BP CEO Tony Hayward sat alone before the House Energy & Commerce Subcommittee on Oversight and Investigations Thursday to answer for his company's questionable decision to continue drilling this spring at the Deepwater Horizon offshore oil well despite safety concerns and that decision's catastrophic consequences. The hours of grilling turned up very little new information, however, as Hayward repeatedly denied knowledge of what was happening at the Macondo (MC252) well site prior to the April 20 explosion that claimed 11 lives, sank the Deepwater rig and unleashed a deluge of oil and natural gas into the Gulf of Mexico.
Hayward frustrated subcommittee members by telling them several times that he would draw no conclusions or admit BP's culpability in the disaster until the company's internal investigation has been completed (although he provided no timeline for that to happen). The investigation covers seven different areas of the Deepwater operation, including cementing, casing, integrity pressure management, well control procedures and blowout preventers. "When the investigation is complete we will draw all the right conclusions," he said.
Subcommittee members bristled at this response, with Rep. Phil Gingrey (R–Ga.) pointing out that BP has already had nearly two months since the Deepwater blowout to conduct its investigation and Rep. Steve Scalise (R–La.) criticizing what he described as a lack of urgency on BP's part to get find answers and keep the oil from reaching Louisiana's coast. Scalise is not listed as a member of the subcommittee.
BP's CEO incurred further hostility from the subcommittee by claiming ignorance of decision-making related to the Macondo well operation prior to its blowout. "I was not aware of any decisions being made about the well while it was being drilled," Hayward said. Neither would Hayward state specifically who within BP was responsible for different decisions made regarding how the well was drilled. Rep. Mike Doyle (D–Penn.) said he found it amazing that Hayward could not say who made that decisions related to the well on behalf of his company. "The best minds and most senior people should be paying attention to those decisions," Doyle said.
Subcommittee members repeatedly revisited a statement that Hayward made, soon after being hired as BP CEO in 2007, that he would maintain a "laser" focus on safety. Rep. Henry Waxman (D–Calif.), Energy & Commerce Committee chairman, disputed whether Hayward has kept this commitment, with the Congressman saying he could find no evidence that Hayward or his executive team paid attention to the risks that his company was taking while drilling at the Macondo well site. "BP's corporate complacency is astonishing," Waxman said during his opening statements.
BP has been cited by the U.S. Department of Labor's Occupational Safety and Health Administration (OSHA) for 760 safety violations in the past five years, compared with eight violations cited against Sunoco, eight for ConocoPhillips, two for Citgo and one for Exxon during that same period. "This may not have happened if one of the domestic oil companies had been operating that rig," Rep. John Sullivan (R–Okla.) told Hayward. In fact, subcommittee members frequently brought up an earlier briefing where representatives from those U.S. oil companies testified that they would not have taken the risks that BP took with the Macondo well. Subcommittee chairman Rep. Bart Stupak (D–Mich.) called Hayward's attitude toward safety "cavalier," particularly in light of the company's poor record in that area.
This record includes the March 2006 oil spill that dumped about 267,000 gallons into Alaska's Prudhoe Bay and the March 2005 fire and explosion at BP's Texas City Refinery in Texas City killing 15 workers and injuring more than 170 others.
Also cited several times were comments made by BP employees prior to the Deepwater explosion that expressed concern and even disregard for safety. One e-mail from BP engineer Brian Morel described the Deepwater operation as "a nightmare well," although Hayward testified that he was not aware of that e-mail until U.S. investigators brought it to his attention after the blowout. In another e-mail a few days prior to the blowout, a different BP engineer reacted to the company's decision to take risks with the cement used to hold the bore hole in place, writing, "Who cares, it's done, end of story, will probably be fine." Rep.Diana DeGette (D–Colo.) pointed out that a team of inspectors sent to look over Deepwater's cement job was sent away 11 hours prior to the explosion without carrying out the inspection, which would have cost BP more money and taken nine to 12 hours to complete. "Nothing suggests that anyone put costs before safety," Hayward said.
Waxman accused BP of not listening to the concerns of its engineers. "A letter said that BP used a more dangerous well design to save $7 million, what do you think about that?" Hayward responded, "The long-term integrity of the well would be better served by a long string [from the top to the bottom of the well], which is not an unusual design in the Gulf." Waxman disputed this based upon the testimony of BP's competitors at an earlier hearing.
Rep. Michael Burgess (R–Texas) asked Hayward whether any of BP's other wells have been drilled in the same manner. Hayward replied that there are many wells in the Gulf that have the same casing design and the same cement procedures but that he didn't know how many. "With respect," Hayward said, "we drill hundreds of wells each year." Stupak responded, "Yeah, I know, that's what scares me."
Subcommittee members also used Thursday's hearing to trade barbs regarding the Obama administration and the government's response to the disaster. President Obama and BP executives announced Wednesday the creation of a $20 billion claims fund to cover economic damages related to the oil spill. The account is to be managed by attorney Kenneth Feinberg, and a three-judge panel will be created to consider appeals to Feinberg's decisions, the Associated Press reported.
However, Rep. Joe Barton (R–Tex.) apologized to Hayward for what the Congressman called the White House's "shakedown" of BP "forcing" the company to create what he characterized as a "slush fund" for the government. Barton went on to say that if he had acted in the same manner as the White House, he would be sent to jail. He also stated that he "does not want to live in a country where a company is subject to political pressure that amounts to a shakedown."
Rep. Edward Markey (D–Mass.) devoted his opening statement to disagreeing with Barton, claiming that the $20 billion was not a slush fund but rather a way to protect the Gulf's "most vulnerable citizens." Markey justified the fund as a partnership between the public and private sectors, adding, "It is BP's spill, but it is American's ocean and American citizens are being harmed."
Rep. Bruce Braley (D–Iowa) later asked Hayward if he felt BP had been "shaken down." The BP CEO did not answer the question directly but said that his company is working with the government to resolve the claims being made by victims of the spill. "The fund is signal of our commitment to do what is right," Hayward said. "I certainly didn't think it was a slush fund."
Image #1 courtesy of C-SPAN/ National Cable Satellite Corporation
Image #2 of oil slick courtesy of U.S. Coast Guard photo by Petty Officer 3rd Class Caleb Critchfield
Image #3 of natural gas burning courtesy of Coast Guard photo by Petty Officer First Class John Masson