Betty Sutton on the Coerced Transocean Statements

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As you may have read, Transocean (the company that owns the Deepwater Horizon rig) made everyone rescued from the rig sign statements laying out whether they were involved in the incident, and whether they had gotten hurt.

Lawyers for the oil rig’s owner, Transocean, requested that workers who had survived the blast sign the form in the wake of the April 20 blowout on the Deepwater Horizon. This was hours before the workers had been allowed to see their families.

Now some of those survivors say they were coerced and that the forms are being used against them as they file lawsuits seeking compensation for psychiatric problems and other injuries from the blast.

A couple of members of Congress asked Transocean’s CEO about it yesterday, most pointedly Betty Sutton in this exchange.

Now, frankly, I think there may be some truth to Transocean’s claim that they were trying to collect information with the form. This is a documentation-driven industry, and for a rig owner like Transocean, getting a sense of who was on the rig, what contractor they worked for, and what they were doing would be a concern. That said, given the lock-down they kept workers in until they signed these documents, I’d guess they were more interested in surveying precisely what information was out there so they could keep that information locked down as anything else. And the lockdown was certainly heartless and heavy-handed.

Besides, Transocean CEO Steve Newman had to have known yesterday that his company would move, today, to limit its liability in the disaster (albeit on different grounds).

Transocean Ltd., the owner and operator of the Deepwater Horizon drilling rig that burned and sank last month unleashing a massive oil leak into the Gulf of Mexico, will file in federal court Thursday a petition to limit its liability to just under $27 million, according to a person familiar with the company’s plans and a copy of the filing reviewed by Dow Jones Newswires.

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Lois Capps: Booms Will Only Collect 15% of Spilled Oil

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The eye-popping part of this exchange is the news that all the efforts to protect the Gulf Coast are only going to collect a fraction of it from reaching the shore.

But the whole comment is worthwhile, because Capps expresses so well the outrage we should all be expressing about the inefficacy of oil spill recovery.

CEO Mud Wrestling

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One of the key moments of yesterday’s Environment and Public Works hearing on the BP Disaster came when Tom Udall tried to pin the CEOs down on whether, as reported by WSJ, at BP’s direction, Halliburton swapped out the drilling mud for seawater prematurely–something we’ve looked at as well.

BP, the well owner, blames the failure of a big set of valves on the sea floor, known as the blowout preventer, to halt the blowout once it started.

A different account comes from Halliburton, a contractor in the drilling. This account is corroborated to some extent by Transocean, as well as by two workers on the drilling rig, The Wall Street Journal has determined.

This account describes a failure to place a cement plug within the well. The plug is designed to prevent gas from escaping up the pipe to the surface.

Before such a plug is placed, the job of keeping underground gas from coming up the pipe is done by heavy drilling fluid inside the well, commonly known as “mud.”

The plug is normally put in before the mud is removed, but according to the account of Halliburton, Transocean and the two workers, in this case, that wasn’t done—drilling mud was removed before a final cement plug was placed in the well.

It is not clear why such a decision would have been made. Rig owner Transocean says that BP, as owner of the well that was just being completed, made key decisions on how to proceed. BP declined to comment on this account of the drilling procedures.

Predictably, no one really wanted to go on the record whether that was one of what appear to be numerous problems that contributed to the spill. Equally predictably, no one seems to have the well plan that would make this all clear.

A More Revealing BP Hearing?

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The House Commerce Committee is holding the third hearing into what went wrong on the BP Deepwater Horizon rig (CSPAN is showing it on CSPAN3). As is typical for a Waxman/Stupak hearing, the Committee has done its homework, advancing the understanding of what went wrong.

Henry Waxman’s opening statement reveals that the well failed a number of tests, but BP kept testing until getting a passing test, and then proceeded to close the well.

Rigs like the Deepwater Horizon keep a daily drilling report. Transocean has given us the report for April 20, the day of the explosion. It is an incomplete log because it ends at 3:00 p.m., about seven hours before the explosion. But it confirms that three positive pressure tests were conducted in the morning to early afternoon.

The next bullet says: “After 16.5 hours waiting on cement, a test was performed on the wellbore below the Blowout Preventer.” BP explained to us what this means. Halliburton completed cementing the well at 12:35 a.m. on April 20 and after giving the cement time to set, a negative pressure test was conducted around 5:00 p.m. This is an important test. During a negative pressure test, the fluid pressure inside the well is reduced and the well is observed to see whether any gas leaks into the well through the cement or casing.

According to James Dupree, the BP Senior Vice President for the Gulf of Mexico, the well did not pass this test. Mr. Dupree told Committee staff on Monday that the test result was “not satisfactory” and “inconclusive.” Significant pressure discrepancies were recorded.

As a result, another negative pressure test was conducted. This is described in the fourth bullet: “During this test, 1,400 psi was observed on the drill pipe while 0 psi was observed on the kill and the choke lines.”

According to Mr. Dupree, this is also an unsatisfactory test result. The kill and choke lines run from the drill rig 5,000 feet to the blowout preventer at the sea floor. The drill pipe runs from the drill rig through the blowout preventer deep into the well. In the test, the pressures measured at any point from the drill rig to the blowout preventer should be the same in all three lines. But what the test showed was that pressures in the drill pipe were significantly higher. Mr. Dupree explained that the results could signal that an influx of gas was causing pressure to mount inside the wellbore.

Another document provided by BP to the Committee is labeled “What Could Have Happened.” It was prepared by BP on April 26, ten days before the first document. According to BP, their understanding of the cause of the spill has evolved considerably since April 26, so this document should not be considered definitive. But it also describes the two negative pressure tests and the pressure discrepancies that were recorded.

What happened next is murky. Mr. Dupree told the Committee staff that he believed the well blew moments after the second pressure test. But lawyers for BP contacted the Committee yesterday and provided a different account. According to BP’s counsel, further investigation has revealed that additional pressure tests were taken, and at 8:00 p.m., company officials determined that the additional results justified ending the test and proceeding with well operations.

This confusion among BP officials appears to echo confusion on the rig. Information reviewed by the Committee describes an internal debate between Transocean and BP personnel about how to proceed. [my emphasis]

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Cancer, Chemicals, and Corporations

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As you might know, my family is a walking cancer cluster: three out of five of us had some form of cancer. What has frustrated me as I’ve lived through three bouts of cancer in my family was the cancer industry’s focus on “curing cancer,” with very little attention on preventing it. Particularly given how dangerous the “cures” for cancer are, it’s high time we focused more attention on how we avoid it.

Which is why I’m happy that this report from the President’s Cancer Panel is getting a good deal of attention. It talks about all the environmental hazards that may contribute to cancer, devoting an entire chapter exploring each of six kinds of exposures that may contribute to cancer:

  • Exposure to Contaminants from Industrial and Manufacturing Sources
  • Exposure to Contaminants from Agricultural Sources
  • Environmental Exposures Related to Modern Lifestyles (things like automobile pollution, airplane travel, and cell phones)
  • Exposure to Hazards from Medical Sources
  • Exposure to Contaminants and Other Hazards from Military Sources (pointing to 900 abandoned military sites that are Superfund sites)
  • Exposure to Environmental Hazards from Natural Sources (things like radon and naturally occurring arsenic)

But as the report notes, one of the reasons Americans are exposed to so many potentially carcinogenic materials is that our regulatory system doesn’t work.

The prevailing regulatory approach in the United States is reactionary rather than precautionary. That is, instead of taking preventive action when uncertainty exists about the potential harm a chemical or other environmental contaminant may cause, a hazard must be incontrovertibly demonstrated before action to ameliorate it is initiated. Moreover, instead of requiring industry or other proponents of specific chemicals, devices, or activities to prove their safety, the public bears the burden of proving that a given environmental exposure is harmful. Only a few hundred of the more than 80,000 chemicals in use in the United States have been tested for safety.

U.S. regulation of environmental contaminants is rendered ineffective by five major problems: (1) inadequate funding and insufficient staffing, (2) fragmented and overlapping authorities coupled with uneven and decentralized enforcement, (3) excessive regulatory complexity, (4) weak laws and regulations, and (5) undue industry influence. Too often, these factors, either singly or in combination, result in agency dysfunction and a lack of will to identify and remove hazards. [my emphasis]

It elaborates in the expanded section on regulation to talk about regulatory capture.

Like many other industries, the U.S. chemical, manufacturing, mining, oil, agriculture, transportation/shipping, and related industries are substantial political contributors and actively lobby legislators and policymakers on issues that affect their operations and revenue. For example, corporations aggressively block proposed chemical manufacturing, use, and disposal regulation, both through lobbying activities and in some cases, by manipulating knowledge about their products (e.g., industry-funded research).115,116 Although the Doll and Peto assessment of attributable fractions of the national cancer burden related to specific causes has been largely abandoned by the scientific community, it remains the basis of many existing chemical regulations and policy. The chemicals industry in particular likewise continues to use the notion of attributable fractions to justify its claims that specific products pose little or no cancer risk. As a result of regulatory weaknesses and a powerful lobby, the chemicals industry operates virtually unfettered by regulation or accountability for harm its products may cause.

This report came from the President’s Cancer Panel, in a report telling Obama the shortcomings of our National Cancer Program. And it said that while there are a number of other controllable factors contributing to cancer (most notably smoking), we’re simply not doing enough to even investigate these other possible causes of cancer.

With the BP spill, we’re entering into a big discussion about whether our oil and gas habit is really safe and–more importantly–whether we even try to regulate it effectively. But at the same time, we ought to be having a wider discussion of the many ways (including our oil and gas addiction) that our modern lifestyles lead to cancer.

Oil and Water and Leaky Hydraulics Don’t Mix?

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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. Read more →

Halliburton: We Worked to Spec

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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

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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 Read more →

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

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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.

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BP’s Procedural Spills

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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.

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