Tuesday, November 09, 2010

Reilly Calls BP Accident "Ghastly: One Bad Call After Another"

Nov 9: The National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling established by the President through Executive Order 13543 on May 21, 2010 is currently holding its fifth meeting (November 8-9) in Washington, DC. The Commission and its Chief Counsel Fred Bartlit are conducting the two-day hearing on preliminary findings regarding BP's Macondo well blowout. The primary focus of the hearing will be on the causes of the rig explosion. The meeting follows an October 28, letter from Bartlit, to the Commission report the results of cement testing and drawing several conclusions  indicating that an unstable cement from Halliburton may have been the cause of the BP blowout. Halliburton subsequently announced that it does not believe that the foam cement design used on the Macondo well was the cause of the incident.

    Today (November 9), Co-Chairman William Reilly's issued an opening statement summarizing his feeling on the previous day's hearing and the Commissions investigation thus far. Co-Chairman Bob Graham's was expected to release a statement later today at the completion of the hearing. Co-Chairman Reilly said the presentations and examinations covered in the November 8 session uncovered a suite of bad decisions which he listed as follows: failed cement tests, premature removal of muds underbalancing the well, a negative pressure test that failed but was adjudged a success, apparent inattention, distraction or misreading of a key indicator that gas was rising toward the rig.

    He said, "Our investigative team did not ascribe motive to any of those decisions and reported that they found no evidence that those flawed decisions were made to save money. They didn't rule out cost, just said they weren't prepared to attribute mercenary motives to men who cannot speak for themselves because they are not alive. But the story they told is ghastly: one bad call after another.

    "Whatever else we learned and saw yesterday is emphatically not a culture of safety on that rig. I referred to a culture of complacency and speaking for myself, all these companies we heard from displayed it. And to me the fact that each company is responsible for one or more egregiously bad decision, we're closing in on the answer to the question I posed at the outset of yesterday's hearing, whether the Macondo disaster was a unique event, the result of special challenges and circumstances, or indicates something larger, a systemic problem in the oil and gas industry.

    "BP, Halliburton and Transocean are major respected companies operating throughout the Gulf and the evidence is they are in need of top-to-bottom reform. We are aware of what appeared to be a rush to completion at Macondo, and one must ask whether the drive came from that made people determine they couldn't wait for sound cement, or the right centralizers. We know a safety culture must be led from the top, and permeate a company. The Commission is looking beyond the rig to the months and years before. BP has been notoriously challenged on matters of process safety. Other companies may not be so challenged and today we will hear from two whose reputations for safety and environmental protection are exemplary.

    "They will tell us, I believe, that safety and efficiency reinforce one another, and that their safety cultures have contributed to their profitability. Both companies and their safety/risk management systems have received extensive examination by the Commission's staff in meetings I have attended. They are impressive. Nevertheless, their rigs have been shut down in the Gulf this summer because of the performance of other companies. This has led the Commission to learn from the nuclear industry which has an institute that promotes best practices, reinforces regulations, and polices the laggards. So if yesterday we heard from the laggards, today we hope to learn from the leaders -- companies which learned from their own crises and disasters and rose to become standard setters."

    The Commission issued a summary listing of "Preliminary Conclusions –Technical," along with extensive technical backup information. The summary is as follows: 

  • Flow path was exclusively through shoe track and up through casing.
  • Cement (potentially contaminated or displaced by other materials) in shoe track and in some portion of annular space failed to isolate hydrocarbons.
  • Pre-job laboratory data should have prompted redesign of cement slurry.
  • Cement evaluation tools might have identified cementing failure, but most operators would not have run tools at that time. They would have relied on the negative pressure test.
  • Negative pressure test repeatedly showed that primary cement job had not isolated hydrocarbons.
  • Despite those results, BP and TO personnel treated negative pressure test as a complete success.
  • BP's temporary abandonment procedures introduced additional risk.
  • Number of simultaneous activities and nature of flow monitoring equipment made kick detection more difficult during riser displacement.
  • Nevertheless, kick indications were clear enough that if observed would have allowed the rig crew to have responded earlier.
  • Once the rig crew recognized the influx, there were several options that might have prevented or delayed the explosion and/or shut in the well.
  • Diverting overboard might have prevented or delayed the explosion. Triggering the EDS prior to the explosion might have shut in the well and limited the impact of any explosion and/or the blowout.
  • Technical conclusions regarding BOP should await results of forensic BOP examination and testing.
  • No evidence at this time to suggest that there was a conscious decision to sacrifice safety concerns to save money.
    In addition to various agency personnel, the Commission was scheduled to receive testimony from: Dr. E.C. Thomas, Consulting Petrophysicist and Owner, Bayou Petrophysics; Charlie Williams, Chief Scientist, Well Engineering and Production Technology, Shell Energy Resources Inc.; Steve Lewis, Advanced Drilling Technology Implementation Engineer, Seldovia Marine Services; Dr. John Rogers Smith, Associate Professor, Department of Petroleum Engineering, Louisiana State University; Darryl Bourgoyne, Director, Louisiana State University Petroleum Engineering Research and Technology; Marvin Odum, President, Shell Oil Company, and Upstream Americas Director, Royal Dutch Shell; and Rex Tillerson, Chairman and Chief Executive Officer, ExxonMobil.
    On November 8, Representatives Ed Markey(D-MA) and Lois Capps (D-CA) urged Senate Republicans to stop blocking legislation (H.R. 5481) giving subpoena power to the National Commission on the BP Deepwater Horizon Oil Spill investigating the BP oil spill from coming to the Senate floor for a vote. The Representatives pointed out that at the hearing to present the preliminary findings of the commission's investigation, Bartlit, expressed his dismay that the commission has not been granted subpoena power by Congress. He said, "Because I don't have subpoena power, I have to look you in the eye and say I'm telling you what people told me. I can't subpoena people and put them under oath. I wish I could. I think it's damned important, but it's the way it goes."
    Representative Capps who introduced H.R. 548 which passed the House 420-1 on June 23, said, "It is clear after hearing Mr. Bartlit's testimony that without subpoena power the oil spill commission is operating without all of the tools it needs to conduct a thorough investigation of BP's disaster. It's really astonishing that Senate Republicans have not allowed a bill that passed the House nearly unanimously to even come to the floor for the vote. They need to stop defending Big Oil and allow this bill to come to the floor when Congress returns to Washington next week." Representative Markey said, "Every day that Senate Republicans block subpoena power for the independent commission is another day BP, Halliburton and Transocean can duck and dodge the panel's hardest questions. The commission has already shown its value, and Senate Republicans should stop protecting the companies responsible for the spill by preventing the pursuit of the truth in this disaster."
    Access the list of Preliminary Conclusions (click here). Access Co-Chairman Reilly's statement (click here). Access the meeting agenda with links to detailed information and 3D-animations (click here). Access the Oil Spill Commission website for a additional background information (click here). Access a release from Reps. Markey and Capps (click here).