BP, Transocean and Halliburton blame each other for Deepwater Horizon spill

http://www.guardian.co.uk/environment/2010/may/11/bp-transocean-halliburton-blame-deepwater-horizon-senate

BP, Transocean and Halliburton blame each other for Deepwater Horizon spill

Executives from three oil giants point fingers at one another under tough questioning from US senate committee

* Suzanne Goldenberg, US environment correspondent
* guardian.co.uk, Tuesday 11 May 2010 18.54 BST

US national guard helicopters drop sandbags onto a breach near Grand Isle, Louisiana

US national guard helicopters drop sandbags near Grand Isle, Louisiana, in an effort to contain oil from the Deepwater Horizon spill. Photograph: Ted Jackson/AP

The three oil industry titans behind the catastrophic Gulf of Mexico spill all sought to blame one another under tough questioning from senators today, as troops fanned out along the Louisiana coastline to limit the damage caused by the unfolding environmental disaster.

With at least 4m gallons of oil now fouling the Gulf, the executives of BP America, which owned the well, Transocean, which owned the sunken Deepwater Horizon rig, and Halliburton, which cemented the well, were involved in a desperate attempt to avoid taking direct blame for the 20 April incident.

As the Energy and Natural Resources committee hearing got underway, Senate staffers joked it could be subtitled Scenes from an Execution, with a grilling due from the senators. But some of the worst damage may well have been done by executives themselves, as the three companies all tried to shift the responsibility.

In his opening statement, Jeff Bingaman, the New Mexico Democrat who chairs the committee, suggested a fatal combination of errors. "We will likely discover that there was a cascade of failures: technical, human and regulatory," he said. The industry executives - while all professing to be too caught up in the clean-up effort to draw conclusions about the causes of the catastrophe - were more singleminded.

BP America's' chief executive, Lamar McKay, blamed Transocean, the operator of the rig. "BP hired Transocean to drill that well. Transocean had the responsibility for ensuring the safety of that operation," he said. He pinned the spill on the failure of a blowout preventer, a 450-tonne set of valves on the ocean floor. "We have a blowout preventer that didn't work," McKay said.

Transocean's executive, Steven Newman, was having none of that. In his testimony, he said BP, as well operator, was calling the shots on the rig. "Offshore oil and gas production projects begin and end with the operator, in this case BP," he said. It was BP that drew up the drilling plan, and BP engineers who were in charge when the drilling wound up and crew prepared to cap the well.

He rejected any suggestion of a failure of the blowout preventer, which is supposed to stop a gusher. "The most significant clue is that these events occurred after the well construction process had been completed," Newman told the committee.

That pointed the finger at Halliburton, which was brought in to cement the lining of the well, effectively sealing off the reservoir. But Halliburton, unsurprisingly, was equally unwilling to fall. The company's health safety and environment officer, Tim Probert, started off by warning against a premature rush to judgment - then took his turn at assigning blame.

Like Newman, he told the hearing that Halliburton had carried out its work according to BP's specifications. "Halliburton, as a service provider to the well owner, is contractually bound to comply with the well owner's instructions on all matters relating to the performance of all work-related activities." Probert said.

As the hearings played out on Capitol Hill, the Louisiana national guard deployed troops using Blackhawk helicopters and heavy machinery to drop huge sandbags and shovel rocks, gravel and sand into breaks along the shoreline. Near Grand Isle, they hurried to plug one gap that left environmentally sensitive marshland exposed to potential pollution from encroaching oil.

Much of the evidence was highly technical, involving the various protective devices that should - if functioning properly - prevent catastrophe.

But BP and the other companies faced tough questions about contingency plans in the event of a spill, with senators asking why a containment dome and stocks of dispersants were not on standby. "What I see here is a company flailing around trying to deal with a worst case scenario," Senator Robert Menendez of New Jersey told BP.

The three companies were also forced to admit under questioning that they were conducting no research into how to deal with deep water spills. BP, in particular, was singled out over fatal accidents in Texas, as well as safety violations in Alaska. The company was accused of a "pattern of accidents". It was also pressed for assurances that it would honour its commitment to pay compensation to locals affected by the spill.

But the senators' ire stretched beyond the companies, with pointed questions about the US government's regulatory regime. In anticipation, the Obama administration announced today that it was splitting the functions of the mineral and management service, the regulatory body in charge of licencing oil and gas operations. Under the new structure, one body will approve offshore drilling and collect the billions of dollars of royalties, and another will monitor safety and environmental standards. The hearing was the first of a series in Congress into the oil spill.

The most immediate political casualty of the spill in America could be the climate change and energy bill, due to be formally unveiled tomorrow, and earlier versions of which included extensions for offshore drilling.

BP and other industries have acknowledged that the aftermath of the spill could well change future offshore drilling operations in regions beyond America. In Brussels, oil and gas giants operating offshore in Europe were also urged to reinforce security measures in the aftermath of the explosion. "No regulatory regime along can give us 100% guarantees of safety," the EU energy commissioner, Gunter Oettinger, said. "I wish to make sure that ... all possible efforts are made by the industry to avoid a similar accident."