http://www.bloomberg.com/news/2011-12-14/bp-oil-spill-shows-blowout-preventers-need-redesign-panel-says.html
BP Oil Spill Shows Blowout Preventers
Need Redesign, Panel Says
By Jim Polson – Dec 14, 2011 7:00 AM PT
Blowout preventers, which are supposed to seal off an oil well in an emergency, must be redesigned to prevent failures like the one last year at BP Plc’s Macondo well in the Gulf of Mexico, according to the final report of a technical panel.
The U.S. government and the energy industry had “misplaced trust” in the ability of blowout preventers to act as fail-safe mechanisms, a committee of the National Academy of Engineering and National Research Council said in a report today. The 57 foot (17 meter) valve systems, which stand atop deep-water wells, weren’t designed or tested for the conditions that existed when the Macondo well exploded, the report found.
A blowout at the Macondo well in April 2010 killed 11 workers aboard Transocean Ltd. (RIG)’s Deepwater Horizon drilling rig off the coast of Louisiana, causing it to sink and resulting in the biggest offshore U.S. oil spill in history. An estimated 4.9 million barrels of crude went into the Gulf while operators fought for 87 days to seal the well.
If the blowout preventer had cut off the flow of oil and gas from the well, the rig might not have sunk and the spill probably would’ve been smaller, the report found.
“It failed to stop the blowout because of its design and operational shortcomings,” the committee reported. “There is an urgent need for those shortcomings to be corrected.”
The 400-ton system built by Cameron International Corp. (CAM) was four years overdue for maintenance and hadn’t been disassembled and refurbished since the Deepwater Horizon was commissioned in 2001, Jason Mathews, a member of a joint U.S. Coast Guard- Interior Department investigative panel, said during an April 6 hearing in Metairie, Louisiana.
‘Limited’ Evolution
Cameron invented blowout preventers in 1922 and “the evolution of this expensive and long-lived piece of equipment appears to have been limited,” according to today’s report. It “was neither designed nor tested for the dynamic conditions that most likely existed at the time that attempts were made to recapture well control” at Macondo.
The report, requested by Interior Secretary Ken Salazar, is the latest in a series of three government probes of the disaster. President Barack Obama appointed a commission to investigate the spill and the Coast Guard and Interior Department held their own joint inquiry.
A November 2010 interim report by the same committee issuing today’s findings said key staff overlooked signs of a failed cement plug that led to the blowout. It accused BP, its contractors and federal regulators of weak oversight. Today’s report proposes new procedures and regulation of well design and offshore rigs.
‘Robust and Reliable’
It also calls for redesign of blowout preventers to allow for “robust and reliable cutting, sealing and separation,” as well as new testing and maintenance procedures.
The government in September 2010 required drillers to have third-party verification that blowout preventers are capable of cutting off pipes, as well as having the ability to remotely close off the valves.
The report “has helped to affirm the tremendous efforts we have made in the last 18 months to raise the bar for safety and oversight of offshore oil and gas operations,” Salazar said in a statement. “The work we have done to implement rigorous new offshore drilling and safety rules and reform offshore regulation and oversight is in line with the recommendations of the committee.”
BP, based in London, won permission on Oct. 21 to resume oil exploration in the Gulf’s deep waters. The company said on July 15 it will use blowout preventers with added equipment to cut off the flow in the event of an emergency in the Gulf.
Salazar is scheduled to be in New Orleans today to announce the first Gulf of Mexico oil and natural-gas leases to be awarded since the Deepwater Horizon explosion.
To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net
To contact the editor responsible for this story: Susan Warren at susanwarren@bloomberg.net
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http://www.google.com/hostednews/ap/article/ALeqM5giLPFasRXVOgfuii2XUQmvKvz98Q?docId=9d55b04065ea434f877388c7fb61d89d
Engineering experts hit safety culture in BP spill
By SETH BORENSTEIN, AP Science Writer – 20 minutes ago
WASHINGTON (AP) – BP and the oil industry drilling in the Gulf of Mexico lacked the proper safety attitude to handle the large risks of deep-water drilling, leading to the many bad decisions behind the nation’s worst offshore spill, a panel of expert engineers said Wednesday.
Despite better safety practices, the experts worried that the improvements could fade without new steps. They pointed to NASA and how lessons the agency learned after the 1986 Challenger disaster eventually dimmed, leading to the 2003 Columbia disaster.
The National Academy of Engineering, which advises the federal government, cited errors that combined to make the well platform explode and oil spill, but noted a problem with the safety culture underlying last year’s 172 million gallon spill at BP’s Macondo well in the Gulf of Mexico.
“The industrial management involved with drilling the Macondo well had not adequately understood and coped with the system safety challenges presented by offshore drilling operations,” the 136-page report said. “This raises questions about the industry’s overall safety preparedness, the ability to handle the complexities of the deep-water operations, and industry oversight to approve and monitor well plans and operational practices and personnel competency and training.”
That’s a problem because the report called drilling in the Gulf’s deep waters “some of the most complex and most risky ventures conducted by commercial enterprises.”
Experts said a deficient safety culture led BP to rely on blowout preventers – a 57-foot-tall, 400-ton system of well control devices – as equipment that just couldn’t fail.
The trouble is that even before the April 2010 well blowout, “there were numerous warnings to both industry and regulators about potential failures of existing” blowout preventers, the report said. The report pointed to studies in 2001, 2002, 2004, and a 1999 well blowout and fire off the Louisiana coast.
“One needs to understand that they do not work all the time,” said panel chairman Donald Winter, a former Navy secretary and engineering professor at the University of Michigan. BP and all the industry had “a misplaced confidence that the blowout preventer could provide a guarantee if you will, an insurance policy, against a blowout.”
Panel member Roger McCarthy, a private engineering consultant who has investigated past oil spills, said blowout preventers are treated like drilling’s circuit-breakers, but there’s no safety group certifying them in the same that Underwriters Laboratories approves key electrical safety devices in homes.
Winter said the safety culture issue was apparent in the industry’s attitude toward risks involved in drilling: Instead of acknowledging that there are risks and that industry officials need to make intelligent decisions comparing risk and business decisions, they had an unrealistic attitude that their actions never added risks.
Like other studies of the BP spill, the report highlighted several technical failures behind the disaster, with no lone cause. But Winter said the bad decision that was uppermost to him was the decision to abandon the well temporarily, which is normal, even though the cement poured in the well failed important pressure tests.
“Once they made the decision to basically disregard the tests,” it set the chain-of-events for all that followed, Winter said.
In a statement, BP said it “has acknowledged its role in the accident and has taken concrete steps to further enhance safety and risk management throughout its global operations.”
The experts do say drilling safety has improved in the Gulf of Mexico.
“We think it is indeed in fact a reasonable process to continue drilling at this point in time,” Winter said at news conference. “But further improvements in safety can in fact be made and should be made.”
The independence of the National Academy of Engineering means the report is likely to carry more weight in Congress than some of other investigations. Republican lawmakers have criticized prior reports by a presidential commission saying that the panel was biased.
A joint federal investigation also has inherent conflicts of interest because the committee was comprised of those who regulate the offshore drilling industry.
Since the disaster, the Obama administration has reorganized the offshore drilling agency and boosted safety regulations. But Congress has yet to pass a single piece of legislation to address safety gaps highlighted by the disaster. House Republicans, meanwhile, have passed bills to jump start offshore drilling.
Associated Press writer Dina Cappiello contributed to this report.
On the Net:
* The National Academy of Engineering report: http://bit.ly/vQK3ai
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http://www.businessweek.com/news/2011-12-13/cameron-asks-court-to-derail-february-bp-gulf-spill-trial.html
Business Week
Bloomberg
Cameron Asks Court to Derail February BP Gulf Spill Trial
December 13, 2011, 9:51 PM EST
By Margaret Cronin Fisk and Laurel Brubaker Calkins
(Updates with law professor’s comment in 11th paragraph.)
Dec. 13 (Bloomberg) — Cameron International Corp. asked a federal appeals court to derail a trial set for February to determine which companies should be blamed for the 2010 BP Plc oil spill in the Gulf of Mexico.
Cameron, which made the blow-out prevention equipment used for the Macondo well, asked the U.S. Court of Appeals in New Orleans to throw out the existing trial plan and rule that claims against the company should be tried before a jury. U.S. District Court Judge Carl Barbier, who is overseeing much of the spill litigation, has scheduled a nonjury trial for Feb. 27 in New Orleans to determine liability and apportion fault.
Barbier plans two subsequent nonjury phases on the size of the spill and efforts to contain it. Test jury trials on damages to victims would follow, the judge has said. Cameron said that trial plan violates its constitutional rights.
“The proceeding envisioned by the district court’s plan is not a ‘trial’ as it is known in Anglo-American law,” Cameron, a defendant in hundreds of lawsuits over the explosion and subsequent oil spill, said in a court filing. “Its three phases are reminiscent of the procedures followed by European courts in which the judges are active prosecutors in search of justice while the litigants are virtually bystanders.”
The appeals court last week set oral arguments on Cameron’s challenge for Dec. 22 in Dallas.
Blowout and Explosion
The April 2010 Macondo well blowout and the explosion that followed killed 11 workers and set off the worst offshore oil spill in U.S. history. The accident and spill led to hundreds of lawsuits against BP and its partners and contractors, including Cameron, Transocean Ltd., the Switzerland-based owner and operator of the Deepwater Horizon drilling rig that exploded and Halliburton Co., which provided cementing services.
The lawsuits for injuries, economic and environmental loss are combined before Barbier in federal court in New Orleans.
Cameron, based in Houston, argues that the trial plan should include specific claims by injured parties in the multidistrict litigation, or MDL.
“The trial plan does not formally include the claim of any individual MDL plaintiff or limitation claimant, yet it seeks a global fault allocation for all of them,” the company said in court papers.
‘Free-for-All’
The trial plan “invites” the plaintiffs’ lawyers “to participate in a potentially riotous free-for-all over fault on behalf of an undifferentiated mass of unidentified plaintiffs,” wrote David Beck, Cameron’s lawyer.
“The appeals court may be reluctant to intervene,” said Carl Tobias, a law professor at the University of Richmond in Virginia. “MDLs are special and appeals courts are pretty deferential to MDL judges.”
The appellate court may decide that it needs more time to decide and delay the Feb. 27 trial, Tobias said. “If Cameron is right, and the trial goes forward, they would have to redo it all,” he said.
Cameron also contends that Barbier chose the wrong laws to govern the spill litigation and that claims against the company fall under the federal Outer Continental Shelf Lands Act, which allows for a jury trial.
‘Impermissibly’ Infringed
Maritime law disputes are typically tried by a judge alone. By choosing maritime law, Barbier “impermissibly” infringed on Cameron’s constitutional right to a jury trial, the company’s lawyer said.
BP, which owns the blown-out well, filed papers disagreeing with Cameron and urging the appellate court to allow Barbier the discretion to conduct the massive spill litigation in whatever manner he deems most efficient.
“BP does not agree with all of the rulings” Barbier has made in “perhaps the most complex admiralty proceeding in history,” the London-based oil company said last month. “But BP does believe that Judge Barbier is doing an admirable job of managing the enormous proceedings.”
Lawyers for spill victims also opposed Cameron’s appeal. Cameron “fundamentally misunderstands” the structure of Barbier’s trial plan, which doesn’t require the participation of individual injured parties, lawyers for the committee representing thousands of spill victims said in an appellate filing.
Facts and Conclusions
Barbier is entitled to utilize the structure to determine facts and conclusions he’ll need to apply in further phases of the spill litigation, Stephen Herman and James Roy, liaison counsel said in the filing.
Halliburton Co., which provided the cementing services to the well, said it supported the challenge to the trial plan.
“The current trial plan purports to address liability issues in isolation from actual claims and causation issues,” Donald Goodwin, Halliburton’s lawyer, said in a Nov. 7 filing at the appeals court.
Any attempt to use the judge’s liability findings in individual claims “violates the district court’s limited pre- trial jurisdiction over MDL cases,” Goodwin said. Houston-based Halliburton supports the use of maritime law to govern the lawsuits, he said.
Barbier said in September that the February trial would “address all allocation of fault issues that may properly be tried to the bench without a jury.” This includes “the negligence, gross negligence, or other bases of liability of, and the proportion of liability allocable to the various defendants, third parties, and non-parties,” he said.
Fault Denied
Cameron has denied any fault for the incident, contending its blowout preventer functioned as designed.
“The BOP was not activated in time to seal the well and prevent a blowout,” Cameron lawyer David Beck said in an Oct. 18 filing in the appeals court.
Transocean set the trial in motion last year by filing what’s known as a limitation action, seeking to restrict the company’s exposure to damage claims under a 160-year-old law that shields ship owners from unlimited injury claims.
Barbier allowed thousands of spill victims who suffered only economic losses to file claims in Transocean’s limitation action, rather than requiring them to file individual suits under the Oil Pollution Act, which compensates economic losses.
‘Limitation Action’
“Cameron was dragged into the limitation action and forced to confront the prospect of liability to a vast number of claimants in that proceeding, as well as potentially catastrophic liability to BP on its cross claims,” Beck told the appeals court.
The limitation action has high-jacked what should be a trial over liability and damages conducted under Oil Pollution Act rules, Cameron contends. Under OPA, injured parties must present damage claims to designated responsible parties first. Only after this stage can legitimate damage claims be filed in court or lodged against third parties, such as Cameron, which aren’t designated as responsible parties under OPA, the company said.
“The district court has inverted the congressional order by confusing Transocean’s limitation action with the OPA claims that this case is mainly about,” Beck said in the Oct. 18 filing. “This has become a case of the caboose driving the train, and it needs to be put back on the tracks.”
Even if subsequent juries determine the company isn’t liable for specific injuries, Barbier may have already unfairly assigned a percentage of fault to Cameron through the proceeding that’s to begin in February, Beck argued. “A futile trial would be very prejudicial, and the prejudice suffered cannot be put back in the bottle,” he said.
The appeals case is In re: Cameron International, U.S. Court of Appeals for the Fifth Circuit. The lawsuits are combined in In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).
–Editors: Fred Strasser, Michael Hytha
To contact the reporters on this story: Margaret Cronin Fisk in Southfield, Michigan, at mcfisk@bloomberg.net; Laurel Brubaker Calkins in Houston at laurel@calkins.us.com
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
Special thanks to Richard Charter