Our investigation shows that a series of specific and preventable human and engineering failures were the immediate causes of the Deepwater Horizon fire. But, in fact, this disaster was almost the inevitable result of years of industry and government complacency and lack of attention to safety.
Better management of personnel, risk and communication by BP and its contractors would almost certainly have prevented the blowout.
To be sure, the Counsel’s Report doesn’t focus exclusively on BP. There’s plenty of damning evidence against Transocean and Halliburton, as well. For example, new details emerge about previous incidents, like a near blowout on a Transocean rig in the North Sea in December 2009. A well barrier failed and a metric ton of oil and mud gushed onto the rig floor and spilled into the Atlantic. Transocean put an advisory online about the lessons learned from the incident, but there’s no evidence the Deepwater Horizon rig (also owned by Transocean) was notified about it. The Counsel’s Report goes on to say that “events at Macondo may have unfolded differently” if these lessons from the North Sea rig were shared with the Deepwater Horizon crew.
(Don’t get confused. Transocean’s “near miss” in the North Sea in 2009 differed from BP’s “near miss” in Azerbaijan, the December 2008 incident uncovered by WikiLeaks. That time, BP determined a bad cement job to be the culprit. But don’t confuse that bad cement job with the bad cement job in the 2009 Montara blowout, which became the biggest oil spill in Australia’s history. That’s a different case altogether. A Thailand company owned the Montara well, although investigations blamed the spill on a bad cement job by Halliburton. But don’t confuse the Montara, off Australia, with the Macondo, in the Gulf — even though Halliburton did the cement on both wells. And finally, please don’t confuse the Macondo, with the other group of wells in the Gulf that have been leaking since 2004.)
There’s been precious little reporting on the Counsel’s Report, so please read David Hammer’s recent article in the Times Picayune, especially this part:
The commission presented its final report to Congress on Jan. 11, but [chief investigator Fred Bartlit Jr.] continued to gather new details and responses to previously unanswered questions, resulting in Thursday’s report. The Justice Department is considering possible criminal charges and might seek to increase civil pollution fines if it determines the spill was the result of gross negligence or willful misconduct, so the greater detail could prove to be significant evidence.
Hammer helpfully summarizes some of the “significant evidence” detailed in the latest report:
For example, during what might have been the most important test of the Macondo well’s ability to withstand a blowout — the negative pressure test run just hours before the actual accident — the top BP man on the Deepwater Horizon rig attributed disturbing pressure readings to a purported force called the “bladder effect,” something most scientists consider a myth.
So the question becomes: 80 percent of what, precisely?
Well, if BP is deemed to have been grossly negligent, they will pay Clean Water Act fines of $4,300 per barrel spilled which would total over $21 billion. Absent a finding of gross negligence, BP will pay $1,100 per barrel, which would be over $5 billion. (Criminal charges and penalties for BP are another matter.)
Unfortunately, BP has a team of lawyers ready to dispute everything from the “gross negligence” tag to the total volume of oil spilled. They want to keep their civil penalties as small as possible, and I wouldn’t expect them to manage their defense as badly as they managed the Deep Water disaster. In theory, though, if the current 5 million-barrel spill figure holds up, and BP is deemed grossly negligent, and Congress directs eighty percent of the money to the Gulf Coast, that would mean upwards of $16 billion for restoration. Obviously, that would be an enormous windfall for a region that has suffered two mega-disasters in 5 years, both of them exacerbating the slow-motion catastrophe of coastal loss, now nearing the point of no return.
Interestingly, back in the so-called spendthrift Bush years, the budget was supposedly too tight for things like coastal restoration and Cat 5 flood protection for South Louisiana. Now, the political climate has turned, um, even more frugal. Thus, the BP civil penalties under the Clean Water Act might represent the biggest lump sum Louisiana can expect for coastal restoration in the foreseeable future. That heightens the relevance of the Chief Counsel’s report, which portrays BP’s management failures as overarching and exacerbating the mistakes made by Transocean and Halliburton. In short, findings like the “bladder effect” episode from the Chief Counsel’s investigations might have billion dollar consequences for Louisiana’s coast.
We shouldn’t get too excited, though, because the smart money is always on “the under” when it comes to penalties an oil company will ultimately pay. BP will likely negotiate reductions in any civil fines, and the government will settle quickly for pennies on the dollar, because they know BP could drag things out for years in court. Louisiana needs as much as it can get as quickly as possible because the window of opportunity to save the coast is closing fast. So, while there’s a big difference between the Obama administration settling for $2 billion versus say $10+ billion, there’s also a big difference between getting something in the next year or two versus five or 10 years down the road.
