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Oil Executives Face Congressional Criticism Over Spill Readiness

June 15, 2010 at 12:00 AM EST
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BP and other oil executives defended offshore drilling during hearings Tuesday in the House, as criticism of the response to the disaster continues to mount. Ray Suarez has an update on the hearings and the downgrading of BP's credit rating.
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JUDY WOODRUFF: The anger over the oil disaster in the Gulf of Mexico played out today in Congress. And President Obama planned to address the anger and demands for action tonight.

RAY SUAREZ: Right from the start, members of the House Energy and Commerce Committee aimed fierce criticism at BP over the catastrophe in the Gulf.

REP. PETER WELCH, D-Vt.: What happened in the Gulf was something that BP assured us would never, ever happen. That it did happen, in fact, was foreseeable and inevitable.

RAY SUAREZ: For Vermont Democrat Peter Welch and others, that claim was bolstered by internal company documents. They showed the ill-fated well, where an offshore rig exploded and sank in April, was badly behind schedule. Democrats angrily charged BP had started cutting corners to save money.

REP. ANTHONY WEINER, D-N.Y.: I mean, the one thing we know from this hearing with metaphysical certitude is that BP created this problem through their own negligence.

RAY SUAREZ: Lawmakers also charged, BP knew all along the spill was far worse than its initial estimates of 40,000 gallons a day.

Hearing Chairman Edward Markey of Massachusetts went after Lamar McKay, chairman of BP America.

REP. EDWARD MARKEY, D-Mass.: Are you ready to apologize for getting that number so grossly wrong that the capacity of federal and state governments to put in place a response was delayed because you did not do the job?

LAMAR MCKAY, president and chairman, BP America, Inc.: I will just reiterate what Commandant Allen said, is that those were not BP estimates. Those were Unified Area Command estimates. We did provide…

REP. EDWARD MARKEY: They were your cameras at the bottom of the ocean.

LAMAR MCKAY: That’s true.

REP. EDWARD MARKEY: You got it wrong…

REP. EDWARD MARKEY: … Mr. McKay. Your company got it wrong. BP got it wrong.

RAY SUAREZ: Today, a government task force raised the estimated daily flow rate again to as high as 2.5 million gallons.

To make matters worse, BP had to halt its efforts in the Gulf to pump the oil to the surface this morning, after lightning started a fire on the containment ship. The pumping resumed five hours later.

The oil giant has also been roundly criticized for a spill response plan full of outdated information and outright mistakes. At today’s hearing, the leaders of Chevron, ConocoPhillips, ExxonMobil, and Shell drew fire on that same point.

California Democrat Henry Waxman said their plans are virtually identical to BP’s.

REP. HENRY WAXMAN, D-Ca., Government Reform Committee chairman: The same company, The Response Group, wrote the five plans and described them as cookie-cutter plans. Much of the text is identical. Four of the plans discuss how to protect walruses, but there are no walruses in the Gulf of Mexico.

RAY SUAREZ: But ExxonMobil’s CEO, Rex Tillerson, said much of what is in those plans is prescribed by federal regulation. He claimed his company learned many lessons from the 1989 Exxon Valdez spill in Alaska and would not have made the mistakes BP made.

REX TILLERSON, chairman & CEO, ExxonMobil: What we do know is when you properly design wells for the range of risk anticipated, follow established procedures, build in layers of redundancy, properly inspect and maintain equipment, train operators, conduct tests and drills, and focus on safe operations and risk management, tragic incidents like the one we are witnessing in the Gulf of Mexico today should not occur.

RAY SUAREZ: Chevron’s John Watson said the Gulf spill should not destroy the country’s confidence in deepwater drilling.

For the record, Chevron is an underwriter of the “NewsHour.”

JOHN WATSON, chairman and CEO, Chevron Corp.: This is not a tradeoff of energy for safety. I strongly believe that responsible deepwater development must continue. America needs the energy. And we can produce that energy safely.

RAY SUAREZ: Republicans on the committee cautioned against targeting the oil and gas industry, and Joe Barton of Texas insisted criticism of the spill response should be shared between the federal government and the oil companies.

REP. JOE BARTON, R-Texas: And if there’s anybody, from President Obama on down, who really knows the solution, and can stop that oil from spilling right now, by golly, all they have to do is pick up the phone and tell them what to do.

And the fact they’re not is simply because the laws of nature and the laws of physics don’t respond to 30-second sound bites.

RAY SUAREZ: Still, BP remains under intense pressure, financially and politically. A major British rating service cut the company’s credit rating today, and the Obama administration was pushing for a huge independently managed escrow fund to pay damages.

BP and the other companies are not the only ones taking heat over the Gulf disaster. President Obama has been feeling it, too. A new Associated Press poll found 52 percent of those surveyed disapprove of his handling of the spill. On the second day of a trip to the Gulf Coast, Mr. Obama toured Pensacola Beach in Florida. He said some damage is clearly inevitable.

U.S. PRESIDENT BARACK OBAMA: But if we can reduce it as much as possible, help businesses get through this season, clean it up, by the time we get to next season, there’s no reason why this beach behind us is not going to be as beautiful as ever, and Pensacola and other coastline communities across Florida won’t be thriving, as they always have.

RAY SUAREZ: Later, at the Naval air station in Pensacola, the president again promised an all-out federal effort.

BARACK OBAMA: Yes, this is an unprecedented environmental disaster. It’s the worst in our nation’s history. But we’re going to continue to meet it with an unprecedented federal response and recovery effort, the largest in our nation’s history. This is an assault on our shores and we’re going to fight back with everything that we’ve got.

RAY SUAREZ: The president is expected to focus heavily on that point in his Oval Office address to the nation tonight at 8:00 p.m. Eastern time.