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Betty Sutton on the Coerced Transocean Statements

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As you may have read, Transocean (the company that owns the Deepwater Horizon rig) made everyone rescued from the rig sign statements laying out whether they were involved in the incident, and whether they had gotten hurt.

Lawyers for the oil rig’s owner, Transocean, requested that workers who had survived the blast sign the form in the wake of the April 20 blowout on the Deepwater Horizon. This was hours before the workers had been allowed to see their families.

Now some of those survivors say they were coerced and that the forms are being used against them as they file lawsuits seeking compensation for psychiatric problems and other injuries from the blast.

A couple of members of Congress asked Transocean’s CEO about it yesterday, most pointedly Betty Sutton in this exchange.

Now, frankly, I think there may be some truth to Transocean’s claim that they were trying to collect information with the form. This is a documentation-driven industry, and for a rig owner like Transocean, getting a sense of who was on the rig, what contractor they worked for, and what they were doing would be a concern. That said, given the lock-down they kept workers in until they signed these documents, I’d guess they were more interested in surveying precisely what information was out there so they could keep that information locked down as anything else. And the lockdown was certainly heartless and heavy-handed.

Besides, Transocean CEO Steve Newman had to have known yesterday that his company would move, today, to limit its liability in the disaster (albeit on different grounds).

Transocean Ltd., the owner and operator of the Deepwater Horizon drilling rig that burned and sank last month unleashing a massive oil leak into the Gulf of Mexico, will file in federal court Thursday a petition to limit its liability to just under $27 million, according to a person familiar with the company’s plans and a copy of the filing reviewed by Dow Jones Newswires.

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Lois Capps: Booms Will Only Collect 15% of Spilled Oil

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The eye-popping part of this exchange is the news that all the efforts to protect the Gulf Coast are only going to collect a fraction of it from reaching the shore.

But the whole comment is worthwhile, because Capps expresses so well the outrage we should all be expressing about the inefficacy of oil spill recovery.

CEO Mud Wrestling

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One of the key moments of yesterday’s Environment and Public Works hearing on the BP Disaster came when Tom Udall tried to pin the CEOs down on whether, as reported by WSJ, at BP’s direction, Halliburton swapped out the drilling mud for seawater prematurely–something we’ve looked at as well.

BP, the well owner, blames the failure of a big set of valves on the sea floor, known as the blowout preventer, to halt the blowout once it started.

A different account comes from Halliburton, a contractor in the drilling. This account is corroborated to some extent by Transocean, as well as by two workers on the drilling rig, The Wall Street Journal has determined.

This account describes a failure to place a cement plug within the well. The plug is designed to prevent gas from escaping up the pipe to the surface.

Before such a plug is placed, the job of keeping underground gas from coming up the pipe is done by heavy drilling fluid inside the well, commonly known as “mud.”

The plug is normally put in before the mud is removed, but according to the account of Halliburton, Transocean and the two workers, in this case, that wasn’t done—drilling mud was removed before a final cement plug was placed in the well.

It is not clear why such a decision would have been made. Rig owner Transocean says that BP, as owner of the well that was just being completed, made key decisions on how to proceed. BP declined to comment on this account of the drilling procedures.

Predictably, no one really wanted to go on the record whether that was one of what appear to be numerous problems that contributed to the spill. Equally predictably, no one seems to have the well plan that would make this all clear.

Maria Cantwell Tries to Get BP to Define “Legitimate Claims”

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One of the highlights of the first of several Deepwater Horizon hearings in Congress this week came when Maria Cantwell tried to get BP American President Lamar McKay to commit to what BP would pay as “legitimate claims.” She asked about:

  • Long term and short term harms to the fishing industry
  • Business loss to tourism
  • State and local governments for lost tax revenue
  • Long term damages to LA fishing industry and it’s brand
  • Additional troubles with fisheries
  • Shipping impacts
  • Impacts on further drilling operations
  • Impacts to the pristine beaches in this area

He balked about the tax revenues, the brand of LA’s fishing industry, and further drilling operations.

In any case, he certainly didn’t commit to what he meant by “legitimate claims.”

BP Oil Slick The Result Of Republican DOJ And Regulatory Policy

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The economic and environmental damage resulting from the exploding fireball compromise of the Deepwater Horizon oil platform may be unprecedented, with the potential to emit the equivalent of up to four Exxon Valdez breakups per week with no good plan to stop it. There will be plenty of finger pointing among BP, Transocean and Halliburton, while it appears the bought and paid for corporatist Congress put the screws to the individual citizens and small businesses by drastically limiting their potential for economic recovery; all in the course of insuring big oil producers like BP have effectively no damage liability for such losses.

How did this happen? There are, of course, a lot of pertinent factors but, by far, the one constant theme underlying all is the mendacious corporate servitude of the Republican party, their leaders and policies. The arrogance and recklessness of BP and its oily partners gestated wildly under the Bush/Cheney administration.

Until the turn of the decade, BP had a relatively decent safety and environmental record compared to others similarly situated. Then BP merged with American oil giant Amoco and started plying the soft regulated underbelly of Republican rule in the US under oil men George Bush and Dick Cheney. Here from the Project On Government Oversight (POGO) is an excellent list of BP misconduct, almost all occurring and/or whitewashed under the Bush/Cheney Administration. If you open the door, foxes eat the chickens.

But it is not just regulatory policy behind the open and notorious recklessness of BP and its ilk, it is intentional policy at the Department of Justice as well. Here is how the former Special Agent In Charge for the EPA Criminal Investigative Division, Scott West, described the DOJ coddling of BP under the Bush/Cheney Administration:

In March 2006, a major pipeline leak went undetected for days, spilling a quarter-million gallons of oil on the Alaskan tundra. The spill occurred because the pipeline operator, British Petroleum (BP), ignored its own workers warnings by neglecting critical maintenance to cut costs. The spill sparked congressional hearings and a large federal-state investigation. Despite the outcry, in a settlement announced in late October 2007, BP agreed to one misdemeanor charge carrying three-year probation and a total of only $20 million in penalties (a $12 million fine with $8 million in restitution and compensatory payments).

The settlement resulted from a sudden U.S. Justice Department August 2007 decision to wrap up the case, according to West. That precipitous shutdown meant Read more →

$75 Million Buys BP Six Years of Lobbying or One Giant Oil Spill

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As you’ve no doubt heard, BP’s own liability for the damages the Deepwater Horizon spill will cause may be limited to $75 million (though it will have to pay for cleanup).

The federal government has a large rainy day fund on hand to help mitigate the expanding damage on the Gulf Coast, generated by a tax on oil for use in cases like the Deepwater Horizon spill.

Up to $1 billion of the $1.6 billion reserve could be used to compensate for losses from the accident, as much as half of it for what is sometimes a major category of costs: damage to natural resources like fisheries and other wildlife habitats.

Under the law that established the reserve, called the Oil Spill Liability Trust Fund, the operators of the offshore rig face no more than $75 million in liability for the damages that might be claimed by individuals, companies or the government, although they are responsible for the cost of containing and cleaning up the spill.

That’s obviously puny. But to give you a sense of just how puny it is, consider that, at its current levels of spending on lobbying, BP will spend as much every six years on politicians in DC.

BP is one of the most powerful corporations operating in the United States. Its 2009 revenues of $327bn are enough to rank BP as the third-largest corporation in the country. It spends aggressively to influence US policy and regulatory oversight.

In 2009, the company spent nearly $16m on lobbying the federal government, ranking it among the 20 highest spenders that year, and shattering its own previous record of $10.4m set in 2008. In 2008, it also spent more than $530,000 on federal elections, placing it among the oil industry’s top 10 political spenders.

But the puny amount for which BP will be liable for damages didn’t stop them from potentially trying to make their liability even punier. The early contracts it drew up to pay Alabama fishermen to help contain the spill included a $5000 damage limit, which presumably wouldn’t even cover the cost of a fishing boat.

Alabama Attorney General Troy King said tonight that he has told representatives of BP Plc. that they should stop circulating settlement agreements among coastal Alabamians.

The agreements, King said, essentially require that people give up the right to sue in exchange for payment of up to $5,000.

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BP’s Procedural Spills

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Another thing that happened while I was tromping around one of the most beautiful places on earth (Yosemite) is that the BP drilling rig that had an explosion and fire last week sunk and oil has started to spill into the Gulf (as this dramatic NASA picture makes clear). In the last day, the Minerals Management Service (one of the federal agencies that regulate offshore drilling) has released documents showing that BP was cited in 2007 for training problems related to a similar problem in 2002.

BP Exploration & Production, which owns the deep water rig that exploded last week in the Gulf of Mexico, was cited in 2007 for inadequately training employees in well control, according to the US Minerals Management Service.

The conditions of the training are the same as those suspected in the possible blowout aboard the TransOcean Deepwater Horizon, which left 11 workers missing and presumed dead.

MMS slapped BP with $41,000 in fines in October 2007 after a series of violations related to a near-blowout five years earlier.  In November 2002, the Ocean King rig, operated by Diamond Offshore Drilling, in the Gulf had to evacuate all 65 of its workers for nearly two days after operators detected a dangerous rise in gas pressure.  The rig, which had been drilling at a depth of more than 5,000 feet, didn’t resume work for nearly a week, according to the MMS report.

Unlike last week’s disaster, workers were able to keep the well from leaking by using cement and mud to plug the well.  The same subcontractor, Diamond Offshore, was also used when BP was fined $25,000 in 2004 for bypassing a gas detection system while drilling.  A BP spokesman in London says the company still uses Diamond Offshore as a contractor.

KEY SAFETY PROCEDURES

In the 2002 incident, the MMS said that BP and Diamond Offshore were unaware that some of the key safety procedures they used to initially stop the dangerous rise in pressure could have contributed to a blowout.  The MMS cited BP for what it called “no formal procedures” and “no written guidelines” to follow in case of an emergency.  MMS also cited BP and contract workers in the incident for what they said was a “lack of knowledge of the system, and lack of pre-event planning and procedures.”

Let me give some background on this. In the 1990s, I worked for a company that consulted on safety procedures for the oil industry (a writer who reported to me did some procedures for one Amoco refinery, which was subsequently purchased by BP; we bid on, but did not get, a job that included BP; and we did some procedures for a drilling entity that has since been purchased by Halliburton, which is involved here as well). The way in which the government forces oil companies to operate in ways which minimize the safety and environmental danger of inherently dangerous processes is to ask (either nicely or by mandating) a set of procedures to cover both normal and emergency procedures. It’s a way of setting up documented procedures which can be trained and audited; the procedures allow the government to check whether the operators are operating as safely as possible. Just as importantly, it’s a way of proactively making sure that in case something does go badly wrong, the operator in question–and more importantly, the workers actually doing the work–will have a way of figuring out what to do quickly enough so as to minimize the safety and environmental damage.

MMS is saying that in 2002, BP not only had none of these procedures, but it hadn’t trained the workers and contractors on the rig, and as a result, the workers did the wrong thing to contain the damage. BP got lucky in 2002, because doing the wrong thing did not exacerbate the problems.

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