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The case for the defence

The Economist

Sep 8th 2010, 19:29 by The Economist online


THERE is plenty of blame to go around, at least according to BP. The company’s report on September 8th into the causes of the accident that led to the loss of the oil rig Deepwater Horizon, the death of 11 of its crew and the biggest oil spill in American history contains a litany of mistakes, many of which, if they had been caught, might have averted the catastrophe. Some of those errors, the report concludes, were BP’s. But its finger also points at Halliburton, which worked on the cement seal at the bottom of the well and Transocean, which owned and ran the rig, and maintained the crucial blowout preventer which so signally failed to live up to its name.

The stakes here are high. If BP is found to have been grossly negligent in its role as operator the fines it faces would increase by billions, and its chances of recouping money from its junior partners in the project, Anadarko and Mitsui, would be badly damaged. On the basis of this report, hardly the last word, such a finding seems unlikely. The likelihood of protracted suits and countersuits between the companies involved, though, remains high, with damage to the reputations of all of them.

With events and errors ticked off day by day, hour by hour and then minute by minute as the implacable oil rises from below, the report makes eerie reading. Its tragedy unfolds in four acts, each containing a number of errors: the initial penetration of hydrocarbons into the well through cement seals and physical barriers meant to be impermeable; the subsequent failure to spot that the seals had not worked and that oil and gas were building up in the well as rig workers turned, unaware, to other tasks; the subsequent rig-wrecking explosions; and, at the sea floor, the failure of the blowout preventer to cut off the flow of oil as the rig toppled and its connection to the well below broke open, releasing oil into the Gulf for the next three months.

In the first act, the report claims that Halliburton supplied a cement slurry of its own devising which it should have recognised was not fit for the purpose. Subsequent testing showed that the cement produced by a similar slurry (Halliburton’s own was apparently not made available) would have been likely to break down. BP’s well team, the report goes on, failed to appreciate the challenges of the cementing, to assess the risks and to make sure it knew what was going on. Analysis by Halliburton suggested that extra “centralisers”, which keep the pipe that transports the oil in the right position, were needed. BP procured them but did not use them, its well team suspecting, wrongly, that they were the wrong sort. The report concludes that this error is unlikely to have been key to the cement failure, but it is a pretty striking mistake and others will likely differ on its significance. The team then failed to run a test, or log, to show that the cement seal was OK, a failure that has already been criticised by others.

In the second and third acts, after the hydrocarbons had got through valves at the bottom of the well, the focus shifts to Transocean, and at times to decisions made by people who died in the disaster. When the heavy drilling mud that provides the pressure needed to keep things from coming up the well was removed, first as a test, then as part of procedure for closing down the well and moving the rig, telltale signs that something was wrong were missed. When the oil and gas reached the rig, they were diverted not overboard, as might have been wiser, but to a system called the mud-gas separator which was overwhelmed and spewed gas back on to parts of the rig that did not have safeguards on their electronics to minimise the chance of ignition, as the systems on the drilling floor did.

Then there was the blowout preventer, a huge stack of valves on the sea floor. When one of its valves was activated, after people realised something was wrong and just before the explosion, it did not stop the flow. Nor did it shut off the flow when its connections to the rig were lost, as it should have. Nor when a remotely operated vehicle activated it later. Studies of the blowout preventer’s control pods suggest that a flattish battery and a dodgy valve meant that neither was in a fit state to close off the well automatically when they should have, which BP takes as evidence of poor maintenance by Transocean. This does not explain why the great valves failed even when they were activated by other means. More answers may be forthcoming now the blowout preventer has been raised from the sea floor; currently in the custody of the Department of Justice, it may be a forensic treasure.

Perhaps unsurprisingly, Transocean rejects the report as self-serving, and points to issues with the well’s design, as well as to the cement log, as deserving much more scrutiny. Other oil companies have also pointed to BP’s decision to run a single “long string” of production pipe from the top of the well to the bottom as a problem, claiming that an alternative approach which puts a physical barrier around the production pipe at an intermediate depth offers greater safety. The issue is clearly an important one, but it is not clear that in itself it made a crucial difference. If oil got into the production pipe from the bottom, then barriers that would have impeded its flow up the cavity around that pipe would have made little difference.

The BP report points to pros and cons of the long string approach and its alternatives; subsequent analysis may be less even handed—stressing, perhaps, the way that the long string approach made centralisers all the more important. And other reports, both from Transocean and the various boards of investigation, not to mention court rulings, will be flowing for years to come.

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