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BP, Oil Allies Mobilize Huge Lobby Operation

Industry Bracing for Gusher of New Regulations

BP and its allies are drawing on their considerable resources and deep lobbying teams in Washington as they seek to mitigate the fallout — including Congressional grillings and possible legislative action — from the oil spill in the Gulf of Mexico.

Already the London-based oil company has launched a major public relations effort, utilizing social media such as Facebook and Twitter to communicate its efforts to deal with an environmental disaster originating at one of its oil rigs.

The company’s CEO, Tony Hayward, has made the rounds of the television talk shows, which were posted on the company’s website. On Monday, he met with top Obama administration officials, including Interior Secretary Ken Salazar and Homeland Security Secretary Janet Napolitano in Washington, D.C., to discuss BP’s mitigation plan, according to administration officials.

The company is also relying on an international public relations firm, Brunswick Group, to help Hayward with the formidable task of getting the company’s message out.

“Tony Hayward has been clear with his entire executive team that BP’s focus is stopping the flow of oil, mitigating the impact and keeping the public informed,” said Su-Lin Nichols, a director at Brunswick. She said Brunswick was assisting BP with communications strategy.

But the coming weeks will provide more than public relations challenges for the company and the oil industry in general as some lawmakers demand tougher safety standards and re-evaluate the wisdom of widespread drilling off the coasts.

The Senate Energy and Natural Resources Committee has scheduled a hearing for May 11 on the oil rig accident, where experts on offshore exploration are expected to testify. The House Energy and Commerce Subcommittee on Oversight and Investigations has announced a hearing for that week as well to examine the companies’ safety measures and emergency responses.

In anticipation of that hearing, Energy and Commerce Chairman Henry Waxman (D-Calif.) and subcommittee Chairman Bart Stupak (D-Mich.) have sent letters to the executives of BP and two other companies involved in the operation, Transocean Ltd. and Halliburton, requesting documents related to the accident. They have asked BP for copies of complaints lodged by employees with the company’s ombudsman regarding engineering concerns at any of the company’s deep-water projects.

Meanwhile, New Jersey Democratic Sens. Frank Lautenberg and Bob Menendez and Florida Democratic Sen. Bill Nelson have proposed legislation to raise the cap on oil company liability for spill damages from $75 million to $10 billion.

Dampened Enthusiasm

Energy lobbyists expect that the oil spill will dampen the enthusiasm of some Members to expand offshore drilling.

“The implication of the incident is significant in the debate to open up the Eastern Gulf of Mexico” to drilling, said Mike Olsen, a former deputy assistant secretary for Land and Minerals Management who now works in the Washington office of the Houston-based law firm of Bracewell & Giuliani. Olsen, who said his firm does not represent BP or the other directly affected companies, said the energy industry will be watching closely how Congress deals with the spill.

“Ultimately, any number of companies could be impacted,” he said.

BP and other oil companies are well-positioned to deal with Capitol Hill maneuvering, ranking near the top in terms of annual lobbying budgets.

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