10th UPDATE: US Lawmakers Blast BP CEO At Congressional Hearing

17th Jun 2010 00:57

(Updates with details on blowout-preventer documents published Thursday by the committee.) 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 had put the leak at 1,000 barrels of oil a day. Hayward said that the company is currently capturing 20,000 barrels a day through its latest containment effort. 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 comments came as the House Energy and Commerce Committee posted on its website a 2004 letter from Transocean Ltd. (RIG), the owner of the Deepwater Horizon. Transocean had warned BP that modifying the blowout preventer, as requested by BP, would "reduce the built-in redundancy" and "substantially" increase the risk of the equipment. "Why would you modify it, increase the risk of problems?" Stupak asked. Transocean pulled the blowout preventer from the sea floor in 2009 after multiple problems, a separate, newly released email showed. Hayward said he hadn't seen the 2004 letter. He 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 that no rules require performing a cement-bond log test, a test that Halliburton has said is the only way to ensure the quality of cementing work. 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. No worker has been fired so far in connection with the explosion, Hayward said. "I think they should clean house at BP," Stupak told reporters. 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." The Halliburton contractor prepared a report that said with even seven centralizers, "well is considered to have a SEVERE gas flow problem." "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. -By Siobhan Hughes, Tennille Tracy and Stephen Power, Dow Jones Newswires; 202-862-6654; [email protected] (Jessica Holzer contributed to this article.) (END) Dow Jones Newswires June 17, 2010 19:57 ET (23:57 GMT)