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Lawmaker tells BP chief to 'commit hara-kiri'

By Annalyn Censky and Aaron Smith, staff writers


NEW YORK (CNNMoney.com) -- A hearing to discuss the future of national energy policy in the wake of the Gulf oil disaster got pretty ugly Tuesday.

Lawmakers slammed executives from five of the world's largest oil companies. At one point Rep. Cliff Stearns, R-Fla., called on Lamar McKay, chairman and president of BP America, to quit his job. Rep. Anh "Joseph" Cao, R-Louisiana went so far as to suggest McKay try a type of ritual suicide.

"Mr. Stearns asked you to resign. In the Asian culture we do things differently. During the Samurai days we just give you a knife and ask you to commit hara-kiri," said Cao, who is of Vietnamese descent.

McKay did not respond to these comments. However, he did say that a relief well will allow his company to get the leak under control "by mid-August."

Rep. Ed Markey, D-Mass. called on executives from BP (BP), ExxonMobil (XOM, Fortune 500), ConocoPhillips (COP, Fortune 500), Chevron (CVX, Fortune 500) and Shell Oil (RDSA) to answer before his House Energy and Environment subcommittee Tuesday. Specifically, he wanted to focus on the ongoing spill, renewable energy development and the effect of President Obama's six-month moratorium on deepwater drilling.

Saving the walruses

But the hearing opened with Markey criticizing the companies for having cookie-cutter contingency plans for dealing with disasters like the Gulf Coast oil spill.

Those plans included "embarrassing" errors like a reference to protecting walruses, which haven't lived in the Gulf Coast for at least 3 million years, and the phone number of a marine biologist who died five years ago, Markey said.

In opening remarks, senior House Democrats held up a 500-page binder from Exxon Mobil, which details the company's plans for dealing with emergencies such as oil spills, and decried it for being nearly identical to BP's.

Chevron, ConocoPhillips and Shell Oil also have similar plans, calling for measures like blowout preventers and top kill procedures which failed to contain the ongoing spill, lawmakers said.

When it comes to emergency plans, the "only technology you seem to be relying on is a Xerox machine," Markey told the oil execs.

Exxon Mobil Chairman and CEO Rex Tillerson called the walrus debacle an "embarrassment." ConocoPhillips CEO James Mulva and Chevron CEO John Watson followed suit, saying they too found the walruses "inappropriate" for a Gulf of Mexico response plan.

'Not equipped' for worst case scenario

Asked if the Exxon would have done anything differently than BP, Tillerson explained that he would have used a "different well design" and a "different cement formulation" than those used by BP at the Deepwater Horizon rig, which exploded and sank on April 20, killing 11 workers and causing the leak that is fouling the Gulf.

But when Rep. Bart Stupak, D-Mich., pointed out that ExxonMobil used the same plan as BP, authored by the New Jersey-based contractor Marine Spill Response Corp., Tillerson admitted that his company is "not equipped" to handle a worst-case scenario.

"That's why the emphasis is always on preventing these things from occurring because when they happen we are not very well-equipped to deal with them," said Tillerson. "And that's just a fact of the enormity of what we are dealing with."

The oil executives also told the committee that scaling back offshore drilling in wake of the Gulf Coast spill would only make matters worse in the region because it would mean cutting jobs, limiting government revenues and heightening the country's dependence on foreign drilling.

Both Exxon and Chevron's CEOs said they would most likely redeploy their deepwater rigs and personnel to other places in the world if not allowed to drill off U.S. shores.

"We would redirect human resources to other parts of the world where we're allowed to work," Exxon's Tillerson said. "This stuff is too expensive to just let sit around."

In May, President Obama extended a ban on deepwater drilling in the Gulf Coast from 30 days to six months. The ban requires all Gulf wells drilling in more than 500 feet of water to shut down, and prevents new permits from being issued. Wells that are already pumping crude can continue to operate.

In a letter to the company on Monday, Senate majority leader Harry Reid, D-Nev., and other members of the Senate Democratic Caucus called on BP to establish a $20 billion account to pay for the oil spill. The company is also weighing whether to issue its $2.4 billion second quarter dividend, which is set to be paid out in August.

Just hours before the hearing on Capitol Hill Tuesday, Fitch Ratings downgraded BP for a second time this month to just above junk status.

Aaron Smith, CNNMoney.com staff writer, contributed to this story. To top of page

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