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Oil Executives Testify on Capitol Hill

posted on May 14, 2010

Events surrounding one of the worst ecological catastrophes on record continue to unfold. For the past three weeks, the uncapped Deephorizon well has been spewing more than 5,000 barrels of oil per day into the Gulf of Mexico. Recent independent estimates have called this number into question saying they could be off by a factor of ten, making the disaster greater than originally believed.

As a third attempt to cutoff the flow of oil is in progress, President Obama ordered the inspection of all U.S. off-shore oil wells.

Billions of dollars in domestic seafood sales remain in jeopardy. Millions of dollars in lawsuits have been served against BP. And thousands of jobs remain in the balance.

This week, high-ranking officials with BP -- the oil company taking responsibility for the clean-up--, Haliburton -- the group which supplied drilling components --, and TransOcean -- owner of the doomed Deepwater Horizon drilling platform -- were summoned to Capitol hill to sort out the details.


Oil Executives Testify on Capitol Hill

Sen. Mary Landrieu, D-Louisiana: "And my first question is to BP, because this is the question Mr McKay that I get more than any other question. Will BP pay?"

Lamar McKay, President BP America: "We are going to pay all legitimate claims. All legitimate claims…

Sen. Mary Landrieu, D-Louisiana: "And define legitimate please."

Lamar McKay, President BP America: "Substantiated claims. I can't define the term."

Executives of British Petroleum, Halliburton and Transocean Ltd testified before the Senate Energy and Natural Resources Committee to try to determine the cause of the April 20th explosion and destruction of an offshore oilrig in the Gulf of Mexico.

Sen. Jeff Sessions, R-Alabama: "Well you do this business do you not? I'm just asking you a single question. What percentage in you best judgment, is it, that they remove the mud before the final plug is put in?"

Tim Probert, Halliburton Global Business Lines: "I do not know senator."

Sen. Jeff Sessions, R-Alabama: "Is it less than 50%?"

Tim Probert, Halliburton Global Business Lines: "I do not know senator."

Since the explosion, that killed 11 workers on the oilrig owned by Transocean Ltd and leased by BP, oil has been pouring into the ocean at an estimated 210,000 gallons per day. What caused the explosion has yet to be determined, but congressional investigators have been looking at the failure of a safety device known as a blowout preventer.

Lamar McKay, President BP America: "We have instituted some incremental testing of blow out preventers world wide."

Sen. Lisa Murkowski, R-Alaska: "Do you have any reason to believe that the Deep Water Horizon B-O-P was modified

Lamar McKay, President BP America: "During our intervention work in the last three weeks, we have umm… We do have reason to believe it was modified."

According to BP officials, their cost of fighting the oil spill has been $450 million and increases $10 million a day. Transocean LTD is petitioning to limit its liability for the disaster to $27 million.

President Obama: "BP is responsible for the leak. BP will be paying the bill."

At the same time, the Obama administration is asking Congress to raise a liability cap making way for BP to pay a larger share of the economic damages in the Gulf. The White House also hopes to increase a per-barrel tax on oil companies to replenish the cleanup fund that likely will be depleted by the environmental disaster.

Meanwhile, solutions on how to prevent future offshore oil spills continue to be elusive.

Tim Probert, Halliburton Global Business Lines: "It is in the interest of all of us, and the industry in general, and the nation's energy security, that we learn from this and continue to take those learning and build them into our future operation procedures and technology."

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