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Congress grills Big Oil on spill preparation

Members of Congress chastised the largest oil companies Tuesday, accusing them of being no better prepared than BP to avert an environmental catastrophe.
Image: Lamar McKay
BP's Lamar McKay testifies at a House Energy and Commerce Committee hearing.Mark Wilson / Getty Images
/ Source: The Associated Press

Members of Congress chastised the largest oil companies Tuesday, accusing them of being no better prepared than BP to avert an environmental catastrophe.

As the oil executives testified at a House hearing, Rep. Henry Waxman asserted that the companies' spill response plans amounted to "paper exercises" that mirrored BP's failed plan. Their strategies to plug a spill deep beneath the sea are the same failed strategies that have stymied BP, the California Democrat said.

The other companies "are no better prepared to deal with a major oil spill than was BP," said Waxman, setting the tone for a tense hearing.

But the executives sought to distance themselves from BP, telling lawmakers they would not have drilled the Deepwater Horizon well in the same way as the British company. They suggested some of BP's design decisions and actions may have jeopardized well integrity.

One lawmaker after another expressed frustration at BP's inability to stop oil gushing from its stricken well as the chief executives representing ExxonMobil, Chevron, ConocoPhillips and Shell — as well as BPAmerica — sat shoulder to shoulder at the witness table.

The House Energy and Commerce Committee hearing unfolded as President Barack Obama was on the Gulf coast for the second day and walked on a beach near Pensacola, Fla. as onlookers chanted "Save our beach, save our beach."

Obama at one stop pledged to "fight back with everything we've got" against the spreading oil.

A new Associated Press-Gfk poll released Tuesday found a majority of Americans disapprove of how Obama has handled the spill. Obama planned to address the nation Tuesday night on the oil spill.

Meanwhile, BP said Tuesday it was speeding up payments for large commercial claims. The company said in a statement that it has approved initial payments toward 90 percent of large commercial claims filed as a result of financial losses. BP said it approved 337 payments totaling $16 million to businesses.

The House hearing marked the first time that the chief executives of the major oil companies — all leaders in deep-water drilling in the Gulf — were called before Congress since the April 20 BP explosion on the Deepwater Horizon, unleashing the country's worst oil spill.

The five companies, including BP, have a combined worth of $776 billion and earned $64 billion last year.

Rep. Jay Inslee, D-Wash., questioned why BP paid CEO Tony Hayward $36 million last year, while spending just $10 million on research.

"Do you think that is appropriate prioritization?" Inslee asked Lamar McKay, president of BPAmerica. He declined to answer.

The government has estimated that as much as 2 million gallons of oil a day may be flowing into the Gulf.

Waxman's committee questioned McKay on internal company e-mails and documents that the lawmaker said showed that BP made repeated decisions in the days and hours before the explosion that increased the risk of a major well blowout.

Were mistakes made by BP? asked Waxman of the executives.

ExxonMobil chief executive Rex Tillerson said the Gulf spill would not have occurred if BP had properly designed its deepwater well. "We do not proceed with operations if we cannot do so safely," said Tillerson.

"We would not have drilled the well in that way," said James Mulva, the CEO of ConocoPhillips.

As BP's McKay sat inches away, Shell president Marvin Odum said, "It's not a well that we would have drilled the way it was set up."

Chevron CEO John Watson said some of BP's practices aimed at well integrity "we would not put in place."

"We must learn from this accident," said Watson.

In a tense exchange, Rep. Edward Markey, D-Mass. insisted repeatedly that McKay "apologize to the American people for "lowballing" for weeks the amount of oil that was gushing from the damaged wellhead. BP had said 5,000 barrels (210,000 gallons) a day were being released when it's now known that possibly ten times that amount may have been flowing, said Markey.

"Are you ready to apologize for getting that number wrong," repeated Markey.

McKay said "those were not BP's estimates" but those of the government's "unified command" dealing with the response. "We are sorry for everything the Gulf coast is going through," McKay finally said.

So far, 114 million gallons of oil have poured into the Gulf under the worst-case scenario described by scientists — a rate of more than 2 million gallons a day. BP has collected 5.6 million gallons of oil through its latest containment cap on top of the well, or about 630,000 gallons per day.

Waxman's committee released documents that showed BP made a series of money-saving shortcuts and blunders that dramatically increased the danger of a destructive spill from a well that an engineer ominously described as a "nightmare" just six days before the April blowout.

Investigators found that BP was badly behind schedule on the project and losing hundreds of thousands of dollars with each passing day, and responded by cutting corners in the well design, cementing and drilling efforts and the installation of key safety devices.

"Time after time, it appears that BP made decisions that increased the risk of a blowout to save the company time or expense," Waxman and Rep. Bart Stupak, D-Mich., chairman of the committee's investigations panel, wrote in a letter.