Senators Slam Oil Executives Over Gulf Spill

By and | May 12, 2010

U.S. senators Tuesday tried to pin the blame for the Gulf of Mexico oil spill on the companies involved, scrutinizing their safety practices and demanding full compensation be paid for the cleanup.

In hearings before two Senate committees, lawmakers accused executives from BP America Inc., Transocean Ltd., and Halliburton Co., of trying to shift the blame onto each other, and then subjected each to tough, technical questions about safety and how the well was sealed.

BP America, a subsidiary of British oil major BP Plc, received the toughest criticism, with Democratic Senator Ron Wyden accusing the company of a “pattern of serious safety and environmental problems.”

At one point Wyden interrupted the testimony of BP America President Lamar McKay, said, “The culture of this company has been one accident after another.”

McKay said BP has instituted a series of management changes, although he was vague about the details. After repeated questioning by Wyden, McKay said, “I’ll acknowledge we’ve had issues” and that the company had “to make changes.”

Senator Barbara Boxer, a Democrat, slammed BP for stating before it began drilling the fateful well that it would use “proven technology” as it sought to get an exemption from an environmental assessment. After the accident, BP said it wasn’t sure how the clean-up would go because the equipment had never been tested in deep water conditions.

“This is just unacceptable to say two starkly different things about the same project,” Boxer told McKay.

The U.S. House will hold a hearing into the catastrophe Wednesday and a series of Congressional panels expected in coming weeks could spawn new legislation on drilling practices.

But several senators, especially those from oil-producing states, said Washington should make offshore oil drilling safer, not abandon it.

On the way into the hearing, the executives were met by protesters holding signs saying “Boycott BP” and “BP Kills,” and six young women, with black ink on their faces, wearing T-shirts with the words, “Energy shouldn’t cost lives.”

As they left, a protester yelled out: “Hey, hey, how many fish did you kill today?”

Republican Senator Jeff Sessions questioned the three executives over reports BP may have asked the government for permission to remove thick drilling mud from the well before a final cement plug was put in place by Halliburton to seal the well at the sea floor.

Sessions’ home state of Alabama could suffer severe environmental and economic damages if the oil slick hits its southern coast.

McKay said he could not answer Sessions’ inquiry, but that a BP investigation of the accident would examine all procedures that preceded the explosion.

Pressed on whether removing mud was unusual, Halliburton senior executive Tim Probert said “it is a procedure that has been used on multiple occasions” in offshore projects.

He added that any decision to remove the drilling mud would be made between the leaseholder of the rig, in this case BP, and government regulators.

‘CATASTROPHIC FAILURE OF CEMENT’

Halliburton provided a variety of services on the Transocean rig leased by BP, and was involved in cementing the well to stabilize its walls and plug it.

Transocean President Steven Newman told senators, “the one thing we know with certainty is that … there was a sudden, catastrophic failure of the cement, the casing or both.”

Senate Energy and Natural Resources Committee Chairman Jeff Bingaman said the oil rig explosion was likely due to a “cascade of errors, technical, human and regulatory.”

The Democrat referred to a “catastrophic” failure of technological systems comparable to the Titanic’s sinking, the meltdown of the Three Mile Island nuclear power plant and the midair explosion of the Challenger space shuttle.”

About 1,000 miles away from Washington, National Guard troops spread across the Louisiana coastline preparing to battle the oil that was approaching from the Gulf of Mexico.

Crude oil continued to gush out of an underwater well that ruptured when a BP-leased rig exploded and sank last month.

McKay told the Senate Environment panel that if all else failed to stop the leak, about 450,000 barrels (18.9 million gallons) of oil would spill into the Gulf until a relief well is drilled and cuts off the flow.

Lawmakers also chastised federal regulators’ actions.

Wyden blamed the U.S. Minerals Management Service for minimizing the risk of blow-outs in offshore drilling, in a study issued just before the spill.

“The lead federal agency is basically telling everybody that they don’t have to sweat safety concerns here,” he said.

Newman rejected charges there could have been a design flaw in the blow-out preventer, a set of valves intended to stop a rush of oil and gas that would cause an explosion.

Asked whether he thought proper procedures were followed in this case, he responded, “I do.”

New Jersey Senator Frank Lautenberg, a Democrat who opposes offshore oil drilling, introduced a bill Tuesday that would impose new fees on oil companies, aimed at raising about $1.8 billion a year to help develop alternative energy technology.

Other legislation would raise liability caps to $10 billion per company, per incident, from the current $75 million.

McKay was asked by several lawmakers whether BP was prepared to pay damage claims. He repeatedly assured them BP would “pay all legitimate claims,” although he did not define “legitimate.”

(Writing by Richard Cowan and Russell Blinch; Editing by Simon Denyer and Eric Walsh)

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