Gulf Oil Spill Disaster: Gulf Oil Well May Continue Spewing Crude Until August - CNBC

Gulf Oil Spill Disaster: Gulf Oil Well May Continue Spewing Crude Until August - CNBC

After failing again to stem the flow of oil into the Gulf of Mexico, BP scrambled Sunday to make some progress in ending the spill that the president's top energy adviser said was the biggest environmental disaster the U.S. has ever faced.

Six weeks after the spill, oil giant BP [BP 42.95 -2.43 (-5.35%)] said that its latest plan to cap the well wouldn't capture all the crude fouling the Gulf. And the relief wells currently being drilled—which are supposed to be a better long-term solution—won't be done for at least two months.

"Well, the relief well at the end of August is certainly the end—the end point on this game," Robert Dudley, BP's managing director, said Sunday on ABC's "This Week." "But we failed to wrestle the beast to the ground yesterday."

That would be in the middle of the Atlantic hurricane season, which begins Tuesday.

The crude likely won't affect the formation of storms, but the cyclones could push the oil deeper into coastal marshes and estuaries and turn the oil into a crashing black surf.

White House energy adviser Carol Browner said Sunday on NBC's "Meet the Press" that there was more oil spilling into the Gulf than at any other time in history.

"This is probably the biggest environmental disaster we've ever faced in this country," Browner said.

The effort to curb that disaster known as the "top kill" failed after engineers tried for three days to overwhelm the crippled well with heavy drilling mud and junk 5,000 feet underwater.

And skepticism is growing that BP can solve the crisis.

Rep. Ed Markey, D-Mass., who leads a congressional committee investigating the disaster, told CBS' "Face the Nation" on Sunday that he had "no confidence whatsoever in BP."

"So I don't think that people should really believe what BP is saying in terms of the likelihood of anything that they're doing is going to turn out as they're predicting," he said.

BP hopes to saw through a pipe leading out from the well and cap it with a funnel-like device using the same remotely guided undersea robots that have failed in other tries to stop the gusher.

Even that effort won't end the disaster—BP officials have only pledged it will capture a majority of the oil.

None of the remaining options would stop the flow entirely or capture all the crude before it reaches the Gulf's waters.

Engineers will use remotely guided undersea robots to try to lower a cap onto the leak after cutting off part of a busted pipe leading out from the well.

The funnel-like device is similar to a huge containment box that failed before when it became clogged with icelike slush.

Dudley said officials learned a lot from that failure and will pump warm water through the pipes to prevent the ice problems.

The spill is the worst in U.S. history—exceeding even the 1989 Exxon Valdez disaster—and has dumped between 18 million and 40 million gallons into the Gulf, according to government estimates.

The leak began after the Deepwater Horizon drilling rig exploded in April, killing 11 people.

"This scares everybody, the fact that we can't make this well stop flowing, the fact that we haven't succeeded so far," BP Chief Operating Officer Doug Suttles said Saturday. "Many of the things we're trying have been done on the surface before, but have never been tried at 5,000 feet."

He said cutting off the damaged riser isn't expected to cause the flow rate of leaking oil to increase significantly.

However, Browner said Sunday on CBS' "Face the Nation" that cutting the pipe could send more oil flowing into the Gulf—up to 20 percent more than is currently spewing.

That's because engineers will cut off a kink in the pipe that currently seems to be holding back some of the gusher, Browner said. Browner also said how much oil the new cap can collect depends on how well it's fitted over the leak.

Other experts also have said installing the new containment valve is risky because of the bend in the riser pipe.

"If they can't get that valve on, things will get much worse," said Philip W. Johnson, an engineering professor at the University of Alabama.

Word that the top kill had failed hit hard in fishing communities along Louisiana's coast, where the impact has been underscored by oil-coated marshes and wildlife.

The top official in coastal Plaquemines Parish said news of the top kill failure brought tears to his eyes.

"They are going to destroy south Louisiana. We are dying a slow death here," said Billy Nungesser, the parish president. "We don't have time to wait while they try solutions. Hurricane season starts on Tuesday."

European Debt Crisis - Germany's Upper, Lower Houses Approve Aid Package - CNBC

European Debt Crisis - Germany's Upper, Lower Houses Approve Aid Package - CNBC

Germany's parliament on Friday approved a law allowing Europe's biggest economy to contribute to a 750 billion euro ($940 billion) emergency debt package despite wide public opposition to the move. A clear majority of lawmakers in the Bundestag lower house backed the bill, but 10 members of Chancellor Angela Merkel's center-right coalition rebelled by either voting against or abstaining, highlighting the domestic pressure she is under. The bill will allow Germany to contribute some 148 billion euros in guarantees to the international package. Merkel has come under increasing fire for her leadership style during the euro zone debt crisis both from the opposition Social Democrats (SPD) and from within her own ranks. On Friday, there were 319 votes in favor, 73 against and 195 abstentions. The SPD and Greens abstained and the socialist Left party voted against the bill. The Bundesrat upper house later passed the bill, leaving President Horst Koehler to sign it into law. Faced with public anger about bailing out weaker euro zone states, Merkel and Finance Minister Wolfgang Schaeuble have argued the package is crucial to defend the European common currency which, Merkel says, is in danger.

"We're doing this in our best national interests ... the common European currency has been a huge benefit to Germany," Schaeuble said in an impassioned speech before the vote. "Almost two thirds of exports go to members of the euro zone. Without the euro, we would have a much weaker economy, a much weaker Germany," he said to loud applause from lawmakers. Germany has a responsibility to keep the euro stable, the EU Stability and Growth Pact must be toughened and the roots of the euro zone crisis -- deficits -- have to be tackled, he said. The overall package includes 440 billion euros in guarantees from euro states plus 60 billion euros in a European instrument and 250 billion euros from the IMF. It comes on top of a 22.4 billion euro contribution from Germany to an international rescue plan for debt-ridden Greece, approved just two weeks ago.

Merkel Under Attack

In a sign of the pressure Merkel is under, a survey for ZDF television showed that 51 percent of Germans polled opposed the euro zone aid package and 54 percent said Merkel was giving too little direction. Voters in the state of North Rhine-Westphalia punished Merkel's centre-right coalition in a regional vote earlier this month that was overshadowed by a row over the debt crisis. Germans resent forking out for weaker eurozone members. They fear a bulging deficit of their own and fail to see why they should help states that have been less rigorous in budget discipline than themselves.

In the parliamentary debate, SPD leader Sigmar Gabriel accused Merkel of losing all credibility, especially on the question of a financial transaction tax, which his party had made a condition of the SPD's support for the bill. Addressing Merkel, he said: "You have no direction, you have no goal," adding that Merkel's tactics had lost the confidence of Europe. In an even more stinging attack, Horst Seehofer, head of Bavaria's conservatives who share power with Merkel, told the Sueddeutsche Zeitung daily: "Sometimes I have to stop myself from tearing my hair out," complaining of a lack of clarity over the government's plans on a financial transaction tax. "The public feels mocked," he said.

Germany shocked markets and annoyed several EU partners this week with a unilateral ban on various speculative trades, a move widely seen as a response to domestic public pressure over Germany's role as the EU's "Paymaster General." Since then, France and Germany have sought to patch up their differences, with both on Thursday vowing to push for an international tax on banks.

Monetary Policy - Bank of England Keeps Policy Unchanged After Election - CNBC

Monetary Policy - Bank of England Keeps Policy Unchanged After Election - CNBC

Stock Market Week Ahead: Europe's Weekend Will Determine Wall Street's Week - CNBC

Stock Market Week Ahead: Europe's Weekend Will Determine Wall Street's Week - CNBC

Spain Seen as Moving Slowly on Financial Reforms - CNBC

Spain Seen as Moving Slowly on Financial Reforms - CNBC

Spending Doubles Income Gain as Consumers Tap Savings - CNBC

Spending Doubles Income Gain as Consumers Tap Savings - CNBC

U.S. consumer spending increased as expected in March for a sixth straight month as consumer dipped into their savings, a government report showed on Monday, confirming the robust spending growth experienced in the first quarter.

The Commerce Department said spending rose 0.6 percent after rising by an upwardly revised 0.5 percent in February, previously reported as a 0.3 percent gain.

The data was reflected in the first-quarter gross domestic product report that was published on Friday.

Analysts polled by Reuters had expected consumer spending, which normally accounts for over two-thirds of U.S. economic activity, to increase 0.6 percent in March.

Government data on Friday showed spending grew at a 3.6 percent rate in the January-March period, driving the the overall economy's 3.2 percent growth pace during the period.

Analysts, however, worry that an unemployment rate close to 10 percent and sluggish income growth could constrain spending in coming months.

Spending adjusted for inflation increased 0.5 percent in March after a similar gain the prior month, the Commerce Department said. Personal income rose 0.3 percent following a 0.1 percent gain in February.

That was in line with expectations for a 0.3 percent rise.

Real disposable income increased 0.2 percent in March after being flat the prior month. With consumers increasingly tapping their savings to fund consumption, savings fell to an annual rate of $303.9 billion, the lowest level since September 2008.

The savings rate dropped to 2.7 percent, also the lowest level since September 2008. The report also showed the personal consumption expenditures price index, excluding food and energy, rising 1.3 percent in the 12 months to March. The index, which is a key inflation gauge monitored by the Federal Reserve, increased 1.3 percent in February.