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Gulf Coast Oil Spill
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“I think we can all acknowledge there have been times in history when the government has overreached. But in this instance, the oil industry’s cozy and sometimes corrupt relationship with government regulators
meant little or no regulation at all.”
President Obama
“Where I was wrong was in my belief that the oil companies had their act together when it came to worst-case
scenarios.”
President Obama
FRIDAY, MAY 28, 2010
“Those who think that we were either slow on our response or lacked urgency don’t know the facts. This has been our highest priority
since this crisis occurred.”
President Obama
MARVIN JOSEPH/THE WASHINGTON POST
President Obama holds a news conference at the White House to address the government’s response to the oil spill disaster in the Gulf of Mexico.
Obama struggling to show he’s in control of spill
obama from A1
spill began, those words seemed to highlight the difficulty he has had in convincing the country that he is on top of the situation. As oil continues to foul the gulf, the conflicting signals coming from the president and his team have imperiled his reputation for competence and coolness in the face of crisis.
Only three weeks before the
explosion, Obama had proposed opening up 167 million acres to offshore oil exploration, as a means of finding more oil and more votes on Capitol Hill for comprehensive energy and cli- mate legislation. In defending that plan, he had cited advances in drilling technology that he said made it significantly safer than it had been in the past. White House aides say that as oil continued to spew from the
floor of the gulf, the president — who described himself as “angry and frustrated” — privately ex- pressed dismay about the faulty assurances he received from the oil industry that exploration was safe. “For so long, we didn’t have accidents in the gulf, and we took the oil and gas industry maybe a little too much at their word,” said one official, who spoke on the condition of anonymity. Obama announced new steps
that he said would help “ensure that a catastrophe like this never happens again.” Deep and far- reaching reform will come, he promised, after a commission he is appointing finishes a six- month investigation of the causes of the April 20 explosion of BP’s Deepwater Horizon rig and measures that might have prevented it. In the early weeks after the rig sank, polls showed the public
saw a clear villain — BP — and approved of the administration’s approach to the situation, which emphasized ensuring that the oil company would bear the cost of stopping the spill, cleaning it up and repairing the damage. Some in the White House were so con- fident of their ability to stay ahead of the crisis that they wel- comed comparisons with George W. Bush’s bungling of the re- sponse to Hurricane Katrina in 2005.
But the latest surveys show
that public confidence in Wash- ington’s handling of the spill has dropped sharply. And there has also been a fraying of what had begun as a relatively smooth working relationship among the government, BP, and state and local officials in the region. “The president has not been as visible as he should have been on this,” Sen. Mary Landrieu (D-La.) told
Politico, “and he’s going to pay a political price for it, unfortu- nately.”
Gulf Coast residents are furi- ous; images of the oil’s sheen on the water have given way to ones of black beaches and dead ani- mals.
On cable news broadcasts of Obama’s news conference, he had to share the screen with a live shot of that painfully famil- iar underwater pipe spitting out brown gunk. Even as the president laid
greater claim to the handling of the disaster, he distanced him- self from Interior Secretary Ken Salazar’s frequent boast that the administration has a “boot on the neck” of BP. “I think Ken Salazar would probably be the first one to admit that he has been frustrated, an- gry and occasionally emotional about this issue, like a lot of peo-
ple have,” Obama said. He added: “I would say that we don’t need to use language like that.” Indeed, Obama seemed most sensitive to suggestions — made with increasing frequency by such critics as Democratic strat- egist James Carville — that the oil company is calling the shots. BP is the “responsible party,” with access to resources, technol- ogy and expertise that the gov- ernment lacks, Obama said. But all its actions, he insisted, are done “under our supervision, and any major decision that they make has to be done under the approval of Thad Allen, the na- tional incident coordinator.” Although he acknowledged
that the government’s perform- ance before and since the spill began has been far from perfect, Obama insisted that it should not be faulted for lack of effort. “This has been our highest prior-
ity since this crisis occurred,” he said, and later added, “We are re- lying on every resource and ev- ery idea, every expert and every bit of technology, to work to stop it.”
Obama spoke of the toll the crisis has taken on him, an un- usual turn for a president who is sometimes faulted for being too intellectual and aloof. “This is what I wake up to in the morning, and this is what I go to bed at night thinking about,” he said. He cannot escape questions about the spill, even at home. As he was shaving Thurs- day morning, he said, 11-year-old daughter, Malia, peeked in and asked, “Did you plug the hole yet, Daddy?”
tumultyk@washpost.com
Staff writers Anne E. Kornblut and Scott Wilson contributed to this report.
High drilling costs for Deepwater Horizon pressured BP to save time
by Steven Mufson
When it comes to offshore oil
drilling, time isn’t just money. It’s a whole lot of money. Now, 38 days after the Deep-
water Horizon blowout that trig- gered the oil spill in the Gulf of Mexico, mounting attention is be- ing paid to whether concerns about money created a sense of haste that — even more than bro- ken gadgets or buckling cement — may have led to the disaster. Even before the Deepwater Ho- rizon drilling rig went down in flames, BP’s ill-fated exploration well in the Gulf of Mexico’s un- derwater Mississippi Canyon had been consuming time and burn- ing through money.
BP had been drilling for six months, about twice as long as ex- pected. And it was paying prob- ably around $2 million a day — half a million dollars a day just to lease the rig, and more for sup- plies and a bevy of top-drawer contractors such as Halliburton. The company had paid more than $5.2 million since January for drilling mud alone, according to a daily drilling report. Industry ex- perts estimate that the total cost was nearing twice the $100 mil- lion typical for deepwater wells. “Poking anything in the deep
water, it’s above $100 million just for starters, and the meter keeps running,” said Fadel Gheit, oil analyst with Oppenheimer & Co. “For a tricky well, it could cost $150 million or $200 million.” That price tag appears to have weighed heavily on the minds of rig workers on the Deepwater Ho- rizon, according to interviews they have given to government in- vestigators and publications in- cluding The Washington Post. “There appears to have been a number of changes in the well plan during its construction,” Sen- ate Energy and Natural Resources Committee Chairman Jeff Binga- man (D-N.M.) said during a May 18 hearing. “These decisions can
CHIP SOMODEVILLA/GETTY IMAGES
Sara Stone, left, and Meccah Boynton-Brown clasp hands at a House committee hearing on the Deepwater Horizon explosion. Their husbands survived the explosion and testified Thursday.
be driven by cost and the desire to make up lost time in a drilling project.” In a briefing Wednesday, BP in-
vestigators said company officials on the rig and in Houston decided to install only six of the 21 devices they had originally planned to use to make sure that the drill pipe was centered in the well hole. An off-center pipe can cause faults in the cement surrounding it, which could allow gas to shoot up the sides of the well. BP said that it did not do the other centralizer tests because the correct pieces of equipment were not available that night, and those on hand might have broken into pieces. It did not wait to obtain the optimal materials. Industry sources say that BP also told three workers from the oil services firm Schlumberger to go home without doing a key test of the sturdiness of the cement in the hole, something that would have taken several hours; they left the rig 11 hours before the well
blew up. Rig workers and lawmakers
have faulted BP for failing to pay enough attention to a spike in pressure in the drill pipe and for neglecting to ask for a second ce- ment plug in the well — both of which could have been addressed with more time. Instead, rig work- ers have said, BP pressed for clos- ing the well and moving the ex- ploration rig off the site. (A sep- arate platform would be built later to produce the oil.) BP says Transocean had pri-
mary responsibility for the rig’s safety. Transocean and other con- tractors blame decisions by BP. “People in these jobs are under
a lot of pressure to save time and money,” said Tadeusz W. Patzek, chairman of the department of petroleum and geosystems engi- neering at the University of Texas at Austin. This particular well seemed jinxed. The oil prospect, named Macondo after the fictitious town where the novel “One Hundred
Years of Solitude” took place, was tricky, with high pressures and temperatures. A different rig, the Transocean Marianas, had ar- rived to start drilling Oct. 21 but was damaged and forced to shut down Nov. 28 by Hurricane Ida. The Deepwater Horizon rig ar- rived in January, only to run into technical obstacles in the hole. Ul- timately, those cost an extra $20 million to $25 million and forced BP and Transocean to drill a new section of the well. Given the high-stakes nature of
offshore drilling, that figure seems trifling. Oppenheimer’s Gheit estimates that developing Macondo and nearby fields could cost $8 billion to $10 billion. At current oil prices, BP and its part- ners would make that back in less than five years, he said. Yet even big public companies strive to boost their bottom lines, not just at BP. At Transocean, rig accidents and blowout preventer repairs hurt earnings in the sec- ond quarter of 2009, and analysts
wanted explanations during an August conference call. “During the quarter, we had an unusual number of major opera- tional incidents, mostly with re- spect to deepwater rigs, which re- sulted in a $30 million increase in lost revenue,” said Gregory L. Cauthen, Transocean’s chief fi- nancial officer. Transocean chief executive Ste-
ven Newman added, “We had a couple of human error incidents” and “a handful of BOP [blowout preventer] problems.” The “human errors” shut down
two rigs for four to six weeks each for repairs, according to a source close to Transocean. In one, an in- attentive worker hoisted equip- ment too far and caused some large parts to fall 167 feet to the rig floor, according to the Minerals Management Service accident re- port. In the other, 17,500 pounds of steel casing was dropped by a crane and fell 10 feet. Pressed by an investment ana- lyst from Credit Suisse, Newman added: “We did a deep dive on each one of those incidents. . . . They were anomalies, and I think I would just leave it at that.” Concerns about time — and
money — might also explain the installation of a test valve in the Deepwater Horizon’s blowout preventer. In a 2004 letter, Transocean and BP agreed to sub- stitute a test valve for one of three variable bore rams capable of pinching off oil flow in a blowout — while acknowledging that the substitution would reduce redun- dancy and increase risk. In an article in the November- December 2006 issue of Drilling Contractor, Gary Leach of Transocean and Bob Judge, chief engineer of Hydril, a GE unit that makes blowout preventers, said “substantial savings” were pos- sible by leaving a test valve on the blowout preventer and turning it upside down to avoid having to withdraw pipe for testing. They said companies could save 12.5 hours or $260,000 of rig time
with each test. Yet BP recently told congres- sional investigators that it lost a precious day when it was trying to activate the blowout preventer af- ter the accident; BP was baffled by the test valve’s connections to the control panel. Saving time was also the sub-
ject of a 2009 presentation by a Halliburton employee to the American Association of Drilling Engineers. He said that “the ce- ment slurry should develop com- pressive strength rapidly. This is particularly important in the deepwater environment given the associated rig cost.” Oil industry executives say that consequences of a catastrophic failure such as the oil spill are so great that they have plenty of in- centives, including financial, not to cut corners on safety. Asked whether time pressure might have skewed key decisions on the rig, BP senior spokesman Andrew Gowers said, “We have found no evidence that anything of that kind had anything to do with the incident.” He added that “as the investigations go on, all sorts of other things may be drawn in, but that will not be found to be an issue.”
mufsons@washpost.com
on
washingtonpost.com
Full coverage Rep.
Charlie Melancon (D-La.)
breaks down at a subcommittee meeting as he talks about how the oil spill has devastated his state’s coastline and lives of residents; live video captures cleanup efforts as the “top kill” strategy is underway; a photo gallery illustrates the stark toll on the disaster’s animal victims; mourners remember the 11 workers killed in the oil rig explosion; interactive charts explain what oil does to a salt marsh and how an oil burn works.
washingtonpost.com/nation
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