The BP Deepwater Horizon Report: Blame Petroleum

Analyzing the BP Deepwater Horizon Disaster

Earlier this month, after a four-month-long internal investigation, BP released its findings as to the cause of the worst oil spill in US history, with the conclusion that:

“The team did not identify any single action or inaction that caused this accident. Rather, a complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation, and team interfaces came together to allow the initiation and escalation of the accident. Multiple companies, work teams, and circumstances were involved over time.”

In the company’s press release, former CEO Tony Hayward, who had once admitted that BP hadn’t done enough planning before the “natural disaster,” said, “It is evident that a series of complex events, rather than a single mistake or failure, led to the tragedy. Multiple parties, including BP, Halliburton, and Transocean, were involved.”

In fact, the report places the majority of the blame on its contractors, Halliburton and Transocean. “Of their own eight key findings, they only explicitly take responsibility for half of one,” remarked Rep. Edward J. Markey (D., Mass.), chairman of the House Energy and Environment Subcommittee, “BP is happy to slice up blame as long as they get the smallest piece.”

Key Findings From the Investigation

Specifically, the 8 key findings are as follows:

1. The annulus cement barrier did not isolate the hydrocarbons. This was essential because “shortcomings in the planning, design, execution, and confirmation of the cement job reduced the prospects for a successful cement job.”

2. The shoe track barriers did not isolate the hydrocarbons as a result of either the design or contamination of the cement.

3. The negative-pressure test was accepted although well integrity had not been established. BP well leaders and the Transocean rig crew, expected to know how to read a key negative-pressure test, misinterpreted it and the well became unbalanced.

4. Influx was not recognized until hydrocarbons were in the riser. A requirement for safe Drilling and Completions (D&C) operations, explicitly stated in the Transocean Well Control Handbook, is that all phases of operations should be continuously monitored. However, Halliburton’s Sperry–Sun mudloggers and Transocean’s rig crew failed to do so and thus did not recognize the influx or act to control the well until it was too late.

5. Well control response actions failed to regain control of the well because the rig crew routed the fluids to the Deepwater Horizon mud gas separator (MGS) instead of the overboard diverter line, as they were supposed to, which would have allowed for more response time and reduced the severity of the accident.

6. This diversion to the mud gas separator resulted in gas venting onto the rig.

7. The fire and gas system did not prevent hydrocarbon ignition. According to the report, “Because of the low probability of hydrocarbons being present before a well produces, only a small area of Deepwater Horizon was electrically classified…If a flammable mixture migrated beyond these areas, the potential for ignition would be higher.” Unfortunately, in this case, the HVAC system transferred a flammable gas-rich mixture into the engine rooms, creating a source of ignition.

8. The BOP emergency mode did not seal the well. The explosion and fire most likely disabled the emergency disconnect sequence, and the equipment had not been properly maintained. The batteries in one pod were not charged sufficiently, and in another, there was a faulty solenoid valve.

So basically, the report concluded that it was not the design of the well that caused the explosion and subsequent spill but Halliburton’s use of faulty cement and cement design and its failure to “conduct comprehensive lab tests that could’ve identified potential problems,” as well as the “lack of a robust Transocean maintenance management system.” The crew, particularly Transocean’s and Halliburton’s, was also to blame for failing to  properly maintain the equipment, monitor the well, interpret a key test, recognize and respond to warning signs and did not perform the correct and intended safety procedures

The Role of BP and Other Stakeholders

In response, Halliburton and Transocean blasted BP for not taking enough of the responsibility. Halliburton said that it “noticed a “number of substantial omissions and inaccuracies” in BP’s report and is confident that its work on the well was “completed in accordance with BP’s specifications.”

Furthermore, “Deepwater operations are inherently complex and a number of contractors are involved which routinely make recommendations to a single point of contact, the well owner. Contractors do not specify well design or make decisions regarding testing procedures as that responsibility lies with the well owner.”

Transocean considered it “a self-serving report” that concealed the fact that the explosion was really a result of “BP’s fatally flawed well design” and ignored evidence that “BP made a series of cost-saving decisions that increased risk—in some cases, severely.”

For example, BP dismissed, if not outright ignored, significant criticisms against itself, such as the decisions for the long string design of the pipe, the final cement plug, and the use of 6 centralizers instead of 21, as recommended by Halliburton.

Assuming Too Much Risk Leads to Disaster

Cost-saving decisions that increased risk? Omissions and inaccuracies? Really? Are we talking about the same company that is responsible for at least 10 deadly and disastrous accidents as a result of equipment failure and negligence, all because of cost-saving decisions that placed profits above safety measures, the welfare of its employees, and the environment? A company that was cited in 2007 by The Minerals Management Service for a “lack of knowledge of the system, and lack of pre-event planning and procedures?”

This is the same company that, prior to the accident, was already being accused of cutting corners on a well that was 43 days and more than $20 million behind schedule at the time of the blast. A well that was considered a “crazy well,” a “nightmare well” by its own engineers who warned BP managers to shut it down.

In defense of BP and the report, Mark Bly, BP’s head of safety and operations and of the investigative team, said that the team had been directed to look only at the immediate causes of the accident, not any other issues that might have led to it – including cutting of corners or rushing to save money. “We’ve really tried to understand what happened and to the extent possible, why.”

Bob Dudley, BP’s new CEO, stated, “We are determined to learn the lessons for the future, and we will be undertaking a broad-scale review to further improve the safety of our operations…to ensure that a tragedy like this can never happen again.”

Chairman of the Board Carl-Henric Svanberg commented: “It is of the utmost importance to the Board to ensure that BP learns from this and further enhances the safety of its operations for the future.”

Deepwater Horizon: Lesson Learned?

To demonstrate the lessons learned, the team developed 25 recommendations for itself, its service providers, and the industry in general to ensure safer procedures and operations and prevent similar accidents from happening in the future. These include strengthening oversight on, clarifying, updating, and establishing standards and practices for blow-out preventers, well control, well integrity, emergency systems, gas and drilling fluid systems, cement jobs and testing, rig audit and verification, and personnel competence. Other recommendations include providing more specific detailed instructions and training for monitoring, testing, reporting, and safety procedures and action plans, and improved communication, risk management, and management of change.

Be that as it may, too bad they hadn’t figured this out before nearly if not definitely, destroying the Gulf. Perhaps the most important lesson learned is that offshore drilling, particularly deepwater drilling – actually any drilling, for that matter – is incredibly and inherently complex, risky, and dangerous. For cutting corners or not, the tragedy in the Gulf is not just a result of BP’s or its contractor’s negligence but an endemic risk to the entire industry. In the twenty years of deepwater drilling, there have been numerous serious problems and accidents, and it’s obviously not getting any safer.

Because here’s the thing, with nearly 4000 rigs in the Gulf, 60 percent of them involved in deepwater drilling, and nearly 14,000 deepwater wells around the world, there’s a pretty good chance that another disaster will occur in the not-so-distant future. Especially since, as observed from the Congressional Hearings earlier this summer, none of the other big oil companies have any better safety plans in place.

Forget their assertions of a “Nobody Gets Hurt” culture – that they do not “proceed with operations if we cannot do so safely,” their “practices for deepwater wells are safe and environmentally sound,” and “safety and environmental protection are, and always will be,” their “top priorities.” Not one of them can give the American public 100 percent assurance that their drilling operations “are free from a similar accident as Deepwater Horizon.”

Recommendations or not, are we really willing to take that risk? It becomes clearer as more oil is found on the ocean floor, as the clean-up continues, and as the Gulf residents attempt to receive their promised claims and move forward with their lives. Are we really that addicted to keep returning to the dealer who has such a legacy of destruction, devastation, and death? It sounds dramatic, but seriously, isn’t it time that we truly move beyond petroleum?

Let’s just hope that the other investigations come to the same conclusion before the temporary suspension of deepwater drilling in the Gulf expires.

The full report is available online.

Image credit: Ideum-ideas+media, courtesy Flickr