American Morning

Tune in at 6am Eastern for all the news you need to start your day.
May 28th, 2010
06:30 AM ET

Oil industry fights back

By Bob Ruff and Carol Costello, CNN

(CNN) – Disaster doesn't begin to describe what is happening now in the Gulf of Mexico. Despite BP's efforts to "fix what's wrong," in many people's minds it remains "a villain."

So does the oil industry as a whole. No one knows that more than J. Bennett Johnston, a former senator from Louisiana turned oil lobbyist for Steptoe & Johnson.

For 24 years, Johnston served in the Senate and much of that time sat as the chairman and ranking member of the Energy and Natural Resources Committee. When it comes to the power to make and break oil and natural gas policy making, it doesn't get much bigger than that.

Now that he's lobbying for an industry reeling from a the largest oil spill in American history, our Carol Costello asked Johnston, only partially tongue-in-cheek, if he now has the toughest job in the United States right now.

"Probably. No, no. BP's got the toughest job!"

How does he make his pitch when he lobbies for the oil industry?

"We've got to get away from the us vs. them. Us being the Americans vs. BP. As if we need, somehow if can punish BP everything will be all right."

Johnston says anger at BP is affecting every company drilling in the Gulf, no matter their safety record.

President Obama at his news conference Thursday announced four restrictions on future oil drilling:

"First, we will suspend the planned exploration of two locations off the coast of Alaska. Second, we will cancel the pending lease sale in the Gulf of Mexico and the proposed lease sale off the coast of Virginia.

Third, we will continue the existing moratorium and suspend the issuance of new permits to drill new deep water wells for six months. And four, we will suspend action on 33 deep water exploratory wells currently being drilled in the Gulf of Mexico."

Those companies operating wells in shallow waters, between 12 and 189 feet, like McMoRan Oil and Gas, can continue pumping natural gas and oil. It's a relief for McMoRan whose wells operate differently than those hundreds of miles off-shore. They consider themselves good citizens.

We asked McMoRan Vice President Billy Richey for his reaction to those who say people in oil business are greedy and only care about profit.

"Well," he told us, "that perception is not accurate. Because everybody in our business, we care greatly about what we do. About working safe. We want all these men and ladies on these rigs to go home when [they] get off their hitch to their families like we do every night."

Richey, like Johnston, says he's appalled by the disaster and by allegations of widespread corruption and lax oversight at Minerals Management Service (MMS), the government agency responsible for regulating offshore drilling.

Johnston says his did not know that MMS people were cozy with oil industry representatives. Was he surprised to hear those allegations this week?

"Understand I haven't been back in the Senate since '96. I don't think that was at the heart of this accident. Although we'll find that out too. I think it was sloppy on behalf of the companies."

Johnston favors of a presidential commission to look into allegations of corruption. But, drilling, new drilling, should continue for the good of the American economy. Like it or not, he says that the oil industry is part of America, and the majority of those who work in the industry are loyal Americans. He says this disaster should not make the U.S. shy about drilling offshore, it's better than being totally dependent on foreign exports from countries we may not consider our friends.


Filed under: Business • Gulf Oil Spill
soundoff (One Response)
  1. Randall of Texas

    Johnston fails to address years of the wealth creation taking place all through the years of the oil industry was in the catbird seat. Now there is a disaster and they expect to be pampered to where they can get by with a minium of expense when paying the huge amounts is the best way to ease suffering.

    Contrary to the popular belief deregulation in the early part of this decade caused this accident the opportunity to happen. Even when the pieces of the broken annular was being returned with drilling fluids and was ruled not to matter with the presents of acoustic regulators would have prevented this. The acoustic regulators were an expense Cheney omitted.

    May 28, 2010 at 7:15 am |