Editorial: A different operator?

June 28, 2010
A bedrock question for deepwater drilling off the US is whether the Macondo well would have blown out if a different company had been operator.

A bedrock question for deepwater drilling off the US is whether the Macondo well would have blown out if a different company had been operator. While still incomplete, an answer is coming into focus. It is not flattering to BP.

Facts have been elusive amid the uproar under way since the Apr. 20 explosion and fire aboard the Transocean Deepwater Horizon semisubmersible off Louisiana. To a public outraged by deaths on the rig and a monstrous spill, BP is a villain. To a government under pressure to show resolve, it is a whipping post and source of cash. The company has acknowledged its responsibilities and committed huge resources to killing the well, mitigating the spill, and compensating spill damage.

BP's efforts since the blowout are commendable. The hard question concerns actions before then.

Important information

Pieces of the answer have emerged in hearings by subcommittees of the House Energy and Commerce Committee, chaired by California Democrat Henry Waxman. Political theatrics aside, those hearings and related staff work have produced two important bodies of information. One is a plausible account of lapses that might explain the blowout. The other is unusual repudiation by leaders of other oil companies of BP's well design and management.

The repudiation came in testimony to the Subcommittee on Energy and the Environment on June 15. In response to questions about a letter from House leaders to BP challenging decisions about the well, ExxonMobil Chairman and Chief Executive Officer Rex Tillerson said he saw "a number of design standards" that did not follow "the industry norm." Asked if BP had made mistakes, Tillerson replied, "We would not have drilled the well the way they did." Chevron Chairman and CEO John S. Watson said, "It certainly appears from your letter that not all standards that we would recommend or that we would employ were in place." Shell Oil Co. Pres. Marvin Odum said, "It's not a well that we would have drilled with that mechanical set-up, and there are operational concerns."

Pressed for details, Watson said Chevron would not have run a full casing string in the Macondo well, which left no pressure barrier in the annulus from the casing hanger to cement at bottom. Tillerson agreed, saying ExxonMobil would have run a tie-back liner. He also said the company would have used a different cement formulation, tested the cement job before circulating out mud, and installed a locking device at the casing hanger.

With those answers, the executives addressed three of five questions Waxman and Bart Stupak, chairman of the Subcommittee on Oversight and Investigations, raised in their letter to BP Chief Executive Tony Hayward. Other questions concerned the number of centralizers installed before the cement job and failure to circulate out potentially gas-bearing mud.

Hayward faced all those questions and more in a withering June 17 hearing of Stupak's subcommittee. He didn't answer. Acknowledging that the letter raised "very legitimate issues for concern," he said he wasn't involved in decision-making about the well. On many questions he deferred to an incomplete BP investigation, saying he lacked sufficient information. The day after he testified, the chairman and chief executive officer of a 25% Macondo partner showed no such hesitation. Jim Hackett of Anadarko Petroleum Corp. issued a statement that called the tragedy "preventable and the direct result of BP's reckless decisions and actions." Hackett said BP's actions "likely represent gross negligence or willful misconduct."

Motives and incentives

Yes, chiefs of oil companies other than BP have political motives to say BP's Macondo performance falls short of industry standards. And, yes, Hackett has a financial incentive to call BP careless.

Still, these are extraordinary criticisms from companies that know how to drill oil and gas wells. The questions put to BP by the Waxman-Stupak letter were straightforward and accompanied by detailed analysis. For reasons no doubt shaped by BP lawyers, Hayward chose to stonewall pending results of an internal investigation.

That report will be interesting indeed. But Hayward and his lawyers may be the only people withholding judgment until it appears.

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