Gulf Of Mexico, Bp | featured news

The Obama administration warned BP in a strongly worded letter Saturday that the federal government expects the oil giant -- and not taxpayers -- to pay all damages associated with the ongoing Gulf of Mexico oil leak, even if they exceed the $75-million liability cap under federal law.

The effort to place a massive containment dome over a gushing underwater wellhead in the Gulf of Mexico was dealt a setback when a large volume of hydrates -- icelike crystals that form when gas combines with water -- accumulated inside the vessel, a BP official said Saturday.

A fix by engineers was not expected to immediately reduce the release of oil into the Gulf of Mexico.

MMS' fines against BP have been the equivalent of a rounding error. From 1998 through 2007 "when MMS issued its last fine against the company" BP has paid less than $580,000 in penalties for its 12 safety violations. Environmental groups say this simply isn't enough.