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Gulf Oil Spill: Who's to Blame? BP, Halliburton and the Feds Are All Implicated

BP, the oil giant operating the drilling rig that blew up and created a massive oil spill in the Gulf of Mexico, has officially taken responsibility for the accident. But it may actually be able to spread the blame.

According to federal law, BP is automatically required to pay for much of the damage, and its name is obviously attached to the accident. Denying responsibility would be foolish; accepting it is good PR. But there are levels of responsibility, and BP works closely with other companies who might also deserve some of the opprobrium.

Last week, my colleague Kirsten Korosec noted that BP CEO Tony Hayward was already pointing fingers at Transocean, the owner of the drilling rig (BP was merely leasing it). Besides BP and Transocean, there are numerous companies involved, as well as the regulators who were supposed to keep the operation safe.

The tangle will take a long time to sort out, but here are three emerging reports that give a deeper view into who may be culpable:

CEO Hayward thinks that the damage to BP, and the wider oil industry, may be manageable if the oil spill is soon contained. That's half the story, anyway; the other half is the notion that the Horizon's explosion was a cruel twist of fate, the kind of industrial accident that occasionally occurs regardless of all safeguards.

If it's discovered that BP didn't do everything it could to prevent the accident, its guilt in the public eye will soar to new levels. Now a whistleblower report by a former contractor has emerged that apparently says BP was in fact cutting corners, dangerously so. The contractor first suspected problems when hired to work on the BP Atlantis oil platform, according to Truthout:

It was then that the whistleblower, who was hired to oversee the company's databases that housed documents related to its Atlantis project, discovered that the drilling platform had been operating without a majority of the engineer-approved documents it needed to run safely, leaving the platform vulnerable to a catastrophic disaster that would far surpass the massive oil spill that began last week ...

Indeed, according to an August 15, 2008, email sent to BP officials by Barry Duff, a member of BP's Deepwater Gulf of Mexico Atlantis Subsea Team, the Piping and Instrument Diagrams (P&IDs) for the Atlantis subsea components "are not complete" and "there are hundreds if not thousands of subsea documents that have never been finalized, yet the facilities have been" up and running ...

The risk in turning over drawings that are not complete are: 1) The Operator will assume the drawings are accurate and up to date," the email said. "This could lead to catastrophic Operator errors due to their assuming the drawing is correct," said Duff's email to BP officials Bill Naseman and William Broman.

There's more to the story, which you can read at Truthout. If the allegations are in fact correct, BP could be in for a world of hurt; in Congress, the Committee on Energy and Commerce has already begun digging for evidence of wrongdoing at the company, and other politicians are calling its response inadequate.

It's hard to have a worse public image than Halliburton, the multinational engineering firm whose image took a beating during the first part of the Iraq War. But the company may well get slugged again over the Gulf accident, too. The latest accusation: The cement slurry Halliburton was pumping into the drill hole prior to the Horizon's explosion may have in fact been at fault.

The Los Angeles Times describes what Halliburton was doing at the site:

After an exploration well is drilled, cement slurry is pumped through a steel pipe or casing and out through a check valve at the bottom of the casing. It then travels up the outside of the pipe, sheathing the part of the pipe surrounded by the oil and gas zone. When the cement hardens, it is supposed to prevent oil or gas from leaking into adjacent zones along the pipe.

As the cement sets, the check valve at the end of the casing prevents any material from flowing back up the pipe. The zone is thus isolated until the company is ready to start production.

The process is tricky. A 2007 study by the U.S. Minerals Management Service found that cementing was the single most-important factor in 18 of 39 well blowouts in the Gulf of Mexico over a 14-year period.

The bad news for Halliburton is that a number of experts think the accident probably originated in the pipe that the cement was being pumped into. The good news for the company is that investigators may find it difficult to tell whether the cement did its job or not, especially if BP is successful in dropping massive concrete domes on top of the leaks to stop them.

The feds
Federal oversight of oil drilling rigs and platforms in the Gulf is intense; the Interior Department's Mineral Management Service inspectors often travel between drilling sites, proactively checking up on documentation and procedures. However, the Wall Street Journal has dug into a story that suggests that Fed oversight failed at a much earlier point.

Undersea drilling is immensely complicated, so the MMS is also involved in permitting the various equipment used. From the WSJ:

Federal regulators learned in a 2004 study that a vital piece of oil-drilling safety equipment may not function in deep-water seas but did nothing to bolster industry requirements ... The equipment, called shear rams, is supposed to seal off out-of-control oil and gas wells by pinching the pipe closed and cutting it.

In 2004, a study commissioned by the MMS raised significant questions about the ability of rams to cut through the stronger pipes used in deep-water drilling. Those thicker pipes--as well as the shear rams--must withstand the enormous pressures found at 5,000 feet below sea level ...

Only three of 14 newly build rigs had blowout preventers that were able to squeeze off and cut the pipe at the water pressure likely to be experienced at the equipment's maximum water depth, the study noted.

Whether the shear rams could crimp the pipe may turn out to be a moot point, if they system that was supposed to relay the command to the rams failed. On the other hand, if the rams functioned but didn't fulfill their job, the Fed may suddenly find itself the target of public anger, along with Transocean, which bought the rams, and Cameron International, the manufacturer.

The WSJ story, in fact, says that the Fed study singled out Cameron for doing a bad job calculating the amount of force their shear rams needed to apply. But for now, all of these allegations are still at the stage of finger-pointing, and more potential culprits may emerge over the coming weeks.

[Image credit: uscgd8 / Flickr]

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