BP Adopts the Public Face of Dick Cheney

I mean that headline more metaphorically than literally. But I do find it really really telling–and really really bad taste–that BP just hired Cheney’s former campaign press flack, Anne Womack-Kolton, to head its American media relations.

BP has hired a former top aide for Vice President Dick Cheney to be their new spokeswoman. Anne Womack-Kolton has been hired to be “head of U.S. media relations.” A rising star in the Bush-Cheney White House since the 2000 campaign, Womack-Kolton served as Cheney’s press secretary during the 2004 election before running public affairs in the Bush Department of Energy.

Now Reuters, which first reported this, paints the move as an effort to better respond to the overwhelming influx of inquiries. But I wonder if there isn’t something more to this.

First, as this DKos diary notes, Womack-Kolton had the honor of defending Dick Cheney’s Energy Task Force, particularly its secrecy.

Administration spokeswoman Anne Womack responded to the GAO lawsuit by sounding the same righteous tone: “We are ready to defend our principles in court. This goes to the heart of the presidency and to the ability of the president and vice president to receive candid, discreet advice.”

Then there’s the legal nuance of this. Womack-Kolton was working for Brunswick Group, which BP retained as early as May 4. So she’s basically just moving in-house from the crisis communication firm that BP had already hired. Perhaps this is a testament to BP’s need to get better coordination in-house. But I can’t help but wonder whether there’s some other reason. Does being a BP employee as opposed to a consultant’s employee change Womack-Kolton’s legal protection, for example, during upcoming lawsuits?

Whatever the reason for bringing Dick Cheney’s own flack in-house, perhaps this will bring a new level of honesty to BP’s response. What could be more honest, after all, then putting Dick Cheney’s face on this disaster?

Cheney photo Copyright World Economic Forum (www.weforum.org)
swiss-image.ch/Photo by Jean-Bernard Sieber

BP Criminal Liability Working Thread

Jason Leopold and I have both been going head on at the DOJ and Obama Administration over the issue of criminal treatment for BP and its actions in causing the Gulf disaster; see: here, here, here and here. One of the thoughts has regarded the DOJ’s ability to leverage one or both of the Federal criminal probation matters BP is currently operating under for past crimes.

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.

The key to unlocking where we stand on this is understanding the exact relationship, and how clearly defined it is, between the parent company “BP Plc.”, the Texas City criminal defendant entity “BP Products North America Inc.” and the Alaska criminal defendant entity “BP Exploration (Alaska) Inc. Also, what exact names are on the permits and leases for the Macondo well project? How do all these fit together and can we pierce these alter egos and reasonably argue that the parent entity BP Plc. is legally, including criminally, liable for all?

So this is a crowdsourcing game for one and all that are interested in helping. If we can dissect this bull manure for the cute liability dodge sham it is, maybe we can gain some traction. Put any thoughts, links, cites and results of your work in the comments. Many of you are a lot better at drilling into corporate entities than I am, so thanks for the help!

Top Hat and Tails; BP Has Yet Another “Solution”

Now that this is an all oil all the time blog, the restless residents are clamoring for a new thread for the LMRP, the latest greatest bullshit moonshot BP is ginning up for the gullible media and public. You ask, we comply; this is a full service blog!

Here is a quick recap. Top Kill failed. Junk Shot failed. Top Kill and Junk Shot combined failed. The only thing BP has been successful at is failure, but they are very good at failure. There is a very good chance the key to all this failure is contained in this quote buried in the lower half of an article by oil and gas industry publication Upstream Online:

Flow from the Macondo well is not travelling up the main well bore, BP operations boss Doug Suttles said Tuesday, a revelation that supports theories that a cement failure played a part in the blowout.

“We actually believe the flow path is between two strings of the casing and not up the main wellbore,” Suttles said.

Suttles said BP could not be certain of the flow path but diagnostic tests on the well seem to indicate the flow is not coming up main bore.

A veteran industry source told UpstreamOnline that the news about the flow path “almost certainly confirms” what many suspected, that problems with the annular cement around the production casing played a part in the blowout.

The well itself has no structural integrity; it has not from the outset. The well was doomed to blow out and all these hair brained fixes BP has hucked to the clueless media and public were doomed to fail as well. This has been an insane ostrich head in the sand process, apparently all to salve a pissed public and angry mother nature because BP and the government have got nothing else and they know it.

The latest greatest pie in the sky dream fix is LMRP, which technically stands for Lower Marine Riser Package. It is the new and improved Top Hat! Here is a diagram of the LMRP plan.

Here is my question: How the heck is this going to work if the well itself – the casing, seals, cement and well walls – is not intact, which we know it is not as to all of said factors? LMRP may further choke or restrict the flow, but it strikes me it cannot, and will not, stop it; and the resulting back pressure could exacerbate other inherent problems. We have been led to believe all the oil being lost is through the BOP, and such is the only video evidence we have been provided by the unified disaster response command. However, there is no evidentiary proof such is the case, and we have been intentionally prohibited from seeing the full scope of what is going on down there at the Macondo well bore.

Secondly, the existence of decent flow through the wounded BOP has kept well pressure from building up and really blowing out the well bore. When you cap such a compromised well bore with either the LMRP or the “new BOP”, even assuming they can really pull either of those off as BP claims (and the fuckers have not been right about any of their half assed ideas yet), then you will block the pressure vent that has kept the well bore itself from further eroding and being further seriously compromised.

As even Obama Administration flak Carol Browner now admits, the only real hope for stopping the oil flow of the biggest environmental disaster in history comes from the relief wells being drilled. But they can not be completed until sometime in August at best (hey, did you know hurricane season is on its way?), and BP has ceased work on one of the two relief wells because they may want to pirate the BOP from that effort to further jerry rig the Macondo well head by putting it on top of the current broken BOP. The sheer willful and wanton incompetence from both BP and the government continues unabated. Also, from the same link:

Congressman Ed Markey, who forced BP to make available a live video feed of the oil leak, said Sunday he had “no confidence whatsoever in BP.”

“BP has been making it up as they go along the whole way,” he said on “Face the Nation.” I don’t think that people should really believe what BP are saying.”

No shit Sherlock. LMRP, the latest version of “Top Hat”, is just another song and dance. And people laughed at Dr. Sludgelove’s bomb.

UPDATE: Henry Waxman, Bart Stupak and the Energy and Commerce Committee have made a notable document dump:

Committee Releases Memo & Documents Concerning Issues Raised in Recent News Media Accounts Related to the Deepwater Horizon Gulf of Mexico Oil Spill

Sunday, 30 May 2010 15:06

Today, the Committee on Energy & Commerce released a memo and documents concerning issues raised in recent news media accounts related to the Deepwater Horizon Gulf of Mexico Oil Spill.

Yesterday, The New York Times published an article entitled “Documents Show Earlier Fears About Safety of Offshore Well.” The article described documents from BP that, according to The New York Times, “show serious problems and safety concerns with the Deepwater Horizon rig.”

Some members have asked whether we were the source of the documents cited by The New York Times and whether they can review the documents. We were not the source of the documents, but we have been able to identify most of the documents mentioned in the article. We are providing them to the members as attachments to this memorandum.

Some of these are technical documents about well design. Others are documents that raise questions, but their connection to the blowout, if any, require additional investigation. The Committee staff is continuing its investigation of these issues.

Documents:

Memo from Chairmen Henry A. Waxman and Bart Stupak

Evaluation of Casing Design Basis for Macondo Prospect, May 14, 2009

GoM Exploration Wells, Appendix F, Jan 2010

BP Email, March 12, 2010

BP Emails, March 10, 2010

BP Emails, February 8, 2010

BP Emails, November 17, 2009

The Official Flow Rate: 12,000-19,000 BBL/Day

The head of the USGS just did a press conference to announce the government’s official estimate of how much oil is flowing into the Gulf. The official estimate is that the flow rate is 12,000-19,000 BBL/day.

To get the estimate, the team used two different methodologies, then adopted the rate of overlap between the two methodologies: One team calculated how much oil is on the surface of the Gulf of Mexico, using data collected from NASA on May 17. It estimated that between 130,000 – 270,000 BBL of oil were on the surface on May 17. In addition to what is on the surface, the team calculated that a similar volume has been burned, skimmed, or evaporated. It’s initial estimate based on the estimate of how much oil was on the surface gave a rate of release of 12,000-19,000 BBL/day.

The second team developed an estimate by observing the flow video and estimating the fluid velocity and volume. This methodology was limited because it had a limited window of data to choose from (and it sounds like they didn’t get good quality video until the last week and a half). This team then estimated how much was oil, gas, hydrates and water. It’s lowerbound estimate was 12,000-25,000 BBL/day.

The team as a whole then checked these results by estimating what was coming out of each leak, which came up with the 12,000-19,000 range.

McNutt made two caveats before announcing the amount.

  • Administration response has been based on worst case scenario (she seemed to want to suggest that the response wasn’t hindered by bad estimates from BP).
  • The numbers are still preliminary–the scientists are getting new data.

Interestingly, one thing McNutt noted is that about 75% of the volume coming out of the pipe was gas.

BP’s Own Internal Documents Prove It Knew Its Oil Leak Estimates Were Bogus

In today’s Natural Resources Hearing on the BP Disaster, Ed Markey brought out proof that BP knew it was lying about the flow of oil from its disaster. He brought two BP documents showing that even when their Chief Operating Officer Doug Suttles was giving low-ball estimates of 1,000 BBL/day, BP’s own internal documents showed that their best guess was 5,758 BBL/day.

The fact is BP has not been entirely candid and open with the American people about this disaster. Mr. Secretary, initially, BP estimated that 1,000 barrels of oil per day were leaking into the Gulf. On April 28, 2010, a new leak was discovered and Coast Guard officials pushed BP to increase the estimate to at least 5,000 barrels per day. However, BP’s Chief Operating Officer Doug Suttles was initially quoted that day–April 28–saying that he believed that the flow rate of 1,000 barrels per day was accurate and that “Due to its location, we do not believe that this new leak changes the amount currently believed to be released.”

Yesterday, BP provided me with an internal document dated April 27, 2010, and cited as BP Confidential that shows a low estimate, a best guess, and a high estimate of the amount of oil that was leaking. According to this BP document, the company’s low estimate of the leak on April 27 was 1,063 barrels per day. It’s best guess was 5,758 barrels per day. It’s high estimate was 14,266 barrels per day. BP has also turned over another document dated April 26 which includes a 5,000 barrel per day figure as well. So when BP was citing the 1,000 barrel per day figure to the American people on April 28, their own internal documents from the day before show that their best guess was a leak of 5,768 [sic] barrels per day and their high estimate was more than 14,000 barrels that were spilling into the Gulf every day. [my emphasis]

As Markey goes on to point out, BP’s intentional low-balling might have been designed to help them argue for a $5-15 million penalty per day as opposed to a $14-42 million penalty.

Secretary Salazar promised several times during the hearing that the government would release its own estimate of the flow sometime today.

Breaking! Obama Cabinet Official Looks Backward!

Doug Lamborn (R-CO Whiner) complained to Ken Salazar that there had been too much focus on the sex and drug scandal of MMS under the Bush Administration.  Salazar let him have it.

Lamborn: We all want to get to the bottom of this tragedy. And I think we all agree that finger-pointing will not get us there. I don’t understand–I have to be real honest here–why you and others keep harping on what MMS did or didn’t do in the previous Administration, when you did know about these problems when you came into office and you have been in charge of them for more than a year now. Why aren’t we talking about the here and now?

Salazar: Well we are talking, Congressman Lamborn, about the here and now, and that’s why people have been terminated, people have been referred over to prosecution, and we’ve done a lot to clean house at MMS. Unlike the prior Administration, this is not the candy store of the oil and gas kingdom which you and others were a part of. And so we have moved forward in a manner that is thoughtful, that is responsible, that holds those accountable. And those who violate the law, Congressman Lamborn, will be terminated and whatever other sanctions of law are appropriate, those sanctions of law will be applied.

On February 4, 2009, after Salazar halted some of Bush’s drilling efforts and asked DOJ to reconsider for prosecution some of those involved in the worst MMS scandals, I mused with some surprise that Ken Salazar was at that point the high point of the Obama Administration for me.b

And for his strengths and weaknesses since then, I gotta say that Salazar is still the only one who looked backward in timely manner and because of that could say, this clearly, that he had put the corruption of the Bush Administration behind him.

“I cannot see that any other form of organisation would stand a better chance”

I’ve been thinking a lot during the last month about the fact that 50-some years ago, the United States overthrew the democratically-elected government in Iran because the country nationalized BP’s assets in the country. Take this FT interview with the Chairman of BP, Carl-Henric Svanberg, that Yves Smith linked to.

As Yves points out, Svanberg discusses its relationship with the United States (remember–the country that overthrew a government for BP) as mutually beneficial, or perhaps mutually dependent, and certainly equal.

He said: “The US is a big and important market for BP, and BP is also a big and important company for the US, with its contribution to drilling and oil and gas production. So the position goes both ways.

“This is not the first time something has gone wrong in this industry, but the industry has moved on. Of course our reputation will be tarnished, but let’s wait and see how we do with plugging the well and cleaning up the spill.”

Yves points out that BP “was far from the only major oil company that does deep water drilling.” And that’s undoubtedly true. But it’s worth recalling a few details I pointed out in this post. BP has a significant share–perhaps a third–of the deepwater drilling in the Gulf and is involved in several of the most ambitious projects in terms of depth and complexity. BP also does significantly more deepwater drilling than its competitors (see slide 30)–more than Exxon and Mobil combined; Shell is a distant second to BP. Not that that should make the US subservient to BP; ultimately Shell or Exxon or Andarko (which has a stake in the Macondo well) should be able to come in and take over this well. But BP is the company that is most pushing the limits of deepwater drilling at the moment, and because of that has the ability to best exploit the oil reserves in the deepwater Gulf.

So to the extent that the US feels a strategic need to develop some US sources of oil–and frankly, to the extent that the US feels a need to develop a non-nationalized source of oil anywhere in the world–the Gulf is going to be a part of that. Apparently, 4 US locations are in the top 20 sources of non-nationalized sources of oil.

For example, once reserves that are entirely owned by governments are removed from the analysis, of the 104 remaining fiscal regimes ranked by Wood Mackenzie that allow some participation by international oil companies and that have remaining oil and gas reserves, the deep water U.S. Gulf of Mexico ranked 18th highest in terms of remaining oil and gas reserves. Three other U.S. regions were ranked in the top 18 in terms of reserves. These were the U.S. Rocky Mountains (8th), Alaska (14th), and U.S. Gulf Coast (15th), but these regions are not uniquely covered by the federal fiscal regimes, as state and private resource owners may also exist.

Of course, the reason we need to retain sources of oil not owned by national governments is to prevent countries like Venezuela and Iran from attaining too much power to use their oil as a weapon. (And to ensure that if, say, Israel decided to launch a war against Iran, there would be sufficient supply in our control for us to join in the belligerence.)

So while BP is not irreplaceable, the drilling it does in the Gulf does play a key role in the US strategy for maintaining its global hegemony. That doesn’t mean that’s the way it should be. But that’s the way it is.

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BP Fixed a Negative Pressure Test before the Well Blew

Back when the House Commerce Committee had its first hearing on the BP Disaster, Henry Waxman revealed some inconsistencies about the negative pressure test BP did on the well before it moved to close off the well.

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. [my emphasis]

Today, Waxman is out with an interim report on what happened. And here’s what that report says about this negative pressure test.

Further, BP’s preliminary findings indicate that there were other events in the 24 hours before the explosion that require further inquiry. As early as 5:05 p.m., almost 5 hours before the explosion, an unexpected loss of fluid was observed in the riser pipe, suggesting that there were leaks in the annular preventer in the BOP. Two hours before the explosion, during efforts to begin negative pressure testing, the system gained 15 barrels of liquid instead of the 5 barrels that were expected, leading to the possibility that there was an “influx from the well.” A cementer witness stated that the “well continued to flow and spurted.” Having received an unacceptable result from conducting the negative pressure test through the drill pipe, the pressure test was then moved to the kill line where a volume of fluid came out when the line was opened. The kill line was then closed and the procedure was discussed; during this time, pressure began to build in the system to 1400 psi. At this point, the line was opened and pressure on the kill line was bled to 0 psi, while pressure on the drill pipe remained at 1400 psi. BP’s investigator indicated that a “fundamental mistake” may have been made here because this was an “indicator of a very large abnormality.” The kill line then was monitored and by 7:55 p.m. the rig team was “satisfied that [the] test [was] successful.” At that time, the rig started displacing the remaining fluids with seawater, leading to the three flow indicators described above.

[snip]

Negative pressure testing was initially done on the drill pipe rather than the kill line, even though the drill plan specified that it would be done on the kill line. After anomalous results, the negative pressure testing was conducted on the kill line and ultimately accepted. Evidence suggests that spacer fluid used during the displacement of drilling fluid with seawater did not rise above the BOP to the level required by the drilling plan; this increased pressure in the drill pipe and may have interfered with later pressure testing. [my emphasis]

Click through to read the whole memo. You’ll see that before BP played this little game with the negative pressure test, there were already indications that something was amiss. Yet they still used procedures that violated their drill plan. And in spite of indications of a “very large abnormality,” they kept testing until they got something they could claim fulfilled the test. And then, kaboom!

I’m most disgusted by the description of some discussion of the procedure they were using for the test. Remember–there were a bunch of BP bigwigs on the rig, celebrating its spotless safety record! It sort of makes you wonder who took part in those discussions that ultimately led them to ignore two contrary tests and do another one?

And I’m wondering about Mr. Dupree. Did he deliberately forget to tell the Committee about the third test, the one they miraculously declared adequate?

You almost get the feeling BP didn’t know precisely what it wanted to tell Congress about these multiple and contradictory tests, huh?

BP: We Have to Use Corexit Because No One Tests for Endocrine Disruptors

As Scarecrow reported on Saturday, BP told EPA it would not switch from Corexit to another less toxic dispersant. BP admits that five approved dispersants are less toxic than Corexit; it dismisses four of those because the manufacturers cannot get enough product in place immediately.

BP does not have a stockpile of the other dispersants that meet the criteria in the May 19th Directive [of being less toxic], and the manufacturers tell us that they cannot produce the requested volume for 10 to 14 days or more.

So what about the fifith dispersant, Sea Brat #4, which is both less toxic and–BP tells us–and which BP has 100,000 gallons in its inventory? BP explains that Sea Brat #4 may degrade into an endocrine disruptor.

Sea Brat #4 contains a small amount of a chemical that may degrade to a nonylphenol (NP). The class of NP chemicals have been identified by various government agencies as potential endocrine disruptors, and as chemicals that may persist in the environment for a period of years. The manufacturer has not had the opportunity to evaluate this product for these potential effects, and BP has not had the opportunity to conduct independent tests to evaluate this issue either. BP learned of this issue after it applied to use Sea Brat #4 at the incident site.

With this additional information in hand, we believe it would be prudent to evaluate the potential NP issue more carefully before EPA or the FOSC require Sea Brat to be used at the incident site, and in particular, before it is applied underwater near the ocean floor.

BP latches onto a reality of the great test tube that is our everyday environment to explain why it is not using a competitors product. And the concern about the effect of possible endocrine disruptors is real. Endocrine disruptors have been associated with a range of biological problems, particularly with normal reproduction and cancers.

But that sort of raises a larger point, doesn’t it? These chemicals have been approved for use by the EPA but haven’t been tested to see if they degrade into endocrine disruptors. Not only does that mean we can’t choose a less toxic dispersant in time of emergency. But it also means this stuff is already being used, with no clear idea of the consequences of its use.

Of course, all this doesn’t answer the other question: whether we should be using dispersants at all, or whether BP is using it just to hide the effects of the spill underwater.

How Much Does BP Pay Us for Privilege of Soiling Our Shores?

The Mineral Management Service claims that revenues from oil production once became the country’s second largest source of revenue after income tax.

As the industry continued to evolve through the 1950s, oil production became the second-largest revenue generator for the country, after income taxes.

That’s a historical claim, though the American Petroleum Institute still pitches a version of it: “one of the federal government’s largest sources of non-tax income.” But it got me thinking about how much we’re actually getting from the oil companies, like BP, in exchange for them soiling our shores.

Last year, the Minerals Revenue Management department of the Mineral Management Service reported $9.9 billion in royalties from all mineral exploitation. Of that, MRM collected $5.8 billion for all federal offshore drilling of oil and gas.

$5.8 billion for exposing an ecosystem like the Gulf to the risk of the catastrophe that is now playing out. BP will pay more in liability or cleanup than that.

Of the $5.8 billion MMS brought in from offshore oil and gas drilling, $3.1 billion appears to come from oil, which is our share of the $23.5 billion in revenues for 425,199,067 BBL of oil drilled off shore.

Do the math. If I’m doing my math correctly, that means we’re getting less than $7.60/BBL for royalties the oil. That’s not all the money we get, mind you. There’s the actual bonus bid for the drilling rights and rent up until oil starts flowing; BP paid $34 million to the rights to this particular site. And starting in 2008, royalty percentages for Gulf leases were raised to 18.75%, but a lot of those leases aren’t producing yet. But using the $7.60 we’ve been getting for oil, taking the highest estimates for the rate of spill–70,000 BBL/day–and assuming it will spill for a total of 90 days, taxpayers would get less than $48 million in oil revenues for all that oil, enough to ruin the Gulf ecosystem for a generation, not to mention the serious damage to the fishing and tourist industries. While not all of the fishing and tourist industries will be destroyed, in 2008 all Gulf states brought in over $1 billion in fish, shrimp, and oysters, and $20 billion in tourism.

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