BP has predicted it will be back drilling in the Gulf of Mexico within a matter of months despite continuing legal threats and rows over pollution from last year's Deepwater Horizon disaster.
"We expect to be back and actively drilling during the second half of the year," Byron Grote, the company's chief financial officer, told financial analysts from the City of London on Wednesday.
The comments are likely to infuriate environmentalists who believe BP should be kept away from the Gulf, and could upset a US offshore regulator still considering whether to grant permits to BP.
Verbal gaffes by former chief executive Tony Hayward in the wake of the Macondo well accident 12 months ago damaged the company's reputation in America as it attracted widespread criticism from the White House downwards.
Grote was speaking as BP revealed it had taken a further $400 million of extra charges relating to Macondo in its first quarter financial results, which helped dent profits.
The company has not drilled any wells in the US Gulf since a moratorium was introduced last summer but formally lifted again in October. Some rival firms have already been granted permission to drill new deepwater wells, but not BP.
A spokesman for the British company said it had applied to resume drilling production wells to keep up output levels at important fields such as Thunderhorse and Atlantis. "This is clearly subject to the regulator's permission being granted," he added.
Hopes that drilling could begin soon come barely a month after the US justice department confirmed it was still considering a range of civil and criminal charges against BP. It also comes amid continuing arguments over how much oil or dispersant chemicals used in the aftermath of Macondo continue to damage the waters of the Gulf.
The financial figures for the first three months of the year were boosted by much higher oil prices but were also damaged by the chancellor, George Osborne, taking a billion dollar bite out of profits. Changes announced in the March budget on North Sea oil fields cost BP $683 million in extra taxes over the first quarter of the year while a further $400m is expected to go in 2012 owing to fiscal treatment covering the decommissioning of platforms.
The higher tax charge in the first three months helped replacement cost profits dip to $5.5 billion from $5.6 billion during the same period a year ago but the figures were also hampered by an 11% slump in production volumes and higher operating costs.
These special items outweighed a substantial increase in oil prices year on year and a very strong performance from its Russian business, TNK-BP, where BP is in conflict with its oligarch partners over a proposed tie-up with another local group, Rosneft.
The tax hit from Osborne has infuriated the North Sea oil and gas industry which claims hundreds of jobs stand to be lost. There has been a series of meetings between company executives and government officials but so far Osborne has shown little sign of backing down.
Osborne presented the move last month as a "fair fuel stabiliser" which would raise the tax rate on oil producers to avoid having to increase the tariff on pump petrol, which has reached record levels.
The chancellor said the change would raise £2 billion of extra taxes but BP's figure of $683 million is the first from a company and BP is still one of the largest in the North Sea. The BP tax rate went up from 30% to 37% over the first quarter as a result of the move, said a company spokesman.
The oil group has gradually been running down its UK interests and is talking to potential buyers about various gas fields it wants to sell along with the Wytch Farm onshore field in Dorset.
BP has disposed of $24 billion worth of assets worldwide as part of a cash-raising move to help pay for the $41billion cost of Deepwater Horizon.
That's what BP CEO Tony Hayward asked his board of directors as the Deepwater Horizon disaster unfolded last spring. This week, an independent commission appointed by President Obama answered his question.
Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling is a painstakingly thorough examination both of what led to the disaster and of the challenges we face as an oil-dependent nation. But this is no dry recital of facts. For the first couple of hundred pages, at least, it's enough of a page-turner that you almost wonder whether the Commission hired Sebastian Junger (The Perfect Storm) as a ghostwriter.
This, however, is a storm of imperfection -- incompetence, greed, complacency, and cynicism are abundant. Industry leaders and government officials alike are found culpable -- with the latter (notably Minerals Management Service employees) failing time and again to stand up to the corporate corner-cutters at the former. Added up, all of this results in not just putting our coastlines and our coastal economies at risk, but there are more fatalities at U.S. offshore rigs than other countries.
But besides telling the American people what happened, the Commission was charged with making recommendations for what we should do about it:
…no less than an overhauling of both current industry practices and government oversight is now required. The changes necessary will be transformative in their depth and breadth, requiring an unbending commitment to safety by government and industry to displace a culture of complacency.
But that, however, is only what we must do if we hope to avoid another oil-spill disaster. The Commission did not shy away from addressing the bigger picture. This report makes a strong case for adopting a balanced national energy policy that addresses national security, economic, human safety, and environmental issues. But left unsaid is the fact that the only way to succeed on all of those fronts will be to get our nation off of oil as quickly as possible. If the Navy and Marine Corps can cut oil use in half by the end of this decade, why can't the rest of the country?
Both President Obama and Congress need to take the Commission's recommendations seriously -- and act accordingly. But we also have a responsibility as citizens to make it clear to them that we want to see real solutions instead of political posturing like attempts to weaken the EPA (an agency that actually is doing its job).
A good first start would be to implement all of the report's recommendations for properly funding and managing the recovery of Gulf communities and habitats. Tony Hayward now has the answer to his "why us?" question. The fishermen, small business owners, and other Gulf residents whose lives and livelihoods were destroyed are still waiting.
LONDON – BP is jettisoning CEO Tony Hayward, whose verbal blunders made the oil giant's image even worse as it struggled to contain the Gulf oil spill, and will assign him to a key job in Russia, a person familiar with the matter said Monday.
Hayward is set to step down in October and take a post at TNK-BP, the company's joint venture in Russia, according to the person, who spoke on condition of anonymity because an official announcement had not been made by the British company's board.
The move was being made more than three months after an oil rig explosion set off the spill and less than two weeks after a temporary cap finally stopped the oil from leaking. The government's oil spill chief, retired Coast Guard Adm. Thad Allen, said in Washington on Monday that efforts to solidly seal BP's busted deep-sea well are set to begin in a week.
Moving Hayward gives BP a chance to make a fresh start. BP executive Robert Dudley, an American who has been overseeing oil spill recovery efforts, is likely to be his successor.
"The sooner Bob Dudley is empowered to act as CEO, especially with regard to the U.S., the better it will prove to be for BP," said Stephen Pope, the chief global equity strategist at Cantor Fitzgerald in London.
The board met Monday but it was unclear whether it had made the demotion official. A statement was expected early Tuesday, at the same time the company files its second quarter results.
Hayward left BP's headquarters after the board meeting without speaking to reporters. The Briton's silver Lexus was mobbed by photographers, who chased the car down the tony street in central London.
It's not yet clear what Hayward's role will be with TNK-BP, but the job suggests BP still holds more faith in Hayward than much of the U.S. public and political establishment do. Analysts consider the Russian venture one of BP's crown jewels; it accounts for a quarter of the company's production.
TNK-BP's challenges are well known to Hayward's likely successor as CEO, who used to run it. Dudley was forced to flee Russia in 2008 and ran BP's interests there in absentia until that became untenable after a dispute with Russian shareholders.
Repeated calls to TNK-BP's offices in Moscow went unanswered Monday.
BP owns half of the oil firm, which is Russia's third-largest. Moving Hayward gives insiders who believed he was scapegoated for his off-the-cuff remarks — rather than his performance — a chance to keep a highly trained professional in the company.
"They still think highly of Tony Hayward but they have to get him away from this situation," said Phil Weiss, an oil analyst with Argus Research in New York. "TNK-BP is an important part of BP."
Hayward was called back to London a month ago after a bruising encounter with a congressional committee and has since kept a low profile. There is persistent speculation that BP Chairman Karl-Henric Svanberg, who moved into the post on Jan. 1, is also likely to lose his job later this year.
In New York, BP shares rose almost 5 percent Monday as the stock market anticipated a formal announcement about Hayward. Shares of BP PLC rose $1.79, or 4.9 percent, to close at $38.65 Monday in New York. BP shares closed up 4.6 percent at 416.95 pence ($6.45) in London.
The one-day board meeting comes a day before BP announces earnings for the second quarter. That report is expected to include preliminary provisions for the cost of the Gulf disaster, which analysts say could be as high as $30 billion.
Hayward, 53, who has a doctorate in geology, had been a well-regarded chief executive. But his promise when he took the job in 2007 to focus on safety "like a laser" came back to haunt him after the April 20 explosion on the Deepwater Horizon rig, which killed 11 workers and unleashed a gusher of oil a mile below the surface.
His early attempts to shift blame to the rig owner, Transocean, failed to take the heat off BP. Later remarks that the amount of oil pouring into the Gulf was "tiny" compared to its volume of water and his complaint that he would "like my life back" made him an object of scorn.
Dudley assumed oversight of the oil spill recovery last month, soon after Hayward was pilloried for spending a day at a yacht race at the height of the disaster.
New Orleans Mayor Mitch Landrieu said BP's attitude about making things right was more important than who is running the company.
"BP, from I think everybody's perspective, made a very bad mistake," he said. "I think what the world expects from BP is an acknowledgment that something was done wrong. I think BP has a long way to go to gain the trust of the people."
Allen, the Obama administration's point man on the spill, indicated that Hayward's departure would not significantly affect the government's relationship with BP as it presses the company to plug the leak, clean up the mess and compensate people harmed by the spill.
"I talk to Bob Dudley when I need to. ... I woke him up on a number of occasions from time to time," Allen said. "The communication is frequent. It also was frequent when Tony Hayward occupied that position. There's no material difference in my level of communication with either one."
Allen said the so-called "static kill" — in which mud and cement are pumped into the top of the well — should start Aug. 2. Because the well is now capped, that effort will be more controlled than a previous failed effort, a "top kill" in which mud was shot into the still-spewing well.
A relief well is nearly complete for the final stage, a "bottom kill" in which mud and cement are pumped in from deep underground. Allen said that work could begin Aug. 7 and could take days or weeks, depending on how well the static kill works.
Delays are possible, though. Tropical storm forecasts last week forced crews to suspend their work about 50 miles off the Louisiana coast for several days. Allen says he'll order an evacuation again if a similar storm forms.
Tony Hayward, the BP CEO who wanted his life back after the travails of the Deepwater Horizon disaster, will be replaced by managing director Robert Dudley on October 1. Hayward was excoriated for minimizing the disaster and complaining about the public outcry. Media reports on the expected transition emphasize that the little-known Dudley is an American from Mississippi, now in charge of BP’s Gulf Coast response. However, there is little reason to expect that the incoming BP CEO will change anything other than the accent. In his public appearances, Dudley has defended Tony Hayward, minimized the toxic threat, and greenwashed BP’s chaotic record:
Describing the dispersant Corexit, a combination of petroleum distillates, propylene glycol, and dioctyl sodium sulfosuccinate:
It is essentially like soap. It’s like dish soap. [PBS Newshour,May 19]
On Corexit, again:
It’s not far off of the toxicity levels of dish soap. [PBS Newshour, July 1]
Dismissing the threat of oil to the Gulf Coast:
We’re not seeing anything like what you see in Louisiana in any of the other states. JUDY WOODRUFF: Yet, you’re saying? ROBERT DUDLEY: I don’t think that’s going to happen, Judy. [PBS Newshour, May 25]
Blaming the blowout preventer for the disaster:
The failure of the blowout preventers, which is the ultimate multiple redundant fail-safe system, has not happened like this before. [CNN State of the Union, May 30]
On Tony Hayward:
I think he’s done a great job of leading a company to stand up and do the right thing. . . . I think Tony’s doing a fantastic job. [Meet the Press, May 30]
Why America needs to let BP keep making huge profits:
I think I would look at some of the process today as just making sure that through that sentiment we don’t actually shoot the dog who is trying to bring home the bone and meet its obligations all across the Gulf, and we are going to be there a long time. [Fox News, June 16]
Whatever Bob Dudley’s roots, he is now, like Tony Hayward, a millionaire living in England with the mission of converting oil into cash. Dudley will return to BP’s London headquarters to run the toxic oil giant, continuing its shareholder-focused gamble on extreme deepwater drilling and catastrophic pollution throughout the world, fromAzerbaijan to Libya.
While BP has taken some heat over its spill in the Gulf, it is remarkable how limited the anger actually is. Many defenders of the company have made the obvious point: It was an accident. BP did not intend to have a massive spill that killed 11 people, devastated the Gulf ecosystem and threatens the livelihoods of hundreds of thousands of workers.
Of course this is true, but it is also true that a drunk driver who runs into a school bus did not intend to be involved in a fatal collision. As a society, we have no problem holding the drunk driver responsible for a predictable outcome of their recklessness. Driving while drunk dramatically increases the risk of an accident. This is why it is punished severely. A person who is responsible for a fatal accident while driving drunk can expect to face many years in jail. Even someone who drives drunk without being in an accident often faces jail time because of the risk they imposed on others.
This raises the question as to why the public seems to accept that the top officials at BP, who cut corners and made risky gambles in their drilling plans, should be able to “get my life back,” as BP CEO Tony Hayward put it. The people who lost their livelihood as a result of BP’s spill will not get their lives back, even if BP does pay compensation. Certainly the 11 workers killed in the original explosion will not get their lives back. Why should the people responsible for this carnage be able to resume their lives of luxury?
There are two separate questions. The first is a narrow legal issue concerning the extent to which Hayward and other high-level executives can be held criminally liable for the accident. It may be the case that the laws are written so that even if companies commit gross negligence that results in enormous harm, including multiple deaths, top officials are not criminally liable. This is a question about the status of current law.
The second question is a moral and economic one about what the laws should look like. From either standpoint, it is very difficult to see why we would want to say that reckless behavior that would be punished with long prison sentences if done by an individual, somehow escapes serious sanction if done as part of a corporation’s pursuit of profit. Do we give a “get out of jail free” card to people when they are wearing the hat of a top corporate executive? This makes no sense.
Just to take the extreme case, suppose that Tony Hayward was racing back to the office after a three-martini lunch in order to prepare the paperwork for a big contract that he had just negotiated. On his way, he hits a school bus, killing 11 children. Would it make sense to absolve him of blame for these deaths because it was the result of his efforts to raise BP profits? And, if that doesn’t make sense, why does it make sense to absolve him of responsibility for the deaths of 11 oil rig workers that were the direct result of his decision to cut corners in order to increase profits?
We can ask the same question about the responsibility of the top executives of the Massey Energy Company, whose shoddy safety practices led to the explosion that cost 29 workers their lives. We should also ask why the top executives of UtahAmerican Energy Company weren’t subject to criminal prosecution when their recklessness led to the deaths of six miners and three rescue workers in a mine collapse in 2007. In these cases and many others the problem was not simply bad luck. In all three cases, the accidents were the direct result of reckless behavior on the part of the management of these companies. They ignored standard safety measures in order to save money.
Of course most acts of recklessness don’t result in fatalities, just as the vast majority of incidents of drunk driving do not end in fatal collisions. Nonetheless, when they are caught, we still punish drunk drivers for their recklessness. This would be a good pattern to follow more generally. The executives of the major oil companies whose clean-up plans for the Gulf of Mexico involved procedures for rescuing walruses would find the matter far less humorous if it involved jail time. Is there any reason it should not?
The problem is that government has been controlled for far too long by soft on crime conservatives. They are willing to look the other way and give break after break to criminals, as long as they are the white-collar types who belong to the best country clubs.
This must come to an end. The country can’t afford special privileges for high-class criminals. It is time to take a tough stand on criminals who inhabit the corporate suites. We have to tell the top executives at BP, Massey, Goldman Sachs and elsewhere that if you can’t do the time, don’t do the crime.
On June 17, after watching BP's oil blowout pollute the Gulf of Mexico for nearly two months, environmental campaigner and fourth-generation Texas shrimp boat captain, Diane Wilson, had had more than enough.
So Wilson seized the only opportunity she may ever have to confront BP chief executive, Tony Hayward, eye to eye, about his "criminal activities" as top dog at the oil giant.
That day, Hayward happened to be giving testimony before the Senate Energy Committee hearings. Wilson, who works with CodePink now, had been on the road and was heading home to Seadrift, Texas, when she heard Hayward would be testifying at the Capitol. "I was coming back to Texas and I found out the CEO of BP was going to be in D.C," said Wilson, in a telephone interview. "I felt compelled to come. I had to see Hayward. I had to. And I did."
But Wilson was not merely planning to be a passive observer, sitting in awe in one of the great deliberative bodies of U.S. democracy.
"I got in and I snuck in some black paint," she said, "and I sat there and waited ‘til he started testifying and then I smeared that paint all over myself, poured it on my hands, and I stood up and told him he should be jailed. He should be jailed, I told him."
"BP is a criminal company that has ignored safety regulations at the health of our oceans and even its own workers," Wilson called out to Hayward and the members of the committee," before she was pounced on by security and hustled out of the hearing room.
"Tony Hayward and BP need to be held accountable for their criminal activities as well as paying every last cent they may have to the families in the Gulf affected by their willful, criminal neglect," she told me, after she was arraigned in federal court on charges stemming from several acts of civil disobedience. "Our message to Obama, and Congress: BP must pay to clean up this mess and our government must move to end offshore drilling and move us into a new century of clean energy."
Now the woman who has been fighting corporate polluters from the Gulf Coast of Texas to Bhopal, India, is facing two years in federal prison and will go before a jury on Aug. 20, which she notes will be "the fourth month anniversary of the oil spill.
"And that's when I'll go to trial for, can you believe, doing unlawful conduct?"
In the Heart of Seadrift
Wilson has been facing off with corporate polluters for many years around the world. Then, in 2006, she learned that she lived in the most polluted county in the United States.
She initiated a campaign against corporations that were covering up spills and dumping lethal toxins on the Texas Gulf Coast. Wilson wrote a book about her experiences, entitled An Unreasonable Woman: A True Story of Shrimpers, Politicos, Polluters, and the Fight for Seadrift, Texas.
"You know, Dennis, I have been fighting, ever since I found out my county was the number one county in the nation for toxic disposal," said Wilson. "We had half the waste generated in the state of Texas was right there in my home town. And we had the largest dolphin die-offs anywhere ...
"We have the largest mercury superfund so I am used to fighting chemical plants, refineries, oil people."
But even Wilson, a fierce fighter for the environment who is usually upbeat and a determined, seemed a bit daunted by the magnitude of the BP oil blowout a mile under the Gulf and the lack of a clear, effective response.
"I have been trying for twenty years to talk to these politicians," she said, "these agencies, the criminal prosecutors, the federal, the state ... and nobody paid any attention. ...
"You know, I got to thinking, I must be crazy, it must not matter. And then now with this nightmare going on that for the first time people are looking at it. And they are saying, you know, is this what they do, is this what agencies do, is this what companies do?
"They lie about the releases, they don't want to give you the information, you know, they don't tell you about worse case scenarios; and you come to find out, this is what has been going on and ... so I was not surprised. I just hated that it could, you know, it really is catastrophic in the Gulf."
Though the oil first befouled the shorelines of Louisiana and Alabama, the brown ooze has now rolled up on the Texas coast.
"I know in the beginning they were predicting it wasn't going to reach Texas," said Wilson. "As a matter of fact, they were saying Texas was going to be kind of a sea bank for fish and that we would have the entire Gulf of Mexico off Texas protected."
"Well everyone I talk to," she said, "even the fisherman from Louisiana, they say it's all just a matter of time. ... We had a Vietnamese fisherman in my home town, and it was right after Hurricane Alex hit Brownsville ... with all the high tides and the rain, and everything, he went out in the Gulf and he said - this was mid-Texas Gulf Coast, and he said it was covered in dead fish. It was small fish, big fish, he said it was everywhere.
"He couldn't figure out what was going on and quite frankly I don't think anybody knows. There is too much that people just find out bits and pieces."
Wilson was outraged at how the government agencies dropped the ball and trusted BP to lead the clean-up and rescue effort itself.
"They were not reporting leaks," said Wilson. They "had no type of response plan. Their clean-up program was totally non-existent. Now it has happened, you know, the unthinkable, I mean the worst-case scenario, that these companies will tell you will never, never, never happen: It happened."
The frustrated activist-turned-author said people "are just sitting' and waiting' for it to happen. It's kind of like sitting there watching Katrina on the TV set and you just see it get bigger and bigger and bigger, worse one day after the next...and just watching it happen.
"I think a lot of people have no idea what to do. The answer to almost every question, is ‘we don't know'."
Wilson's latest nightmare scenario is that the toxic pollution won't just kill off some fish, birds and other animals but entire species, turning the Gulf of Mexico into a mass graveyard. She said:
"They never thought it would put at risk the entire species of shrimp or crabs or fish, and when you start messing with that, when you start messing with the sea plankton, and ... you're messing with the food chain.
"You might, I think, for the first time you might see the end of it. And I think it's like they have cob webs in their heads, and they keep trying to shake them off and not believing it. I have a hard time believing' it too."
Wilson's strong will to stand up to BP CEO Tony Hayward and put her body on the line, including doing jail time, is explained by her love of the Gulf, of the region where, for generations, her family lived and thrived off the riches of the sea.
"I was just outraged," she said of her confrontation with Hayward. "That was the first I saw the face of the man who represented the destruction of my home out there. You know, my family has been out there for a hundred years in that town. A hundred years, and it's like seeing it go.
"And he somehow represented to me everything that BP was doing. And so I was directing it to him. I kept calling him Tony. I said, ‘Hey, Tony, you need to go to jail'."
LONDON — BP denied on Monday that its chief executive Tony Hayward was set to resign over the Gulf of Mexico oil spill which is costing the embattled British energy group about four million dollars an hour.
Russian Deputy Prime Minister Igor Sechin, preparing to meet Hayward on Monday, said the British boss was to resign and present a successor, Russian news agencies reported.
But a BP spokeswoman insisted that Hayward was not stepping down.
"Tony Hayward remains chief executive and is not resigning," she told AFP.
According to the Interfax and RIA Novosti news agencies, Sechin said that "Hayward is leaving his post and will present a successor".
Hayward was due in Moscow on Monday to meet Sechin, the Russian government's energy supremo, as the oil giant wrestles with the liabilities from the Gulf of Mexico oil spill.
Hayward, who has faced severe criticism from US President Barack Obama over his handling of the crisis, last week handed over management of the oil spill to another senior manager, Bob Dudley, who is a US national.
He received much criticism for complaining to the media about wanting his "life back" and for participating in a yacht race.
BP on Monday raised the cost so far of its oil spill in the Gulf of Mexico to 2.65 billion dollars, an increase of about 300 million dollars over the weekend.
"The cost of the response to date amounts to approximately 2.65 billion dollars (2.14 billion euros), including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs," BP said in a statement.
"It is too early to quantify other potential costs and liabilities associated with the incident," it added.
The costs for BP are rising sharply on a daily basis. On Friday the bill stood at 2.35 billion dollars.
That works out at about 4.0 million dollars an hour on the basis that the figures were given three days apart.
But these figures are a drop in the ocean compared to the billions of dollars wiped off its market value.
BP's share price has collapsed by more than 50 percent since the Deepwater Horizon oil rig which the company operated sank on April 22, two days after a blast killed 11 workers.
The shares hit a 14-year low point on Friday but won back some ground with a gain of 3.10 percent to 314 pence in Monday trading.
After coming under intense pressure from Obama over the worst ever US environmental disaster, BP has agreed to suspend its shareholder dividend and create a 20-billion-dollar fund for costs arising from the spill.
BP is also selling non-core assets to raise 10 billion dollars, while international ratings agencies have downgraded the company's credit worthiness.
Although Obama has vowed to hold BP accountable, the president has agreed with British Prime Minister David Cameron that the company should "remain a strong and stable company".
"The leaders agreed that BP should meet its obligations to cap the leak, clean up the damage and meet legitimate compensation claims," Cameron's office said in a statement issued after the meeting held before the G20 leaders' weekend summit in Toronto, Canada.
"They also agreed that it was to both countries' advantage for BP to remain a strong and stable company," Downing Street added.
A senior US administration official added that both leaders had agreed "BP has certain obligations and that those obligations have got to be met".
On Friday, Cameron warned against the "destruction" of the company, saying it was "important for all our interests".
Despite desperate efforts, BP is still not capping all of the 35,000 to 60,000 barrels of oil estimated to be spilling into the sea every day, saying it is managing to contain about 25,000 barrels daily.
BP chief executive Tony Hayward, often criticized for being tone-deaf to U.S. concerns about the worst oil spill in American history, took time off Saturday to attend a glitzy yacht race off England's Isle of Wight.
Spokeswoman Sheila Williams said Hayward took a break from overseeing BP efforts to stem the undersea gusher in Gulf of Mexico to watch his boat "Bob" participate in the J.P. Morgan Asset Management Round the Island Race.
The one-day yacht race is one of the world's largest, attracting hundreds of boats and thousands of sailors.
In a statement, BP described Hayward's day off as "a rare moment of private time" and said that "no matter where he is, he is always in touch with what is happening within BP" and can direct recovery operations if required.
That is likely to be a hard sell in Gulf states struggling to deal with the up to 120 million gallons of oil that have escaped from a blown-out undersea well.
A pair of relief wells that won't be done until August is the best bet to stop the massive spill that was set off by an oil rig explosion that killed 11 workers on April 20. BP has been hammered for its response, in part because of comments by Hayward that Gulf Coast residents horrified by the spill consider insensitive.
By late June, the oil giant hopes it can keep nearly 90 percent of the flow from hitting the ocean. Coast Guard Adm. Thad Allen on Friday said a newly expanded containment system is capturing or incinerating more than 1 million gallons (3.8 million liters) of oil daily, the first time it has approached its peak capacity.
British environmental groups immediately slammed Hayward's outing. Charlie Kronick of Greenpeace said Hayward was "rubbing salt into the wounds" of Gulf residents whose livelihoods have been wrecked by the disaster.
"Clearly it is incredibly insulting for him to be sailing in the Isle of Wight," he said.
Hugh Walding, the coordinator of the Isle of Wight Friends of the Earth, said Hayward's choice of venue was sure to arouse anger.
"I'm sure that this will be seen as yet another public relations disaster," Walding said.
Hayward's public persona has already dented the company's image. Hayward angered many in the United States when he was quoted in the Times of London as suggesting that Americans were particularly likely to file bogus claims. He later shocked residents in Louisiana by telling them that no one wanted to resolve the crisis as badly as he did, adding: "I'd like my life back."
On Thursday, Hayward told lawmakers on a U.S. House investigations panel that he was out of the loop on decisions surrounding the blown well. Both Democrats and Republicans were infuriated when he asserted, "I'm not stonewalling."
The next day, BP Chairman Carl-Henric Svanberg seemed to suggest that Hayward was being withdrawn from the front line of the oil spill response, although his comments were later qualified by company spokespeople.
"It is clear that Tony has made remarks that have upset people," Svanberg said in a U.K. television interview.
It was not clear whether Hayward actually took part in Saturday's race or attended as a spectator. Williams refused to comment beyond saying that the embattled chief executive was there with his son.
Peta Stuart-Hunt, a press officer for the event, said Hayward "wasn't listed on any of the crew list." She said she could not immediately who was on the crew list.
"If he is on the boat, he's in contravention of the rules," she said.
The BP oil spill has put many Republicans in a precarious position – they’re understandably relishing the opportunity to portray President Obama as feckless and weak, but are worried that the crisis is making their pals in the oil industry look pretty bad.
Most of them have steered clear of this quandary by either solely attacking the Obama administration for its belated and inept response to the crisis or by even acknowledging that BP was a particularly bad apple within the oil industry. After all, smart GOP operatives understand that Americans are just as pissed off at big business as they are at the government and that the GOP will blow its chance to retake Congress this fall if it can’t control its authoritarian impulse to hump corporate America’s leg.
Thankfully, though, not all right-wingers have the message discipline of your typical GOP campaign manager and many of them have dutifully gone to bat for our economic overlords at BP. This Thursday, Rep. Joe Barton actually apologized to CEO Tony Hayward for the White House's arrangement with BP to establish a $20 billion fund to pay for damages in the Gulf. If Democrats are smart they'll put the spectacle of a GOP congressman apologizing for America to a British company to good use. Imagine pictures of dead birds and unemployed fishermen with the following voiceover:
"Joe Barton has apologized to BP, apparently worried that Her Majesty would be upset for criticizing a company of the Crown. Is this what our Founding Fathers fought and died for? So that Republican Joe Barton could bow before the Queen of England?"
Earlier this week, high-profile spillologist and Mississippi governor Haley Barbour said that “It’s just as possible that what happens here will be manageable and of moderate and even minimal impact.” Barbour further went on to caution against “washing our face in it” but said the spill could still render the ocean safe enough to allow “jumping off the boat to ski.” Perhaps Barbour is trying to attract more Satanists to come visit his state, since I’m sure they’re the only ones who would find water skiing amidst dead dolphins appealing.
But wait, it gets worse for our pal Haley! When the Obama administration did something useful and scored the escrow account, Barbour expressed “concern” that the fund could cut into BP’s profits. Hey Haley, that’s sort of the point. As any student of Econ 101 knows, firms respond to incentives. And if we can take away oil companies’ incentives to be reckless buffoons that destroy entire ecosystems, well, that’s a pretty good thing.
(On the plus side, Barbour’s reaction was still saner than Michele Bachmann’s, as the Tea Party star called the escrow account a “redistribution of wealth fund.”)
The Republican Study Committee issued a statement slamming the fund, with Rep. Tom Price accusing the administration of "Chicago-style politics" and seemingly scolding BP for agreeing to sort of take responsibility for their actions. Said Price, "BP's reported willingness to go along with the White House's new fund suggests that the Obama administration is hard at work exerting its brand of Chicago-style shakedown politics. These actions are emblematic of a politicization of our economy that has been borne out of this administration's drive for greater power and control."
Rush Limbaugh somehow managed to make it about ACORN: "Who's gonna get this money? Union activists? ACORN people? Who's gonna get this money?"
The wingnuts have been valiantly defending the poor oil giant for a while now.
Pundit Tony Blankley got the ball rolling at the National Review last month by crying about Interior Secretary Ken Salazar’s declaration that he intended “to keep the boot on the neck of British Petroleum.” Blankley found this statement to be disturbingly totalitarian, comparing it to the image of a boot stepping on the face of humanity used in Orwell’s 1984. Such a hostile tone, reasoned Blankley, was not the proper “attitude toward a respected member of the corporate community.”
Never mind that this respected member of the corporate community owns two refineries that accounted for 97 percent – yes, 97 percent – of all flagrant safety violations found in the refining industry over the last three years. Also never mind that BP has blatantly and knowingly lied to the public about the size of the disaster by a factor of more than 14. And finally, ignore the fact that BP has a long history of disregarding even its own safety standards and of pressuring its employees to keep their mouths shut about safety violations. No, none of this matters: in the Randroid world of economic royalism, any company that makes ungodly sums of money must by nature be run by morally superior individuals who deserve honor and respect from the little people who greedily sponge off their productivity.
This “BP Shrugged” attitude was on full display in a recent post by Pajamas Media’s Matt Patterson, who said the BP disaster should not be blamed on the company responsible for causing it but rather on the dastardly environmentalists who put so many terrible restrictions on our free enterprise system in the first place.
“Finding and extracting oil from the earth ranks among the most dangerous of occupations,” he whined on behalf of the world’s 10th-richest company. “And thanks to regulations and pressure from environmental groups, oil companies are largely prevented from seeking new oil reserves near U.S. coasts, forcing them out into deep water where the dangers and complexities of an already dangerous and complex business increase one hundred-fold.”
Patterson concluded his bold defense of the oil giant by acting like an unpaid BP flack in trying to minimize the damage the spill would cost, comically asserting that “we would do well to remember that oil is as natural as water, and regularly seeps into the oceans naturally in quantities many times the size of the Deepwater Horizon spill” and that “the ocean can handle the oil.” You hear that, you crybaby fishermen? Oil is just as natural as the seafood you used to catch! Use your rational self-interest and come up with a way to make oil taste good! If people like eating jumbo shrimp, there’s no reason they can’t love eating globs of petroleum as well!
The Weekly Standard’s Andrew Wilson similarly sought to minimize the damage of the spill by resorting to General Buck Turgidson’s patented “it was just a single slip-up” defense.
“Until the explosion on April 20 that destroyed the Deepwater Horizon rig, oil companies had experienced only one significant spill in drilling hundreds of wells in the Gulf over a period of more than 60 years, including many in ultra-deep water,” he wrote. “It has taken just one disaster to call an exceptionally good safety record into question.”
Yeah, c’mon you guys! BP only destroyed one teensy little Gulf Coast! We’ve still got the whole Pacific Ocean to play with!
What all of these arguments share in common is their bizarre faith that BP is run by beings with superior intellects who are the only people in the world smart enough to plug the oil well they blew up. Harrison Schmidt at Pajamas Media painted BP as a noble group of besieged rugged individualists who could have certainly figured out how to clean up their own mess by now if not for the irrational and angry clamoring of the leaching federal government.
“It has been left to BP engineers and managers and to Gulf state officials to respond as best they can in a regulatory environment that is politically charged, incompetent, fearful, and hesitant,” he fumed. “Rather than allowing BP to stay focused only on solving the problems of the spill, Attorney General Holder now has launched a civil and criminal investigation! And let’s then follow with sending an unsupported bill to BP for $69 million!”
Heaven forbid we cause the people who destroyed the Gulf Coast any discomfort! Similarly, Blankley said that the government had meanly isolated an invaluable “partner” in trying to clean up the Gulf Coast while chiding Homeland Security Secretary Janet Napolitano for “not be able to navigate a dingy across a yacht basin.”Anne Applebaum at the Washington Post accused Democrats of being “downright hostile” to the private sector and said that putting public pressure on BP to do more to clean up the spill was counterproductive since “BP's shareholders have already lost billions of dollars and BP's executives are motivated to find solutions faster than anyone in the White House ever could.”
It’s too bad that this sort of rational self-interest didn’t kick in earlier, back when the company was flaunting its own safety regulations to avoid paying for a protective liner in the well that would have cost a mere pittance compared to what the company will now have to pay for the Gulf cleanup. Why, it’s almost as if rampant greed isn’t producing optimal economic outcomes anymore! Who would have thought that would ever happen!
It was the Weekly Standard’s Wilson who took the “BP-as-Nietzschean-Supermen” meme to hilarious new heights, however, by declaring that the company’s own rational self-interest negated the need for any sort of government regulation.
“Clearly, it does not occur to [Obama] that the oil companies have a powerful motive to self-regulate,” he bitterly complains. “In light of the physical threat to their own workers and the huge potential damage to the long-term viability of their companies that awaits anything less than an exceptional safety performance.”
Ah, yes. If there’s one industry that comes to mind when I think of socially conscious, pro-labor policies, it’s the oil industry.
What these noxious defenses of BP reveal is the true elitism that lurks behind the phony populism of today’s Randroid right. After all, it was none other than Tea Party darling Rand Paul who called Obama’s mildly critical comments on BP “un-American,” since the Founding Fathers would have apparently frowned upon criticizing the actions of British companies. Alaska Senator Lisa Murkowski, meanwhile, has gone beyond rhetoric and took direct action to block a bill in the Senate. And it’s not at all surprising that BP has desperately reached out to former Bushies to help boost its public image, including Dick Cheney’s former press secretary Anne Womack-Koltan and former chief-of-staff Josh Bolten.
In other words, all the angry populism espoused by the Tea Party over the past two years cannot cover up an eternal political truth: When the rich say, “Hump!” the GOP says “How hard?”
BP's chief executive is being grilled by a congressional committee this afternoon. Follow the action with Andrew Clark as Tony Hayward defends his company's handling of the Deepwater Horizon oil spill
Protesters stand behind BP's chief executive, Tony Hayward, as he arrives on Capitol Hill to testify before the House Oversight and Investigations sub-committee on the Deepwater Horizon oil spill. Photograph: Haraz Ghanbari/AP
9.26pm: Henry Waxman's moving in for the kill. He finds it shocking that when the potential consequences of a mistake on a rig are so enormous, Hayward seems so "removed" from the operations on the Deepwater Horizon platform. Where were the best minds in BP paying attention: "You were oblivious and so were other BP officials. I think this was a fundamental mistake in management."
Hayward says the focus of top executives was safety. What his team can do is ensure the right people are in places, the right processes are in place, that proper equipment and safeguards are in place: "I believe the right people were making decisions."
9.24pm: Everybody's had a turn to ask questions now. A few members have quick "follow-ups". So we're nearing the end. Hayward looks doleful, like a dog that's been repeatedly kicked. Deservingly or otherwise.
9.22pm: Hayward says the "integrity rating" of the failed Halliburton blowout preventer in the oil well was "of the order of ten to the minus five, ten to the minus six". He says: "That is to say, it was designed to fail between one in a hundred thousand and one in a million times."
Castor expresses surprise that this is considered an "acceptable risk".
9.18pm: Karhy Castor, a Democrat from Florida, wants to start out by expressing the "anger and frustration" of all the mom and pop businesses of her state at this "sucker punch", which she reckons is a consequence of BP placing "profit over safety". No jumping to conclusions there, then.
9.15pm: The New York Times points out that a satirical website has sprung up,www.joebartonwouldliketoapologize.com, to celebrate Republican congressman Joe Barton's apology to BP for the White House's "shakedown" - and for his subsequent apology for his apology. The site notes that Barton would also like to apologise to Osama bin Laden, Kanye West and to the England football team for depriving them victory last week.
9.11pm: A cheap shot? Congressman Jay Inslee says BP's investment on "safer offshore drilling technology" is about $10m annually - about 0.0033% of BP's revenue: "That doesn't sound like an adequate prioritisation. How does it compare to your compensation?"
Hayward isn't taking this lying down: "In what respect?"
He adds that his comp was $6m.
8.57pm: Hayward is asked if he thinks Obama's six-month moratorium on offshore drilling is reasonable
He replies: "I believe it is prudent for the industry to take stock of what has happened here before it moves forward."
Congressman Charles Gonzalez wants to know when it would be appropriate to lift the moratorium. Hayward vaguely says it should be lifted when everybody understands the causes of the spill.
8.49pm: Scalise is frustrated: "If it's not you that's blocking it, you need to go tell somebody that it's being blocked. Because it's being blocked." He says Louisiana does not have the luxury of time on sand barriers or on things like salvage of seafood.
Hayward: "I understand your concern and your anger."
8.47pm: A Louisiana Republican, Steve Scalise, has a prop - he holds up a picture of an oiled pelican. He wants to know why it's taking so long to enact Bobby Jindal's plan for sand barriers protecting the Louisiana coast.
Hayward blames the federal government, saying "ultimate approval" lies with the administration.
8.44pm: Eliot Engel, a New York Democrat, wants to know how the US can be certain that what happened at the Macondo well won't happen at BP's hundreds of other wells in the Gulf of Mexico.
"The other wells have all been completed and are secure," says Hayward.
Engel asks if that's the same type of assurance that Hayward gave when he promised a "laser-like" focus on safety. Much heat, no light. Engel hits out: "I, like everyone else here and everyone else in America, am thoroughly disgusted. I think you're stalling, I think you're insulting our intelligence and I really resent it."
8.39pm: Stearns wants to know if Hayward was briefed about Halliburton warning of gas surges in the Macondo well. Hayward says he wasn't informed of this.
"I had no prior knowledge of this well prior to the incident whatsoever," says the BP boss.
Stearns wonders if Hayward would have been fired if he was the captain of a ship that crashed into New Orleans, killing 11 people and spilling lots of oil. Has anybody at BP been fired as a result of this incident? Hayward: "Not so far."
8.36pm: A comedian. Cliff Stearns, a Republican from Florida, says Hayward doesn't seem to be able to answer many questions - so he has an easy one: "Is today Thursday?"
Hayward (unamused): "It is Thursday."
Getting serious, Stearns asks if the oil spilt on the coast of the Gulf of Mexico is a consequence of BP's reckless behaviour.
"It is a consequence of a big accident."
Stearns: "Yes or no - reckless behaviour or not?"
Hayward: "There is no evidence of reckless behaviour."
Stearns: "You're saying BP has had no reckless behaviour?"
Hayward: "I have seen no evidence of reckless behaviour."
8.33pm: Welch asks about resignation. He wants to know if Hayward still enjoys the confidence necessary to act as chief exec, given the loss of $100bn in shareholder value, the suspension of BP's dividend and the damage caused to the Gulf.
Hayward replies: "I'm focused on the response. I'm focused on trying to eliminate the leak, trying to contain the oil on the surface, defending the beaches, clean up the spill and restore the lives of people on the Gulf Coast. That's what I intend to do."
8.30pm: BP's boss goes a little further in defending decisions on the Deepwater Horizon. Asked about the small number of centralisers keeping the drilling pipe in place, Hayward says "more doesn't always mean better". And asked by congressman Peter Welch about the use of saltwater, rather than heavier drilling fluid, to flush out the well, Hayward says: "The procedure that was used to displace mud was a procedure not uncommon in the industry. it was a procedure approved by the Mineral Management Service."
8.27pm: Good stuff from Peter Welch, a Democrat, who lists, one by one, all of BP's past accidents in the US. Is it true that BP's Texas City refinery blew up in 2005, killing 15 people? Is it true that BP's pipelines leaked in Alaska the following year? Is it true that BP was fined $370m by the US department of justice?
"That is correct," Hayward glumly replies to each one.
8.24pm: Hayward is accused of a "real detachment, a real disconnect" by Betty Sutton, a Democrat. She says: "When push came to shove on the Deepwater Horizon, the company's concern appeared to be the bottom line."
She wants to know who was responsible for decisions on the rig: "Mr Hayward, as the leader of the company, don't you have to take responsibility?"
Hayward: "I am absolutely responsible for the safety and reliable operations of BP. That is what I have said all along."
8.20pm: Texas Republican Joe Barton asks: "Based on what you now know, do you agree that this accident was preventable?"
Hayward: "I believe that all accidents are preventable, absolutely."
Then, bizarrely, Barton apologises for his earlier apology to BP. Barton, something of a conservative maverick, said at the beginning of the hearing that the oil company was the victim of a White House "shakedown" and had been obliged by the Obama administration to set up a $20bn "slush fund" for compensation. Barton now says he believes BP was responsible and should be brought to account for the accident - and that he apologises if anything he said earlier had been "misconstrued".
8.12pm: Christensen notes that Hayward has described BP as "a responsible party" for the accident, not "the responsible party". Does he think there are others?
Hayward: "The government has named four responsible parties - BP, Transocean, Mitsui and Anadarko."
Mitsui and Anadarko were minority shareholders in the well, where BP had a 65% stake. Transocean owned and managed the rig that was leased for the operation.
8.09pm: A piece of masterly understatement. Donna Christensen, a delegate from the US Virgin Islands, asks Hayward if he surprised somebody didn't take a decision to shut down the Deepwater Horizon drilling platform earlier.
"I think in the light of what we now know, it is perhaps surprising that someone didn't say that they were concerned," replies the BP boss.
8.05pm: Hayward is asked if BP shouldn't have had "failsafe mechanisms" in case of a massive oil leak. He says Halliburton's faulty blowout preventer, which was supposed to cut off oil in the event of the accident, was intended to fill this role.
"We believed that the blow-out preventer was the ultimate failsafe mechanism. That clearly wasn't the case in this instance."
Hayward says blowout preventer failed three times - when it was activated from the drilling rig, when the drilling rig separated from the blowout preventer and when undersea robots tried to activate it a day later. That's another clear signal by BP that it feels contractors share the blame for the accident.
7.59pm: Did BP force Deepwater Horizon rig workers to sign legal disclaimers before allowing them to go home after the explosion on the platform?
Hayward says his company wasn't responsible, appears to blame Transocean: "I think it's inappropriate and it was nothing to do with BP"
7.57pm: Jan Shakowsky, a Democrat, notes that Hayward says he was "personally devastated" by the Deepwater Horizon disaster: "Probably not as devastated as the widows that testified for our committee." Ouch.
She quotes one of the widows, Natalie Roshto, who says two BP execs came to her husband's memorial service and "never extended a hand, a hug, never extended a word of sorrow". Were only interested in where they were sitting.
"I'm devastated by the accident, absolutely devastated," says Hayward. "I feel great sorry for the people who werte impacted by it. But the people who were killed by the accident were not employees of BP, they were employees of Transocean and other contractors."
Hayward says Transocean and the other companies involved made it clear to BP that they wanted to deal with the families themselves.
7.51pm: Hayward says he'd be "very surprised" if his chief operating officer, Doug Suttles, or head of exploration and production, Andy Inglis, were involved in decisions about the design of the leaking Macondo oil well.
The BP boss is playing a dangerous game by declaiming all responsibility for what went on at the rig. He's not exactly inspiring confidence in his senior leadership team.
Mike Doyle, a Pennsylvania Democrat, reminds Hayward that he's not running a department store, he's running an oil company with "life or death" decisions. Doyle wonders if running an oil company might be a good career option - it pays better than being a Congressman and doesn't seem to involve much work: "Those of you at the top don't seem to have a clue what was going on at this rig."
7.46pm: Diana DeGette, a Democrat, draws a bit of blood by highlighting an email in which a BP engineer responded to concerns about the design of the Macondo well by glibly remarking: "Who cares, it's done, end of story, it will probably be fine."
Hayward says: "I think that email is a cause for concern. I'd like to understand the context it was sent. As I've said before, if there's any action that people put cost ahead of safety, we will take action."
The BP boss denies being told by lawyers to evade answering Congressional questions.
7.41pm: Did anybody inform Hayward about a now notorious internal BP memo back in April describing the Deepwater Horizon drilling operation as a "nightmare well"?
"They did not," says Hayward, who says the first he knew of it being a "nightmare well" was when investigators from the Congressional committee drew the memo to his attention.
7.37pm: Does Hayward think BP was "shaken down" by the White House to set up its $20bn compensation fund, an Iowa Democrat, Bruce Braley, wants to know.
Hayward doesn't exactly say no, but neither does he say yes. He says of the meeting at the White House: "We came together to figure out a way of working together to figure out a way to resolve a very, very serious situation."
So, Braley asks, is the $20bn pot of money a "slush fund" as Republican Joe Barton has controversially described it?
Hayward says the fund is "a signal of our commitment to do right", to make sure that fishermen, charter boat captains, property owners are made whole. He adds: "I certainly didn't think it was a slush fund, congressman."
7.31pm: Strongest semi-rebuttal from Hayward so far: "There's nothing I've seen in the evidence so far that suggests that anyone put costs ahead of safety. If there are, then we'll take action."
Phil Gingrey, a Republican from Georgia, wonders whether, if Hayward was physically present on the rig, he would have made the same decisions concerning the design and the casing of the well.
Hayward: "I'm not a drilling engineer so I'm not actually qualified to make those judgements. better people than I were involved in those decisions in terms of the judgements that were taken."
Gingrey: "With all due respect, Mr Hayward, I think you're copping out. You were the captain of the ship."
Frustrated, the congressman adds that the buck stops on Hayward's desk: "It seems like your testimony has been way too evasive."
7.28pm: A Democrat, Ed Markey, is tackling Hayward on the contentious issue of underwater plumes of oil. To date, BP has been sceptical about the presence of "plumes", insisting that the spilt oil is largely on the ocean surface. Markey cites BP's own water sampling and asks: "Are you now, once and for all, prepared to conceded that there are subsurface plumes?"
"There's oil in very low concentrations, 0.5 parts per million, distributed throughout the column," says Hayward. "Some of it is related to this spill, other parts are related to other oil in the water."
Markey asks if he's therefore saying that he doesn't recognise the term "plume".
Hayward: "I'm not an oceanographic scientist. What we know is..."
Markey interrupts: "I'm going to take that as a continuing 'no' from you and your testimony continues to be at odds with all known scientists."
7.19pm: under questioning from Republican congresswoman Marsha Blackburn, Hayward says BP has sought help from all over the place - both our "immediate peers and competitors in the Gulf of Mexico and globally from around the world and across America". Several hundred organisations are involved - the Brazilian energy firm Petrobras, academic institutions, many of the "greatest minds in this country".
7.16pm: We're off again! And Hayward has just been sternly ticked off by chairman Bart Stupak for his evasive answers. Stupak says Hayward was briefed on the topics he'd be facing and ought to be able to offer much more informative responses.
6.07pm: Key points from the first chunk of questioning:
• Tony Hayward says there are seven areas under investigation in a probe into the cause of the Deepwater Horizon disaster: cementing, the casing of the well, pressure measurements, well-control procedures and three issues surrounding a failed blowout preventer.
• As for decisions taken in the run-up to the accident, Hayward refuses to draw judgement until investigations are complete. He repeatedly declines to answer questions about alleged cost-cutting decisions with the refrain: "I can't answer that question because I wasn't there."
• Congressmen are getting irritated and frustrated with Hayward, who was accused by Henry Waxman of "kicking the can down the road" and acting as if he has nothing to do with the company.
• The BP boss says the only knowledge he had of the Macondo well was in mid-April, when he was informed by the head of the company's exploration division that BP had made an oil discovery. He had no other "prior involvement" until the disaster.
5.58pm: Another break. The committee is adjourned for an hour for a further six congressional votes. Bart Stupak tells us they're the last votes of the day and that when they're done, we'll be able to complete the grilling of Hayward without further interruption. Bang, bang, gavel, gavel.
5.55pm: What about a decision not to fully circulate mud in the well – was that to save money and time?
"I can't answer that question because I wasn't there."
How much money and time was saved by not circulating the mud?
"I'm afraid I can't recall."
Hayward offers the same response to every question: he wasn't party to individual decisions. He doesn't know how much money each alleged corner-cutting saved.
5.53pm: Michigan congressman John Dingell is interested in the decision to use single casing for the well, not a "tie-back" method. Was this decision to save money: yes or no?
Hayward says he wasn't involved in the decision and "can't possibly know" the precise reasoning behind it.
What about the decision to use only six centralisers to keep the bore in the middle of the well, not the 21 recommended by Halliburton?
Hayward: "I was not involved in that decision so it's impossible for me to answer that question."
5.49pm: This is shaping up to be extremely testy. Hayward is rigorously sticking to his line that he isn't going to make judgments on what happened on the Deepwater Horizon platform until investigations are complete.
John Sullivan, a Republican from Oklahoma, suggests that the accident wouldn't have happened if Exxon or Chevron were operating the rig. Don't they have more rigorous procedures?
"I don't think we can make that judgment," says Hayward flatly.
5.44pm: Waxman says it appears to him that BP knowingly risked well failure to save a few million dollars. Doesn't Hayward feel any sense of responsibility for these decisions?
Hayward: "I feel a great sense of responsibility for the accident."
Waxman: "How about for the decisions that made the accident more likely?"
The BP chief executive replies that we still need to determine what were the critical decisions. Says he can't "pass judgment" on these decisions at this stage. He says: "I'm not prepared to draw conclusions about this accident until such time as the investigation is concluded."
Waxman is annoyed. He says this is an "investigative committee". Accuses Hayward of "stonewalling" and of refusing to co-operate: "I'm just amazed at this testimony. Mr Hayward, you're not taking responsibility. You're kicking the can down the road and acting as if you have nothing to do with this company."
5.41pm: Hayward is asked about allegedly risky decisions concerning the cementing design of the well, and whether BP ignored warnings. He replies: "I wasn't involved in any of the decision-making. It's clear that there was some discussion among the engineering team and an engineering decision was taken."
Waxman says it's "clear that you don't want to answer our questions" and asks whether Hayward hasn't been involved in engineering throughout his career. Citing an internal document, he accuses BP of using a more dangerous well design called a "long string" to save $7m.
The BP boss isn't having it. Says the document also says the "long string" design would best serve the long-term integrity of the well and that the "long string" design isn't unusual in the Gulf of Mexico. So far, Hayward is being surprisingly feisty.
5.36pm: Now it's Henry Waxman's turn. He's not taking any nonsense. Wants to know "yes or no" whether Hayward has kept his commitment at the time of his appointment to focus "like a laser" on safety.
Hayward says he's made a lot of progress and starts saying he's "distraught" by the Gulf spill. Waxman snaps: "I don't want to know whether you're distraught. I want to know whether you've kept your commitment."
5.33pm: Hayward: "With respect, sir, we drill hundreds of wells around the world."
Congressman Burgess: "I know, that's what's scaring me."
5.32pm: Under questioning by Texan congressman Michael Burgess, Hayward defends the design of the Macondo well, saying there are "many wells" in the Gulf of Mexico with "the same casing design and the same cementing procedures". First sign that he isn't going to take this lying down.
He's not willing to be pressed further on the cementing: "I'm not prepared to speculate on what may or may not have made a difference until such time as the multiple investigations are concluded."
Asked how much he knew of what was happening on the Deepwater Horizon rig, he continues: "The only knowledge I had of the Macondo well was in mid-April when I was notified that we had made a discovery. That was my only prior involvement in the well."
5.29pm: The BP boss tells the committee that his oversight of safety in the company is through a "group operating risk committee", which meets on a bimonthly basis and which reviews safety throughout the global organisation. He says this arrangement is mirrored lower down the business.
5.27pm: Hayward is asked if he expects to be BP chief executive for much longer.
He replies that he's focused on carrying out his responsibilities – BP's "highest priority" is to stop the leak and clean up the oil on the surface of the Gulf of Mexico.
5.26pm: Stupak asks whether should there be a ban on companies operating in the US if they have "miserable" safety and environmental records. He cites BP's Texas City refinery disaster and the Gulf spill.
Hayward doesn't answer directly, just says he's devastated by the accident and that he's focused on "safe, reliable operations". Says he's made progress in changing BP's culture but that there's more work to do.
5.24pm: Stupak: every one of those seven areas dealt with saving money and saving time. Shouldn't leadership at BP be held accountable?
In reply, Hayward keeps repeating vaguely that since he became chief executive, he has focused on "safe, reliable operations" and that investigations are ongoing.
5.22pm: Stupak wants to know if BP managed the risk on the well properly, whether BP cut corners and why rival oil companies said they would have done things differently.
Hayward: We've launched an investigation which has identified seven areas – cement, casing, integrity pressure measurements, well-control procedures and three areas around the failed blowout preventer. That investigation is ongoing.
5.18pm: Stupak bangs his gavel and we're back moving.
5.12pm: Hayward's back in the room and congressmen are beginning to trickle back to their seats, so we'll be up and running again soon.
So a round-up of the main points so far:
• BP's chief executive, Tony Hayward, told Congress he was "personally devastated" by the Deepwater Horizon disaster.
• Proceedings were disrupted by a protester smeared with an oil-like substance who yelled that Hayward should "go to hell" and should be "tarred with a brush".
• A Democratic congressman, Peter Welch, called on Hayward to resign.
• Energy committee chairman Henry Waxman said that in 30,000 documents and emails, there was no sign that BP's top brass paid "the slightest attention" to clear safety problems at the Macondo well.
• But a maverick Republican, Joe Barton, broke ranks to declare BP was the victim of a "shakedown" by the White House. He claimed the company had been forced to set up a $20bn "slush fund" to clean up the Gulf and compensate victims.
4.34pm: Hayward says it's simply too early to say what caused the "incident". There are multiple investigations going on. BP will emerge "stronger, smarter and safer".
Still no questions! Bart Stupak is adjourning the hearing until 12 noon (5pm UK time) so members can go and vote. So after two hours, nothing of substance has been extracted from BP's boss.
4.31pm: My colleague Suzanne Goldenberg, who is in the room, tweets that the protester had a black oil-like substance on her hands and appeared to be hurt as she was wrestled to the ground by cops. She was screaming: "You need to be charged with a crime. You need to go to jail."
4.29pm: The protester has been thrown out, amid quite a furore. Scores of photographers descended on her and she didn't go quietly. The chairman, Bart Stupak, bangs his gavel, says he knows that emotions are running high but that the hearing will be conducted with "proper decorum".
Tony Hayward begins to read his pre-prepared statement, which can be found here. He emphasises that he was "personally devastated" by the death of 11 men on the Deepwater Horizon rig.
4.26pm: A furious interruption. A woman dressed in green has stood up and is yelling that Hayward needs to be "tarred with a brush" and should "go to hell". She is shouting very loudly and is being bundled to the ground by Congressional police. It takes about half a dozen officers to subdue her and drag her out of the room.
4.25pm: Opening statements are finally over. Now Hayward is being sworn in. He stands, raises his right hand and swears to tell the truth.
The BP boss is asked if he wants to be represented by a lawyer. He says: "I do not."
4.22pm: Betty Sutton, a Democrat from Ohio, informs us that she feels "physically sick" when she sees pictures of oil gushing into the Gulf.
Before any quizzing of Hayward, she's already decided that the disaster is a result of BP's recklessness and "come what may, cross that bridge when it comes to it" attitude, which is "outrageous and unacceptable".
4.19pm: First demand of the day for Hayward to resign. Peter Welch, a Democrat from Vermont, says the Gulf accident is "not an aberration" for BP, it's business as usual: "It's deja vu again and again and again."
Welch wants to know whether a CEO of a company that's incurred $370m in environmental fines and who's presided over the destruction of $100bn of shareholder value and the suspension of a dividend can still command confidence.
He asks: "Is it time, frankly, for that CEO, to consider submitting his resignation?"
Not wishing to nitpick but the $370m in fines imposed by the US department of justice in October 2007 were for the Texas City disaster and Alaska oil spill, which happened under Hayward's predecessor, John Browne.
4.14pm: Hayward looks tired and bored. He's slumped forward with his arms on the table in front of him and he keeps blinking extraordinarily slowly.
4.13pm: A voice from the Caribbean. Donna Christensen, delegate from the US Virgin Islands, says BP aren't the only ones at fault – the company couldn't have cut corners on safety "without the complicity of government agencies and regulators". But she can't ignore the fact that if different decisions had been made by BP, the 11 men who died on the Deepwater Horizon rig might still be alive.
I like her Caribbean accent.
4.03pm: An hour on the clock and Hayward still hasn't been allowed to utter a word. We're still on windy opening statements – members of Congress essentially addressing their constituents on television. Not much seeking-after-truth going on yet.
4.01pm: Parker Griffith, an avuncular-looking Republican from Alabama, offers a quirky bit of philosophy to try to put the oil spill in perspective.
"You're never as good as they say you are or as bad as they say you are, so this hearing will go back and forth," he tells Hayward.
Then Griffith goes off on a rather eccentric tangent, declaring: "The greatest environmental disaster in America is cigarettes. 60,000 Americans this year will die from cigarette-related diseases so if we're talking about the environment, let's not leave that out."
He adds: "This is not going to be the worst thing that ever happens to America."
Hmm.
3.55pm: It's quibbling, really, at this point but several bloggers have pointed out that some of the committee members persist in referring to BP as "British Petroleum" – a name that was dropped after BP merged with the American firm Amoco in 1998. John Sullivan, an Oklahoma Republican, seemed to delight in rolling "British Petroleum" over his tongue. No doubt he picked up the habit from the White House's spokesman, Robert Gibbs.
3.50pm: The committee is playing a video of testimony from the widows of two of the 11 men who died on the Deepwater Horizon platform calling for BP's top brass to be held accountable for their actions.
One of them talks of how her family was destroyed: "My family can never, and will never, be adequately compensated for our loss."
3.45pm: For the record, Hayward was paid £4.01m in salary, bonus and share awards last year, up from £2.85m in 2008.
3.44pm: First mention of Tony Hayward's pay package. John Dingell, a Michigan Democrat, thinks it's too high.
"Last year, Mr Hayward enjoyed a splendid 41% pay raise even as BP's profits dropped 45%. I just happen to be a poor Polish lawyer from Detroit but it seems to me this is a curious response to a drop in profits. It makes me wonder what the compensation package of our witness will be this year."
3.40pm: A bit of grandstanding from congressman John Sullivan, a Republican from the oil state of Oklahoma. He reckons the government is using the disaster to put oil companies "out of business" as part of a dangerous leftie agenda motivated by global warming.
"The administration is exploiting this disaster to advance its disastrous cap and trade energy policy," says Sullivan, who says carbon trading will "cripple the economy" and make unemployment lines longer. Hayward remains diplomatically expressionless.
3.37pm: Many of the committee members' chairs are still empty. Seems not everybody turns up to listen to opening statements from each lawmaker. Hayward is sitting at a table alone, facing the lawmakers. He looks a tad lonely.
3.33pm: Ed Markey, chairman of the panel's climate change subcommittee, takes issue with Joe Barton for describing BP's $20bn clean-up fund as a "slush fund".
"It was the government of the United States working to protect the most vulnerable citizens that we have in our country right now - the residents of the Gulf. It is BP's spill but it is America's ocean and it is American citizens who are being harmed."
Markey says victims of the Exxon Valdez spill in Alaska had to wait "years" for compensation, while certain claims from the 1984 Bhopal disaster in India were only settled this week. Markey says people can't wait for things to drag through the courts.
3.26pm: Stupak is picking off some of BP's less admirable public statements – including Hayward's often quoted remark that he wanted the spill halted so he could have his life back.
"We are not small people but we wish to get our lives back," says the Michigan Democrat. "For the Americans who live and work on the Gulf coast, it may be years before they get their lives back."
He adds: "Mr Hayward, I'm sure you'll get your life back and with a golden parachute back to England. But we in America are left with the terrible consequences of BP's reckless disregard for safety."
3.22pm: A Guardian article is being displayed by the committee's chairman, Bart Stupak! The Democrat is interested in a town hall hearing held by Hayward in Houston shortly after he became chief executive in 2007 at which he ordered a streamlining of management to speed up decisions. The Guardian piece, which is here, was subheaded "oil company has become too cautious" and Stupak is worried about BP's corporate culture.
3.15pm: Suddenly a change of tone. BP has a sympathiser in Joe Barton, a Republican from Texas. He says there's a system "built on British traditions" in the US that when people or corporations do bad things, they're held responsible.
However, Barton says he's "ashamed" of what happened in the White House yesterday: "I think it's a tragedy of the first proportion that a private corporation can be subjected to what I would call a shakedown, in this case a $20bn shakedown."
Barton describes BP's government mandated clean-up fund as a "slush fund" created at the behest of the US attorney general. There's no question BP made mistakes, says Barton, but there's a "due process" system that ought to be followed.
Stressing that he's speaking personally, rather than for the Republican party, Barton offers a rather remarkable apology to BP: "I apologise. I do not want to live in a country where every time a corporation does something wrong, it's subject to a political process that amounts to a shakedown."
3.10pm: Waxman continues: "BP's corporate complacency is astonishing."
One of BP's contractors, Halliburton, warned of gas flow problems, an engineer on the project dubbed it a "nightmare well". Waxman says there's a "complete contradiction between BP's words and deeds". He says "BP cut corner after corner to save a million dollars here, a few hours or days there, and now the whole Gulf of Mexico is paying the price."
Tousle-haired Hayward is looking grim. The smile has disappeared.
3.08pm: Henry Waxman, the moustachioed, bespectacled Californian renowned for taking no prisoners, is giving the first opening statement. He starts by commending BP for setting up its $20bn clean-up fund.
He says that when Hayward became CEO of BP, he promised to focus "like a laser" on safety. But complains that in 30,000 documents, there's no sign that Hayward looked closely at risks on the Deepwater Horizon well: "There's not a single email or document that shows you paid the slightest attention to the dangers at this well."
3.03pm: Stupak is banging his gavel and asking photographers to clear off so looks like we're ready for the off.
3.03pm: Hayward's in the room now, making his way to his seat with the ever-present slight smile that seems to infuriate BP's critics. He's being mobbed by photographers. A few protestors are in the room, holding up pink signs with slogans such as "BP kills".
The session is scheduled to run for five hours so we're potentially in for a bit of a marathon. The hearing is being chaired by Bart Stupak, a Democrat from Michigan, who heads the energy panel's subcommittee on oversight and investigations.
ing-bottom: 0px; padding-left: 0px; padding-right: 0px; padding-top: 0px;"> 2.57pm: There's no shortage of advice out there for BP. In the Wall Street Journal,Daniel Henninger muses that the company is looking a little "beaten up" by the Obama administration. He says he can't recall a previous president with "this depth of visceral, antibusiness animosity".
A New York Times editorial says BP is "beginning to ante up" and that its $20bn fund is a step in the right direction.
And in Reuters' Breaking Views column, Neil Collins suggests there's only one man up to the job of chairing BP and winning over angry Americans - the former prime minister Tony Blair.
2.51pm: The action kicks off shortly. Henry Waxman and his colleagues will gavel us in at 10am (3pm UK time). Anybody keen to watch the hearing can do so here on CSPAN's website.
2pm: It's showdown time for BP's chief executive, Tony Hayward, who faces a public grilling today from 35 members of the House energy and commerce committee. It's set to be an extremely tough session for the BP boss, who has variously been dubbed "toxic Tony" and "wayward Hayward" for his occasionally tone-deaf public statements in response to the company's catastrophic oil spill in the Gulf of Mexico.
Lawmakers are understandably disgusted by the environmental damage wreaked since BP's Deepwater Horizon oil rig exploded and sank on April 20. With Congressional elections just five months away, politicians aren't likely to extend much sympathy to BP, despite the company's commitment on Wednesday to set up a $20bn fund for the clean-up and compensation costs.
Hayward's written evidence, which you can read here, seems to strike a suitable contrite note. Hayward says he was "personally devastated" by the oil rig's explosion, which claimed 11 lives. He adds: "I fully grasp the terrible reality of the situation."
