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BP Officials Summoned to Washington

posted on June 18, 2010

Hello, I'm Mark Pearson. Economists caution it could be years before the labor market recovers the 8.4 million jobs lost to the worst recession since the 1930s. But the government reported Friday the ranks of those without a job declined last month in most U.S. states.

According to the Labor Department, the unemployment rate fell in 37 states in May. But, the improved labor figures may have been skewed by government hiring of temporary census workers.

Six states endured increased unemployment last month while the ranks of the unemployed held steady in seven. However, those numbers may reflect a growing number of people who gave up looking for work and, therefore, were not counted.

And the Labor Department reported this week the Consumer Price Index -- the government's most closely watched barometer of inflation fell -- 0.2 percent in May. Stripping out the volatile food and energy sectors, so-called, "core" inflation edged up 0.1 percent in May, and is up just 0.9 percent over the past year.

Analysts credit declining energy costs for keeping inflation in check last month. But crude oil prices now are up about 5 percent from the May low, and many analysts expect the rally to continue.

Much of the news relating to oil these days comes from the Gulf of Mexico, where the U.S. government estimates up to 60,000 barrels of oil have leaked from a ruptured BP well every day for more than eight weeks. In the ongoing investigation into the catastrophe, BP officials were summoned to Washington this week to account for their actions and offer remedies.

BP Officials Summoned to Washington As the largest environment disaster in U.S. history enters its ninth week, nearly one-third of the fishing grounds in the Gulf of Mexico remain closed, miles of oil-absorbing boom have been deployed, and thousands of Gulf Coast residents face an ominous future.

Against that backdrop, BP officials spent the week going from the Hill to the White House and back -- alternately being grilled and cajoled by federal officials from the president on down.

On Tuesday, President Obama delivered his first Oval Office address. While much of the speech focused on the need for domestic energy reforms, he assured the American people BP would be held responsible.

President Barack Obama: "I've seen empty docks and restaurants with fewer customers -– even in areas where the beaches are not yet affected. I've talked to owners of shops and hotels who wonder when the tourists might start coming back. The sadness and the anger they feel is not just about the money they've lost. It's about a wrenching anxiety that their way of life may be lost. I refuse to let that happen."

Earlier in the day, Lamar McKay, president and chairman of BP America, went before the House Energy and Commerce Committee.

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.

Rep. Anthony Weiner, D-New York: I mean, the one thing we know from this hearing with metaphysical certitude is that BP created this problem through their own negligence.

Rep. Edward Markey, D-Massachusetts: 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, 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, D-Massachusetts: "They were your cameras at the bottom of the ocean."

Lamar McKay, BP America, Inc.: "That's true."

Rep. Edward Markey, D-Massachusetts: "You got it wrong...Mr. McKay. Your company got it wrong. BP got it wrong."

Then on Wednesday it was back to the White House where BP officials met with the president.

President Barack Obama: "Currently, under federal law, there is a $75 million cap on how much oil companies could under certain circumstances be required to pay for economic damages resulting from a spill such as this. That amount obviously would be insufficient. That's why I'm pleased to announce that BP has agreed to set aside $20 billion to pay claims for damages resulting from this spill."

And then Thursday, Tony Hayward, BP's CEO, testified at a House hearing.

Tony Hayward, CEO, BP: "I will."

But before the embattled company official pleaded his case, he got an earful from a member of the public.

Unknown woman: "You need to go to jail!"

Call for incarceration aside, the committee was less than accommodating.

Rep. Eliot Engel, E- New York: "Well, Mr. Hayward, perhaps your lawyers have told you to be very cautious but it's really an insult for you to come to this committee and keep repeating the same thing, evade questions, evade answers, and just repeat again and again, that you are not responsible and that we have to wait for an investigation. Why didn't you come and testify after the investigation if you're not prepared to tell us anything of knowledge now?"

Tony Hayward, BP: "With respect, Congressman, I wasn't party to any of the decision making around this well." Senator..."

(Rep. Cliff Stearns R- Florida: "Do you think BP has reckless behavior?"

Tony Hayward, BP: "I believe all accidents are preventable. The investigation will determine how this accident has occurred."

Rep. Cliff Stearns R- Florida: "So you're saying right now, based upon all the information I gave you, you do not think, BP had any reckless behavior. That's your position, this morning, this afternoon."

Tony Hayward, BP: "I..."

Rep. Cliff Stearns R- Florida: "I want you to say that you don't think BP has reckless behavior."

Tony Hayward, BP: "I have seen no evidence of reckless behavior."

Cliff: "Okay. Alright"

Rep Peter Welch, D-Vermont: "I'll leave out motivation, but there was a choice of more casing-centralizers or fewer casing-centralizers. More cost more, fewer cost less. Which choice did BP make at Deepwater Horizon?"

Tony Hayward, BP: "The decision taken by the engineering team at the time, which was a technical judgment, was to use fewer centralizers rather than more. It is not always true that more is better."

BP has spent more than $1 billion on the cleanup and has already paid nearly $100 million in claims to Gulf Coast residents. And the oil giant has further agreed to make available an additional $100 million to compensate unemployed oil-rig workers affected by the closure of deep water drilling rigs.

Nevertheless, thousands of jobs and billions in revenue remain in jeopardy.

While those in Washington continue to hammer out the details, millions of gallons of oil continue to spill into the Gulf of Mexico, where the total environmental impact may never be known. Because the area affected is so large, scientists are uncertain of the spill's effect on fish and wildlife.

Tags: BP Congress disasters government Gulf of Mexico news oil oil spills