Posts Tagged ‘macondo’

In 2010, corporate negligence and pursuit of profit at all cost resulted in two tragic accidents – the Upper Big Branch mine and Deepwater Horizon explosions. As we watch the subsequent investigations unfold, we don’t know what the final results will be, but we can draw one firm conclusion: Similar disasters will occur in future if corporations continue to escape serious consequences for putting profits over people.

Upper Big Branch Mine Explosion

On April 5, 29 mine workers were killed in the worst U.S. mine disaster in four decades.  Federal regulators have reported that the explosion at the Upper Big Branch mine in West Virginia was the result of a series of basic safety violations that were entirely preventable. Further, the report found that the former mine operator, Massey Energy, used “systematic, intentional and aggressive efforts” to conceal life-threatening problems.

In the year before the blast, the Mine Safety and Health Administration issued more violation orders at Upper Big Branch than at any other mine and shut the mine down 48 times but had to let it reopen when the violations were remediated.

Deepwater Horizon Rig Explosion

On April 20, BP’s Macondo well in the Gulf of Mexico blew out, triggering an explosion on board the Deepwater Horizon drilling rig, killing 11 workers and setting-off the worst oil spill in U.S. history. Federal investigators have already identified 15 violations of offshore regulations in drilling, designing and cementing in the failed well. The investigation into whether the corporations involved in the explosion were criminally negligent are ongoing.

However, in January 2011, the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, appointed by the Obama administration to review the accident and develop recommendations, cited failure of management and an industry culture that puts profits over safety as key causes of the explosion.

In the two years leading up to the Macondo well blowout, BP pled guilty to two crimes and paid more than $730 million in fines and settlements to the U.S. government, state governments and civil lawsuit judgments for environmental crimes, willful neglect of worker safety rules and penalties for manipulating energy markets.

In response to these tragic events,

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Oil spill response legislation has stalled in the Senate.

Gulf shrimpers are having their worst season in more than 50 years.

Two thousand claims a week are still rolling into the Gulf Coast Claims Facility.

On Wednesday, the Bureau of Safety and Environmental Enforcement issued a permit to BP to drill its first deepwater drill since the devastating Macondo well blowout in April 2010. This came just two days after the company reported its third quarter earnings; profits nearly doubled from the same quarter last year, from $1.8 billion to $4.9 billion.

According to The Houston Chronicle, BP plans to drill the newly approved well in 6,034 feet of water – about 1,000 feet deeper than its doomed Macondo project. Drilling could begin within days using Seadrill’s three-year-old West Sirius semi-submersible rig.

Meanwhile, shrimpers along the Gulf Coast are calling the season the worst in memory. Some fishermen said their catches were off by 80 percent or more.

And while the BP Compensation Fund has paid out nearly $6 billion of the $20 billion escrow account to those harmed by the spill, BP has yet to pay oil spill penalties under the Clean Water Act and other federal regulations. Critics of the fund also note that 300,000 claims have been denied. In the event that the $20 billion has not been paid out by the time the fund expires in August 2013, the balance will be returned to BP.

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Last week the Oil Spill Commission released its preliminary findings in a two day meeting held in Washington D.C.

Findings confirmed that the Macondo well blowout was an avoidable accident. And that escalating series of issues leading up to the blowout were the result of BP’s prioritization of cost cutting over safety.

Specifically, the Commission’s investigation team found that most of the mistakes and oversights that led to the blowout were the result of management failures by BP, Halliburton, and Transocean.

Key findings include:

    • BP, Transocean, and Halliburton failed to communicate adequately. BP did not share important information with its contractors, or sometimes even within its own team. And contractors did not share important information with BP or each other;
    • Halliburton and BP management processes did not ensure that cement was adequately tested before pumping. Halliburton didn’t have sufficient controls in place to ensure that its personnel tested cement in a timely manner or rigorously vetted test results. BP personnel did not ensure that Halliburton completed testing before pumping cement, despite recognizing problems with timeliness of Halliburton’s cement testing;
    • BP and Halliburton employees knew that the cement job would be difficult but did not adequately communicate these issues to the rig crew;
    • Neither the BP well-site leaders nor the Transocean crew consulted anyone on shore about anomalies in the negative pressure test;
    • If these challenges and anomalies had been better communicated, the Macondo blowout could have been prevented.

The findings made clear that there is plenty of blame to go around for the worst oil spill in U.S. history, but the analysis provided on the key actors’ deplorable safety culture and history of violations and accidents begs the questions: Why were they permitted to drill at all?

BP

BP’s history of cost-cutting and resulting problems across all business segments and over many years suggests systemic corporate culture issues.

Accident History:

  • Grangemouth Refinery complex –2000
  • Forties Alpha Production Platform –2003
  • Texas City Refinery –2005
  • Thunder Horse Platform -2005
  • Prudhoe Bay Pipeline -2006
  • Deepwater Horizon -2010
  • Texas City Refinery (again) -2010
  • BP pipelines across Alaska –2010

BP safety lapses appear to be chronic; its systems safety engineering and safety culture still need improvement.

Halliburton

Halliburton is the largest company in the global oil field cementing business, which accounted for 11% of the company’s business, or $1.7 billion in 2009.

For all of its experience, Halliburton prepared cement for BP, one of its major clients, that had repeatedly failed laboratory tests. And Halliburton managers on shore let its team, Transocean, and BP continue with a cement job without timely and positive stability results.

Halliburton was also the cementer on the Montara well that suffered a blowout in August 2009, off the coast of Australia.

The accident inquiry confirmed that cementing problems led to the blowout.

While specific cementing problems at Montara were different from mistakes at Macondo, in both cases management processes by the operator and Halliburton failed to ensure the crew achieved a good cement job.

Transocean

In February, the UK Health & Safety Executive accused some of the company’s offshore managers “of bullying, aggression, harassment, humiliation, and intimidation” [towards their staff] according to Upstream, an industry trade journal that had seen a copy of the report.

Early in 2010, Transocean contracted Lloyds Register to review its safety management and safety culture after “a series of serious accidents and near hits within the global organization.”

Of the four North American rigs that Lloyd’s visited, the Deepwater Horizon was the highest performing with scores solidly in the twos and threes on a five point scale.

“[A] fundamental lack of hazard awareness underpins many of the issues in the North America Division.”

Transocean Supervisors and rig leaders themselves believed: “The workforce was not always aware of the hazards they were exposed to . . . ”

“[F]rontline crews are potentially working with a mindset that they believe they are fully aware of all the hazards when it is highly likely that they are not.”

Information courtesy of  Oil Spill Commission Staff

Allison Fisher is the Outreach Director for Public Citizen’s Energy Program

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