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BP and the Deepwater Horizon spill
Lessons not learned
Jan 6th 2011, 15:20 by The Economist online
A SINGLE barrier had been put in place at the bottom of the well so that hydrocarbons in the reservoir below could not get into the pipe that led to the surface. A “negative pressure” test had been run to show that the barrier worked. Now seawater was being pumped into the well as part of the procedure to finish it off, meaning that there was not as much pressure available to keep the oil down where it belonged as there had been previously; yet the workers on the rig, owned by Transocean, a contractor, had been reassured by the pressure test, and were not looking out as hard as they might have for signs that something could be going wrong. And it was. The barrier failed; oil and gas broke through in a powerful “kick”. Mud gushed onto the rig above as hydrocarbons forced their way up to the surface.
This was not the Deepwater Horizon, the Transocean rig contracted to BP which caught fire and sank after a blowout on April 20th 2010, leading to million of barrels of oil gushing into the Gulf of Mexico. It was Transocean’s Sedco 711, operating under contract to Shell in the Bardolino field in the North Sea, on December 23rd 2009. Happily, in the case of Sedco 711, the rig’s blowout preventer, a stack of valves that sits over the well on the sea floor, worked as it should have done, and as Deepwater Horizon’s did not, closing off the well before a significant amount of oil could get through. But in its other particulars the mishap was “eerily similar” to what transpired four months later in the Gulf, according to the national Oil Spill Commission, set up by Barack Obama to learn the lessons of the Deepwater Horizon disaster, which released a part of its conclusions on January 6th.
In the Gulf, too, a crucial barrier—not a valve, as in the Sedco 711 case, but a cement seal at the bottom of the well—had given way, and a negative-pressure test had failed to detect the problem. And the drill team was not as vigilant as it should have been for signs of something coming up the well as the replacement of heavy “drilling mud” with lighter seawater left it unbalanced. But the commission discusses the Sedco 711 incident not so much because it highlights the risks faced at every field, or the value of an blowout preventer that works properly—invaluable though that has proved to be—but because of Transocean’s response.
A Powerpoint presentation from Transocean, produced in response to the Sedco 711 event looked at shortcomings in the company’s manuals for dealing with such events, and at the need for heightened vigilance in such circumstances. “Are we ready?” it asked, and “WHAT IF?”. Yet Transocean told the commission that neither that sobering presentation, nor a subsequent advisory notice, ever made it to the Deepwater Horizon. If you want an illustration of the “systemic failures of management and communication” that the commission sees as underlying most, if not all, of the fatal mistakes that led to the Gulf spill, look no further.
Running an accumulator
Previous analyses of the Deepwater Horizon accident, including BP’s own, have argued that the failure of the cement was one of the key steps on the road to disaster. As BP’s then chief executive, Tony Hayward, said later, “To put it simply, there was a bad cement job." But that bad cement job was not in itself the key factor, says the commission. The key factor was that the company Mr Hayward was running failed to exercise proper caution before relying on the cement.
Of the various decisions that led to the subsequent disaster, some, perhaps even many, may have been justifiable on narrow grounds. As it was put in a now infamous e-mail written by someone whose preferred, and safer, position on the subject of how many “centralisers” to use to position the metal casing in the well had been overruled: “Who cares, it's done, end of story, will probably be fine…[BP team leader John] Guide is right on the risk/reward equation."
The risk/reward equations on which the individual decisions seem to have been taken look as though they were strongly weighted towards getting things done quicker, and thus cheaper. The commission tabulates nine decisions where higher-risk options were chosen over lower ones; in seven of them the riskier option was also the time-saving one (in the other two the implications for time-saving are not clear). Poor management meant that there was no overall view of how the decisions interacted and thus no good sense of how these risks added up. Poor communication meant that key people on the rig were unaware of the increased risk some of those decisions were seen as entailing.
For example, choosing a “long string” design, in which a single pipe hung all the way down from the sea bed to the bottom of the well, was not necessarily indefensible (though other oil companies say they would have done things differently). But it put an extra burden on decisions such as the one about the centralisers and other aspects of the cementing. That extra burden seems to have not recognised by people making those subsequent decisions. Thus risks accumulated while caution did not.
On top of that, there were straightforward errors. The results of the negative-pressure test were misunderstood, and signs that things were going wrong were simply missed. More deliberation, better communication and a set-up that was running less risk would have either caught the errors or mitigated their effects. That is what better management might have achieved. Better regulation could have helped drive that achievement; but the regulator (then called the Minerals Management Service) was not up to the job. To take two examples: there was no recommended protocol for the key negative-pressure test; one decision which increased the risk of a blowout was approved in just 90 minutes.
Beyond BP
Much of the blame is BP’s. But not all. The report says that tests by Halliburton, the company contracted to do the cementing, showed the cement being used was likely not to set stably and effectively in the well; but Halliburton did not communicate that conclusion—nor, it seems, all of the test results—to BP. And BP, for its part, did not draw the right conclusions from the data it did see. Indeed the commission found no evidence it had actually looked at them. Transocean, as well as failing to spread the word about the dangers of dealing with unbalanced wells in such conditions, seems to have trained its crew inadequately in how to respond to emergencies. It could also bear responsibility for the failure of the blowout preventer, which may well have failed due to poor maintenance, but that is still under investigation.
The criticism of Transocean and Halliburton is not just a problem for those companies; it is the foundation of the report’s assertion that the oil industry has a systemic problem. As the commission’s co-chair, William Reilly, has pointed out, there are oil companies with exemplary safety records. BP might just have been a bad egg. But the fact that all three companies working on Deepwater Horizon made bad errors of management and communication—and that two of those are contractors which are involved in more or less every offshore field there is—indicates that there are things that need fixing in the attitudes and practices of the industry as a whole. These broader issues, and what might be done about them, are sure to make up much of the meat of the rest of the report, due for release next week.
Doubtless all concerned will be keen to say that lessons have already been learned. But a lesson learned is of limited use unless the learning is openly spread far and wide. A report by the Energy and Climate Change Committee of Britain’s House of Commons on the implications for the North Sea fields of the Deepwater Horizon disaster was also released on January 6th. In its evidence to the committee, Transocean did not think to volunteer the clearly relevant story of the near-miss blow out on Sedco 711 in 2009.
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BP at least made the symbolic gesture of sacking its CEO. Have Transocean or Haliburton done likewise? Or held anyone else in their upper management accountable?
This article has failed to mention the fact that the physics and engineering needed to develop into operational use deep sea robotic damage control systems capable of controlling such blowouts has been around for more than four decades.
Technological deficiency is absolutely no defense for any Oil Company in 2011, drilling on this planet that is.
The oil industry is fundamentally not friendly to operational managers that are slow, deliberate, thoughtful types. Ultimately it is the consumers and stock-holders that choose what type of management personality dominates a particular industry. In the case of petroleum, the management style that rises to the top in operations is the hard charging, get-it-done-right-f'n-now, GO!GO!GO! type.
Foundationally, the only way you "fix" that is to either put so much bureaucracy in place that those types either change jobs or eat a bullet. Or, you find some other method, like nationalization or taxation, that takes all the money out of it.
In a way, every accident is a "systemic failure" in that we are always making choices, weighing risks versus rewards, and choosing what seems to be the best choice under the circumstances. Most of the time, when we take too much risk, luck saves us. Once in a while, luck fails and we have a big problem. At that point, we usually back off on the risk and settle on a somewhat safer, if slower and more expensive, process in the future. This general philosophy applies whether it's a individual driving a car, a nation sending men into space, or an oil company drilling a well.
The BP blowout is pretty much the definition of a hell of an expensive mess. No doubt drillers have taken similar risks before and gotten away with it. The lawyers will be pointing fingers at each other for probably another decade, and when it's all settled, staggering amounts of money will have been paid, most of which will not actually improve safety, compensate victims, or improve the environment.
I might observe that whenever we have systemic failure, it helps to define the system. What is the system that failed here? Was it the cement job? Was it the blowout preventer? Was it the drilling crew? Was it the foreman of the job? Was it BP? Was it the oil industry in general? Was it the government regulators? Or was it the collective global system of extracting and utilizing petroleum? My point in that is that BP does not exist in isolation. BP is not the result of a bunch of rich bastards deciding to get together and invest tens of billions of dollars into destroying the environment. BP exists because we all want oil. Everything we know of as modern civilized life depends in some way or another on oil. BP is an organization that exists to make money on the first stage of modern civilization -- extracting oil from the ground and making basic petroleum commodities from it. If we did not want a civilization based on oil, we would have no oil spills. Furthermore, we want oil as cheaply as we can get it. BP may have cut corners, but they did it because oil is a commodity and whoever can produce it the cheapest gets the order.
Clearly, there will be more US drilling regulations as a result of this spill. Since oil is a global commodity, and most of it doesn't come from US waters, these regulations will probably not have much effect on the global price of oil. Where they will have an effect is on the US drilling industry. If the regulations make it uneconomical to drill in US waters, that industry and all its workers will go away. If that's the choice we make as a nation, let's make it openly and honestly. As a way of keeping this spill in perspective, let's also remember that it really did not turn into any sort of environmental disaster on the scale originally predicted by any number of "experts" including the President. It's arguable that the net effect of the dispersants and skimming was approximately zero. They did a little good in some places and did harm in other places. Nature, especially in the open sea, and especially in warm water, can deal with oil pretty well. By historical standards, the total volume spilled, large as it was, was probably somewhat less than the Spindletop gusher and the Lakeview gusher, both of which were on land and caused massive environmental damage, though no one cared about it at the time.
In short, this spill caused a big mess, a lot of people were hurt economically by it, procedures must be changed to reduce the chances of similar accidents, but oil is too important to us, and the damage from oil spills is too small, to justify effectively shutting down the US offshore drilling industry.
The Economist correctly identifies the difference between the UK non-event and the Macondo event.
In the UK the failsafe safety device designed to prervent blowouts was working. In Macondo it was not.
What this report is doing is a political job. Obama has told a pile of lies about this event and, along with or perhaps following a dysfunctional media, has created a mass hysteria that has turned a very small environmental imnpact into an economic and human mental health disaster. BP have been villified in a sickening public witch hunt that has created a whole reality, one that is pretty much all embarassingly ignorant and indeed shameful for those that have invested in it. A narrative that has resulted in clean beaches remaining empty and uncontaminated seafood remaining unsold.
So, how does Obama square the reality that lawyers will reveal in time with this pile of self harming lies and pitiful "leadership"?
Well, first leak a chapter that does not include the Blowout Preventer and make out that, despite not being to identify any specific negligence, somehow now everyone is to blame. People will forget. They always do.
Kicks happen all the time when drilling for oil and gas. Fixating on what caused the kick is a diversion, a useful one for Obama. Sure you should try and avoid kicks, but the Blowout Preventer is in place to contain precisely the event that occurred on Macondo. It is an event that will happen again. If another BOP fails then we will have more lost life and more pollution.
The Macondo Blowout Preventer failed. It failed to close manually as the rig crew ordered it to, it failed to close on its deadman handle device as the rig sank then it failed to close when manually operated by ROV using every method possible. EVERYTHING failed on this useless piece of Transocean junk. It was a total and utter and complete failure.
This was the material difference. Expect it to be suppressed for a as long as our US "friends" can manage.
Like driving a car drilling for oil is inherently dangerous. If you have a crash and the seat belt you are wearing fails totally resulting in a dented car incident turning into the smashing of your skull against the windscreen, will you balme the sytemic errors in your driving? Well for the dent yes. For your smashed brain.....? No, the seat belt would be obviously to blame. The Blowout Preventer failure is the cause of the 11 lost lives and of each and every barrel of oil spilled (about 50% of what the liar US govt claims it wants to base its fine on)
I used to be very pro US. I will be avoiding investing there until this President has gone. Shouldn't be long at this rate.
Since this report is all about placing blame, I'd like to add one more piece of blame that has not been reported anywhere as far as I know. While the leak was still spewing oil into the gulf, the world's largest oil-skimming ship was brought in. As it was arriving, there was news coverage. It was a ship designed to suck oil water off the surface of the ocean, remove most of the oil, discharge water that was largely cleaned. The news stories mentioned the arrival of the ship, and its capabilities, but then no more stories were forthcoming.
What became of this oil-skimming ship that was supposed to be a big part of the cleanup? I made some inquiries and was told that the EPA prohibited it from operating. The official reason was that the water it would discharge would still contain oil at levels that exceed what that agency permits for discharge into the environment. The fact that the water it discharged would be vastly cleaner than the water it took in was irrelevant. There are only two classes of explanations for this idiocy. One is that the EPA is a hidebound bureaucracy composed of small-minded people who can do no more than recite chapter and verse from a policy manual, no matter how inappropriate that policy is for the matter at hand. The other is that a decision was made at a high level that the spill should be allowed to become as large and as devastating as possible in order to advance some larger political goals. Sadly, both possibilities seem quite plausible to me. Also clearly, in either scenario, the President has the final authority and could have made the executive decision to favor either environmental protection, inappropriate bureaucratic regulations, or political strategy. I don't know which of the two latter courses of action the president chose, but he clearly did not choose environmental protection, despite having falsely and publicly claimed that this was the greatest environmental disaster in the history of our country.
**The direct and unique responsibility is of each and all the CEO's of the corporations involved. They have to be incriminated, judged, and condem if found guilty to pay for the damages and to be keep in jail for the rest of their lifes.
With respect to juries who made a symbolic sacking..quote from the Economist"
...ON TUESDAY July 27th BP announced its chief executive, Tony Hayward, was stepping down after just three years in the job. He leaves with a year’s salary, £1m ($1.6m), and a pension reported to be worth £11m, accrued over 28 years of service. On the same day the company revealed a quarterly loss of £17 billion, reflecting the cost of the oil spill in the Gulf of Mexico. Mr Hayward has received criticism over his handling of the Deepwater Horizon spill. For all the opprobrium heaped on him over the last few months, Mr Hayward's payout is modest compared with those enjoyed by many similarly high-profile bosses…
Modest it may have been in someone's eyes… to me I feel it was an utter disgrace that the man was not sacked on the spot and made to pay something for the damages he caused.
Guilty as hell: Transocean, Halliburton & BP - in that order.
Guilty as charged: BP.
How come? Do I smell a rotting rat??
let's talk about the risk/reward. according to BP annual report, profit before tax is 26 billions, which is the lowest among 2007-2009. the contribution of BP to victim account is 20 billion. and this amount will be funded by BP gratually in the next 5 years. so, this is the reward: fast pace / lower cost forever and if there is disaster, profit less than 1 year can do the job. i won't be surprised to see another disaster in the near future.
yes, there is damage to the mother nature. but doesn't people really care? company like eron is wiped out fromt he stock market, while BP have been on the market without disappear of one day since the spill.
Did the spill hurt the investors interest? Yes. Is it acceptable? the market have tolded all observers the story.
so the right question is how will BP steer away from the storm? and how will goverment protect the investor's interest? it will fit investors' benefit to keep BP's similar operation. and restore the deep sea drilling. it will need to unfold this truth.
I have nothing to do with the oil industry other than a physics A level and therefore some understanding of what is involved, but as a retired GP I have one small comment to add. In medicine we also have endless checks and counter checks to ensure safety. And still the wrong limbs are removed, overdoses in spinal anaesthesia regularly kill or paralyze patients and prescriptions are written to which the patient is documented as lethally allergic. I have no doubt that every oil company in the world is thinking of the Deepwater Horizon incident: "There, but for the Grace of God, go I." Just as any doctor does on reading of such medical disasters given above.
Human error all through. It happens all the time. Doubtless the rules and regulations will be tightened up, making such a problem marginally less likely in the future, but it will happen again. Medical disasters happen when every single safeguard fails. Such is life. With regard to the gulf of Mexico, thankfully the natural world is more robust that we give it credit for and has sorted most of the problem out. After all, oil is a natural product, is it not?
I don't see BP as a "bad egg." BP depended on it's contractors to do their jobs, and they failed. They rig blew up when one of their VPs arrived to take over the rig. They wouldn't have risked his life or anyone else's if they'd known about the problems. Perhaps they weren't adequately informed by their contractors.
I don't see how the leak was "mostly" the fault of BP. Their only fault was that they were picked for close examination by the press because they were identifiable to the public at large. Everyone had seen BP's fillilng stations.
BP took responsibility and compensated everyone for whatever damage was done. That's to their credit rather than the opposite. They were subjected to a lot of spurious claims and harassment by cities and groups that made claims for damages that they didn't really suffer.
The Louisiana marshes may have threatened; however my personal experience showed that the Florida-Panhandle Gulf of Mexico beaches were relatively unaffected by the spill. There was only a few tiny tar balls. BP paid people to clean up any of these tiny balls. Their crew had fish-landing nets, drinks and a tent to cool-down in while doing their job. They had a good time sitting and talking to each other. There wasn't much to do in the section of beach that I frequent.
My second comment. I was told that there was a spill in the Gulf of Mexico by Permex, the Mexican State Oil Company a while before the BP spill, but it was hushed up by the Mexican authorities. No one has commented on Permex. The way that companies other than BP get away with it by keeping out of the public awareness.
During the spill I was personally frustrated by the lack of progress in collecting the oil and stopping the well. However, campadres, Let's not make a scapegoat of BP. It didn't seem to me to be the party most responsible for this mess. The contractors did.
Poor BP, made the scapegoats of the spill, while the real culprits, viz: Transocean & Halliburton slink away & escape unscathed! Such a mindbogglingly engineered massive cover-up, succeeded only because the media & the authorities, colluded & complied so disgustingly with the premeditated charade. Obviously, at the imperial behest of their powerful & influential vested interests benefactors.
And you bet thousands upon thousands of spurious claimants, will have have sprung up in the wake of the spill - like termites in rotting wood - hoping to make a fast buck at BP's cost! That's the seamy, unsavoury, greedy, litigious & unscrouplous side of America, one sees everywhere & all the time.
Sad & pathetic..
D. Sherman’s assertion that every accident is a systemic (human) failure is pretty much on target. What we need to understand is that it is an industry wide cultural problem and it is not just the oil industry.
It is all our heavy industries, think of the West Virginia mining disaster at Massey Energy's Upper Big Branch Mine and the mining disaster in Chile. There was a fire last Thursday at CNRL’s Upgrader on the oil sands near Ft. McMurray AB that I understand injured 4 workers. Not only that, the title of this article “Lessons not learned” is disturbingly similar to the title of Andrew Hopkins book about the BP Texas City Refinery Disaster, “Failure to Learn" that describes the investigation into that disaster.
The point being that these types of incidents are far too common and our technological systems should be able to prevent most if not all of these. The problem is with the human systems that are the true safety systems. Specifically, it is about the industry culture and how it thwarts these human systems. A more detailed discussion of the industrial cultural problem is presented in the White Paper titled “Is our Industrial Culture the Problem”.(http://www.metapower.com/pdfs/Is-Our-Industrial-Culture-The-Problem.pdf)
The executives, managers and employees of these companies do not go out and intentionally create these incidents. To a very large extent they are “victims” of this culture. Culture can be an insidious force that thwarts the best of plans and leads smart people to do really dumb things.