Lawmakers blast oil firms' drilling plans
U.S. lawmakers blasted major oil companies on Tuesday for "virtually worthless" and "cookie cutter" plans to handle a deepwater oil disaster, with one top executive conceding the industry was ill prepared to handle big offshore spills.
Summoned to Capitol Hill to testify along with the U.S. chief of BP, top executives from four major oil companies distanced themselves from BP and its massive Gulf of Mexico oil spill by defending their practices and explaining how they could have prevented the catastrophe.
Facing a hostile room, the oil company executives were hoping to head off potentially costly new regulations by detailing their drilling policies and criticizing BP for not following industry norms.
Democrat Edward Markey blasted the companies for mentioning walruses -- which have not been found in the Gulf of Mexico for millions of years -- in their plans and for including the name and phone number of a specialist who died in 2005.
The outcome of the charged hearing could affect BP, U.S. offshore drilling and legislative efforts to introduce a new climate bill, as lawmakers consider options to address the worst oil spill in U.S. history.
The hearing came ahead of a televised address to the nation on Tuesday evening by President Barack Obama, who could outline new efforts to contain the spill and make a new call for climate legislation. Polls show many Americans doubt his administration has done enough to clean up the mess.
'Not Well Equipped'
Soon after the deadly BP well explosion that killed 11 people, the Obama administration imposed a six-month moratorium on drilling in waters more than 500 feet deep.
The executives from Exxon Mobil, Chevron, ConocoPhillips and Royal Dutch Shell, are trying to reassure lawmakers that drilling is safe, saying they would have done things differently with such a spill.
But when pressed on how to handle a worst-case scenario with hundreds of thousands of barrels of oil spilling into the ocean, Exxon's chief Rex Tillerson said, "When these things happen we are not well equipped to deal with them."
"We've never represented anything different than that. That's why emphasis is always on preventing these things from occurring, because when they happen we are not very well equipped to deal with them," Tillerson said.
Lawmakers seemed unconvinced that the four major oil companies had better contingency plans than BP, which is still struggling to contain the oil that has been gushing into the ocean from a ruptured well for nearly two months.
The hearing could lead to new legislation that would have wide impact in the U.S. Gulf, America's best hope for increasing its domestic oil supply. It's also one of the most promising exploration frontiers for companies including BP, Shell and Chevron.
One by one the lawmakers took turns heaping criticism on the oil executives who sat expressionless as they stared facing rows of their inquisitors.
"Lawmakers won, no question. As soon as the companies were asked why they were better, it ended up making them all look worse in the eyes of the lawmakers," said Kevin Book, analyst at ClearView Energy Partners in Washington.
Though all five men were seated at the same large table, it was clearly four against one with BP America's chief Lamar McKay looking solitary at the end of the table as he faced most of the verbal attacks.
While McKay silently listened to Republican Representative Cliff Stearns of Florida demand his resignation, the other executives had only to defend their policies and insist that they would have done it differently.
McKay, who appeared drawn but showed little emotion, did not offer much new ahead of Thursday's testimony by BP's chief executive, Tony Hayward, on Capitol Hill.
Though Wall Street investors shrugged off the hearing as political theater, it is a tradition in Washington and a conduit of public anger, especially ahead of November elections.
Representative Bart Stupak, a Democrat and one of the lawmakers heading a probe of the disaster, slammed the companies' response plans for offshore accidents. He singled out Exxon Mobil for having a 40-page media response strategy, including pre-written talking points.
"Exxon Mobil's plan appears more concerned about public perception than wildlife protection given the fact that their media plan is fives times longer than its plan for protecting wildlife," said Stupak, adding that all of the companies' plans were "virtually worthless when an actual spill occurs."
Representative Henry Waxman, a Democrat, said the companies had submitted nearly identical "cookie cutter" strategies to deal with a major spill which all included techniques that had failed to stem the flow of oil from BP's well.
"We found that none of the five companies has an adequate plan," he said.
BP's McKay was emotionless when repeatedly asked by Markey to apologize for under-estimating how much oil was gushing into the ocean after the well ruptured.
"We are sorry for everything the Gulf Coast is going through, we are sorry for that and the spill," he said, adding that the company did not have the technology to measure the amount of spilled oil.
But though the four non-BP executives appeared to stick together, chatting apart from McKay when the hearing ended, they still had to face public anger.
As the hearing came to a close, a protester holding a soda bottle filled with a black liquid approached the executives shouting, "You all are just as corrupt as BP. You should all be ashamed of yourself."
Police presence was beefed up, with the building and hearing room entrances both inside and outside lined with police officers.
[Source: By Tom Doggett and Matt Daily, Reuters, Washington, 15jun10]
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