Nick Snow
OGJ Washington Editor
WASHINGTON, DC, May 5 -- BP Chief Executive Officer Tony Hayward met with several US senators on May 4 to discuss the company’s efforts to contain crude oil leaking from one of its Gulf of Mexico wells. Two of them, Democrats Mary L. Landrieu (La.) and Bill Nelson (Fla.), came away with different impressions. There were also indications that BP executives will be asked hard questions at upcoming hearings on both sides of the Capitol.
“We continue to attack this on three fronts: on the subsea, on the surface, and from the shoreline,” Hayward said following the meetings. “We are throwing all our resources at it. We are working in an extraordinary and collegial way with federal agencies, particularly with the Coast Guard, which has been fantastic.
“BP is taking our responsibilities on this very seriously,” he maintained. “We understand the concern of the local communities and the people along the [Gulf] Coast.”
The company announced on May 5 that it has made four, $25 million block grants to Louisiana, Alabama, Mississippi, and Florida to help accelerate implementation of area contingency plans to remove the spill and mitigate its threats. BP noted that the grants, which the states will administer, do not affect its response to the spill or the existing claims process but are intended to help local businesses support cleanup and recovery efforts.
Landrieu said that her meeting with Hayward, which was her second, gave her another opportunity to remind him that controlling and containing the flow of oil into the gulf from the well must be his top priority. “The full responsibility and extent of this unprecedented disaster lay at the feet of BP and its contractors,” she said. “I urged the company to devote every available technology and resource, including engaging industry-wide experts, to stop the flow of oil.”
‘Greater oversight’
Landrieu said she also raised the issue of damages that businesses might suffer in the long and short term with the BP executive. “While BP is complying with the current law, it is clear to me that there needs to be greater oversight on filed claims to ensure Gulf Coast businesses are fairly and quickly compensated for their losses,” she said. “If there needs to be a change in the law to improve the claim process, I will work to introduce and pass legislation as soon as possible.”
Nelson said Hayward told him BP expects to exceed the current $75 million spill liability cap. “When I asked him if [the company] would be responsible for economic damages, he said it was something that would have to be worked out in the future,” the senator said. He said this was another reason why the limit should be raised to $10 billion over and above the actual cleanup cost, as outlined in a bill which Sen. Robert Menendez (D-NJ) introduced on May 3 with Frank R. Lautenberg (D-NJ) and Nelson as cosponsors.
Landrieu said she was encouraged by the response team’s innovative use of dispersants at the source of the leaks. Response teams sent remotely operated vehicles down with nearly 3,000 gal of dispersants over the weekend, with some success. “Work is under way to drill not one, but two interceptor wells. The first relief well is currently at approximately 6,000 ft, with approximately 12,000 more feet to go,” the senator said. “The drilling of another well is expected to commence soon. This effort is critical to capping the well if the remotely operated vehicles cannot seal the well.”
She said she would continue to meet with top federal officials and BP executives until the situation was under control, the risks to the Gulf Coast from the spill are eliminated, and proper safeguards have been put in place “as we move forward with drilling offshore.”
But Nelson reiterated that additional oil and gas activity on the US Continental Shelf, including preparation of a new 5-year program, should be suspended until the causes of the accident and spill have been fully identified. He also said that the response under way attempts to apply technologies in depths where they have not been proven successful.
‘Never been done’
“I asked [Hayward] what’s the chance this dome that’s going to be lowered is going to work,” said Nelson. “He said that while it’s been done successfully in 300 or 400 ft of water, it’s never been done before in 5,000 ft. There are questions about what’s going to come up the pipe—the gas, sand, water, and oil—and how it’s going to be handled once it reaches the surface.” Containing the leak could take 3 months and hurricane season in the gulf starts in 3 weeks, he added.
He said Hayward told him that acoustic systems at the well had not been turned on because they were not expected to be reliable at the greater depths, but that three other safety mechanisms—a switch on the surface to bring metal plates in the well together to shut off the crude oil’s flow, an automatic backup designed to do the same thing if power is lost, and robot submersible vehicles that could be launched for the same purpose—were all used unsuccessfully.
Nelson said Hayward told him that BP has stopped its other exploration projects in the gulf but is continuing offshore work elsewhere. “His answer, basically, was that statistically the chance of failure elsewhere is so minimal that it is unlikely to occur again,” he said.
“We’re talking about an enormous environmental and economic disaster, and the CEO of BP said in an interview no one knows why and how it failed,” Mendendez said separately on May 4. “It wasn’t supposed to happen. There were redundant shutdown systems which weren’t supposed to fail. Well, they did fail, as they did off Australia’s north coast last year and off Mexico’s coast in 1979, and they could fail off the coasts of Virginia, Delaware, Florida, or my home state of New Jersey. That is what we’ve been saying for some time.”
He suggested that the spill may actually have improved prospects for climate change legislation since it dramatically demonstrates the risk of continuing to rely on fossil fuels. “Instead of expanding drilling and doubling down on 19th century fuels, we should be investing in a new 21st century green economy that can create thousands of new jobs with American ingenuity, improve American security and create a new opportunity for wealth in our country,” Menendez said.
‘Long history’
US Rep. Bart Stupak (D-Mich.), the chairman of the House Energy and Commerce Committee’s Oversight and Investigations Subcommittee, said on May 4 that BP has a long history with the panel, which examined leaks from a BP-operated oil gathering system on Alaska’s North Slope in 2006 and the 2005 explosion and fire that killed 15 and injured 170 at its Texas City, Tex., refinery. “I look forward to our hearing on May 12, where we will hear from company officials and discuss what may have happened the day of the explosion as well as what efforts are being made to minimize the environmental effects of the spill,” he said.
Questions at that time will include whether the Deepwater Horizon semisubmersible rig’s blowout preventer had been tested and properly maintained for use at such depths, why remote control acoustic shutoff switches were not used as a backup, and what steps were taken to test emergency response technologies and procedures before the accident and spill, according to Stupak.
“Some of the techniques currently being used to contain the oil spill have never been used before in water this deep,” he said. “We want to make sure all of the appropriate steps were taken to test these methods at these depths and to have a comprehensive response plan in place before a spill occurred.”
But US Sen. Lisa Murkowski (R-Alas.), the Energy and Natural Resources Committee’s ranking minority member and vice-chair of the Senate Republican Conference, said on May 4 that there would be plenty of time later to assign blame for the accident and spill, and to concentrate now on cleaning it up.
“There's a lot of focus right now, folks want to bring the individuals from BP, get the execs in here, and basically start pounding them,” Murkowski said at the weekly Republican Leadership news conference. “My interest right now is to make sure that everybody who can do anything to help contain the spill is doing that job right now rather than coming up here and trying to figure out how they're going to be briefing Congress.”
Contact Nick Snow at [email protected].