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In Waxman, BP execs face a master interrogator at Gulf oil spill hearing

Rep. Henry Waxman is a rare breed in Congress: an impeccable interrogator. He will be eager to question BP chief executive officer Tony Hayward about the Gulf oil spill Thursday.

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One key factor is the cost of further delay. BP had anticipated that drilling the Macondo well would take 51 days and cost about $96 million. An initial rig used to drill the well was damaged in a hurricane and replaced with the Deepwater Horizon. But the well took longer than planned to complete, and the Deepwater Horizon rig had been due at a new location.

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By the morning of the blowout, the rig was 43 days late, costing BP as much as $21 million in leasing fees alone. Such costs "may have set the context for the series of decisions that BP made in the days and hours before the blowout," Waxman wrote.

At a White House meeting on Wednesday, Hayward agreed to fund a $20 billion compensation fund to pay claims for damages for the Gulf oil spill. To meet this obligation, BP announced that it will suspend dividends for the year.

“This $20 billion will provide substantial assurance that the claims people and businesses have will be honored,” said President Obama in a statement after the meeting. “It’s also important to emphasize this is not a cap. The people of the Gulf have my commitment that BP will meet its obligations to them.”

The independent escrow account will be managed by Kenneth Feinberg, who managed the compensation fund for families of victims of the 9/11 attacks.

In advance of Thursday's hearings, BP released excerpts of Hayward's prepared statement: “I fully grasp the terrible reality of the situation,” he is expected to say. "I understand people want a simple answer about why this happened and who is to blame. The truth, however, is that this is a complex accident, caused by an unprecedented combination of failures."

On Tuesday, BP America President Lamar McKay testified under oath before a congressional panel that BP would not insist on the $75 million liability limits for economic damages stemming from an oil spill prescribed in a 1990 law. “We're going to pay all legitimate claims and the whole company is standing behind that,” he told the Energy and Environment Subcommittee of the House Energy and Commerce Committee.

Meanwhile, Democratic lawmakers want to use hearings to build a case documenting instances of negligence or willful misconduct that, according to the 1990 law, lift the $75 million liability cap.

A push for green energy

With the American public cool to global warming legislation, this week's hearings are a chance for Democrats to build on the message from President Obama's Oval Office speech and argue that a stronger government role is needed to regulate the oil industry and to make a transition to greener technologies.