Senators grill industry witnesses at gulf oil spill hearings

Nick Snow
OGJ Washington Editor

WASHINGTON, DC, May 12 -- Testifying May 11 before two US Senate committees, top executives from BP America Inc., Transocean Ltd., and Halliburton Co. said that full investigations would be required to determine the cause behind the blowout of the Macondo well and subsequent explosion and fire on the Deepwater Horizon semisubmersible rig in the Gulf of Mexico.

The Senate committees questioned BP America Chairman and Pres. LaMar McKay, Transocean Chief Executive Officer and Pres. Steven L. Newman, and Halliburton Global Business Lines Pres. Tim Probert.

Members of the two Senate committees, ignoring recommendations from witnesses and other US senators to not reach conclusions before investigations of are complete, asked in separate hearings if drilling mud being prematurely replaced with seawater in the wellbore before final cementing was complete may have led to the Apr. 20 rig accident and subsequent oil spill.

Other Energy and Natural Resources Committee and Environment and Public Works Committee members demanded assurances from well operator BP that it intends to pay all of the cleanup costs, and not just the $75 million limit under federal law before asking to be reimbursed from the oil spill liability fund.

“We are looking at why the blowout preventer did not work because that was to be the fail-safe in case of an accident,” McKay said. “The [BOP] is a 450-ton piece of equipment that sits on top of the wellhead during drilling operations. It contains valves that can be closed remotely if pressure causes fluids such as oil or natural gas to enter the well and threaten the drilling rig. By closing this valve, the drilling crew can regain control of the valve.”

McKay noted that BOPs are used on virtually every oil and gas well that is drilled, and that they are designed with multiple layers of redundancy and are regularly tested. “All of us urgently want to understand how this vital piece of equipment failed and what measures are required to prevent this from ever happening again,” McKay said.

Unusual difference 
Newman said the explosion was unusual because it occurred after the well construction process was essentially completed. Drilling had been completed 3 days before and crews were taking steps leading up to setting a cement plug to temporarily seal that well, which BP would have opened later if it chose to put the well into operation.

“At this point, drilling mud was no longer being used as a means of reservoir pressure containment; the cement and the casing were the barriers controlling pressure from the reservoir,” Newman said. “Indeed, at the time of the explosion, the rig crew, at the direction of the operator, was in the process of displacing drilling mud and replacing it with seawater,” he said.

But Probert noted that while Halliburton, which BP hired for cementing and other services, had completed cementing of the well’s ninth and final production string some 20 hr before the blowout, the final cement plug was not set because Transocean, the drilling contractor, displaced drilling fluid inside the rise with lighter sealer prior to the planned placement of the final cement plug, which consequently was not set.

That led Energy and Natural Resources Committee Chairman Jeff Bingaman (D-NM) to ask, in the morning hearing, if replacing drilling fluid with seawater is customary when a deepwater well is drilled. “It is,” Probert replied. “It reduces the density and pressure downward on the hydrostatic head.”

Several hours later, Environment and Public Works Committee member Tom Udall (D-NM) asked during that committee’s hearing if the sequence at this well was different from normal. “It’s not unusual to replace certain weight fluids with others. The investigation will determine if this procedure was valid. There are various ways to do cementing procedures,” said McKay.

Part of process
“As part of the well abandonment process, the cementing has to be placed and the mud displaced from the riser,” Newman added. “I don’t have any basis for characterizing what happened as normal or abnormal. I’m not aware of any drivers that would dictate a particular order of these steps.”

“I don’t believe it was an unusual procedure,” said Probert. “The process was consistent with the well plan, which was established. To the best of our knowledge, this process was conducted in this order on previous Gulf of Mexico wells.”

In a second round of questions, Udall asked him if a final cement plug had been installed at a Timor Sea well off Australia’s coast which blew out in 2009. Probert said it was not, and the blowout occurred 5 months later.

That attracted the attention of Environment and Public Works Committee Chairwoman Barbara Boxer (D-Calif.), who asked if a final cement plug would have a difference in the Timor Sea or the Gulf of Mexico blowouts. “It’s always good to have multiple barriers in place to protect the wellbore, and the final cementing would have been the final barrier,” Probert responded.

At the morning hearing, two other witnesses explained how barriers can help control high-pressure wells. “A barrier provides a means by which gas is prevented from entering the wellbore or, if it has already, from continuing to enter and from moving up to the surface,” said F.E. Beck, a petroleum engineer and associate professor at Texas A&M University. Numerous drilling barriers can be used, including drilling mud, high-strength steel casing, cement, and BOPs or other mechanical barriers, he indicated.

Crew must respond
Beck also said in the event of a kick—when gas enters a wellbore at high pressure and tries to force its way to the surface—it becomes critical for the drilling crew to flawlessly exercise procedures to activate the BOP, remove the kick from the wellbore, and adjust the drilling mud’s density to restore the well’s balance. “When a kick is recognized, it is critical that the crew respond immediately to the kick and install a barrier, such as closing a [BOP] valve across the wellbore or around the drillstring,” Beck said.

“The drilling industry strives to assure multiple barriers remain in place at all times during operations on a well. This reduces the possibility of a blowout caused by sequential loss of barriers,” he explained. “However, there remains the potential for human error to create conditions by which barriers are subjected to loads for which they are not designed. The industry has used intensive training as a means of reducing this risk, but unfortunately it has not eliminated the risk.”

Elmer P. Dannenberger III, who retired in January as chief of the US Minerals Management Services’ offshore regulatory program, told the Energy and Natural Resources Committee that deepwater rigs typically have crews that are experienced and capable and their compliances records tend to be very good. “The blowout record is better for deepwater rigs than for shallow-water units,” he said.

When committee member Ronald L. Wyden (D-Ore.) suggested that MMS has not required adequate blowout backup prevention systems offshore, Dannenberger noted that at the BP well, “they were required to have a backup, in this case [a remotely operated vehicle] instead of an acoustic switch. It didn’t work.”

In his written statement, Dannenberger recommended 10 actions, including streamlining the US Outer Continental Shelf regulatory regime to reduce gaps, overlaps, and confusion; establishing an independent authority to investigate offshore accidents, make assessments, and report trends; thoroughly review BOP performance considerations including redundancy, independent functioning, shearing capability, and backup actuation options; and requiring all OCS operators to have comprehensive safety and environmental management programs. “They need to pay attention to hurricane issues if they operate in the Gulf of Mexico,” he suggested.

Presses for commitment
Senators directed more inquiries at the three officials. Energy and Natural Resources Committee member Maria E. Cantwell (D-Wash.) pressed McKay to confirm BP’s promise to pay all the spill’s costs. “You’re stepping up today at a hearing with probably the best advice money can buy behind you, with [public relations] and legal teams, and I’m sure they’re saying, ‘Let’s say that we’re going to pay,’” she said.

“So I want to make sure that we really understand what you’re saying you’re really going to be committed to today, because the long-term impacts of this are going to be for 20 years and we cannot sustain this kind of behavior or cost. And I want to make sure that we’re getting full answers to the coverage that you are really signing up for today,” Cantwell continued.

McKay replied, “We are trying to be extremely responsive, expeditious, and meet every responsibility we have as a responsible party, and that means paying all legitimate claims. So that is our intent. I can’t speculate on every case, but I can tell you this is not about legal words; this is about getting it done, and getting it done right.”

In the afternoon hearing, Boxer expressed further concern, saying, “None of you can assure us that this won’t happen again. Your statements to MMS when you wanted quick approval of this project were that there would be no problem even if there was a blowout because of the cleanup technology you have. All of this is falling like a house of cards. If you look at your statements and what is happening, it’s very troubling, yet you seem satisfied that you did your best.”

McKay, Newman, and Probert each said that they and their companies would continue to work to improve their offshore operations and practices. “I’m never satisfied,” McKay added.

Contact Nick Snow at nicks@pennwell.com.

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