Five Questions for BP's Tony Hayward
BP CEO Tony Hayward today faces what is sure to be a tough inquisition before the House Energy and Commerce Committee.
Here are five questions Hayward should be forced to answer under oath:
1. Do you agree that the Deepwater Horizon disaster could have been averted if BP had exercised a greater degree of concern for safety?
In advance of the hearing, Energy and Commerce Committee Chair Henry Waxman and Subcommittee on Oversight and Investigations Chair Bart Stupak sent Hayward a detailed letter elaborating five separate cost-cutting and corner-cutting decisions made by BP. Had BP made a different decision in any of these and other instances -- prioritizing safety over profit -- it is likely the Gulf catastrophe could have been averted. The Committee is sure to focus on these issues.
2. If you believe that the Gulf gusher is simply an unfortunate accident, rather than the result of BP's negligence and recklessness, do you therefore agree that deepwater drilling is too risky and dangerous?
3. Even if this disaster could have been prevented if BP had not been so reckless, doesn't the scale of the gusher and the fecklessness of BP's response mean that deepwater drilling should be abandoned?
It is evident that the gusher is having a devastating effect on the Gulf's ecology, but no one knows how serious it is or will be. This disaster has far outpaced scientific knowledge about the deep sea.
The disaster has also shown that, while oil giants do have the technology to drill a mile below sea level and miles into the earth's core, they do not have commensurate capacity to handle an oil geyser a mile below the ocean's surface. There is not even a serious capacity to control oil on the surface.
4. After the explosion, BP claimed 1,000 barrels a day were leaking into the ocean. The government now estimates 60,000 barrels are gushing a day. Some experts believe the amount may be more like 100,000. Some skeptics have understandably raised questions about whether BP's initial public statements on the size of the leak were made in good faith. Will you release all internal estimates and related documentation on the size of the oil gusher, and continue to release such information publicly as you generate it?
More generally, will you presumptively share publicly all materials you are now generating related to capping the well, capturing oil and cleaning up the ocean and shore?
Information about BP's operations in this regard can no longer be considered proprietary and nonpublic, if it ever should have been. BP is now performing essentially public functions in trying to address the gusher. BP remains in control of the remedial process only because the government does not have the technological capacity to take over.
5. You have agreed to pay $20 billion into an escrow fund to pay victims of the oil gusher. You have also agreed to suspend dividend payments for this year. But BP's liabilities may vastly exceed $20 billion. Do you pledge to make available the resources of the entire BP corporate structure to satisfy these liabilities?
Behind this question: There is good reason to be concerned about BP trying to isolate liability in one or more subsidiaries, and then either entering the subsidiary into bankruptcy, or manipulating the corporate form in an attempt to pay all of what it will owe.
For Tony Hayward and BP, the hard questions are just beginning.
© 2010 Robert Weissman