At Gulf oil spill hearing, plenty of blame, not many answers

Senators grilling executives from the companies at the center of the Gulf oil spill tried to discern why fail-safe systems failed and why the spill has gotten out of hand. They got few answers.

By , Staff writer

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    From left to right, Lamar McKay, president and chairman of BP America; Steven Newman, Transocean CEO; Tim Probert, Halliburton executive testify before the Senate Committee on Environment and Public Works in Washington Tuesday.
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The US Senate waded into the expanding Deepwater Horizon oil spill mess for the first time Tuesday, grilling oil industry executives over fail-safe systems that failed, lack of planning to deal with a major spill, and the executives' attempts to shift blame to one another.

The hearing focused on what industry executives believed may have been the cause of the blowout – as well as why exemptions from environmental review were granted for the well from the Minerals Management Service, the lead federal safety agency overseeing offshore oil drilling.

IN PICTURES: Louisiana oil spill

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The day brought typical flourishes of theater, with lawmakers asking rhetorical questions they would not let the panel answer. But it also revealed what appeared to be genuine anger, suggesting that this hearing was – as Sen. Barbara Boxer (D) of California said – "just the first step" toward new regulations. Along the way, senators did their best to paint the offshore oil industry as one beset by shoddy oversight and dubious safety records.

For their parts, the executives for BP, Transocean, and Halliburton – the companies that owned the lease for, operated, and did contract work on the Deepwater Horizon oil rig, respectively – pointed fingers.

Lamar McKay, chairman of BP America, blamed the failure of Transocean's blowout preventer. Steven Newman, president and CEO Transocean Ltd., cited problems with Haliburton's cementing job. And Tim Probert, chief health, safety, and environmental officer for Halliburton, said his company was simply following BP's design.

BP: An accurate portrayal of risk?

But Sen. Benjamin Cardin (D) of Maryland, in the Environment and Public Works committee, zeroed in on the BP drill plan and BP's request for exemption from detailed environmental reviews.

"The plan you submitted is used in part to determine whether an environmental waiver should be granted," he said to BP's Mr. McKay. The company, Senator Cardin said, stated that "it is unlikely that an accidental oil spill release would occur" – and if it did it that the Gulf "would be temporarily affected.... Do you believe you accurately portrayed the impact on the environment of such an event?"

Cardin cut off McKay before he could answer.

Other senators focused on McKay's repeated assurances that BP would pay all "legitimate" damages, asking again and again for the definition of "legitimate."

"I want to make sure that we really understand what you’re saying you’re really going to be committed to today," said Sen. Maria Cantwell (D) of Washington.

McKay answered: “We are trying to be extremely responsive, expeditious, meet every responsibility we have as a responsible party and that means pay all legitimate claims. So that is our intent. I can’t speculate on every case, but I can tell you this is not about legal words, this is about getting it done and getting it done right.”

Blowout preventers often failed, senator says

Senator Cantwell also produced documents showing industry knowledge of blowout preventers failures, including a 1999 study by the US Minerals Management Service (MMS) that found 117 blowout preventer failures in deep-water Gulf of Mexico oil rigs from 1997 to 1998. A 2004 MMS study found that just 50 percent of tested blowout preventer shear rams – designed to cut through pipe to stop a leak – were successful at maximum depths.

While the Department of Interior has launched a flurry of initiative to tighten safety procedures and oversight of offshore drilling, industry analysts say it's clear that new regulation is on its way.

Among the first measures is likely to be a bill to increase the liability cap on such spills from $75 million currently to around $10 billion. Also Tuesday, Department of Interior Secretary Ken Salazar that he will restructure the MMS to separate the MMS’s inspection, enforcement, and investigation operations from the agency’s revenue collection, leasing, and permitting operations to limit opportunities for conflicts of interest.

IN PICTURES: Louisiana oil spill

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