Oil Spill Commission Roundup: 'A Failure of Management'

The presidential oil spill commission has released one chapter of its final report focused on one aspect of the calamity:

Most of the mistakes and oversights at Macondo can be traced back to a single overarching failure-a failure of management. Better management by BP, Halliburton, and Transocean would almost certainly have prevented the blowout by improving the ability of individuals involved to identify the risks they faced, and to properly evaluate, communicate, and address them. A blowout in deepwater was not a statistical inevitability (p. 90).

As BP drilled the well, its focus was on maximizing profits, the report says, not necessarily on safety or preventing a gusher:

BP engineers focused heavily on the biggest challenge: the risk of fracturing the formation and losing returns (p. 100).

But, the report says:

The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again (p. 122).

Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur (p. 123).

In light of that, environmental groups are furious about the failure of the Senate last year to increase the federally mandated total liability that oil companies should have to pay for such disasters. "We have allowed the privatization of profits by major corporations in offshore oil developments, while we've allowed the socialization of the liability," National Wildlife Federation President & CEO Larry Schweiger said late last night. "We've transferred to the society the risk of these developments by capping the liabilities at $75 million. That's incredibly small for such a large disaster as this. It's probably going to reach somewhere around $16 billion in total liability."

Meanwhile, Oil and Gas Journal summarized the responses to the report from BP, Halliburton, and Transocean, the three companies involved with setting up the well and drilling it:

BP said in a statement that the release largely adopted the preliminary findings by the commission's chief counsel that the accident was the result of multiple causes by multiple companies. The multinational oil company said it has instituted significant safety and risk management improvements already, and that it is working with contractors and regulators to improve deepwater drilling operations and contractor services.

Halliburton said in its statement that the chapter acknowledged that cementing an oil well is an inherently uncertain process where things can go wrong even under optimal conditions. But the company added that the commission "selectively omitted information we provided them in response to their numerous inquiries." The oil field services company disagreed with the report's characterization of February and April foam stability tests, and noted that the report acknowledged that Halliburton operated under BP's direction and that the well operator put constraints on the well's cement design.

Transocean, meanwhile, said in its statement: "Consistent with industry standards, the procedures being conducted in the final hours were crafted and directed by BP engineers and approved in advance by federal regulators. Based on the limited information made available to them, the Transocean crew took appropriate actions to gain control of the well. They were well trained and considered to be among the best in the business."