4th UPDATE: Companies, Lawmakers Level Blame At Oil Hearing
By Siobhan Hughes and Corey Boles
Of DOW JONES NEWSWIRES
WASHINGTON (Dow Jones)–Irregular pressure readings, limitations in some testing and deference on decision-making preceded last month’s deadly oil-rig explosion in the Gulf of Mexico, according to new details emerging from testimony by oil company executives before the U.S. Senate.
The testimony added to the picture of the accident on the Transocean Ltd. (RIG) rig, which BP Plc (BP) was leasing in order to drill an exploratory well with the help of Halliburton Co. (HAL) employees. But a big question about whether procedures took place in the correct sequence remained unanswered, as officials said that none of them was familiar with the federally approved plans for drilling an exploratory well that was located one mile below the ocean’s surface.
BP America President Lamar McKay told the Senate Environment and Public Works Committee that “there were anomalous pressure-test readings” in an exploratory well that was drilled into the ocean floor before the explosion. Last month’s blast has caused an oil leak that has been spewing 5,000 barrels of oil a day into the sea for roughly three weeks.
Halliburton safety chief Tim Probert, whose company was cementing a pipeline into the hole bored into the sea floor, said that only a particular type of test could have determined the effectiveness of the cementing, but that test wasn’t conducted.
Probert also said that the explosion occurred before Halliburton had installed a final cement plug in the well on the ocean’s floor, at a time when workers had begun replacing heavy mud that had exerted pressure on the well with lighter seawater, a sequence that some people have called into question.
Probert said he wasn’t sure how common it was to remove the heavy mud before installing a cement plug that is the final barrier put into place to guard against blowouts. That prompted Sen. Jeff Sessions (R., Ala.) to angrily respond: “You do this business, do you not? You’re under oath, I’m just asking you a simple question.”
The hearing came as the Obama administration’s Interior Department announced plans to reorganize the Minerals Management Service, which currently is responsible for both safety oversight and collecting revenues from oil and gas leasing on federal lands. Interior Secretary Ken Salazar, responding to criticism about the potential for conflicts of interest, said the agency would be split so the two functions would be separated.
Senate Environment and Public Works Committee Chairman Barbara Boxer (D., Calif.) questioned BP America’s chief on why the company said it foresaw no problems when it requested government permission to drill earlier this year. She also asked why Halliburton steered clear of testing the cement “unless they ask you?”
Under repeated questioning, Prebert allowed that “we would feel an obligation if we felt that the integrity of the cement was in question.”
As companies and lawmakers assigned blame, Senate Energy and Natural Resources Committee Chairman Jeff Bingaman (D., N.M.) said that multiple factors were at work.
“At the heart of this disaster are three interrelated systems–a technological system of materials and equipment; a human system of persons who operated the technological system; and a regulatory system,” he said. “These interrelated systems failed in a way that many have said was virtually impossible. We need to examine closely the extent to which each of these systems failed to do what it was supposed to do.”
BP’s McKay, questioned repeatedly about the oil company’s plans to pay for costs related to the spill, said BP would pay all “legitimate” claims. But he said that “claims have to have some basis, have to have some substantiation.”
Senators also said the oil industry and regulators weren’t prepared when disaster did strike. Speaking at a later hearing in the Senate Environment and Public Works Committee, Sen. Arlen Specter (D., Pa.), said oil companies could have had a containment dome, which BP is now trying to lower onto the leaking well to collect runaway oil, “ready for the spill rather than building one after it happened.”
Sen. Lisa Murkowski (R., Alaska) questioned why tests on using chemical dispersants underwater hadn’t been conducted before the spill. BP is using dispersants to break up the oil on the ocean’s surface, but it has suspended the use of underwater dispersants pending the outcome of Environmental Protection Agency tests.
Halliburton was performing the cementing work, which involves filling up a space between the hole bored into the sea floor and the casing inserted into the hole. Transocean Chief Executive Steven Newman testified that “the one thing we know with certainty” is that in the blast “there was a sudden, catastrophic failure of the cement, the casing, or both.”
“I agree,” F.E. Beck, a petroleum engineer at Texas A & M University, told the Senate Energy and Natural Resources Committee. But he said that the wellhead casing “is also suspect.”
BP has been unable to activate a blowout preventer, equipment made of up heavy-duty valves that can shut of the well as a last resort. Lawmakers questioned whether such equipment is subject to enough testing.
“Why is it that the testing always seems to pass, and yet when it was needed, it failed?” asked Sen. Bob Menendez (D., N.J.).
-By Siobhan Hughes and Corey Boles, Dow Jones Newswires; 202-862-6654; siobhan.hughes@dowjones.com
Reference : http://online.wsj.com/article/BT-CO-20100511-719944.html?mod=WSJ_latestheadlines
