of Mississippi, Alabama and northwest Florida.

So far, efforts to stop the flow of oil have failed. If unchecked, it will take about 50 days for the leak to eclipse the 1989 Exxon Valdez spill in Alaska, the worst U.S. oil spill, which sent 10.8 million gallons (49 million litres) of crude oil into Alaska's Prince William Sound.

The accident forced Obama to put on hold politically sensitive plans to expand offshore U.S. oil drilling, which he unveiled last month, partly to try to win Republican support for climate change legislation.

Obama said domestic oil drilling remained an important part of the U.S. energy policy, but insisted it must be done responsibly.

Interior Secretary Ken Salazar said he told BP to "work harder and faster and smarter to get the job done."

"We cannot rest and we will not rest until BP permanently seals the wellhead and cleans up every drop of oil," Salazar said in Louisiana, where Governor Bobby Jindal has declared a state of emergency.

BP PROMISES "AGGRESSIVE" CLEANUP

Obama, no doubt mindful of public criticism of President George W. Bush's handling of the 2005 Hurricane Katrina disaster, sent top officials to check on the cleanup effort.

Homeland Security Secretary Janet Napolitano urged BP, whose CEO Tony Hayward promised an "aggressive" cleanup campaign, to commit more resources to the operation.

She said two Air Force C-130 aircraft equipped to spray dispersant chemicals on the slick were on their way to the area to join one of the biggest containment operations in history involving several hundred boats and planes.

The Navy was supplying the Coast Guard with inflatable booms and seven skimming systems.

BP'S Hayward said the company would clean up the oil spill and compensate those affected. "We are taking full responsibility for the spill... We are going to be very, very aggressive in all of that," he told Reuters in an interview.

BP had earlier admitted it was struggling to control the spill, which is 5,000 feet (1,525 metres) under the sea and asked the Pentagon to help by supplying sophisticated underwater equipment, not available commercially.

There already are signs the spill may be worse than one in 1969 off Santa Barbara, California, which prompted a moratorium on oil and gas drilling off the Pacific and Atlantic coasts -- a ban Obama had said he wanted to modify.

It could take weeks to stop the flow of oil and would require either trapping it and channelling it to a tanker, or drilling a relief well. In the interim, the Coast Guard deployed booms along parts of the coast to protect the shore.

Jindal, flanked by federal officials at a news conference, said the current boom deployment was "not effective."

"Weather is one of our biggest challenges. Wind and waves are up. Seas are at 6-8 feet which can make it difficult to deploy boom," said Ayana Mcintosh-Lee, a BP spokeswoman, noting that several booms had been laid on Friday.

Jindal is seeking to mobilise 6,000 National Guard soldiers for security and to help support the response to the oil spill.

"SHEEN" OF OIL

Officials said a "sheen of oil" -- edges of the 120-mile (193-km) oil slick -- had reached some barrier islands in a Louisiana wildlife reserve on the fringes of the vast Mississippi Delta.

"So far, it's minimal oil that has come ashore but when you look at the wind we have to prepare for the worst ... If it goes inland it will be massive and out of control," Plaquemines Parish President Bill Nungesser told Reuters.

"There are a lot of angry people right now," said Christopher Creppel, 25, a fisherman in Venice, Louisiana. "This will not just put us out of business this year. It will put us out of business for years to come."

Underwater robots failed to activate a cutoff valve on the ocean floor to stop the leak. BP is hoping to cover the well with a giant inverted funnel that would capture the oil at the sea floor and channel it directly to a tanker ship.

But that would take four weeks to put in place, by which stage over 150,000 barrels could have been spilt. If the funnel doesn't work, BP will have to try stemming the flow by drilling a relief well, which would take two to three months.

Fitch's Energy Team estimated containment and cleanup costs could reach $2 billion (1.3 billion pounds) to $3 billion "once the leak reaches land, and potentially more, the longer it takes to arrest the flow of oil into the Gulf."

The cost to Louisiana's fishing industry could be $2.5 billion and the impact on tourism along Florida's Gulf coast could be $3 billion, estimated Neil McMahon, analyst at investment firm Bernstein.

Florida has declared a state of emergency on its Panhandle coastline.

U.S. Attorney General Eric Holder sent a team of lawyers to monitor the oil spill and said the Obama administration would vigorously enforce environmental laws.

"Those responsible will be held accountable," said Salazar, referring to the explosion and sinking of the Deepwater Horizon rig last week that triggered the spill.

The White House said no new areas of offshore oil drilling would be allowed until a review was conducted of the spill.

BP was already working to repair its reputation in the United States after a 2005 blast at a Texas refinery, which killed 15 workers, and a major oil spill in Alaska in 2006, blamed on corroded pipelines.

The two incidents cost BP billions of dollars and drew scrutiny from U.S. politicians and regulators.

Shares of companies that provided services or operated the sunken Deepwater Horizon drilling rig, including Halliburton Co and Transocean Ltd, fell sharply as worry mounted about liability from the spill.

The Gulf Coast and its marshlands are home to hundreds of species of wildlife, including manatees, sea turtles, dolphins, porpoises, whales, otters, pelicans and other birds. The Gulf teems with shrimp, oysters, crabs and fish and supports a $1.8 billion fishing industry second only to Alaska.

Shrimp fishermen in Louisiana and Alabama have filed a class-action lawsuit against BP, Swiss-based rig company Transocean Ltd, Halliburton and Cameron, accusing them of negligence.

(Additional reporting by Chris Baltimore in Houston, Tom Bergin in London, Phil Stewart in Washington, Joshua Schnyer and Rebekah Kebede in New York and Kelli Dugan in Mobile, Alabama. Writing by Pascal Fletcher; editing by Christopher Wilson)