BP Knew of Deepwater Horizon Problems 11 Months Ago 438
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.'"
Old memo deja-vu (Score:5, Interesting)
From here [cnn.com]:
Was anyone else reminded of that little gem?
Yes. (Score:4, Interesting)
You honestly think BP will face more than token consequences and maybe a name change?
Yes.
This incident has a lot of visibility, and the government can not afford to let it go with a slap.
Beyond that, lawsuits arising from this will fill the courts for YEARS. The lawsuits will cost BP much more money and bad publicity that any government action.
BP *WILL NOT* come out of this unscathed, if they come out at all.
President Obama (Score:5, Interesting)
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?
Flamebait (Score:5, Interesting)
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. [slashdot.org]
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 (Score:5, Interesting)
1953 Iranian coup d'etat [wikipedia.org]
http://wearechangecoloradosprings.org/docs.php [wearechang...prings.org] (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.
Re:Liability caps (Score:3, Interesting)
Bullshit. BP is already pricing its oil to whatever brings it most profits. It can't pass anything to consumer since rising prices would send consumers to competitors instead, leading to less profits for BP.
Re:Liability caps (Score:2, Interesting)
This is definitely what will happen. I used to work with the retail pricing team at Shell, and the prices at the pump are set almost entirely based on what the competitors in the local market are charging.... where 'local market' may be as specific as a single intersection with gas stations on 3 corners, and local prices being set and re-evaluated twice every day.
If BP has higher costs, and is therefore forced to charge (for example) 4 cents a litre more at a given location, then the other retailers that compete in that location will simply bump up their prices by 3.9 cents a litre... with the 0.1 cents being enough of a difference to swing more than a few customers.
So not only will customers end up paying for BP's fines... but we'll also end up paying for increased margins at all of BP's competitors.
Re:I have to wonder what goes on inside BP (Score:5, Interesting)
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:President Obama (Score:4, Interesting)
And the legal base for this would be?
Re:President Obama (Score:5, Interesting)
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.
Re:Liability caps (Score:5, Interesting)
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:Duh (Score:1, Interesting)
No matter, who screwed it up, the corporation should be liable for it. If someone is not 100% sure about what the warnings mean, they need to talk back/investigate it further. A corporation should be punished hard, if they create such a catastrophe due to neglect. It's the only way to get them to take security concerns and environmental issues seriously. They must know that, if they don't follow the rules and fuck up, they'll regret it bitterly, so that they really try to make sure that no mistakes are made, and if it means checking everything 2 or 3 times.
Afaik in aviation the manufacurers take security very seriously, because if they screw up and an accident happens, they are in big trouble. If oil companies handle things more lax and are not afraid of the consequences, something is going really wrong. It should be that way that the people on top insist that everyone in their company does his best to avoid such catastrophes and that they seriously go mad, if people fuck up, because they are afraid that the consequences for the company are severe. It can only work this way.
Re:Duh (Score:4, Interesting)
Of course not. Anyone with half a brain knows that private companies are utterly amoral entities beholden to no law or regulation beyond those they set themselves; Not even the profit motive--though this is most often their creed.
If you look at the problems seen in this spill, the financial crisis and elsewhere, you see that each and every single person involved in the poor and negligent decisions that were made acted in their own interests to the exclusion of all else. It's obvious why they did so; no-one was accountable for anything. And what happens when people can do whatever they want with no consequences?
Forget fines. Fines on large companies count as paperwork to them. No-one cares. Who's going to jail over this. Who will have to personally pay fines? That is the only type of punishment that people, human beings will understand. If the supervisors and managers of Deepwater Horizon knew that their jobs, pensions and freedom was on the line if anything happened at that plant, you can be certain that all measures would have been taken to ensure safety. Instead, punitive measures are passed on to the company in the form of (minor) bureaucratic fines, all while bonuses are paid out to employees for illegal/dangerous behaviour. Deepwater Horizon was one disaster amid millions waiting to happen under our current corporate system.
The problem is the corporate system, and the unnecessary and dangerous insulation it gives to individuals. Corporations and their actions are ultimately a result of the decisions and actions of individuals and those must be the people who are held to account, not some abstract entity. The science fiction cliché of mega-corporations who commit all kinds of outrageous crimes is not a fantasy so much as it is a logical extrapolation of what the corporate system will ultimately allow to happen; indeed, that is has allowed to happen.
This is of course the whole point of corporations. There whole purpose is to shield their owners and managers from liability, financial and otherwise, while enabling them to maximise profit. The net result is incompetent oil drilling safety measures with no contingencies in the Gulf, and bankers getting paid bonuses for every dollar of other people's money they shovel out the door. The only people who are surprised when things finally go belly up are those under some kind of ridiculous delusion that the people who run corporations are "good, reasonable, upstanding businessmen". The notion of the corporate suit as anything other than a pantomime villain is rapidly becoming obsolete.
Re:President Obama (Score:4, Interesting)
Hypothetically, that sounds like what dictators of certain countries would love to do to companies and newspaper publishers that don't support them. Just find an excuse, or create one.
You mean like "indefinite detention" for onetime-suspected terrorists and sex offenders? Sorry pal, but the "makin' shit up" method of justice has a fresh coat of asphalt, and the entire US government (as well as a large portion of its citizenry) is barreling along on that strategy bus. Might as well use it.
Re:Duh (Score:2, Interesting)
Re:I have to wonder what goes on inside BP (Score:3, Interesting)
Comment removed (Score:3, Interesting)
So (Score:5, Interesting)
Re:Flamebait (Score:3, Interesting)
Give me a list of all offshore oil well blowouts in the last 30 years (since Ixtoc 1) and how they were capped. Just comparing two incidents, we can't possibly know whether these two events were anomalies, and sombrero/top hat, and top kill are techniques that have worked on other wells in the interim, and that could generally be expected to work.
Re:Duh (Score:5, Interesting)
Does this really surprise anyone?
Yes, I am surprised. In one really important regard:
That NYT piece [nytimes.com] 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.
excellent indicator (Score:2, Interesting)
Re:President Obama (Score:3, Interesting)
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.
It looks like firms adapted to this challenge and we may indeed need new laws. It may well be impossible to collect enough evidence to convict any single executive because the responsibility was purposefully spread as thin as possible. One guy does buying, another guy does ordering, yet another one does inspection, yet another one is responsible for personnel training, and they all have supervisors of various degree. Any fuckup, no matter how bad, can be ultimately blamed on a failure to get a message through the system, so that no single person can be held responsible.
And I think that holding someone responsible is an obvious point. I mean, it all happened in the broad daylight. They drilled a hole and when it came to the most basic and most predictable kind of contingency, they had no solution for it. The company has to pay, and I just cannot think of a good way to make it pay other than to make the top management pay. This is the only way to make other companies to behave more intelligently. If no one person can be shown criminally negligible, then entire board should pay, each out of their own pocket. If there is no law to make them do that, there should be.
Re:Duh (Score:1, Interesting)
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?
Typically this would be a HAZOP (HAzard and OPerability) study, performed by various engineers, project staff, and safety experts. I have participated in a number of these in the oil & gas world, and they constitute a very important part of the engineering process. They are also legal documents.
So I was pretty concerned to hear, from a senior management type at another large oil & gas company, how they handle HAZOP reports, after the engineers have finished. The next step is to pass it by the legal department, who go over it with a fine-tooth comb, looking for phrases that could imply liability via foreknowledge of problems (which they have no intention of fixing). The last paragraph of the summary is a classic for this type of thing:
"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.'"
Bear in mind that, although these statements will most likely be supported by the engineer's signatures (why do engineers sign off on changes like this christs sake?), the changes were made by non-technical staff, for non-technical reasons, without proper analysis as to the effect on safety. And that is how you screw an engineering job - pure unadulterated greed with little to no consequences. Drill baby drill, indeed.
history and context (Score:2, Interesting)
People should really be aware of the history and context of these companies.
This is British Petrol, the same company that is effectively responsible for the mess in Iran today. They have a history of blatant disregard for safety.
And the platform is owned by Transocean, a Swiss company, the same company that had a nearly identical accident in 1979 that was the second largest oil spill in world history, the Ixtoc I (the largest being the oil spill that was part of the Gulf War).
The reinsurance companies are two German companies; insurance companies are supposed to assess the risk, insist on necessary safety measures, and price insurance accordingly. They dropped the ball too.
It's disturbing that Europeans are so quick to point the finger at the US. This is a problem that has been primarily created by European companies. It would have been nice if US regulators had regulated them more strongly, but that doesn't transfer responsibility to the US government.