US oil firms 'unprepared' for major offshore disaster
- 16 June 2010
- From the section US & Canada
Major oil firms drilling off the US coastline are as unprepared as BP for a large-scale spill, the head of a Congressional panel has said.
Edward Markey told the House energy and commerce sub-committee Exxon-Mobil, Chevron, ConocoPhillips and Shell all have identical response plans to BP.
BP's US chief Lamar McKay and four other oil bosses gave evidence amid accusations BP took shortcuts.
President Barack Obama is to make a TV address later from the White House.
He will use the prime-time speech, at 2000 (0000 GMT), to outline the next steps his administration will take against the spill.
Those are reported to include new steps to restore the Gulf Coast ecosystem and explicit demands to ensure BP fully compensates those affected.
The speech will be delivered from the Oval Office, a setting reserved for the most sombre and important moments in US national life.
Speaking in Florida before returning to Washington at the end of a two-day trip to the affected region, he said the government would not abandon those affected.
"I am with you, my administration is with you for the long haul to make sure BP pays for the damage it has caused," Mr Obama said.
Oil has been spewing into the Gulf of Mexico since a drilling rig leased by BP exploded on 20 April with the loss of 11 lives and sank two days later.
A cap placed by BP on the damaged oil well earlier this month is now said to be collecting about 15,000 barrels daily.
But US government and independent scientists now estimate that the most likely flow rate of oil is between 35,000 and 60,000 barrels per day - a sharp increase on the estimate of a week ago.
The operation suffered a setback on Tuesday when a lightning strike sparked a fire on board a vessel collecting oil, forcing BP to suspend operations temporarily.
Fitch Ratings, one of the three big credit rating agencies, has downgraded BP by six notches, from AA to BBB.
The move means Fitch is less confident of BP's ability to repay its debts following the huge clean-up and legal costs the company is expected to rack up as a result of the spill.
Also on Tuesday, Mr Obama named Michael Bromwich as the new head of the federal agency in charge of oil and gas development, the White House.
Opening the congressional hearing, Henry Waxman, joint chairman of the full House energy committee, took a tough line, declaring that the major oil firms were "no better prepared to deal with a major oil spill than BP".
He called the five firms' responses "cookie-cutter" plans and "paper exercises", adding: "BP failed miserably when faced with a real leak and one has to wonder whether... [the others] would do any better."
Echoing the words of former President George W Bush, Mr Waxman said the US was "addicted to oil".
"This addiction is fouling our beaches, polluting our atmosphere and undermining our national security," said Mr Waxman.
However, Texas lawmaker Michael Burgess, a Republican, accused Democrats of using the oil spill as a cover to propose climate change and energy legislation that would lead to over-regulation and higher taxes.
And the five oilmen called to give evidence - the bosses of Shell, Chevron, ExxonMobil and ConocoPhillips as well as BP America - all told the committee of their corporate commitment to safety.
"We do not proceed with operations if we cannot do so safely," ExxonMobil boss Rex Tillerson said.
While the theme of Tuesday's hearing is deepwater drilling in general, BP chief executive Tony Hayward will face a separate House hearing on Thursday devoted to the Deepwater Horizon disaster.
Mr Waxman and fellow committee member Bart Stupak sent Mr Hayward a letter on Sunday in which they set out technical questions they expect him to answer.
The letter quotes internal communications between BP engineers before the disaster in which the site is described as a "nightmare well".
'Carelessness and complacency'
At issue were the choice for the design of the well, preparations for and tests of the cement job, and assurances that the well was properly sealed on the top.
Among other things, BP apparently rejected advice of a sub-contractor, Halliburton, in preparing for a cementing job to close up the well.
BP rejected Halliburton's recommendation to use 21 centralisers to make sure the casing ran down the centre of the well bore. Instead, BP used six.
In an e-mail on 16 April, a BP official involved in the decisions explained: "It will take 10 hours to install them. I do not like this."
Later on the same day, another official recognised the risks of proceeding with insufficient centralisers but added: "Who cares, it's done, end of story, will probably be fine."
"It appears that BP repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk," the congressmen write.
"If this is what happened, BP's carelessness and complacency have inflicted a heavy toll on the Gulf, its inhabitants, and the workers on the rig," they say.
The BBC News website will provide live coverage of Barack Obama's address, insights from BBC correspondents and reaction from around the web between 2300 and 0200 GMT (1900 to 2200 EST).