Oil, Gulf Oil Spill | 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.

Scientists say incident is especially troubling because it is the 1st massive U.S. oil spill whose effects so far are largely hidden underwater.

Company says its costs for fighting spill in the gulf have risen by $100 million in three days.

BP PLC told Congress Tuesday its massive Gulf oil spill was caused by the failure of a key safety device made by another company. In turn, that company says BP was in charge, and that a third company that poured concrete to plug the exploratory well didn't do it right. The third company, which was plugging the well in anticipation of future production, says it was only following BP's plan.

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.