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tv   [untitled]    June 16, 2010 2:30am-3:00am EDT

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my relatives and friends along the gulf coast. the gulf coast states have hosted b.p. and b.p.'s herridge companies for decades. thousands of our employees, contractorses and their families couple the cuffle coast states home. this horrendous accident which killed 11 workers and injured 17 others has profoundly touched all of us. there's been extreme shock such an accident could have happened and great sorrow for the lives lost and the injuries sustained. i'd like to make one thing very clear, b.p. will not rest until the well is under control when we discover what happened and why. in order to ensure it never happens again. as a responsible party under the oil pollution act of 1990, we will carry out our responsibilities to mitigate the environmental and economic impact of this accident.
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in fact, b.p. is going beyond obligations under o.p.a. to pay all claims from economic damages resulting in the spill. while it's difficult to divert from the here and now, we cannot lose sight of the need to help shape the country's future energy and climate policy. b.p. is committed to working with the congress and a broad cross section of energy consumers and other stakeholders to address the challenges of climate change and the context of increasing u.s. energy demand. we appreciate the opportunity to share our views on energy and climate policy. as well as a chance to discuss the major role of natural gas, that is can play in needing emission reductions in the power sector, delivering the greatest reductions at the lowest cost for consumers using technology that is available today. b.p. has advocated for uite
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some time an all or above approach in tackling climate changes. in meeting the nation's growing need for energy. we support policies that encourage conservation. energy efficiency and greater production of domestic energy including alternatives oil aad gas and nuclear. our views on climate policy flow from the fact a ton of carbon is a ton of carbon whether it comes out of a tailpipe or smokestack and the belief ear time should be treated the same. we support a national climate policy that creates a level playing field for all forms of energy that produce carbon emissions. we favor an economy wide price based on carbon fair and equitable across all sectors. market based solutions like cap or trade or linked fee is the best solution to manage greenhouse gas emissions and if applied would achieve
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effectiveness at reducing emissions and treat all consumers equitably and facilitateeinvestments in creating and sustaining jobs. we supported alternatives to assist in their development and accelerate their market entry. additionally, we think natural gas holds great promise in becoming a larger component of the u.s. energy pool and can provide a critical down payment at delivering upon our carbon reduction goals. i'd like to conclude by noting while b.p. is in the midst of a crisis now and we are prepared to be judge i by our response to the crisis we cannot lose sight of the futtre. thank you and i look forward to your questions. >> thank you, mr. mckay. that completes. the opening statements. rewill now turn to questions by the committee -- we will now turn to the questions by the
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subcommittee members. the chair will recognize myself. as i mentioned in my opening statement the gulf of mexico response plans for exxonmobil, conoco phillips and shell are virtually identical to b.p.'s, and just as depisht. -- as deficient. as you can see by looking at the covers of these five plans on the screen and over my head, the pictures are the same for each plan. all that's changed is the color of the cover of the plan from each of the companies seated at the table. this tillerson, like b.p. on page 116 of your plan the response plan lists walruses under sensitive, biological and human resources. as i'm sure you know, there aren't any walruses in the gulf of mexico and there have not
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been for three million years. how can exxonmobil have walruses in their response plan for the gulf of mexico? p> congressman markey, those response plans incorporate a number of broad-based studies, marine mammal studies, many of which are part of the e.i.s. statements put together by the m.m.s. and much of the response plan and what is contained in it by regular nation, including the models that are used to project different scenarios for oil spills and many of the statements ann representations in the plan -- >> these arr regional oil spill response plans. how can this be in a response plan for the gulf of mexico. this is the regional response plan that each of you had to put together. >> i understand.
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>> and it's unfortunate walruses were included and it's an embarrassment they were included but that's part of a larger marine ma'am ell study used in preparing regional response plans. >> mr. mulva, your plan as well includes walruses. mr. watson, your plan has them on page 11-6. how do you respond to having walruses in your plan? >> respond in a similar fashion. the plans are put together in response to guidelines from the minerals management service. >> do you agree it's an embarrassment to have walruses in a response plan for the gulf of mexico. >> certainly for the gulf of mexico it's not an appropriate. >> do you agree it's an embarrassment to have it in a plan to respond to the crisis in the gulf of mexico? >> i agree it's not appropriate to include for that region.
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in your response plan, mr. tillerson as will as some of the other plans, including conoco phillips, there is a dr. watts who is referred to as an expert, a technical support person. he died in 2005, four years before the plan was actually filed. how, mr. tillerson, can you justify a response plan in having a person who has been dead four years. >> it is but let me point out dr. lutz is part of the university of miami's marine mammal research which has been an important resource for preparation of the plans for yeers. the fact dr. lutz died in 2005 does not mean his work and importance of his work died with him. there are other many + individuals identified in the
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plan. >> it's 2010. >> those numbers are valid in the plan. >> it's 2010. you conclude dr. lutz's phone number in your plan for a response, that you have not taken this responsibility seriously. mr. mulva, the same true for you, is it an embarrassment for conoco phillips to have that as part of your plan? >> the plans need to be updated more completely. obviousll it is embarrassing but we look towards the institution and not necessarily the individual. >> it just seems to me for each of your companies the only technology you seem to be relying upon is a xerox machine to put together your response plans, that there wasn't enough effort put together to ensure
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that in the gulf if a catastrophe occurred you would be able to respond, did you, mr. mckay? in the first week your company developed a document that showed that your range of possibilities for an accident was 1,214,000 barrels a day. and yet your company continually in the first week low balled the number and said that is was only 1,000 barrels per day. you are now estimating it could be upwards of 40,000 barrels per day and you are today capturing 15,000 barrels per day of oil from that gusher. are you ready to apologize to the american people to getting that number so wrong, having been so incompetent or deceptive to the american people that proper preparations
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were not put in place before of b.p.'s low balling of the actual amount of oil that was going into the gulf of mexico? >> first, just to be clear, those were unified area command estimates and came from the 5,000 barrels a day was an estimate done on april 26 by noaa. our input to that on the 27th was a range of 1-14,000 barrel as day and our best fiment was about 5,000 barrels a day. we've stuck with that. information has been gathered as things have moved along as we gathered oil. >> this document that i have is b.p. confidential. in the first week. it says 1,000 to 14,000. this is b.p. comfortal.
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the onus, the responsibility is on your shoulders. you had the technology. you were able through your expertise to make this determination and i heeve it's a deliberate deception of growth and confident because the amount of boon, skimmers and cleanup of the beaches and rescue of birds and turltses, you need it in order to capture the oil coming out of that spill, testing for the health of the workers. it was all dependent on how large the spill was. are you ready to apologize to 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. >> i will just reiterate what com aun dauntal -- commandant
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said. they were estimates. >> thhy were your cameras at the bottom of the ocean. >> that's true. >> your company got it wrong, b.p. got it wrong. >> we have provided every bit of data we've got into the unified area command with government scientists and the noaa, coast guard to help them understand. >> on the day that you are ready to apologize -- >> what's that? >> on the day you are ready to apologize, that is the day we can begin to move forward and put together the kinds of plans to make sure this never happens again. it was b.p.'s spill but america's ocean and we need you to admit that you knew or should have known very early on that this was not a spill of 1,000 or 5,000 barrels per day. they were your cameras, more
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technology, your expertise the american people were relying upon and you got it completely wrong, either an audit to limitt competence but thh ultimate impact on this region of the country is profound and will last for a generation. please, one final chance, apooogize to getting that number wrong. >> we are sorry for everything the gulf coast is going through. we are sorry for that and the spill. what i can say is we have provided every bit of data and information we have to the unified command, to the do. , to every scientist that's working on this full time and to the government from that day you're talking about. to measure that. that is still under evaluation. >> i continue to believe that b.p. is still more interested in its liability than it is in the livability of the gulf and this hearing is one further
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indication of that. my time has expired. let me turn and recognize the gentleman from michigan, mr. upton. >> thank you. mr. mckay. you indicated b.p. is looking toopay all legitimate damages. are you will to put in an escrow account enough money to pay as such chair damages as might be expected? >> we've been very clear from day one that we as a responsible party under open 90 we will be responsible and living up to the obligations of open 90. i cannot comment whether there will be a fund set aside or not. we made it clear the company stands behind these commitments. we've got a trong balance seat and intend to stand behind note. i cannot commit one way or another whether the fund would serve that if nurtance. >> not a this point? >> i can't comment yes oo no. >> why not?
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the buck stopts there. >> we'll honor all legitimate claims and the full company stands behind that. >> have you asked the federal government for any help you've not received? >> not that i know of. >> what grade would you give the administration in its efforts to stop the spill? >> we've been cooperating in every way we know how with the administration -- >> a, b, c, d? >> i can't give a grade. it's and a unified band we've partsed in with many other industries. we have 150 companies working on this. i can't comment on grades of individual components onnthat. >> your counterparts at the table, are you working with any of them to try and stop the leak. >> yes. all these countries have been tremendously helpful to us.
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>> a question for all of you as you drill across the world, which country has the toughest regulations take enforce those regulations and what -- if that country gets an a, where would you put the u.s. by the enforcement of the m.m.s.? >> i think the united states and then the north sea countries have the most mature regulatory structure around offshore drilling activities because that's where it's taken place the longest. i can tell you those standards didn't get taken to countries that do not have established regulatory structures and the same standards are applied every where. >> the same standards are in the gulf as they are in the northeast? >> by and large they are the same. for exxonmobil we take what we believe to be the best practice and then apply that globally because it really doesn't matter where you are, if you have a well controlled incident, you need to use the
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best you have in everywhere in deep water drilling, it's not an area i'll make a distinction in this country because i can. >> i know in the north sea when they had the accident i think back in 19 8 and 180 folks, as i recall -- >> hyper alpha. >> right. >> changes were made in essence split the m.l.s. -- split the enforcement agency, similar to what the administration is proposing with the m.m.s. that is a better system than what we have in the united states, right? >> i don't know the structure is as important as the competency and the process by which the oversight occurs. >> mr. watson? >> i'm not sure i can grade all of the differences across the jurisdiction. >> i just want to know what bottle should we be looking at and what -- >> we start with regulations in each country and then we apply our standards on top of those regulations.
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the application of our process and procedures are similar in other ountries. whether our particular requirements in a particular country we of course comply with those. our view is certainly that the u.k. and u.s. have very high standards. >> mr. mulva? >> the greatest part of our experience and operation has been in the north sea. particularly norway and the united kingdom. and in norway and the united kingdom, especially developed some of the best practices that are applicable and used around the world. so based on our experience for several decades, those best practices and oversight review have been applied and used in the industry and other places of the world. so i would say that they rank quite up at the top in terms of capability and development of practices.
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>> mr. odom? >> similar answer in that i think the u.s. has the most comprehensive set of recommendations for the industry in the world. you can find other areas where a particularrregulation may be more stringent than what you see in the u.s. the important part for us as a company is going back to what i called our global standards, how we do things everywhere that often exceed the regulations in any country. >> mr. mckay? >> yes, i would agree with that, are slag -- similar but the u.s. has a strong set of standards. i would add a comment i think learning what we're learning through this we'll augment some of those standards and will be helpful. >> gentlemen, the chair recognizes the chairman of the full committee, gentleman from california, mr. waxman. >> yesterday chairman stupak and i sent a letter to yeny
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heyward, the c.e.o. of b.p. and it had questions about the design and decisions made by b.p. at the well. the letter describes a series of decisions b.p. made that seemed to reduce the risk of catastrophic blow out. i'd like to ask each of you whether you think mistakes were made by b.p.? >> in reviewing the letter that you both send, it appears clear to me that a number of design standards were -- i would consider to be the industry norm were not followed. >> let me go through this, if i could quickly. you think they made mistake? the answer you would give would be yes. >> we would not have drilled the well the way they do. >> how about you, mr. watson? >> just had a chance to take a look at your letter, it's quite lengthy with a number of details comments, our experts
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are looking at it. i've read it myself and it's consistent with what the joint industry task force found in that we have the opportunity to raise the bar, if you will, on standards in the industry and it certainly appeaas from your letter that note all standards -- not all standards we would recommend or employ were in place. >> do any of you disagree with the statement b.p. made mistakes? >> it's not a disagreement, it's just confirmation that don't have all the information but from information in your letter aad what we know about the well, a similar statement, it's not a well we would have trilled and put that mechanical setup there for operational concerns. >> mr. watson, you're quoted in "the wall street journal" saying this incident was preventable. what mistakes did b.p. mr. you would not have made? >> first we would say, as we look at this incident, we need
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to let the investigation run its course. what we've done since the first days of this investigation and accident we participated in the joint industry task force where the industry -- >> you made the statement. you're quoted as saying this incident was preventable. >> yes. >> what would you have done differently to prevent the diiaster that we're now encounting. >> there are several areas that appear based on the information we've seen in the joint area task force and the information we've gathered to suggest practices we would not put in place were employed here. -p>> specifically? >> for example the casing design and mechanical barriers we put in place would be different from what we use. >> darren mckett said chevron uses a safer well design. can you tell us why the chevron well design is safer than
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b.p.'s? >> it's the two characteristics i commented there on top of what e are effective procedures and other authorities we have in place that would have prevented this incident. in the well design b.p. had a choice of two primary options, it could closer -- lower a full string of casings from the top of the well to the bottom of the well and could hang a liner from the lower end of the casing inside the well and install a tie back in front of the liner. b.p. recommended convince the first ring of casing because it would create an open wellness to the barrier with the cement job failed. would you have chosen the other option and do you choose the other option in your wells? >> we would not have run them full strength. >> would you not have. mr. tillerson, you made a
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similar claim and testified, quoted what we do know is when you properly design wells from the range of risk anticipated, follow established procedures. build in layers of redundancy, train operators, conduct tests and drills and focus on safe operations in risk managemenn, tragic incidents like the one in the gulf of mexico today should not occur. mr. tillerson, you said this blowout would not have happened as exxonmobil had been drilling the well. tell us what you would have done differently and please be specific. >> it would have been a different well design. we would have run a liner, a tailback liner and used a different cement formulation and we would have tested for sheement. we would have had the locking seal ring before the proceeding. and leading up to all of that there was clearly -- this is
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based on what's publicly been made available, there weee clearly a lot of indications or problems with this whale going on for some period of time leading up to the final loss of control. and why those -- how those were dealt with and why they weren't dealt with differently, i don't know. and we don't have all the information so i want to echo what mr. watson said there. we are very interested, i said in my remarks. we want to see the actual investigation because we want to understand were they looking at something as opposed to making the decisions almost any of our drilling operations people would have made differently that led to the ultimate loss of the well. >> thank you. my time is running out but let me make a statement, mr. chairman. i feel more confident in these assurances if i didn't realize that each of the oil spill responses plans from the companies are virtually
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identical to b.p.'s. so you would have done things differently, i would think certainly in retroexpect that's a statement you would certainly back. i hope that's true. but the record does not support other countries here and today have been more prepared than b.p. and their plans weee the same. i think you for -- i thank you for your experience and we have to learn from that experience and move on. we really haae to learn these things have to be thought out, that the plans should not just be cookie cutter plans. thank you, mr. chairman. >> the chair recognizes the ranks member of the full committee, the gentleman from texas, mr. barton . >> the stakes are higher and the consequences more dire but reminds me a built of monday morning call-in radio talk show after the redskins have blown another one. everybody has an idea what
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should have been done and now that they know what was done and it wasn't done properly, they're much smarter than the coach on the field and the quarterback on the field at the time. so it's very easy to second-guess and to point out the problems. there's kind of good news, bad the bad news is i agree with chairman waxman. judgment calls were made that now that we're -- now we know what happened those were the improper judgment. that's bad. but the good news is, and this is what our industry c.e.o.'s are saying, i think, is it is preventable. i don't know what this task force is going to recommend that mr. tillerson has alluded to, but if the recommendation is that best practices on these deep wells ought to have these double sleeves, i think we
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could butt that in regulation if we need to. if the best practices is you ought to put the lockout collar on the well before you do the final cementing job is something you can be done. if the best practice is that we ought to really focus on degassing the mud before you recirculate and do that final stage when that accident occurred, i think we'll go along with that. these are not huge technically complex, we just don't know how to solve that particular problem. so that's the good news. my first question is to the c.e.o. of british petroleum, or the president of british petroleum u.s.a. has the federal government, tested, sold, asked you do anything you just flat said no to. have they proposed some solutions you've durned down and in hindsight if you had 3 the well wouldn't ten to be leaking? >> i don't know of any
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solutions that have been proposed that we haven't done. >> and it is b.p.'s responsibility for the well. i mean, you are the owner of the well but in terms of mitigation and in terms of the cleanup on the beaches, did b.p. tell the president of the united states we shouldn't let the has -- let the louisiana people go out and do the sand berms? >> what we're trying to do is and decisions like that go through unified command. they did go through unified command and we agreed once it was a decision to go forward. >> are you any of you gentlemen here because you were subpoenaed? >> no. >> you're here voluntarily and chosen as free citizens to come and answer any question this committee has, is that correct? >> correct. >> in terms of b.p., this television camera showwng the oil, isn't that your television


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