Shortcuts may have led to well blow-out, BP faces record fines

US lawmakers on Monday stated foreign-based BP took shortcuts on the Deepwater Horizon well that led to “catastrophic well failure”, took the lives of 11 workers, and created environmental devastation in the Gulf of Mexico and along its US shoreline.

The US House of Representatives Energy and Commerce Committee, led by Representatives Henry Waxman and Bart Stupak, have disclosed details of their probe into the BP debacle in a letter to BP CEO Tony Hayward, who is scheduled to testify before the committee on Thursday. BP has offered no comment to the latest efforts by the US government as it continues ratcheting up pressure against the oil giant-turned-environmental assaulter. The letter, in part, states: "It appears that BP repeatedly chose risky procedures in order to reduce costs and save time and made minimal efforts to contain the added risk." The doomed well, which on April 15 - five days before its explosion - was called a “nightmare well” by BP’s drilling engineer, was the result of BP’s desire to bring the drilling operation on-line. It was more than 40 days behind production. Among the issues the committee wishes Hayward “be prepared to address” in the Thursday testimony, the committee notes violation of industry guidelines, ignoring warnings from BP personnel and contractors, risky procedures used to save time and money, and minimal efforts for containing the increased risks resulting from the company’s negligence. The Committee letter adds: “At the time of the blowout, the Macondo well was significantly behind schedule. This appears to have created pressure to take shortcuts to speed finishing the well. In particular, the Committee is focusing on five crucial decisions made by BP: (I) the decision to use a well design with few barriers to gas flow; (2) the failure to use a sufficient number of "centralizers" to prevent channeling during the cement process; (3) the failure to run a cement bond log to evaluate the effectiveness of the cement job; (4) the failure to circulate potentially gas-bearing drilling muds out of the well; and (5) the failure to secure the wellhead with a lockdown sleeve before allowing pressure on the seal from below. The common feature of these five decisions is that they posed a trade-off between cost and well safety.” BP’s apparent decision to use a “risky casing option” rather than a full string of casing was done to speed up drilling operations and save the oil company between $7 and $10 million. A BP plan review, prepared in mid-April, recommended against the full string casing option. The same review also predicted cement failure, as the committee letter notes. “Cement simulations indicate it is unlikely to be a successful cement job due to formation breakdown,” the company review states. The Committee letter also provides startling details on events leading up the the environmental disaster, all of which center around company neglect and the need for money. Among BP’s many neglects leading to the disaster, the letter notes that: “A cement bond log is an acoustic test that is conducted by runming a tool inside the casing after the cementing is completed. The cement bond log determines whether the cement has bonded to the casing and surrounding formations.” It goes on to quote Tommy Roth, Halliburton Vice President of Cementing, who informed Committee staff that BP was responsible for conducting a cement bond log. “If the cement is to be relied upon as an effective barrier, the well owner must perform a cement evaluation as part of a comprehensive systems integrity test.” An independent engineer with expertise in well failure analysis has called BP’s actions before the blowout as “horribly negligent.” Gordon Aaker, Jr, P.E., is a Failure Analysis Consultant with the firm Engineering Services, LLP, and told Committee staff it was “unheard of” not to perform a cement bond log with the single casing method. On April 14, Brian Morel, a drilling engineer for BP, discussed options for the well in an email to colleague Richard Miller. The email notes: "this has been [aJ nightmare well which has everyone all over the place.” The Committee letter concludes by informing Hayward the Committee’s investigation into the disaster is ongoing, and notes BP’s decisions, “time after time”, increased blowout risk for the sake of time and money. As a result of BP’s negligence, it now faces record fines. The Guardian reports US senators have demanded BP set up an escrow account of $20 billion to ensure payment of escalating costs associated with the company’s nightmare world. Many analysts had estimated a number closer to $5 billion for cost of clean-up efforts and payment of damage claims. BP also shared the lower estimate. On Monday, as news of the escrow account broke, BP’s shares tanked by another 9 percent. The company’s value has decrease by almost half since the disaster began unfolding on April 20. Already facing civil fines up to $14 billion, all payable under US environmental laws, the additional $20 billion account may well polish off any hopes BP has of a future with Gulf of Mexico drilling operations. Before Thursday’s scheduled testimony, Hayward will meet on Wednesday with President Obama in attempts to reduce increased attacks on the the oil company’s attempts at using the blown out well as an assault weapon on the planet’s food chain.