Wednesday, February 27, 2013

BP On Trial - Finally

At long last BP is finally standing trial (before a single judge, not a jury) for civil damages caused by their catastrophic blowout in the Gulf of Mexico nearly three years ago. That blowout caused an explosion and fire on the massive Deepwater Horizon drill rig that killed 11 workers, injured many others, and sent the rig to the ocean floor nearly a mile below.  And the resulting oil spill was the nation's worst to date, spewing some 172 million gallons of crude oil into the Gulf. 

In-situ burning of oil slicks during spill response operations in the Gulf of Mexico, June 22, 2010. Photo courtesy Dr. Oscar Garcia, Florida State University.
Assuming BP and their partners don't come to a settlement with the Justice Department, the trial is expected to last throughout most of 2013. But don't hit the snooze button just yet: this could get very interesting.  The trial will be conducted in two phases.  The first phase, underway now, will assign the share of blame for this tragedy among the defendants (BP, Transocean and Halliburton; right now they're all doing their level best to deflect as much of the blame as possible onto each other).  It will also decide if, as government lawyers are arguing, BP acted with "gross negligence."  That's a key ruling because it ramps up the fine BP will pay from the standard $1,100 per barrel spilled, to $4,300 per barrel.  Under the RESTORE Act that Congress passed last year, 80% of that fine will go toward funding restoration projects in the Gulf region. As we wrote back in February 2012,
...federal prosecutors will attempt to paint BP as a "rogue" operator that took unusual risks, to convince the judge that the spill resulted from gross negligence.  BP, to defend itself, will likely claim that their operations, well design, and decisionmaking were not so unusual, and were consistent with industry-wide practices.  To make that case BP will have to present lots of information about the offshore drilling industry as a whole, including the safety record, accidents and near-misses experienced by other companies that we never hear about.  None of the official investigations of the BP / Deepwater Horizon spill looked at the industrywide record, leaving many of us wondering:
Just how risky is modern offshore drilling? 
Given Shell's serial blundering during their Arctic drilling program last year -- problems so severe they just announced today that they've scrapped the entire program for 2013 -- we have to wonder if BP is truly a "rogue" or if their level of risk-taking is more or less the norm throughout the offshore oil industry.

By the way, I'm somewhat dismayed at this statement yesterday by the Chairman and President of BP America, Lamar McKay, that suggests BP has a long way to go when it comes to establishing an effective safety culture:
I think that's a shared responsibility, to manage the safety and the risk. Sometimes contractors manage that risk. Sometimes we do. Most of the time it's a team effort.
I'm not a risk-management expert but it's my understanding that this diffusion of responsibility, and unclear definition of authority, is exactly the kind of management muddle that leads to major system failures.  In other words, somebody has to clearly be in charge at all times.

The second phase of the trial will determine how much oil spilled into Gulf waters, the key to determining how big a fine BP will pay and how much money will go toward Gulf restoration.  That will pit lawyers against scientists.  Place your bets.


Thar She Blows! Another Oil "Geyser" in Gulf of Mexico

According to news accounts and reports coming through the SkyTruth Alerts system, a work boat struck a wellhead in the Gulf of Mexico about 9 miles southwest of Port Sulphur, Louisiana, about 8pm on Tuesday.  [NOTE: keep your distance - this well poses a hydrogen sulfide risk.]  The well has been intermittently discharging an oily mixture ever since, in a semi-spectacular way judging from this photo provided by the Coast Guard:

Oily geyser erupting from wellhead damaged by a work boat Tuesday. Photo courtesy U.S. Coast Guard.
This is reminiscent of a similar incident in the Gulf back in August 2010, when an abandoned wellhead in Barataria Bay was also struck by a vessel and spouted oil 100 feet into the air

Both incidents underscore a serious problem identified in an investigative report by AP way back in 2010. They identified more than 27,000 abandoned wells in the Gulf, and found that thousands of these wells are allowed by federal and state regulators to linger for many years in a state of quasi-abandonment:  they are "temporarily shut-in" or "temporarily abandoned," meaning the steel shutoff valves have been closed but the wells have not been permanently plugged with cement.

This sloppy practice gives the companies flexibility to cheaply and easily reactivate the wells at some point in the future, but here is the problem:  steel rusts; valves can be damaged by, say, a poorly piloted vessel.  And as long as the well is not permanently plugged and abandoned, it represents a spill risk.  As the AP report states:
Regulations for temporarily abandoned wells require oil companies to present plans to reuse or permanently plug such wells within a year, but the AP found that the rule is routinely circumvented, and that more than 1,000 wells have lingered in that unfinished condition for more than a decade. About three-quarters of temporarily abandoned wells have been left in that status for more than a year, and many since the 1950s and 1960s -- even though sealing procedures for temporary abandonment are not as stringent as those for permanent closures.
It's time for the feds and the states to get serious about this ongoing hazard, and tighten up their oversight.