Blame to go around

A new report criticizes industry and government regulators for the Deepwater Horizon catastrophe

By Kyle W. Morrison, senior associate editor

The Deepwater Horizon rig explosion that resulted in the deaths of 11 workers and the largest ecological disaster in U.S. history could have been prevented, according to the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling.

On Jan. 11, the commission – an independent and non-partisan group established by President Barack Obama last May – released a report on the April 20 disaster that occurred off the coast of Louisiana.

The nearly 400-page report does not identify a sole cause for the blast; instead, it points to a number of errors on the part of the companies involved, the industry and even the government.

“This disaster likely would not have happened had the companies involved been guided by an unrelenting commitment to safety first,” commission co-chair and former senator Bob Graham said in a press release. “And it likely would not have happened if the responsible government regulators had the capacity and will to demand world-class safety standards.”

The companies and the industry

The three companies involved in the drilling operation – BP (leased the rig), Halliburton (was hired to cement the well) and Transocean (owned the rig) – made a series of mistakes that led to the blowout, according to the commission.

Among the report’s findings:

• Risks in well design and procedures were not adequately identified or addressed.
• The cement slurry used to seal the bottom of the well was not adequately tested.
• Lessons on similar, earlier near-misses on other rigs were not communicated to the Deepwater Horizon crew.
• The companies failed to adequately communicate with each other.
• Tests to identify problems in the operation were incorrectly judged to be a success.
• The companies did not pay enough attention to signs of the impending blowout.

The report indicated financial savings may have played a role in some of these mistakes. “Officials made a series of decisions that saved BP, Halliburton and Transocean time and money – but without full appreciation of the associated risks,” the report said.

The companies’ “systematic failures” bring into question the safety culture in the entire industry, according to the report.

A major industry representative took issue with that assertion. The Washington-based American Petroleum Institute said a single incident – the Deepwater Horizon blast – should not cast doubt on the industry as a whole.

“This does a great disservice to the thousands of men and women who work in the industry and have the highest personal and professional commitment to safety,” API Upstream Director Erik Milito said in a press release. Since the Deepwater Horizon explosion, the industry has taken several steps to improve safety, API said, and the organization itself is developing a safety program for deepwater operations.

The commission was dubious of the trade group’s efforts, noting that although API serves as a “reliable standard-setter” for the industry, that role is compromised through the organization’s efforts as the industry’s principal lobbyist and advocate. Additionally, the report said, API has for years fought against regulatory approaches – such as a safety and environmental management system – that exist elsewhere in the world.

The government

Drilling operations have rapidly increased over the years to reap financial returns, but investments in safety, containment and response equipment have lagged, the report said. Before the Deepwater Horizon explosion, no major incidents occurred in the industry and the “business culture succumbed to a false sense of security,” Graham and his co-chair, former Environmental Protection Agency head William K. Reilly, wrote in the report.

This conclusion is applied to both the industry and the government. Federal regulatory enforcement of offshore oil rigs was overseen by the Minerals Management Service, an agency created in 1982 that also was in charge of collecting revenue from lease sales and royalty payments from oil-producing wells. This, the commission said, created a conflict of interest.

“From birth, MMS had a built-in incentive to promote offshore drilling in sharp tension with its mandate to ensure safe drilling and environmental protection,” the report said. Compounding matters, the agency lacked resources, technical expertise and adequate regulations to ensure offshore drilling was performed safely.

Shortly after the Deepwater Horizon explosion, the Department of the Interior created a new entity – the Bureau of Ocean Energy Management, Regulation and Enforcement – and divided oversight of safety, revenue collection and leasing into separate offices within that agency.

The report called this reorganization a “significant improvement,” but one that does not address the deeper issues of insulating safety oversight from pressures to increase productivity and revenue from the wells. Instead, the commission recommended the function of offshore drilling safety oversight be placed in a new, independent agency.

Other commission recommendations:

• Create an industry safety institute to supplement government oversight, similar to the Atlanta-based Institute of Nuclear Power Operations
• Include risk assessment and risk management practices in regulation of offshore activity
• Fill gaps and current deficiencies in current law by implementing new standards to be applied throughout the Gulf of Mexico and the Arctic
• Update standards at least every five years under the International Organization for Standardization formal review process

The commission’s report also addressed the American people, noting the dangerous task of energy extraction is driven by the country’s oil and gas consumption.

“Our national reliance on fossil fuels is likely to continue for some time – and all of us reap benefits from the risks taken by the men and women working in energy exploration,” Graham and Reilly wrote in the report. “We owe it to them to ensure that their working environment is as safe as possible.”