Home US & World News NEWS: Deregulation & cost-cutting may have led BP to omit costly standard safety item

NEWS: Deregulation & cost-cutting may have led BP to omit costly standard safety item

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In early March the Economist noted "a round of efficiency measures and cost cuts" at BP "aimed at increasing annual profits by $3 billion over the next few of years."[1]  --  On Friday, a Daily Kos blogger called attention to the failure of BP's well to use a standard device known as an "acoustic switch" to ensure against catastrophe.[2]  --  The blogger cited an Apr. 28 Wall Street Journal article that reported that "two major oil-producing countries, Norway and Brazil, in effect require them.  Norway has had acoustic triggers on almost every offshore rig since 1993."[3]  --  "The U.S. considered requiring a remote-controlled shut-off mechanism several years ago, but drilling companies questioned its cost and effectiveness, according to the agency overseeing offshore drilling," said Russell Gold, Ben Casselman, and Guy Chazan.  The agency, the Interior Department's Minerals Management Service, says it decided the remote device wasn't needed because rigs had other back-up plans to cut off a well."  --  "An acoustic trigger costs about $500,000, industry officials said."  --  "Some major oil companies, including Royal Dutch Shell PLC and France's Total SA, sometimes use the device even where regulators don't call for it."  --  Whoops.  --  "Industry critics cite the lack of the remote control as a sign U.S. drilling policy has been too lax.  'What we see, going back two decades, is an oil industry that has had way too much sway with federal regulations,' said Dan McLaughlin, a spokesman for Democratic Florida Sen. Bill Nelson."  --  "The industry argued against the acoustic systems.  A 2001 report from the International Association of Drilling Contractors said 'significant doubts remain in regard to the ability of this type of system to provide a reliable emergency back-up control system during an actual well flowing incident.'  --  By 2003,  U.S. regulators decided remote-controlled safeguards needed more study. A report commissioned by the Minerals Management Service said 'acoustic systems are not recommended because they tend to be very costly.'" ...


1.

Offshore oil platforms

WELL DRILLED


Offshore oil platforms operate at ever-greater depths

Economist
March 3, 2010

http://www.economist.com/daily/chartgallery/displaystory.cfm?story_id=15602848


BP, A big British oil company, announced a round of efficiency measures and cost cuts on Tuesday March 2nd aimed at increasing annual profits by $3 billion over the next few of years.  But BP and the world's other big oil companies face similar problems when it comes to boosting profits.  Few big new oil fields that are easy to reach and cheap to exploit have been discovered in recent years.  This has driven firms to seek oil ever deeper below the sea.  In 1947, Kerr-McGee built the world’s first offshore oil well that was completely out of sight of land, drilling 4.6 meters into the seabed off the coast of Louisiana.  This year Shell's 22,000-ton Perdido rig is set to begin operation.  Standing nearly as tall as the Eiffel Tower, it is chained to the seabed 2.4km meters below and is capable of extracting oil at a maximum depth of 2.9km.

[GRAPHIC: Maximum operational depth of offshore fields in first operating year, km.  Auger 0.8 (1994); Mars 0.85 (1996); Ursa 1.0 (1999); Hoover/Diana 1.45 (200); Horn Mountain 1.65 (2002); Devils Tower 1.7 (2004); Atlantis 2.15 (2007); Independence Hub 2.4 (2007); BW Peace 2.5 (2009); Perdido 2.9 (2010).  Source: Mustang Engineering, Offshore Magazine.]

2.

BP OIL PLATFORM SPILL DISASTER IS CHENEY'S FAULT -- UPDATED

By ericlewis0

Daily Kos
April 30, 2010

http://www.dailykos.com/storyonly/2010/4/30/862414/-BP-Oil-Platform-Spill-Disaster-is-CHENEYS-Fault


Mike Papantonio, an environmental lawyer on the Ed Show just now:  An 'acoustic switch' would have prevented this catastrophe -- it's a failsafe that shuts the flow of oil off at the source -- they cost only about half a million dollars each, and are required in off-shore drilling platforms in most of the world . . . except for the United States.  This was one of the new deregulations devised by Dick Cheney during his secret meetings with the oil industry at the beginning of Bush's first term.

UPDATE 4:  Here's a link to the video of Papantino on the Ed Show -- go to the 5 minute mark:

http://www.msnbc.msn.com/id/21134540/vp/36879861#36879861


* ericlewis0's diary :: http://ericlewis0.dailykos.com/

Thanks, DICK.

Mr. Papantonio said he is amazed that this part of the story hasn't been reported yet -- that it's really the key to the whole thing -- that it's yet another classic example of Bush/Cheney Era deregulation wreaking havoc on the planet.

Many thanks to Ed Schultz for shining light on this.  I'd say it's high time we brought Richard Cheney to justice.  Cheers.

UPDATE 1:
From followyourbliss in the comments: the oil platform in question was run by Halliburton, another factor that implicates Cheney. 

UPDATE 2: From the Wall Street Journal, an article titled "Leaking Oil Well Lacked Safeguard Device" [see #3 below]:  "The oil well spewing crude into the Gulf of Mexico didn't have a remote-control shut-off switch used in two other major oil-producing nations as last-resort protection against underwater spills.

"The lack of the device, called an acoustic switch, could amplify concerns over the environmental impact of offshore drilling after the explosion and sinking of the Deepwater Horizon rig last week."

3.

LEAKING OIL WELL LACKED SAFEGUARD DEVICE
By Russell Gold, Ben Casselman, and Guy Chazan

Wall Street Journal

April 28, 2010

http://online.wsj.com/article/SB10001424052748704423504575212031417936798.html


The oil well spewing crude into the Gulf of Mexico didn't have a remote-control shut-off switch used in two other major oil-producing nations as last-resort protection against underwater spills.

The lack of the device, called an acoustic switch, could amplify concerns over the environmental impact of offshore drilling after the explosion and sinking of the Deepwater Horizon rig last week.

The accident has led to one of the largest-ever oil spills in U.S. water and the loss of 11 lives.  On Wednesday federal investigators said the disaster is now releasing 5,000 barrels of oil a day into the Gulf, up from original estimates of 1,000 barrels a day.

U.S. regulators don't mandate use of the remote-control device on offshore rigs, and the Deepwater Horizon, hired by oil giant BP PLC, didn't have one.  With the remote control, a crew can attempt to trigger an underwater valve that shuts down the well even if the oil rig itself is damaged or evacuated.

The efficacy of the devices is unclear.  Major offshore oil-well blowouts are rare, and it remained unclear Wednesday evening whether acoustic switches have ever been put to the test in a real-world accident.  When wells do surge out of control, the primary shut-off systems almost always work.  Remote control systems such as the acoustic switch, which have been tested in simulations, are intended as a last resort.

Nevertheless, regulators in two major oil-producing countries, Norway and Brazil, in effect require them.  Norway has had acoustic triggers on almost every offshore rig since 1993.

The U.S. considered requiring a remote-controlled shut-off mechanism several years ago, but drilling companies questioned its cost and effectiveness, according to the agency overseeing offshore drilling.  The agency, the Interior Department's Minerals Management Service, says it decided the remote device wasn't needed because rigs had other back-up plans to cut off a well.

The U.K., where BP is headquartered, doesn't require the use of acoustic triggers.

On all offshore oil rigs, there is one main switch for cutting off the flow of oil by closing a valve located on the ocean floor.  Many rigs also have automatic systems, such as a "dead man" switch as a backup that is supposed to close the valve if it senses a catastrophic failure aboard the rig.

As a third line of defense, some rigs have the acoustic trigger:  It's a football-sized remote control that uses sound waves to communicate with the valve on the seabed floor and close it.

An acoustic trigger costs about $500,000, industry officials said. The Deepwater Horizon had a replacement cost of about $560 million, and BP says it is spending $6 million a day to battle the oil spill. On Wednesday, crews set fire to part of the oil spill in an attempt to limit environmental damage.

Some major oil companies, including Royal Dutch Shell PLC and France's Total SA, sometimes use the device even where regulators don't call for it.

Transocean Ltd., which owned and operated the Deepwater Horizon and the shut-off valve, declined to comment on why a remote-control device wasn't installed on the rig or to speculate on whether such a device might have stopped the spill.  A BP spokesman said the company wouldn't speculate on whether a remote control would have made a difference.

Much still isn't known about what caused the problems in Deepwater Horizon's well, nearly a mile beneath the surface of the Gulf of Mexico.  It went out of control, sending oil surging through pipes to the surface and causing a fire that ultimately sank the rig.

Unmanned submarines that arrived hours after the explosion have been unable to activate the shut-off valve on the seabed, called a blowout preventer.

BP says the Deepwater Horizon did have a "dead man" switch, which should have automatically closed the valve on the seabed in the event of a loss of power or communication from the rig. BP said it can't explain why it didn't shut off the well.

Transocean drillers aboard the rig at the time of the explosion, who should have been in a position to hit the main cutoff switch, are among the dead.  It isn't known if they were able to reach the button, which would have been located in the area where the fire is likely to have started.  Another possibility is that one of them did push the button, but it didn't work.

Tony Hayward, BP's CEO, said finding out why the blowout preventer didn't shut down the well is the key question in the investigation.  "This is the failsafe mechanism that clearly has failed," Mr. Hayward said in an interview.

Lars Herbst, regional director of the Minerals Management Service in the Gulf of Mexico, said investigators are focusing on why the blowout preventer failed.

Industry consultants and petroleum engineers said that an acoustic remote-control may have been able to stop the well, but too much is still unknown about the accident to say that with certainty.

Rigs in Norway and Brazil are equipped with the remote-control devices, which can trigger the blowout preventers from a lifeboat in the event the electric cables connecting the valves to the drilling rig are damaged.

While U.S. regulators have called the acoustic switches unreliable and prone, in the past, to cause unnecessary shut-downs, Inger Anda, a spokeswoman for Norway's Petroleum Safety Authority, said the switches have a good track record in the North Sea.  "It's been seen as the most successful and effective option," she said.

The manufacturers of the equipment, including Kongsberg Maritime AS, Sonardyne Ltd. and Nautronix PLC, say their equipment has improved significantly over the past decade.

The Brazilian government began urging the use of the remote-control equipment in 2007, after an extensive overhaul of its safety rules following a fire aboard an oil platform killed 11 people, said Raphael Moura, head of safety division at Brazil's National Petroleum Agency. "Our concern is both safety and the environment," he said.

Industry critics cite the lack of the remote control as a sign U.S. drilling policy has been too lax.  "What we see, going back two decades, is an oil industry that has had way too much sway with federal regulations," said Dan McLaughlin, a spokesman for Democratic Florida Sen. Bill Nelson. "We are seeing our worst nightmare coming true."

U.S. regulators have considered mandating the use of remote-control acoustic switches or other back-up equipment at least since 2000. After a drilling ship accidentally released oil, the Minerals Management Service issued a safety notice that said a back-up system is "an essential component of a deepwater drilling system."

The industry argued against the acoustic systems. A 2001 report from the International Association of Drilling Contractors said "significant doubts remain in regard to the ability of this type of system to provide a reliable emergency back-up control system during an actual well flowing incident."

By 2003, U.S. regulators decided remote-controlled safeguards needed more study. A report commissioned by the Minerals Management Service said "acoustic systems are not recommended because they tend to be very costly."

A spokesman for the agency, Nicholas Pardi, said the decision not to require the device came, in part, after the agency took a survey that found most rigs already had back-up systems of some kind. Those systems include the unmanned submarines BP has been using to try to close the seabed valve.
—Jeff Fick contributed to this article.

Write to Russell Gold at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , Ben Casselman at This e-mail address is being protected from spambots. You need JavaScript enabled to view it and Guy Chazan at This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Corrections & Amplifications:
The oil rig that exploded and sank in the Gulf of Mexico was owned by Transocean Ltd. and leased by BP PLC. A previous version of this article incorrectly said that BP owned the rig.

 

Last Updated on Sunday, 02 May 2010 16:15