BP Installs Containment Cap After Mishap

Energy giant BP put the collection cap back on the spewing oil well after removing it Wednesday morning following a mishap in which an undersea robot bumped a venting system, causing oil to spew into the Gulf of Mexico.

"The lower marine riser package cap containment system was successfully reinstalled on the Deepwater Horizon's failed blow-out preventer at approximately 1830 CDT on June 23," the company said in a statement. "This containment system is connected to the drill ship Discoverer Enterprise on the surface."

BP said the system resumed collecting oil and gas at 7 p.m.

The earlier setback, yet another in the nine-week effort to stop the gusher, came as thick pools of oil washed up on Pensacola Beach in Florida and the Obama administration tried to figure out how to resurrect a six-month moratorium on deep-water drilling.

The accident with the robot forced BP to remove a cap that had been funneling oil to a drilling ship. The immediate result was to send more oil from the damaged well spewing into the Gulf again.

Coast Guard Adm. Thad Allen said it was a precautionary move made after officials noticed gas in a vent that carries warm water to prevent the containment system from clogging with ice crystals.

"The problem was [that] a remotely operated vehicle that had been around the lower marine riser package bumped into one of those vents that allows the excess oil to come out," Allen said. "It actually closed it, thereby creating pressure in it, and the backflow potentially up the water vent."

NPR's Richard Harris told All Things Considered's Michele Norris that it's unclear how much oil was now leaking into the Gulf. "The increase in oil, without the cap, is about 16,000 barrels a day," Harris said. "But we don't know the total of oil that's going in -- it could be anywhere from 35,000 to 60,000 barrels a day." One barrel holds about 42 gallons of oil.

Harris noted that BP is still collecting some oil at the rate of about 10,000 barrels of oil a day.

"It's coming out of a hose that's going up the side of the blowout preventer," he said.

Wednesday's accident is the second involving one of the remote-controlled deep sea vessels that are in use to help control the spill.

Over the past two days, BP's containment system had collected sizable amounts of oil.

Pensacola Hit With Tar Balls

A large part of the beach at Pensacola, Fla., was slammed with globs of tar from the Gulf spill on Wednesday. Local health officials placed signs warning people to avoid contact with the water.

"The beach looks trashed," said T.J. Allen, 20, who was confronted with sludge before reaching the water's edge. "It's on my feet, dude," Allen said. "You can't get it off; you can't get it off for nothing."

Florida Gov. Charlie Crist toured the beach as dozens of BP workers in white hazmat suits combed the sand. "When you grow up in a place like this and see this kind of junk coming up on these beautiful beaches, it just breaks your heart," Crist said.

Beach visitors for the most part continued to sunbathe, but didn't get in the water.

Officials said they've called for and are expecting more skimmers to keep the oil offshore, but they also expect more waves of oil in coming days.

White House Seeks Delay In Ruling

In court papers, the Justice Department said it was appealing the decision by U.S. District Judge Martin Feldman in New Orleans that overturned a moratorium on new drilling. Feldman said the government simply assumed that because one rig exploded, the others pose an imminent danger, too.

Feldman, appointed by President Ronald Reagan in 1983, has reported extensive investments in the oil and gas industry, including owning less than $15,000 of Transocean stock, according to financial disclosure reports for 2008, the most recent available. It's unclear whether he still holds those stocks. He did not return calls for comment on his investments.

Some environmental groups say no matter how small the amount the judge should have stepped aside. "It would be one thing if it were two steps removed form the dividend process, but we are talking about dividend checks to this judge for a company that has two contracts that are being canceled for the moratorium," said Kate Gordon, vice president for energy policy at the Center for American Progress, a liberal think tank. "That's pretty direct."

But Ed Sherman, a law professor at Tulane University, says Feldman's holdings are not surprising because anyone with a diversified portfolio is going to own oil stocks. And, Sherman says, owning stocks in a broad industry doesn't mean you can't rule on cases in that industry.

"Judge Feldman is a respected judge and he did make a careful opinion," Sherman said. "I would be surprised if that ownership of small amounts of stock would affect him in any way."

The White House promised an immediate appeal of Feldman's ruling. The Interior Department imposed the moratorium last month in the wake of the BP disaster, halting approval of any new permits for deep-water projects and suspending drilling on 33 exploratory wells.

Interior Secretary Ken Salazar said in a statement that within the next few days he would issue a new order imposing a moratorium that eliminates any doubt it is needed and appropriate.

"It's important that we don't move forward with new drilling until we know it can be done in a safe way," he told a Senate subcommittee Wednesday.

New York Officials To Sue BP

Far from the spill, in New York state, officials announced they're suing BP, hoping to recover hundreds of millions of dollars in losses suffered after the oil giant's stock price plunged.

New York's retirement fund held more than 19 million shares of BP stock in April. Then the Deepwater Horizon oil rig exploded.

In the weeks since, BP shares have lost nearly half their value.

State Comptroller Thomas Dinapoli, who manages the pension fund, issued a statement accusing BP of misleading investors about its safety procedures and its ability to respond to major oil spills.

Dinapoli said the state will now seek "lead plaintiff" status in a class action lawsuit against BP.

New York's pension fund is the nation's third largest, with more than $132 billion in assets. It pays retirement benefits for nearly 1 million state and local government employees, police officers and firefighters.

Among other state pension funds stung by the decline of BP stock, the California Public Employees' Retirement System has seen its investment drop in value by more than $200 million.

With reporting from NPR's Debbie Elliott and Robert Smith, Trimmel Gomes of Florida Public Radio, Brian Mann of North Country Public Radio and The Associated Press