The president's Oil Spill Commission has concluded that systemic failures, not a rogue BP management style, caused the disastrous Gulf of Mexico oil well blowout in April.
"The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again," says the commission's final report, released late Wednesday. "Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur."
That conclusion could prove devastating to the oil and gas industry, which is waiting with bated breath to see whether a new regulatory agency will issue new drilling permits in time for idle rigs currently under contract through the spring to return to work in the Gulf of Mexico.
The chapter of the report focusing on what caused the April 20 blowout makes it clear that poor management, mostly by BP, doomed the rig, leading to the death of 11 rig workers and considerable damage to the Gulf from nearly 5 million barrels of spilled oil.
But William Reilly, the commission's co-chairman, said those missteps reflected on the industry as a whole because of the active role played by the rig owner, Transocean, and the cementing contractor, Halliburton, in many of the most devastating decisions.
"Given the documented failings of both Transocean and Halliburton, both of which serve the offshore industry in virtually every ocean, I reluctantly conclude we have a systemwide problem," Reilly said.
The chapter on the blowout's causes was released ahead of the commission's full report due out Tuesday, which will also include an assessment of government oversight, spill response and damages to natural resources.
It offered possibly the most detailed analysis to date of the crucial errors made by BP and its drilling partners.
"Whether purposeful or not, many of the decisions that BP, Halliburton and Transocean made that increased the risk of the Macondo blowout clearly saved those companies significant time (and money)," the report says.
What's more, the commission goes further than ever before to say that by making different management decisions, BP and its partners would have actually stopped the disaster.
"Better management by BP, Halliburton and Transocean would almost certainly have prevented the blowout by improving the ability of individuals involved to identify the risks they faced, and to properly evaluate, communicate and address them," the report says. "A blowout in deepwater was not a statistical inevitability."
The report doesn't offer any new findings about what led to the blowout. It repeats the well-worn theory that a series of human missteps caused the accident, and that the massive stack of shut-off valves on the sea floor called the blowout preventer suffered various mechanical failures.
But the report does more than others to put BP's management decisions into the larger context of an extremely difficult drilling project that should have caused BP and others to exercise far more caution. Instead, BP went on to make a string of "compromises" that placed prioritized ease and speed, not safety, the commission concluded.
First, BP distrusted a recommendation based on a risk analysis by its cementing contractor, Halliburton, and chose to use a single, long central metal tube called "casing" to line the well for later production. Halliburton had found it would be safer to use a shorter tube called a "liner" at the bottom. BP engineers changed some data Halliburton had used in its models to justify their preferred conclusion, the commission found.
BP ignored another Halliburton warning about how many devices called "centralizers" it would use to stabilize the telescoping metal tubes it would be cementing into place down in the well. The commission called the components "critical ... in ensuring a good cement job," and Halliburton warned cement could channel and form weak spots to allow oil and gas to flow into the well if BP used fewer centralizers.
But BP engineers distrusted the style of centralizers that were immediately available, and rather than wait, they chose to go with a more limited number of the devices. Adding insult to injury, BP internal investigators later determined the additional centralizers may have been the right style all along.
The commission questioned BP's true commitment to the safety centralizers were supposed to provide, saying its approach was summed up by this April 16 e-mail from one BP engineer to another: "Who cares, it's done, end of story, will probably be fine and we'll get a good cement job."
When it was time to pour the cement into the well and form a final seal along its walls, a two-way valve near the bottom of the well needed to convert into a one-way valve. To do so, drilling mud needed to be sent through it at a high rate of speed. The rig crew never was able to achieve that speed, but BP's rig leader, Bob Kaluza, and Transocean crew members concluded it was because their pressure gauge was broken and concluded the valve had converted successfully.
"What is certain is that BP's team again failed to take time to consider whether and to what extent the anomalous pressure readings may have indicated other problems or increased the risk of the upcoming cement job," the report says.
Concerned about repeating the April 8 episode where high mud weights fractured the sides of the well, BP decided against circulating fluids through the hole before cementing the well's walls. The commission said circulating "bottoms up" would have cleaned the well and let technicians check the material at the bottom of the well for any invasion of gas. But nervous BP engineers decided against it.
Still nervous about exerting too much pressure, BP ordered Halliburton to pump the sealing cement into the well at a "less-than-optimal rate of ... flow," the commission concluded.
BP limited the volume of cement Halliburton could put into the well. It pumped in enough to cover the space required by law, but only half as much as BP's own internal guidelines called for, again for fear of putting too much pressure on an already delicate rock formation.
BP and Halliburton chose a lighter type of cement infused with nitrogen foam. When Halliburton ran a series of tests on the foam cement's stability in the days leading up to the accident, it failed, sometimes miserably, but the contractor didn't report some of the findings to BP, the commission found.
Assuming all was fine with the cement, BP made several major changes to its final plugging procedures, including the decision to remove critical drilling mud from the well before setting the final plug near the top of the well, rather than after that safety cork-like device was in place. The commission also found that BP did all these last-minute changes without performing "any sort of formal risk assessment."
In possibly the most fatal error of them all, BP's Kaluza and the Transocean drilling crew blatantly misinterpreted the so-called "negative pressure test," the industry-recognized best method for making sure oil and gas aren't leaking into the well and, the commission report says, the "only test performed that would have checked the integrity of the bottom-hole cement job." Pressure in two places in the hole that should have both been zero instead read zero in one spot and 1,400 pounds per square inch in the other. Transocean workers may have tried to explain away the difference as a product of an effect they'd heard about, but that most experts say is a myth. The different readings "could only have been caused by a leak into the well," the commission concluded, and yet BP ordered no further testing and took the negative test results to mean there was no leak.
While displacing the protective drilling mud with lighter seawater, Transocean's drill team decided to divert some of the mud directly overboard, rather than into mud collection pits, something that saved time but made the job of monitoring the conditions in the well harder. At the same time, workers who were supposed to be checking computer screens showing pressure readings missed several signs that natural gas was kicking up the well and threatening a total blowout.
From there, several other safety mechanisms failed, most importantly the blowout preventer. But the die had been cast by the buildup of risk from the series of managerial decisions leading up to the actual blowout.
"BP's fundamental mistake was its failure ... to exercise special caution (and, accordingly, to direct its contractors to be especially vigilant) before relying on the primary cement as a barrier to hydrocarbon (oil and gas) flow," the commission report said.
The commission also leveled harsh criticism at government regulators, for leaving industry to its own devices far too often. The lack of a protocol for the negative pressure test or any requirements for cement testing got special mention in the report. But even when the former Minerals Management Service had safety measures in place, it allowed BP to bypass them, as when BP convinced a regulator to let it set its final plug thousands of feet lower down in the hole than the law allowed.