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Obama Criticizes ‘Spectacle’ of Blame at Oil Spill Hearings

U.S. President Barack Obama speaks about the oil spill in the Gulf of Mexico at the White House in Washington on May 14, 2010. Photographer: Saul Loeb/AFP/Getty Images
U.S. President Barack Obama speaks about the oil spill in the Gulf of Mexico at the White House in Washington on May 14, 2010. Photographer: Saul Loeb/AFP/Getty Images

May 15 (Bloomberg) -- President Barack Obama denounced the “ridiculous spectacle” of finger-pointing by BP Plc, Transocean Ltd. and Halliburton Co. over the Gulf of Mexico oil spill and vowed to end the “cozy relationship” between companies and the agency that permits them to drill.

During congressional hearings on the disaster “you had executives of BP and Transocean and Halliburton falling over each other to point the finger of blame at somebody else,” Obama said yesterday at the White House after meeting with Cabinet members and advisers on efforts to stem environmental and economic damage on the Gulf coast.

“The American people could not have been impressed with that display, and I certainly wasn’t,” the president said.

The president said oil exploration and drilling must still be part of the nation’s energy strategy.

The well, about 40 miles (64 kilometers) off Louisiana’s coast, began spewing oil after the Deepwater Horizon rig exploded on April 20 and sank two days later, killing 11 workers. Government officials have estimated that the well is spewing about 5,000 barrels a day of crude, or about 210,000 gallons, into the Gulf.

Higher Estimate

Another assessment, reported by National Public Radio, said as many as 70,000 barrels a day may be pumping into the Gulf, one of the country’s largest fishing grounds. Efforts to end or contain the leak by London-based BP so far have failed.

Executives from BP, Transocean, which owned the drilling rig, and Halliburton, the contractor involved in cementing the well on the day of the explosion, testified this week before congressional panels investigating the spill.

BP America Inc. Chairman Lamar McKay blamed Transocean’s blowout preventer for failing, while Transocean’s Chief Executive Officer Stephen Newman said responsibilities for the project “begin and end” with BP.

Halliburton’s president of global business lines, Tim Probert, said his company was following BP’s orders, as it was “contractually bound” to do.

“There’s enough responsibility to go around, and all parties should be willing to accept it,” Obama said. “That includes, by the way, the federal government.”

‘Sense of Urgency’

BP CEO Tony Hayward said in a statement that the company shares Obama’s “sense of urgency” about the time it is taking to halt the leak. BP is “participating fully in investigations that will provide valuable lessons about how to prevent future incidents of this nature,” he said.

Cathy Mann, a Halliburton spokeswoman, declined to comment. A spokesman for Transocean, Guy Cantwell, declined to comment.

Oil and equipment companies and the government share the responsibility for guarding against accidents and spills, Obama said. “I will not tolerate more finger pointing or irresponsibility,” he said.

Obama faulted the Minerals Management Service for having too close a relationship with the industry it regulates. BP got an exclusion from a National Environmental Policy Act review by the agency for its damaged well in the Gulf.

He called for a “top-to-bottom reform” of the MMS and a review of how the agency assesses the environmental impact of offshore drilling.

“It seems as if permits were too often issued based on little more than assurances of safety from the oil companies,” Obama said. “That cannot and will not happen anymore.”

‘Thorough Investigation’

Interior Secretary Ken Salazar said in a statement that overhauling the agency will be “an important part of the ongoing comprehensive and thorough investigation of this incident.”

Obama previously announced plans to split the service’s responsibilities. It now manages gas and oil resources on the outer continental shelf and collects and accounts for revenue from leases issued to companies such as BP and Exxon Mobil Corp.

The president has ordered a halt to any new offshore leases until an Interior Department review determines whether more regulation is needed. He also ordered inspections of existing rigs.

The president supports raising the limit on liability for oil companies for economic damages from a spill. Under current law, economic liability is capped at $75 million. A measure that would raise the limit to $10 billion failed to win expedited approval in the Senate this week because of objections from Republican Senator Lisa Murkowski of Alaska.

In addition, the administration has asked Congress for $118 million of emergency funding to cover costs related to the spill. Most of that expense will be recouped from BP.

To contact the reporters on this story: Nicholas Johnston in Washington at Njohnston6@bloomberg.net; Kate Andersen Brower in Washington at kandersen7@bloomberg.net

To contact the editor responsible for this story: Mike Tackett at mtackett@bloomberg.net

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