Oil industry executives questioned

Senate committee challenges BP’s safety claims

WASHINGTON – As thousands of gallons of oil continued to spew from a damaged well in the Gulf of Mexico, grim-faced industry executives came under withering attack Tuesday on Capitol Hill from senators who accused them of trying to shift blame to each other and of making pre-drilling safety assurances that proved disastrously off-base.

In back-to-back hearings, senators accused BP, which owns the well, of misrepresenting blowout preventers placed atop wells as fail-safe and of telling federal regulators that the drilling would have “no adverse impacts” to the environment.

“We can’t have a world where people say one thing before they get a permit and then just act like they never said it,” Sen. Barbara Boxer, D-Calif., told Lamar McKay, chairman and president of BP America. “You said we won’t have a problem.”

“We obviously did not expect a situation like this,” McKay said.

The BP executive also told senators that the company was determined “to do all we humanly can to stop the leak, contain the spill, and to minimize the damage suffered by the environment and the people of the Gulf Coast.”

But he said that Transocean Ltd., owner and operator of drilling rig, had “responsibility for the safety of drilling operations.”

Steve Newman, Transocean’s president and CEO, seemed to point a finger at yet another contractor. Although the investigation of the cause continues, he told the senators, “there was a sudden, catastrophic failure of the cement, the casing, or both.”

An executive with Halliburton, which did the cementing, subtly reminded senators that it was operating under BP’s plan for the well. Halliburton’s work was done “in accordance with accepted industry practice” and BP’s plans, said Tim Probert, president of the company’s global business lines.

“Halliburton is confident that the cementing work … was completed in accordance with the requirements of the well construction plan,” he said. “Had the (blowout preventer) functioned properly this tragedy wouldn’t have taken place” he later told a committee headed by Boxer.

The back-and-forth drew the ire of several senators – one of whom accused the executives of doing a “Texas two-step” to avoid liability – as well as two lawmakers considered industry allies.

“I hear one message, and the message is: ‘Don’t blame me,’ ” Sen. John R. Barrasso, R-Wyo., said. “Well, shifting this blame does not get us very far.”

Sen. Ben Cardin, D-Md., grilled McKay about industry representations that the blowout preventers were designed never to fail when, he said, they have failed more than a dozen times.

“Isn’t it accurate that industry touted these blowout preventers as fail-safe?” Cardin asked.

“Obviously, this an unprecedented accident, and it’s going to be reviewed in every way it can possibly be reviewed,” McKay responded.

The growing pressure to increase scrutiny of drilling companies also appeared to be behind Interior Secretary Ken Salazar’s announcement Tuesday that he would split the agency that regulates offshore drilling into two departments – one to lease federal land and water for drilling and collect royalties, and the other to inspect drilling operations and enforce safety and environmental regulations.

Critics have blamed the dual role of the agency, the U.S. Minerals Management Service, for a lack of oversight of the industry, and they say its regulations and risk assessments have not kept pace with the rapidly evolving drilling technologies. In addition, a scathing report by Interior’s inspector general in 2008 described agency employees who received gifts “with prodigious frequency” from the oil companies they were supposed to be regulating.

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