goodfellowsmansfield.com

Friday, September 10, 2010

BP released their report into the causes of the Deepwater Horizon disaster earlier this year on Wednesday, and shifted much of the blame for the explosion and subsequent oil spill in the Gulf of Mexico, the largest accidental marine oil spill in the history of the petroleum industry, onto Transocean, the company managing the rig. The report concludes by stating that decisions made by “multiple companies and work teams” contributed to the accident which it says arose from “a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces.” The report, the product of a four-month investigation conducted by BP’s Head of Safety Operations, Mark Bly, criticizes the oil rig’s fire prevention systems, the crew of the rig for failing to realize and act upon evidence that oil was leaking from the surface of the ocean, and describes how BP and Transocean “incorrectly accepted” negative pressure test results. The document goes on to note that the blow-out preventer failed to operate, likely because critical components were not operational.

Bob Dudley, who will become chief executive of BP, described the accident as “tragic”. He said, “we have said from the beginning that the explosion on the Deepwater Horizon was a shared responsibility among many entities. This report makes that conclusion even clearer, presenting a detailed analysis of the facts and recommendations for improvement both for BP and the other parties involved. We have accepted all the recommendations and are examining how best to implement them across our drilling operations worldwide.” The report included 25 recommendations, according to a press release, “designed to prevent a recurrence of such an accident.” The oil company has previously blamed Transocean and Halliburton, the well contractor, for the disaster and BP executives feel they have been unfairly blamed by US politicians for the disaster, and the report continues this view.

Tony Hayward, who was fired from the position of BP’s chief executive following multiple public relations issues, squarley places the blame for the disaster on Halliburton. “To put it simply, there was a bad cement job,” he said in a statement, also claiming that BP should not be the only company to take the blame for the explosion. “It would appear unlikely that the well design contributed to the incident,” he argues. The report blames the type of cement used by Halliburton, designed to prevent harmful hydrocarbons from reaching the seabed, as well as criticizing the crew of Deepwater Horizon, for failing to realize for forty minutes that oil had started to leak from the well, and once it was realized, the crew “vented” the hydrocarbons “directly onto the rig”.

Describing how the explosion, which killed eleven rig personnel, occurred, the report states that “the heating, ventilation and air conditioning system probably transferred a gas-rich mixture into the engine rooms,” where the hydrocarbons ignited and a fireball engulfed the rig. But, the report states, the blowout preventer, the ultimate failsafe on the Deepwater Horizon failed, likely due to the fire on the rig. An automated system was not operational because the batteries powering it, located in a control pod, had gone flat, and another control pod contained a faulty solenoid valve.

The report was likely, however, written with the company’s legal liability for the disaster in a prominent position, since they are facing hundreds of lawsuits and criminal charges as a result of the spill. The executive summary is four and a half pages long and the first page is made up entirely of legal disclaimers saying if BP was found to be negligent in their operations of the rig, they could be fined a good deal more.

Questions have also been raised as to why BP has chosen to release their report before authorities examine the blowout preventer. The energy editor of The Guardian, Terry Macalister, wrote that the “catalougue of errors – both human and mechanical” in the report “demolish” the oil industry’s “much quoted mantra” of safety first. “It may come first in the board room but it does not down at the wellhead where the real dangers are faced,” he wrote. “It is worth remembering that BP, its rig operator Transocean and the main well contractor Halliburton are the blue chip companies in the wider oil and gas sector. If the shoddy work practices highlighted here are what the best-in-class do, then what is happening in the lower reaches of this industry?”

Transocean described the report as a “self-serving” attempt to “conceal the critical factor that set the stage for the Macondo incident: BP’s fatally flawed well design. In both its design and construction, BP made a series of cost-saving decisions that increased risk – in some cases, severely.” In a statement, the company listed five issues they felt had contributed to the disaster that were no fault but BP’s. “Transocean’s investigation is ongoing, and will be concluded when all of the evidence is in, including the critical information the company has requested of BP but has yet to receive.” Members of Congress, who are also carrying out a review into the disaster, also dismissed the report. Ed Markey, the Massachusetts democrat who has been investigating the spill in Congress, said that he felt the report was simply a lengthy defense of the oil company’s handling of the spill. “BP is happy to slice up blame, as long as they get the smallest piece,” he said.

Bly acknowledged during a press conference in Washington that the report did not detail the charges raised against the company in Congress and that BP permitted a culture of recklessness to flourish. He did, however, reject suggestions that cost-cutting had put lives at risk and the rig was a disaster waiting to happen. “What we see instead is, where there were errors made they were based on poor decision-making process or using wrong information,” he said. The Guardian reported that “the report is narrowly focused on the final days before the explosion rather than on earlier decisions about well design and safety procedures. It is also closely focused on the rig itself. No BP officials have been sacked for their role in the explosion, and Bly said there was no indication of any blame beyond the well-site managers.”

The Associated Press reported that Bly “said at a briefing in Washington that the internal report was a reconstruction of what happened on the rig based on the company’s data and interviews with mostly BP employees and was not meant to focus on assigning blame. The six-person investigating panel only had access to a few workers from other companies, and samples of the actual cement used in the well were not released.” The report continued, “Steve Yerrid, special counsel on the oil spill for Florida Gov. Charlie Crist, said the report clearly shows the company is attempting to spread blame for the well disaster, foreshadowing what will be a likely legal effort to force Halliburton and Transocean, and perhaps others, to share costs such as paying claims and government penalties.”

Head of Greenpeace’s energy campaign Jim Footner said that it was “highly likely that a truly independent report would be even more damning for BP.” However, he said, “the real problem is our addiction to oil, which is pushing companies like BP to put lives and the environment at risk. The age of oil is coming to an end and companies like BP will be left behind unless they begin to adapt now. The time has come to move beyond oil and invest in clean energy.” Alfred R Sunsen, whose oyster company operating in the Gulf of Mexico is facing the prospect of going out of business after 134 years, reacted angrily the the report. “The report does not address the people, businesses, animals, or natural resources that have been impacted by the disaster and will be dealing with the consequences of their inadequate and slow response to the disaster,” he said. The New York Times said that the report is “unlikely to carry much weight in influencing the Department of Justice, which is considering criminal and civil charges related to the spill,” and described it as “a public relations exercise” and a “probable legal strategy as it prepares to defend itself against possible federal charges, penalties and hundreds of pending lawsuits.”

Wayne Pennington, head of the geological engineering department at Michigan Technical University, also alleged that BP was wrong to blame other parties involved with the disaster. “The blowout and subsequent explosion and spillage appear to the result of an overall attitude that encouraged unwarranted optimism in the quality of each component of the job, allowing the omission of standard testing procedures, and the misinterpretation of other tests in the most-favorable light.” He continued: “Instead, skepticism should reign on any drilling job, and testing and evaluation at each stage of the drilling and completion would then be routine; instead of questioning the need for such things as the cement bond log, the companies involved should insist on checking and double-checking quality at each step of the process. This was clearly not done, repeatedly, in the case of the Macondo well, and disaster resulted.”

4.9 million barrels of crude oil leaked into the Gulf of Mexico, causing damage to marine and wildlife habitats as well as the Gulf’s fishing and tourism industries. Extensive measures were used to prevent the oil from reaching the coastline of Louisiana, including skimmer ships, floating containment booms, anchored barriers, and sand-filled barricades. Scientists have also reported immense underwater plumes of dissolved oil not visible at the surface. The U.S. Government has named BP as the responsible party, and officials have committed to holding the company accountable for all cleanup costs and other damage.

Dudley went on to say that BP “deeply regret” the disaster. “We have sought throughout to step up to our responsibilities. We are determined to learn the lessons for the future and we will be undertaking a broad-scale review to further improve the safety of our operations. We will invest whatever it takes to achieve that. It will be incumbent on everyone at BP to embrace and implement the changes necessary to ensure that a tragedy like this can never happen again.”