Testimony targets BP spill response
NEW ORLEANS (AP) — An employee of the company that owned the doomed Deepwater Horizon drilling rig testified Tuesday that he was surprised when BP scrapped his team’s design to stop the gusher in the Gulf of Mexico.
Robert Turlak, a Transocean Ltd. manager, was a witness for his employer at a federal trial that is focusing on BP’s response to the April 2010 well blowout. BP’s trial adversaries argue the company could have sealed the blown-out well much sooner if it had employed a capping strategy that Turlak and others had devised. It was ready for installation in early June.
BP ultimately used a capping stack to stop the spill July 15 after several other methods failed.
Turlak said he never heard why BP scrapped his team’s design.
“We were so close. We had come a long way,” said Turlak, Transocean’s manager of subsea engineering and well control systems.
During the first few weeks after the spill, engineers focused on two methods for stopping the flow of oil: Capping the well was one option. The other, called “top kill,” involved pumping drilling mud and other material into the Deepwater Horizon rig’s blowout preventer.
Turlak’s team was working on a strategy that was called “BOP-on-BOP” because it lowered a second blowout preventer on top of the rig’s failed one.
Turlak called it the “obvious solution,” but BP said it wasn’t a viable option because it could have made the situation worse and hampered other strategies if it failed. BP said the capping stack that later sealed the well was specifically designed to land on the well system above the blowout preventer.
BP employed the “top kill” method in May 2010, but it didn’t stop the flow of oil.
Applications to Sept. 11 fund soar
NEW YORK (AP) — With just a few days remaining until a key deadline, more than 32,000 people have applied to the federal compensation fund for people with illnesses that might be related to toxic fallout from the Sept. 11 attacks, program officials said.
Congress has authorized paying as much as $2.78 billion to people exposed to the tons of thick dust that fell on Manhattan when the World Trade Center collapsed.
The first deadline to apply for a payment comes Thursday, and as that date has approached, the number of applicants has soared. As recently as late June, only 19,733 people had applied. More than 6,000 registrations have been completed just since Sept. 15.
Applications have come in the greatest numbers from firefighters, police officers and construction workers who spent months on the smoking debris pile. A smaller number of registrants are people who lived or worked many blocks away and are concerned about the heaps of ash that fell on the streets or blew through building ventilation systems.
It is unclear how many of those people are actually ill, or who among them might qualify for compensation.
The flood of applications has long been expected. The Congressional Budget Office initially projected that as many 50,000 people would seek compensation. Still, there have been concerns since the program’s start that relatively loose eligibility requirements could result in the sizeable fund being stretched thin by the number of enrollees.
Those concerns have multiplied since federal officials began adding many common types of cancer to the list of illnesses that could qualify a person for a payment.
This year, the director of the National Institute for Occupational Safety and Health added prostate cancer as a covered condition. That is an illness that affects 1 in 7 American men during their lifetime, meaning it is bound to hit huge numbers of people exposed to World Trade Center dust even if there is no actual connection between the ash and the disease.
The compensation fund’s special master, Sheila Birnbaum, said it was premature to speculate how the number of claimants or addition of cancers might affect the program, “but it is something we are closely monitoring to ensure that the fund is administered in a fair and transparent fashion.”
John Feal, a former World Trade Center demolition worker and leading advocate for sick responders, said he thought maybe as many as a third of people registering for the fund are actually healthy and are registering as a precaution because they worry they might get sick later.
“I think there is enough money, and if there isn’t enough money, we go back to Congress and ask for more money,” he said.
He said his more immediate concern is that so few people have completed the claims process and received a payment. As of Sept. 15, fund administrators had rendered only 78 compensation decisions.
Birnbaum said the fund’s staff was hard at work reviewing claims, which have been slowed partially by the need to verify that applicants were actually exposed to the trade center dust and suffering from covered illnesses.
The Oct. 3 deadline applies to anyone who was ill with a condition covered by the fund when it began operating in 2011. That group includes people with several types of respiratory and digestive system ailments.
People with several types of cancer will have an additional year to apply because federal officials didn’t expand the program to include those diseases until more recently. People who were healthy in 2011, but have since fallen ill, will also get an additional two years from the date of their diagnosis. The fund closes entirely in 2016.
Markets rise even as U.S. government shutdown starts
NEW YORK (AP) — Investors stayed calm on the first day of a partial shutdown of the U.S. government Tuesday and sent the stock market modestly higher.
A long-running dispute in Washington over President Barack Obama’s health care law caused a deadlock over the U.S. budget, forcing about 800,000 federal workers off the job and suspending all but essential services. With the Republican-controlled House of Representatives and Democratic-controlled Senate locked in a stalemate, it was unclear how long a temporary bill needed to finance government activities would be stalled.
Despite the political rancor, investors didn’t push the panic button. That suggests that, at least for now, they aren’t anticipating that the stalemate will cause enough disruption in the economy to threaten a gradual U.S. recovery and a four-year bull run in the stock market.
“The trend of the economy appears to be in a positive direction,” said Michael Sheldon, chief market strategist at RDM Financial Group. “Unless this really gets ugly, we think the markets should start to look ahead to what we believe should be better economic data over the next six to 12 months.”
In the latest encouraging news on the economy, a private industry group reported Tuesday that U.S. manufacturing expanded at the fastest pace since April 2011 last month on stronger production and hiring.
The Dow Jones industrial average rose 62.03 points, or 0.4 percent, to 15,191.70. The Standard & Poor’s 500 index gained 13.45 points, or 0.8 percent, to 1,695.00. The Nasdaq composite rose 46.50 points, or 1.2 percent, to 3,817.98.
All ten sectors of the S&P 500 rose, led by gains in health care and technology.
Merck helped lift the health care sector. The drugmaker’s stock rose $1.13, or 2.4 percent, to $48.74 after it announced plans to cut another 8,500 jobs as part of a plan to reduce its annual costs by about $2.5 billion by the end of 2015.
The technology sector was given a boost by Apple, which gained $11.21, or 2.4 percent, to $487.90, after billionaire investor Carl Icahn tweeted about his dinner meeting with Apple’s CEO Tim Cook. Icahn, who said he has invested $2 billion in Apple, is pushing for the company to spend $150 billion buying its own stock.
“I feel very strongly that this should be done,” Icahn told CNBC in an interview. “It’s a no-brainer.”
The Apple board pledged in April to spend $60 billion buying back its stock through the end of 2015. About $18 billion of that commitment had been exhausted through June.
The S&P 500 index has fallen 2 percent since climbing to a record on Sept. 18, when the Federal Reserve surprised investors by saying it would continue with its economic stimulus. The index has fallen seven out of eight days leading up to the partial government shutdown.
“We’re not jumping in with both feet but we’re selectively putting money to work,” said Joseph Quinlan, chief market strategist for U.S. Trust Bank of America Private Wealth Management. “On the other side of the government shutdown, you’ve got continued support from the Fed and a global economy that’s rebounding.”
Many investors still predict that the budget fight will be resolved before it spills over into a dispute about raising the nation’s borrowing limit. Treasury Secretary Jack Lew said last week that the government would run out of borrowing authority by roughly Oct. 17.
The last time the borrowing limit, or debt ceiling, issue came up in August 2011, it led to a downgrade of the United States’ credit rating by Standard & Poor’s. The Dow went through nearly three weeks of triple-digits moves almost daily shortly thereafter.
“To some extent investors are conditioned to a certain amount of drama and if we can get the drama behind us quickly it won’t be a big deal,” said Dean Junkans, Chief Investment Officer for Wells Fargo Private Bank. “If this goes beyond the middle of next week, the market will get increasingly more worried about the debt ceiling.”
In other stock trading, the Russell 2000, an index of small-company stocks, rose to a record level, a sign that investors are still willing to buy riskier assets despite the government slowdown.
The Russell rose 13.64 points, or 1.3 percent, to 1,087.43.
In government bond trading, the yield on the 10-year note rose to 2.65 percent from 2.61 percent late Monday.
The price of oil fell 29 cents, or 0.3 percent, to $102.04 a barrel. Gold fell $40.90, or 3 percent, to settle at $1,286.10 an ounce.
The dollar fell against the euro and the Japanese yen.
Among other stocks making big moves:
— Walgreen rose $2.44, or 4.5 percent, to $56.24 after the drugstore chain said its fiscal fourth-quarter earnings soared 86 percent after it booked gains from its method of inventory accounting and its acquisition of a stake in European health and beauty retailer Alliance Boots.
— Ford gained 32 cents, or 1.9 percent, to $17.19 after the automaker said that U.S. sales rose 6 percent in September, with strong car sales making up for slower sales of SUVs.
Donald Trump interested in NY’s Plum Island
MINEOLA, N.Y. (AP) — Donald Trump is thinking about adding an island to his already flashy portfolio.
The real estate mogul and TV reality star said Tuesday he’s considering purchasing New York’s Plum Island, but has yet to make a final decision.
“I’d be interested in looking at it,” Trump told The Associated Press in a telephone interview. “It is a very complicated subject and nobody knows what is going to happen.”
The 843 acres off the coast of Long Island house a laboratory that studies infectious animal diseases that could imperil the nation’s livestock industry. Congress voted in 2009 to close the aging lab, which opened in 1954, and build a new one in Manhattan, Kan.
The General Services Administration is overseeing the proposed sale of the island to defray the costs of constructing the new facility; there has been no estimate of what the island could fetch at auction.
Trump said he has yet to consider exactly what he might do with the property.
“We would do something, but it would not be on a big scale,” Trump said. “We would look at it and come up with something appropriate.”
On Monday, Gov. Andrew Cuomo joined a growing number of elected officials in New York and Connecticut expressing doubts about a planned sale. Cuomo is calling for a thorough environmental review of conditions on the island, specifically citing concerns about potential groundwater pollution.
“Before the sale of Plum Island can continue, Washington must step up and sign a legally binding consent order spelling out its full plan for cleaning up the Island and giving the state oversight authority to make sure the work has been done properly,” Cuomo said in a statement.
Additionally, several members of Congress from the region have introduced legislation that would overturn plans to sell the island. Even if it were sold, the town of Southold has passed zoning laws that would severely limit development of the property.
In addition to a high-tech lab that studies foot-and-mouth disease and other illnesses dangerous to cattle and pigs, the island includes a defunct U.S. Army base and a lighthouse.
Trump has numerous properties, including luxury hotels and other holdings in New York City, Chicago and Las Vegas.