U.S. to probe spill as BP says more oil contained

Energy giant BP said on Tuesday it was now able to siphon off about 40 percent of the oil gushing from a ruptured well in the Gulf of Mexico but has not been able to stop the leak, as President Barack Obama is to create a commission to probe the spill.

BP's progress in capturing more oil through a tube inserted by undersea robots into the mangled riser pipe of the well came amid new evidence that a powerful sea current in the Gulf was pushing the crude closer to the U.S. Eastern seaboard.

BP estimated the bill for the clean-up at $625 million, $175 million higher than a few days ago, with analysts saying costs could reach into the billions. The spill has threatened economic and environmental calamity to the U.S. Gulf Coast.

BP's stock was up about 1.0 percent in morning trading in London on Tuesday.

The U.S. Coast Guard said on Monday that state park rangers at Fort Zachary Taylor State Park on the island of Key West, Florida, found tar balls washing ashore throughout the day, marking the first appearance of oil debris reported in Florida since BP's deep-sea well rupture on April 20.

The National Oceanic and Atmospheric Administration has previously said the southern edge of the spill could make its way into the so-called Loop Current current, which could carry oil eastward toward the Florida Keys, out of the Gulf and up the East Coast of the United States.

Samples of the tar balls were collected and will be shipped to a laboratory for analysis to determine the origin of the source, the Coast Guard said.

Officials have stressed the spill has so far had minimal impact on the shoreline and wildlife along the Gulf Coast, but oil debris and tar balls had been reported earlier in Louisiana, Alabama and Mississippi.

A mile-long tube is now siphoning off oil at the rate of 2,000 barrels per day, about 40 percent of the 5,000 barrels (210,000 gallons/795,000 liters) BP has estimated to be leaking daily. Initially, half that amount was being suctioned off to a collection vessel at the surface.

WASHINGTON INVESTIGATES

Obama is expected to announce on Tuesday a presidential commission to probe the disaster as the oil industry and its practices come under sharp scrutiny.

Whether it's a nuclear meltdown at Three Mile Island or an oil blowout one mile deep, appointing an independent review panel is critical to reduce the risks of future accidents, said Edward Markey, chairman of a House of Representatives committee on global warming and energy independence.

The presidential commission will investigate issues related to the spill and its aftermath, including rig safety and regulatory regimes at the local, state and federal levels.

It will also look into the federal government's oversight role, environmental protections, and the Minerals Management Service, the Interior Department agency that has been heavily criticized for regulatory lapses.

With a shakeup of the agency imminent, Chris Oynes, the top official overseeing its offshore oil and gas drilling, announced he would retire at the end of the month.

Interior Secretary Ken Salazar is due to face questions from the Senate Energy and Natural Resources Committee on Tuesday about the agency's failings on issues surrounding the oil spill and how the Interior Department will be reformed.

A Senate Commerce Committee hearing on the oil spill is also due to question BP America President Lamar McKay and Steven Newman, president of Transocean, which owned the rig that exploded and was working on behalf of BP.

SOME PROGRESS

I do feel that we have, for the first time, turned the corner in this challenge, BP Chief Executive Tony Hayward said in Florida on Monday.

Investors have knocked $30 billion off BP's value over the spill, which followed the April 20 rig explosion that killed 11 workers and the fallout it faces is ramping up.

The disaster has hurt BP's image, already tarnished in the United States from a 2006 spill in Alaska from a BP-owned pipeline and 2005 fire at the company's Texas City refinery that killed 15 workers and injured 180.

Battling to salvage its reputation, BP said on Monday it was providing grants to Gulf coast states to help them promote tourism, which, along with fishing, is a mainstay of the region's economy.

People are freaking out. They see the news and think oil is everywhere, but it is not, said Michael Dorie, co-owner of Wild Native and Five Rivers Delta Safaris, which takes people on eco-tours of Alabama's Mobile Tensaw Delta.

If it all dries up and disappears, well the highlight of my tours is wildlife and pretty flowers. Take that away and my tour becomes just a boat ride. If people see oil slicked birds, how many more will not come?

(Additional reporting by Sarah Young in London, Writing by Ed Stoddard; Editing by Jackie Frank)