Big Oil set for grilling on Capitol Hill

In the nearly eight weeks since BP PLC's ruptured Gulf of Mexico well began belching untold amounts of crude from the sea floor, the London-based oil giant has been blasted by everyone from talk show pundits to the president.

And this week, things could get even worse.

One of BP's most vocal critics will get the chance to question the heads of the oil giant's largest competitors as to what they would have done differently both in the lead-up to and aftermath of the explosion on the Deepwater Horizon rig that set in motion what is already believed to be the largest environmental catastrophe in U.S. history.

Rep. Chairman Ed Markey (D-Mass.) has summoned the top executives of Exxon Mobil Corp., Chevron Corp., ConocoPhillips and Shell Oil Co., as well as BP, to a hearing in his House Energy and Environment Subcommittee tomorrow.

While the other executives are unlikely to deliver the harsh rebuke that BP has received from lawmakers and elsewhere, they will be put on the spot to explain how their safety protocol and response plans differ from BP's, making it difficult for them to completely avoid leveling at least implicit criticism against BP, according to congressional aides.


Markey has been unrelenting in his criticism of BP's handling of the oil spill, saying that the actions and comments from company executives show that "they are either incompetent or they are lying." He has floated a number of legislative proposals in response to the accident, ranging from efforts to increase the financial liability of oil companies drilling offshore to the creation of an industry-funded research and development fund for spill cleanup and leak containment.

Of particular concern for Markey has been BP's failure to provide an accurate estimate of the amount of crude that is escaping from the ruptured well, and the oil company's decision not to immediately release live video footage of the leak to the public -- moves he says were made only in the company's financial self interest.

"Right from the very beginning, I think, their interest was in their own liability, rather than in the livability of the Gulf," Markey said last week. "There is no way they didn't know that on the first week that there was more than 1,000 barrels."

BP's original estimates pegged the flow rate at 1,000 barrels per day, a figure the company -- in consultation with the U.S. government -- later raised to 5,000 barrels per day in the early weeks after the spill began. BP has not yet released a new flow rate estimates, but the latest government figures say the true rate could be more than 50,000 barrels per day.

"BP is definitely trying to lower their liability because they get fined per barrel per day depending on how much oil goes out there, and that could go as high as $3 billion, $5 billion, $10 billion, if the number of barrels out there is in that large of number," Markey said.

Markey -- a key ally of Speaker Nancy Pelosi (D-Calif.) and one of several Democratic leaders crafting a package of oil spill response legislation -- has been prepping for weeks for tomorrow's hearing, according to aides. In addition to grilling the industry executives over BP's response, he is also expected to take an aggressive line of questioning over general industry business practices, safety standards and efforts to pursue energy alternatives to oil and gas.

The hearing will likely provide plenty of fodder for Markey and other Democrats when they bring their oil spill package to the House floor later this month and could also go a long way in helping to shape the energy and climate debate in the Senate.

A number of observers have said that tomorrow's hearing could provide Markey with his own "Waxman moment," a reference to Energy and Commerce Chairman Henry Waxman's (D-Calif.) high-profile questioning of Big Tobacco in the 1990s, when he got the executives to say on the record that smoking is not addictive.

The hearing will be the first time that the oil executives have appeared together on Capitol Hill since 2008 when they were summoned to discuss rising oil and gas prices, which had climbed above $4 per gallon.

While tomorrow's hearing is expected to draw the most media attention, a second Energy and Commerce hearing later in the week could prove just as uncomfortable for BP executives. The panel's Oversight and Investigation Subcommittee will meet Thursday to question BP over the specifics surrounding the Deepwater Horizon explosion.

Subcommittee Chairman Bart Stupak (D-Mich.) has invited embattled BP Chief Executive Tony Hayward to testify, although his appearance has not yet been confirmed.

While the rig itself was owned by Transocean Ltd., there remain questions over an alleged dispute between Transocean and BP officials who were aboard it in the lead-up to the April 20 explosion. According to an internal BP investigation, rig workers missed a number of signs that should have alerted them that efforts to seal up the well were not going as planned.

Lawmakers have also questioned a number of other BP actions during the exploratory drilling in the Gulf of Mexico, including decisions not to run additional tests to ensure the Macondo well was stable and to use less expensive equipment.

Late last month at a hearing held by the House Natural Resources Committee, Lamar McKay, president of BP America, was heavily criticized by lawmakers on both sides of the aisle over those decisions.

"It's disturbing to me that every single time there seemed to be a juncture between doing something safer and a maybe a little more expensive, and something riskier and maybe a little less expensive, in this particular case, BP went with the cheaper and riskier solution," said Rep. Jay Inslee (D-Wash.).

President Obama has formed a special commission to investigate the causes of the accident, and lawmakers have likewise pledged to continue to examine the events that led to the explosion and ensuing oil spill.

In order to help investigators better understand the causes of the accident, the government has issued a subpoena to Transocean to recover the failed blowout preventer -- the device that was supposed to serve as a fail safe and seal off the well if it was comprised -- and to ensure it is not comprised once it is removed from the sea floor.

Natural Resources Chairman Nick Rahall (D-W.Va.) has asked Coast Guard Adm. Thad Allen, the top U.S. official overseeing the ongoing response, to take additional steps to secure the chain of custody of the device to ensure that it remains untouched until federal investigators can begin examining it.

It is "clear that there are many outstanding questions regarding the failure that cannot be answered until the blowout preventer is recovered from the wellhead and undergoes comprehensive forensic analysis." Rahall wrote in a letter made public over the weekend.

Schedule: The industrywide hearing is tomorrow at 9:30 a.m. in 2123 Rayburn.

Witnesses: Rex Tillerson, chairman and CEO of Exxon Mobil; John Watson, chairman and CEO of Chevron; James Mulva, chairman and CEO of ConocoPhillips; Lamar McKay, president and chairman of BP America; and Marvin Odum, president of Shell Oil.

Schedule: The BP hearing is Thursday, June 17, at 10 a.m. in 2123 Rayburn.

Witnesses: Tony Hayward, BP chief executive, has been invited, but not confirmed.

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