On the night of April 20th, 2010 a rush of methane gas up the well pipe to the sea surface occurred and the Deepwater Horizon Oil rig that was drilling the Macondo well exploded, killing 11 workers and injuring 17. The oil well head, almost a mile deep, began gushing oil. Since April 20th oil has gushed into the Gulf of Mexico. Initially it was reported that the oil was being released at a rate of 1,000 barrels a day. That estimate was shortly upped to 5,000 barrels a day. On May 27th the US Geological Survey estimated that the well was actually leaking 12,000-19,000 barrels of oil a day. That estimate was subsequently raised to 20,000 to 40,000 barrels of oil a day and now after 57 days the scientists monitoring the Deepwater Horizon / BP Macondo well have raised their estimate of the amount of oil spilling into the Gulf of Mexico to 35,000 to 60,000 barrels a day. This is an environmental disaster or immense proportions.
The House Energy and Commerce Committee (Chaired by Rep. Henry Waxman (D., CA) and the subcommittee on oversight and investigations (Chaired by Bart Stupak D., Mich.) have this week released a series of documents that indicate that BP, a company whose corporate culture values profitability over safety and risk management, engaged in egregious corner cutting that resulted in the worst offshore oil spill in US history. According to the documents released, BP repeatedly cut corners in getting the well operational to speed up the process saving several days and reduce costs so that they could get the well operational. The Deepwater Horizon rig was the second rig to attempt to drill this well the first had been damaged in a Hurricane in late 2009. Transocean charged BP approximately $500,000 per day to lease the Deepwater Horizon rig, plus contractors' fees. BP planned that drilling the well to take 51 days and cost approximately $96 million; however, the drilling had run over 94 days by April 20, 20 10, the day of the blowout.
Very literally, time was money. Behind schedule and over budget, BP had made a series of decisions to save time and money which resulted in the explosion. According to the Energy and Commerce Report: BP ignored recommendations by Halliburton for 21 “centralizers” to stabilize the well before cementing and went with 6 to save the 10 or more hours it would have taken to install them. In choosing the final pipe for the well, BP opted for “long string” running from the Gulf floor to the well bottom instead of the more expensive and safer design. The safer design would have provided more barriers to prevent the flow of natural gas up the well wall and potentially prevented the explosion, but would have cost up to $10 million more. BP decided not to test the integrity of the cement using a 12-hour procedure known as the “cement bond log.” This decision was made despite the presence of the team from Schlumberger on the rig to perform the test. BP sent the team home. BP also failed to fully circulate the drilling mud which would have helped detect any methane gas pockets. This procedure would have taken 12 hours. Finally, BP did not deploy the casing hanger lockdown sleeve that would have prevented the seal from being blown out from below.
I have two points to make here. The first is why there were no inspectors to ensure that the design of the well was according to best practices and that the well was installed according to design. BP should never have had the leeway to make these decisions. When I installed solar panels on my home that tie into the electric grid, the Chief Electrical Inspector ensured that the design would work and met the building electrical code and that the project was installed as designed. Charles Jackson, the Chief Electric Inspector, became my hero when his thoroughness and insistence on following the approved plans protected me and made sure I ended up with a properly functioning system. I do not understand why the Minerals Management Service of the Federal Land Management Bureau can not be as effective an inspector and regulator as my local Building Development Division.
The second point is that BP has a demonstrated history of sacrificing safety for profits and should be required to pay for all damages. If you will recall the 2005 Texas refinery explosion, “The Report of the BP U.S. Refineries Safety Panel Review,” concluded that BP had a "corporate blind spot" when it came to safety. The report noted that employees were often poorly trained in the safety procedures required to prevent major incidents, while managers were sometimes too focused on increasing production to meet profits expectations. Executives failed to instill a culture where this "process safety" was paramount and instead created a corporate culture focused primarily on maximizing profits. This sounds very much like what happened with the Deepwater Horizon explosion. While I think that BP should be required to pay for the cleanup and all damages, I object to using political pressure rather than the rule of law and the courts to obtain a $20 billion settlement account. The government is engaging in political theatre instead of ensuring that regulators are able to ensure best practices are used in design and that wells are installed as designed.