Gulf oil spill could lead to colossal case of corporate whodunit

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by Dave Fehling / 11 News

khou.com

Posted on May 10, 2010 at 3:21 PM

HOUSTON—The BP blowout started as a human tragedy and evolved into an environmental catastrophe.

But soon, it may become a colossal case of corporate whodunit.

"I think we’ve already seen some finger-pointing going on between the companies involved," said Blake Wright, Bureau Chief for Upstream, a leading energy-industry newspaper. "This is literally their worst nightmare."

It’s certainly a nightmare for BP, the British company that oversaw the drilling operation. BP has been trying to overcome a reputation of putting profits over safety.

But while BP is an easy target, stopping there misses the mark. In fact, other companies with headquarters and factories in Houston played key roles in the blowout disaster.

BP was paying Transocean, a Swiss company whose main offices are in Houston, for the drilling rig that eventually burned and sank.

"They were paying $500,000 a day to rent this rig," Tyler Priest, an oil industry historian at the University of Houston, said. "There are time pressures in this industry. And with time pressures comes the temptation to cut corners. I’m not saying that’s what they did."

Priest has written extensively about offshore drilling and advises the government agency that regulates it.

"If it turns out they were cutting corners, wow – there’s going to be hell to pay," Priest said.

Investigators will want to know if BP not only pressured Transocean, but also Halliburton – the giant drilling services company that’s based in Houston.

Halliburton was on the rig doing what’s known as cementing—injecting cement into the drill hole to create a seal around the pipe.

Halliburton has said the cement was tested and met standards, but if it’s not done right, methane gas can leak into the hole, blow to the surface with tremendous force and explode.

A 2007 government report found that cementing was a factor in nearly half of all blowouts in the Gulf of Mexico.

And that leads us to another Houston company: Cameron.

Cameron supplied what’s called a blowout preventer, a massive valve that’s supposed to cut off the well if something goes wrong.

Last year, a columnist with an energy industry newsletter toured Cameron’s Houston facilities and wrote about the blowout preventers:

"Everything is double or quadruple redundant to guard against dangerous and costly failures … without spilling a drop of oil," the article read.

Had the drilling industry convinced itself and government regulators that drilling no longer carried substantial risks?

"Disbelief is a big part of it," Wright said.

Last year, BP told federal regulators that it was unlikely that an oil spill would occur, and if it did, "response capabilities" meant that "no significant adverse impacts are expected."

But what, exactly, were those response capabilities?

"They have to prepare for the worst-case scenario, and they were not preparing for the worst-case scenario," Priest said.

BP had no structure to temporarily capture the oil, so it made one – the giant containment dome. But over the weekend, that dome failed.

Now, the company plans to try a smaller version, called a "top hat."

It’s not exactly an original idea. Thirty years ago, after a blowout in shallow waters off the coast of Mexico, a Houston company called Brown and Root fabricated the top hat. It was nicknamed "the Sombrero."

It didn’t work, either.

By one estimate, it collected a mere 10 percent of the escaping oil.

Three decades later, the same old technology is being applied to a new blowout.

On Tuesday, the first Congressional hearings about the blowout will begin.

The companies and regulators involved will be asked if there was a lack of preparedness leading up to the disaster, because no one believed a catastrophic blowout would ever happen.

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