July 22, 2019 / by 

 

Oil and Water and Leaky Hydraulics Don’t Mix?

I wanted to call your attention to this excellent story from the Houston Chronicle describing some of the potential causes of the Deepwater Horizon spill. The short version appears to be that they were switching the drill chamber over from mud to water, which exposed what may be a potentially faulty concrete job, which brought gas to the surface. When that happened, and the blowout preventer was activated, the BOP failed, potentially because of leaky hydraulics.

As the Chron story explains, BP should not have been replacing the mud with water unless they were very sure of the cement job done the day before.

Experts say well-capping poses special hazards. One arose that day as crews were replacing the mud with seawater in pipes going from the ocean floor to the rig.

Deep gases exert astounding upward pressure on a well. “Drilling mud,” a heavy fluid used to lubricate the drill and bring up bits and pieces of rock, is used as the main line of defense against the upward pressure, or a disastrous eruption of gas.

The mud was being displaced so the riser could be detached from the rig and the wellhead, and the well could be capped with a final cement plug. But seawater is much lighter than mud. The pressure the riser was applying to the well would have lessened by as much as 38 percent, experts said.

That could prove significant.

Investigators likely will be considering whether the drill hole and the casing pipe were secured properly with cement a day earlier.

“The big question is how confident were they in the casing cementing job,” said Elmer “Bud” Danenberger, who recently retired as chief of offshore regulatory programs for the Minerals Management Service. “They shouldn’t have begun this (riser) operation until they were confident in that.”

Now, as the MMS recently found, problems with the cementing process have been one (but not necessarily the only) cause in a plurality of blowouts in recent years. Though most of those cementing-related blowouts occurred in far shallower waters than this well.

Cementing problems increased significantly during the current period as these problems were associated with 18 of the 39 blowouts, compared with 18 of the 70 blowouts with identified contributing factors during the previous study. During the current period, all but one of the blowouts associated with cementing problems occurred in wells with water depths less than 400 ft.

The Chron notes that HAL claimed it had tested its cement job in its “we worked to spec” statement from last week, but had not released the results of that test. A number of comments on oil boards suggest this is where a fight over liability between BP and HAL might break out–whether the tests showed the concrete was sufficient or not, and if there were doubts, whether the BP guy in charge should have called a halt to efforts to remove the rig.

In any case, for whatever reason, at the moment they were replacing the mud with seawater, gas and oil surged out of the hole, which is when the BOP should have–but failed to–prevent the blowout.

When the alarms go off “you shut it down,” said Daniel Becnel, an attorney from Reserve, La., who has filed lawsuits on behalf of fishermen, oystermen and other Louisiana residents claiming damages from the spill. “They’ve got panic switches all over the place.”

Those switches are supposed to activate a blowout preventer on the ocean floor, a huge and complex tower of valves and pipe crimpers designed to shut down a well in an emergency. It didn’t work.

Although it had been tested beforehand, BP now says robot submarines have discovered at least one problem with the blowout preventer, though it is unclear whether it caused the malfunction.

“We have found that there are some leaks on the hydraulic controls,” said Bob Fryar, senior vice president of BP’s exploration and production operations in Angola, in southwestern Africa.

Is anyone besides me wondering why BP’s Vice President in charge of exploration in Angola is the one discussing this malfunctioning blowout preventer off the coast of Louisiana? Because I am.

In any case, we’re back into an issue of testing again. A survivor from the rig describes how these tests would play into the decision to replace the mud with water (starting at about 0:30):

At that point, the BOP stack–the blowout preventer that [a previous caller] was talking about–was tested. Don’t know the results of that test. However, it must have passed because at that point, they elected to displace the riser–the marine riser–from the vessel to the sea floor. They displaced all the mud out of the riser preparing to unlatch from the well two days later. So they displaced it with seawater.

[snip]

The test should have been [sufficient] or they would never have opened it back up.

And we’re also back to the question of whether former Halliburton CEO Dick Cheney’s Energy Task Force fostered a climate in which a backup system–an acoustic regulator–was deemed too expensive to require.

The absence of an acoustical regulator — a remotely triggered dead man’s switch that might have closed off BP’s gushing pipe at its sea floor wellhead when the manual switch failed (the fire and explosion on the drilling platform may have prevented the dying workers from pushing the button) — was directly attributable to industry pandering by the Bush team. Acoustic switches are required by law for all offshore rigs off Brazil and in Norway’s North Sea operations. BP uses the devise voluntarily in Britain’s North Sea and elsewhere in the world as do other big players like Holland’s Shell and France’s Total. In 2000, the Minerals Management Service while weighing a comprehensive rulemaking for drilling safety, deemed the acoustic mechanism “essential” and proposed to mandate the mechanism on all gulf rigs.

Then, between January and March of 2001, incoming Vice President Dick Cheney conducted secret meetings with over 100 oil industry officials allowing them to draft a wish list of industry demands to be implemented by the oil friendly administration. Cheney also used that time to re-staff the Minerals Management Service with oil industry toadies including a cabal of his Wyoming carbon cronies. In 2003, newly reconstituted Minerals Management Service genuflected to the oil cartel by recommending the removal of the proposed requirement for acoustic switches. The Minerals Management Service’s 2003 study concluded that “acoustic systems are not recommended because they tend to be very costly.”

Finally, there’s one more question about this–why they switched from mud to seawater in the first place. Apparently, that’s done because it makes it easier to come back and reopen the well in the future–it’s a cost saving measure. Though it appears that not switching over from mud to water might just have postponed the ultimate failure a few days.

All of which is an elaborate way of saying we don’t know. It’s possible outright negligence played into this spill. It’s possible that the standard requirements for such drilling have been (ahem) watered down because of laughable concerns about cost, or that the parties involved cut corners on this well in particular because of time pressures (which are ultimately money pressures too). And it’s possible that none of these safeguards would have made drilling at these depths safe.

But I sure am curious whether we’ll ever see those test results.


Halliburton: We Worked to Spec

As oil continues to gush into the Gulf, I’ve been haunted by the statement Halliburton put out about the Deepwater Horizon spill.

Here’s the statement, dated April 30, in its entirety.

Halliburton (NYSE: HAL) confirmed today its continued support of, and cooperation with, the ongoing investigations into the Deepwater Horizon drilling rig incident in the Gulf of Mexico earlier this month. Halliburton extends its heartfelt sympathy to the families, friends and our industry colleagues of the 11 people lost and those injured in the tragedy.

As one of several service providers on the rig, Halliburton can confirm the following:

  • Halliburton performed a variety of services on the rig, including cementing, and had four employees stationed on the rig at the time of the accident. Halliburton’s employees returned to shore safely, due, in part, to the brave rescue efforts by the U.S. Coast Guard and other organizations.
  • Halliburton had completed the cementing of the final production casing string in accordance with the well design approximately 20 hours prior to the incident. The cement slurry design was consistent with that utilized in other similar applications.
  • In accordance with accepted industry practice approved by our customers, tests demonstrating the integrity of the production casing string were completed.
  • At the time of the incident, well operations had not yet reached the point requiring the placement of the final cement plug which would enable the planned temporary abandonment of the well, consistent with normal oilfield practice.
  • We are assisting with planning and engineering support for a wide range of options designed to secure the well, including a potential relief well.

Halliburton continues to assist in efforts to identify the factors that may have lead up to the disaster, but it is premature and irresponsible to speculate on any specific causal issues.

Halliburton originated oilfield cementing and leads the world in effective, efficient delivery of zonal isolation and engineering for the life of the well, conducting thousands of successful well cementing jobs each year. The company views safety as critical to its success and is committed to continuously improve performance. [my emphasis]

HAL’s first concern, in its statement, was to invoke “its cooperation” in the investigation. Only after that did it mention the casualties from the explosion. Then, it described (sort of) its role on the rig, stating that their work was:

  • Consistent with that utilized in other similar applications
  • In accordance with accepted industry practice approved by our customers
  • Consistent with normal oilfield practice

You get the feeling that HAL wants to cement (heh) the impression that everything it was doing on the rig was all standard practice? You get the feeling that HAL wants you to know that everything they were doing on the rig had been approved by BP?

And it took them a full week to come up with that statement.

All of which leads me to wonder whether–though mind you, I’m just wondering–HAL (which did, after all, originate oilfield cementing) did something that may well have met BP’s specifications, but which HAL, with its expert knowledge of what it should do in conditions like those at the Deepwater Horizon site, might be rethinking. That is, the tone and content of their statement suggests HAL is preparing a defense that it met spec, regardless of whether that spec was appropriate to the conditions involved.


BP Oil Slick The Result Of Republican DOJ And Regulatory Policy

The economic and environmental damage resulting from the exploding fireball compromise of the Deepwater Horizon oil platform may be unprecedented, with the potential to emit the equivalent of up to four Exxon Valdez breakups per week with no good plan to stop it. There will be plenty of finger pointing among BP, Transocean and Halliburton, while it appears the bought and paid for corporatist Congress put the screws to the individual citizens and small businesses by drastically limiting their potential for economic recovery; all in the course of insuring big oil producers like BP have effectively no damage liability for such losses.

How did this happen? There are, of course, a lot of pertinent factors but, by far, the one constant theme underlying all is the mendacious corporate servitude of the Republican party, their leaders and policies. The arrogance and recklessness of BP and its oily partners gestated wildly under the Bush/Cheney administration.

Until the turn of the decade, BP had a relatively decent safety and environmental record compared to others similarly situated. Then BP merged with American oil giant Amoco and started plying the soft regulated underbelly of Republican rule in the US under oil men George Bush and Dick Cheney. Here from the Project On Government Oversight (POGO) is an excellent list of BP misconduct, almost all occurring and/or whitewashed under the Bush/Cheney Administration. If you open the door, foxes eat the chickens.

But it is not just regulatory policy behind the open and notorious recklessness of BP and its ilk, it is intentional policy at the Department of Justice as well. Here is how the former Special Agent In Charge for the EPA Criminal Investigative Division, Scott West, described the DOJ coddling of BP under the Bush/Cheney Administration:

In March 2006, a major pipeline leak went undetected for days, spilling a quarter-million gallons of oil on the Alaskan tundra. The spill occurred because the pipeline operator, British Petroleum (BP), ignored its own workers warnings by neglecting critical maintenance to cut costs. The spill sparked congressional hearings and a large federal-state investigation. Despite the outcry, in a settlement announced in late October 2007, BP agreed to one misdemeanor charge carrying three-year probation and a total of only $20 million in penalties (a $12 million fine with $8 million in restitution and compensatory payments).

The settlement resulted from a sudden U.S. Justice Department August 2007 decision to wrap up the case, according to West. That precipitous shutdown meant

Felony charges would not be pursued and the agreement foreclosed any future prosecutions. No BP executive faced any criminal liability for a spill second in size only to the Exxon Valdez;

The fines proposed by Justice (to which BP immediately agreed) were only a fraction of what was legally required under the Alternative Fines Act. EPA had calculated the appropriate fine levels as several times what Justice offered BP – ranging from $58 million to $672 million, depending upon the economic assumptions; and

The BP Alaska settlement is part of a pattern of “lowball” corporate public safety and pollution settlements engineered by the Bush Justice Department. In that October 2007 settlement package, Justice asked for only $50 million in fines for the BP Texas refinery explosion in which 15 people died – penalties not carrying strong deterrent value for a big multi-national corporation

The above is verbatim from a formal complaint filed with the Inspector General of the DOJ, Glen Fine, by West and a group known as Public Employees for Environmental Responsibility (PEER). The complaint went on to quote West as follows:

Never …have I had a significant environmental criminal case shut down by the political arm of the Department of Justice, nor have I had a case declined by the Department of Justice before I had been fully able to investigate the case. This is unprecedented in my experience.

When a chief agency criminal investigator cannot get traction for the prosecution of crimes, and considers the internal DOJ policy to be complicit, you might have a problem. It appears, however, the complaint went nowhere, which is not IG Glen Fine’s fault as, once again, DOJ accountability has been prevented by the fact that, unique to executive agencies, the DOJ IG has no jurisdiction over the conduct of the attorneys in the DOJ and goodness knows neither OPR nor David Margolis would countenance such an investigation.

By the way, since I have not seen anybody else mention it, much less the Obama/Holder DOJ appear to care, it should be pointed out that BP, despite the bend over sweetheart comprehensive deal the Bush DOJ worked out for them, is still on at least two different criminal probations for their malevolent reckless and intentional conduct. One case was for the Alaska spill and BP was placed on criminal probation for three years starting in December 2007. The other case was a felony plea resulting from the Texas City Refinery explosion. Here is the plea agreement from the Texas City Refinery case and here is the concurrent statement of facts in support thereof.

As special Agent Scott West complained, they were indeed sweetheart deals cut in a comprehensive settlement swath by the Bush DOJ; nevertheless there are still multiple criminal probations BP is still operating under. Where is the DOJ on this now? Contemplating a third strike, repeat offender takedown of BP? No, there has been nary a peep in this regard from the Obama/Holder DOJ. In fact, the only lawyers DOJ has indicated they are assigning the BP Deepwater Horizon catastrophe are Civil Division and Natural Resource Division talking heads Tony West and Ignacia Moreno. Nope, par for the course, the DOJ is sending managers to smooth the waters, not prosecutors and investigators to bring accountability.

The DOJ under the politicized Republican rule of Bush and Cheney instituted a preference for coddling corporate malfeasants like BP and Exxon with lax civil measures instead of punitive criminal prosecutions and, in the process, created a get rich windfall program for their friends to serve as “monitors” for the civil settlements. The policy was begun when Bush first took office and was formally instituted as DOJ policy by Bush/Cheney water carrier Paul McNulty in 2006. From an April 2008 New York Times article by Eric Lichtblau:

In a major shift of policy, the Justice Department, once known for taking down giant corporations, including the accounting firm Arthur Andersen, has put off prosecuting more than 50 companies suspected of wrongdoing over the last three years.

Instead, many companies, from boutique outfits to immense corporations like American Express, have avoided the cost and stigma of defending themselves against criminal charges with a so-called deferred prosecution agreement, which allows the government to collect fines and appoint an outside monitor to impose internal reforms without going through a trial. In many cases, the name of the monitor and the details of the agreement are kept secret.
…..
But critics of the agreements question that assertion. Charles Intriago, a former federal prosecutor in Miami who specializes in money-laundering issues, said that huge penalties, like the $65 million fine for American Express Bank International in 2007, were “peanuts” compared with the damage posed by a criminal conviction.

Neutering the criminal deterrent of the DOJ criminal process for big business and corporate interests, and gutting of regulatory agencies, is the Republican ethos. It is what they live for, and what gets us where we are with catastrophes like the Gulf oil slick. A guest poster at Digby, Debcoop, hit the nail on the head:

The fault lies with the ideology and mores of the Republican party and its theory of government. Their solution to this country’s energy’s future is to drill anywhere and everywhere. In their theory of government, government has no right to control who, what, where and how the natural resources of this country or this planet are exploited or not exploited, resources that are needed by us all and are needed to protect us all. Like my friend Jim Gilliam said in a private email, government is supposed regulate corporate behavior not just be their willing partner/follower. This is a lesson that we all need to keep in mind and that includes the president.

In the Republican theory of government, government regulation is inherently evil or at least counterproductive. So under George Bush et al, the only regulation in the Gulf has been self regulation. This oil spill is the fault of Republican ideology.

It is who the Republicans are, and what they do. And when they cannot accomplish their goals by legislating in service to corporate masters, they pack the Supreme Court with corporatist ideologues like Roberts, Alito and Thomas. The result is directly displayed by the 2008 decision in Exxon Shipping Co. v. Baker:

…a nakedly activist decision that pulls its standard for limiting damages out of thin air, demonstrates hostility to the role of Congress, and continues a pattern of ignoring the Framers’ views on the importance of civil juries. Progressives would do well to treat this decision with resounding scorn, and highlight it as a textbook example of why the Supreme Court matters.

The case arose from the 1989 Exxon Valdez spill, wherein Exxon allowed Joseph Hazelwood, a relapsed alcoholic, drunk at the time, to the helm of a massive oil tanker navigating the treacherous waters of Alaska’s Prince William Sound at night. The ship ran into a reef, ruptured and spilled 11 million gallons of crude oil, devastating the Sound’s fragile and pristine ecosystem. Grant Baker is one of 32,000 commercial fishermen and Alaska Natives that sued Exxon for their economic losses and for punitive damages against Exxon.

More than 6,000 of these victims have died during the course of this litigation, which Exxon has tenaciously prolonged for 16 years with appeal after appeal. In 2006, the Ninth Circuit Court of Appeals cut what was originally a $5 billion jury verdict down to $2.5 billion. Today, the Court cut this again for Exxon to a maximum of $500 million.

It is not just the Republicans however, Democrats have become the same kind of servile lackeys for big corporate interests as the Republicans. The Obama DOJ has continued the Bush/Cheney/McNulty policy of coddling corporate criminals with civil treatment as opposed to hard criminal prosecution and conviction of both corporations and their leaders. And if Barack Obama follows through with his impostrous determination to appoint a “moderate consensus builder” like Elena Kagan to replace John Paul Stevens, you can expect even more corporatist decisions from the Supreme Court.

Business/government symbiotic corporatism is becoming the defining characteristic of our government; the United States is on the road to neo-feudalism in a land run by the New Robber Barons. The oil slick in the Gulf can either be a wake up call, or grease for a further slide down the current slope.

UPDATE: Jason Leopold has a new article up at Truthout that meshes perfectly with this post. As I noted above, BP was on criminal probation for the Texas City Refinery fire; Jason follows up with the literally dirty details of just how repetitively and badly BP has wantonly violated said probation:

“It was the most comprehensive and detailed investigation the CSB has ever done,” Bresland said March 24, marking the fifth anniversary of the refinery explosion. “Our investigation team turned up extensive evidence showing a catastrophe waiting to happen. That cost-cutting had affected safety programs and critical maintenance; production pressures resulted in costly mistakes made by workers likely fatigued by working long hours; internal audits and safety studies brought problems to the attention of BP’s board in London, but they were not sufficiently acted upon. Yet the company was proud of its record on personnel safety.” According to OSHA, BP has not only failed to comply with the terms of its settlement agreement, it has knowingly committed hundreds of new violations that continue to endanger the lives of its refinery workers. ….. Still, as highlighted in a January 2007 report issued by a panel chaired by former Secretary of State James Baker III, systemic issues related to process safety were not limited to the firm’s Texas City refinery. In fact, they were widespread.

Leopold’s article is a good read and gives a good bead on the reckless operating philosophy of BP which gestated under the lax regulatory and prosecutorial Republican regime of Bush/Cheney as discussed in the body of this post above.


Erik Prince Proposes Blackwater Become Big Oil’s Enforcer

Jeremy Scahill reports on a recording that was liberated from a recent Erik Prince talk in which Prince talks about all the great roles he thinks Blackwater should play in protecting Big Oil. Mind you, he didn’t call it Big Oil. But he proposed sending Blackwater to a number of countries to (seemingly) counteract Iran’s challenge of Saudi hegemony in the Middle East.

Prince painted a global picture in which Iran is “at the absolute dead center… of badness.” The Iranians, he said, “want that nuke so that it is again a Persian Gulf and they very much have an attitude of when Darius ran most of the Middle East back in 1000 BC. That’s very much what the Iranians are after.” [NOTE: Darius of Persia actually ruled from 522 BC–486 BC]. Iran, Prince charged, has a “master plan to stir up and organize a Shia revolt through the whole region.” Prince proposed that armed private soldiers from companies like Blackwater be deployed in countries throughout the region to target Iranian influence, specifically in Yemen, Somalia and Saudi Arabia. “The Iranians have a very sinister hand in these places,” Prince said. “You’re not going to solve it by putting a lot of uniformed soldiers in all these countries. It’s way too politically sensitive. The private sector can operate there with a very, very small, very light footprint.” In addition to concerns of political expediency, Prince suggested that using private contractors to conduct such operations would be cost-effective. “The overall defense budget is going to have to be cut and they’re going to look for ways, they’re going to have to have ways to become more efficient,” he said. “And there’s a lot of ways that the private sector can operate with a much smaller, much lighter footprint.”

In addition to his plot to use Blackwater to counter Iranian power, Prince also called to send Blackwater to Nigeria, in what would amount to propping up a corrupt (but US-friendly) government to beat back the indigenous opposition to the abuse, environmental degradation, and corruption related with the oil industry in that country.

Prince also proposed using private armed contractors in the oil-rich African nation of Nigeria. Prince said that guerilla groups in the country are dramatically slowing oil production and extraction and stealing oil. “There’s more than a half million barrels a day stolen there, which is stolen and organized by very large criminal syndicates. There’s even some evidence it’s going to fund terrorist organizations,” Prince alleged. “These guerilla groups attack the pipeline, attack the pump house to knock it offline, which makes the pressure of the pipeline go soft. they cut that pipeline and they weld in their own patch with their own valves and they back a barge up into it. Ten thousand barrels at a time, take that oil, drive that 10,000 barrels out to sea and at $80 a barrel, that’s $800,000. That’s not a bad take for organized crime.” Prince made no mention of the nonviolent indigenous opposition to oil extraction and pollution, nor did he mention the notorious human rights abuses connected to multinational oil corporations in Nigeria that have sparked much of the resistance.

Scahill doesn’t say it explicitly (nor did Prince), but this amounts to a plan to use mercenaries to shore up the hegemonic system the US build on big oil.

Scahill describes a lot more of Prince’s braggadocio in his post. But I, for one, am particularly intrigued by Prince’s naked aspirations to become Big Oil’s privatized enforcer.


$75 Million Buys BP Six Years of Lobbying or One Giant Oil Spill

As you’ve no doubt heard, BP’s own liability for the damages the Deepwater Horizon spill will cause may be limited to $75 million (though it will have to pay for cleanup).

The federal government has a large rainy day fund on hand to help mitigate the expanding damage on the Gulf Coast, generated by a tax on oil for use in cases like the Deepwater Horizon spill.

Up to $1 billion of the $1.6 billion reserve could be used to compensate for losses from the accident, as much as half of it for what is sometimes a major category of costs: damage to natural resources like fisheries and other wildlife habitats.

Under the law that established the reserve, called the Oil Spill Liability Trust Fund, the operators of the offshore rig face no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government, although they are responsible for the cost of containing and cleaning up the spill.

That’s obviously puny. But to give you a sense of just how puny it is, consider that, at its current levels of spending on lobbying, BP will spend as much every six years on politicians in DC.

BP is one of the most powerful corporations operating in the United States. Its 2009 revenues of $327bn are enough to rank BP as the third-largest corporation in the country. It spends aggressively to influence US policy and regulatory oversight.

In 2009, the company spent nearly $16m on lobbying the federal government, ranking it among the 20 highest spenders that year, and shattering its own previous record of $10.4m set in 2008. In 2008, it also spent more than $530,000 on federal elections, placing it among the oil industry’s top 10 political spenders.

But the puny amount for which BP will be liable for damages didn’t stop them from potentially trying to make their liability even punier. The early contracts it drew up to pay Alabama fishermen to help contain the spill included a $5000 damage limit, which presumably wouldn’t even cover the cost of a fishing boat.

Alabama Attorney General Troy King said tonight that he has told representatives of BP Plc. that they should stop circulating settlement agreements among coastal Alabamians.

The agreements, King said, essentially require that people give up the right to sue in exchange for payment of up to $5,000.

[snip]

By the end of Sunday, BP aimed to sign up 500 fishing boats in Alabama, Mississippi and Florida to deploy boom.

BP had distributed a contract to fishermen it was hiring that waived their right to sue BP and required confidentiality and other items, sparking protests in Louisiana and elsewhere.

Darren Beaudo, a spokesman for BP, said the waiver requirement had been stripped out, and that ones already signed would not be enforced.

Next time some DC politico gets $5000 from BP, I hope they reflect on the fact that that’s all BP wants to pay for putting a family’s entire livelihood on the line.


BP’s Procedural Spills

Another thing that happened while I was tromping around one of the most beautiful places on earth (Yosemite) is that the BP drilling rig that had an explosion and fire last week sunk and oil has started to spill into the Gulf (as this dramatic NASA picture makes clear). In the last day, the Minerals Management Service (one of the federal agencies that regulate offshore drilling) has released documents showing that BP was cited in 2007 for training problems related to a similar problem in 2002.

BP Exploration & Production, which owns the deep water rig that exploded last week in the Gulf of Mexico, was cited in 2007 for inadequately training employees in well control, according to the US Minerals Management Service.

The conditions of the training are the same as those suspected in the possible blowout aboard the TransOcean Deepwater Horizon, which left 11 workers missing and presumed dead.

MMS slapped BP with $41,000 in fines in October 2007 after a series of violations related to a near-blowout five years earlier.  In November 2002, the Ocean King rig, operated by Diamond Offshore Drilling, in the Gulf had to evacuate all 65 of its workers for nearly two days after operators detected a dangerous rise in gas pressure.  The rig, which had been drilling at a depth of more than 5,000 feet, didn’t resume work for nearly a week, according to the MMS report.

Unlike last week’s disaster, workers were able to keep the well from leaking by using cement and mud to plug the well.  The same subcontractor, Diamond Offshore, was also used when BP was fined $25,000 in 2004 for bypassing a gas detection system while drilling.  A BP spokesman in London says the company still uses Diamond Offshore as a contractor.

KEY SAFETY PROCEDURES

In the 2002 incident, the MMS said that BP and Diamond Offshore were unaware that some of the key safety procedures they used to initially stop the dangerous rise in pressure could have contributed to a blowout.  The MMS cited BP for what it called “no formal procedures” and “no written guidelines” to follow in case of an emergency.  MMS also cited BP and contract workers in the incident for what they said was a “lack of knowledge of the system, and lack of pre-event planning and procedures.”

Let me give some background on this. In the 1990s, I worked for a company that consulted on safety procedures for the oil industry (a writer who reported to me did some procedures for one Amoco refinery, which was subsequently purchased by BP; we bid on, but did not get, a job that included BP; and we did some procedures for a drilling entity that has since been purchased by Halliburton, which is involved here as well). The way in which the government forces oil companies to operate in ways which minimize the safety and environmental danger of inherently dangerous processes is to ask (either nicely or by mandating) a set of procedures to cover both normal and emergency procedures. It’s a way of setting up documented procedures which can be trained and audited; the procedures allow the government to check whether the operators are operating as safely as possible. Just as importantly, it’s a way of proactively making sure that in case something does go badly wrong, the operator in question–and more importantly, the workers actually doing the work–will have a way of figuring out what to do quickly enough so as to minimize the safety and environmental damage.

MMS is saying that in 2002, BP not only had none of these procedures, but it hadn’t trained the workers and contractors on the rig, and as a result, the workers did the wrong thing to contain the damage. BP got lucky in 2002, because doing the wrong thing did not exacerbate the problems.

As a reminder, subsequent to that 2002 drilling rig problem, BP had a huge disaster in its Texas City refinery in March 2005 in which 15 people were killed and 170 were injured. BP’s own assessment of the accident found training and procedures to be one of four key factors in the accident. While it had appropriate procedures for the unit in question, it didn’t make sure the guys on the line were trained on or used them.

Despite the startup procedure not being fully updated, the procedure is generally of high quality, addressing all the safety warnings and key process control steps in detail. Many steps in the procedure were not followed, and the fact that the procedures were not updated indicates that they were not seen as important documents. Supervisors and Superintendents did not verify that the procedures were available and correct or being followed. Poor handover procedures meant that risks were not discussed and the correct procedures were not available to the board operator. In general, employees were unaware of the risks of operating without the procedures, considering this to be a routine operation needing little evaluation or thought. As a result of this, the Control of Work process broke down.

[snip]

There was a lack of rigor and follow through in the area of training. Records showed incomplete training and there was little verification that all required training was occurring. The lack of gun drills to reinforce practical knowledge meant that operators’ theoretical knowledge was not complete and rarely witnessed. The heavy reliance on computer based training (typically done by individuals on their own) appears to limit the overall effectiveness of the training program.

In other words, BP has a recent history of blowing off the procedures and training that are one key to emergency management in this industry (though FWIW, I believed BP was better than most of the industry when I was working in it in the early 1990s). And, as the HuffPo reports, some the same companies involved in last week’s accident opposed MMS mandating this kind of procedure and training process just last year.

BP and TransOcean have also aggressively opposed new safety regulations proposed last year by a federal agency that oversees offshore drilling — which were prompted by a study that found many accidents in the industry.

There were 41 deaths and 302 injuries out of 1,443 incidents from 2001 to 2007, according to the study conducted by the Minerals and Management Service of the Interior Department. In addition, the agency issued 150 reports over incidents of non-compliant production and drilling operations and determined there was “no discernible improvement by industry over the past 7 years.”

As a result, the agency proposed taking a more proactive stance by requiring operators to have their safety program audited at least once every three years — previously, the industry’s self-managed safety program was voluntary for operators. The agency estimated that the proposed rule, which has yet to take effect, would cost operators about $4.59 million in startup costs and $8 million in annual recurring costs.

The industry has launched a coordinated campaign to attack those regulations, with over 100 letters objecting to the regulations — in a September 14, 2009 letter to MMS, BP vice president for Gulf of Mexico production, Richard Morrison, wrote that “we are not supportive of the extensive, prescriptive regulations as proposed in this rule,” arguing that the voluntary programs “have been and continue to be very successful,” along with a list of very specific objections to the wording of the proposed regulations.

While some of the specific complaints in BP’s letter make good sense (for example, making electronic documentation sufficient for procedures may lead to such documentation be better accessible in case of an emergency), it appears BP specifically wanted to limit its own responsibility for the procedures and hazard analysis of its contractors. In addition, BP resisted sharing audit information with MMS.

Now, we don’t yet know what caused this explosion and–just as importantly–what has led to the failure to limit the damage from the explosion. But BP’s recent history shows that it hasn’t made sure that the operators on its facilities are prepared to deal with emergencies like last week’s explosion.


Biden To Announce Fisker Auto Plant In Wilmington Delaware

imagesVice President Joe Biden is set to make an appearance in his home state of Delaware today to make an announcement that Fisker Automotive will be purchasing, retooling and opening up operations in a shuttered former General Motors facility in Wilmington. From the Washington Post:

Vice President Biden will make the announcement that Fisker Automotive of Irvine, Calif., is expected to invest $175 million to retool the plant.

Fisker, which will pay the old GM $18 million for the facility and equipment, is getting tax incentives from the state of Delaware, although officials there declined Monday to say how much.

Fisker plans to make a car in Delaware that is being developed under the name “Project Nina” after the ship belonging to explorer Christopher Columbus. Russell Datz, a Fisker spokesman, said that the project’s name is meant to be “symbolic of the transfer from the old world to the new in terms of auto technology.” The car is expected to cost about $39,900 after tax incentives.

The Fisker facility is expected to create 2,000 jobs and will likely be operational by 2011. Administration officials said the deal will indirectly create another 3,000 jobs once the plant is fully operational, expected in 2014. Administration officials say that Fisker expects many of the jobs will go to former GM or Chrysler auto workers.

Time will tell, but on the front end this looks like a wonderful deal in a lot of ways. Fisker is a company that has been putting the pieces together behind the scenes for a couple of years for a major production move, and their initial prototype, and soon to be production model, the Karma, is absolutely stunning and, from all reports, technologically sound. Wilmington is an area that, while not as hard hit as Detroit, is certainly depressed and has been further decimated by the recent closing of the large GM plant there as well as a separate Chrysler plant. When fully up and running, the Fisker Nina plant in Wilmington may be able to reemploy many, if not most, of those orphaned workers.

The Fisker Nina will sell for approximately $39,000 after an anticipated $7,500 tax credit and has been described by the company as follows:

Design
“Nina is the project name for a family oriented, user friendly plug-in hybrid featuring cutting edge technology, radical styling and world-class quality,” said Euslberg
It seems likely Fisker already has some significant design development underway, but perhaps no sold models. However, we are going to have to wait a while before seeing any of them. “We are not currently releasing designs,” he said.

Battery
The car will use lithium ion batteries for energy storage. Like the Karma, the new vehicle will also source its batteries from Indiana-based EnerDel (NASDAQ: HEV).

Charger
Fisker will be using level 2 or 240 Volt home chargers built by Lear.

Engineering Architecture
The Karma is utilizing an extended-range electric architecture wherein the car is always powered by the electric motor, and can deliver up to 50 all electric miles, with the gas range extender going on after that.

Even more interesting is the synergy and interplay at work by the government (presumably with Ed Montgomery having a large hand) below the surface. Fisker will be paying GM $18 million for the plant and is expected to invest up to $175 million to retool and fit the plant for their needs and, conveniently, Fisker was awarded last month a $528 million loan from the US Department of Energy’s $25 billion Advanced Technology Vehicles Manufacturing Program. The ATVMP is designed to encourage the domestic design and manufacture of new battery technology and electric cars. And, of course, the US government is now a substantial stakeholder in GM itself. If this works, it is a marvelous and efficient interjection of government seed and green stimulus money and everybody will benefit.

It is nice to get this project for Wilmington Delaware, and it is surely needed there. Now that Vice President Biden’s backyard has been greened, how about Michigan? If there is any place in America that could use just this kind of stimulus more than Michigan, it is hard to figure where it would be. And Michigan would have been prime for Fisker as they just opened a design and engineering facility in Pontiac Michigan last year. Fisker may not be able to handle a second new facility this quickly, but surely the Obama Administration can find some analogous love to spread around in the state most desperate for it.


Don’t Drill Baby, Don’t Drill

In yet another chapter of Ken Salazar being my temporary favorite cabinet secretary, Salazar and Obama have reversed Bush’s plans to increase offshore drilling.

The Obama administration on Tuesday overturned another Bush-era energy policy, setting aside a draft plan to allow drilling off the Atlantic and Pacific coasts.

"To establish an orderly process that allows us to make wise decisions based on sound information, we need to set aside" the plan "and create our own timeline," Interior Secretary Ken Salazar announced in a statement.

Alleging that the Bush administration "had torpedoed" offshore renewable energy in favor of oil and natural gas, Salazar said he was extending the public comment period by 6 months.

"The additional time we are providing will give states, stakeholders, and affected communities the opportunity to provide input on the future of our offshore areas," he said.

Salazar also ordered Interior Department experts to compile a report on the Outer Continental Shelf’s energy potential — not just oil and gas, but also renewables like wind and wave energy.

"In the biggest area that the Bush administration’s draft OCS plan proposes for oil and gas drilling — the Atlantic seaboard, from Maine to Florida — our data on available resources is very thin, and what little we have is twenty to thirty years old," he said. "We shouldn’t make decisions to sell off taxpayer resources based on old information."

Granted, compared to Eric Holder (who gets to embrace renditions as his first meaningful act) and Tim Geithner (who is stuck with the worst economy in decades), Salazar has it easy. He can stay busy for months just undoing Bush’s harm. 

Still, it’s nice to see one Department improving on what Bush had done.


Salazar’s Successes

desolation-canyon.jpgI didn’t think I’d be saying this, two weeks into the Obama Administration. But thus far, Ken Salazar has been the high point of the new Administration for me.

Yesterday, we learned via POGO that Salazar is interested in reopening cases against those at the Minerals Management Service who made a mockery of that department. 

According to several sources at the department, Salazar is specifically interested in Gregory Smith and Lucy Denett. They’re both former high-ranking Interior officials; Justice declined to prosecute either one.

Smith is a former director of the controversial royalty-in-kind program at MMS. He took tens of thousands of dollars in consulting fees from a company that wanted to do business with oil and gas companies, and accepted gifts and trips from the industry. Denett ran the Minerals Revenue Management agency, part of MMS, and steered more than $1 million in contracts to a friend.

These are the alleged crimes, recall, referred to DOJ–including alleged sexual assault of a subordinate–that Michael Mukasey didn’t think merited prosecution.

And today we get the news that Salazar is going to cancel Bush’s last minute drilling leases on sensitive land in UT. 

Interior Secretary Ken Salazar is cancelling oil and gas leases on 77 parcels of federal land in Utah, according to sources familiar with the decision, ending a fierce battle over whether to allow energy exploration in the environmentally-sensitive area.

The Bush administration conducted the lease sale in December, but environmental groups went to court to block the winning bids encompassing roughly 110,000 acres near pristine areas such as Nine Mile Canyon, Arches National Park and Dinosaur National Monument.

Just before Bush left office last month, U.S. District Judge Ricardo M. Urbina issued a restraining order on the lease sales, postponing the final transactions until he could hear arguments on the merits of the case.

An Interior spokesman declined to comment on the matter, but several sources familiar with the decision said Salazar planned to announce it later today, adding that he can reject the winning bids without a penalty because the transactions had not become final and the department has the discretion to accept or reject lease bids that prevail at a public auction.

He’s also modifying upcoming leases in Wyoming to account for local concerns about conservation and recreation.

Granted, thus far Salazar has simply set about reversing some of the most egregious abuses of the Bush Administration. But I gotta thank Salazar for making sure that’s at least happening somewhere.


Oh Noes! Lobbyists Standing in Line with Labor Leaders!!

standing-in-line.jpgThe really amusing part of this story–describing how a number of business interests who ran were warmly welcomed in the Bush White House are aghast that they have to stand in line in the same waiting room with labor interests–is behind a firewall (thanks to egregious for liberating it).

The extent of substantive interaction varies. Some lobbyists, particularly those representing industries Obama wants to promote, report numerous contacts and substantive meetings.

But other K Street veterans report a shocking new reality.

Top business officials accustomed to red-carpet treatment in the Bush White House say they must stand in line in the cold outside transition headquarters along with people they don’t recognize, waiting to be cleared to meet with Obama staffers they don’t know and who don’t always appear to understand their issues. One veteran business official lamented that the only Obama official he has recognized so far is former Environmental Protection Agency Director Carol Browner — along with lobbying foes for labor and environmental organizations he has seen milling around or standing in the queue.

"We were part of the team" during the Bush transition, reminisced another top K Street player. "The business lobby was not pro-Obama," he acknowledged. "And for good reason, if you look at the campaign rhetoric."

Several business representatives wondered whether they were involved in a "check the box" scam designed to show inclusiveness rather than practice it.

"You get your five-minute elevator presentation," said one top industry lobbyist who said his meetings have been devoid of meaty discussion. "They say nothing. It’s a pure note-taking exercise. Will they be able to say they reached out? Sure." [my emphasis]

And these poor lobbyists are also worried that the white papers they give the Obama Administration, which under the Jack Abramoff style system employed by the Bush White House would be printed out on White House letterhead and presented as Administration policy, will be released in original form on the net.

Obama appears so far to be sticking to his promise to shed daylight on the process, reversing Bush White House practices most famously exemplified by Vice President Dick Cheney’s secret meetings with energy lobbyists. Instead, business types huddling with Obama officials are immediately told that the position papers and other documents they are pushing across the table are going directly onto the Web. 

To be fair, the story describes the industries which Obama has welcomed warmly: small businesses, wholesalers and distributors, high tech, and alternative energies. That focus is not entirely a good thing. For example, Obama and Democrats in Congress seem intent on making the auto czar an environmental/finance position, rather than one which brings real value add to auto industry. Though it appears that Steven Rattner has a significant conflict with Cerberus that may make him an impossible auto czar, I still don’t see what value he would bring. 

That said, I find it immensely satisfying to know that a bunch of indignant lobbyists are being made to stand in line along with lobbyists who represent the rest of us.

(Photo by dabdiputs)

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Originally Posted @ https://www.emptywheel.net/energy-policy/page/14/