US Cong blows the lid off oil majors' disaster preparedness plans

All five oil giants have well laid out response plans to tackle a deepwater oil spill, in fact photocopies of identical and outdated plans drawn up prior to 2005 by a marine scientist (long dead and gone) from a small Texas sub contracting firm.

"The only technology you seem to be relying upon is a Xerox machine to put together your response plans," Rep Ed Markey, chairman of the sub committee on global warming mocked the heads of five oil giants at a US Congressional hearing yesterday.

According to The Washington Post, three of the oil majors listed the phone number of the deceased University of Miami marine science expert, Peter Lutz, who died in 2005, while four talked about the need to protect walruses, which have not inhabited the Gulf of Mexico in the last 3 million years.

The 500-page long plan also documents protecting seals and sea lions, neither of which inhabit the Gulf of Mexico.

In a shocking revelation before the house energy and commerce committee, multinational oil giants, Exxon, Chevron, ConocoPhillips and Shell, admitted that they did not have the technology or plans in place to handle a spill like the one in the Gulf of Mexico.

Yet, BP's four rivals assured the committee that the spill would never have occurred in their domains of operations since they followed "strict safety guidelines", which according to them, BP ignored.

This revelation comes just a few days after US energy giant Chevron's chief executive John Watson grandiosely told The Wall Street Journal in an interview that his company has in place policies and procedures that can prevent and deal with an oil spill like the one in the Gulf of Mexico.

The response plan in case of a spill of all the five oil companies were from the Response Group, a Houston-based firm having its offices in Houston and Alaska, employing about 35 people.

The five companies that includes BP also rely on one company, the Virginia-based Marine Spill Response to provide equipment in the event of a spill, which does not posses the necessary type and size of equipments required for a spill of the size as the oil spill from the Deepwater Horizon of BP in the Gulf.

"When you look at the details, it becomes evident these plans are just paper exercises," House Energy and Commerce chairman Henry A. Waxman said in relation to the five companies relying on a single supplier, which anyway does not possess the necessary equipments to deal with a large spill.

The big four US oil giants told the committee that they would have stopped drilling if they realised that there was a problem such as the one experienced by BP on the Deepwater Horizon.

"This incident represents a dramatic departure from industry norms in deepwater drilling," said Rex Tillerson, chairman and chief executive of ExxonMobil. "We do not proceed with operations if we cannot do so safely."

"I believe an investigation will show that this tragedy was indeed preventable," Chevron's Watson said.

 Tony Hayward, chief executive of BP had acknowledged in a 3 June interview with the Financial Times that the company was not prepared to tackle the blowout. "What is undoubtedly true is that we did not have the tools you would want in your tool kit," he said.

But Waxman, said that all the five oil companies had practically the same response plans as BP, which does not have adequate measures to respond to a blowout or spill at an offshore rig. "None of the five companies had an effective response plan," Waxman said.

Of the 500 pages oil response plan, ExxonMobil had devoted 40 pages detailing how to respond to the media in the event of a spill, while nine pages were devoted to environmental impacts.

Watcdog sleeps through response charade
But the worst offender was the US Minerals Management Service Department, which approved the oil companies 500 page plans, which claimed that they are capable of handling oil spills much larger than the current one at the Gulf of Mexico.

It will be interesting to see if the US lawmakers will sue the oil companies for making false declarations to get the go-ahead for drilling in deepwaters.

Oil has been spewing into the Gulf of Mexico since a drilling rig leased by BP exploded and sank on 20 April with the loss of 11 lives. The US Coast Guard estimates that about 35,000 barrels still escape each day.

After a series of failed efforts to cap the leak, last week BP finally managed to lower marine riser package containment cap that is able to collect oil and gas flowing from the well and siphon them to the Discoverer Enterprise drillship on the surface.

According to BP, nearly 15 thousand barrels of oil were collected and 32.9 million cubic feet of natural gas were flared until Monday.

Oil majors have earned billions of dollars from deepwater oil extraction, but have not invested in research for containment of spills in the event of a blowout.

BP has spent $1.6 billion so far in trying to contain and in cleaning up the spill that is threatening the shorelines of Florida, Alabama and Mississippi and the Louisiana barrier islands.

The Gulf of Mexico spill has revealed that oil companies do not have a clue as to how to contain an oil spill that is often miles underwater.

''From 'junk shots' to 'top hats,' this spill shows that BP and the oil industry paid more attention to drilling ultra-deep wells instead of creating fail-safe technologies to prevent and respond to a crisis,'' Massachusetts Democratic Senator, Markey said in a statement this month.

Twelve of the top global oil companies have made a net profit of $1.76 trillion collectively last year, a time when oil prices had come down due to the global recession, which had sawed their bottom lines.

Figures for 2009 in billions of US $
Company	Country	Revenues	Net Profit
ExxonMobil	US	310.5	19.28
Royal Dutch Shell	Netherlands/UK	278	12.5
Chevron	US	273	23.9
British Petroleum	UK	246.1	16.58
Total S A	France	161.3	10.4
PetroChina	China	160.8	15.1
ConocoPhillips	US	136	4.8
CNPC	China	110.50	13.2
Petrobras	Brazil	104.9	16.6
Gazprom	Russia	98.6	25.3
OAO Lukoil	Russia	81.1	7.1
Statoil	Norway	71.65	2.72
Total		2032.45	176.48
Table compiled by Ravi Kunder: domain-b from company figures till December 2009

Despite the massive profits, none of the oil companies have invested in systems, equipments, technical expertise to contain deepwater oil spills.