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Federal Inspectors Clueless About Cementing, Oil Spill Panel Finds

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BP America Chairman and President Lamar McKay, Transocean President and CEO Steven Newman and Tim Probert, president of global business lines, and chief health, safety and environmental officer at Halliburton, are sworn in before testifying to the Senate on May 11, 2010 regarding the Deepwater oil spill. (Photo by Chip Somodevilla/Getty Images)

Yesterday the government's oil spill panel released a letter alleging that Halliburton knew of potential flaws in its cement prior to the Deepwater Horizon blowout. That same spill commission, in a little-noticed report by the New Orleans Times-Picayune, had earlier this week criticized government inspectors for their lack of knowledge about how to safely cement an offshore well.

"When we asked about cementing and centralizers, they said very freely, 'We don't know about that stuff; we have to trust the companies,'" the commission’s co-chairman, William Reilly, told the Times-Picayune. "All they get is on-the-job training. It really is fairly startling, considering how sophisticated the industry has become.”

We’ve noted such problems within the Minerals Management Service—the regulatory agency responsible for inspecting offshore drilling rigs—including its shortage of inspectors, reliance on industry to self-police, and history of ethical violations, some of which occurred as recently as 2008.

Newly renamed the Bureau of Ocean Energy, the agency has announced plans to add to its current staff—which has 64 inspectors—by hiring 200 new inspectors and engineers. Its head, Michael Bromwich, told the Times-Picayune that the agency is also moving to correct deficiencies in training:

"BOEMRE currently does not have a formal training and certification program for its inspectors, but up until this point has relied upon on-the-job training from more experienced inspectors," Bromwich said. "One of the things that we are looking at implementing is a strong bureau-wide certification or accreditation program for inspectors to ensure that our inspectors are given the proper fundamental knowledge and maintain proficiency with current systems and operations."

… New safety rules imposed by BOEMRE last month are the first to require federal engineers to review cementing plans to ensure they follow best industry practices. Under [the Minerals Management Service], there were no federal regulations governing specific cementing procedures.

In a letter released Thursday, the oil spill commission alleged that Halliburton’s cement mixture—meant to help seal the well—was unstable. The commission also noted that BP and Transocean personnel “misinterpreted or chose not to conduct” subsequent tests that could have identified cementing problems.  

As we’ve pointed out, BP, in its 193-page report on the Gulf disaster, acknowledged that subsequent testing “might have enabled the BP Macondo well team to identify further mitigation options to address risks.”

Halliburton, in response to the panel’s finding, issued a statement on Thursday disputing its validity, while acknowledging that it skipped a stability test before proceeding with cementing the well. Halliburton has in the past placed blame on BP for its risky well design. According to the Washington Post, the commission isn’t ruling those design flaws out, and has stated in background briefings they could have been a factor in precipitating the accident. The panel’s findings regarding the cause of the blowout are due at hearings on November 8 and 9.

‘Halliburton, in response to the panel’s finding, issued a statement on Thursday disputing its validity, while acknowledging that it skipped a stability test before proceeding with cementing the well.’  Halliburton’s statement went on to say that it fully expected to be exonerated of any liability due to its very substantial monetary investment in Congressional leaders and government regulators.

: ) it would almost be funny but ...

The jailing of Board Members for corporate wrongdoing may be the only way to get the reward /risk ratio right for these might companies and banks.

I have always thought that somewhere in US law there must be the crime of economic sabotage. It just needs to be used a couple of times and I am sure that executive behaviour would improve dramatically.

Andrew Whitacre

Oct. 29, 2010, 1:45 p.m.

@dieseltaylor: That’s not a bad idea. You could set a high evidentiary bar so that it doesn’t discourage legitimate cost-cutting measures, but lawsuits just aren’t scary enough to CEOs. Jailtime is a stronger motivator.

Boris L Matthews

Oct. 30, 2010, 8:03 a.m.

When hefty fines have become a “cost of doing business,” let’s see if the same view pertains to 60 days in a “standard issue” jail.

Alan M Dransfield

Nov. 1, 2010, 1:02 p.m.

I agree that the Board of Directors should be Jailed in such incidents.
The truth about the DODGY cement is slowly leaking out.

It will NEVER stop unless and until Halliburton pays a monster fine and someone goes to jail. Dick Cheney’s oil stained mits are all over this story.

I don’t know.  Given the facts that the check vavle did not close, and the heavy mud was replaced with sea water, I don’t think any cement job could setup fast enough to seal everything, and act as a single barrier to all that pressure.  The cement did fail, but why.  The real problems start at the bad negitive test that was declaired good, and the use of poor spacer that plugged up the BOP lines.  The cement was never designed to act as a single barrier.  I am don a Halliburton fan by any means, but the fact is eleven people died, and they require us to find out why.  We have to look at the facts.

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