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BP needs a crude awakening

By Dana Milbank
Wednesday, May 12, 2010; A02

Lamar McKay, the BP official who visited Capitol Hill on Tuesday, couldn't have been any more slippery if he had just bathed in the Gulf of Mexico.

What changes has the oil company made to stop its record of accidents, the latest causing 5,000 barrels a day to pour into the gulf?

"Our operating management system in the Gulf of Mexico is as good as anyone," McKay replied. "I can't point to any deficiencies."

Did BP ask federal regulators to reverse procedures shortly before its oil rig in the gulf exploded?

"I'm not familiar with the individual procedure on that well," answered McKay, the president of BP America.

Will BP compensate state and local governments for lost tax revenue from the devastated fishing and tourism industries?

"Question mark," McKay responded.

Here's another question mark: What is BP thinking?

The British oil firm has shown a crude lack of accountability as it tries to shift blame for the spill. But perhaps the most unnerving part of McKay's performance was how familiar it seemed.

Just a week ago, Goldman Sachs officials came to Congress and declared that they have no responsibility for the mortgage-market meltdown and the resulting collapse of the world economy. Others in the banking industry, saved from bankruptcy by government intervention, are now bitterly fighting new regulations designed to prevent a recurrence. Before that, auto industry executives flew to Washington on corporate jets to demand government money. This all seems to be part of a new era of corporate irresponsibility, in which amoral executives pursue profits without a thought about collateral damage, then demand government help when they get in trouble.

In a pair of Senate hearings Tuesday, BP's McKay traded blame with the oil platform operator, Transocean, and drilling contractor Halliburton. Their finger-pointing led one senator to compare them to children blaming one another for the baseball that went through the neighbor's window.

"Transocean, as owner and operator of the Deepwater Horizon drilling rig, had responsibility for the safety of drilling operations," McKay declared.

Transocean chief executive Steven Newman, in turn, blamed "a sudden catastrophic failure of the cement, the casing or both." Those were provided by Halliburton.

Halliburton official Tim Probert pointed the finger back at BP. "The well owner's representative has ultimate authority," he said.

That slick performance didn't satisfy senators on either side of the oil-drilling debate. "The message is 'Don't blame me,' " said Sen. John Barrasso (R-Wyo.). Sen. Robert Menendez (D-N.J.) called it a "liability chase."

Sen. Lisa Murkowski (R-Alaska), a charter member of the drill, baby, drill crowd, urged the executives to take responsibility. "If we can't continue to operate and convince people that we can perform safely, then not only will BP not be out there, but the Transoceans won't be there to drill the rigs and the Halliburtons won't be there to provide for the cementing," she said.

But Big Oil needn't worry. Because of the national failure to develop alternative energy sources, oil companies know they have the country over a barrel. "Tragic and unforeseen as this accident was, we must not lose sight of why BP and other energy companies are operating in the offshore, including the Gulf of Mexico," McKay reminded the senators. "The gulf provides one in four barrels of oil produced in the United States, a resource our economy requires."

You knew the oil-spill executives were in for a rough voyage on Capitol Hill from the room selection: the Russell Caucus Room, where hearings on the Titanic sinking were held 98 years ago. The energy committee chairman, Jeff Bingaman (D-N.M.), included the oil spill among "the sinking of the Titanic, Three Mile Island or the loss of the Challenger."

In case that was too subtle, Menendez invoked the hearings about the supposedly unsinkable Titanic and said: "Here we have a rig that the industry has told us so many times is so technologically advanced it supposedly could not spill."

The man from BP -- entertained by hecklers chanting, "Hey, hey, Lamar McKay, how many fish did you kill today?" -- avoided responsibility for the spill as if navigating around icebergs. How did he define BP's promise to pay all "legitimate" claims? "I can't define the term." What if the cost of claims reaches $14 billion? "I'm not going to speculate on numbers." Would BP pay for long-term damage to the fishing industry? "I can't quantify or speculate."

The S.S. BP was taking on water. Sen. Jeanne Shaheen (D-N.H.) noted the lack of "a plan that had been thought through." Sen. Jeff Sessions (R-Ala.) found it "a bit odd." Menendez said BP was "making things up as you go along." Sen. Barbara Boxer (D-Calif.) called the executives' statements a "house of cards."

Sen. Ron Wyden (D-Ore.) asked why BP hasn't "been able to change its corporate culture and end this pattern of accidents."

"I would say in the Gulf of Mexico this has been an area where we've been extremely safe," McKay informed the senator.

That is, if you don't count the past three weeks.

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