Oil Companies Create Spill Response System

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Chevron CEO John Watson, Conoco Phillips CEO James Mulva and Shell Oil President Marvin Odum i

Chevron CEO John Watson, Conoco Phillips CEO James Mulva and Shell Oil President Marvin Odum testify on Capitol Hill last month. The three business leaders, along with ExxonMobil's Rex Tillerson, have agreed to pool $1 billion to form a new company that would respond to offshore oil spills. Haraz N. Ghanbari/AP hide caption

itoggle caption Haraz N. Ghanbari/AP
Chevron CEO John Watson, Conoco Phillips CEO James Mulva and Shell Oil President Marvin Odum

Chevron CEO John Watson, Conoco Phillips CEO James Mulva and Shell Oil President Marvin Odum testify on Capitol Hill last month. The three business leaders, along with ExxonMobil's Rex Tillerson, have agreed to pool $1 billion to form a new company that would respond to offshore oil spills.

Haraz N. Ghanbari/AP

Three months after the BP well exploded and sank in the Gulf of Mexico, the oil industry says it has a plan to address any future disasters. Four of the biggest companies — Chevron, ExxonMobil, ConocoPhillips and Royal Dutch Shell — are putting up at least $1 billion to design and build what is essentially a giant oil cleanup machine.

This effort may have an effect on the environment, but what the companies also want is to see politics shift a little in their favor.

Even Marvin Odum, president of Shell Oil, agrees that the giant oil slick in the Gulf has left a huge stain on the reputation of all oil businesses.

"The tragic accident that has occurred in the Gulf of Mexico has changed the way the public, politicians and even the companies look at this business. It's a different perception of the risk in the business," he says.

Odum says the disaster prompted the industry to consider better prevention mechanisms. And over the last month, a team of 40 engineers have been working on a system that would help contain oil in the event of future spills in the Gulf.

The companies will fund a joint venture, which is developing this system of vessels, pipes and subsea machines. They promise the system will be able to deploy within 24 hours and operate in waters nearly two miles deep, under harsh weather conditions. When complete, the system will contain 100,000 barrels of spilled oil a day.

The real significance of this partnership, however, may not be what it achieves technically, but what it signals to Washington. And the companies have been selling their ideas to the Obama administration and members of Congress.

"Frankly, we have to restore the trust of the government and of the American public in this industry of what we can do and what we can do safely," Odum says.

And Odum says he thinks if this group can prove it can be better at preventing blowouts — and that it can react to contain any future disasters — the administration might be likelier to support lifting the ban on offshore drilling.

White House Press Secretary Robert Gibbs on Thursday acknowledged the industry is addressing a gap in its reaction plans. But he also said the administration stands by its moratorium.

Amy Myers Jaffe, director of Rice University's Baker Institute Energy Forum, says she believes that over time, this partnership will lead to an easing in the moratorium.

"In the past I've been very critical of the fact that there wasn't an existing technology initially on," Jaffe says.

BP was caught flat-footed, with no functional plan to cap or contain a broken well. But the plan announced Wednesday has changed Jaffe's attitude toward the rest of the industry.

"In a country where leadership in corporations and on Wall Street have not responded with any kind of solutions to any of the problems that have come up in the last 2 or 5 years in American business — the fact that these companies in 60, 90 days are out here with an announcement of a billion-dollar commitment to actually create a solution in consortium fashion is pretty impressive," Jaffe says.

She says it restores her faith that the industry is capable of engineering solutions to its own problems — and that it cares.

BP is not currently a part of this effort. But the companies say they expect it and many of the other oil and gas operators in the Gulf to join the project.

Shell's Odum says he expects the system will be up and running within the next year and a half.

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