Oil Executives Break Ranks in Testimony
From right, Lamar McKay of BP, Marvin E. Odum of Shell, James J. Mulva of ConocoPhillips, John S. Watson of Chevron, and Rex W. Tillerson of Exxon Mobil.
Published: June 15, 2010
WASHINGTON — The chairmen of four of the world’s largest oil companies broke their nearly two-month silence on the major spill in the Gulf of Mexico on Tuesday and publicly blamed BP for mishandling the well that caused the disaster.
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Luke Sharrett/The New York Times
The prepared remarks of Mr. McKay at Tuesday’s hearing.
Seeking to insulate their companies from the continuing crisis in the gulf and the political backlash in Washington, the leaders of Exxon Mobil, Chevron, Shell and ConocoPhillips insisted at a Congressional hearing that they would not have made the mistakes that led to the well explosion and the deaths of 11 rig workers on April 20.
“We would not have drilled the well the way they did,” said Rex W. Tillerson, chief executive of Exxon Mobil.
“It certainly appears that not all the standards that we would recommend or that we would employ were in place,” said John S. Watson chairman of Chevron.
“It’s not a well that we would have drilled in that mechanical setup,” said Marvin E. Odum, president of Shell.
The hearing was an opportunity for three dozen members of Congress to vent their frustration at top executives of the world’s largest privately owned oil companies. The occasion was reminiscent of the 1994 hearing before a panel of the same committee — the House Energy and Commerce Committee — at which the chief executives of the major tobacco companies were ritually grilled on the dangers of their products. Top banking executives recently got the same treatment.
The oil company leaders presented a similar tableau on Tuesday — a group of middle-aged, dark-suited executives raising their right hands in preparation for nearly five hours of hostile interrogation.
Democrats generally were seeking confessions of error and expressions of regret. Republicans focused more on the economic impact of the spill and the moratorium on most offshore drilling that President Obama imposed in the aftermath of the disaster. They sought assurances that deepwater drilling could resume safely.
But even some Republicans were moved to join the attack on Lamar McKay, president of BP America and designated scapegoat of the day, who was seated at the witness table with the other executives. Representative Cliff Stearns, Republican of Florida, told Mr. McKay that he should resign; another Republican, Representative Joseph Cao of Louisiana, said, “In samurai days, we would just give you a knife and ask you to commit hara-kiri.”
Representative Edward J. Markey, Democrat of Massachusetts, chairman of the energy and environment subcommittee that convened the hearing, demanded that Mr. McKay apologize for what Mr. Markey termed the incompetence and deceit that led to consistently low estimates of the size of the spill and the resulting damage.
After weaving for a bit, Mr. McKay said meekly: “We are sorry for everything the Gulf Coast is going through. We are sorry for that and for the spill.”
He refused repeated requests that he promise to place billions of dollars of BP’s profits in an escrow fund to pay damage claims, as members of Congress and Mr. Obama have demanded. “I cannot commit today one way or another to a fund,” he said. “We said we’ll honor all legitimate claims, and the full company stands behind that.”
Until now, the other major oil companies had provided technical assistance to BP and refrained from criticizing the company’s handling of the disaster. Even as they watched their offshore rigs idled and their stock values fall, they had presented a united front.
But that unity crumbled Tuesday before the House committee, mirroring growing private frustration with being linked to BP. Some executives have been angered at BP’s efforts to paint the gulf accident as an industrywide problem that will require industrywide reforms. The executives of the other companies asserted Tuesday that they believed BP was an outlier, cutting corners to save time and money in ways that they would not tolerate.
The BP spill came just as the industry was about to realize a long-awaited goal of expanding offshore drilling to new parts of the gulf, the Atlantic Coast and parts of the Arctic. That is now all in question.
Although most of the Congressional fire was aimed at BP on Tuesday, the other executives came under criticism as well, particularly for the response plans that they prepared for a major spill in the gulf. The five companies submitted virtually identical plans to government regulators and to the committee. The 500-page document, prepared by a private contractor, refers to measures to protect walruses and gives a phone number for a marine biologist who died five years ago.
James J. Mulva, chief executive of ConocoPhillips, said the citations were “certainly an embarrassment to Conoco,” adding, “Plans need to be updated more frequently.”
Representative Henry A. Waxman, the California Democrat who is chairman of the Energy and Commerce Committee, noted that each of the companies said it had planned for a much larger spill than the BP accident, even though it is clear that even a spill of the current size is beyond any company’s ability to handle.
“BP failed miserably when confronted with a real leak,” Mr. Waxman said, “and Exxon Mobil and the other companies would do no better.”
Mr. Tillerson admitted that the only way to deal with major spills was to keep them from occurring.
“The point is,” he said, “we have to take every step to prevent these things from happening, because when they happen we are not well equipped to prevent any and all damage. There will be damage. There is no response capability that will ensure that you won’t have an impact.”
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