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BP CEO Tony Hayward Testifies on Capitol Hill
Aired June 17, 2010 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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WOLF BLITZER, CNN ANCHOR:--environment, lives, could affect the economy. They shouldn't be able to operate. There should be some regulatory process to make sure they don't.
One of the subtexts coming through this hearing though this morning, brought up by some Democrats and Republicans, where was the federal government? Where was the regulatory process? Why didn't they shut down BP in the Gulf of Mexico if there were serious problems?
GLORIA BORGER, CNN SENIOR. POLITICAL ANALYST: Right. And that's a regulatory problem that the United States has to continue to deal with. And I was looking at something that the acting inspector general for Interior was testifying today. And the testimony said that MMS, which is responsible for all of these inspections --
BLITZER: At the Department of Interior.
BORGER: -- at the Department of Interior, has 60 inspectors in the Gulf of Mexico to cover nearly 4,000 facilities. By comparison, on the Pacific Coast, there are 10 inspectors for 23 facilities. So, you see the lack of inspectors in that particular region. It gives you some sense of the job that they've got to do and the job that they weren't doing.
BLITZER: Yes. It was clearly a regulatory issue, a problem that is now recognized by everyone. The president announcing just the other day that they were breaking up this whole MMS agency in the Department of Interior because they were too cozy with the oil industry.
BORGER: Well, so you combine the coziness with the lack of a number of inspectors, and then you really have a double problem there.
BLITZER: Let me play a little clip of Henry Waxman. He's the chairman of the full committee on Energy and Commerce. This is an exchange he had with Tony Hayward.
(BEGIN VIDEO CLIP)
REP. HENRY WAXMAN (D), CHAIRMAN, ENERGY & COMMERCE COMMITTEE: Let me follow up on that.
We had a hearing earlier this week with CEOs from the other oil companies. They were unanimous in their view that you made risky decisions that their companies would not have made.
And in particular, they criticized your decision to install a long single string of casing from the top of the well to the bottom on April 19th, the day before the blowout. They said this well design choice provided an unrestricted pathway for gas to travel up the well in the annular space that surrounded the casing. And, of course, it blew out the seal.
How do you respond to their criticism? Did BP make a fundamental misjudgment in selecting the single string of casing?
TONY HAYWARD, CEO, BP: I wasn't involved in any of that decision-making.
(CROSSTALK)
WAXMAN: Well, but I want to know your view of it. Now that you know about it, now that you know what your company did, pursuant to your laser request that they be attuned to safety, do you think that was a mistake?
HAYWARD: The original design was surrounded (ph) a long string. It was approved by the MMS.
There was then a discussion in the course in the drilling of the well of whether a long string or seven-inch liner would be most appropriate. That is what I understand based on having looked at the documents and listened to our investigation team. The decision to run a long string, at least in part, was to do with the long-term integrity of the well.
(END VIDEO CLIP)
BLITZER: All right. So, a little flavor of what happened in the early round of questioning right after the opening statement that was delivered by Tony Hayward.
We're standing by. We're getting ready for the resumption of the hearing. The Q&A is about to resume. The chairman, Bart Stupak, of this Subcommittee on Oversight, Investigations getting ready to resume the questioning.
A lot of members still have questions to ask. They each has five minutes to ask those questions. We'll see how many answers are forthcoming in the course of that.
But, Gloria, the other story that emerged today was Joe Barton, the Republican congressman from Texas, really apologizing to BP on behalf of the federal government for what happened to BP at the White House yesterday, when he says they were coerced into creating this $20 billion -- he called it a "slush fund" -- when he says that was totally inappropriate, to have the attorney general of the United States, Eric Holder, at this meeting at the White House for a four- hour meeting, when he's involved in a criminal investigation of BP.
BORGER: Right. And I think those are two separate issues. One is whether this escrow account is indeed a slush fund that they were pushed into doing because they were under a great deal of pressure from the attorney general sitting across the table from them. I doubt that's the case.
The legitimate question I think people are raising is, should the attorney general have been in that meeting when, in fact, his Justice Department is launching a criminal investigation of BP? And that's something that you're going to hear a lot more about from Republicans, who are going to say, you know, it was inappropriate for the attorney general to even be there yesterday because it looked like there could be undue pressure exerted on BP. And the White House has said of course not.
BLITZER: We're checking into the ethics, the legal ethics of this whole question that Joe Barton has raised. Now, politically, he's being hammered, especially, obviously, by the Democrats right now, for saying he's apologizing to the government for getting BP to come up with this $20 billion escrow fund.
BORGER: And the question is, if the government doesn't get BP to come up with a $20 billion escrow fund, does that then mean that the taxpayers ought to be paying that $20 billion?
BLITZER: That's not, obviously, what Joe Barton wanted, but he is raising this issue of the appropriateness of what happened at the White House yesterday. I assume he's going to have some opportunities to resume this dialogue.
The White House, by the way, really going after Joe Barton, issuing a statement. The White House press secretary, Robert Gibbs, saying what he said is simply outrageous. And Eric Holder, the attorney general, defending the conduct of his Justice Department as well, saying there was nothing inappropriate that happened yesterday.
BORGER: Right. And there may not have been. It's just the appearance that, you know, may not have been the greatest picture for them in the world.
BLITZER: All right. Let's set the stage right now.
We're waiting for members to come back into this hearing room on Capitol Hill. They're clearly not there yet. The photographers are there. You see them up front.
Tony Hayward will be coming in. I assume during the course of this hour break that they had, some members going to vote. They also had a little time to have some lunch as well. Tony Hayward is going to need a little sustenance right now.
The questioning will be tough, we expect, not just from Democrats, but from Republicans as well.
Our coverage here in the CNN NEWSROOM will continue right after this.
(COMMERCIAL BREAK)
BLITZER: We're waiting for Tony Hayward to come into the committee room. He's going to resume the Q&A.
The chairman of this subcommittee, Bart Stupak, they took a break to let members go vote, maybe have a little lunch, and now they're going to be coming back momentarily. The questions and the answers will resume.
Tony Hayward, he's really literally in the hot seat right now, trying to answer some questions, but doesn't have a whole lot of answers, even though the committee earlier in the week sent him a seven-page detailed single space letter, basically saying here are the questions we're going to ask you, and he's come forward and he's unable to answer some of these questions, doesn't want to answer some of them. Simply says he doesn't know the answers, wasn't involved in some of the decision-making. Clearly not satisfying answers to members of this committee.
The other part of this story we're following is Representative Joe Barton of Texas, a Republican. Earlier in the day, he caused a stir when he said this --
(BEGIN VIDEO CLIP)
REP. JOE BARTON (R), TEXAS: But I'm ashamed of what happened in the White House yesterday. I think it is tragedy of the first proportion that a private corporation can be subjected to what I would characterize as a shakedown. In this case, a $20 billion shakedown with the attorney general of the United States, who is legitimately conducting a criminal investigation and has every right to do so to protect the interests of the American people, participating in what amounts to a $20 billion slush fund that's unprecedented in our nation's history and has got no legal standing, and which sets, I think, a terrible precedent for the future.
(END VIDEO CLIP)
BLITZER: Republican Congressman Joe Barton of Texas making that blast against the Obama administration.
Congressman Ed Markey, Democrat of Massachusetts, then responded.
(BEGIN VIDEO CLIP)
REP. EDWARD MARKEY (D), MASSACHUSETTS: Not only is the compensation fund that was created yesterday at the White House in an agreement reached between BP and President Obama not a slush fund, and not a shakedown. Rather, 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.
(END VIDEO CLIP)
BLITZER: This committee is about to resume the questioning. There you see Bart Stupak calling the session to order.
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REP. BART STUPAK (D), CHAIRMAN, HOUSE ENERGY AND COMMERCE SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS : -- inability to answer their questions.
We initially wanted to have this hearing last week. However, your staff pleaded with the committee to give you an additional week so you could be adequately prepared for this hearing. And we agreed.
In addition to the extra week, we allowed you to prepare. Chairman Waxman and I sent you a 14-page letter outlining five issues you should be prepared to address in today's hearing. You did not address any of those issues in your opening statement. And thus far, you have responded to our questions with little substance and many claims of not knowing or not being part of the decision-making processes.
You've preached accepting responsibility for actions to your staff in town hall meetings. And yet, you have not yet provided us with direct answers, or taken responsibility thus far today.
I sincerely hope that you will reconsider your approach to these questions. I hope you will be more forthcoming and less evasive with your answers for the remainder of this hearing.
We are done with (INAUDIBLE), so we should be able to get through the rest of this hearing. And we'll probably go a second round, because members do want to push you on some of these issues.
You're the CEO, great experience. You've got a Ph.D. You've been head of exploration. You know what's going on.
We hoped that we'd have more candid responses to our questions.
And with that, let me turn it to Ms. Blackburn for questions.
Five minutes, please.
REP. MARSHA BLACKBURN (R), TENNESSEE: Thank you, Mr. Chairman.
And, indeed, Mr. Hayward, we are a little bit frustrated with hearing you say you were not a party to certain decisions, or were not in that chain of command, or that you can't comment because of ongoing investigations. So, I'm going to try a little bit different tact, because I do want to get some answers and get some of these questions answered.
I want to go back to the safety issues. I mentioned that in the opening statement to you.
I'm one of those individuals that grew up down on the Gulf Coast and then moved away. I'm familiar with people working off shore, if you will. And what I would like to know from you, have you been briefed on the safety issues and the safety concerns? And then, if you were a part of the decision-making process on what would be considered the best operating practices, were you a part of the chain of command? And what is the chain of command for dispute resolution when there's a difference about how to approach safety?
Go ahead. I would love your response.
HAYWARD: Well, I clearly am the ultimate in the chain of command. But as I've said, I wasn't involved in the decision-making on the day.
BLACKBURN: OK. Let's do this then -- if you were not involved in the decision-making of how safety is approached on these rigs and platforms, would you submit to us in writing for the record a description of what that chain of command is and what the process is when there's a difference of opinion on how you approach rig safety? Would you be willing to submit that? And I will ask you and your team to submit that for the record.
In addition, since becoming CEO, have you been briefed on the significant safety incidents that have occurred in BP's explorations, Alaskan production facilities, over the past year? Have you been briefed?
HAYWARD: I have discussed those issues at the Group Operating Risk Committee.
BLACKBURN: As a result of these briefings, did you authorize any changes to BP policies and practices for dealing with the safety?
HAYWARD: We took actions in Alaska to change both the organization and some of the processes.
BLACKBURN: Thank you.
Since the Deepwater Horizon incident, have you made changes? And what are those? Will you submit these to us for the record?
HAYWARD: We have made changes to our testing procedures on BOPs. We have made changes to the intensity with which well site leaders are aware of well control procedures and a variety of other interventions that are predicated on what we have learned from the incidents so far. And as we learn more, we will make more changes as we deem appropriate. And I would be very happy to submit to you, Congresswoman, the details of the changes that we've made.
BLACKBURN: Thank you.
Did you ask other companies for help in cleaning up the BP oil spill? You know, last week for the hearing, we had several different companies. Did you all approach other companies or either other countries and ask for their help and their expertise in plugging that leak and in participating in the cleanup? HAYWARD: We've sought help from both our immediate peers and competitors in the Gulf of Mexico, and globally from around the world, and across America. There are several hundred entities involved in the effort. All of them major operators in this country, major operators from elsewhere in the world, such as PetroGas. Many of them major academic institutions in this country.
Some of the greatest minds in the country are involved in trying to deal with this problem.
BLACKBURN: Did they participate at your invitation or the government's invitation?
HAYWARD: They participated in the first instance at our invitation. And subsequently, the federal authorities brought some of the great academic institutions in this country to bear.
BLACKBURN: OK.
Are you currently -- is BP currently working on industry-wide efforts to look at rig safety?
HAYWARD: We have made recommendations to the MMS with respect to the things that we've learned so far, particularly with respect to blowout preventers. And we will continue as we learn what the realities of this accident are to make our recommendations to the relevant authorities. And I believe that in the course of the coming months, the industry will work together to determine what is the best way forward.
BLACKBURN: We hope that you are working together, because I hope you understand our frustration when you have stated before safety would be a priority for BP. And we expect you all to take action on lessons learned.
And when you tell us that you're taking that action, and then you return because of what has occurred, Mr. Hayward, I cannot even begin to tell you how disappointing it is to us that you are saying -- and you mentioned actions and words in your testimony, but, sir, you are giving the rhetoric. What we want to see going forward is the action, that, indeed, you have learned these lessons, that BP has learned these lessons, and that you are going to share these best practices with the industry. That would be very helpful.
Thank you for being before us today.
I yield back.
STUPAK: Thank you, Gentlelady.
Mr. Hayward, you indicated that you made recommendations on the blowout preventer -- your company has. Would you provide those to this committee?
HAYWARD: We certainly can, Chairman.
STUPAK: Next, let me turn to Mr. Markey for questions.
MARKEY: Thank you, Mr. Chairman.
Mr. Hayward, the existence of large clouds of -- or plumes of oil suspended deep beneath the ocean surface are of concern because the toxic oil and dispersants can poison the aquatic plants and animals, and they also consume oxygen, potentiality asphyxiating marine life.
On May 30th, you stated that your samples showed no evidence of such plumes. On June 7th, in a response to my letter, BP again denied the plumes existed, citing a BP document saying that there is no coherent body of hydrocarbons below the surface. Even after NOAA Administrator Jane Lubchenco confirmed the plume's existence on June 8th, your COO, Doug Suttles, went on national television and continued to deny their existence.
These are photographs presented to us on the committee by Dr. Samantha Joye of the University of Georgia, who has sampled the deep water of the Gulf and found such plumes. On the right, there is a filter, with oil clearly present from water from within a plume as it passed by.
Now, it isn't just university scientist data. I have up here on the screen as well from EPA's Web site entitled "Subsurface Plume Detected." It was prepared using BP's data.
There are 17 red dots indicating that your own data shows evidence of subsurface plumes. This is your data, Mr. Hayward.
Are you now, once and for all, prepared to concede that there are plumes or clouds of oil suspended deep beneath the surface of the ocean?
Yes or no, Mr. Hayward?
HAYWARD: As I understand the data, Chairman, it indicates that there are -- there is oil in very low concentrations, 0.5 parts per million, distributed through the column. The detailed analysis that NOAA has conducted in three locations around the spill show that in one locations, 0.5 parts per million clearly attributed to this spill.
MARKEY: Are there plumes of oil deep beneath the ocean's surface?
HAYWARD: There are concentrations of oil of about 0.5 parts per million in the water column. Some of it is related to this spill. Other samples have been typed to other oil.
MARKEY: So, you do not define that as a plume?
HAYWARD: I think -- I'm not an oceanographic scientist. But what we know is --
(CROSSTALK)
MARKEY: I'm going to take it as a continuing "no" from you. And your testimony continues to be at odds against all independent scientists.
Yesterday, at the Energy and Commerce Subcommittee on Health, during the hearing the director of the National Institute of Occupational Health and Safety told me, in answer top my question, that he has asked BP for a roster of all workers multiple times, and BP has failed to give him that information, information that is critical to tracking chemical exposure. Representative (INAUDIBLE) and I were both outraged at BP's failure to take such a straightforward step to protect the health of their workers.
Mr. Hayward, will you commit to immediately provide the National Institute of Occupational Health and Safety and the Centers for Disease Control will all of the information that nay need to evaluate health impacts and to protect these workers?
HAYWARD: We've endeavored to provide all information requests as quickly as possible, and we will endeavor to do that as well.
MARKEY: The head of the National Institute of Occupational Health and Safety testified yesterday that you are not doing that.
Will you provide all of the information that they have requested of you?
HAYWARD: We are endeavoring to provide all the information requests that we receive, and we will certainly do it for that one.
MARKEY: Again, the equivocation in your answer is something that is not reassuring to those workers who potentially have been exposed to these chemicals in ways that can impact on their health.
BP has dumped 30,000 gallons of drilling mud in the ocean. Drilling mud is often made using synthetic oils and other chemicals. And in this case, also may have used significant quantities of antifreeze, which is toxic.
Mr. Hayward, will you commit to disclosing the ingredients of the drilling mud?
HAYWARD: Yes, we will. I believe that all of the mud that has gone into the ocean is water-based mud with no toxicity whatsoever.
MARKEY: Will you also commit to disclosing all other measurements you have made related to chemical, oil and methane concentrations in the water immediately?
HAYWARD: Those are being published as we make them on a variety of Web sites, and we will continue to do that. And we'll make them available in whatever form is appropriate to all of you.
MARKEY: And you will give us all of the measurements which you have made? Is that correct?
HAYWARD: All of the measurements we have made have been made available, and we'll continue to do that.
MARKEY: Thank you, Mr. Chairman.
STUPAK: Thank you.
Mr. Gingrey for questions, please.
REP. PHIL GINGREY (R), GEORGIA: Mr. Hayward, as demonstrated by the number of cameras in this room, interest in this hearing is at a fever pitch. The anger at BP and the anger at our administration is palpable.
You just look at the polls. And we members of this committee have an obligation to get to the bottom of this to address the frustrations of the American people.
The chief executive of ExxonMobil testified just yesterday at the Energy and Environment Subcommittee of this committee that, "We would not have drilled the well the way they did."
In addition, the president of Shell (sic), John S. Watson, stated, and I quote, "It's not a well that we would have drilled in that mechanical setup, and there are operational concerns."
Mr. Hayward, my profession before Congress was the practice of medicine, obstetrics and gynecology. If I delivered a baby that resulted in a bad outcome, a seriously bad outcome, and two of my friendly competitors, well-respected peers, said that, "Dr. Gingrey, in this instance, practiced below the standard of care," I would be in a serious world of hurt.
Reflecting on the fact that two of your major competitors admitted that BP drilled a Macondo well in a nonstandard way, in retrospect, what is your opinion of BP's design plan for the Macondo well?
HAYWARD: Well, as I have tried to explain, there are clearly some issues that our investigations has identified. And when the investigation is complete, we will draw the right conclusions. If there is --
(CROSSTALK)
GINGREY: Well, with all due respect, you've had 59 days, and you're not exactly moving with fever pitch here.
Do you believe BP was drilling the well following the best safety practices you were focused on, reinvigorating when you were promoted to the position of CEO a couple of years ago?
HAYWARD: I have no reason to conclude that wasn't the case. If I found at any point that anyone in BP put cost ahead of safety, I would take action.
GINGREY: Do you believe that the decisions made regarding Deepwater Horizon on and leading up to April the 20th, such as the decision to use only six centralizers instead of 21, the decision not to run a cement bond log, do you believe those decisions reflect the normal decision-making process at BP, or would you characterize those decisions as an exception to normal operating procedures?
HAYWARD: There's nothing that 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.
GINGREY: Well, let me put it this the way, Mr. Hayward, in the remaining time that I have left. If you had been physically present on that rig, along with the 11 men that were killed, would you have made the same decisions as were made? Would you have approved the decision to use only six centimeters, despite the recommend to use 21? Would you have made the decision to not run a cement bond log if you had been standing on that Deepwater Horizon rig?
HAYWARD: I'm not the drilling engineer, so I'm not actually qualified to make those judgments. Better people than I were involved in those decisions in terms of the judgments that were taken. And if our investigation determines that at any time, people put costs ahead of safety, then we will take action.
GINGREY: Well, with all due respect, Mr. Hayward, I think you're copping out. You're the continue of the ship. And it's been said by members on both sides of the aisle of this committee -- you know, we had a president once that said, you know, "The buck stops on my desk," a very distinguished president. And I think the buck stops on your desk.
And we're just not getting, I don't think, the answers from you that need to be presented to this committee in a forthright manner. It's a little frustrating for all of us, and it seems like your testimony has been way too evasive.
Mr. Chairman, I'll yield back at this time.
STUPAK: Thank you, Mr. Gingrey.
Mr. Braley for questions, please.
REP. BRUCE BRALEY (D), IOWA: Thank you.
I want to follow up on my friend from Oklahoma's questions about the culture of safety at BP, Mr. Hayward, because you have stated repeatedly that since you took over as CEO of BP, that safe, reliable operations are a number one priority correct?.
HAYWARD: That is correct.
BRALEY: And you've been CEO for the past three years, correct?
HAYWARD: Correct.
BRALEY: Then explain to us why between June of 2007 and February of 2010, the Occupational Health and Safety Administration, checked 55 oil refineries operating in the U.S. Two of the 55 are owned by BP, and BP's refineries racked up 760 citations for egregiously, willful safety violations accounting for 97 percent of the worst and most serious violations that OSHA monitors in the work place. That doesn't sound like a culture of safety.
HAYWARD: We acknowledge we had very serious issues in 2005 and 2006.
BRALEY: Well, I'm not talking about 2005 and 2006. I'm citing from an OSHA study between June of 2007 on your watch and February of 2010 where OSHA said BP has a systemic safety problem. And of those 760 that were classified as egregious and willful, it's important to note that that is the worst violation that OSHA can identify.
And their definition is "a violation committed with plain indifference to or intentional disregard for employee safety and health." Ninety-seven percent of all those egregious violations at U.S. refineries on your watch were against your company.
That doesn't sound like a company that, to your words, is committed to safe, reliable operations as your number one priority. There's a complete disconnect between your testimony and the reality of these OSHA findings. Do you understand that?
HAYWARD: I understand what you're saying.
BRALEY: So we also had Mr. Barton earlier make this comment about what happened at the White House yesterday. Were you there for that conference with White House?
HAYWARD: I was.
BRALEY: Do you think BP was shaken down by the Obama Administration to come up with this $20 billion compensation fund?
HAYWARD: We attended the White House at the invitation of the government to form a way forward and try and work together to deal with the leak, the response to the leak and to make -- to return the Gulf Coast to its past, and that's what we're going to do.
BRALEY: And I realize that we speak the same language, but it's not always the same language. When we speak English in the United States and English in great Britain. So I want to make sure I'm clear on this. Here in this country, the word shaken down means somebody in a position of disadvantage is forced to do something against their will. Is that how you viewed these negotiations at the White House yesterday?
HAYWARD: As I said, we came together to figure out a way of working together to resolve what is clearly a very, very serious situation.
BRALEY: And the reason you came together, sir, is because it was not only in the best interests of the United States taxpayers and the citizens of this country. It's also in the best interest of BP to try to get this problem solved so that it can move forward, isn't that true?
HAYWARD: That's undoubtedly true, that. We would like to resolve this issue as would everyone else here and more broadly in this country.
BRALEY: When the Ranking Member referred to this compensation fund, which I applaud as a positive step forward, as a 'slush fund,' I want you to know that in this country that implies a very negative connotation as something illegal, below the surface of what's acceptable. Did you consider this compensation fund for people who had lost their lives, lost their businesses, lost their environment, lost their ability to earn -- did you consider that to be a slush fund?
HAYWARD: As we said yesterday, the fund is a signal of our commitment to do right, to ensure that individuals -- fishermen, charter boat captains, small hotel owners -- everyone who's been impacted by this is kept whole. That is what I have said from the very beginning of this, and that is what we intend to do. And as I said in my testimony, I hope people will now take -- see that we are good for our word.
BRALEY: And can we take that as a no in response in my question, sir, that you did not consider this to be a slush fund?
HAYWARD: I certainly didn't think it was a slush fund.
BRALEY: Thank you.
HAYWARD: Congressman.
BRALEY: I'll yield back.
WAXMAN: Mr. Latta, questions? Five minutes.
REP. ROBERT LATTA (R-OH): Thank you, Mr. Chairman. Thanks for being with us, Mr. Hayward. Earlier in the morning, our Ranking Member, Mr. Burgess, had asked a question and you had responded -- if I wrote it down here correctly -- that everything we do is subject to regulatory oversight. And who is that? When we're talking about regulatory oversight.
HAYWARD: The regulatory oversight of the Deepwater Drilling Operations is the Mineral Management Service.
LATTA: Okay, but uh, here with the federal government, who would be out on the rig for that oversight?
HAYWARD: It is the inspectors of the Mineral Management Service, I believe.
LATTA: And, you know, I'm sure the records are out there, but when was the last time that the MMS would have been on the rig?
HAYWARD: I'm afraid I'm not aware of that date, but I would think it was relatively shortly before the incident.
LATTA: OK. Do you know of any citations that were issued during that time out there on the rig?
HAYWARD: I'm not aware of any citations, no.
LATTA: Let me ask this question. I know I've talked to quite a few members from the Gulf Coast, and also from news reports. And there have been many, many cases out there where they're talking about it takes almost about five days for a turnaround time.
And once this starts -- I came from local government, and so, you know, there's a chain of command out there from local government to state government, and depending on what the chain is out there, bit they're saying over and over that it takes about five days.
A lot of times it says we have to go talk to BP. And I was just wondering, because knowing that time is of the essence out there, because of all these different critical matters that are happening, why is this they say they have to go ask BP and this turnaround time takes so long?
HAYWARD: I'm afraid I can't answer that question. I don't know.
LATTA: Could you get that information for us?
HAYWARD: We can, yes. Certainly.
LATTA: I guess the next question probably is going to have the same response, but, you know, the question then is who set the procedure up this way that we would have a situation where it would take a five-day turnaround time. Do you have any knowledge of that?
HAYWARD: I'm afraid I don't. No.
LATTA: After the disaster occurred, have you had direct contact with the White House, and do you have a direct person at the White House that you have been dealing with that you can get things turned around quickly?
HAYWARD: My primary contact through all of this has been with Admiral Thad Allen, who is the National Incident Commander, and he and I talk on a very regular base basis.
LATTA: When you say on a very regular basis, how often would that be?
HAYWARD: Typically once a day, often more than once a day.
LATTA: And again, you know, as the lady from Tennessee -- we have a frustration level on getting some responses, but with that, Mr. Chairman, I'm going to yield back.
WAXMAN: Thank you, Mr. Latta. Ms. DeGette, for eight minutes, please.
REP. DIANA DEGETTE (D-CO): Thank you so much, Mr. Chairman. Mr. Hayward, in your initial testimony, you testified that BP has drilled hundreds of wells around the world, how many are deep water wells?
HAYWARD: I don't know the precise number, but we drill a lot of deep water wells in various parts of the world.
DEGETTE: Okay, you don't know how many?
HAYWARD: No.
DEGETTE: Do you think that BP's wells, irrespective of where they are drilled should be drilled to the highest of industry standards?
HAYWARD: I believe that's what we try and do.
DEGETTE: So your answer would be yes?
HAYWARD: Yes.
DEGETTE: Okay. And as this well was being drilled, were you informed as CEO of the company of the progress of the well?
HAYWARD: I was not.
DEGETTE: You were not? Okay. Now, before I continue, I know you've had difficulty answering some of the technical questions members have asked you. So I know you brought a technical expert with Mr. Xian he. Would you like us to swear him in to see if he can answer some of my technical questions?
HAYWARD: I think that depends on the question, I guess, ma'am.
DEGETTE: All right, well let's see how it goes. Now, Mr. Hayward, you said that you received the Chairman's June 14 letter to you which talks about five decisions that compromised the safety of this well -- well design, centralizers, cement bond log, mud circulation and lockdown sleeve.
I want to ask you in my questioning about one of those issues, and that's cement bond log. First thing I want you to do, if you can take that notebook that's to your left, open it up, and in the front flap, there's a memo which was written from Brian Morell to Richard Miller on Wednesday, April 14.
And that memo says, "This has been a nightmare well which has everyone all over the place." Did anybody inform you as CEO of the company in April of this year that this was a nightmare well?
HAYWARD: They did not.
DEGETTE: OK. Did you subsequently seen this memo? Have you seen this memo?
HAYWARD: I saw this memo when it was raised by your committee.
DEGETTE: And that's the first you've ever heard of it?
HAYWARD: That is the first time I --
DEGETTE: Is that the first you ever heard of it being a nightmare well?
HAYWARD: When I first saw this memo.
DEGETTE: Okay. Now, let's talk for a minute about the cementing job. Because all of the testimony that we've had in this committee through our hearings, also in the Natural Resource Committee through their hearings indicates that the choices that BP made, and its subcontractors, in order to save money led to blind faith and a successful cementing job.
Let me just walk through it first so that you can understand. First of all, BP chose a riskier well design, and the Chairman -- Chairman Waxman talked about this for a moment. The best practice would have been to use a liner and a tieback which provides four barriers to prevent the flow of dangerous hydrocarbons to the well head.
Instead, BP, as the Chairman said, chose a long string approach which has only two barriers. An internal document of the company warned that this approach was not recommended because quote, "cementing simulations indicate it's unlikely to be a successful cement job," and you can look at Tab 6 of the notebook that you have in front of you to see that, Mr. Hayward. It says "cement simulations indicate it's unlikely to be a successful cement job due to formulation breakdown." This is an internal BP confidential document from mid-April. Have you seen this document before?
HAYWARD: I saw it as a consequence of the letter that I received.
DEGETTE: But you did not see it at the time?
HAYWARD: I did not see it at the time.
DEGETTE: But there were BP folks who saw it, correct? To your knowledge?
HAYWARD: There were certainly BP people who saw this.
DEGETTE: Okay. Secondly, so the document says there would be potential need verify with a bond log and perform a remedial cement job, but BP chose the riskier approach.
Secondly, BP chose the riskier centralizer option. Experts have told us in testimony to this committee that the best practice would have been to use 21 centralizers, but BP only used six. If you take a look at Tab 8, it says on Page 18, it says you did this even though your cementer, Halliburton, said this would create a, quote, "severe risk that the cement job would fail."
It says that it would be a severe risk and the BP operations drilling engineer wrote about this decision, who cares, it's done, end of story. We'll probably be fine and gate good cement job.
Were you aware of that document at the time, Mr. Hayward?
HAYWARD: I was not aware of any of these documents at the time.
DEGETTE: And when did you learn about that memo?
HAYWARD: That memo was, again, when I was made aware of it by your committee.
DEGETTE: But you wouldn't deny that BP employees and supervisors were aware of that document at the time, correct?
HAYWARD: There were people in BP who were aware of that document.
DEGETTE: Now, would you say it's the best business practice to say who cares, it's done, end of story. We'll probably be fine and get a good cement job?
HAYWARD: I think that e-mail is a cause of concern.
DEGETTE: I would think so. Thank you.
HAYWARD: I would like to understand the context in in which it was sent, and as I've said a number of times, if there's any evidence that people put cost ahead of safety, then I will take action.
DEGETTE: I understand. Let me finish with the cement bond. Now, BP failed to perform the most effective test that was known to determine whether the cement was properly sealed, and that's the cement bond log test. There was a contractor onboard, Schlumberger, on board hired to perform this test, but they were sent away 11 hours prior to the explosion.
This test was described by Halliburton's chief safety operator Tim Probert as, quote, "the only test that can really determine the actual effectiveness of the bond between the cement sheets, the formation, and the casing itself."
Now the committee has consulted an independent expert who said that cement bond logs should always be used. Another expert said it is unheard of not to perform this test. He called your decision, and I'm quoting, "horribly negligent."
So I want to ask you a question. Do you think as CEO of this company, it was a mistake not to conduct this cement bond log test?
HAYWARD: That is what our investigation will determine, as I understand it.
DEGETTE: So your answer would be yes it was a mistake, correct?
HAYWARD: I didn't -- I'm not able to answer yes or no until the investigation is complete. When we --
DEGETTE: Because your lawyers told you not to or what?
HAYWARD: Simply because I wasn't involved -- I'm sorry.
DEGETTE: But you just said you think that all the evidence shows that it was a mistake, correct?
HAYWARD: That is not correct. That's not what I said.
DEGETTE: OK. Do you think it was all right not to conduct the --
HAYWARD: I think we need to complete the investigation --
DEGETTE: OK. Well --
HAYWARD: -- and determine whether running a cement bond log or not would have created a major difference to what happened here.
DEGETTE: Okay.
HAYWARD: There are --
DEGETTE: Let me ask you this. Are you aware of the fact it would have cost about $128,000 and taken 9 to 12 hours to complete the cement bond log test.
HAYWARD: I am aware of that fact, yes.
DEGETTE: Yes, okay. OK. I yield back. Thank you, Mr. Chairman.
WAXMAN: Thank you. Mr. Doyle for questions, please.
REP. MIKE DOYLE, (D-PA): Thank you, Mr. Chairman. Mr. Hayward, in your testimony, you said some of the best minds and deepest expertise are being brought to bear on the oil spill and that it's difficult to imagine the gathering of a larger, more technically proficient team in one place at peacetime.
I know that's meant to reassure us that everything possible is being done. But it does make me wonder who was making these key decisions before the accident. Now, one of the key decisions was which type to pipe to insert into the well. A single tube from the top or a two-piece line we are a tieback set up.
Now the second offers more barriers to unintended gas flow. And on Tuesday, the other oil companies that we talked to told us they would have chosen that design. Looking back, the decision that BP made appears to have had serious consequences. Mr. Hayward, were you involved in that decision?
HAYWARD: I was not involved in that decision.
DOYLE: Were you aware of that decision?
HAYWARD: I was not involved or aware of any decisions around this well as it was being drilled.
DOYLE: We asked your representatives who were the Senior BP Executives responsible for the McCondo well. They told us it was Andy Ingles, the Chief Executive for exploration and Doug Suttles, the Chief Operating Officer for exploration. Can you tell me was Andy Ingles involved in this decision?
HAYWARD: I'm afraid I can't answer that question. I genuinely don't know. I would be very surprised.
DOYLE: What about Doug Suttles? Was he involved in the decision?
HAYWARD: I would also be very surprised if Mr. Suttles was involved in any decision.
DOYLE: We've reviewed all of their e-mails and communications. We find no record that they knew anything about this decision. In fact, we find no evidence that they ever received briefings on the activities aboard the deepwater horizon before the explosion.
These decisions all seem to have been delegated to much lower ranking officials. Well, Mr. Hayward, then who was the one who made the decision to use a single tube of metal from the top of the wall to the bottom. Who did make that decision?
HAYWARD: I'm not sure exactly who made the decision. It would have been a decision made by the drilling organization in the Gulf of Mexico. They are the technical experts that have the technical knowledge and understanding to make decisions of that sort.
DOYLE: But you can't tell this committee who that person was?
HAYWARD: I can't sitting here today. I'm afraid.
DOYLE: You can get this information to our committee? I mean I think it's pretty amazing that this is a decision that had enormous consequences, and you can't even tell the committee who made the decision on behalf of your company. And the reason I'm asking you these questions is because your industry is different than many. You're not the CEO of a department store chain where it's fine to leave decisions about running the store to branch managers.
You know, if a department store middle manager makes a mistake there's no life or death consequences. What you do is different. You're drilling far below sea level into a region that's more like outer space than anything else. The consequences of that have drilling are huge. If a mistake or misjudgment is made, workers on the rig can get killed and an environmental catastrophe can be unleashed.
The best minds and the senior leadership of a company should be paying close attention to those risks, but it didn't happen here. And now we're all paying the consequences because those of you at the top don't seem to have a clue about what was going on on this rig.
I'm sitting here thinking I could be a CEO of an oil company. I hear it pays a little bit better than being a member of Congress because I've watched you in this front of this committee and you're not able to give us much information on anything here. I want to ask you one last question while I have some time. You told us that you're doing everything possible to stop this well from leaking, but it seems to me that what we're left with now is waiting for this relief well to be drilled and that's going to happen sometimes in August.
So, you know, today is June 17th. Now, back in 1979, the I-Tox One took over nine months to cap after drilling several relief wells. And that well was only 160 feet down into the ocean, while the mccondo well is over 5,000 feet below the surface of the ocean.
Can you tell us today, have you abandoned any other efforts to kill this well? Or are we at the point now where BP is doing nothing until the relief well gets down there? Or are you trying some different technology or some other way to kill the well, you know, before you get a relief well down there? Is there anything else on the horizon?
HAYWARD: I'm afraid there are no other options to kill this well other than a well at the base of the reservoir. As you all are aware, we tried to kill the well from the top using the top kill operation. And the pressures in the well are such that it's not possible to do that.
So we have to rely on the relief wells. In the interim, we are continuing to contain as much of the oil as we can, and that operation is currently containing 20,000 barrels a day.
By the end of this month, we'll have the ability to contain between 40,000 and 50,000 barrels a day. And by the middle of July, between 60,000 and 80,000 barrels a day.
DOYLE: I'll ask you the same question I asked other oil executives on Tuesday. Why wouldn't you just drill relief wells when you drill the main well so that if something like this happened, instead of us waiting two, three months and watching millions of barrels of oil come into the ocean destroying our ecosystem and our way of life in the Gulf Coast, that you could kill that well in a short period of time?
I understand the extra relief well would cost you a little bit more money, but it seems to me in this case, it would save you billions of dollars. What are your thoughts on drill drilling relief wells along with main wells.
HAYWARD: I think we would need to look at all of the options available to us going forward with respect to deep water exploration.
DOYLE: I see my time is up, Mr. Chairman. Thank you.
WAXMAN: Thank you, Mr. Doyle. Mr. for questions, please.
REP. JANICE SCHAKOWSKY (D-IL): Thank you, Mr. Chairman. I wanted to focus on the mind set of BP when it comes to its workers. You said in your opening statement that you were personally devastated, you attended a memorial service for those men. It was a shattering moment. I want to offer my sincere condolences to their friends and families. I can only imagine their sorrow.
Probably not as devastated as the widows who testified before our committee. And I asked them, what about BP? What kind of contact have you had with BP since the incident -- Letters, phone calls, visits?
And Natalie Roshto said two BP men attended Shane's services. "They never extended a hand, a hug. Never extended a we're sorry, their condolences. The only words that came out of their mouth was where they were to be seated and I never saw them after that."
I asked what about you, Mrs. Kemp. "Two BP men came to Wyatt's services. and one extended his hand. I shook it. He told me he's very sorry for my loss. He asked if he could hug me. He did. The other gentleman extended his hand and told me who he was, and they sent two plants to the service and that's the extent of my conversations or any dealings with BP."
That's it. Do you feel that you owe something more to those women and to those -- just in terms of expressing something and more?
HAYWARD: As I said, I'm devastated by the accident, absolutely devastated and I feel great sorrow for the people who have been impacted by it.
SCHAKOWSKY: Well, they haven't heard anything --
HAYWARD: The people who were killed in the accident were not BP employees. They're employees of Transocean, another contractor and both of them made it very clear that they want to deelt with the families. We have provided support to both Transocean and --
SCHAKOWSKY: I guess I was talking to you as a human being.
HAYWARD: And we have made it clear that we will provide all and every need for the families.
SCHAKOWSKY: Let me ask another question. There were BP personnel on the rig, and we read that oil workers from the rig were held in seclusion on the open water for up to two days after the April 20 explosion while attorneys attempted to get them to sign legal documents stating that they were unharmed by the incident.
The men claimed they were forbidden from having contact with concerned loved ones during that time and were told they would not be able to go home until they signed the documents they were presented with. After being awake for 50 harrowing hours, Steven Davis caved in and signed the papers.
He said most of the others did as well. Do you think this is an appropriate way to treat people that experienced that and sincere executives, you had people on the rig, what was their feeling about that? What is your feeling about that?
HAYWARD: I think it's inappropriate, and it was nothing to do with BP. SCHAKOWSKY: I see. And BP had no comment on it and had no opportunity -- I mean, did the company know about it? Was there any --
HAYWARD: I don't believe we were aware it was taking place, but it was certainly nothing to do with BP.
SCHAKOWSKY: Well, I did mention during my opening statement this document that basically says such voluntary effort shall be at my own risk, that people were made to sign. And there were two court appearances that were needed to finally get BP to take responsibility.
But what I understand is that BP continued to fail to protect adequate protective gear to the fishermen. And on May 16, OSHA issued a detailed directive on the training requirement for specific task responders and stated that OSHA had officials monitoring the traing and observing the clean-up.
But according to testimony we heard in Louisiana, still BP failed to provide respirators to the workers exposed to the crude oil, and the workers experienced health impacts.
The workers were afraid to speak up due to the potential to lose their jobs. Those fishermen who attempted to wear respirators while working were threatened to be fired by BP due to the workers using the respirators. Do you want anything about that?
HAYWARD: I'm not aware of that. What we clearly are endeavoring to do is to ensure that anyone involved in the response is appropriately provided with whatever safety equipment is need.
SCHAKOWSKY: Endeavoring to provide? Are the workers currently provided with what they need?
HAYWARD: Absolutely. In every case we're trying to make certain that people to do put them --
SCHAKOWSKY: You're trying to make certain but is all the equipment there and are all these workers protected?
HAYWARD: To my knowledge, yes.
SCHAKOWSKY: Thank you. I yield back.
WAXMAN: Thank you. Next turn to Mr. Ross for question, please.
REP. MIKE ROSS (D-AK): Thank you, Mr. Chairman. And Mr. Hayward, since my opening statement up to 416,666 gallons of oil have leaked into the Gulf. That was about four hours ago.
In my opening statement four hours ago, I asked you to provide us -- to be open and honest with us in your responses, and instead it seems as though we're getting statements memorized by you and provided by your legal counsel. I don't know if BP quite understands how angry the American people and the world is at them. I can tell you it's rare that you see democrats and republicans on this panel agreeing with one another, and yet it's been pretty consistent today with a few major exceptions. The level of discontent and anger and frustration at BP. I also watched this on the news, and it seems to me that BP has not been honest with the American people.
It's not been honest with our government and it seems as though you're trying to hide something. Sir, it's hard to hide two-and-a- half million gallons of oil a day pouring into the Gulf. We want answers. We want you to be honest and open with us, and we want to finally see the kind of transparency that you've been talking about.
I've got a few questions for you. BP is currently in the process of drilling two relief wells to stop the flow of oil that may or may not work, which you've said will be finished by August. After these relief wells are finished and the leak is stopped, what does BP plan to do with these wells? Do you plan to put these wells into production and make a profit off of them? Or do you plan to shut them down after the situation has been resolved?
HAYWARD: They will be shut down after the situation has been resolved. The first relief well, we will pump mud down the relief well to kill the well, to kill the current well that's flowing and then cement it up.
ROSS: A recent article in "The New York Times" reported that the clean-up effort thus far has created over 250 tons of solid waste, and a 175,000 gallons of liquid waste that are now being carted away from the Gulf Coast and shipped
