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A 'Nightmare Well' Now Everyone's Nightmare

WASHINGTON - Six days before the Deepwater Horizon explosion that broke the wellhead still gushing oil into the Gulf of Mexico, a BP drilling engineer called it a "nightmare well."

Activist with a bottle of spilled BP oil is restrained by security guards as she tried to approach oil industry executives testifying before a Congressional subcommittee, June 15, 2010. (Photo © Mannie Garcia courtesy Greenpeace) On April 14, drilling engineer Brian Morel e-mailed a colleague about the BP's options for securing the well with cement. He wrote, "this has been [a] nightmare well which has everyone all over the place."

The comment is contained in a letter sent Monday to BP CEO Tony Hayward by legislators to alert Hayward to the issues he will be expected to address when he appears to testify before the House Energy and Commerce Committee on Thursday.

The letter outlines the findings of committee's independent investigation into the explosion that resulted in the sinking of the Deepwater Horizon offshore drilling rig.

"Evidence before the Committee calls into question multiple decisions made by BP. Time after time, it appears that BP made decisions that increased the risk of a blowout to save the company time or expense. If this is what happened, BP's carelessness and complacency have inflicted a heavy toll on the Gulf, its inhabitants, and the workers on the rig," wrote Committee Chairman Henry Waxman and Subcommittee Chairman Bart Stupak.

At the time of the blowout, the well was significantly behind schedule and was costing BP some $500,000 a day, Waxman and Stupak pointed out. "This appears to have created pressure to take shortcuts to speed finishing the well."

In particular, the Committee is focusing on five crucial decisions made by BP:

  • the decision to use a well design with few barriers to gas flow
  • the failure to use a sufficient number of "centralizers" to prevent channeling during the cement process
  • the failure to run a cement bond log to evaluate the effectiveness of the cement job
  • the failure to circulate potentially gas-bearing drilling muds out of the well
  • the failure to secure the wellhead with a lockdown sleeve before allowing pressure on the seal from below
"The common feature of these five decisions is that they posed a trade-off between cost and well safety," Waxman and Stupak wrote.

In a congressional hearing this morning, executives of four other giant oil companies attempted to distance themselves from BP. Guarded by personal security agents, they entered the hearing room after making their way through a crowd of environmental activists holding signs reading "Big Oil Lies, People Die."

The executives appeared before the Energy and Environment Subcommittee of the House Energy and Commerce Committee, chaired by Congressman Edward Markey, a Massachusetts Democrat, who is unconvinced by the CEOs' assurances of safety.

Opening the hearing today, Markey said, "57 days ago, in the dead of night, the worst environmental nightmare in U.S. history began."

"For years, the oil industry swore this could never happen. We were told that technology had advanced, that offshore drilling was safe."

"BP said they didn't think the rig would sink. It did. They said they could handle an Exxon Valdez-sized spill every day. They couldn't. BP said the spill was 1,000 barrels per day. It wasn't. And they knew it," Markey said.

"Now the other companies here today will contend that this was an isolated incident. They will say a similar disaster could never happen to them. And yet it is this kind of Blind Faith, which is ironically the name of an actual rig in the Gulf, that has led to this kind of disaster," Markey said.

Exxon Mobil Chairman Rex Tillerson told the committee that "when you properly design wells for the range of risk anticipated, follow established procedures, build in layers of redundancy, properly inspect and maintain equipment, train operators, conduct tests and drills, and focus on safe operations and risk management, tragic incidents like the one in the Gulf of Mexico today should not occur."

"We are eager to learn what occurred at this well that did not occur at the 14,000 other deepwater wells that have been successfully drilled around the world," Tillerson said. "It is critical we understand exactly what happened in this case, both the drill well design and operating procedures, and the execution of the drilling plans, which led to such severe consequences. We need to know if the levels of risk taken went beyond industry norms."

Tillerson said the 1989 Exxon Valdez tanker spill "was the low-point in ExxonMobil's history. But it was also a turning point."

Exxon launched what Tillerson called "a full-scale, top-to-bottom review of our operations, and implemented far-reaching actions that today guide every operating decision we make on a daily basis."

"An overriding commitment to safety excellence is embedded in everything we do, with a daily commitment by our employees and contractors to a culture that "Nobody Gets Hurt."

ExxonMobil has drilled almost 8,000 wells worldwide over the last 10 years, he said. Of these, 262 have been in deepwater, including 35 in the Gulf of Mexico.

"We do not proceed with operations if we cannot do so safely," said Tillerson. "The American people have shown their support for deepwater drilling - but they expect it to be done safely and in an environmentally sensitive way."

John Watson, chairman and chief executive of Chevron, told the lawmakers that within a few hours of the Deepwater Horizon accident, Chevron held safety briefings on its rigs around the world, examined blowout contingency plans, and scrutinized drilling and completion policies.

"We reinforced our own safety practices, which include what we call 'stop work' authority - the responsibility of any employee or contractor to stop work immediately if they see anything unsafe," he said. "All our people clearly understand they have that authority. They take it very seriously, and they do stop work. We reward people who exercise stop-work authority, to underscore both its importance and our aim to confront any problem right then and there."

Waxman asked the other oil company executives if any of them disagreed with the statement that BP made mistakes. None of them did.

Shell Oil Company President Marvin Odum said, referring to the BP well, "its not a well we would drill."

"We remain confident in our drilling expertise and procedures, built on a foundation of multiple required safety barriers, proven methods and strict company standards," Odum said. "The first imperative of any project is that it be done safely. Safety and environmental protection are, and always will be, Shell's top priorities."

James Mulva, the chief executive of ConocoPhillips, told the subcommittee, "We are not in a position to speak about what went wrong at the Deepwater Horizon. The companies involved and the regulators will speak to that. But as an industry, we must commit ourselves to learning lessons and making necessary changes to ensure that nothing like Deepwater Horizon ever happens again."

Lamar McKay, president and chairman, BP America, Inc. told the committee the consequences of the spill are "very personal" to him.

"I am from Mississippi, and spent summers on the Gulf Coast growing up. I have many relatives and friends in the area," said McKay. "The Gulf Coast states have hosted BP and its heritage companies for decades. Thousands of our employees, contractors and their families call the Gulf Coast states home."

"I would like to make one thing very clear: BP will not rest until the well is under control and we discover what happened and why, in order to ensure that it never happens again," said McKay. "As a responsible party under the Oil Pollution Act of 1990, we will carry out our responsibilities to mitigate the environmental and economic impact of this incident."

All the oil executives repeated over and over in different ways - America needs supplies of oil and gas and we can supply these resources safely - even from deepwater wells.

Watson said, "We believe that meeting projected increases in U.S. demand for energy during the coming decades will require the use of all available energy sources, which include conventional and unconventional oil and natural gas, coal, nuclear power and renewable and alternative sources, coupled with energy efficiency."

McKay told the committee, "BP estimates that world energy demand will soar 45 percent over the next 20 years. That's the equivalent of adding today's United States more than twice over. The International Energy Agency estimates that around $1 trillion per year will need to be invested every single year during that time if we are going to have a chance of meeting that level of demand."

"And while alternative fuels hold great promise, we must be realistic about what we can expect from them in the near-term," said McKay. "They start from an extremely low base. Scaling them up to the point where they can begin making a significant contribution to world energy demand is a project that will span decades."

In preparation for this hearing, the committee reviewed the oil spill safety response plans for all of the five companies whose CEOs testified today.

The committe found that these five companies have identical response plans. "The plans cite identical response capabilities and tout identical ineffective equipment. In some cases, they use the exact same words," Markey said. "We found that all of these companies, not just BP, made the exact same assurances."

"Like BP, three other companies include references to protecting walruses, which have not called the Gulf of Mexico home for three million years," he said. "Two other plans are such dead ringers for BP's that they list a phone number for the same long-dead expert."

Markey declared, "The American people deserve oil safety plans that are ironclad and not boilerplate."

But the Department of the Interior's Minerals Management Service continues to approve new oil leases that give BP and other companies the right to drill even more deepwater wells in the Gulf of Mexico under the same inadequate oversight that led to the current oil spill, according to a new legal challenge filed by the Southern Environmental Law Center and Defenders of Wildlife.

The groups say current policies create an incentive to allow drilling even in the face of evident risks because once a lease is issued by MMS, the U.S. government is obligated to pay the lessee either the fair market value of the lease or the amount spent to obtain the bid plus costs and interest if the government cancels the lease or refuses to allow drilling.

MMS approved new leases for deepwater tracts as recently as June 10 under the same lax oversight complicit in the current Gulf spill.

"MMS quietly granted oil companies the right to drill 198 more deepwater wells as if the spill wasn't devastating the Gulf," said Derb Carter, senior attorney and director, Carolinas Office, Southern Environmental Law Center. "If it's too deep to stop a spill, it's too deep to drill."

The groups' lawsuit challenges MMS approval of 198 deepwater leases, including 13 new leases for BP to drill in deep water without any better oversight than what was in place before the Deepwater Horizon exploded and caught fire on April 20.

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