Professionalism/The Explosion on ''Deepwater Horizon''

Deep sea semi-submersible

While it is still unclear what factors unquestionably caused the explosion on Deepwater Horizon, this event brings to light many flaws in professionalism. There are a few factors that may have influenced the explosion. More importantly, these factors give a glimpse into the unethical rational of the professionals involved and let you, as the reader, decide whether you define this incident as a mere accident or a failure to act in a professional manner.

The objective of oil companies is to locate and extract hydrocarbons or fossil fuel miles within the earth. Large vessels known as deep sea semi-submersibles tap into this hydrocarbon-filled rock miles below the seafloor, known as payzones. The $560 million semi-submersible drilling rig named Deepwater Horizon, contracted by BP and owned by Transocean, was sent in late January 2010 to drill the Macondo well in the Gulf of Mexico.

The Explosion

Deepwater Horizon offshore drilling unit on fire

Oil drilling is a delicate and dangerous process because of the high pressure in payzones. Drilling utilizes mud, steel casings, and cement to create an equilibrium without releasing the high pressure within the earth. As a path is drilled, pipe transports high density mud to counter balance the high pressures within the earth. If the mud's weight is too low, oil and pressure can enter the pipe and cause a kick, potentially destroying all the drilling equipment used. If the mud's weight is too high, the mud pressure may fracture the payzone, causing the oil to be irretrievable. Steel casings line the well hole for stability. Devices called centralizers are used to keep the casings in place. The whole system is sealed with cement to prevent fluid and pressure leakage. Continuous readings of the pressures and volumes of fluid in the system are monitored. In an emergency, especially if the pressure is too high, the crew can shut off the well and sever the connection to the rig via a blowout preventer before a disaster ensues.

Although Deepwater Horizon struck its intended payzone, the pressure of the mud fractured the area around the hydrocarbon-filled rock. The new plan was to pump the area with high viscous fluid to seal the fracture then to install a final steel casing for future oil and gas extraction. The final casing was stabilized with centralizers and cemented by Halliburton, a subcontractor.

From 9:40 pm to 9:43 pm on April 20th, 2010, evidence of a kick occurred when mud spewed from the rotary onto the rig deck. At 9:49 pm, the first explosion occurred on Deepwater Horizon. A Transocean representative, during government hearings, compared the explosion to “a 550-ton freight train hitting the rig floor,” followed by what he described as “a jet engine’s worth of gas coming out of the rotary.”

After this initial explosion, the crew immediately tried to seal the well. However, their control of the blowout preventer failed. The following moments included more explosions, resulting in 11 deaths and 17 injuries. After months of leakage from the Macondo well, 4.9 million barrels of oil was estimated to be in the Gulf of Mexico. BP suffered an estimated $40 billion in losses from this disaster.

Negative Pressure Test Ignored

According to District Judge Carl Barbier, a negative pressure test "confirms the integrity of the entire system, including the casing, cement outside the casing, and cement in the shoe track," which was performed hours before the explosion. Although the test "should have been completed in a relatively short time," he says that the test "was conducted over three hours from 4:55 p.m. to 7:55 p.m.," because "anomalous pressure readings and other phenomena occurred." After the test was "initially conducted by monitoring pressure on the drill pipe," he suggests that "there were significant anomalies," implying "that the test had failed and needed to be restarted."

Barbier says that "BP Well Site Leader Don Vidrine ordered the Transocean drill crew to shift the test to the kill line and monitor for flow," while still "monitor[ing] pressure readings on the drill pipe." As the "drill pipe pressure steadily rose to 1,400 psi," he notes that "it remained [there] until the negative pressure test concluded around 7:55 p.m." Because "no fluid was observed flowing from the kill line," and "there was also no pressure on the kill line," he says that the BP Well Site Leaders Vidrine and Robert Kaluza as well as the Transocean crew "declared the negative pressure test a success." Since "something had blocked the kill line," he asserts that the "lack of flow from and pressure on the kill line was obviously a false reading." The test results were evidence of fluid buildup and increased pressure in the well.

Vidrine and Kaluza had forty and thirty years of experience in oil, respectively, showing that they were experienced enough to realize the test's severity. While Kaluza ordered the crew to stop drilling before his shift ended, he left the responsibility of addressing the test to Vidrine. Vidrine talked with Mark Hafle, a BP senior engineer in Houston, about the test, while being unaware that Hafle was booking tickets instead of reviewing the test data. According to the BP investigation team's interview with Hafle, "Vidrine told Mark that the crew had zero pressure on the kill line, but that they still had pressure on the drill pipe." They claim that Hafle "told Don that you can't have pressure on the drill pipe and zero pressure on the kill line in a test that's properly lined up," so Hafle deemed the test a failure. According to Barbier, "BP contends that Mark Hafle was not sure if Don Vidrine . . . was describing the initial test on the drill pipe or the later test on the kill line," suggesting that Hafle was confused about the context. Despite Vidrine's discussion with Hafle, he ignored the test and continued drilling.

"If anyone at BP," such as Vidrine, Kaluza, or Hafle, "had instructed Transocean's drill crew to re-run the negative pressure test," Barbier asserts that "drill crew's first step would have been to stop the mud pumps and close the annular preventer in the BOP [blowout preventer]," which "would have secured the well and prevented the kick from escalating into a blowout," thus avoiding the explosion. Furthermore, Hafle showed a lack of professionalism by not bothering to analyze the test data and interrogate Vidrine to get the whole story. According to Transocean senior toolpusher Randy Ezell, the Transocean crew "had stop-work authority if we saw something wasn't correct." Because the Transocean crew conducted the test and were experienced in it, they could have canceled the drilling to prevent the explosion.

Decision to Use Fewer Centralizers

One possible source of the explosion comes from the inadequate use of centralizers. Centralizers are key components in ensuring a good cement job, keeping the steel casings centered when cementing a solid barrier. BP contacted its supplier, Weatherford, for more centralizers to plug its well for future oil production. While BP's original design called for sixteen centralizers, Weatherford had only six “sub” centralizers in stock on April 1. The alternative to using “sub” centralizers was to use “slip on” centralizers. These would slide onto the casing rather than screw in like the “subs.” BP team leader John Guide was not in favor of these because they risk catching on other equipment while the casing is lowered.

BP made no effort to request new modeling from Halliburton to predict the effect of using only six centralizers, nor did it inform Halliburton of its decision. Halliburton engineer Jesse Gagliano overheard a discussion on the rig concerning the use of only six centralizers. He ran computer simulations using proprietary modeling software, concluding that they would need more than six centralizers to prevent leakage of pressure and fluid.

Gagliano went to BP with this information on April 15. With John Guide not present, drilling engineer Gregory Walz ordered fifteen additional “slip on” centralizers, which was the most they could immediately obtain from Weatherford. Gagliano reconfirmed that using fifteen more centralizers with the original six would provide greater protection from leakage. Walz emailed Guide, telling him that they should honor Gagliano’s model and use the “slip ons” despite Guide's concern with them. He ensured that these centralizers were custom built for a previous BP rig, deciding it was a safe option.

When the “slip on” centralizers arrived, BP engineer Brian Morel identified them as being conventionally designed instead of custom built like they expected. Morel voiced his concern about this in an email to BP Operations Drilling Engineer Brett Cocales, where he questioned the need for the more centralizers. Cocales disagreed with his opinion, ending by saying: “But, who cares, it’s done, end of story, [we] will probably be fine and we’ll get a good cement job. I would rather have to squeeze [remediate the cement job] than get stuck above the WH [wellhead]." Guide also identified the centralizers as being the wrong type. Since the last minute addition of these centralizers concerned him, he ultimately decided to use only six.

The BP investigation reported that the 15 additional “slip ons” were the custom built type that it had ordered, and the team had mistaken them for the wrong kind. There are conflicting accounts from BP on whether they were the correct type.

If BP had sought help from Halliburton rather than waiting for Halliburton to catch one of its mistakes, it could have determined whether more centralizers would be needed. BP could have then based its decision on a full examination of potential risks, so it could order the correct number and type of centralizers needed. Instead, it was stuck making a misguided, last minute decision. Though it is uncertain whether the failure of using too few centralizers was a direct cause of the blowout, BP's decision making shows critical flaws in its management as well as poor communication between BP and Halliburton.

Mismanagement

Minerals Management Service

Management's choices before the explosion played a role in the safety and integrity of Deepwater Horizon. In management, some decisions have to be made for safety reasons, which may compromise other technical functions. Some decisions had unclear motivations, while others were made with insufficient resources.

The Mineral Management Service (MMS) was a federal agency that was responsible for leasing offshore drilling areas and ensuring safety and environmental compliance. It approved drilling permits and inspected drilling rigs. There is evidence that it was more relaxed in regulations in cases, including the Deepwater Horizon. One example of mismanagement occurred when there were more applications coming in for drilling than there were engineers qualified to approve them. So, the MMS hired engineers who would be willing to approve the excessive applications. However, the MMS did not have specific qualification requirements for the engineers.

Many regulations promote safety in design and maintenance of offshore drilling rigs. The Oil Pollution Act of 1990 and Oil Spill Response Plans are a couple examples of regulation that require vessels to have plans for worst-case scenarios. Despite BP not showing real preparation for a worst-case scenario, the MMS did not challenge it, inspect the rig properly, or have the capacity for running high risk analysis on the report.

Months before the explosion, management may have compromised the project's integrity and effectiveness to provide more safety. Though BP had a goal of reaching 20,200 ft in drilling, it stopped at 18,360 ft due to concerns of well integrity and safety. The Transocean crew made a judgment call when determining whether the detected mud circulation pressure was valid. While the drilling mud subcontractor determined that 570 psi would be required, the crew reading obtained only 340 psi. By testing a different circulating pump, they determined the gauge was broken. It is unclear as to why they decided this value was due to a broken gauge.

BP made compromises on different issues, taking risks in some areas to provide safety in others. Another example is when BP decided to reduce the cement it pumped into the well to reduce the pressure on the well. The amount of cement was provided for a column 500 ft above the payzone, even though BP's own requirements called for the column to reach 1000 ft above. The cement's purpose is to reduce contamination risks, such as leakage, and help protect against placement errors.

Regulatory Failures

The Mineral Management Service (MMS) is one of the most prominent examples of regulatory capture in the US. In the years leading up to the blowout, the oil and gas industry typically had a hand in any regulatory action performed by the MMS. Often, regulations were not even created by the MMS, and instead were recommendations from the American Petroleum Institute. The MMS relied on at least 78 industry-defined standards as a basis for their regulations. This occurred for several reasons: corruption and the agency's inability to keep up with the advancement of the industry.

In July 2006, the Interior's inspector general Earl E. Devaney received an anonymous tip that alleging that the MMS had been receiving a portion of the oil and gas collected by the companies under their oversight. This was known between the MMS and its affiliates as the royalty-in-kind program. In exchange, the MMS performed fewer audits and essentially allowed the companies to regulate themselves. The anonymous informant further stated that in MMS employees suffered from greatly conflicted interests. Some received free ski trips, football, baseball, and concert tickets, and other expensive gifts, and others even engaged in sexual relationships with industry officials. A Shell representative stated that the company provided gifts to the MMS for "relationship-building" and referred to the royalty-in-kind program as "just another oil exploration company." As a result of this program and other actions taken by the MMS, the agency became one of the largest federal revenue collectors, behind the Internal Revenue Service.

On September 10th, 2008, Earl E. Devaney delivered three reports to Congress detailing the wrongdoings of around a dozen current and former employees of the MMS. In his cover memo he wrote that, "A culture of ethical failure pervades the agency." In addition to gifts accepted by employees far exceeding ethical value limits, several of the employees often used consumed copious amounts of alcohol at industry functions, used cocaine and marijuana, and had pursued sexual relationships with oil and gas company officials. The royalty-in-kind program's manager was accused of having sexual relationships with two of his underlings, one of which having frequently sold him cocaine. Earl E. Devaney stated in one of his reports that the agency, "appeared to be devoid of both the ethical standards and internal controls sufficient to protect the integrity of this vital revenue-producing program." The MMS viewed itself as partners with the oil and gas industry, but that partnership had strayed dangerously close to corruption.

Immediate Regulatory Response

A week after the Obama administration came into office, Ken Salazar, the new interior secretary, made it his goal to reform the MMS into a responsible and ethical agency. On April 27th, 2010, seven days after the Deepwater Horizon Explosion he finally achieved his goal. The Department of the Interior (DOI) began an internal restructuring of the MMS to remove corruption and improve its regulatory efficacy. While the restructuring occurred, the MMS was to be replaced by Bureau of Energy Management, Regulation, and Enforcement (BOEMRE). On the same day Secretary Salazar and Secretary of Homeland Security Janet Napolitano began a joint 30-day investigation on the Deepwater Horizon Incident. During this time, the DOI suspended approval of all drilling permits. Once the investigation concluded, Secretary Salazar released a moratorium that prohibited all Deepwater drilling for the next six months. All wells drilling greater than 500 ft were forced to be temporarily abandoned.

In May 2010, President Obama created the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, otherwise known as the Deepwater Horizon Commission. By doing so, President Obama began the process of deeper reform to identify and eliminate the causes of the Deepwater Horizon Explosion and be better prepared for future disasters that may occur. BOEMRE also released several new safety measures following the conclusion of Salazar's investigation. The most important of which being NTL No. 2010-N05 which put in place many of the DOI's recommendations for stricter regulations on equipment, structural integrity, disaster intervention and response capabilities.

Legal Repercussions

The Deepwater Horizon explosion and subsequent oil spill resulted in many lawsuits. By the start of December 2010, there were hundreds of lawsuits filed against BP. The US Department of Justice filed a criminal and civil lawsuit against BP on December 15th, 2010. The DOJ claimed that BP violated the Clean Water Act, and the plaintiffs of the case included private individuals and Gulf states. The Justice Department wanted to prove that BP "was grossly negligent and engaged in willful misconduct in causing the oil spill." Conversely, BP claimed that the explosion and oil spill incident was an accident and that their conduct did not reach the point of gross negligence. The distinction of gross negligence was important, since it would result in fines that were 4 times as large, and it would also make BP liable for any private claims for punitive damages. The ruling in the lawsuit found BP guilty of gross negligence and willful misconduct under the Clean Water Act. Since the fines were distributed based on the degree of blame by the guilty parties, the U.S. District Judge Carl Barbier attributed 67% of the blame to BP, 30% to Transocean, and 3% to Halliburton. BP had already spent over $28 billion on cleanup of the Gulf. However, now they were also responsible for another $18 billion in damages. This amount was distributed between the National Fish and Wildlife Foundation, the Oil Spill Liability Trust Fund, the National Academy of Sciences, the North America Wetland Conservation Fund, General Treasury, and the Securities and Exchange Commission. In 2012, BP also settled about 100,000 claims by businesses and individuals, with BP estimates claiming that they would pay around $7.8 billion. By 2013, they had paid about $13 billion to individuals, the government, and businesses.

The Justice Department also filed criminal charges against four different BP employees. Two of the employees were charged with manslaughter and negligence in their supervision of the crucial safety tests prior to the explosion, as well as their failure to notify on-shore engineers of the issues. The other two employees were charged with obstruction of justice and lying to federal officials. In January 2013, Transocean agreed to plead guilty and to pay $1.4 billion in civil and criminal fines. This amount was distributed between the Gulf Coast restoration Trust Fund, the Oil Spill Liability Trust Fund, the National Fish and Wildlife Foundation, and the National Academy of Sciences. In September 2014, Halliburton agreed to settle many of its suits by paying around $1.1 billion in three installments over the course of two years into a trust fund.

Conclusion

Drilling for oil is a complex system. Many parties are involved and must interact efficiently to accomplish their goals in a safe and efficient manner. Management failed in their abilities to prevent a disaster as shown by evidence, such as the negative pressure test being ignored. If guidelines and protocol were enacted for pressure testing, this disaster would not have occurred. The decision to use too few centralizers shows how leadership rushed without taking the time to look into every scenario, which could have contributed to the high pressure buildup and cement failure. Finally, the broader management of oil companies via government organizations became lax in enforcing safety regulations, potentially causing a trickle-down effect that resulted in the Deepwater Horizon explosion. Can future disasters in complex systems be prevented after examining this event? Yes, as long as professionals do not let factors sway them from making ethically rational decisions.