House panel cites similarities in majors' spill plans

June 21, 2010
Four other major oil companies have Gulf of Mexico oil spill prevention and response plans that are practically identical to BP America Inc.'s, Democrats on the House Energy and Commerce Committee said during an Energy and Environment Subcommittee hearing on June 15.

Four other major oil companies have Gulf of Mexico oil spill prevention and response plans that are practically identical to BP America Inc.'s, Democrats on the House Energy and Commerce Committee said during an Energy and Environment Subcommittee hearing on June 15.

Little thought apparently went into the plans' preparation, subcommittee chairman Edward J. Markey (D-Mass.) charged. "The plans cite identical response capabilities and tout identical ineffective equipment," he said in his opening statement. "In some cases, they use the exact same words. We found that all of these companies, not just BP, made the exact assurances. The covers of the response plans are different colors, but the content is 90% identical."

Henry A. Waxman (D-Calif.), the full committee's chairman, said a single company, The Response Group, wrote the strategies and described them as "cookie-cutter" plans. All five rely on the Marine Spill Response Corp. to provide equipment for a spill response, he noted. "BP's plan says that another contractor will organize its oil spill removal. Chevron, Shell, and ExxonMobil use the same contractor," he said.

Joe Barton (R-Tex.), the committee's ranking minority member, agreed with Waxman that a cookie-cutter approach is inappropriate. But he also said the five witnesses—ExxonMobil Corp. Chairman and Chief Executive Officer Rex W. Tillerson, Chevron Corp. Chairman and Chief Executive Officer John S. Watson, ConocoPhillips Chief Executive Officer James J. Mulva, Shell Oil Co. Pres. Marvin Odum, and BP America Chairman LaMar McKay—"have the wherewithal, the expertise, and they certainly have the incentive, to put that plan together."

The witnesses essentially responded that the plans are similar because the companies use the same resources to deal with emergencies and other contingencies in the gulf. "The cookie-cutter characterization should not come as a surprise because the industry has relied on being able to share resources," said Tillerson. But they also conceded that the plans should be updated when Markey pointed out that they included provisions for protecting walruses—an animal which has not lived in the region for at least 2 million years.

Wrong emphasis

Bart Stupak (D-Mich.), who chairs the committee's Investigation and Oversight Committee, said he noticed one significant difference in the plans: ExxonMobil's included a 40-page appendix on dealing with the media compared with the others' much-shorter media relations plans. "My problem is that ExxonMobil has given far less attention to actually controlling a spill," he continued. "While ExxonMobil has 40 pages on its media response strategy, its plan for 'Resource Protection' is only 5 pages long, and its plan for oil removal is just 9 pages long. The strategy is a perfect metaphor for what happened in the gulf since it emphasized public relations but was essentially worthless," he said.

But Parker Griffith (R-Ala.), the subcommittee's newest member, suggested that the spill response plans' similarities may not have been surprising since hospitals' emergency rooms across the country probably also have similar plans for dealing with medical crises. "Some of the petulant questions in this hearing show that many of us on Capitol Hill can't resist the urge to demagogue," he added. "They also show there's not a shortage of natural gas up here."

When they were asked if their companies would have made similar choices if they'd received similar indications at one of their wells to what BP supposedly received before its well blew out, the other executives asked to delay full responses until investigations have been completed.

Tillerson said, based on the industry's extensive experience, "what we do know is that 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 managements, tragic incidents like the one in the Gulf of Mexico today should not occur."

Chevron's Watson said, "There are several areas that suggest that practices we would put in place were not used here, such as casing design and mechanical barriers. These characteristics on top of effective procedures and other practices and standards we employ could have prevented this incident."

Lessons, changes

Mulva said ConocoPhillips also does not believe it's in a position to comment on what happened at BP's well on Apr. 20. "But as an industry, we must commit ourselves to learning lessons and making necessary changes to ensure that nothing like Deepwater Horizon ever happens again," he said. "We need to spend money on technology to improve our responses on the seabed to contain and capture oil."

Shell's Odum said, "We remain confident in our drilling expertise and procedures, built on a foundation of multiple required safety barriers, proven methods, and strict company standards. The first imperative of any project is that it be done safely. Safety and environmental protection are, and always will be, Shell's top priorities." The company welcomed US Interior Sec. Ken Salazar's recommendations in his May 27 report to President Barack Obama and has already made several of them part of its offshore operations, he added.

Tillerson said ExxonMobil developed an operations integrity management system company-wide after the Exxon Valdez's 1989 grounding and subsequent oil spill into Alaska's Prince William Sound. The standards and requirements within the OIMS dictate the company's approach to drilling for oil and gas as well as approaches for other operations, he explained.

"We utilize proprietary technology to predict pressures and model resource flow, and we carefully analyze that information to both understand and reduce risk," Tillerson told the subcommittee. "We ensure that everyone onboard the rig, contractors included, knows their roles and responsibilities and that all operations are in compliance with ExxonMobil's expectations and standards. And we test this knowledge through regular drills and exercises."

McKay said that BP's emphasis now is on stopping the leak, containing the spilled crude, and paying all legitimate claims. "I believe that what we're learning from this incident will augment what we already know," he indicated.

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