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Rick's List
BP CEO Grilled on Capitol Hill
Aired June 17, 2010 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(JOINED IN PROGRESS)
REP. MIKE ROSS (D), ARKANSAS:--off to landfills.
BP executives have stated that this waste, which is admittedly hazardous and destructive to our ocean environment, is perfectly safe to dump in our nation's landfills. You have polluted our coast and our air with this tragic spill and now you're shipping the waste you collect and dumping it near our homes and our water sources.
I want to know where this waste is going. And are you -- are you shipping it throughout the country? How can we be sure it has been treated and is safe?
TONY HAYWARD, CEO, BP GROUP: I don't know the details of that, but I can assure that we will do the right thing to ensure that it is treated in the proper and appropriate way.
ROSS: Can you provide me and this committee with a response?
HAYWARD: We certainly can.
ROSS: Let me try this in the time I have left.
This has been asked several times, and I don't think we have gotten an answer yet. We all know about the e-mails from BP employees expressing their concerns about the casing procedures, including an April 15 e-mail from your drilling engineer, Brian Morel, who described the well as -- quote -- "a nightmare well."
How much were the drilling engineers consulted in the decision to use the single spring casing? Was this a bottom-up decision in which the people actually connected to drilling the operation had some influence, or did it come from the top down?
HAYWARD: The -- as I understand it, from the discussion with our investigation team and from the review of the documents, there was a discussion taking place amongst the drilling engineering team responsible for this well. And that's how the decision and the judgments were taken.
ROSS: So would you call that a bottom-up decision or a top-down decision?
HAYWARD: I would say it was a decision taken by the right experts with the right technical knowledge to make the decision. ROSS: In your testimony, you note that you're currently drilling two relief wells which will ultimately stem the flow of oil.
In previous testimony from BP and Transocean, we have heard that there are numerous redundancies built into all of your equipment and in all your personnel procedures to ensure that your company does the very best it can to ensure that tragedies like the one we have seen unfold over the past 59 days don't occur.
My question is this. Do you view these relief wells as an on-off switch? When these wells are complete, are they going to stop the flow of oil into our ocean? If so, why didn't you pre-drill emergency relief wells prior to this whole mess? It's been asked before. We're still waiting for a good answer.
Did you do cost-benefit analysis and determine that it was cheaper to drill one well, spend years rolling in profits from the oil you managed to capture and then potentially pay a massive sum to clean up an inevitable tragedy? Which was it, sir?
HAYWARD: We believed that the blowout preventer was the ultimate failsafe mechanism. That clearly was not the case in this instance. It failed in three separate occasions.
It failed when it was activated on the drilling rig at the time of the incident. It failed to operate when the drilling rig separated from the blowout preventer, as it should have done. And it failed to activate when we had submersible robots at the blowout preventer within 24 hours of the incident. That was the failsafe mechanism.
ROSS: Mr. Chairman, I see I'm out of time.
REP. BART STUPAK (D), MICHIGAN: Thank you, Mr. Ross.
Ms. Christensen for questions?
DEL. DONNA CHRISTENSEN (D), U.S. VIRGIN ISLANDS: Thank you, Mr. Chairman.
Mr. Hayward, you have pledged $20 billion to a trust fund, which I see as a commitment to meet BP's obligation and not a slush fund, just for the record.
My question, are health payments, such as for any illnesses that residents or workers may develop as a result of the spill covered in your statement to cover all legitimate claims? And what about federal and local government outlays of health and other personnel? Are they covered under that?
HAYWARD: Claims of that sort are covered under the fund.
CHRISTENSEN: Thank you.
Several individuals and organizations have called for more people and more expertise to assist in fighting what is increasingly -- increasingly being called a war. General Honore called it World War III and calls for it to be fought as such.
What is not a part of the effort that needs to be? What's missing? And do you feel that you need more hands, more people to effectively fight this so-called war and keep the oil -- and prevent the oil from creating any more damage?
HAYWARD: We have been fighting a battle on three fronts since the very beginning, to eliminate the leak, to contain the oil on the surface, and to defend the shore.
And it is now the task of the incident commander, the national incident commander, Thad Allen, to determine what further resources are required. It's a conversation that he and I have on a regular basis to try and ensure that we have the right resources in the right place at the right time to deal with the incident.
CHRISTENSEN: So, as of your last conversation with Admiral Allen, the sense was that you had all that you needed and all of the people that you needed?
HAYWARD: We're continuing to -- excuse me -- we're continuing to work the issue of defending the shore to try and mitigate to the maximum extent possible the amount of oil that comes onshore. That is where we can still do more to defend the beaches.
CHRISTENSEN: OK. Thank you for your answer.
You state also in your testimony that -- you state in your testimony that the events of 4:20 were not foreseen by you, but, in light of the several areas of concern that have been raised, shouldn't someone have foreseen and be able to prevent the explosion?
For example, I understand that there's supposed to be a policy where any one person on a rig can shut it down if they perceive a problem. Is this a real policy that's enforced and reinforced in training, or is it something just on paper? Because that didn't seem to happen then -- in this instance, even though some Transocean, some Halliburton, and even BP employees reportedly had serious concerns.
HAYWARD: It is a policy that is real, and if anyone at any time believes that what they're doing is unsafe, they have both the right and the obligation to stop the task.
CHRISTENSEN: Are you surprised that no one -- given what we're hearing -- and I know the investigation is not complete -- that no one made that decision to shut the rig down?
HAYWARD: I think, in the light of what we now know, it is of course surprising that someone didn't say that they were concerned. And I think that is to the heart of the investigation, to understand exactly what the events were and why there was not different decisions taken with respect to the event, particularly in the last five or six hours on the day of the incident.
CHRISTENSEN: There was a company -- I think it's -- that was supposed to be the -- Schlumberger -- that was on the rig at the time and left.
Now, when we were in New Orleans, we were told in the hearing that they left because of concern for safety. But other reports said that they left because they were told they weren't needed. What is, in your -- to your knowledge, is the correct reason?
(CROSSTALK)
HAYWARD: I believe that it's clear that they left the rig because they had completed the task, or the task that they had anticipated to do was not required.
CHRISTENSEN: OK. So, as far as you know, it was not that they felt unsafe, as we were told in New Orleans?
HAYWARD: It was nothing to do, I don't believe, on the basis of anything that I have seen, that it was anything to do with safety.
CHRISTENSEN: OK.
My last question, in your testimony, you say -- and I'm quoting -- "BP is a responsible party under the Oil Pollution Act," and you distinguish that terminology from any implication of legal liability, which is still being investigated.
When you say, A, do you think that you're the sole responsible party? Or might there be others? And, if so, who?
HAYWARD: The government has named four responsible parties. They are BP, Transocean, Mitsui, and Anadarko. They have all been named as responsible parties in this incident.
CHRISTENSEN: The last two were?
HAYWARD: Mitsui, Anadarko, Transocean, and BP.
CHRISTENSEN: Thank you. Thank you, Mr. Chairman. My time...
(CROSSTALK)
STUPAK: Thank you, Ms. Christensen.
Next for questions would be Mr. Welch. He's not here.
Next would be Mr. Green for questions, please.
REP. GENE GREEN (D), TEXAS: Thank you, Mr. Chairman.
Mr. Hayward, yesterday, Mr. Tillerson from -- or the day before yesterday -- ExxonMobil testified Tuesday that in the aftermath of the Exxon Valdez accident, ExxonMobil launched a full-scale top-to-bottom review of their operations and implementing far-reaching actions that today guide every operating decision they make on a daily basis.
Have there been any specific reforms that BP has implemented following the Alaska pipeline accident and the Texas City refinery disaster?
HAYWARD: We have implemented major, major change following the incidents in 2006 and 2007. We have implemented changes to our people in terms of the skills and capabilities we have. We have implemented changes to the training that they get and the expertise that they develop. And we have implemented significant changes to all of our operating practices, including the implementation of an operating management system that covers all of the company's operations.
It has been a root-and-branch review from top to bottom.
GREEN: I guess my concern is, having followed both the Alaskan pipeline and the Texas City refinery disaster, those reforms haven't worked.
What will be done differently this time? In the last almost 60 days, has there been some discussion on why the reforms from the Texas City and the pipeline, Alaskan pipeline, hasn't worked? And, again, you know the information our committee has. You received a letter two days ago on some of the decisions that were made literally on the rig by BP's representatives.
What, going forward from here, will we know five years from now, that we won't have to repeat what we're doing this time?
HAYWARD: That is why I am so determined to get to the bottom of this incident, such that we can learn from it and make changes to ensure that it doesn't happen again.
GREEN: What's happened with your drilling procedures internationally? I know there are different standards for different companies.
Our committee heard testimony that -- from the executives a few days ago that typically the -- Norway and the Scandinavian countries have the toughest offshore drilling. I know BP is active in Norway. Is there a significant difference on what you do in the Gulf of Mexico, as compared to what you do off the course of Norway or even off the coast of Edinburgh or off the coast of Great Britain?
HAYWARD: We operate on the same standards globally. And the truth is that the rules and regulations, as I understand it, in the Gulf of Mexico are higher than they are, for example, in the North Sea and the U.K. sector in terms of the requirements.
So, we will continue to learn from this incident and make changes to ensure that it cannot happen again, and it will be global.
GREEN: Thank you, Mr. Chairman.
STUPAK: Thank you. Mr. Green, you yield back?
GREEN: Yes, sir.
STUPAK: Mr. Green yields back. Next turn -- the next turn to Mr. Barton, ranking member, for questions, please. REP. JOE BARTON (R), TEXAS: Thank you, Chairman Stupak. And I appreciate the opportunity to ask some questions.
Mr. Hayward, yesterday, when we had a hearing in a different subcommittee of this -- of this full committee, we had four CEOs of other oil companies. I think, to a person -- I could be wrong about this, but I think they all indicated that they either would not have drilled this well or at least would not have drilled it the way BP drilled it. What's your response to that?
HAYWARD: I want to understand exactly what happened through our investigation, to compare it with other practices, to determine what is the truth. And I can't comment today on that.
BARTON: All right.
I have had off-camera discussions with a number of experts in the drilling processes for the deep Gulf of Mexico, and they all say that BP has a different culture, that there is -- for example, in most of other companies that operate in the deep Gulf, there are a number of individuals on site that have what is called stop-order authority.
In other words, if they see something that is going on that compromises safety or integrity, they have the ability to stop production. But I'm told that BP doesn't give that authority, that it is further up the chain of command.
Is that correct? And, if so, is that something that BP may consider changing, given what's happened?
HAYWARD: Well, on a drilling operation such as this, anyone can stop it, the BP man, the Transocean driller, the Transocean tool pusher, the (INAUDIBLE) or the BP well site leader.
It requires everyone to agree to continue. And if there is one person who does not agree, then they do not continue.
BARTON: So, when I'm told that the BP culture in terms of this authority is different, I have been told incorrectly?
HAYWARD: I believe that's so, Congressman.
BARTON: OK.
In terms of the two relief wells that are currently being drilled, are they being drilled using the same procedures as this well? Or are they being drilled differently? In other words, some of the things that weren't used on this well, the double casing, things of this short, are those relief wells going to use these enhanced safety procedures?
HAYWARD: There are clearly some areas of concern, as we have identified in our investigation, cement casing. And the relief wells are being drilled with all of those issues absolutely foremost in the procedure. Now, the -- clearly, the relief wells are rather different because of what they have to do. But all of the things that we have learned to date from our investigation have absolutely been incorporated into the activity that is taking place with respect to the relief wells.
BARTON: OK.
Have you either read or been at least given a summary of the letter that Chairman Waxman and Chairman Stupak sent earlier in the week that lists the five or six outstanding or what they consider -- what the staffs consider to be the anomalies in this well, the -- in the safety concerns? Are you familiar with that letter?
HAYWARD: I am familiar with that letter.
BARTON: OK. Do you agree in general with the concerns that are raised there about the lack of a -- of a -- I -- for lack of a better term, a safety collar being employed, the number of devices that could have stopped the oil and gas venting and escaping up the well?
It was -- somebody recommended, I think, 21 or 22. And BP made a decision to only use six. Do you -- now that you know what's happened, do you share some of the concerns that that letter raises?
HAYWARD: I think I share the concern about the number of contributing factors that may have -- that have created this incident.
They're focused on the cement, on the casing, on the integrity test, on the well control procedures, and on the complete failure of the blowout preventer. And they are all areas that I believe we all need to understand fully before we draw conclusions about how this accident occurred.
BARTON: And my final question is that, based on what you now know, do you agree with the general conclusion expressed yesterday that this was a preventable accident?
HAYWARD: I believe that all accidents are preventable, absolutely.
BARTON: OK.
Finally, Mr. Chairman, if I may take a small point of personal privilege, I want the record to be absolutely clear that I think BP is responsible for this accident, should be held responsible, and should in every way do everything possible to make good on the consequences that have resulted from this accident.
And if anything I have said this morning has been misconstrued in an opposite effect, I want to apologize for that misconstruction.
With that, Mr. Chairman, I yield back.
STUPAK: Thank you, Mr. Barton.
Ms. Sutton for questions?
REP. BETTY SUTTON (D), OHIO: Thank you, Mr. Chairman.
DON LEMON, CNN CORRESPONDENT: We want to go now to CNN's Candy Crowley, because we have been listening to this, and we know that Joe Barton made news this morning when he came out and apologized, he said, to Tony Hayward and BP because he felt that the president was involved in a shakedown of BP by asking for the money to be put in escrow.
Candy Crowley joins us now.
Candy, for the record, he said, "I think that BP should be responsible."
Why this? Is it a mea culpa or a turnabout here?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Not quite.
(LAUGHTER)
CROWLEY: He was almost there. He said just, if anything I said this morning is construed as not believing that BP is responsible monetarily and every other way for the people who have been hurt by this disaster, then I apologize that it was a misconstruct, I believe, is what he said, which is misspeaking.
It wasn't exactly, I apologize for saying, as he did earlier, that BP was -- had been forced into creating what he called a slush fund. We heard people say earlier a slush fund. It sounds like it's something illegal. Do you agree with that, Mr. Hayward?
So, it created quite a stir. He walked it back a little, didn't totally apologize for the remark itself, but to say, look, I think these people should pay.
LEMON: He's going to pace heat for that. What do you think? Because it's -- it's probably not that popular right now to defend BP in any way, considering, and when you look at the pictures and what's actually going on down in the Gulf of Mexico, Candy.
(CROSSTALK)
CROWLEY: Yes, it's devastating, and particularly when, as I'm sure not the only one, you see this huge plume of oil going -- still ongoing underneath the Gulf of Mexico.
And then right next to it, you see the testimony of the BP CEO. It's hard, I think, for most people to watch that and come down on the side of BP. So, I would suspect it's not politically correct at this point to try to defend BP. In fact, we have some polling where their numbers are ridiculous. They're down in the double digits somewhere, so not a real good time to defend BP.
(CROSSTALK)
LEMON: Yes.
The host of CNN's "STATE OF THE UNION," Candy Crowley, joining me to get us through these subcommittee hearings going on.
I'm Don Lemon here at the CNN world headquarters Atlanta. We're going to get back to these hearings now.
Betty Sutton, congresswoman, Democrat from Ohio speaking now. Let's listen in.
HAYWARD: ... any of the decisions or any of the documents surrounding this well prior or during the drilling of the well.
SUTTON: OK.
And what's fascinating also is that, when you were asked about how these decisions were made within the structure of your organization, you referenced this from a perspective of, "As I understand it from our investigation, this is how these decisions are made."
But you're the leader of the company. So, you weren't -- you couldn't even tell us if they were top-down or bottom-up decisions. You were just referencing them based on an after-the-fact investigation. So, when we talk about these documents, the documents just I -- I just referenced, the one that says the well design was chosen because it would save $7 million to $10 million, and the other one that says that the reason for not using sufficient centralizers is because it would take 10 hours to install them, none of these documents makes a decision to ensure a safe environment on the rig or protect the environment from a catastrophic oil spill.
Would you say that that's true, that that doesn't indicate a decision being made based on ensuring a safe environment or protecting the environment?
HAYWARD: Well, I don't think it's possible to say that based on the documents out of context.
SUTTON: And, see, that's why I think there's a real detachment here, a real disconnect, as we have heard that word used earlier today.
It seems to me there was a disconnect prior to the explosion, and there remains a disconnect when viewing evidence that is very clear and being presented. This was a tragic failure. You have talked about your commitment to safety and the environment, but when push came to shove on the Deepwater Horizon, the company's concern seemed to be the bottom line.
And I guess this is -- this is my question to you, Mr. Hayward. Who was responsible for the failures on the Deepwater Horizon and the terrible set of decisions that led to the tragedy in the Gulf?
HAYWARD: Well, that is what our investigation will determine. And that is what it's going to do. And if there's at any point evidence to suggest that people put costs ahead of safety, then I will take action.
SUTTON: So, evidence like those documents?
HAYWARD: The evidence from the totality of the investigation.
SUTTON: OK. Mr. Hayward, as the leader of the company, don't you have to accept the responsibility? You talked the about the importance of safety and the environment. But you have presided over a corporate culture where safety and risks and risks to the environment were ignored in order to save a few days and a few dollars in drilling costs.
If you're the leader of the company, don't you have to take responsibility?
HAYWARD: I'm absolutely responsible for the safety and reliable operations in BP. That's what I have said all along.
SUTTON: Thank you, Mr. Chairman. I yield back.
STUPAK: Thank you, Ms. Sutton.
Mr. Welch for questions, please.
REP. PETER WELCH (D), VERMONT: Thank you, Mr. Chairman.
Mr. Hayward, is it true that, in 2005, the Texas City operation owned by BP blew up, resulting in the loss of life of 15 workers?
HAYWARD: That is true.
WELCH: And is it true that, in 2006, a BP oil pipeline in Alaska ruptured and spilled 200,000 gallons of crude oil?
HAYWARD: That is true.
WELCH: And is it true that, in 2007, when you took over as CEO of BP, the corporation settled a series of criminal, not civil, criminal charges and agreed to pay $370 million in fines?
HAYWARD: That is correct.
WELCH: And is it also true that, in one year, the Occupational Safety and Health Administration, OSHA, found more than 700 violations at BP's Texas City refinery and fined BP what was then a record fine of $87.4 million? Is that true?
HAYWARD: That is correct.
WELCH: And is it true that, earlier this year, a BP refinery in Toledo, Ohio, was fined $3 million for willful -- and I emphasize the term and the finding -- willful safety violations, including the use of valves similar to those that contributed to the Texas City blast?
HAYWARD: That is correct.
WELCH: And is it true as well that the U.S. Chemical Safety Board, which did investigation into the Texas City refinery, was headed with active anticipation of former Secretary of State James Baker. Are you familiar with that report?
HAYWARD: I'm very familiar with that report.
WELCH: And, in that report, which you, I take it, regard as credible?
HAYWARD: I believe it's very credible. And it's been the basis on which we moved forward in 2007.
WELCH: And that report -- and I quote -- "found that BP management allowed operators and supervisors to alter, to edit, to add, and to remove procedural steps at the Texas City refinery without assessing risk. And the Baker panel examined all of BP's U.S. refineries and found a toleration of serious deviations from safe operating practices."
Is that an accurate statement of the findings of Mr. Baker's report?
HAYWARD: It is accurate findings. And based on the findings of that report and the instances of 2005 and 2006, we implemented a systematic change in how we manage safety and a systematic change in the culture of BP.
(CROSSTALK)
HAYWARD: That is something we have done consistently over the last three years.
WELCH: Well, did that systematic change that you say you implemented as a result of the Baker report account for the reason that, at Deepwater Horizon, when faced with the choice of a cheaper and quicker casing design or a safer design, BP chose the cheaper and quicker casing design?
Did you do that on the basis of the recommendations of the Baker report?
HAYWARD: As I have said, we need to wait for the results of the investigation to conclude. If there's any evidence whatsoever that people put costs ahead of safety in this incident, then we will take action.
WELCH: Well, I'm not going to ask you what their reason was. But I'm going to ask you -- and, in fact, it's not in dispute -- that the choice was made to use a cheaper and quicker casing design, rather than a more expensive design.
And I will ask you again, there were fewer casing centralizers than some folks were recommending. Is that -- I will leave out motivation, but there was a choice of more casing centralizers or fewer casing centralizers. More costs more. Fewer costs less. Which choice did BP make at Deepwater Horizon?
HAYWARD: The decision taken by the engineering team at the time, which was a technical judgment, was to use fewer centralizers, rather than more. It is not always true that more is better.
WELCH: And BP chose at Deepwater Horizon not to circulate drilling mud that would have cleaned out the well. It chose a lighter saltwater base for the cementing procedure. Is that correct?
HAYWARD: The procedure to displace the mud was a procedure that's not uncommon in the industry. It was a procedure that was approved by the MMS prior to implementing it.
WELCH: Are you saying you made the right choice in this case?
HAYWARD: I'm not able to make a judgment as to whether the right choices were made.
WELCH: Well, you're the CEO.
HAYWARD: Well, but I'm not, with respect, Congressman, a drilling engineer or a technically qualified engineer in these matters.
WELCH: But you're in charge of them.
HAYWARD: That -- that doesn't mean to say I'm an expert.
WELCH: Well, you know, one of the frustrations that I think folks have is, who is in charge? And there was a Baker report that said that there was a systematic choice being made consistently by BP that led to the loss of life, that led to pollution, that could be attributed to a decision based on saving money, increasing profits at the expense of safety and, as it turns out, unfortunately, human lives.
You know, I'm going to get back to what I asked you earlier. There is a -- I think all of us live in a world where we would prefer to have fewer regulations, rather than more. We would like to rely on trust and faith and our word, rather than regulations and checking over your shoulder and all those things that I think both sides find annoying.
But I'm going to ask a question. Does a CEO who has presided over a company that's incurred $370 million in fines, whose company was subject to this report by Mr. Baker indicating a choice for -- the choice at the expense of safety, does that person who's presided over almost $100 billion in loss of shareholder value in a suspension of a $10 billion annual dividend, who's lost the confidence of shareholders and regulators and most importantly, the families and citizens of the Gulf, does that person enjoy the confidence necessary to continue acting as CEO, or is it time for that CEO to resign?
HAYWARD: I'm focused on the response. I'm focused on trying to eliminate the leak, trying to contain the oil on the surface and to clean the beaches and to clean up the spill and to restore the lives of the people on the Gulf coast. And that's what I intend to do.
UNIDENTIFIED MALE: I yield back, Mr. Chairman.
STUPAK: That concludes questions by members of the subcommittee. As I indicated earlier, members of the full committee will have an opportunity to ask questions if they so choose. So we will alternate, and as I indicated earlier, it's based upon committee seniority.
So Mr. Sterns, you would be next first on the Republican side. Questions for five minutes, please.
REP. CLIFF STERNS, (R) FLORIDA: Thank you, Mr. Stupak, and thank you for allowing me to ask these questions.
Mr. Hayward, I've watched this hearing, and time and time again, you've indicated this -- you've responded with this statement "I can't give you a legitimate answer to that question." You said it over and over again. They've asked you for details, you didn't know.
Did you bring anybody with you who has the detailed information that could help you answer a lot of these questions?
HAYWARD: I have a technical expert with me.
STERNS: I don't see you go back to that technical expert. And you just continue to say I just can't answer that question. So my question for you today, is today Thursday? Yes or no?
HAYWARD: It is Thursday.
STERNS: OK. Next question, the people of Florida when I talk to them and they said there's oil spilling on the coast, would it be appropriate to say it's because of BP's reckless behavior? Yes or no?
HAYWARD: It's the consequence of a big accident.
STERNS: Yes or no, reckless behavior or not?
HAYWARD: There's no evidence of reckless behavior.
STERNS: So you're saying here today that BP had no reckless behavior. Is that's your position?
HAYWARD: There is no evidence of reckless behavior.
STERNS: Yes or no. You're saying BP has not reckless behavior.
HAYWARD: I have seen no evidence of reckless behavior.
STERNS: So you're on record saying there's been no reckless behavior. We had a hearing, Mr. McKay was here. We had the CEO of Exxon, Chevron, Conoco Phillips, and Shell. We asked them questions.
Knowing what we know today about the inconsistent well pressure test readings, would you have proceeded with withdrawing fluid from the well? Every one of them said no. Then the next question was asked to them about safety measures. Are there safety measures that your company could have taken to prevent this incident? Every one of them said yes.
So you're here this morning saying your company had no reckless behavior, yet all your peers, the CEO of Exxon, Chevron, Conoco Phillips, and Shell all pointed out your reckless behavior. Later on, Halliburton warned your company that the well could have a severe gas flow problem. Were you aware of Halliburton's warnings? Yes or no?
HAYWARD: I was not involved in now of the decisions --
STERNS: I don't want to hear that. I mean, this is the same thing you've been saying all day. What I want to know is, you in your position, has anyone on your staff briefed you about Halliburton warning your company that we could have a severe gas flow problem.
HAYWARD: No, prior to the incident.
STERNS: You're up at this top echelon, and you didn't hear -- did you hear about the e-mails that occurred? Later that day, a BP official involved in a decision recognized the risks of proceeding with insufficient centralizers, threw caution to the wind in an e-mail just four days before the disaster stating who cares, it's done. End of story. We'll probably be fine. Did you know about that email?
HAYWARD: I had no prior knowledge of this well prior to the incident whatsoever.
STERNS: In light of what your four peers have said, dealing with safety, dealing with the precautions with the pressure test reading, and dealing with Halliburton, don't you think there's reckless behavior indication based upon -- if what I told you is true, do you think BP has reckless behavior?
HAYWARD: I believe all accidents are preventable. The investigation will determine how this accident occurred --
STERNS: OK, you're saying right now based on all the information I gave you you do not think BP had any reckless behavior. That's your position this afternoon, is that correct?
HAYWARD: I have seen no --
STERNS: I want you to say that you don't think BP has reckless behavior.
HAYWARD: I have seen no evidence of reckless behavior.
STERNS: OK, all right. Let's say you were on a ship and you ran into New Orleans and you spewed all this oil and you killed 11 people. Do you think the captain of that ship should be fired? Has anyone in BP been fired because of this incident? Anybody? Yes or no?
HAYWARD: No, so far. STERNS: No people have been fired. Your captain of the ship runs into New Orleans, spews all this oil from Alabama, Mississippi, Florida, Louisiana, and no one's been fired?
HAYWARD: Our investigation is ongoing.
STERNS: So, let's say the investigation goes for three years. Does that mean you wouldn't fire anybody?
HAYWARD: As the investigation draws co conclusions we'll take the necessary action.
STERNS: OK, so in light of the environmental damage, the human damage, and just the information from your peers saying that you were indeed reckless, and the e-mails that I've told you, you still are going to stonewall us this morning and afternoon saying basically we did nothing wrong and we're going to say the evidence proves whether we did wrong or right. Is that correct?
HAYWARD: I believe we should wait for the conclusions of the various investigations before we make decisions based on those conclusions.
STERNS: Well, Mr. Chairman, he did answer that today is Thursday.
STUPAK: The chair now recognizes the gentleman from New York for five minutes.
DON LEMON, CNN ANCHOR: OK, CNN's Candy Crowley joining me here. Don Lemon here. We're listening to these hearings. Candy, it's getting very contentious.
CANDY CROWLEY, CNN ANCHOR: I think if anybody is looking for new information in this hearing. They're not going to find it. Let's face it. I mean, you have this sparring going on. And you have two sides, one side in Congress, wanting to show how tough they are on BP, and BP obviously in the form of Tony Hayward saying look, there's still an ongoing -- every question. There's still an ongoing investigation, I wasn't involved in that. I'm not really sure.
You just heard Cliff Sterns, congressman from Florida, going after Hayward saying listen, do you think there was reckless behavior? And what does Hayward reply? I have seen no evidence of reckless behavior. We're seeing an awful lot of lawyerly replies. I don't know if he is a lawyer, but I bet he talked to one.
LEMON: And shouldn't he resign? You heard one of the workers for BP, or at least one of the muckety-mucks that McKay should commit hari-kari. Tony Hayward really getting grilled. We're going to take a quick break but we'll be right back.
(COMMERCIAL BREAK)
LEMON: Welcome back everyone. Tony Hayward, the CEO of BP, appearing in front of a Congress subcommittee today answering questions about Deepwater Horizon and the disaster down in the Gulf of Mexico. Let's get back to it.
UNIDENTIFIED MALE: How many other wells does BP have in the Gulf?
HAYWARD: I don't know a precise number but it's a large number.
UNIDENTIFIED MALE: Give me a ballpark figure. How can we be assured that this won't happen again to several hundred wells?
HAYWARD: The other wells that I've referring to have all been drilled and completed and are secure.
UNIDENTIFIED MALE: So you are saying in all the other wells that BP has, something that happened to this well could never happen again to any of those other wells?
HAYWARD: All the other wells I'm referring to are wells that have been completed and are secure.
UNIDENTIFIED MALE: So is that the same assurance that you are going to with a laser make safety a priority? Is this the same kind of assurance that you're giving us now?
HAYWARD: I have throughout my tenure been very explicit about the priority of safety in BP. It is the first word I utter every time I talk to any group of people in BP. Safe and reliable operations are our number one priority.
And we have made very significant changes to our processes, to our people, and invested very significant into the integrity of our plants and equipment over the last three or four years.
UNIDENTIFIED MALE: Mr. Hayward, let me say with all due respect. I like everyone else here and everyone else in America is thoroughly disgusted. I think you're stalling. I think you're insulting our intelligence, and I really resent it. Mr. Chairman, I yield back.
STUPAK: Mr. Scalise, questions please, five minutes.
REP. STEVE SCALISE, (R) LOUISIANA: Thank you, Mr. Chairman.
Mr. Hayward, this is a picture of our state bird in Louisiana. I'm going to keep this on my desk as long as we're battling this. This is a constant reminder of what's at stake.
But I want you to keep this in your mind as well to recognize that we're not just talking about the loss of life, which is tragic. We're not just talking about the oil that's still spewing out of that well. We're talking about our way of life, not just in Louisiana, but all along the Gulf coast that's at stake.
I would hope you keep this image in your mind as a constant reminder of what's at stake and what we're battling on a daily basis.
Our two priorities right now are, number one, doing everything we can to make sure that you all cap this well, but also to battle as strongly as we can to keep the oil out of our marsh and our ecosystem. We don't want to sit back and wait until the oil comes in and does possibly irreparable damage. We want to be proactive.
But we're having problems on the ground being proactive because of the delays. I still hear -- I was on Grand Isle Friday. I hear the biggest complaints from our local officials, that they're spending more of their time fighting BP and the federal government than they are fighting the oil. This is unacceptable.
I know you talk about all the things that you all are doing, but it's not enough. We need a more urgent sense of response to this disaster.
And I want to ask you what you are going to do to help speed that up. When our local officials tell us that when they have basic question they need answers to, it takes at least five days. They first go to the coast guard, then they're sent to BP to get approval, and then they go around in circles. They never get answers.
This is just not an acceptable way to run this operation. And so when we hear who's in charge, I want to ask you, who is in charge on the ground?
HAYWARD: The national incident commander is the person in charge of this operation.
SCALISE: So is the federal government telling them what to do? Are you telling the incident commander what to do? When our local officials say we need something approved, do they need to get the incident commander and your approval, because they're getting run around in circles right now?
HAYWARD: Well, we're not being perfect, I acknowledge that. And we're trying very hard to do better. We are operating under the direction of the federal government.
SCALISE: Let me give you an example. When our governor came with an idea, and this was over a month ago now, he had an idea, Governor Jindal working with local leaders to have a sand barrier plan.
They made some changes. They worked with scientists and engineers. And then over three weeks went by without any approval. We tried to get the president engaged in breaking this logjam. Still to this day only 25 percent of that plan has been approved.
Is that you not approving the other 75 percent? Is that the federal government? Who's not approving the other 75 percent, because it's not approved to this day?
HAYWARD: The approval process flows through --
SCALISE: Who is it, you or the federal government? Can you tell them no?
HAYWARD: The ultimate approval process is with the government. SCALISE: So the federal government is the one that hasn't approved the other 75 percent?
HAYWARD: I can't speak to the details of the other 75 percent.
SCALISE: You don't know about it? I know they submitted it. Our governor submitted this to you.
HAYWARD: We have committed, as you know, $360 million to build a large part of the barrier island that --
SCALISE: It's not a large part. It's 25 percent of the plan. I mean, that may seem like a large part to you.
Let me go to another question that we get asked. They don't have any kind of approval of creation of seafood safety plan. Now, is that something that was submitted to you all? Is that the federal government not approving it? Is it BP not approving it?
Our local leaders are getting run around in a circle. And nobody is held accountable when things don't happen. And what I'm going to present to you that we don't have time for these games to continue to be played. We can't have five days go by before an answer is given to anybody because the oil is coming every day.
And I'll just give you an example about the sand barrier plan. Now, you say you all have approved a lot of it. There's no plan of protect along any part of Grand Isle. About a week and a half ago, there was no oil in Barataria Bay. That section was scheduled to be covered by the barrier plan that still to this day has not been approved.
Now today there's thick oil coming into we have oil in Barataria Bay. We had a plan a month ago to keep the oil out of Barataria Bay, and so when people are hearing everything is being done, I'm here to tell you on the ground it's not being done.
And I don't know what you're doing differently, but you need to do something differently. And if it's not you that's blocking it, you need to tell somebody who's blocking it, because it's being blocked. And it's not getting done on the ground and we don't have the luxury of time.
This shouldn't be happening. We put plans in place to stop this from happening, and our plans are not being approved. Now, I would love it if our plans were being rejected because there were better alternatives being offered by somebody that were being approved, but there are no other alternatives.
All we're being told is no, without any other option being presented. And we're saying if you've got a better option present it, otherwise approve our plan. But we don't have time to waste, do you understand that?
HAYWARD: I understand your concern and your anger. SCALISE: And I hope you make the changes that are needed, because we don't have time. This is something else. We continue to get, and my office gets flooded with ideas of how to stop the oil from come into the marsh, how to cap the well and other things.
I've going to give you this database. This is a database of ideas with links, with schematics. I'm going to give you a resolution passed by our Senate that asks that you engage our local people affected by this. A lot of them are not even being able to be employed in saving the marsh. They want that to be done and also to speed up the efforts on some of these alternatives going nowhere.
STUPAK: Time.
SCALISE: We want every opportunity for you to fix that so I'm going to give this to you. Thank you, Mr. Chairman. I yield back.
STUPAK: Miss Capps, your questions, please.
UNIDENTIFIED FEMALE: Thank you, Mr. Chairman. Mr. Hayward, your $20 billion --
LEMON: As these hearings continue in Washington we'll continue to monitor them and we'll get a bit of a break in. But don't go anywhere because we'll go back to them. A lot of news being made today -- Tony Hayward, the CEO of BP, being grilled by the congressional subcommittee. Back here in a moment on CNN.
(COMMERCIAL BREAK)
LEMON: If you're watching CNN today, you know this is incredible television, what's happening in Washington. And obviously the list is consumed by the BP oil spill today on day 59 of this Gulf oil disaster.
BP CEO Tony Hayward is in Washington. You see him there live. He's been on the hill for a grilling by a congressional panel on oversights and investigations. But you know what, a funny thing happened on the way to that grilling. Listen.
(BEGIN VIDEO CLIP)
BARTON: I'm ashamed of what happened in the White House yesterday. I think it is a 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.
REP. JOHN SULLIVAN, (R) OKLAHOMA: What is equally as important as our efforts to combat the spill is the knee jerk legislative reaction from this Congress. Right now the administration and their allies in the House are more focused on the politics of putting the oil and gas industry out of business than on solutions to the problem.
Instead of working in a bipartisan way to push for rigorous safety standards on all offshore rigs, the administration is exploiting this disaster to advance this disastrous cap and trade energy policy which won't stop the well from leaking but will rather only serve as a national energy tax on the American people, crippling our economy and making the unemployment lines longer.
REP. PHIL GINGREY, (R) GEORGIA: However, today's hearing is incomplete. We can only ascertain half of the story today because we do not -- we do not have anyone representing the administration.
Why did this happen now? I've heard some assert that it was a lax oversight of the previous administration that led to this accident. Well, if that's the case, why did this not happen during the last decade? Why did this occur almost a year and a half into the current administration?
We need to hear from our own department of interior and the Mineral Management Services.
I further realize there are some in this administration who have a penchant for not letting a crisis go to waste. But for a nation dependant on foreign oil, for a nation with unemployment hovering at 10 percent, we can't just say we can't do this.
(END VIDEO CLIP)
LEMON: Candy Crowley is the host of "STATE OF THE UNION" and has been watching the hearings in Washington. Candy, Joe Barton really drew a lot of attention this morning and raised some eyebrows with his comments, and then he had to back off just moments ago. What do you make of that?
CROWLEY: He raised enough eyebrows that they really felt he had to come out.
I think the problem here, and you don't hear this just from Congressman Barton but from others who feel that the whole administration handling of BP fits into their larger storyline about this administration, and that is that it is trying to take too much power, that it is trying to control Wall Street, that it's trying to control main street, and now that it's trying to control this big oil company.
So that's the kind of political atmospherics here. I think what happened when he said this it came across that he really felt that BP wasn't responsible.
So that's why we hear Congressman Barton come back say, hang on a minute. I just want you to know that I think BP is responsible here. I think that in fact they should have to pay for all the damage they have done.
He didn't quite back off the whole, you know, I think it's a shame you had to do this because I think they do believe that this sort of strong arming, a number of conservatives believe that this sort of strong arming, they think, of BP is out of line for a government.
LEMON: And we should be clear, Candy, for our viewers because not everybody has been watching all day. He basically apologized for the president asking for this escrow account for people down in the Gulf to be helped. And it looked like he was, you know, choosing sides with BP here.
Just moments ago he said I think BP is responsible for everything, and my comments should not be misconstrued.
CROWLEY: Right, right. It wasn't a flat out I should have apologized for that remark. It was don't misunderstand me here because I still believe that BP needs to pay for this.
LEMON: Candy, we have interesting sound that I want you to hear. It's Plaquemine's Parish president Billy Nungesser.
(BEGIN VIDEO CLIP)
BILLY NUNGESSER, PRESIDENT, PLAQUEMINE'S PARISH: I just think it's time for him to retire.
(END VIDEO CLIP)
LEMON: All right, so more heat for Admiral Thad Allen to step down. And today the admiral was at the Gulf meeting, and he spoke, and he took a second to answer -- those questions about that, and the very first question was about would he step down? Listen.
(BEGIN VIDEO CLIP)
ALLEN: I've been in public service a long time, and I've always looked forward to constructive feedback, and I serve at the pleasure of the president. Thank you.
(END VIDEO CLIP)
LEMON: So Candy, when we hear I serve at the pleasure of the president, on the other side of that something usually happens.
CROWLEY: It does, but I -- listen, remember that Thad Allen has now retired from being commandant of the coast guard. He's no longer commandant of the coast guard. But he was already in this job. The administration has wanted a single face down there that would be answerable to, if you would.
The problem is that there have been so many complaints about the lack of a central command. You talk to any governor down there, and they will say there are 14 agencies down here. They all have veto power. It's completely confusing. We don't know where to go for what.
And so the problem with being the face of the rescue, as Admiral Allen is, if it's not going well you become the face of that failure. So, yes, you're right. Sometimes when people make remarks like that, it's right before they leave.
I don't think, and this is pure guesswork on my part, but that is one tough job. Everybody is mad at you, and he was looking forward to retirement.
LEMON: Candy, this is the first time he's faced those questions and not the first time he's responded to that in this particular situation as well.
CROWLEY: Exactly. And, you know, he is -- he is a big boy. He has done this before. He knows he's going to get that kind of statement being made. I thought he, you know, tried to get in a point there or two by saying I always welcome constructive criticism.
You know, he's been working very closely with Nungesser, and obviously there are a lot of furious people down there, and that's BP and the face of the administration is where all fury is going.
CROWLEY: And this has made the television, Candy, because imagine being Tony Hayward sitting there while these people are pulling out your resume, what your company is done, and all your failures, and you have to be cordial and answer the questions.
"Do you know that Tuesday is Thursday?" "Yes, today is Thursday." Candy, we'll talk on the other side. Let's go back to those hearings now.
HAYWARD: -- failsafe mechanism over the blowout preventer.
UNIDENTIFIED MALE: This blowout preventer, and it's the ultimate failsafe. And I know you keep using that term and it comes back to somewhat what haunts you, but I am curious about blowout preventers and the difference -- and I was noticing, my staff was able to give me some information. If you have a surface well, you have a 10,000-pound per square inch blowout preventer.
