House Democrats criticize oil executives for response plans no better than BP's
Tuesday, June 15, 2010; 1:09 PM
Top House Democrats blasted major oil companies on Tuesday for having oil spill response plans that are virtually identical to BP's, including two that list a phone number for the same long-dead expert.
"It could be said that BP is the one bad apple in the bunch," said Rep. Bart Stupak (D-Mich.) at a hearing of the House Energy and Commerce Committee's subcommittee on energy and environment. "But unfortunately they appear to have plenty of company. Exxon and the other oil companies are just as unprepared to respond to a major oil spill in the Gulf as BP."
Five top executives from the major oil companies -- Exxon Mobil, Chevron, BP, Shell Oil, and ConocoPhillips -- sat silently as lawmakers expressed outrage in their opening statements about the disastrous April 20 BP oil spill in the Gulf of Mexico.
Later, pressed by committee chairman Henry A. Waxman (D-Calif.), the chief executives distanced themselves from BP's decisions on the ill-fated well.
"We would not have drilled the well the way they did," said Rex W. Tillerson, chairman and chief executive of Exxon Mobil.
Tillerson, questioned by Stupak on the adequacy of the companies' spill response plans, later acknowledged that "we are not well equipped" for major oil spills. He added that "there will be impacts" from spills. "We never represented anything other than that."
The hearing unfolded hours before President Obama was scheduled to use his first Oval Office address to call for a new national energy strategy in response to the BP spill. On Monday, Waxman and Stupak, chairman of the panel's subcommittee on oversight and investigations, released a letter to BP chief executive Tony Hayward that said the oil giant "repeatedly chose risky procedures in order to reduce costs and save time, and made minimal efforts to contain the added risk."
In one instance, four days before the explosion, a BP drilling engineer sent an e-mail to a colleague noting that engineers had not taken all the usual steps to center the steel pipe in the drill hole, a standard procedure designed to ensure that the pipe would be properly cemented in place. "[W]ho cares, it's done, end of story, will probably be fine and we'll get a good cement job," the engineer wrote.
In London, Fitch Ratings agency on Tuesday downgraded BP's long-term issuer default rating and senior unsecured rating to BBB from AA, sending the oil company's shares to a new low. The ratings company said it was concerned by U.S. government reports that the volume of the spill was significantly larger than previously indicated, and by calls from U.S. officials for BP to pay billions of dollars into an escrow account to guarantee payment of cleanup costs.
BP has lost 45 percent of its value since the explosion at the Deepwater Horizon rig in the Gulf of Mexico that killed 11 workers and set off the worst oil spill in history.
At Tuesday's hearing, Rep. Edward J. Markey (D-Mass.), chairman of the energy and environment subcommittee, complained that the five biggest oil companies have "virtually identical" response plans. "The covers of the response plans are different colors, but the content is 90 percent identical."
Waxman said that the "cookie cutter" plans relied on the same single contractor, the same stockpile of dispersant and same top kill and "junk shot" strategies for stopping a leaking well. Markey said that three companies, like BP, include references to protecting walruses which, Markey noted, "have not called the Gulf of Mexico home for 3 million years."