BP Chief Hayward 'Not Involved' in Gulf Well Decision

June 17, 2010 — -- When Tony Hayward became CEO of energy giant BP in 2007, he promised to "focus like a laser" on safety. Members of Congress today repeatedly reminded Hayward of that promise as they lambasted the British executive for his and BP's actions preceding the mammoth spill in the Gulf of Mexico.

"As the entire country now knows, an uncontrolled blowout can kill rig workers and cause an environmental disaster," House Committee of Energy and Commerce Chairman Henry Waxman, D-Calif., told Hayward, who testified before the House today.

After reviewing 30,000 documents, Waxman said, the committee could "find no evidence that you paid any attention to the tremendous risks BP were taking" with respect to the drilling of the well that would become the source of the spill.

"BP cut corner after corner to save a million dollars here, a few hours or days there," he said. "And now the whole Gulf coast is paying the price."

During his questioning of Hayward, Waxman accused the CEO of "stonewalling" after Hayward said he "wasn't involved in any of the decisionmaking" in the development of the well's design and declined to comment on whether BP made a risky decision in its choice of well design.

Other oil company executives have criticized the well's design, while BP documents show, according to Waxman, that BP could have spent several million more dollars on the well to implement a safer design.

"Why were the safety recommendations of your own engineers ignored?" Waxman asked.

Hayward countered that BP documents also showed that "the long-term integrity" of the well was best-served by the design that BP ultimately chose. The government's Mineral Management Service, he added, approved the well design.

"I'm just amazed at this testimony," Waxman responded. "Mr. Hayward, you're not taking responsibility. You're kicking the can down the road and acting as if you have nothing to do ... with the decisions."

Hayward later defended against committee members' assertions that BP had put cost savings ahead of safety in establishing the well, saying that he'd seen no evidence that that had happened. But Hayward also said he would not draw any conclusions about the accident until investigations into the disaster were completed -- a statement he reiterated several times throughout the hearing, much to the consternation of the congressmen questioning him.

"You're really insulting our intelligence, with all due respect, by not giving us any answers and telling us you have to wait for some investigation," said Rep. Eliot Engel, D-N.Y.

Congressmen also blasted BP and Hayward for safety issues that came to light before the April spill. Rep. Bruce Baley, D-Iowa, noted that since the beginning of Hayward's tenure as CEO, the Occupational Safety and Health Administration found 760 "egregious and willful" safety violations at BP refineries in the U.S.

"That doesn't sound like a company that is commited to safe and reliable operations," Baley said. "...There's a complete disconnect between your testimony and these OSHA findings."

Though most congressmen directed their criticism at Hayward and BP, Rep. Joe Barton, R-Texas, also faulted the Obama administration, calling the $20 billion damages fund that BP recently agreed to a "shakedown" and apologized to Hayward.

"I'm ashamed of what happened in the White House yesterday," Barton said, referring to the meeting between President Obama and Hayward on Tuesday that led up to the $20 billion announcement. "I do not want to live in a country where anytime a citizen or a corporation that does something that is legitimately wrong is subject to some sort of political pressure which ... amounts to a shakedown."

The White House immediately issued a statement slamming Barton's comments.

"What is shameful is that Joe Barton seems to have more concern for big corporations that caused this disaster than the fishermen, small business owners and communities whose lives have been devastated by the destruction," according to the statement.

Hayward, 53, has become the face of the oil spill and the explosion of the Deepwater Horizon oil rig, which killed 11 men and devastated Gulf shores. In a letter to Hayward earlier this week, from Waxman and Rep. Bart Stupak, D-Mich., Hayward was warned that he should come prepared to address BP's "questionable decisions."

Just a few words into his opening statement, Hayward was interrupted by a protestor who was eventually subdued by Capitol police.

Later identified as Diane Wilson, the co-founder of the activist group Code Pink , she shouted "I think you need to be charged with a crime, you need to go to jail."

Hayward, who restarted his statement after Wilson was carted away by police, apologized to those hurt by the spill but added that it was "simply too early to say what caused the incident."

"There is still extensive work to do. A full answer must await the outcome of multiple investigations" by both BP and the government, he said.

Hayward said that, in the meantime, BP is concentrating on cleanup efforts and on stopping the flow of oil by drilling two relief wells. The company, he said, also has deployed equipment that has allowed BP to collect 20,000 barrels of oil per day. BP expects to increase its collection to between 60,000 to 80,000 barrels a day by mid-July, he said.

Hayward said the company has paid out more than $95 million in damage claims and noted that Obama administration pay czar Ken Feinberg will now oversee the claims process, which he said will ensure payments will be as "fair, transparent and rapid" as possible.

The CEO acknowledged, however, that there's little he can say to quell public anger about the spill.

"I understand the seriousness of the situation and the concerns, frustrations and fears that have been and continue to be voiced. I know that only actions and results, not mere words, ultimately can give you the confidence you seek," he said. "I give my pledge as the leader of BP that we will not rest until we make this right."

Hayward has been excoriated in recent weeks not only for his role as head of the company blamed for the spill, but also for his public statements, including the now-infamous, "I'd like my life back," -- a comment Hayward made while explaining his desire to quickly resolve the disaster, which killed 11 men and devastated Gulf shores.

Hayward's life before the Deepwater Horizon explosion was an enviable one. Last year, the British native's compensation totaled $14.3 million, according to the research firm Equilar, some of which he's spent on vacations sailing through the tropics and skiing in Vail, Colorado, with his wife, a former BP geophysicist, and their two children. He's also an avid sports fan and enjoys watching games of rugby, soccer and cricket.

"I don't work weekends. ... And I take all my holidays," he once told a BP publication.

But Hayward's defenders point out that while the often tie-less CEO has a noticeably laid-back demeanor, he asserted his commitment to safety long before the Gulf spill. In another past interview, Hayward recalled an incident that killed a young BP employee in Venezuela. Hayward attended his funeral, where he was confronted by the young man's mother.

"At the end of the service his mother came up to me and beat me on the chest," he said. "'Why did you let it happen?' she asked. It changed the way I think about safety. Leaders must make the safety of all who work for them their top priority."