BP Knew of Deepwater Horizon Problems 11 Months Ago

jkinney3 was one of several readers to send in news of recently discovered internal documents from BP which indicate the company knew "there were serious problems and safety concerns with the Deepwater Horizon rig far earlier than those the company described to Congress last week." According to the New York Times, "The documents show that in March, after several weeks of problems on the rig, BP was struggling with a loss of 'well control.' And as far back as 11 months ago, it was concerned about the well casing and the blowout preventer." Reader bezenek points out this troubling quote about BP's inconsistent risk assessments: "In April of this year, BP engineers concluded that the casing was 'unlikely to be a successful cement job,' according to a document, referring to how the casing would be sealed to prevent gases from escaping up the well. The document also says that the plan for casing the well is 'unable to fulfill M.M.S. regulations,' referring to the Minerals Management Service. A second version of the same document says 'It is possible to obtain a successful cement job' and 'It is possible to fulfill M.M.S. regulations.'"

Comments

Duh

[S.O.B.]

Does this really surprise anyone?

Re:Duh

[gt_mattex]

No.

What I would really like to see is the risk analysis report. How cautionary were the warnings of the engineers and how did the pencil pushers at the top translate this as an acceptable risk?

Re: Duh

[Black Parrot]

and how did the pencil pushers at the top translate this as an acceptable risk?

Apparently they just changed "unable" to "able".

Re:Duh

[3dr]

Oh, like this.

First of all, the sections of pipe are joined mechanically, and sealed with O-rings. The O-rings are specified for shallow water pressures (and temperatures), and rather than use adequate deep water parts, the shallow water parts were continued to avoid mandatory Federal oversight and testing.

On top of that, deadlines for completion were already tight, as no schedule variability was provided for unforeseen events, such as severe weather, that might hamper drilling and well conversion efforts. The conversion from an exploratory/research structure into a production well was a hard deadline, and pressure was on internally from the otherwise stagnant middle managers clamoring for achievement. There was no room for failure with a project named Deepwater Horizon.

As engineers' warnings flowed up the chain of command, the wording changed from "grave concern" to "concern" to "noted comment" to eventually "thumbs up!". Inter-hierarchical presentations followed a strict time schedule, so power point mentality and "no bad news up" reigned.

/satire

Re:Duh

[QRDeNameland]

Oh, like this.

First of all, the sections of pipe are joined mechanically, and sealed with O-rings. The O-rings are specified for shallow water pressures (and temperatures), and rather than use adequate deep water parts, the shallow water parts were continued to avoid mandatory Federal oversight and testing.

On top of that, deadlines for completion were already tight, as no schedule variability was provided for unforeseen events, such as severe weather, that might hamper drilling and well conversion efforts. The conversion from an exploratory/research structure into a production well was a hard deadline, and pressure was on internally from the otherwise stagnant middle managers clamoring for achievement. There was no room for failure with a project named Deepwater Horizon.

As engineers' warnings flowed up the chain of command, the wording changed from "grave concern" to "concern" to "noted comment" to eventually "thumbs up!". Inter-hierarchical presentations followed a strict time schedule, so power point mentality and "no bad news up" reigned.

/satire

That reminds me of this old classic:

In the beginning was the Plan.

And then came the Assumptions.

And the Assumptions were without form.

And the Plan was without substance.

And darkness was upon the face of the workers.

And they spoke among themselves, saying, "It is a crock of shit, and it stinks."

And the workers went unto their Supervisors and said, "It is a pail of dung, and we can't live with the smell."

And the Supervisors went unto their Managers, saying "It is a container of excrement, and it is very strong, such that none may abide by it."

And the Managers went unto their Directors, saying "It is a vessel of fertilizer and none may abide its strength."

And the Directors spoke among themselves, saying to one another, "It contains that which aids plant growth, and it is very strong."

And the Directors went to the Vice Presidents, saying unto them, "It promotes growth, and it is very powerful."

And the Vice Presidents went to the President, saying unto him, "This new plan will actively promote the growth and vigor of the company with powerful effects."

And the President looked upon the Plan and saw that it was good.

And the Plan became Policy.

And that is how shit happens.

Re:Duh

[Peach Rings]

Well since BP's unconscionable business practices are being thoroughly exposed, you don't necessarily have to give them a second chance. There's a point where their organization is so flawed that it would be an unacceptable danger to have these people continue to drill when millions of lives can be affected. The best solution may be to dismantle BP's US operations entirely and let it serve as a warning to the rest.

Re:Duh

[HiThere]

FWIW, I believe that under law the top level executives and the board of directors ARE personally liable. But somehow the prosecutors don't find those targets appealing, and they get to choose which cases they prosecute.

It doesn't *have* to be corruption. That's only one possibility. Personally, I think it is, but only if you give corruption a very wide interpretation. If a DA prosecutes someone powerful, whether they win or lose their career is probably over. Same for the Attorney Generals, but with a tougher criterion for powerful. And judges also, for whatever reason, tend to give favorable treatment beyond the bounds of law or reason to the more powerful.

They *laws* are fair (in the sense recognized by François Villon: simplified"The law forbids both the rich and the poor from sleeping under the bridge."), but the enforcement isn't even fair in that sense.

Re:Duh

[Knuckles]

Like Nigeria. From that article,

In fact, more oil is spilled from the delta's network of terminals, pipes, pumping stations and oil platforms every year than has been lost in the Gulf of Mexico, the site of a major ecological catastrophe caused by oil that has poured from a leak triggered by the explosion that wrecked BP's Deepwater Horizon rig last month.

.

Re:Duh

[grcumb]

Does this really surprise anyone?

Yes, I am surprised. In one really important regard:

That NYT piece is an excellent piece of reporting. It gets to the facts - some of which are decidedly uncomfortable for both the government & BP and many of which required considerable research and effort - it ties everything nicely together and, without commentary, innuendo or logical fallacy, manages to paint a compelling picture of corporate and bureaucratic laxity.

Congratulations to Brown and Lehren for an excellent and important piece of work. This kind of journalism is exactly what we need.

Liability caps

[Darkness404]

How does this come as a surprise since the government limits BP's liability to just a drop in the bucket for them? Yeah, they are thinking about retroactively removing it, but seriously, anytime you reduce the liability to an artificially low number, you are just asking for trouble.

Re:Liability caps

[Lunoria]

If because of these fees BP has higher priced oil than say Exxon, people will flock to Exxon and ignore BP. Of course due to governments creating artificial monopolies, kickbacks, bailouts and the like this doesn't happen for many businesses.

More likely, Exxon will simply raise their prices to be the same as BP's.

Re:Liability caps

[Jeremy Erwin]

Any damages applied to them would simply be passed on to the consumers.

BP has competitors. If BP "passes on" the damages to consumers in the form of higher prices, those competitors can easily undercut BP's prices.

Re:Liability caps

[RyuuzakiTetsuya]

blahblahblah. More Libertarian nonsense.

When I'm out of town and don't know the area, and my car nearly dies running out of gas, I really don't have a choice about what the next gas station is. Whether BP, Citgo, 76, Gulf, etc.

Speaking oil and monopolies, yes, Standard Oil became a monopoly with out the Government's interference. So did many other monopolies.

Re:Liability caps

[shutdown -p now]

We have anti-monopoly laws and investigators to deal with these kinds of things.

Re:Liability caps

[feepness]

Any damages applied to them would simply be passed on to the consumers.

Not a problem in my book. The consumers create the demand for the oil in the first place.

Re:Liability caps

[fermion]

Oil is a commodity and commodities are the freest market in the world, largely devoid of government control. Their costs tend to based on what the market will bear, not what the government mandates. For instance ADM was able to fix prices on food commodities, charging what the market would bear. The majority of these costs were passed on to consumers. It was only when the US government came in and killed the free market that the price fixing ceased and prices fell, not because consumers demanded it.

Oil is a much more transparent market that food commodities, but it still charges what the market will bear. For instance, prices right now are around $70 and that is a magical number, a number that has little to do with what the product is worth. In Saudi Arabia, for example, I have heard it costs much less than $10 a barrel for exploration, drilling, transport, administration, everything. That could be $20, but the point is that it is the lowest int he world.

Oil is a commodity, it costs the same no matter where it comes from, pretty much. A refinery is going to buy oil from whoever it needs to. The US only has 1-3% of the worlds reserves, so US refinaries are going to buy from whomever. The fact that it cost 5X as much to produce oil in the gulf is not going to raise the oil to $350 a barrel.

And here is the problem. Gulf oil producers have to compete with essentially free. This means that they are going to always be corners cut and safety compromised. If oil were $150 a barrel and we paid $4.50 a gallon at the pump, then life would be different. But offshore oil rigs are competing with free. Half the oil reserves are likely on easily drilled land based properties, just waited to be drilled for $20 a barrels or so. The rest of us have to compete with it. We are either going to live with the risk, or change our outlook.

The US produces at most 2% of the worlds oil, we don' have to. It would make many people poor if we don't, it would make me poor, so I hope we don't, but this crocodile tears outrage, and blaming the government, it pathetic. Energy is running in a free market. The only government control is Saudi Arabia trying to keep prices low enough so developing alternatives are not cost effective. The only thing that the US government could do is subsidize shale oil so it is cost effective at $70 a barrel instead of $100, cut drilling in sensitive locations, pull out of the middle east and develop peaceful ties with central and south america, and promote efficiency and short and long term alternatives to crude oil. Otherwise they can leave the free market alone and cry with the citizens when something goes wrong.

Re:Liability caps

[osu-neko]

We have anti-monopoly laws and investigators to deal with these kinds of things.

Hehe!

Oh dear, you were being sarcastic, right?

Re:Liability caps

[coredog64]

What color is the sky on your planet? BP is subject to the federal Oil Pollution Act, which has an infinite limit for cleanup damages: http://frwebgate.access.gpo.gov/cgi-bin/usc.cgi?ACTION=RETRIEVE&FILE=$$xa$$busc33.wais&start=4683182&SIZE=13816&TYPE=TEXT What is limited by the OPA is Federal claims: The $75M is the easy money where plaintiffs don't have to prove that BP was careless or negligent in order to collect their money. The OPA DOES NOT preempt state laws, where there is no limit to what BP will have to pay. The only bar for plaintiffs in state court is that they have to prove that BP was careless or negligent.

Re:Liability caps

[roman_mir]

Oil is a commodity and commodities are the freest market in the world, largely devoid of government control. Their costs tend to based on what the market will bear, not what the government mandates.

- pure nonsense. Look at BP, previously known as Anglo Persian Oil company, or the guys who pumped oil in Iran before the fifties and then, when the Shah was removed and a democratic government came to power, this company went crying to Governments of UK and US and those governments killed democracy in Iran and helped the oil company to get a more favorable contract.

If that is not government 'control' or help, then what the hell is?

--

Nixon set price controls on food and where did this lead? It lead to food manufacturers making sure that the government provides strong subsidies to the farmers to grow corn and soy and wheat (and cotton, whatever) and this destroyed the health of first Americans and second of citizens of many other countries because in order to keep with the inflation, instead of setting the food prices at market rates, the companies had to concentrate on cutting costs only and this lead to the health disaster that is provided by fructose.

I have to wonder what goes on inside BP

[Improv]

Did they not honestly believe that a disaster could occur? Did the right people not talk to each other? Or was the urge to cut corners simply so great that people ignored the risk?

From the ABC interview with one of the survivors, the BP people were arguing with the Transocean people, insisting that it would be ok to skip some phases of sealing the well because they wanted to move the schedule up. I wonder what that BP manager was thinking.

Re:I have to wonder what goes on inside BP

[AnonymousClown]

Did they not honestly believe that a disaster could occur? Did the right people not talk to each other? Or was the urge to cut corners simply so great that people ignored the risk?

From the ABC interview with one of the survivors, the BP people were arguing with the Transocean people, insisting that it would be ok to skip some phases of sealing the well because they wanted to move the schedule up. I wonder what that BP manager was thinking.

If BP is like every other big monster multinational corporation, there were multiple departments or divisions arguing with each other and with the contractors. As far as they were concerned, they knew what was the thing to do and everyone else was a bunch of stuffed shirts and the contractors were morons.

As far as the contractors were concerned, the BP guys were big corporate paper pushing morons that if they knew anything, would be working with the contractors.

The 'BP' in the above statement can be searched and replaced with any big corporation and their outsource "partners".

Don't confuse malice with corporate bureaucracy, internal fighting, politics, and the arrogance of people in the field and in the offices.

Now, this being the typical corporate fuck up, everyone will be pointing fingers at the others stating "We told them so!" but the were: too stupid, political, arrogant, or didn't listen and therefore the disaster happened. If only they listened to us.

The CEO will still get his hundred million dollar paycheck but the peons are probably gonna be axed without much compensation. It's good to be king - CEO.

Re:I have to wonder what goes on inside BP

[bmo]

Don't confuse malice with corporate bureaucracy,

Any sufficiently advanced incompetence is indistinguishable from malice.

Now, this being the typical corporate fuck up, everyone will be pointing fingers at the others stating "We told them so!" but the were: too stupid, political, arrogant, or didn't listen and therefore the disaster happened. If only they listened to us.

Then we need to start plugging the well with BP executives. From what we've all seen, they are largely worthless and incapable of making the decisions for which they supposedly earn their astronomical rock-star pay.

And then we need to regulate their sorry asses. Incapable of doing the right thing? You've earned onerous regulation. BP was arguing in front of the Canadian parliament that they don't need to drill relief wells in the same season as the production wells *after* this disaster started. They are obviously fucking nuts and need to be *told* what to do - with teeth. There needs to be fines targeting not just the company but the executives themselves. Jail time would be nice too, but then the only people who really serve jail time are those who are poor or of color, so that appears to be asking for too much.

Stop excusing BP.

--
BMO

Re:I have to wonder what goes on inside BP

[ultranova]

I don't know about that. BP Stock has dropped by about 33%. That's enough for any public company to axe the CEO. Remember, the CEO still serves the board, and the board serves their bank accounts.

The CEO and the board both serve their bonuses, nothing less, nothing more. And they are going to get bonuses, after which the CEO - if he's going to be fired - will get a golden parachute.

Personal responsibility is for the serfs.

Re:Okay... so now what?

[fuzzyfuzzyfungus]

You honestly think BP will face more than token consequences and maybe a name change?

Old memo deja-vu

[Valacosa]

From here:

BEN-VENISTE: Isn't it a fact, Dr. Rice, that the August 6 PDB warned against possible attacks in this country? And I ask you whether you recall the title of that [President's daily briefing]?

RICE: I believe the title was, "Bin Laden Determined to Attack Inside the United States."

Was anyone else reminded of that little gem?

President Obama

[retech]

If you do want to "own" this disaster and take responsibility then here is a challenge for you. Take this memo and every other smoking gun a decent investigation will reveal and seize BP and all its assets. Take the assets of ALL the top level execs and board, use that to pay for the clean up. Hold those same people criminally responsible for ALL of this and imprison them. Have BP continue to run and use all of its future profits and assets to fund some proper alternative fuel projects, or just pay off the national debt.

This is something the people would gladly see happen. It may restore some faith in us, letting us know the gov't is not completely corrupt and run by these bastards. And it would go a long way to prove you are not just a puppet who provides lip service on the news. It could show you actually give a damn.

So, are you willing to be the change you spoke about?

Re:President Obama

[QuantumRiff]

the united states used to dissolve the charters of thousands of corporations a year. Way back when, it was a valid punishment for fucking up. Then, suddenly, corporations became people too.

Re:President Obama

[Pharmboy]

That is called populism, and while it might make people feel good, it doesn't have a basis in law or the constitution. Holding them financially responsible is an obvious point, but you can't seize assets of the employees (4th Amendment) nor hold them personally responsible unless you can show criminal negligence or that they broke some other law. That is entirely possible for some.

What we can't do is knee jerk react and create new laws because of this. The problem isn't that we don't have enough laws, the problem is that the current system of laws and regulations wasn't followed. Politicians love to pass new laws when the shit hits the fan, because it makes it look like are doing something, when in fact it is a useless gesture.

Re:President Obama

[retech]

Yes I do think it's a perfectly acceptable solution.

If a corporation wishes to be treated as an entity then hold it responsible as such. If you or I went out drinking and slammed our car into a McD's we would be held criminally and civilly liable for those actions. The courts would imprison us, take the car and seize worldly assets to pay the damages.

I am tired of corporations (globally now, but clearly the US set the stage) completely raping local resources (labor, infrastructure, taxation abatement, natural resources) and being patted on the back when the well runs dry. Their upper echelon walks away with well lined coffers and the local area gets shit.

I do not care where this company is "located" they played in the Gulf, they fucked it up, they can pay for it (criminally and civilly). I highly doubt if you did something this egregious they'd (BP Execs) would want you to just walk away from it.

"I wonder what that BP manager was thinking."

[Colin Smith]

20% bonus if I come in ahead of schedule. etc etc etc.

 

Flamebait

[roman_mir]

That's right, it's not the engineers who run those companies and when I point this obvious fact out it gets a 'flamebait' score.

If it's a flamebait, then I am going for it again. ... BP, Transocean, Halliburton have not rationally considered the options and have not rationally analyzed the feasibility. They are doing exactly the same thing they have been doing for the past 30 years at least. The current oil spill is a mirror image of the Ixtoc disaster, the difference is just how deep they are drilling. They couldn't stop the spill in 50 meters of water with the blow out preventer, it did not work then, didn't work now; with the 'sombrero' = 'top hat', with the 'junk shot'= some metal balls they were throwing into the well then, they couldn't stop the leak with pumping the mud='top kill' etc.

Engineers can take all the offense they like, but this is simply the truth. Engineers are not running BP or Transocean or Halliburton. Engineers matter only to the question 'how much more money can we dig out of the earth' and not 'how do we deal with a disaster we may cause'.

BP: birthed out of the destruction of Iran

[copponex]

1953 Iranian coup d'etat
http://wearechangecoloradosprings.org/docs.php (pdf source documents for OPERATION AJAX)

The Persians were dissatisfied with the royalty terms of the British petroleum concession, the Anglo-Persian Oil Company (APOC), whereby Persia received 16 per cent of net profits.

In 1921, a military coup d'état—"widely believed to be a British attempt to enforce, at least, the spirit of the Anglo-Persian agreement" effected with the "financial and logistical support of British military personnel"—permitted the political emergence of Reza Pahlavi, whom they enthroned as the "Shah of Iran" in 1925. The Shah modernized Persia to the advantage of the British; one result was the Persian Corridor railroad for British military and civil transport during World War II.

In the 1930s, the Shah tried to terminate the APOC concession, but Britain would not allow it. The concession was renegotiated on terms again favorable to the British. On 21 March 1935, Pahlavi changed the name of the country from Persia to Iran. The Anglo-Persian Oil Company was then re-named the Anglo-Iranian Oil Company (AIOC)...

The overthrow of Iran's elected government in 1953 ensured Western control of Iran's petroleum resources and prevented the Soviet Union from competing for Iranian oil. Some Iranian clerics cooperated with the western spy agencies because they were dissatisfied with Mosaddegh's secular government...

After the 1953 coup, the Shah's government formed the SAVAK (secret police), many of whose agents were trained in the United States. The SAVAK was given a "loose leash" to torture suspected dissidents with "brute force" that, over the years, "increased dramatically".

Another effect was sharp improvement of Iran's economy; the British-led oil embargo against Iran ended, and oil revenue increased significantly beyond the pre-nationalisation level. Despite Iran not controlling its national oil, the Shah agreed to replacing the Anglo-Iranian Oil Company with a consortium—British Petroleum [40% owner] and eight European and American oil companies.

Yeah right...

[copponex]

Like 9/11 and terrorism have anything to do with oil... err wait.

Long jail sentences for management chain

[stomv]

Fines don't amount to much, even if they're huge -- shareholders get hurt, but the decisionmakers don't get hurt enough.

The solution: long jail sentences, from the CEO on down to middle management. If you knew about this and were anything but a prole, you need to go to jail. A policy like this and management will consider safety far more important than they do now.

P.S. Same goes for Massey up in West Virginia, etc.

Not entirely true. Here's some insights

[Bysshe]

While the top guys are often not engineers, what you're saying isn't entirely true. They have very rationally considered the options. Here's a nice link to a technical briefing from last week where they outline their options and the current situation.

In addition Tony Hayward is a geologist with a PhD.

Re: Okay... so now what?

[Black Parrot]

and maybe a name change?

Too bad "Gulf Oil" is already taken.

Re:Yes.

[bmo]

"HP *WILL NOT* come out of this unscathed,"

Exxon did. Their fine was a drop in the bucket.

--
BMO

This is good for the United States

[arcite]

Face it, your populace have turned into a bunch of overweight zombies. Bush, Obama, whats the difference? The corporations own your government and your asses. Where are the protests in the streets? Where is the outrage? Are you all just going to accept this disaster and go fill up your car with gas and go buy some more junk food (as usual)?

Oh wait a minutes.... you guys got lawyers by the hundreds of thousands, that will SOLVE all your problems. Just sue yourselves while you're at it, you could use the Ca$h I'm sure....

Perhaps,... just perhaps this epic MAN-MADE eco disaster will wake up enough of your patriots (are there any left anywhere in the world these days?) to take back the agenda and start acting like you deserve the moniker, Superpower...

BTW, this isn't a flame, I'm a Canuck and I believe that the US is the greatest country on the planet...Americans are awesome, Hell, I even work for the US government (via third party)! In conclusion; Show some vision will ya? WAKE UP!

So

[dnwq]

What future disasters does someone in BP know about now?

Sick of Pocket Know-it-alls

[bsercombe72]

Anyone who has had any experience with drilling opreations in the gulf will know that loss of drilling fluids, kicks and other well control events are common, expected and routine. Dressing them up to be problems with the well design is pure horsepuckey. If you don't know what you're talking about then STFU. Even so-called "underground blowouts" are common and can be insured by lloyds. Furthermore the phrase 'casing was unlikely to be a successful cement job' makes no sense. The article is poorly written by people who do not have a grasp of oilfield equipment and procedures and obviously could not be bothered consulting with someone who was in the rush to attempt to smear Pulitzer all over themselves. Now, this statement has nothing whatsoever to do with the actual issues which were: failure on BP and Transoceans part to identify excessive fluid flows following the cementation of the production liner AND failure (or so it seems from public information) to maintain the BOP- quite a difficult task given its located at the sea floor but any indication that it has problems should call for immediate halt and repair work. When drilling any well, your BOP is all that stands between you, catastrophe and death. /rant