Oil companies all fail the safety test

WELL WELL BP global CEO Tony Hayward has agreed to President Obama's demand for a compensation fund. This year's $5bn payment will still leave the UK-based oil giant with change of $600 million from its 2010 first quarter profits.

Members of the US Congress tore into the big energy corporations on 15 June for filing almost identical Gulf of Mexico oil spill response plans – which included contact details for a deceased scientist and steps to protect marine mammals not found in the region’s waters.

Exxon-Mobil, Chevron, ConocoPhillips and Shell all have identical response plans to BP, said House energy and commerce committee chair Henry Waxman. The verbal assault by committee members undermined attempts by the oil giants to suggest that their working practices differ from those of BP; and that the catastrophe, which killed 11 workers, would not have happened if the well had been theirs.

Leading the committee’s questioning of energy executives, Democrat Ed Markey focused on their spill response plans. “They cite identical response capabilities and tout identical ineffective equipment. In some cases, they use the exact same words,” he said. He added: “Like BP, three other companies include references to protecting walruses, which have not called the Gulf of Mexico home for three million years.”

Under pressure from US president Barack Obama and ahead of a congressional grilling for BP’s London-based chief executive Tony Hayward this week, BP agreed to the president’s demand for the creation of a $20bn (£13.5bn) compensation fund for victims of the Gulf oil spill. The company also told the president it would not pay shareholders a dividend this year – the first time this has happened since World War II. BP’s shares rose sharply on news of the deal.

The agreement requires BP to pay $5bn into the fund this year, significantly less than its first quarter profits. A week after the rig exploded on 20 April, BP announced profits from January to March 2010 of $5.6 billion (£3.6bn).

The US president has expressed renewed interest in a clean energy plan in the wake of the Gulf disaster.

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