Oil Firms Ignored Warning Signs Before Blast, Inquiry Hears

BP was aware of equipment problems aboard the Deepwater Horizon rig hours before the explosion pumped millions of gallons of oil into the Gulf of Mexico, a congressional hearing was told yesterday .

In
a second day of hearings, the House of Representatives's energy and
commerce committee said documents and company briefings suggested that
BP, which owned the well; Transocean, which owned the rig; and
Halliburton, which made the cement casing for the well, ignored tests
in the hours before the 20 April explosion that indicated faulty safety
equipment.

"Yet it appears the companies did not suspend
operations, and now 11 workers are dead and the gulf faces an
environmental catastrophe," Henry Waxman, the chair of the energy and
commerce committee, said, demanding to know why work was not stopped.

The
committee heard testimony from oil executives suggesting multiple
failures of safety systems that should have given advance warning of a
blowout, or should have promptly cut off the flow of oil.

The
failures included a dead battery in the blowout preventer, suggestions
of a breach in the well casing, and failure in the shear ram, a device
of last resort that was supposed to cut through and seal the drill pipe
in the event of a blowout.

"Already we have uncovered at least
four significant problems with the blowout preventer used on the
Deepwater Horizon drill rig," said Bart Stupak, a Democrat from
Michigan who chairs the oversight subcommittee.

The examination
was far tougher on the oil companies than the Senate hearings on
Tuesday. BP also faced a financial sting as the White House asked
Congress to approve $118m in recovery costs, to be passed on to the oil
company.

While the committee accused the oil industry of failing
to anticipate the dangers of offshore drilling, senators John Kerry and
Joe Lieberman unveiled a climate and energy bill that for the first
time will put a price on carbon and require American cuts in greenhouse
gas emissions.

Kerry said he believed the oil spill would give
impetus to the American Power Act. "This a bill for energy independence
after a devastating oil spill, a bill to hold polluters accountable, a
bill for billions of dollars to create the next generation of jobs and
a bill to end America's addiction to foreign oil."

But after
eight months of careful courtship of industry and political opposition,
the bill has no Republican backers after Senator Lindsey Graham, a
co-author, withdrew his support last month and the immediate response
from industry groups and mainstream environmental groups was guarded.

Passage
of the law is seen as crucial to a global deal on climate change. The
987-page bill was carefully positioned to secure support from industry
and moderate Republicans, making the final product far weaker than
environmental organisations wanted.

In response to the oil
disaster, the bill moderated its original support for offshore
drilling, giving states veto power over projects in waters 75 miles
from their shores. States that go ahead will be able to keep a bigger
share, 37%, of federal revenues from drilling.

Otherwise the bill
calls for 12 nuclear plants and sets aside $2bn for research into clean
coal. Greenpeace condemned it as a "dirty energy bailout", with
director Phil Radford adding: "It seems that after a year and a half
wrangling, the only people who can be happy with this bill are the
fossil fuel industry lobbyists."

The bill aims for a 17% cut in
emissions over 2005 levels, the same weak target enshrined in a bill
passed by the House in June last year. But the Senate version would
apply to a smaller share of the US economy. Heavy industries would not
be required to cut emissions until 2016.

The bill would stop the
Environmental Protection Agency regulating greenhouse gases and would
scrap region cap and trade systems now underway in two dozen states and
Canadian provinces.