Wednesday, May 19, 2010

Gulf Spill: The Blame

May 19, 2010: While politicians and environmental groups step up to posture in the face of the Deep Water Horizon disaster, the company who is taking the brunt of the criticism has not been afforded the right to a fair hearing of facts in the press.

Since the well blew in the Gulf of Mexico on April 20th, several things have happened that warrant a clear and concise explanation.

In what stands to be one of the biggest oil spills in the history of the United States, the cause of the spill now appears to be an unauthorized modification of the blow out prevention (BOP) valve.

The Blame

BP's Deep Water Horizon oil rig exploded and sank off the cost of Louisiana last month. Eleven rig workers are missing, which was operated by Swiss-based Transocean Ltd, the largest independent driller in the world.

Meanwhile, the BOP failed to stop the flow of oil as it should have after the explosion and allowed oil to pour into the Gulf of Mexico. Fingers are being pointed at BP, even though Transocean was the sub-contractor.

Eventually, BP will be exonerated. But first we will all have to play a game of cover our asses.

From the subcontractor who reportedly modified the BOP without the knowledge or permission of BP, to the government regulators who okayed the modified BOP, to the Obama administration who wants to look tough on BP even thought they had no culpability, everyone is running for cover.

After the BOP was installed, the modifications made after the fact are assumed to have prevented the part from operating properly.

These modifications were discovered by remote operated vehicles whose pictures transmitted to engineers trying to find out why the BOP didn't activate, showed the part had been altered.

Government Response

Meanwhile, the Federal Government responded by splitting up the regulating and revenue collecting functions of the Minerals Management Agency, to as President Obama described, break up the cozy relationship between regulators and the oil industry.

However, the action to split up the functions draws attention to just who was responsible for permitting the BOP that failed to work. Could it have been that an MMS inspector didn't properly follow through with the BOP test monitoring?

BP's Safety Record

Much has been written since the well blew four weeks ago about BP's safety record. But that says nothing about the company today and the focus on safety they have made the last two years.

While many press accounts recall the explosion at BP's Texas City refinery in 2005, and the spill at Prudhoe Bay a year later, those incidents occurred before BP's current CEO Tony Hayward assumed control.

Since the spill, Hayward has been a visible point man for BP. He wasted no time in appearing on major network news shows to describe the situation on the ground. He has mobilized 2,500 workers to the site, including several from Anchorage, and he has accepted full responsibility for the disaster.

This shouldn't be surprising. After all it was Hayward, who in 2005 won accolades from BP employees for speaking out against the way the company was handling the Texas City disaster, criticizing his bosses for "a leadership style that is too directive and doesn't listen sufficiently well."

The Politics

The politics are bare knuckle.

The spill has given fodder to environmentalist to once again raise a ruckus about offshore oil & gas drilling. Congressmen, one right after another, attempting to look tough, are demanding answers from BP they already have received. And the White House continues to posture on the real issue which is; energy supplies come at a risk.

But the fact is the Gulf of Mexico accounts for almost a third of America's oil production and has been where most of the new finds have been for oil companies.

Furthermore, before the April 20th disaster, there hadn't been a leak from an offshore well in 40 years.

As the Economist recently opined, "If Americans do not want to hand more money and clout to the likes of Iran, Russia and Venezuela, the argument runs, they should not curb offshore drilling."

The impacts have reached Alaska. The spill has set off another round of opposition to offshore drilling in Alaska and age old worries about a spill in the Arctic conditions. But these concerns are unfounded.

Currently, as a result of the 1989 Exxon Valdez spill, Alaska has the toughest regulations in the world. Companies like Shell Oil who are exploring off Alaska's shores are required to abide by and held to a much higher standard of prevention and response then anywhere on the globe.

The more and more you hear of the Deep Water Horizon tragedy the more you'll learn that it was a careless contractor who set the stage for the disaster. And as I said, at the end of the day BP will be exonerated in my opinion.

Let's hope for the future of our nation's energy security we don't use one bad incident in 40 years as an excuse to stop offshore drilling.

And let's hope we get bp: beyond posturing.

Andrew Halcro's blog

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