Suddenly, Big Oil is big on safety


Big Oil concedes that it cannot yet mount an adequate response to another well blow-out in the murky depths, but promises it will be able to do better six months hence. A year after that, the story goes, a whiz-bang containment plan will be available to deepwater drillers everywhere.

Even if all that it is true, we face the prospect of a very hairy interlude because President Barack Obama’s drilling moratorium expires Nov. 30. But the feds are not about to sit around and do nothing.

They figure, if we are going to court disaster again anyway, the risk is somewhat reduced so we might as well get on with it. Michael Bromwich, who heads the Bureau of Ocean Management, Regulation and Enforcement, says the rigs may be allowed to resume operations ahead of schedule. Bromwich says the moratorium may be lifted early because of the “unprecedented” spirit of co-operation that has seized Exxon, Shell, Chevron and Conoco since the Deepwater Horizon blew up.

Any pretext to lift the moratorium will suit Louisiana just fine, and although the clean-up plan will not be in place, the oil companies have a powerful incentive not to risk a spill in the first place.

Their $1 billion joint venture, Marine Well Containment Corp., shows that the oil industry “gets it or is beginning to get it on oil spill containment,” Bromwich said. Sure, it is heart-warming that companies befouling the seas and the coasts have hit on the idea of a rapid clean-up plan. It’s a shame that a major explosion was required to concentrate their minds, though.

While BP shovels billions into its compensation fund, the decline in its share price since the explosion has cost former chief Tony Hayward and his four fellow executive directors about $45 million. There is no need to shed any tears on their behalf, however. They held shares and options worth more than twice that.

Still, we may be sure that the other oil companies will learn from BP’s travails and adopt a risk-averse approach to deepwater drilling. That will be in sharp contrast to the Deepwater Horizon, where, it seems, the signs of impending catastrophe were plain to see. The only question is whether BP can stick Transocean, which owned the doomed rig, with some of the compensation costs.

Regardless of how that plays out — and Louisiana will not much care who pays, so long as someone does — it is impossible to believe that the derelictions catalogued in a just-released audit will ever be repeated.

According to British press reports of the audit, prepared by BP seven months before the explosion, Transocean had failed to complete 390 “maintenance tasks” on time. The equipment allegedly neglected included the blow-out preventer and the emergency well sealing mechanism. Safety regulations posted on the rig were dated 2002, and maintenance records were missing crucial information. Transocean maintains it is not liable for clean-up costs, but BP says it is, if gross negligence occurred.

Of the 126 workers on the rig when it blew up, six were BP employees. Transocean employed 77, including nine of the men killed. The other two worked for a subcontractor.

Transocean denies any laxity with worker safety, and claims that the backlog of maintenance tasks was overstated because of “a job duplication problem in the conversion of maintenance management software systems.”

As if that weren’t reassuring enough, Transocean reports that “all items identified as critical were addressed immediately” and “the rig was found to be in good condition by a third-party inspector” a few days before the explosion.

We’d better watch out for that guy if the moratorium is lifted.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
Cooper Law Firm

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