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Anderson Cooper 360 Degrees

Continuing Coverage of the Gulf Oil Leak

Aired June 03, 2010 - 01:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

(COMMERCIAL BREAK)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Good morning again from Louisiana.It is just after midnight here, just after 1:00 a.m. on the East Coast.I'm Sanjay Gupta following some breaking news out in the gulf.

Deep, deep under sea, crews trying to attach a cap on top of BP's leaking well.They've lowered this cap into the oil stream earlier.All of these began several hours ago.They're still seems to be an awful lot of oil and/or gas blowing out.We're expecting a briefing about this at 8 a.m. local time.

Also President Obama is arriving just after 1: 00 local time as well and we learned a short time ago, he is postponing his trip to Indonesia and Australia presumably because of what is happening here, this oil disaster.

More now with David Mattingly, he's been working the story every night for the last month and Gary Tuchman as well.

David, I don't know if you've looked some of these images.We have some new angles of what is happening deep under the sea there.The pictures we're looking at right now if you're watching at home are pictures we're seeing for the first time as well.

David, you're seeing these for the first time.What do you make of that?Is there anything that you're seeing new?

DAVID MATTINGLY, CNN NATIONAL CORRESPONENT: What I'm seeing is a huge cloud of oil.We're getting a very good view of it.This oil has been spewing unchecked into the Gulf of Mexico all day ever since they here sheared off that riser pipe at 9: 00 this morning

We were told when that happened, we were going to see an increase in the flow of the oil by about 20 percent and when you think before, conservative estimates were 12,000 to 20,000 barrels a day.We've seen possibly the worst day of oil spilled in the Gulf of Mexico today as a result of this.Looking at this picture right now, that oil is still flowing virtually unchecked.

GUPTA: So this is worse than ever is what you're saying?

MATTINGLY: We're having more flow than we've ever had before because before when we had -- we were watching the oil escape from the kink in that broken riser pipe.Now once they cut that pipe off, the oil, the natural pressure was able to flow out unchecked and that's what's been happening today.

That's what we're still looking at right here.This is just absolutely billowing out thousands and thousands of gallons of oil contributing to this already -- this worst environmental disaster in U.S. history showing that it's continuing to get bigger by the hour.And if this operation doesn't work, it's still going to keep getting bigger.

GUPTA: If this operation doesn't work, what do they do?

MATTINGLY: The only sure thing that they feel like they have in their arsenal is to drill that relief well that is in progress right now and that's going to be complete, they say, sometime in August.They're going to drill down below.

GUPTA: Three miles.

MATTINGLY: Yes.

GUPTA: Three and a half miles I hear.

MATTINGLY: Right.It's going to get harder the more they have to drill down.They're looking for very small space.They're going to try and get right into the well bore that they already have there and fill it up with cement.It sounds simple, but nothing has been simple about this throughout the entire operation.

GUPTA: You know, the cap, you were just mentioning this, putting the cap on itself. Let's take a look at what was happening.This is around 9: 30.They're talking about this cap for some time.David, can you talk us through a little bit -- I know you're not, you know, an engineer.

MATTINGLY: None of us are and we don't have anybody from the government or from BP here to talk us through this.So we'll just do the best we can.

GUPTA: Which is another remarkable thing.

MATTINGLY: All this right here, it looks like something out of deep space.You see the slightly tinged yellow device, that cap being lowered into place.And watch as it breaks into that plume of oil.And that's when they start fighting the oil.

That shows you what force this oil is shooting out and what they're fighting against.Now they have to set that on top of that cut riser pipe.It's only about six inches high and they're going to sit it on top of there and which is what we have right now.If we want to go back to the live picture we have now --

GUPTA: We have that live picture from the new angle?All right.

MATTINGLY: There we go and you see what it looks like now.That cap looks like it's in the location it's supposed to be n we don't know if it's secure or sealed.Obviously, it's not closed down to start funneling the oil off because that oil is escaping all the way through it.We're going to go to another angle here. See everywhere we look that billowing cloud of oil and, look, in the middle of it there, we can see the hose that is spraying the dispersant.That's our only line of defense right now against this oil. They're spraying the dispersant right at the source.As soon as it comes out of the pipe hoping to disperse it before it goes up to the surface and creates a big oil slick.

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: You made an interesting point, Sanjay.

GUPTA: He said it looks like deep space. That's one of the amazing things is that we go 250,000 miles to the moon and walk on the moon.But we can't send a man yet one mile down into a sea bed. I mean that's the whole point.If people were able to go down there, they could get the job done.

MATTINGLY: It is also amazing that we're more prepared to go to the moon right now than we were to go down and fix this.I mean they're making this up as they go along.

GUPTA: People say that this is unprecedented.But there have been oil disasters around the world outside the United States.What about engineers from other countries who may have dealt with something like this?Have you heard about those types of resources?

MATTINGLY: They're applying what they know in previous disasters, but they've never had to apply it at the bottom of the ocean floor a mile down.For instance, that top kill maneuver they tried unsuccessfully.That had been tried on --

GUPTA: Throwing a bunch of sand and rocks.

MATTINGLY: A lot of heavy liquid and solid material, yes.But they tried that on land.It worked.Not 100 percent, but did it work.They tried it in shallow water, it worked, not 100 percent, but it did work.

This, going down a mile below is a completely different environment, completely different set of challenges and they're really having to learn as they go.And I've heard this so many times.I think one of the EPA administrators said this early on, we are clearly in unchartered waters and that goes for everybody here.We are learning something new every step of the way.

MATTINGLY: It's worth pointing out that we've been live really throughout this entire effort which began several hours ago.

GUPTA: While you're doing a great job explaining this to us, no one else from BP, from the United States government has really been able to give us an explanation from their perspective.

MATTINGLY: And all I'm giving you are observations based on the experience I've had over the last month and watching what's going on down there, talking to everybody that is involved with this.You really need the people who are in Houston who are guiding this to tell us what's going on.And, of course, they're not available to us tonight. TUCHMAN: I think it's important to point out we don't know why they're available.Our theory is that because there is ups and downs, they don't want to go back and forth.But it's possible, they don't what's going on, it's possible they do know what's going on, they just don't care.We just don't know the exact reason.

MATTINGLY: Right, and for some reason, I seemed to think just from mechanical standpoint.You put the cap on and start to get the seals attached, you'll start to see some sort of difference, but may be the process just takes much longer than that.

GUPTA: We were here in 12 to 24 hours to find out if this is going to operational the way they hope, but every single timetable that's been offered to us ends up getting tossed out the window sooner or later.

And we hear there's a press conference around 8: 00 in the morning so hopefully, we'll get some more information then let's talk to presidential historian as well, Douglas (Frankley).He's got deep roots down here.In fact, he and I were talking right at the beginning of this entire disaster.

He's written extensively about preserving the wild life treasures especially in this area.That quickly, the president is coming back down here tomorrow.We're talking about that.He seems to have gotten this message that people want to see him and they want to see him very engaged.Is that your sense as well?

MATTINGLY: Yes, I mean, this is a turning point in his presidency.You can't think about a legislative agenda this year.This is it.This issue is going to dominate if you have that amount of oil that we're seeing on the screen right now.Dumping into the gulf, a volcano gushing like that of oil for months with real no clear date and it's not like we could say, August 15th, that's the last date.It could go all the way to October.The president has to really seize the range right now.

GUPTA: Did you - I'm sure you probably lost a lot of sleep over the last month because again, I know how passionate you are about this.What is your confidence level right now that BP hasn't - and this particular plans to actually get this done or are they truly just making this up as they go along and again, doesn't need reminding, but we are talking about the largest environmental disaster in our country's history.Are they just making this up as they go along?

MATTINGLY: Completely making it up as they go along.They never tried any of these things before.This is a rogue company.History is going to shine a very ugly light on this company when we start looking at the -- all of the havoc they reeked.Really everywhere, particularly in the last decade, you had the Texas City blow up.

You had the problem in the Arctic Tundra.But in general, what I'd like your viewers to understand is the Gulf of Mexico has this difficult relationship between the seafood center of north America and being the petroleum center.

And the gulf is filled with all sorts of oil platforms and sometimes the gas and oil industry, most of the time, have been reckless with the wetlands.There is a canal called the Mississippi river gulf outlet.It connects the Gulf of Mexico to the Mississippi River.It's been shut by the Army Corps of engineers as being one of the contributors to Katrina.

Louisiana was losing two football fields of wetlands a day due to the erosion and the stress that oil and gas industry put on the region.A decision has to be made whether we're going to try to save the wetlands and save the great fisheries of America orare we going to just drill, drill, drill without having proper environmental standards?

We're at that point right now.I think the president, rightfully, is starting to see this is his leader -- leaders, presidents are defined in moments of crisis.Our country is now in crisis due to a British company on American soil.

GUPTA: And as sad as it is to say, regardless of what happens with this capping procedure and regardless of what happens with this potential relief well, even a month or a month and a half down the road, there has been a lot of damage done by this oil already.You know, we've been talking about the -- for over a month now.But a lot of people don't really know what crude oil is, petroleum.Is that what you have in the bottle here?

MATTINGLY: Right, this is the enemy right here.This is crude oil that I collected in the marsh right at the mouth of the Mississippi River.That's right when that crude oil first started coming in and making so much -- so many people concerned here.But this stuff is as thick as chocolate syrup and --

GUPTA: Wow.

MATTINGLY: Look at that.The water separated and came out first.I'm going to dump that out.

GUPTA: We should be wearing rubber gloves with this.

MATTINGLY: You can smell it as well.Here we go.There we go.

GUPTA: So you had your hand in themarsh with the glove on.

MATTINGLY: Yes and Gary went out there.He saw people trying to clean this stuff literally off the blades of grasses and marches.Look at this.It sticks to everything it touches and it does not let go.I mean that's what you're dealing with.This isn't like the motor oil you have in your car.I mean this is really a lot thicker.It seems, I don't know.

TUCHMAN: We saw people cleaning blades of grass.There are people hired by BP.They were wearing hazmat suits, but there were holes in them.They looked like they came from a good will store or something.They weren't first class.

GUPTA: They're not quite doing the job.Doug Brinkly, are you still there with us and if you have a television and watching what David Mattingly is doing.This is, as David said, the enemy.Gary, what was it like?So you were there.You saw this stuff.

TUCHMAN: What these people were doing, they were hired by BP, getting paid $12 an hour and replacing the boom alongside the marshland and laying down new boom.But there is only about 40 people in this huge area.They were working hard.I mean they were busting their rear ends.They live here.But there is no way.It's like trying to take water out of a swim will pool with a thimble while it's raining.

GUPTA: You were describing yesterday, I remember, people literally washing the blades of grass by hand.

TUCHMAN: Yes, it was doing a little good.It certainly wasn't doing a lot of good.

GUPTA: I smell the stuff.The vapors are coming off this.It causes headaches, vomiting.We have the ability to turn our heads and get a breath of fresh air.So many people don't.Doug Brinkly, you've been watching this.There is a bill, meaning somebody's got to pay a bill.

I remember asking you, when are the bills going to come in? There is a bill from the federal government to BP, $69 million.A lot of money, maybe depending on how you look at, but virtually chump change compared to what this is going to cost in total.Do you think BP will make good on what they say they're going to make good on?

DOUG BRINKLY: Well, right now there's a lot of -- they're trying to find their different court venue.They're trying to have this where BP has the American operations Houston.They don't want to have anything to do with Louisiana.

One of the problems with BP is they always looked at the Gulf of Mexico, particularly the Louisiana politicians and Alaska as easy places.We're Nigeria and Louisiana to BP.You come in, do what you want.If something bad happens, you cover it up quickly.Louisiana has been known for political bribes.

I mean Governor Edwin Edwards is in jail.Bill Jefferson, the former congressman of Louisiana in jail.So Louisiana last go have just been treated by companies like BP as third world places.The money leaves the state.It doesn't go into banks.Louisiana has really no Fortune 500 companies.It's just the great oil fields just extract and bring the money out of state.

So one of the things that's going to have to be a challenge for the state of Louisiana is suing class action suits and winning and getting money in Louisiana.If off shore drilling is going to continue in the gulf which it needs to for energy future, Louisianians are going to have to see some more money coming from corporations to protect whatever wetlands are going to remain after this.

GUPTA: I was driving in.You may have seen the signs up and down the freeway already talking about if you've had these types of symptoms, have you been exposed call this lawyer.Did you have a question for Doug?

MATTINGLY: Yes, do you remember you and I were sitting around after Hurricane Katrina talking about anger that they had then.One of the questions I want to ask you, is there any comparison to be made to the anger that they had to the Army Corps of engineers for the bad levees five years ago compared to the anger at BP today?

BRINKLY: That's a great question.I think early on during Katrina, the anger was mixed.People were very angry particularly at FEMA, if you recall.And then President Bush for saying brownie, you're doing a heck of a job.The coast guard was the great hero.Thad Allen oversaw the basket drops of rescue being people from housing.Thad Allen oversaw the boats.The coast guard didn't lose a single asset in Hurricane Katrina meaning a boat or helicopter.

Thad Allen on the coast guard this round, people are scratching their heads about his behavior in many ways because he is supposed to be the incident leader here, but he seems very close to Tony Hayward.He doesn't seem to have a strident voice like lieutenant general honorary was during Katrina.Then we brought the army in during New Orleans.The 101st airborne came in and settled things.

The problem and the frustration that I think and anger towards BP right now, it's just that people don't understand it.How can a company be controlling the destiny of an entire region of the country? And every day the anger to BP is growing and growing.And Katrina, it was four or five different people that were taking the brunt of the anger.The gain now for any politician is not to be caught in that buzz saw of public anger because it, you know, you see Bobby Jindal, Mary (Landreu), President Obama, all of the players in this trying to - in the game of musical chairs not to be the ones left standing.

GUPTA: A degree of frustration and depression and anger. We'll talk more about that as well.Douglas Brinkly, thanks so much.Much more ahead on what Gary and David has been demonstrating here just a moment ago with that bottle of crude oil.That's what we're talking about.Also, the growing toll on wildlife, especially the birds.Stay with us.

(COMMERCIAL BREAK)

GUPTA: We are live here following the worst oil disaster now in our United States history.And it's something that seems to be getting worse about it day, by the hour, perhaps, according to images just coming into us.We know all of these.

And we can show you the proof.It's at a center in Louisiana.This is the only place in the state that has birds injured in the spill.When the leak started, a couple birds were being brought now the numbers are rising.Again, here is Gary Tuchman.

(BEGIN VIDEOTAPE)

TUCHMAN (voice-over): This animal is basically unrecognizable.But it's a small gull, the latest bird that's come in contact with the BP oil.We're at a makeshift intensive care unit for birds.This brown pelican is being cleaned in a warehouse by trained workers in Louisiana.All oil birds in the state are now being brought here. JAY HOLCOMB, EXECUTIVE DIRECTOR, INTL. BIRD RESCUE RESEARCH CENTER: What happens is these birds tend to plunge feed for fish. The fish swim underneath the oil.They don't know what it is then they get covered.

TUCHMAN (on camera): It's quite stunning when you take your first look at a bird that's just been brought in.Inside this compartment here is a brown pelican that was just found a short time ago, taken on a boat to the facility.It was found in the Gulf of Mexico near Grand Isle, Louisiana, southwest of New Orleans.You can see, he's completely covered.

(voice-over): In the first month after this disaster, a total of only about 60 birds were brought here, but the pace is suddenly accelerating.

HOLCOMB: We're probably going to end up over 30 birds by the end of the day.

TUCHMAN: So this is a turning point?

HOLCOMB: This is the turning point, yes.

TUCHMAN: The oil prevents the birds from flying.It means they can't eat.Their body temperatures drop.

HOLCOMB: Some of the worst oiled looking birds are some of the ones that have a best chance.The reason only is they were captured really fast.They were picked up -- this gull was picked up out of the water today.They didn't have a chance.If we can get them stable and have nutrition go in, get them washed really soon, there's a good chance for them.

TUCHMAN (on camera): And this is Pelican Island, the final stop after the birds are cleaned off.We'll take you inside.You will see the brown pelicans are remarkably passive. It's almost like a spa.They have a swimming pool. There's about four, five, six, seven -- two more here. They have a nice supply of fish to dine on.

And these brown pelicans are ready to go back into the wild.They'll be here until the weekend and then the U.S. Fish and Wildlife service picks them up and flown to the Tampa Bay area, where they become free.

(voice-over): Just before we leave, another brown pelican is brought in, drenched in oil, as bad as any bird these experts have seen.It's going to be a busy night in the life and death struggle for so many birds.

(END VIDEOTAPE)

GUPTA: Really, it's something about looking at those images of the birds covered in oil, so how many are they taking care of?

TUCHMAN: I mean, this is what's amazing for the first five weeks of this disaster, 62 birds were brought n the last 24 hours, another 60 birds have been brought in. Just the last 24 hours, almost double.It bodes very poorly.What these experts are saying -- and these are experts.They are actually hired by BP.They work for a company that deals with birds during oil spills.They're not always busy.They like when they're not busy.They say this means the oil is spreading and they expect to get more and more birds.

GUPTA: These pelicans, they stay closer to the shore.

TUCHMAN: That's right.Brown pelican, by the way, is the state bird of Louisiana.Thousands of them live on the chandelier islands.That's about 40 miles to our south.They're in a play pen for these brown pelicans.And that's where they spend this time of year.So they're not very far away from the shore, but now they are diving into the water for fish and the fish are under the oil.They dive in and they get caught in the oil.

GUPTA: I imagine not all of them survive.

TUCHMAN: That's the thing.There are 60 brought there today.Who knows how many are still out there either dead or alive suffering with the oil.

GUPTA: They're important reminders of what's happening here.Again, just tough images to look at.Gary, thanks so much. Up next, Chad Myer is going to join us as well with a chilling forecast of just how far the oil could be traveling and how quickly as well.

Also, a top oil scientist is going to try to help us make sense of what we've been looking at all night long.Stay with us.

(COMMERCIAL BREAK)

SANJAY GUPTA, CNN ANCHOR: Our live coverage now of the gulf spill continues. I'm Sanjay Gupta in for Anderson Cooper. The latest effort under way to stop the leak. It started in just several hours ago. What we know is that a cap is in place. Yet it's unclear to us, to our untrained eye if it's in fact working.

There is so much oil out there. How far could it possibly travel? Where is it possibly going to go? Joining us on the phone right now, meteorologist Chad Myers and also Don Van Nieuwenhuise. He's a professor of Petroleum Geoscience at the University of Houston.

Welcome to both of you. Professor, if you have your TV on, you could please turn that down? OK, there we go. Perfect. Now, believe it or not, BP's done a lot of boasting about things over the last several days.

Chad, you've been following this story about what's happening with the oil leak and you're seeing some of the image that's we're seeing now. What I'm curious about, Chad, from your perspective, we're into hurricane season. I thought I heard the president, President Obama talk earlier about the fact that a tropical storm might potentially be worse as far as this oil goes than a hurricane. That sounds surprising to me. What did you think of that? CHAD MYERS, AMS METEOROLOGIST (via phone): To be honest, Doctor, it surprised me as well because a major hurricane will blow this oil farther inland with a larger storm surge therefore, literally poisoning the land all around the gulf coast.

So I understand his reasoning and obviously advisors are telling him this that if we get 130 mile-per-hour winds that that would really stir the ocean up and possibly just tear this oil up so much that it wouldn't affect the land as much. But if you get that oil in a storm surge and that storm surge goes 15 miles inland instead of two miles inland, I lose the perspective there on how that's better.

Because, you know, it's going to be poisoning a larger landmass maybe with a little less oil, of course, because you're spreading it out more. But I certainly don't want any tropical event in the Gulf of Mexico at all. Right now what we have is a wind from the south that will not quit. It is from the south to the north. It will be blowing for the next 120 hours, which is five days straight.

It will blow this oil slick right all the way from the chandeliers right on over to Pensacola and possibly even further to the east. This is worse case scenario. For the longest time, doctor, we had the winds going north, west, south, east. They blew around in a circle. That kept the oil out there where it was coming from. Well now that -- it's called a fetch. The fetch is from the south. It's not stopping from the south and that's going to move the oil right toward land.

GUPTA: I think we have some images of what you call the loop current I think, Chad. Can we put up some of those images? Talk us through this as well. We've been seeing images of where the oil is now. Chad, what do we see? What does this mean?

MYERS: The loop current is a current of water, which means water is moving. It goes from Cancun, which is right there by the western tip of Cuba, and it tries to go right up almost to New Orleans. But by the time it gets up into the middle part of the gulf, it has to turn around because there's land there.

So it turns to the right and it heads over towards Sarasota. But it doesn't get all the way over there, it turns to the right again and around the Florida keys where we call the gulf stream. Everybody of heard of the gulf stream since you were in tenth grade.

It comes out of the keys along Key West and marathon, Florida, turns to the west around Key Largo and then past Miami and it goes all the way up the east coast. That is what the loop current turns into and so when you get oil in the current, in the loop current, it can affect the coral reefs all the way up the east coast.

This oil, literally, is in the loop current, solidly in the loop current and then solidly in the gulf stream, it could go all the way up to Prince Edward Island, which is some of the greatest fishing grounds in north America period. It could really pollute a lot of area if we don't get this done soon. GUPTA: I'll tell you, I've been diving in that area that you're just mentioning in southern Florida. It is really scary to think b about. Stay with us. We also have a professor here who can maybe help us make sense of the images we've been seeing all evening. Thanks for joining us again, Professor.

This cap was supposedly put on several hours ago. I don't know if you can see these images, but I see more oil than I've ever seen before seemingly. Big billowing oil coming out of that area. Professor, what are you seeing here? Can you describe what's going on right now?

DON VAN NIEUWENHUISE, PROFESSOR, UNIVERSITY OF HOUSTON: Well, just like you, I see a large cloud of oil and it's very difficult. You can see some of the flange like things that look like veins. The ROV is moving around, but it looks as though it is not exactly level yet, which suggests to me that they haven't got it completely in place yet.

And as long as it's in this position, the oil is going to be diverted around the outside of the cap mechanism and consequently it's going to look a whole lot worse than it really s the cap was out of the way, it would be more or less a solid stream. But right now you have a big object blocking it and that oil is spreading around. It just makes it look a whole lot worse than it really is.

GUPTA: I think we do have some video of the cap being placed earlier, Professor. We can take a look at again at that, but to your knowledge, is anything happening right now? The cap is in place. Is there active -- is something actively happening right now? Are they trying to reset the cap, put it on in a better position? What do you think is going on?

NIEUWENHUISE: Well, you know, when you put this on, they're trying to get it level because they have to actually get it down a little bit farther over that flange like structure that you can see on top of the (LMRP). And so it has to be lowered maybe a little bit more than it is and then the seal will be in contact.

And, of course, there should be significant amount of oil coming out of the sides. There will be side vents that they have to get it a little bit closer and tighter on the seal. Once they open it up, they have to open it up very slowly. They can't just open it up right away. They don't want to get a lot of water into the pipes.

So it's going -- can you see right there, it's on but not quite on and it's moving around quite bait. It's a little bit unstable. It has the arms holding it in place. And I think it's going to take them a while to get it completely secure and sealed as well as they can and then they'll open up the pipe and try to start producing it. When they do that, they'll produce it as a slow rate to avoid getting any water in there and the potential for forming gas hydrates.

GUPTA: Right. We are live and you're looking at live images right now. So, Professor, I mean, can you make any prediction on how likely this cap is to work? Anything can you say by looking at these images? NIEUWENHUISE: Well, at this point, I wouldn't be able to say one thing or the other. What I'm seeing right now is not a negative thing at this point. I would start to worry if the flow of oil that you're seeing doesn't start to clear up over the next several hours.

It's going to take a while for them to increase the flow rate through the pipe that they've actually got to seal. So it will take a while to see the results of that. I think early on it's going to be like this. But as time progresses, if it's working, you'll start to see it clear up.

GUPTA: All right. Professor, thanks for staying awake with us here. We're live looking at these images with you. Thank you so much. You offered us some insight, which is something that has been hard to find tonight. Chad Myers as well, thanks so much.

Now, believe it or not, BP is doing a lot of boasting about the safety record. We're going to see how the claims actually match up with the facts. We're keeping them honest. That's next.

(COMMERCIAL BREAK)

GUPTA: Welcome back. We are live here in Southern Louisiana. Throughout this disaster, BP has kept its PR machine working overtime. Insisting that it's doing everything it can do to help. The same time the company has been boasting about what it calls a good safety record. Question is, how well do those words stack up against the facts, especially when you see how many times they've been in and out of court. We're "Keeping Them Honest." Here's Joe Johns.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN CORRESPONDENT: Five years ago, it was March 2005, 15 workers killed and 170 injured in a BP refinery explosion in Texas. Since then, BP has been hit with a felony conviction for violating the clean air act and over $108 million in proposed fines in connection with that refinery explosion.

Most of the fines were for failing to correct safety hazards at the plant. Just one year after the Texas refinery accident, BP had another catastrophe, a 200,000 gallon spill of crude oil on Alaska's north slope. BP agreed to plead guilty to a misdemeanor violation of the clean air act and BP paid $16 million in fines for failing to inspector clean the pipeline that leaked the oil.

All told, over the last decade for U.S. violations, BP's been hit with over $730 million in proposed fines and settlements as well as civil court judgments. It breaks down like this -- $215 million for violating worker safety regulations, $153 million for environmental violations, $363 million for manipulating prices.

It sounds like a lot of money, and it s but not for BP. The giant company earned an estimated $93 million in profit a day the first quarter of this year so all the fines and settlements, a watchdog group public citizen, calls them a cost of doing business for BP. TYSON SLOCUM, PUBLIC CITIZEN: Right. I mean, it was $700 million that they paid basically over the last decade for violating various federal laws and regulations over the whole spectrum of BP's operations in the United States.

And that's $700 million is a drop in the bucket compared to what they were making every day or every quarter. This is a hugely profitable company and they were just basically scoffing at the relatively small fines that they were paying.

JOHNS: And a former EPA investigator says there is a kind of cost benefit analysis, which is cheaper. Paying government fines or changing the business?

SCOTT WEST, RETIRED EPA INVESTIGATOR: These companies would come in and they'd wine, but they would write a check for covering the violations. It was still ultimately cheaper for them to pay that fine for that violation than to have acted properly all along.

JOHNS: The government has been very reluctant to use the one weapon against BP that has some teeth. It is a process called debarment, sometimes called the corporate death sentence. That would amount to shutting down the company's enormous government contracting business, supplying fuel to the feds including the Department of Defense.

JEANNE PASCAL, RETIRED DEBARMENT LAWYER, EPA: BP was supplying 80 percent of the fuel to the U.S. forces in Iraq and overseas.

JOHNS: In 2008, Jeanne Pascal was an EPA attorney in the Bush administration. Her job was to shut down worst case corporate offenders. She looked at BP and concluded it was so bad, it could be a good candidate for the corporate death sentence. But she says, she concluded that cutting off BP from government contracts would endanger national security and it wasn't about to happen. She left the agency earlier this year.

PASCAL: He definitely let me know they had access to the White House. Various managers would let me know they had appointments in D.C. and that the White House was on their appointment schedule. I was aware that they had access to the Bush White House and I was aware until I retired that they had access to the White House under the current administration.

JOHNS: We asked BP about debarment, the safety issues, fines they paid and accusations it's cheaper to pay penalties than change the business. They said they don't comment on legal matters. But they talked about their safety record in a written statement.

They said their rigs working in the Gulf of Mexico outperformed the industry average on safety for six years running. Since 1999, they said, injury rates and the number of spills have gone down approximately 75 percent. And as far as 2005 Texas refinery explosion goes, BP said, it has taken steps to improve safety and risk management at its operations worldwide.

(END VIDEOTAPE) GUPTA: Around the world, more people know more about BP than ever before and so much of it is not good. Joining us now is Joe Johns and Jeffrey Toobin. It was an interesting report, Jeffrey. How much of what we just heard - how much of BP's legal history is going to be relevant if any surrounding litigation comes into play here?

JEFFREY TOOBIN, CNN SENIOR ANALYST: Well, to get to the point where you would make the decision about what is relevant, there is a long, long, long way to go. Sanjay, I've been talking to lawyers for the past day or so about this litigation and they say that when you put this all together, this could be its most complicated, the longest and the most expensive litigation in the history of the United States.

GUPTA: Wow.

TOOBIN: The Exxon Valdez case, which is simple compared to this is 21 years and counting. That's a case where all the evidence was right in front of them. Now, most of the evidence in this case is 5,000 feet under the Gulf of Mexico and that's just for starters.

You have many different potential defendants, not just BP. You have Transocean, Halliburton, you have the role of the federal government to be sorted out. So, yes, their safety record may come into play, but to even decide who's suing whom, which insurance company pays, all of that, that is years of litigation first before you even get to the safety record.

GUPTA: You know, these numbers kind of boggle the mind a little bit from Joe Johns' report. Joe, that $69 million bill that the Obama administration sent to BP today, even if the cap on civil damages is lifted, we said it before, that is just a drop in the bucket for them. Just the cost of doing business, is that how your guest on your segment put it?

JOHNS: Yes, you're right. It is only a down payment as well as the cost of doing business although this could be a lot more. We know that BP is swirling ago way hundreds of millions of dollars as a down payment also.

But we're talking about a huge price tag here and probably the one thing that would cost BP the most is debarment as I talked about in the piece. You know, that is cutting off the contracts. The problem is that the law of unintended consequences. You do that and then the federal government might end up paying more to get somebody else to supply that oil. Either way, you know, the taxpayers could lose.

GUPTA: Joe, you may not know the answer to this. But is BP insured? We have nearly 40 million gallons of oil out there. Are they losing money on that? Is there some sort of insurance policy they have for this type of thing as well?

JOHNS: Well, you know, I can literally not even go there becuase I can't be sure. There is a lot of talk about self-insurance on companies like this, but you know, you have different elements. You have the rig. You have Transocean. You have Halliburton. You have other players so I don't even want to begin to figure out their insurance scheme.

GUPTA: All right. Jeff, you see billboards, basically saying if you think you've been harmed in some way by this oil disaster, here's a number to call and that number obviously is a lawyer. You've been talking to some of these lawyers already. What do they say? There are lawyers involved in the case. What are lawyers saying about this?

TOOBIN: Well, lawyers say that there are already almost 200 case that's have been filed. BP and some of the other defendants have started to move to consolidate them. That is certainly going to happen. They're not going to have 200 separate cases. The cases will be consolidated, but remember, as we've been talking about all night and into the morning, this oil slick is spreading.

There are more new potential defendants every day as more coastline is affected, more localities are affected, more individuals are affected. They are all perspective plaintiffs so even to decide how many lawsuits there are, that is probably going to take many months.

And that will only begin the process of sorting out, which judges will deal with them, which courts and we have a situation particularly in the federal court in Houston where many of the judges have so many ties to the oil industry that several have already recused themselves. So the number of judges is not that many who can do this.

GUPTA: There will be lawyers that will literally make their entire careers on this case based on what you were saying earlier about how long you can go. It's remarkable. Joe Johns and Jeffrey Toobin, thank you so much. Thanks for staying up as well. A quick reminder, we are anticipating a briefing on this capping operation about 8:00 a.m. local time.

Also, President Obama arrives here later today. We're going to update developments with our team of correspondents right here live after a short break.

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GUPTA: And we're back live. There is a capping procedure going on 5,000 feet below the surface. With me again, Gary Tuchman and David Mattingly. We've been covering this live all night. It is still looking at those images, hard to know exactly what is going on. What are you going to be working on later on today? It's 2:00 in the morning now in the east coast. A long night of questions, tomorrow a long day of what we hope will be some answers. We're going to hear from Thad Allen first thing in the morning on a teleconference. He has got to do some explaining of whether or not this is working and what are we looking at?

Gary, how about you?

TUCHMAN: President Obama's coming back again tomorrow. We're going to be talking to local people here. Has the president done enough? Has he made the emotional connection that so many people feel are necessary? GUPTA: Right. There is a lot of pressure on him to do exactly that and how engaged has he been. We'll see. He canceled his trip to Indonesia later on as well. So thank you all for staying up. Our live coverage from the gulf is going to continue right after this break. We're keeping an eye on that. Stay with us.

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