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8th UPDATE: US Lawmakers Blast BP CEO At Congressional Hearing

Thu, 17th Jun 2010 22:07

(Updates with comment from Rep. Stupak and BP CEO Hayward.) By Siobhan Hughes, Tennille Tracy and Stephen Power Of DOW JONES NEWSWIRES WASHINGTON (Dow Jones)--U.S. lawmakers on Thursday blasted BP PLC's (BP, BP.LN) chief executive at his first appearance before Congress since a deadly oil-rig explosion, with a top Democrat saying he "found no evidence that you paid any attention to the tremendous risks BP was taking." "There is not a single email or document that shows you paid even the slightest attention to the dangers at this well," U.S. House Energy and Commerce Committee Chairman Henry Waxman (D, Calif.) told BP Chief Executive Tony Hayward, the sole witness at the hearing. Over and over, lawmakers asked Hayward whether the company had taken short cuts to save time and money in capping the well. Over and over, Hayward declined to answer, saying he wasn't part of the decisions that led to the explosion and that it was premature to draw conclusions until multiple investigations have determined the cause of the explosion. "I think you're stalling; I think you're insulting our intelligence; and I really resent it," said Rep. Eliot Engel (D., N.Y.). "The buck stops at your desk," Rep. Phil Gingrey (R., Ga.) said. "Your testimony has been way too evasive." The criticism from lawmakers suggests that BP's agreement to contribute $20 billion to a spill-damage fund did little to quell anger on Capitol Hill. Oil is gushing out of the well at a rate of 35,000 to 60,000 barrels a day, a government-led team of scientists said in revised estimates earlier this week. Initial estimates put the leak at 1,000 barrels of oil a day. Hayward said that currently, 20,000 barrels a day are being captured. Hayward also faced an unflattering media portrayal on cable television in the U.S. CNN, one of several major channels to carry Hayward's testimony live, had a split screen with the BP CEO being grilled by the committee paired with separate video images of oil soaked herons and pelicans, or a live video feed of oil spewing from beneath the ocean. Hayward allowed that a "cause for concern" was an email in which a BP employee said "who cares" that the Deepwater Horizon rig was short of parts known as centralizers. But he emphasized that the company had been counting on a failsafe mechanism called a blowout preventer. The device is supposed to shut off wells in the event of a surge of gas. BP has been unable to activate the blowout preventer. "How can you say blowout preventers are failsafe devices?" said Rep. Bart Stupak (D., Mich.), his voice rising. He said that BP had modified the blowout preventer in spite of warnings from its contractor, and that the equipment had to be removed at one point in 2009 because of problems. "Why would you modify it, increase the risk of problems?" Hayward insisted that the blowout preventer is "the ultimate failsafe mechanism." Hayward defended other decisions. On a decision to use six instead of 21 centralizers, Hayward said that "it is not always true that more is better." Hayward said that a decision by rig workers not to fully circulate drilling mud, which congressional investigators have called "questionable," was "not uncommon in the industry" and had been approved by federal regulators. Hayward said "there's nothing I've seen that suggests anyone put costs ahead of safety," but allowed that if there is, "then we'll take action" against employees who did. Confronted by Waxman later in the hearing, Hayward allowed that some decisions, "sitting here today, appear they may have been to do with money--it's not clear." Hayward said that no workers have been fired so far in connection with the explosion. The mood on the panel suggested the damage to BP from the panel's investigation, which involved a review of 30,000 pages of documents. One email cited by congressional investigators earlier this week showed a BP official brushing aside warnings from Halliburton Co. (HAL) that the company was using too few "centralizers." "Who cares, it's done, end of story, will probably be fine and we'll get a good cement job," according to an email, dated April 16, from BP's operations drilling engineer. "The appearance is, Mr. Hayward, that BP has not learned from previous mistakes," said Rep. Marsha Blackburn (R., Tenn.) Rep. Michael Burgess (R., Texas) grilled Hayward, asking about decisions some of his employees had made. "With respect, sir, we drill hundreds of wells a year around the world," Hayward said. "That's what's scaring me," Burgess said. While focusing their anger on BP, some Republicans also used the hearing to direct anger toward the Obama administration. A deal Wednesday between the White House and BP on the $20 billion escrow fund has riled some people in the business community, who fear the U.S. government is using strong-arm tactics that go beyond ordinary legal processes for handling such disasters. "I think that it is a tragedy of the first proportion that a private corporation is subjected to what I would characterize as a shakedown, in this case a $20 billion shakedown," said Rep. Joe Barton (R., Texas). While "there is no question that BP is liable," he complained about the participation of U.S. Attorney General Eric Holder, who is overseeing a criminal probe of BP, in White House talks on the escrow fund. "I apologize. I do not want to live a country where any time a citizen or a corporation does something that is legitimately wrong is subject to some sort of political pressure." Republican party leaders rebuked Barton. "Congressman Barton's statements this morning were wrong," House Minority Leader John Boehner (R., Ohio), Rep. Mike Pence (R., Ind.) and Rep. Eric Cantor (R., Va.) said in a statement. Barton later backed away from his remarks. "If anything I have said this morning has been misconstrued, I want to apologize," Barton said. "BP is responsible." Speaking to reporters elsewhere in Washington, Holder said "I don't apologize for the Justice Department's role in this matter." He said that "what we have done has been entirely appropriate." The White House issued a statement calling on lawmakers to "repudiate" Barton's comments. Rep. Betty Sutton (D., Ohio) said she felt "physically sick" viewing scenes of the spill on television and condemned BP's "culture of carelessness." Rep. John Dingell (D., Mich.) recited BP's history of accidents in recent years involving an Alaska pipeline and a deadly fire at a refinery, and a series of comments Hayward has made in recent weeks, some of which he has apologized for, such as his remark that he wanted his "life back" and that the amount of oil spilled is "tiny" when compared with the total water volume of the Gulf. -By Siobhan Hughes, Tennille Tracy and Stephen Power, Dow Jones Newswires; 202-862-6654; siobhan.hughes@dowjones.com (END) Dow Jones Newswires June 17, 2010 17:07 ET (21:07 GMT)
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