(2/2011) Review: Drowning In Oil By Loren Steffy

Review By Loyd E. Eskildson

“Drowning in Oil” provides excellent background on the 2010 Deepwater Horizon disaster in the Gulf of Mexico, aka the Macondo well blowout. Author Loren Steffy’s (Houston Chronicle business writer) most important contribution in this book is demonstrating that the tragedy was not the result of a single error or sloppiness by front-line personnel, but rather the accumulation of a series of top-level errors that took place over a period of years creating a corporate culture that had little concern for safety. The ‘Deepwater Horizon’ incident literally was a disaster waiting to happen.
 
The Deepwater Horizon floating drilling platform was a portable town for 126 people, suspended ten stories above the water’s surface and a mile over the underwater well. The platform was also a ship capable of moving about 5 m.p.h. and also staying stably positioned over a wellhead. Its drilling derrick was 20 stories tall over the main deck; the entire apparatus cost about a half-billion dollars to have built (in Korea – but that’s another story, about our on-going economic disaster) in 2001, and about half a million dollars/day to operate. Offshore wells cost about 5 times that of land wells; BP had spent about $150 million up to that point on the well.
 
Steffy provides a good detailing of the chaos and terror of those first moments after the explosion - two massive explosions that immediately ended lighting and power, the roar of the escaping gas, destruction/debris everywhere and impeding walking, shrieking alarms, a hot, noisy and angry fire engulfing the derrick, and thick oil/sludge covering the water below that also began burning. The human toll (11 died) would have been higher but for numerous acts of heroism and personal strength (eg. getting up after being blown across a room and covered with debris, jumping into water 70′ below, carrying others unable to get up) among those on the platform. Fortunately, safety drills had been regularly practiced, the emergency equipment mostly worked, a supply boat was nearby and able to pick up survivors from the water, and Coast Guard helicopters arrived soon after to take the worst injured to expert medical facilities on shore.
 
Incredibly, however, remaining survivors reaching shore 28 hours later were greeted by BP bureaucrats demanding that they immediately undertake drug and alcohol tests to assess possible personal blame, and then sign papers declaring that they were not witnesses to the incident. About ten days later they were also requested to sign waivers stating that they had not been injured, in return for $5,000 payment for their possessions lost on the rig.
 
BP CEO Tony Hayward had been chosen to reverse BP’s accident record – about 10 times the rate of the next highest oil firm. Steffy makes clear that while Hayward had succeeded in lowering costs, he hadn’t succeeded in improving safety. The bulk of “Drowning in Oil” consists of Steffy’s review of recent prior major BP accidents, the most serious of which was the 2005 Texas City refinery plant explosion – 15 died at the site near I-10 which I’ve passed by numerous times. Just months prior to that explosion a consulting report had concluded “We have never seen a site where the notion ‘I could die today’ was so real.” Later, an impartial commission led by former Treasury Secretary James Baker cited numerous issues and concluded in its 2007 report that BP had not distinguished between occupational safety (eg. preventing slips and falls, driving while using cell phones) and process safety (design, hazard analysis, equipment maintenance, follow-up on incidents, etc.). Government action in that instance was limited to imposing a $50 million fine for environmental violations; BP has also paid more than $1.6 billion to compensate victims. Incredibly, OSHA then cited over 700 safety violations and imposed an additional $87 million fine in 2009 for BP’s failing to correct safety hazards at Texas City revealed in the 2005 explosion. (BP has paid $50.6 million, and is contesting the remaining $30.7 million; the fine was also reduced by $6.1 million.) BP recently sold the refinery (Houston Chronicle, 2/1/2011).
 
Steffy also castigates the government’s Minerals Management Service (MMS) responsible for ensuring operational safety on Gulf oil rigs. It had 55 inspectors for about 3,000 offshore facilities requiring monthly inspections. Its last inspection of Deepwater Horizon was four months prior to the explosion, and conducted by a new employee making his first inspection.  Steffy also reports on the numerous allegations of improper relationships between MMS and BP staffers, and the MMS strategy of coping with understaffing through stressing voluntary compliance.
 
It is still unclear why the Macondo well blowout occurred. Once that happened, however, a ‘blowout preventer’ was supposed to prevent massive spills and fires. Steffey and others believe that the blowout preventer failed because three pieces of pipe were caught inside instead of the one it was designed for. However, even the rationale for that occurring is not certain.
 
Finally, Steffy addresses BP’s gross underestimating of the spill’s size – about 1,000 barrels/day, vs. a reality of 70,000/day. As for BP’s willingness to waive the $75 million liability cap, seen by some as indicative of BP’s willingness to assume liability, Steffy sees this as more likely BP’s way to avoid being banned from future drilling in the Gulf.  (The ability to drill in deep water was seen by BP as its competitive advantage.) Regardless, after incurring costs and liabilities exceeding $40 billion, as well as a black eye for the deaths of 11 workers and creating an oil spill that dwarfed that of the Exxon Valdez, Tony Hayward was forcibly retired and ‘got his life back.’ 
 
Bottom-Line: Steffy’s accounting is incomplete – many questions remain, which he admits. Coming out as it did only two months prior to the Deepwater Commission’s final 346-page report means it probably contributed little; however, it did at least help prevent a ‘whitewash’ by that group. Nonetheless, “Drowning in Oil” clearly chronicles the ‘real’ cause of the Gulfwater Horizon disaster – a company oblivious over the years to responsibilities for employees, the environment, and the general populace. However, BP is not the only party guilty of this - federal government regulators in the undermanned and poorly managed MMS unit (aka the SEC), legislators that set funding levels for those regulators, and the general public are also. The latter because despite still unanswered questions of how to prevent a recurrence, much of the area’s population, the judiciary, and numerous political leaders immediately decried the temporary ban on Gulf drilling that followed. It seems that other industries’ ’success’ building profits through offshoring jobs has also made us overly biased towards fixing the resulting jobs shortage.

Loyd E. Eskildson is retired from a life of computer programming, teaching economics and finance, education and health care administration, and cross-country truck driving.  He’s now a blogger and reviewer for Basil & Spice.  Visit Loyd E. Eskildson’s Writer’s Page.

Copyright © 2006-2011, Basil & Spice. All rights reserved.

Copyright © Basil & Spice. All rights reserved. http://www.basilandspice.com/journal/” target=”_blank”Basil & Spice does not provide professional advice, diagnosis or treatment of any kind — medical, legal, professional, personal. The opinions you read on this site are those of members of the Basil & Spice community, not necessarily those of Basil & Spice.

Read more at Basil & Spice