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Tuesday, 11 May 2010 08:33

BP, Transocean and Halliburton Play the Dodge Ball Version of the Blame Game at Senate Hearing on Gulf Oil Spill

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BUZZFLASH NEWS ANALYSIS
by Meg White

In the first of what will be an ongoing series of hearings on the disastrous oil spill in the Gulf of Mexico, leaders at BP, Transocean and Halliburton played an interesting form of the ever-popular corporate blame game.

In news accounts previewing the hearing before the Senate Energy Committee Tuesday, the published testimony of the three witnesses was interpreted as a circuitous effort to deflect blame onto one another.

The CEOs' testimony was interpreted to mean that BP would try to lay the blame on Transocean, the operator of the sunken rig now spewing thousands of barrels of oil into the Gulf of Mexico daily. Testimony from Transocean's CEO Steven Newman criticized BP back, but also called into question the concrete work completed by Halliburton just hours before the deadly explosion. And Halliburton would tell the Senate they were only operating under the requirements of the other two, and therefore had no liability for the spill.

"I can see the liability chase that's going to go on," predicted Sen. Robert Menendez (D-NJ), adding that he was looking forward to seeing "who's going to 'fess up to what."

"The message I hear is, 'Don't blame me,'" said Sen. John Barrasso (R-WY) said before the panel appeared before the committee.

Interestingly enough, the hearing didn't go down that way. It seemed like the three industry giants had seen the reaction many were having over their forecast attempts to blame each other, so they all decided to go with the "It's too soon to tell" approach. Each said their company was conducting an investigation into the spill to determine just what happened, which they'd gladly share with Congress when finished.

"We have been working hard to get to the bottom of the question," said Newman in his opening statement. "It is still too early to know exactly what happened."

"We should not be making a rush to judgment," cautioned Tim Probert, the chief health, safety and environmental officer for Halliburton.

Ranking Member Lisa Murkowski (R-AK) seemed to be appealing to the three to work with her and answer the questions being asked, if for no other reason than to advance the notion that domestic offshore drilling should remain a part of America's energy plan. The committee will be hearing from Interior Secretary Ken Salazar on that very subject next week.

"We are all in this together," Murkowski told the panel. "If we can't continue to operate and convince people that we can operate safely," the offshore drilling industry is in jeopardy.

Another Republican senator was quick to point out that it's not as if this spill happened yesterday. Sen. Jeff Sessions (R-AL) noted that it took BP "several weeks to construct" the dome they used to try and funnel the gushing oil to a pipe on the surface (an effort that ultimately failed). Lamar McKay, BP America's president, said that it would have been "impossible to predict" the need for such equipment, but Sessions remain unconvinced. 

"Shouldn't you have anticipated that these types of things occur?" he asked. "Maybe we have become a bit too complacent in the work that we're doing here."

Menendez apparently agreed with Sessions' conclusion about BP's readiness.

"What I see is not a company prepared to confront a worst-case scenario," he said. "I don't get the sense that you were truly prepared. I get the sense that your making this up as you go along."

For Sen. Ron Wyden (D-OR), BP's ineptitude was merely part of the historical context of the company, which has had a "series of horrific accidents over a number of years."

"In each case... the company always says the same thing: 'We're going to toughen up our standards,'" Wyden said. "The culture of this company is that there's been one accident after another."

The culture of energy regulation was also challenged. In the panel immediately before the three CEOs, several senators harshly criticized the work of one witness named Elmer Danenberger, a former chief of the Offshore Regulatory Program within the Minerals Management Service (MMS).

"MMS has demonstrated its close and sometimes inappropriate relationship with industry," noted Mark Udall (D-CO). He suggested that the agency consider splitting up into separate regulatory and lease-granting agencies as a way to minimize inter-agency conflicts of interest.

"I want to express some of my disappointment with some of the comments that have been directed at some of my former colleagues at the Mineral Management Service," said Danenberger. Though agreed Udall's suggestion had merit, he said, "These people won't take a doughnut from industry. I know, I've tried to set them up."

With so few issues about this oil spill settled, including such elemental issues as the way in which the gusher can be stopped, the one thing all could agree upon is that the government and industry will have much to learn from this disaster. This meme played right into the CEOs' argument that it is just too soon to tell who's to blame.

Though Congress and Big Oil will surely be talking throughout this learning process, one gets the feeling from day one that the lessons each player will glean from the experience will be markedly different. But for Sen. Maria Cantwell (D-WA), the learning process has already crystallized one issue clearly:

"What I've learned from this is that I think it's time for us to diversify off of oil."

BUZZFLASH NEWS ANALYSIS