Houston, 27 May 2010

The Deepwater Horizon disaster is clearly a human tragedy and ecological catastrophe. The impacts of the event are being felt along the fishing grounds of the Gulf Coast, in the board rooms of the various companies that drill for offshore oil and gas, in the halls of government in Washington, D.C. and of course, and most deeply, in the homes of the families who lost loved ones in the tragedy.

As with every disaster, there is vigorous finger pointing by all parties involved, each attempting to apportion and/or deflect blame. BP, Transocean, Cameron (the manufacturer of the blowout preventer), Halliburton, the Minerals Management Service (MMS), the Coast Guard, and even President Obama will be forced to assume some level of responsibility for at least some portion of this unfolding event, from the initial blow out, to the continuing and unabated release of crude into the Gulf waters, and ultimately the clean-up and remediation efforts.

Based upon the information that has been released to date, it would appear that this disaster was entirely avoidable. BP and Transocean have both indicated that anomalous pressure test data indicated that the cement job performed by Halliburton had not been successful, not an entirely uncommon occurrence. Despite this information, it now appears that the BP company representative made the decision, over objections by the rig crew, to move ahead with displacing the drilling mud, the first line of defense against a blowout, with seawater in preparation for temporarily plugging and abandoning the well. As the mud was circulated out and replaced by seawater, the hydrostatic pressure was reduced at the bottom of the well, allowing gas and fluids enter around the faulty down hole cement and rise in the well bore, a situation known as a "kick." After the kick was noted, whatever actions the crew took (actions which are still unclear at this point) to bring the well back under control were ineffective. Once the gas and fluids in the well neared the surface, it would have been too late to do anything other than to close the blowout preventer, or BOP—the last line of defense.

Tragically, the BOP failed to shut-in the well despite multiple and redundant safety systems. There is evidence that indicates that the emergency hydraulics that would have provided the back-up energy to close the rams (in the event of an otherwise complete hydraulic failure) had been disabled for some inexplicable reason. Additionally, BP has reported that records indicate that the BOP was not even properly configured with the right type of rams that could have sealed around the drill pipe and prevented fluid from escaping from the annulus, the space between the well casing and drill pipe. If the pipe rams could have been closed around the drill pipe, the flow could have been contained to that drill pipe and the blow out could have most likely been controlled; and the Deepwater Horizon, and eleven of its crew, would not have been lost.

There is little doubt that this disaster was the result of a series of human errors, errors that most likely began occurring prior to the well being spudded. If the right decisions were made and the proper actions taken prior to and during the blowout, the events of that day would have gone relatively un-noticed and the well would have been counted as just another successful effort in the Gulf, just like the more than a hundred other deepwater wells that are drilled in the region every year. Unfortunately, it didn't happen that way and now there are cries for something, anything, to be done to prevent this type of event from ever occurring again. Clearly, the MMS must exercise improved oversight of offshore operations and new regulations may be necessary if it's found that industry standard (and hereto now proven) procedures were either not effective or were not properly followed. Additionally, after a complete and thorough investigation of the accident, every avenue of legal recourse must be pursued against those individuals or companies that were ultimately responsible.

Unfortunately, every industrial process has inherent risks, though oil and gas exploration is certainly on the high end of the scale of in terms of potential impacts should something go wrong. However, wells are drilled and completed everyday and without incident in the waters of the Gulf Mexico and across wide swaths of the continental United States and Alaska. These drilling activities contribute to meeting the needs of an energy hungry country and reduce our dependence on foreign sources of oil. Of the total U.S. production of more than five million barrels a day, about a third comes from the waters of the Gulf of Mexico, California and Alaska. These offshore reserves are vital to the United State's energy security and, despite this tragic accident, must continue to be exploited until economically viable alternative sources of energy are perfected and available.

Ends --

By Patrick Reames,
Managing Director, The Americas, Utilipoint

www.utilipoint.com