Oil companies turn against BP

During a House hearing that stretched through much of the day Tuesday, executives with the country’s largest oil producers declared embattled petroleum giant BP used risky practices with the Gulf of Mexico well that catastrophically blew out seven weeks ago.
 
The criticism of BP’s practices by Exxon Mobil and other companies was a stunning departure from the industry’s past solidarity on matters such as taxes and drilling bans.
 

The executives, under questioning by House Energy and Commerce Committee Chairman Henry Waxman (D-Calif.), sat just feet from BP America President Lamar McKay but sought to put miles between their companies and his.
 
Waxman and Rep. Bart Stupak (D-Mich.), in a letter to BP two days ago, alleged the company used risky procedures to save money and time.
 
“In reviewing the letter that you both sent, it appears clear to me that a number of design standards that I would consider to be the industry norm were not followed,” said Exxon Mobil CEO Rex Tillerson. “We would not have drilled the well the way they did.”
 
“It certainly appears from your letter that not all standards that we would recommend or that we would employ were in place,” said Chevron CEO John Watson.
 
And Shell Oil Co. President Marvin Odum said that “it's not a well that we would have drilled with that mechanical setup. And there are operational concerns.”
 
The executives’ statements come as lawmakers and the White House consider a wide range of responses to the spill, such as changes to liability rules and safety procedures.
 
More broadly, the industry has suffered a devastating blow to its reputation at a time when Democrats are pushing to remove tax breaks and pass wide-ranging energy legislation that could affect the sector as a whole.
 
But the companies’ criticism of BP did not spare them from wider attacks that several Democrats lobbed at the entire industry during the hearing, which stretched nearly five hours.
 
Waxman and Rep. Edward Markey (D-Mass.) — who leads the Energy and Environment subcommittee that held the hearing — bashed the companies for having nearly identical, cookie-cutter spill response plans for the Gulf of Mexico. Markey noted that the documents reference walruses — a creature that hasn’t lived in the Gulf for millions of years.
 
The grilling also included a range of other allegations, such as attacks on the industry’s level of investment in safety and green energy — by Democrats such as Rep. Jay Inslee (Wash.) — and BP’s claims payment process.
 
“Your industry needs to step up to the plate and recognize the need for change,” Markey said at the hearing’s conclusion.
 
Some Republicans at the hearing turned the focus toward the Obama administration response to the oil spill and what they call a needless six-month ban the White House has imposed on new deepwater drilling — limits that several Gulf Coast Democrats have also criticized as harmful to the regional economy.
 
“America needs the energy beneath the Outer Continental Shelf,” said Rep. Joe Barton (Texas), the top Republican on the Energy and Commerce Committee.
 
Tillerson criticized the ban. “I think the moratorium was unnecessary in terms of the extent and the length of it, and so I would hope that that could be revisited very quickly,” he said.
 
Others focused on the federal side of the containment and cleanup effort. “I think we must take a long, hard look at the federal response while also looking at the response of BP. This disjointed effort has not aided in helping to contain and end the spill,” said Rep. Parker Griffith (R-Ala.).
 
Rep. Roy Blunt (R-Mo.), meanwhile, noted, “We are learning more every day about the failures of both the industry and the government.”
 
Elsewhere, Markey repeatedly pressed McKay to apologize for early estimates of the amount of oil gushing from BP’s ruptured well that proved far too low, alleging the lower numbers led to an initial response capacity that was too modest.
 
“You got it completely wrong, either in order to limit your liability or out of incompetence,” Markey said.
 
But McKay countered that the numbers were based on the work of federal officials, not BP. After several requests from Markey, McKay continually declined to offer an apology about the spill estimates.

But he did offer the following:
 
“We are sorry,” he said, “for everything the Gulf Coast is going through.”

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