(Another) Disaster in Waiting: Whistleblower Calls for Immediate Shutdown of BP’s Second-Largest Gulf Oil Platform

It’s hard to imagine how BP’s reputation in the Gulf of Mexico could get any worse, but a hearing in federal court in Houston yesterday proved that anything is possible.

A whistleblower, by way of his attorney, has warned the federal government that if BP’s Atlantis oil platform – the oil giant’s second-largest Gulf producer – is allowed to continue to operate under current conditions, it could result in a “catastrophe at any time” and it could “dwarf” the Deepwater Horizon disaster.

To provide some geographic context, as far as catastrophes go, the Atlantis (see photo below) is operating roughly 150 miles south of New Orleans, which puts it about 100 miles from the spot where BP’s Deepwater Horizon rig exploded and sank to the seafloor in April 2010, triggering the release of more than 200 gallons of crude oil.

Photo credit to Bloomberg

The Atlantis lawsuit, initially filed in 2009 by a former BP-contracted “project control supervisor,” is as much about incompetence of federal regulators as it is about BP’s alleged safety violations. The case represents all that is wrong, and increasingly dangerous, with the way drilling and production processes bumble along in the Gulf of Mexico.

From a March 19 Bloomberg report by Laurel Brubaker Calkins and Margaret Cronin Fisk:

BP Plc’s (BP/) Atlantis platform, its second-largest oil producer in the Gulf of Mexico, should be shut down until it’s proven to comply with U.S. safety and environmental laws, a whistle-blower’s lawyer told a judge.

BP misled U.S. offshore regulators to win operating permits for the platform, located about 150 miles (240 kilometers) south of New Orleans, according to the whistle-blower. The facility produced an average of 60,000 barrels of oil daily last year and is capable of producing as much as 200,000 barrels a day, according to data on London-based BP’s website.

“Atlantis is presently not fit for service under normal engineering standards,” David Perry, a lawyer for Kenneth Abbott, a former BP contractor, said at a hearing today in federal court in Houston. “We ask the court to take action to oversee remediation to make it fit for service.”

It would seem that BP’s “renewed” commitment to safety and our federal government’s commitment to more rigorous oversight – on the heels of the worst oil spill in U.S. history – are being exposed as a fraud. We’re getting a look behind the scenes at another BP operation, and what is being revealed is frightening indeed. The jig appears to be up, again. More from the Bloomberg report:

Perry told [U.S. District Judge Lynn] Hughes there’s a specific pressure-relief valve “that is protecting a 16-inch pipeline” connecting Atlantis to shore and “that is undersized by a factor of 20 to 1.” A failure in that valve “could cause catastrophe at any time,” Perry said.

…Abbott, who worked as an engineering documentation supervisor on Atlantis, testified before the U.S. Congress in June 2010 that almost 90 percent of the facility’s design and construction drawings weren’t approved by licensed professional engineers, as required by regulators. BP lied to regulators about its engineering certifications to obtain operating permits for the platform, Abbott’s lawyers said in a March 15 filing.

According to Mr. Abbott, a valve failure on the Atlantis could result in a spill that would “dwarf” the size of the 200-million-gallon Macondo release.

Mr. Perry pointed out in the hearing yesterday that the engineering issues aboard the Atlantis are pervasive and he cited past “well-control lapses.” More from Bloomberg:

Perry said today that a BP “service and operations audit,’ which is under seal in the case, showed that 150 of 500 pressure relief valves on Atlantis never received proper sizing calculations to determine if they were the right size. Some of the valves were “under-sized by very large amounts,” Perry said.

…Atlantis has already experienced multiple well-control lapses, during which subsea well valves opened and closed on their own and platform operators temporarily lost the ability to control some wells, Perry said today. Abbott has accused BP of hiding this information from Interior Department regulators to keep production flowing from Atlantis.

Although the allegations were first leveled in 2009, the same dangerous situation exists today. Nothing has been done to rectify the problems, leading Mr. Abbott to ask Judge Hughes “to move quickly to halt production and appoint a special master to oversee measures to ensure the platform is brought into compliance.”

Of course, BP denies all wrongdoing. Shocking, I know.

But all the refutations, however emphatic and indignant, cannot gloss over the fact that BP has been a serial offender when it comes safety violations, particularly (believe it or not) where valves are concerned. From the Bloomberg report:

Abbott’s lawyers have told Hughes he shouldn’t take BP’s word that Atlantis is safe given the company’s track record, which includes the Deepwater Horizon blast, which sparked the largest offshore oil spill in U.S. history. They also called Hughes’s attention to BP’s largest Gulf oil platform, Thunder Horse, which almost sank in 2005 after an improperly installed valve allowed hurricane storm water to pour into the floating platform’s ballast tanks instead of out.

“Thunder Horse was designed and fabricated by the same Korean shipbuilding firm as Atlantis, a firm BP admits does not employ registered professional engineers,” Watts said in court papers.

Photo credit to the Wall Street Journal

This case also brings into stark relief just how insulated, nearly impregnable, the inner workings of such industry operations are way out in the middle of the Gulf of Mexico. It is not uncommon, when a whistleblower exposes safety violations on a particular rig or platform, that the same regulators who overlooked or missed lapses are assigned to investigate whether the allegations have merit. Needless to say, those regulators don’t have much incentive, unless they’re desperate to make themselves look bad.

More from the March 19 Bloomberg report:

The U.S. Interior Department in March 2011 said that BP’s deficiencies in documentation for the platform posed no “serious” safety risks, following its investigation of Abbott’s allegations.

“Although we found significant problems with the way BP labeled and maintained its engineering drawings and related documents, we found the most serious allegations to be without merit, including the suggestion that a lack of adequate documentation created a serious safety risk” on the platform, the Bureau of Ocean Energy Management, Regulation and Enforcement said in an e-mailed statement March 4, 2011.

Abbott’s lawyers asked Hughes to exclude the agency’s investigative report, which they said in court papers was “obtained by fraud.”

The Interior Department regulator assigned to lead the Atlantis investigation “was appointed to investigate his own conduct, and he is now BP’s witness to the safety of Atlantis,” according to the March 15 filing. “His training was to rely on BP’s certifications without verifying their accuracy. He and his inspectors never discovered the major safety violations now documented.”

In addition to Mr. Abbott demanding that the Atlantis be brought into compliance with federal environmental and safety standards, he has also sued BP for $7.8 billion, “which he estimates is the value of oil and gas BP has pumped through Atlantis since the facility came online in 2007.”

Read the Bloomberg report by Laurel Brubaker Calkins and Margaret Cronin Fisk here: http://www.businessweek.com/news/2012-03-19/bp-whistle-blower-seeks-shutdown-of-atlantis-in-gulf-of-mexico#p2

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