By Matthew Bigg
VENICE, Louisiana (Reuters) - The United States 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 still gushing unchecked from a ruptured undersea well off Louisiana, the accident forced President Barack Obama to put on hold politically sensitive plans to expand offshore U.S. oil drilling. In March, he unveiled plans for a limited expansion, in part to try to win Republican support for climate change legislation.
It could take weeks to stem 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.
The Coast Guard received reports from the public saying edges of the 120-mile (193-km) oil slick had reached Louisiana's outlying Pass-a-Loutre wildlife reserve on the fringes of the Mississippi Delta.
Obama, no doubt mindful of public criticism of President George W. Bush's handling of the 2005 Hurricane Katrina disaster, sent senior officials to check on what estimates say could be a $3 billion (2 billion pound) cleanup effort.
Oil is pouring out at a rate of up to 5,000 barrels (210,000 gallons or 955,000 litres) a day. Forecasters say the spill could affect Mississippi, Alabama and northwest Florida in coming days. Louisiana and Florida have declared states of emergency.
Fitch's Energy Team estimated containment and cleanup costs could reach $2 billion 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 the fishing industry in Louisiana could be $2.5 billion, while the impact on tourism along Florida's Gulf coast could be $3 billion, Neil McMahon, analyst at investment firm Bernstein, said on Friday.
"We continue to bring every asset to bear to fight this spill," Coast Guard Rear Admiral Sally Brice-O'Hara told CNN.
Department of Homeland Security Secretary Janet Napolitano, Interior Secretary Ken Salazar and Environmental Protection Agency Administrator Lisa Jackson were due to fly over the affected area on Friday to assess the situation.
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.
The White House said no new offshore oil drilling would be allowed until a review was conducted of the spill, which happened after a rig exploded and sank last week.
BP TAKES "FULL RESPONSIBILITY"
Obama said domestic oil drilling remained an important part of the U.S. energy policy and important to U.S. security, but he insisted it must be done responsibly.
The president has pledged to use every resource, including the U.S. military, to contain the huge oil slick, while making clear that London-based BP, the owner of the ruptured well, was responsible for the cost of the cleanup.
BP'S Chief Executive Tony 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 on Friday.
The disaster comes as BP was 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, which was blamed on corroded pipelines.
The two incidents cost BP billions of dollars and drew considerable 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 Air Force said two C-130 aircraft were on standby in Mississippi to spray an oil inhibitor over the slick, if needed. "We're looking at all kinds of options in our capability portfolio," spokesman Maj. David Faggard said.
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 on record that sent 10.8 million gallons (49 million litres) of crude oil into Prince William Sound.
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.
LAWSUITS UNDERWAY
Louisiana Governor Bobby Jindal, whose state is still recovering from the ravages of Hurricane Katrina in 2005, declared a state of emergency and asked the Defence Department for funds to deploy up to 6,000 National Guard troops to help.
Napolitano declared it "a spill of national significance," meaning federal resources could be used to fight it.
Shrimp fishermen in Louisiana have filed a class-action lawsuit against BP, Swiss-based rig company Transocean Ltd, Halliburton and Cameron, accusing them of negligence.
The Navy said it was supplying the Coast Guard with inflatable booms and seven skimming systems.
BP and the Coast Guard have mounted what the company called the largest oil spill containment operation in history, involving dozens of ships and aircraft. BP admitted struggling to control the spill, which is 5,000 feet (1,525 metres) under the sea.
Eleven workers are missing and presumed dead after the rig exploded 11 days ago.
RACE AGAINST TIME
There 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 has said he wants to modify.
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 will take four weeks to put in place, by which stage over 150,000 barrels could have been spilt. If the funnel does not work, BP will have to rely on stemming the flow by drilling a relief well, which would take two to three months.
(Additional reporting by Tom Bergin in London, Phil Stewart in Washington, Joshua Schnyer and Rebekah Kebede in New York and Kelli Dugan in Mobile, Alabama; Writing by Christopher Wilson and Pascal Fletcher; Editing by Stacey Joyce)
