BP Oil: Government Ups Flow Estimate as Congress Targets Flawed Spill Response Plans

Major oil executives face lawmakers' criticism but defend offshore drilling.

June 15, 2010, 12:23 PM

June 15, 2010— -- Under fire from lawmakers and from fellow oil industry leaders on Capitol Hill today, BP America's chairman and CEO defended his company's response to the oil spill that has polluted much of the Gulf of Mexico.

BP's Lamar McKay told lawmakers that his company's cleanup efforts had been "pretty effective in terms of dealing with it on the water," even as he acknowledged the company's failure fully to control the leak on the bottom of the ocean.

McKay and other executives from five major oil companies testified before Congress today about their disaster response plans, and were brutally excoriated by Democratic lawmakers.

During the tense hearing, subcommittee member Rep. Cliff Stearns (R-Florida) called for McKay to resign, while Rep. Edward Markey (D-Massachusetts) demanded he apologize for BP's low estimates of the size of the spill.

For weeks, the flow rate was estimated to be 5,000 barrels per day, but new government numbers released today reveal a rate considerably higher. A scientific team now estimates the flow rate at between 35,000 to 60,000 barrels per day, meaning that up to 143,640,000 gallons of oil could have been spilled since the start of the disaster 57 days ago.

McKay declined to apologize, saying that the low flow-rate estimates came from the government's own unified command.

Rep. Markey, who has been a harsh critic of BP in recent weeks, today again laid into executives from BP, ExxonMobil, Chevron, ConocoPhillips and Shell. During questioning by the House Energy and Environment Subcommittee, Markey accused the companies of poor preparation for disasters like the current BP spill.

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"These oil companies before us today amassed nearly $289 billion in profits over the last three years. They spent $39 billion to explore for new gas and oil. Yet the average investment in research and development for safety, accident prevention and spill response was a paltry $20 million per year," Markey said, referring to average spending per year per company.

Chairman Henry Waxman (D-California) recapped the House Energy and Commerce Committee's review of all the companies' response plans, saying the documents reveal that all of the companies "are no better prepared to deal with a major oil spill than BP."

"The same company, The Response Group, wrote the five plans and described them as cookie cutter plans," Waxman said. "Much of the text is identical. We found that none of the five oil companies has an adequate response plan."

Markey said that the five oil giants had disaster response plans that were "virtually identical," with equipment he called "ineffective."

Markey said that "two other plans are such dead ringers for BP's that they list a phone number for the same long-dead expert."

Indeed, BP's 582-page response plan, filed in 2009, listed Professor Peter Lutz from the University of Miami as a wildlife expert, though he has been dead since 2005. The document, outlining the company's planned response to a Gulf spill, listed walruses, sea lions and seals as animals that could be affected -- though none of them live in the Gulf of Mexico's warm waters.

Waxman provided examples of sentences from different companies' plans that are identical, save for the name of the company.

"When you look at the details, it becomes evident these plans are just paper exercises. BP failed miserably when confronted with a real leak, and one can only wonder whether ExxonMobil and the other companies would do any better," said Waxman.

Markey said, "The only technology you seem to be relying on for response is a Xerox machine."

Oil Execs Admit Problems But Defend Offshore Drilling as Safe

Not all lawmakers in the hearing were as critical of the oil executives, and one congressman from a Gulf Coast state even chastised his colleagues for their negative tone.

Rep. Parker Griffith (R-Alabama) called his fellow commitee members' questions "childlike, petulant, mean-spirited."

Another committee member, Rep. Joe Barton (R-Texas) said, "the five people most concerned about solving the problem are sitting before us today. [... They] have huge interest in getting it right and preventing it from ever being wrong again."

None of the oil executives shied away from criticism at the hearing, but all were eager to distance themselves from BP.

Chevron CEO John Watson defended his company's wells as "safe and environmentally sound." In prepared testimony, he told lawmakers, "I believe the independent investigation will show that this tragedy was preventable."

ExxonMobil CEO Rex Tillerson said, "We would not have drilled the well the way they did," also saying he believed the BP well had problems and didn't meet some design standards that he said were the industry norm.

Still, Tillerson admitted that the BP spill is proof of the entire industry's inability to respond to accidents.

"We have to take every step to prevent these things from happening," he said. "When they happen, it is a fact we are not prepared to deal with it."

Though Tillerson acknowledged that the mention of a walrus in the Gulf response plans was "embarrassing," he argued that it shouldn't be surprising that the companies have similar response plans. Indeed, he said, the industry works together to pool and develop response efforts.

"Plans look the same because they call upon the same resources to respond," said Tillerson.

And even as a monitor in the hearing room displayed a live video feed of the oil gushing into the Gulf from BP's leak, the CEOs stressed the importance of offshore drilling in meeting the nation's energy needs.

Shell CEO Marvin Odum told lawmakers that offshore drilling remains very important to U.S. supplies and workers, and though lessons can be learned from the BP spill, Exxon's Tillerson said that offshore drilling is safe.

"This incident represents a dramatic departure from the industry norm in deepwater drilling," said Tillerson. "Tragic incidents like the one in the Gulf of Mexico today should not occur."

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The Associated Press contributed to this report.

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