- Associated Press - Tuesday, June 15, 2010

WASHINGTON (AP) — Members of Congress chastised the largest oil companies Tuesday, accusing them of being no better prepared than BP to avert an environmental catastrophe.

With top oil company executives waiting to testify at a House hearing, Rep. Henry A. Waxman, California Democrat, asserted that the companies’ spill response plans amounted to “paper exercises” that mirrored BP’s failed plan. Their strategies to plug a spill deep beneath the sea are the same failed strategies that have stymied BP, Mr. Waxman said.

The other companies “are no better prepared to deal with a major oil spill than was BP,” said Mr. Waxman, setting the tone for a tense hearing.

One lawmaker after another expressed frustration at BP’s inability to stop oil gushing from its stricken well as the chief executives representing ExxonMobil, Chevron, ConocoPhillips and Shell — as well as BP America — sat shoulder to shoulder at the witness table.

The House Energy and Commerce Committee hearing unfolded as President Obama was on the Gulf Coast for the second day and walked on a beach near Pensacola, Fla., as onlookers chanted, “Save our beach, save our beach.” Mr. Obama planned to address the nation Tuesday night on the oil spill.

Meanwhile, BP said Tuesday it was speeding up payments for large commercial claims. The company said in a statement that it has approved initial payments toward 90 percent of large commercial claims filed as a result of financial losses in the Deepwater Horizon explosion and spill. BP said it approved 337 payments totaling $16 million to businesses that have filed claims larger than $5,000 apiece. Initial payments began over the weekend and will be completed this week, the company said.

The Obama administration has pressured BP to speed up payments of claims in the wake of the Gulf oil spill.

The House hearing marked the first time that the chief executives of the major oil companies — all leaders in deep-water drilling in the Gulf — were called before Congress since the April 20 BP explosion on the Deepwater Horizon. The accident unleashed the nation’s worst oil spill. The government has estimated that as much as 2 million gallons of oil a day may be flowing into the Gulf.

Mr. Waxman’s committee is expected to question Lamar McKay, BP America chairman and president, on internal company e-mails and documents that the lawmaker said showed that BP made repeated decisions in the days and hours before the explosion that increased the risk of a major well blowout.

According to prepared testimony obtained by the Associated Press, Mr. McKay will tell Congress that despite the catastrophic oil spill, the United States cannot do without oil from the Gulf of Mexico.

Mr. McKay plans to tell the panel that America’s economy, security and standard of living “significantly depend upon domestic oil and gas production” and that companies have operated in the Gulf safely and reliably.

The BP executive will warn that reducing energy production without consumption would shift jobs offshore — and put millions of additional barrels onto tanker ships that travel across oceans.

Chevron CEO John Watson said Tuesday that Chevron’s deep-water drilling activities “are safe and environmentally sound,” but he said the company welcomes any new standards and “we must learn from this accident.”

Some executives sought to distance themselves from BP.

ExxonMobil chief executive Rex Tillerson told the committee that the Gulf spill would not have occurred if BP had properly designed its deepwater well.

“We do not proceed with operations if we cannot do so safely,” Mr. Tillerson said.

Insisted Shell President Marvin Odum, “Safety and environmental protection shall and will be Shell’s top priorities.”

Meanwhile, federal officials have given permission for BP to use a new method for capturing oil from the damaged wellhead, including burning some of the oil off after it is collected and brought to the surface.

BP said Monday it hopes to trap roughly 2.2 million gallons of oil daily by the end of June as it deploys additional containment equipment, including the flaring system.

Mr. Obama’s trip to the Gulf was his fourth since the spill began. The president, who visited Mississippi and Alabama on Monday and Florida’s coast on Tuesday, sought to assure residents — and the country — that the government will “leave the Gulf Coast in better shape than it was before.”

On Monday, Mr. Waxman’s committee released documents that showed BP made a series of money-saving shortcuts and blunders that dramatically increased the danger of a destructive spill from a well that an engineer ominously described as a “nightmare” just six days before the April blowout.

Investigators found that BP was badly behind schedule on the project and losing hundreds of thousands of dollars with each passing day, and responded by cutting corners in the well design, cementing and drilling efforts, and the installation of key safety devices.

“Time after time, it appears that BP made decisions that increased the risk of a blowout to save the company time or expense. 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,” Mr. Waxman and Rep. Bart Stupak, Michigan Democrat and chairman of the committee’s investigations panel, wrote in a letter.

So far, 114 million gallons of oil have poured into the Gulf under the worst-case scenario described by scientists — a rate of more than 2 million gallons a day. BP has collected 5.6 million gallons of oil through its latest containment cap on top of the well, or about 630,000 gallons per day.

AP reporters Ray Henry and Brian Skoloffe contributed to this report from the Gulf region. AP writer Frederic J. Frommer contributed from Washington.

 

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