The explosion and fire aboard the Deepwater Horizon and the resulting oil spill in the Gulf of Mexico never should have happened—and I am deeply sorry that they did.
That’s how BP CEO Tony Hayward will begin his testimony to the House Committee on Energy and Commerce on Thursday morning, according to several media reports. Hayward’s appearance before Congress has been a long time coming. Though he’s been ubiquitous throughout the spill—often to his and BP’s detriment, given his propensity to say the wrong thing—he hasn’t yet come in for questioning in Washington, and his meeting Wednesday with President Barack Obama was his first. At the White House, the company agreed to a $20 billion independent fund for spill compensation, but had BP Chairman Carl-Henric Svanberg speak to the media afterward—though he didn’t improve much on Hayward.
Congressmen like Bart Stupak, Edward Markey and Henry Waxman have spent the last few weeks beating up on lesser BP executives—even as their investigative teams have uncovered all the mistakes the company made on the road to Deepwater Horizon—so expect that much of the hearing will involve Congress members competing to see who can make Hayward squirm more. (Representative John Dingell, who will be part of the hearing, told the AP: “He’s going to have, if I’m any judge of the committee and the temperament of the members, a very unpleasant afternoon.) But there are still several open questions on the oil spill that Hayward might actually be able to shed light on. Hayward’s already answered one—he’s very sorry for what happened:
This is a tragedy: people lost their lives; others were injured; and the Gulf Coast environment and communities are suffering. This is unacceptable, I understand that, and let me be very clear: I fully grasp the terrible reality of the situation.
But there’s going to be much more. Here are five questions Tony Hayward will face on what will no doubt be one of the most terrible, horrible, no good, very bad days of his life:
1) Why did the Deepwater Horizon accident happen?
In the initial aftermath of the Deepwater Horizon explosion, BP was quick to shift the blame, noting repeatedly that the rig was actually owned and operated by Transocean. But in recent weeks it’s become increasingly clear that cost-cutting decisions by BP may have led directly to the accident on board the rig. The leaders of the House Committee on Energy and Commerce—the very people Hayward will be facing on Thursday—sent a letter to BP on June 14 outlining a pattern of mistakes by the oil company that they say “increased the danger of a catastrophic well.” They found that corners were cut in designing the well, on the cementing job and finishing the well. Of particular concern was BP’s decision to use a less expensive tapered string design for the steep pipes that line the well, known as the casing. Several major executives from other international oil companies at a Congressional hearing on Tuesday said that they wouldn’t have used that piping design, and that the Horizon accident was essentially BP’s fault. “We would not have drilled the well the way that they did,” said Exxon-Mobil CEO Rex Tillerson.
In his prepared testimony, Hayward talks about BP’s internal investigation, and notes that there were problems with the cementing of the well and the casing system, along with several other areas. But he says that “this is a complex accident, caused by an unprecedented combination of failures.” Expect Congressional inquisitors to push him to take responsibility for the entire accident—and expect Hayward to dodge.
2) Why can’t BP stop the leak?
Hayward says in his testimony that “our first priority is to stop the flow of oil and secure the well.” And, as members of Congress will no doubt be shouting over each other to tell him, they’ve done a pretty shoddy job of it so far. Hayward will be testifying less than two days after the Flow Rate Technical Group—a team of government experts and outside scientists—raised the leak estimate to 35,000 to 60,000 barrels a day. At its highest level, that’s the equivalent of a Valdez spill every four days—and given the fact that BP and the government have consistently underestimated the spill, who’s to say it might not get worse?
Fortunately for Hayward, he can point to some recent partial successes. Over the past week the company’s Lower Riser Marine Package cap has been processing 15,000 barrels of oil a day, and on Wednesday BP announced that it had opened a second containment system that should increase the total capacity to 28,000 barrels, with a plan to capture 53,000 barrels of oil by the end of the week, according to Coast Guard Admiral Thad W. Allen, and 80,000 barrels of oil eventually. But even these options come with drawbacks—BP plans to burn some of the oil it is collecting with what is known as an EverGreen burner—but environmentalists have raised concerns about what the process could do to air quality. Expect Congressional investigators to ask Hayward why the company, with weeks to prepare, didn’t have sufficient containment capacity on hand immediately, and why it needs to burn that oil.
3) Why is BP lying?
From the beginning, we have been committed to a transparent response.
When Hayward comes to that line in his testimony, be prepared for the entire chamber to break out in laughter. BP has been opaque throughout much of the spill response, and transparency has been essentially forced on the company. BP resisted requests by scientists to put more sensors near the leak, in order to get a better estimate of the flow rate, saying that finding out the leak size wasn’t necessary. (That changed recently.) Congress had to force BP to hand over a small clip of its underwater video of the leak—and that was the moment when it became obvious that the spill was far larger than the 5,000 barrels a day it had been quoting for weeks. (Congress then had to pressure BP again to allow 24/7 streaming of the leak on the Web.)
On the shore, media have run into constant interference in trying to film oiled beaches and interview cleanup workers. And though the company has promised to allow more free access to reporters in recent days, they’re still running into obstacles, as New Orleans TV anchor Scott Walker discovered when he tried to interview cleanup workers on the beach in Louisiana and was stopped by a BP-employed contractor:
Doesn’t sound like free access. Hayward has some ‘splaining to do.
4) What’s wrong with the cleanup?
One area where both the White House and BP seem to be in agreement is in their characterization of the massive scale of the cleanup for the spill. In his prepared testimony, Hayward talks about the 27,000 personnel BP has hired to help with the cleanup—along with nearly 20,000 volunteers—the thousands of boats that are involved in the surface response and the hundreds of millions of dollars BP is spending to build artificial sand berms off the coast of Louisiana:
To support rapid response, we have made available a total of $175 million to Louisiana, Mississippi, Alabama, and Florida, as well as $70 million to assist these states in tourism promotion efforts.
To date, we have deployed over 2.5 million feet of containment boom and over 3.0 million feet of sorbent boom in an effort to contain the spill and protect the coastal shoreline. The Department of Defense is helping to airlift boom to wherever it is currently needed across the Gulf coast.
But there have been many complaints about how the cleanup is being actually carried out. State and local officials say they’re not being consulted, and they’ve told the media that workers aren’t showing up where they’re needed. Residents complain about the maze of bureaucracy they need to navigate to get anything done, while environmentalists worry that a shoddy cleanup could end up causing more harm than good to sensitive wetlands. And there have been repeated complaints across the Gulf Coast about the difficulty residents and businesses have had getting proper compensation checks from BP—although Wednesday’s announcement that the company would put aside $20 billion in an independent fund for claims may help cool that criticism. But as Campbell Robertson’s exhaustive investigation in the New York Times shows, the cleanup can hardly be considered a success:
From the beginning, the effort has been bedeviled by a lack of preparation, organization, urgency and clear lines of authority among federal, state and local officials, as well as BP. As a result, officials and experts say, the damage to the coastline and wildlife has been worse than it might have been if the response had been faster and orchestrated more effectively.
The federal government deserves some of the blame here as well, but expect Hayward to be called on the carpet for every drop of oil still soaking the beaches of the Gulf coast.
5) Why haven’t you resigned?
BP’s share price has cratered. Its fellow oil companies have turned against it. The company will likely pay tens of billions of dollars in costs, damages and penalties before the spill is finished, and there may still be criminal charges in the offing. And while that’s been happening, the CEO seems to be doing more harm than good. To outsiders, it can seem incredible that Hayward hasn’t yet been kicked out the front door. (In fact Paddy Power, the online British gambling site, is currently offering 5/4 odds that Hayward will be out of a job by 2011.)
Yet Tony Hayward has shown no inclination to quit, and don’t expect a few angry members of Congress to change that now. As Slate’s Daniel Gross pointed out, the company has little to gain cutting Hayward loose now, in the middle of the spill response—and no new CEO would want to take the job under those conditions. (A bit later, though, and all bets are off.) That means Congress—and the American people—will have Tony Hayward to kick around for a while, starting on Thursday. It’ll be a fun show.