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Preview of Spill Commission Report – Confirms Weaknesses in Industry, Government

Yesterday, the President’s oil spill commission issued one chapter of its report to be released in total on January 11.  The released chapter, Chapter 4, goes through the commission’s recounting of the events leading up to the blowout and its own conclusions about causes.  No new information was revealed in the released chapter, though the commission continues to spread blame, primarily to BP, Transocean, and Halliburton.  It also blamed failures  of the industry and government which are clear to those paying attention.  In pointing out these failures the commission said,
Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur. The missteps were rooted in systemic failures by industry management (extending beyond BP to contractors that serve many in the industry), and also by failures of government to provide effective regulatory oversight of offshore drilling.”
Clearly the commission’s full report will go against the Obama administration’s decision this last Monday to allow 16 deepwater projects to resume without safety system redesign or environmental review.  Although there are some new safety training and third party certification rules now being required of deepwater operators, there are no required changes in rigs or well control systems, there is no change in liability limits, and the statutory thirty day permit review limit remains in place. I also continue to disagree with the commission’s (and BP’s, for that matter) conclusion that Halliburton is one of the primary party’s at fault.  Were there communication errors on Halliburton’s part? Yes.  Could Halliburton have done a better job alerting BP about its cement lab tests? Certainly.   Could Halliburton be more forthcoming to the various investigative bodies about its tests and own actions?  Absolutely.  However, as I’ve said before, bad cement does not equal blowout.  Bad cement jobs, especially in deep, hot, high potential wells happen every day, and not due to any particular party’s fault.  Bad cement jobs that require remedial work during completion are a simple fact of life. The failure here was clearly human, clearly on BP’s shoulders as well as its contractor Transocean.  BP’s casing design was over-reliant on a good cement job and vigilant well control.  On-site management failures and BP’s convoluted management structure were the real causes of the well getting away from them.  Transocean’s failed blowout preventer failed to shut-in the well after they lost control. Even with no cement in the well, it must be kept under control with careful well monitoring and redundant procedures.  Assuming the cement job was good, shortcutting the plugging and abandonment procedure, hurrying, and having multiple simultaneous operations blinded the rig crew to what was really going on in the well.  Even with anomalous pressure readings and volume gains in the pits, both BP and Transocean management were distracted by visiting VIPs, a rushed schedule, and a crew change in the middle of the operation.  Overconfidence and complacency born from 7 years of safe operations were also certainly direct causes of this massive failure. The spill commission’s conclusions, though not completely off base, are tainted by politics, lack of industry experience on the panel, and what I believe to be its effort to spread blame, not pinpoint it.  I would imagine that no new information will be forthcoming when its entire report is released next week, so I’m looking forward to the Joint Investigation, managed by the Coast Guard and the BOEMRE, report to be issued in March.  I expect it will be much more objective and thorough, and should provide vital information gained from the forensics testing on the BOP that are yet to be released to the public. In the meantime, oil continues to wash up on the beaches of Alabama and the wetlands of Louisiana.  Thousands of businesses and workers continue to suffer all around the Gulf coast.  The oil and gas industry continues to ignore its own complicity in this disaster and lobby for status quo.  The MSM continues to ignore the massive economic and ecological damage in the Gulf since they are now focused on the size of Speaker Boehner’s new gavel, Lindsay Lohan’s most recent probation violation, and whose going to be on the next Dancing with the Stars. Read the original article on The Daily Hurricane.
disasteronthehorizon Bob Cavnar is the author of Disaster on the Horizon.

Bob Cavnar is a 30-year veteran of the oil and gas industry with deep experience in operations, start-ups, turn-arounds, and management of both public and private companies. He was most recently President and Chief Executive Officer of Milagro Exploration, a large, privately held oil and gas exploration firm based in Houston, Texas with operations along the Texas, Louisiana, Mississippi Gulf Coasts, and offshore in the Gulf of Mexico. Cavnar holds a Master of Business Administration degree from Southern Methodist University and completed the Program for Management Development at the Harvard Business School. He blogs at

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Transocean Execs Shamed into Donating Safety Bonuses, Keep the Rest

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