Lawmakers slam Big Oil executives on spill preparedness

At Tuesday's congressional hearing, legislators criticized four Big Oil companies for being no more prepared for a large spill than BP.

By , Staff writer

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    Big Oil executives, from left: ExxonMobil Chairman and CEO Rex Tillerson, Chevron Chairman and CEO John Watson, ConocoPhillips CEO James Mulva, Shell Oil President Marvin Odum, and BP America chairman and president Lamar McKay, testify before the House Committee on Energy and Commerce on Tuesday.
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Four of five Big Oil executives testifying before Congress Tuesday said they would not have drilled the Deepwater Horizon well in the same way that BP did, saying safety measures that could have been taken were not. The fifth executive, from BP, didn't have that option.

Well-control procedures were front and center at Tuesday's House Committee on Energy and Commerce hearing. A letter Monday by a subcommittee panel cited internal e-mails from a BP drilling engineer who called the Macondo well under the Deepwater Horizon a "nightmare well" just five days before it erupted and sank.

"It certainly appears from your letter than not all the standards we would employ ... were in place," John Watson of Chevron contritely told members of the committee when asked if Chevron would have done things differently.

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Shell Oil Company chief Marvin Odum was more blunt: "It's not a well we would have drilled."

Tuesday's hearing is the latest step from a Congress whose legislators have in recent weeks seemed to alternate between berating BP for its blowout failure and inability to stop it, and hammering on the Obama administration for seeming slow and inept. But all the unrest could develop into what some analysts call a "stampede" in Congress which would bring tougher legislation on offshore drilling.

The wide-ranging hearing saw lawmakers hitting on an increasingly familiar litany of issues, including whether to lift the liability cap for oil spills and whether to escrow BP funds.

Still, the legislators seemed to be zeroing in on specific industry practices that may be the subject of new regulation or legislation, including such esoteric industry topics as the cementing of wells and well-casing procedures.

An even bigger focal point, however, was the degree of preparedness of each of the companies. Several lawmakers made the point that the companies made a show of being prepared for a worst-case spill, but in fact were no more prepared than BP was.

Some Republican members of the panel, like Rep. Fred Upton from Michigan, appeared to try to ride to the rescue of the beleaguered executives. "Jobs, environment, economy" were the big issues, he said, dismissing what he called calculated attempts by some on the panel to make renewable energy and a push for a climate-energy bill the focus of the hearing.

"This [hearing] reminds me of a radio call-in talk show after the Redskins have blown another one," said Joe Barton (R) of Texas. "It's very easy to second guess and point out the problems."

But Rep. Edward Markey (D) of Massachusetts, chairman of the committee, wasn't having any of it.

He and others hammered at what he called "cookie-cutter" oil spill response plans that he noted were identical to each other in most respects.

"It just seems to me that for each of your companies, the only [oil-spill cleanup] technology you seem to be relying upon is a Xerox machine," Markey retorted.

Was it embarrassing for the executives to have each of their oil-spill response plans refer to species not even present in the Gulf – such as walruses – or to cite a deceased University of Miami expert as a reference, as they all did, Representative Markey asked them.

"The fact that Dr. Lutz died in 2005 does not mean his work and the importance of his work died with him," Rex Tillerson, chairman of ExxonMobil said. "There are many other individuals identified in the plan ... those numbers are all valid."

But Markey wasn't satisfied.

"It just seems to me that if you include Dr. Lutz's phone number in your plan for a response that you have not taken this responsibility seriously."

Turning to James Mulva, chairman of ConocoPhillips, Markey asked the same question.

"The plans need to be updated more frequently, " Mr. Mulva said. "Obviously it is embarrasing."

Later in the hearing, Rep. Clifford Stearns (R) of Florida hammered at what he called BP's early "low-ball" estimates of the amount of oil coming out of the well, which he said could have impaired response plans. The government now puts the well's output at somewhere between 20,000 and 40,000 barrels a day. BP America chief Lamar McKay stated repeatedly his company gave its first estimates of 1,000-14,000 barrels per day to the unified command, which issued a 5,000 barrel per day estimate.

But Mr. Stearns wasn't happy.

"You should be resigning as charman of BP America," Stearns said, which drew applause from the audience. "I'm not looking for an apology, I'm looking for you to resign."

Other lawmakers tried to put the oil company failures into a larger context.

"Does America's energy policy work," Peter Welch of Vermont asked. "Is America's energy policy sustainable?"

"Should taxpayers in the US continue to provide billions in subsidies to an industry, the oil industry, that's mature? To an industry that's extremely profitable – and to an industry based on carbon-based fuel?" Or, he asked, should the US be "redirecting to 21st century clean energy technology?"

If such sentiments prevail and build on one another, by August a full blown "stampede" could emerge to tightly regulate the industry, remove liability caps, and take on a raft of other measures – including moves to ban oil drilling in deep water, writes Kevin Book, an energy analyst for Washington energy-policy consulting firm ClearView Energy Partners, in an analysis of the recent hearings.

"We've seen a lot of blame deflection and finger-pointing and we would suggest it can go a lot further than it has," he wrote. But, he warned, "explicit finger pointing, after all, could give Congressional critics of offshore drilling an opportunity to spin ... attacks against BP into broader safety concerns that frame offshore drilling as 'unsafe at any depth.' "

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