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Gulf Coast Oil Spill
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4 oil firms join to create spill response plan Companies will spend
$1 billion on equipment to stop leaks, clean land
by Steven Mufson and Marc Kaufman
Four oil giants are going to spend $1 billion to jointly design, manufacture and store equip- ment to respond to an oil spill in the Gulf of Mexico, part of an ef- fort to bolster their capabilities in the wake of the BP disaster and to reassure Congress members worried about future drilling. Exxon Mobil, Royal Dutch Shell, ConocoPhillips and Chev- ron announced Wednesday a plan to form a nonprofit, theMa- rine Well Containment Co., and to prepare equipment similar to what BP began to design and as- semble only after the April 20 ex- plosion that sank the Deepwater Horizon drilling rig and trig- gered the massive oil spill in the gulf.
Exxon Mobil will lead the engi- neering and construction efforts, which the companies said they hoped to complete in 18 months. The new response plan focuses on how to quickly stop the flow of oil from a leaking, subsea well and how to channel the oil to ves- sels nearby. It does not include new measures for how to skim oil from water or to clean soiled
Federal alumni fill oil and gas lobby
lobbyists from A1
who has experienced the phe- nomenon firsthand: One of his former aides, Jesse McCollum, signed on as a BP lobbyist two weeks after the Deepwater Hori- zon explosion. Towns’s office de- clined to comment; McCollum did not respond to a message. The Post analysis found that BP and other companies involved in the gulf disaster employ as lobby- ists more than three dozen former lawmakers, congressional staffers and bureaucrats. BP alone has hired at least 31 internal and ex- ternal lobbyists with government experience, records show. The American Petroleum In- stitute, the industry’s leading trade group, employs 48 lobbyists with previous federal experience, the analysis shows. They include former senator J. Bennett John- ston (D-La.), who helped dereg- ulate the natural gas industry, and former congressmen Jim McCre- ry (R-La.) and Charlie Stenholm (D-Tex.), both of whom strongly backed oil interests while in Con- gress.
“If you want somebody to work on energy issues, you don’t hire health-care workers,” said Jack N. Gerard, the group’s president and chief executive. Few former government offi- cials who joined the oil industry wanted to discuss their new roles. More than 30 individuals, compa- nies and lobbying firms contacted by The Post, including BP, de- clined to comment or did not re- spond to messages.
All told, more than 430 indus-
try lobbyists once had jobs in the legislative or executive branches, according to the Post analysis, which was based on CRP lobbying data, employment histories and other records. Scores had ties to major committees that shape fed- eral oil policies or to lawmakers who supported industry priorities while in Congress, records show.
Focus on ex-lawmakers The analysis suggests the in-
dustry has focused on hiring for- mer lawmakers from oil-produc- ing states. Fifteen of the 18 former members of Congress who now lobby for oil and gas firms are from Texas, Louisiana, Missis- sippi, Oklahoma or Kansas. Dozens more previously
worked as aides to lawmakers from those states. At least three industry lobbyists, for example, previously worked for Sen. Mary Landrieu (D-La.), an outspoken critic of President Obama’s oil- drilling moratorium in the gulf. During a June hearing, Lan- drieu warned Interior Secretary Ken Salazar that a prolonged halt to deep-water drilling “could po- tentially wreak economic havoc on this region that exceeds the havoc wreaked” by the spill itself. Later that evening, Landrieu held her annual “Crawfish Fest” fund- raiser, and its hosts included sev- en oil industry lobbyists — six of whom previously worked on Cap- itol Hill, the invitation shows.
432 former government employees
THURSDAY, JULY 22, 2010
Some nations see U.S. moratorium as an opportunity
many are moving ahead on deep-water oil wells
by Juliet Eilperin and Steven Mufson
ny-alesund, norway — Few, if any, nations have paid as much attention to the safety of offshore drilling as Norway, which is sur- rounded by oil-rich seas. In 40 years of offshore energy
MARIO TAMA/GETTY IMAGES On Wednesday in Lafayette, La., there was a moment of silence for workers killed in the oil rig explosion.
shorelines. The companies said that the plan will include a containment cap similar to the one now on top of BP’s damaged Macondo well. It will also include specially de- signed subsea manifolds, flexible riser pipes to link a damaged well to the water surface, and ships capable of capturing and storing the oil. The response plan was an- nounced as BP was forced to stop work on efforts to kill its blown-
out well in the gulf and install a plug in the relief well as protec- tion if the seas get rough. Weath- er conditions were deteriorating in the eastern Caribbean; there’s a 50 percent chance that there will be a tropical depression or storm within 48 hours. BP Senior Vice President Kent
Wells said that while boats and crew remain at the Macondo site, work on the relief well was stopped in the morning and evolving plans for an additional
effort to seal the well from above were put on hold. “We could have a tropical storm at Macondo,” Wells said, “and we have to be able to get out of the way. We have to watch the weather very, very carefully and adjust plans accordingly.” The plug was installed about
300 feet below the seafloor, be- neath the blowout preventer of the relief well.
mufsons@washpost.com kaufmanm@washpost.com
Revolving-door lobbyists An analysis by Te Washington Post finds that about three out of every four oil industry lobbyists previously worked in Congress or the executive branch.
613: Total number of oil and gas industry lobbyists
FORMER GOV’T
48 Exxon Mobil 30 BP 29 Chevron 28 Koch Industries 24 Sunoco 23 15 16 20 15 18 former members of Congress
FORMER CONGRESSMAN Bill Archer
Jim Blanchard Tomas J. Bliley Jr. John Breaux
Bill Brewster Vic Fazio Martin Frost George J. Hochbrueckner J. Bennett Johnston
ORGANIZATION
Oilfield Services & Drilling Indus Coalition, Weatherford International
America’s Natural Gas Alliance Soc. of Ind. Gasoline Marketers of America
America’s Natural Gas Alliance, National Propane Gas Assn., Plains Exploration & Production
American Gas Association Royal Dutch Shell Hyperion Resources Advanced Energy Systems
American Petroleum Institute, Interstate Natural Gas Assn. of America
SOURCE: Washington Post analysis, Center for Responsive Politics Landrieu said in an interview
that she is naturally interested in oil and gas issues given the indus- try’s importance to Louisiana. But, she added, the industry con- tributes relatively little to her campaign accounts given its size. Out of more than 100 former
staffers, Landrieu said, only a handful work for oil firms. They include former legislative counsel Kevin Avery, now representing Marathon Oil, and former energy adviser Jason Schendle, now lob- bying for BP and other oil firms. “These two individuals don’t have any more special access than any- body else,” Landrieu said. Avery and Schendle did not respond to messages seeking comment. Marathon spokesman Lee G.
Warren said the company seeks varied backgrounds in hiring for its government-affairs team; rec- ords show it has hired at least sev- en lobbyists with government experience. Warren said former government employees “offer ex- perience and expertise.” The party affiliation of lobby- ists is fairly evenly divided. About 55 percent of the revolving-door lobbyists with clear partisan affili- ations have worked for Repub- licans, including two former aides to Senate Minority Leader Mitch McConnell (R-Ky.) who lobby for Exxon Mobil, the records show. Three aides to former vice presi- dent Richard B. Cheney, himself a former oil-services executive, now lobby on behalf of oil firms, in- cluding former energy adviser Kevin O’Donovan, now a Royal Dutch Shell executive. Former in- terior secretary Gale Norton is a Shell lawyer. Shell spokesman Bill Tanner said the company looks for “can-
didates with the academic and professional experience, proven commitment and highest stan- dards of integrity.” Plenty of oil lobbyists also have
worked for Democrats, including power broker Tony Podesta, whose lobbying firm represents BP and Sunoco. He has co-hosted at least five fundraisers for Demo- cratic candidates this year, includ- ing House Speaker Nancy Pelosi (D-Calif.).
From agency to industry Nowhere has government and
industry coziness been on display more clearly than at MMS — re- cently renamed the Bureau of Ocean Energy Management, Reg- ulation and Enforcement. The Post analysis found more than a dozen former MMS employees working for the oil industry. Law- makers have asked the agency to provide Congress with the work histories of agency employees. The agency’s new director, Mi- chael Bromwich, acknowledged conflicts in the inspecting ranks in a statement to The Post and said new procedures aim to pre- vent employees from conducting inspections of former employers. One recent example of a revolv- ing-door move within MMS in- volved Randall Luthi, who left as agency director just weeks before the BP explosion to become presi- dent of the National Ocean In- dustries Association. Although Luthi’s salary has not been dis- closed, the previous association president made $580,000 in sala- ry and bonuses in 2008, tax rec- ords show. Luthi, who declined interview requests, made less than $160,000 at MMS. The Obama administration’s
TODD LINDEMAN/THE WASHINGTON POST
single revolving-door appoint- ment at the agency is a former BP executive, Sylvia Baca, who was named deputy assistant secretary for land and minerals manage- ment in June of last year. (Baca served as assistant secretary for land and minerals management in the Clinton administration.) Salazar spokeswoman Kendra
Barkoff said Baca does not work on offshore-drilling issues and has been recused for two years, or until next summer, from partici- pating in any cases involving BP. The close ties between industry
and government can lead to trou- bles. In a few cases, fraternal ties and the lure of money have led to criminal convictions. Former In- terior officials Milton K. Dial and Jimmy W. Mayberry pleaded guilty in 2009 and 2008, respec- tively, to charges stemming from a contracting scheme that allowed the men to retire from MMS but continue to earn six-figure sala- ries funded by the agency. Dial declined to comment. In a telephone interview, Mayberry said, “It was a contracting issue between me and the government, and that’s been resolved.” When agency investigators ex- amined the MMS’s Lake Charles, La., office this year, they found that inspector Donald C. Howard reaped financial benefits from an offshore firm he was supposed to be regulating. Howard was sen- tenced last year to one year of pro- bation and fined $3,000. He did not return calls seeking comment.
kindyk@washpost.com eggend@washpost.com
Staff writer T.W. Farnam and staff researcher Madonna Lebling contributed to this report.
Trent Lott Jim McCrery Don Nickles Chip Pickering Ronnie Shows Jim Slattery Charles W. Stenholm
Jim Turner J.C. Watts Jr.
27
Royal Dutch Shell 26
Indep. Petroleum Assn. of America 23
Hess 21
America’s Natural Gas Alliance 17
248 TOP 10 TOTAL 313 FORMER CONGRESSMAN ORGANIZATION
America’s Natural Gas Alliance Atlas Energy, American Petroleum Institute Anadarko Petroleum Tellus Operating Group Denbury Resources America’s Natural Gas Alliance
American Petroleum Institute, Indepen- dent Petroleum Assn. of America, Texas Alliance of Energy Producers
BP Syntroleum
29 35 37 42
American Petroleum Institute
Oil firms and trade groups employing the most lobbyists
TOTAL
LOBBYISTS 56
exploration, it has suffered just four spills — none of the magni- tude of the one in the Gulf of Mexico and none reaching the country’s pristine tundra shores. Its government has made efforts to avoid the kinds of conflicts that have bedeviled the U.S. reg- ulatory process by splitting off safety and environmental over- sight duties from the Ministry of Petroleum Energy. A separate Cli- mate and Pollution Agency weighs in on every decision about whether to open new areas to off- shore drilling, and its inspectors examine rigs once they’re operat- ing. Norway is doing more to study lessons from the gulf than many other nations. But it is also push- ing ahead with offshore drilling plans, including the kind of deep- water drilling that the Obama ad- ministration has suspended in the United States.
“Easy oil is running out,” said
Hege Marie Norheim, head of Statoil’s Strategic Agenda of Arc- tic and Subarctic Business Devel- opment Activities. “We’ve been exploring for oil and gas where it lies.” The strategy of continuing to
exploit the economic opportuni- ties of deep-water wells, even as the hazards they represent be- come clearer, is being pursued the world over. Other countries — including Brazil, Canada, Nigeria and Angola — are also moving forward with drilling, lured by oil reservoirs they are discovering that are two to six times as big as the average Gulf of Mexico reser- voir and taking advantage of new opportunities offered by the U.S. moratorium. “For places like Angola, Nigeria
and Brazil, most of their produc- tion comes from the deep water,” said Leta Smith, director of ex- ploration and production trends at Cambridge Energy Research Associates. “It’s a big piece of their revenue stream.”
Some of these countries stand to gain from the uncertainties in the United States prompted by the disaster in the Gulf of Mexico. This month, Diamond Offshore Drilling announced that it is sending one of its deep-water drilling rigs from the gulf to Egypt. The rig, which can work in water up to 10,000 feet deep, has a new contract running at least through next June. Last week, Diamond said another Gulf of Mexico rig called the Ocean Con- fidence would depart for Congo. On Tuesday, Marathon Oil
Chief Executive Clarence P. Caza- lot Jr. said that his company might divert a rig being built in Singapore and due to be deliv- ered to the Gulf of Mexico in De- cember. “If I can’t use it in the gulf, I won’t bring it to the gulf,” he said.
Moving rigs from the gulf
Diamond has said it might move more of its three remaining Gulf of Mexico rigs to foreign countries. While apologizing for the loss of jobs in the United States, Diamond Chief Executive Larry Dickerson said, “We are ac- tively seeking international op- portunities to keep our rigs fully employed.” There are many such opportu- nities. Brazil, already home to much of the world’s deep-water drilling fleet, is signing up more rigs. It is drilling wells nearly five miles underwater — five times deeper than BP’s Macondo well — and nearly 200 miles offshore, at the edge of its national waters. The political debate over the area known as the “pre-salt” province has focused on how to divide the royalties from such lucrative wells, not whether to curtail ex- ploration and development. Libya also said last month that
on
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Despite the hazards,
it would continue its offshore drilling program and gave BP a green light to go ahead with new exploration wells.
Countries are making long- term plans, as well. Last week, Canada invited new bids on nine- year leases off the coast of New- foundland and Labrador. Nonetheless, in light of the gulf spill, many nations are struggling with how to reconcile the desire to exploit their offshore resources with renewed concerns about safety and environmental protec- tion.
Canada has begun a compari- son of its regulations with U.S. rules, and Brazil’s national petro- leum regulatory agency has asked firms drilling in its waters to re- assess the chances of an accident taking place off its shores. In Ni- geria, President Goodluck Jona- than, a former environmental of- ficial in the strife-torn, oil-rich Niger Delta, is looking for lessons from the United States. “Whatever we do in this coun-
try will set the global scale,” said Fadel Gheit, an oil analyst at Op- penheimer & Co. “No one is going to build to two standards, just like the bumper in Japan cannot be lower than a bumper in the U.S.”
Since the BP spill, Canada has
focused on one specific drilling issue: whether to require compa- nies operating in the Beaufort Sea to drill a relief well at the same time they start an explor- atory wells, to have a quick way of killing the well if needed. Its Na- tional Energy Board canceled a May 11 hearing on the issue and announced it would begin a broad review of safety measures for energy exploration in the Arc- tic.
Learning from the BP spill But a different regulatory au-
thority, the Canada-Newfound- land and Labrador Offshore Pe- troleum Board, has already re- jected the idea of drilling a relief well at the same time as an explo- ration well because of the risk. Sean Kelly, the board’s spokes- man, said in an e-mail: “A blow- out can occur in a relief well, and companies need to take the same precautions drilling this well as they do for an exploration well. ” In Norway, to learn from the BP spill, the Norwegian Petro- leum Safety Authority has as- sembled an 11-person team that is studying the federal inquiries into the BP spill and has begun analyzing the report issued May 27 by the Interior Depart- ment’s Outer Continental Shelf Safety Board. As director general of Norway’s
Climate and Pollution Agency, El- len Hambro takes pride in the fact that her deputies report any drilling violations to the police, but notes that her petroleum unit has fewer than two dozen people and cannot compete with salaries offered by the private sector. “We are loaded with work, trying to keep the piles down,” she said. She also assesses every recom- mendation to open new areas to offshore drilling. But when the Norwegian gov- ernment announced last month which new oil and gas prospects would be leased in the Barents, North and Norwegian seas, it in- cluded seven blocks that Ham- bro’s agency said should be kept off-limits. “Sometimes they listen to our advice, and sometimes they don’t,” Hambro SAID. Hambro said it is hard to pre-
dict whether the BP spill will re- shape the world’s approach to taking oil and gas from the ocean’s depths. “The worst case has just hap-
pened,” she said. “We don’t know yet the consequences, environ- mental or political.”
eilperinj@washpost.com mufsons@washpost.com
Mufson reported from Washington. The Post’s iPhone App
Follow the latest oil spill news on your iPhone Do you want updates on the devastation in the Gulf of Mexico and BP’s cleanup efforts? Get The Post’s new iPhone App today for $1.99 per year from the App Store.
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