‘America Speaks to BP’ Full Transcript: Bob Dudley Interview
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RAY SUAREZ: Hello. I’m Ray Suarez with the PBS NewsHour here at BP headquarters in Houston, Texas. We’re with the president and CEO of BP’s Gulf Coast Restoration Organization, Bob Dudley. He’s agreed to answer the questions of the American people. Our colleagues at Google and YouTube have been collecting video and text questions for the past 24 hours. Mr. Dudley, thanks for joining us.
BOB DUDLEY: Thank you, Ray.
RAY SUAREZ: Well, when we put out the call for our questions, you might have guessed we got thousands of responses. There’s a lot of curiosity about the state of play in the Gulf. We got video; we got text; and we got a lot of people who just came to the site to bolster certain questions that they wanted to be sure would be asked. Selecting one that’s sort of representative from the Gulf, let’s go first to Kirk from Houma, La.
KIRK SHERMIE: Mr. Dudley, my name is Kirk Shermie. I’m a member of the United Houma Nation, which is the state’s largest Indian tribe in the state of Louisiana. We have heard that you are going to make everyone whole. We have 6,000 families in the United Houma Nation that are now out of work because of this spill. Today, I was on Grand Isle on the beach, and normally on the Fourth of July week like this we would have 1,000 people in the area we were. There was not a single person on the beach todaay. How are you going to make everyone whole and at what point do you close the checkbook?
BOB DUDLEY: So Kirk, I was down to Grand Isle two weeks ago and I saw the oil on the beaches and I saw it behind Grand Terre Island and went out to Grand Pass and saw the oil in the marshes where the pelican workers were. I see the devastation that’s down there. We’re going to make good on the claims from individuals and businesses down there.
Anyone who has been impacted like you’ve said should go to the claims offices immediately, file a claim, just have some documentation for it. We’re writing the checks. We’ve written, as of this morning, $138 million of checks. So we are going to make good for it. We put aside $20 billion in an escrow account that will be used to pay claims not only just for now, but as long as the impact is there on your businesses. And that will be not only after we shut the well off, but this cleanup is going to take some time. So it’s not a one-time claim. It’s claims that will go through the months, where your businesses are impacted.
We also realize there’s a seasonality of business down there. And the summer is when – that’s when a lot of the earnings come from. And we’re going to take that into account and try to make people whole. We’re there for the long term. There’s no attempt to cap this. We haven’t capped the well yet. In fact, it’s hard to talk about a limit to claims, certainly before we continue to have this spill in the Gulf.
RAY SUAREZ: You know, those claims can come from an almost unimaginable range of people, and Kirk made the reference to, when does BP close the checkbook. You know, there are places in Florida that haven’t even seen oil yet, but they’ve seen significant dropoffs in their business because of the anticipation that the spill is going to affect it. If you’re a motel owner, can you say to BP, “hey, last year, I had 75, 85 percent of my rooms full; this year, I had 20 percent. I think it’s the oil spill?”
BOB DUDLEY: If you can demonstrate cancelations – there’ll be a track record and a trend line there take that into the claim centers around the coast – we’ve got 33 of those claims centers around the coast. We’re transitioning the claims process to Ken Feinberg, who’s one of the better-known – in fact, he’s probably the best-known independent oversight of our claims process.
He’s coming in with a rigor and formulas of how these things are calculated. It was a little bit beyond our capability to maintain this, because we need that sort of expertise. He’ll be looking at that; he’ll make those determinations. But that’s the intent, is to make sure that businesses that have been impacted are reimbursed.
RAY SUAREZ: Lou writes from Pensacola, Fla., “BP can promise the moon, but in the end, file bankruptcy and skip out on its unpaid obligations. Is BP willing to immediately transfer all the cleanup money, including what it receives from catastrophe insurance carriers to the government now?”
BOB DUDLEY: Lou, I don’t think anybody wants or expects us to do that. BP is a very strong company, in terms of its cash flow. It needs to have that strength to be able to fund these claims. And we’re putting aside $20 billion over four years. We’re going to securitize that with assets in North America. It can still be increased in the future.
One of the things that is important – and the president said it two weeks ago – it is important to have a strong and viable BP. We need to have some certainty for our investments so that we can continue to generate the cash that will actually allow us to make good on our obligations and commitments and claims. I think that’s the better way to approach it.
RAY SUAREZ: But as you mentioned, the oil is still flowing, so your obligations are increasing even as we’re sitting here talking to each other. Lou’s trying to anticipate a moment where it just becomes too much for the company to bear.
BOB DUDLEY: Well, I think – I believe strongly that, that’s not going to happen. I believe that we have given the engineering talent that we have working on it here in the center today there are 100 different companies that are working here around the clock – we will find a way to shut this well off. And then we will continue to devote all the resources necessary, through the Unified Command, with the Coast Guard and the government officials, to clean up the Gulf and restore it to the way it was. And having a strong BP is very important to be able to do that. And it will take years.
RAY SUAREZ: Sam writes from Chicago, “Gulf ecology is surely altered for decades, the effects of which will prove difficult to measure and contentious. What will BP’s guidelines be? How will money be appropriated? When will something be ’caused by the spill’ vs. not? ‘Damaged’ vs. ‘altered?’”
BOB DUDLEY: I’d say to Sam that we’ve got a lot to learn from this incident. There has never before been this volume of dispersant that’s put in the water. That dispersant is doing its job breaking up the oil and allowing the bacteria to eat it. There’s no question that there needs to be baseline measurement of the Gulf now, which has been going on, and we’re funding a $500 million science program – it will be independent science, so that we can continue to measure and learn from and understand what’s happening in the Gulf.
And if those programs show that there are alterations to things, that why we’re committing – an organization that was put in place last week, called the Gulf Coast Restoration Organization. I’ll be heading that up. This is going to be a long-term commitment to doing what we need to to restore the Gulf, measure it, understand it, science. And I think those learnings will not just be for the Gulf of Mexico, it’s going to be for the globe. It’s going to change the oil industry forever. Safety standards need to be understood and increased. We need to take apart the accident, find out what really happened. This is not only a Gulf of Mexico event. This is a game-changing event for the oil and gas industry.
RAY SUAREZ: We’ll go back Houma, La., now, to Michael.
MICHAEL DARDAR: Mr. Dudley, my name is Michael Dardar. I am the vice principal chief of the United Houma Nation. I have seen the cleanup effort in a variety of our communities. I’ve been down to the end of South Pass, the mouth of the Mississippi. I’ve been in places like Bay Baptiste. I’ve been on the beach at Port Fourchon, and what I’ve seen so far is a very disorganized cleanup effort. I’ve seen miles of unattended boom. I’ve seen miles of boom washed up on the bank with no one around. I’ve seen pockets of oil in the marsh with no one there to clean it up. My question is, how are you going to make this cleanup effort more proactive? How are you going to change the dynamics on the ground and make this effort more effective? Thank you.
BOB DUDLEY: I’d say to Michael that the cleanup effort has not been perfect. We have had to respond and allocate resources from Louisiana all the way across to Florida. And we’ve had to do that sometimes very quickly. There have been gaps in the defenses. And you almost have to think about this as an invasion of oil to make sure that you’re ready for it.
We’ve had some devastating pictures, particularly in Louisiana, of the oil that’s got into the marshes. The beaches are easier to clean. The marshes, particularly, they’re very sensitive. They take a long time. We flush them. We even have crews out there to clean blades of grass. But it’s something we have to be very, very careful about.
We see boom that gets washed up because it’s out there, the tides come. The storm that we’re having, actually, today, with Hurricane Alex, has raised high levels of waves all across the Gulf. It’s disrupting the boom. We’re going to have to go back and replace those booms. We’re working with the Coast Guard, who is really the command center for the spill response, which we work with, where we’re going to bring in – go from 500 to 900 skimmers.
We have this it’s interesting – we have this issue with oil. During the evening it moves and we think we know where it is in the evening. And often it at dawn it’s in a different place, it often surprises us.
We also have aerial overflights to get some of the coordinates for where the oil is. Those coordinates are then sent to skimmers and they get out there and they can’t find it. Sometimes it can be only 400 yards away. So we’re going to up the aerial surveillance of these. We’ve going to bring in even airships or blimps in parts of the Gulf, so they can actually direct the ships. We’re learning as we go. It hasn’t been perfect, or you wouldn’t see sights like that. But the effort has really doubled in the last month.
RAY SUAREZ: Is there a system? I mean, you described getting airships in the air, but an intelligent system, a network, so that if the direction of the winds and the water change and oil comes to a new spot on that very long coastline, somebody here – somebody in your shop – finds out about it in good time.
BOB DUDLEY: There’s a nerve center, a command center. It’s called the Unified Command, which – it’s really commanded by the Coast Guard – where BP employees are there as well. There’s representatives of NOAA and government agencies in Robert, La. It was just recently moved to downtown New Orleans.
There’s command centers in Houma and in Mobile, Ala. And then there’s – we’re now transitioning to forward-operating bases, using the military terminology, that will now be in each of the parishes and in Mississippi, Alabama and Louisiana. And we’re setting up, this week, an air center out of Tyndall Air Force Base in Florida to be able to put that real-time oversight to improve what we’ve been doing.
There’s a lot of it that has been captured, skimmed, burned, collected. But it’s these stringers of oil, like the ones that you saw in Louisiana there, that are so devastating. This oil spill is not like a giant pool of oil. It tends to break up anywhere between 10 yards wide and 1,000 yards long, to 50 yards wide and 1,000 yards long.
And then they come in and slip through the defenses and they plow into a beach. Or worse, they get into the back bays and those are the ones that, now, we’re redoubling efforts to try to prevent.
RAY SUAREZ: You mentioned Hurricane Alex. Let’s talk a little bit more about that because just a few yards away from where we’re sitting, there’s a torrential rain coming down, a part of the arms of this storm that came ashore last night. How did it affect your operations and how long will it take to get things back to where they were before Alex came into the Gulf?
BOB DUDLEY: Well, it’s affected it in three ways. One, it sharpened, immediately – as soon as that storm formed and we saw it coming through the southern Caribbean, we put in place a hurricane preparedness system all the way across the Gulf, in Florida, everywhere: where we were going to move the boom, where the buses were going to move out the people. The cleanup people actually have to get out before the local government for their own evacuation plans.
And it gave us an early precision sort of drill if you will, around the Gulf on the beaches. In terms of the storm itself, it has sent 8-to-12-foot waves that have come up from the southeast to the northwest, right through the area where the operations are and the oil. So it has brought in oil, unfortunately, from the panhandle of Florida to Louisiana, right now, at a higher rate that it has been over the last few days.
The waves do not allow us to skim. The booms were ineffective and the dispersant can’t be laid down, so we’re waiting ’til Saturday when the waves come down. And then we’re going to be ready to be back out on the water. Crews have been working in the evening and at night, right now, through these three days, to clean the oil on the beaches.
The third area that’s affected is our offshore containment operation because we are trying to put in place, now, a third flow path for the oil on the subsea, 5,000 feet below. And we need calmer water conditions to be able to keep that equipment in place. So there’s a bit of a delay on that. And I’m hopeful that by around the 8th of July, we’ll have that in place.
RAY SUAREZ: Both government and BP sources were saying that we were on the verge of a new phase in the collection. What has this postponed?
BOB DUDLEY: Well, today, we are producing – we’re collecting roughly 23,000 to 25,000 barrels a day, out of two flow paths. This would be a third path that can add another 20,000 barrels a day. I believe that will collect the majority of the oil.
We are looking at a longer-term containment, which would require us, possibly to – well, we’re planning to bring in larger ships that have something called flexible floating risers that will allow a quick disconnect should a hurricane come, to allow a ship to disconnect quickly and then get back on-stream in a matter of days. Right now, the system we have out there requires us to move off a station a number of days before a storm gets close. Then we have to come back and reestablish it. So we want to get something that minimizes the damage during a storm. That’s my biggest worry, the storms.
RAY SUAREZ: After your boss, Tony Hayward, testified to Congress, it was announced that you were now in charge of the response by BP. What’s changed? There’s this new entity called the Gulf Coast Restoration Organization. Do you still report to Tony Hayward? Who do you work for?
BOB DUDLEY: Well, I am on the board of BP and I do report to Tony Hayward, the CEO of BP. The original intent was to set this organization up at the time that the well was killed. And then we would set up a long-term Restoration Organization. What’s changed is after the meeting at the White House, where we agreed that we would set up the escrow fund, put the assets aside, begin to manage the claims process over to the independent claims expert, Ken Feinberg.
Those activities required a lot of attention. And if anything, everyone should read it as, this organization is a signal to America of the long-term intent of BP to make sure it meets its commitments for many years. It will put a lot of attention on making sure that we get the resources in to the Unified Command, with the Coast Guard. That Unified Command is directed by the Coast Guard. We have people there and we are of course paying for that activity. This should give people comfort that this is not a temporary activity for BP.
RAY SUAREZ: When we talk about the relationship with the federal government, who tells who what to do? Do you tell them what you’re doing, or do you ask them what ought to be done next?
BOB DUDLEY: So we make a series of recommendations, whether it’s on the subsea, or working with the booms and the spill response. The subsea is obviously an area where BP has a lot of expertise. However, Secretary Chu of the Department of Energy, Secretary Salazar at Interior, Lisa Jackson, the National Labs at Los Alamos, Livermore and others are all here in Houston and review every decision.
We have a whole series of engineering options. We review them in great detail. And only after we have, sort of, agreement and their approval do we go forward with significant activities on the subsea.
On the spill response – this is actually not a spill, it’s a leak. It’s an ongoing leak. So we’re plowing new ground all the time here and this is why it’s going to change the way the world looks at these leaks, these spills, in terms of response.
But the Coast Guard does have a lot of experience in the logistics work and the movement of equipment and materials. And that, combined with BP – I think it’s not perfect, but it’s a good cooperation and combination of skills. They do make the decisions on where we allocate the resources.
RAY SUAREZ: Let’s go back to our online audience. Jen writes from Eugene, Ore. “Why are BP staff getting a heads-up when U.S. government officials are going to show up, so that BP can roll out additional cleanup workers to the hardest-hit areas, only to remove them when the officials leave?” Is that happening?
BOB DUDLEY: No, it’s not. And I saw that report about the president’s visit. I actually looked into it myself and said, what was the schedule? We worked through – of course, there’s 40,000 people working on the Gulf Coast on the spill. There’s a lot of subcontractors that work for us and their crews and movements around there are set out days in advance.
I actually checked into that to see if that was, somehow, some temporary piece. It was not. The crews that were there when they rescheduled, they didn’t really even know that the president was coming. He came down on relatively short notice. It may have looked like that because they don’t work right up until dark. There is a period of time when the beach workers work and they left, later, after he left that day.
But there’s no attempt at all to manipulate or put a show on for people. If there was, I mean, we’re failing miserably. We have lots of people that visit and they see, sometimes, where there’s these gaps. And we need to have people out there all the time. But it’s a very large area and it’s not going to be perfect.
RAY SUAREZ: Continuing on the subject of response workers, Brianna from Louisiana:
BRIANNA: “Hi, my name is Ginger Cassady and I’ve been down here in the Gulf for the past week. And I’ve been talking to a lot of locals who are not being employed right now who have asked for jobs to be employed by BP. People have lost their jobs from the oil spill. And my question to you is, when are you guys going to start employing locals here in the area?
RAY SUAREZ: Ginger Cassady with Rainforest Action Network.
BOB DUDLEY: So Brianna, it is our objective and policy to hire as many local people as we can. We’ve put that across all the states, whether it’s Florida, Alabama or Mississippi or Louisiana. We’ve gone back in. We’ve looked at the Vessels of Opportunity program, which is where we hire local boats. We’ve gone through to make sure that subcontractors weren’t bringing in boats from out of the state or sometimes out of counties. We’ve even gone down to the local level to say, what is local for a town such as Venice? It doesn’t mean someone from another part of Louisiana; it means really local.
We put a lot of emphasis on that. There is a limit to the number of people we can employ, of course, because they need to be trained, they need to be out there doing some specialized work. I’ve heard these issues. I’ve been down to Houma. I’ve been down to Venice. I’ve been down to Grand Isle. I hear this. We keep putting strong emphasis and pressure on our subcontractors to make sure there are local people that are hired. We can do better. But I take your point. I’ll go back and continue to push on it.
RAY SUAREZ: Now, how does the system work? If you are a ready pair of hands and you want to get involved, and perhaps your own work has been compromised by this disaster, who do you tell? Who do you ask? How do you get into the system?
BOB DUDLEY: So these – people call them ads, but there’s a set of newspaper ads that we’ve been running and we’ve been doing it in local papers as well, with phone numbers, so it’s a hotline to report, there’s a hotline to make claims and there’s a hotline or information for exactly that. So we direct people to either the subcontractors or ourselves. We’ve made it clear that we don’t want people migrating from other parts of the country to come down and work on the spill which in the early days was an issue.
RAY SUAREZ: You’ve already discussed compensating people, compensating their livelihoods, making up for economic losses. Ashey J. writes from New York about the region itself, the ecosystem. “While BP has set up a compensatory fund of $20 billion for the people, the Gulf region, itself remain unaddressed. Will BP step up and allocate resources toward the setting up of marine reserves and rehabilitation facilities going forward?”
BOB DUDLEY: So, in late May we announced a $500 million fun that we will set up that is to do the science and one of the things that fund will do is look at recommendations for setting up a rehabilitation activities. I think it will also be a fund that will work to increase the capabilities of the research institutes around the Gulf Coast, the universities themselves. We want to make the Gulf and the economy stronger over time as a result of the spill. I know it doesn’t feel that way today. That’s probably the last thing people are thinking, making it even better.
But that’s what these funds are going to be set up to do. We’re going to be administering them independently. We’ll have boards of experts look at it. We undoubtedly go through the process of, where do you prioritize which states. All the states affected have to benefit from this. We’re going to work with the wildlife institutes. I think – I think the world will change along the Gulf, obviously, detrimentally for a while as a result of the spill, but longer term, we want to make it a stronger ecosystem for not only the science, the response, the protection mechanism, longer term.
RAY SUAREZ: There are still differences of opinion, differences in what’s being reported about the extent of the damage. Will it take some time to even know how bad things are when crude sits on the bottom, which there are widespread reports of that being the case now, and basically, it suffocates the ocean floor and kills everything that depends on a healthy ocean floor to live in other parts of the chain?
BOB DUDLEY: I just read the NOAA reports and the joint committees of the government – NOAA, Department of Energy and one other – to look at some of these reports of the plume and the measurements right now. What they’re seeing is a reduction in oxygen levels, but they’re still above acceptable levels in parts where the oil moves up.
And that’s the symptom of the bacteria eating and the bacteria, actually eats the dispersants, as well. It does reduce the oxygen levels. That will be temporary. But in terms of this creating the dead zones, I’m not aware of data that shows that, but that is what the baseline data and the data collection now is going to show. We’re not going to try to hide anything. Everything we’re doing, want to post it and in fact, I think we were posting all this on the websites.
I know the people don’t trust oil companies. It’s been that way for as long as I’ve worked in the industry. It’s a particularly American phenomenon, in many ways. We try to be as open as we can. People have talked about us holding back on the right data. We simply don’t know some of this, though, and we’re working with the government to do it. There’s no attempt to hold back anything on this. If the studies show that, that that kind of damage has been done to the Gulf, I assure you, we will meet our commitments to do what we need to restore it over time.
RAY SUAREZ: Lane writes from San Francisco, “Have all the blowout preventers associated with BP’s other deepwater operations been tested since the big spill? Did they all pass, and how regularly will they be tested in the future to ensure their functionality, when they absolutely have to work?”
BOB DUDLEY: Lane is right. These things have to work. This is the last line of defense. And there’s seven different barriers in this, and for whatever reason, this blowout preventer failed. We – and I imagine like many in the industry, but certainly BP went worldwide looking at all the blowout preventers that we had in activity, went way beyond that, looked at our production facilities and all kinds of safety conditions, again, on all of our facilities around the world.
I imagine that other oil companies will have done the same thing. This is a very unusual incident, this blowout preventer system to fail. It’s about four stories high, 400 tons. The MMS, although they’ve widely been criticized, actually, these pieces of equipment are tested every 14 days in the U.S. This is a very tragic and yet not-well-understood accident.
RAY SUAREZ: Do you have to re-examine the engineering and the original assumptions that were made when these things were put in? Maybe in very deep water, where the water pressures are tremendous, they just work differently from shallower places where you do business and extract petroleum?
BOB DUDLEY: Well, we’ve been drilling in the Gulf of Mexico, in the deep water for 20 years now. So – and this is 5,000 feet of water. There’s actually some wells that are drilled even deeper – 10,000 feet of water. You just never see an accident like this. These have always functioned before and the technology’s gotten better and better and better over time.
However, we now know that something happened – something didn’t work. We need to understand why. We need to then make sure it never happens anywhere, ever again. I think this is going to fundamentally change the offshore oil industry, as it should. We’ll eventually take this off the ground. It will be a piece of evidence, actually, in what will be investigations by the marine board to understand the failure mechanisms.
I believe that the industry will have no choice except to go through – re-engineer these to make them more failsafe. We have, with airplanes, with nuclear power plants – we have a standard of safety which people regard as failsafe, as they need to be. We just had an event now, that is going to make us re-evaluate the oil and gas industry globally, no question in my mind.
RAY SUAREZ: Your company had to make certain assurances to the United States before it was able to extract oil from certain places. While the references to walruses and sea otters got a lot of attention, what should have gotten more attention, probably, is the fact that you assure the United States that if there was a leak of even greater magnitude than is underway now, you would be able to handle it. You’d be able to get that oil up off the surface. Now, you’re struggling, 70-plus days in, to handle even one quarter of the amount that you had said in those filings that you could. What happened?
BOB DUDLEY: Well, like an oil spill – say we have a tanker or a ship that has a spill – it’s a finite amount. It could be a very, very large amount. And you respond. What’s different about this event and any event that’s ever happened, is it’s a continuous flow. And no one anticipated that. No regulations anywhere in the world anticipate that.
No one – because – the reason is, the blowout preventers – you could have had a terrible, tragic accident like we had with the loss of the control of the well – terrible, tragic accident, with a fire, and the rig sank. The controls on the rig where workers can just hit a button and the blowout preventers will close.
Then, if the rig becomes disconnected, the system’s in place, then it closes. Then if that doesn’t work – the unthinkable – then if that doesn’t work, you send down the robots – the remote-operated vehicles – and you manually activate valves to close. That didn’t work. So the number of failures here – and we need to understand why – was, I think, not contemplated by anybody.
RAY SUAREZ: Let’s go back to our questions from our online.
HANK: “My question to you is, do you think this could have happened to any company at any offshore oil exploratory rig, or was there something unusual going on here? And most importantly, what I want to know is, do you think that offshore deepwater oil drilling can ever really be safe? And when I say safe, I mean for your workers and I mean for the environment. Because to me, it seems like it can’t. Thank you for your time.
RAY SUAREZ: Hank in Missoula, Mont.
BOB DUDLEY: Yeah, Hank raises a good point. I think what we’ve learned on this incident is only part of what we’re going to learn through this investigation. It needs to be taken apart forensically – what happened, in terms of equipment failures, judgment of people. There has been a fairly quick, I want to say rush to judgment, but it feels, though, that everything is wrong with what BP has done here. And I think the facts are going to emerge that this was a complex accident with multiple stages. Some will be decisions that were made by very, very experienced people. Some of the equipments will have failed. We need to understand that fully before we determine that.
I believe that offshore deepwater oil and gas is something that – it’s a very tough choice that societies have to make, because the world does depend on energy and oil. Over time, there would be a transition from hydrocarbons, whether it’s oil and gas or coal, to a lower-carbon economy, but it’s going to take time. And a nation like the United States has to make a choice: Can it do this safely until we further engineer and make them even safer and safer? The fact that we have been drilling for 20 years in the Gulf of Mexico without an accident – and BP’s safety record in the Gulf of Mexico has been very good, as one example, as have other companies’. So I believe that the United States will need to get back to a period of producing oil and gas in the deep water.
RAY SUAREZ: But I think Hank reflects a lot of the people who weighed in and sent in videos over the last day. They seem surprised that we’re still here on day 72, 73 – that you guys, at some point, didn’t seem to quite know what to do. There was one response. Then we were told they would know in 48 or 72 hours if that worked. Then after we know it didn’t work, it will take another several days after that to put in place response number two. And everybody learned the lingo and the jargon, top hat, top kill, junk shot – all this stuff. And when none of it worked, there was this feeling like, we thought they knew what to do – how to make this stop. They seem to be as clueless as we are.
BOB DUDLEY: So it’s surprised everybody that this has been taking as long as it has. Right after the incident, we pulled together people – more than 100 companies here – the experts from the government and ourselves and we laid out a parallel tracks of engineering, try to learn what was happening with the well, made sure we did nothing that made it work, because there is a containment – ah, make it worse.
We tried what was the lowest-risk, quickest, easiest way with the first containment dome. We had a problem with hydrates, which was an unusual problem, which created ice crystals, which started to float it off. We learned from that. And at that time, we also had six other options that we’re working our way through, which we’re doing today. So we learned. We learned, we alter and then we do. Right now, we’ve got an option – relief wells that are coming down. There’s two of those. We’ve got options beyond that, that we’re planning today. We’re dealing with this as best we know how. We’re not making it up as we go along, because we have the absolute best engineering and science minds in the world working on this. It’s just a very unusual problem that we’ve never faced before.
RAY SUAREZ: Kurtis writes from Vancouver, British Columbia, what’s your alternative plan if the interception of the relief wells fails? How much longer could Americans expect this unprecedented disaster to be prolonged?
BOB DUDLEY: So we’ve got relief wells that have come down, now. We’ve got two of them that are being drilled. We had a major success just two days ago. One of the most difficult things is coming down with the relief well and locating the first well. We’ve not come down and done some electromagnetic ranging. We are now running parallel, only 20 feet away, from the well. We need to drill down about 600 more feet, put casing in there and make it very solid. And then we’ll be able to enter the other well – the original wellbore.
If we have a problem with that, we have a second one coming down. With drilling relief wells, there’s nothing guaranteed, but it is technology that we know how to do and have done before and is more common in the world. If those don’t work, we’re now working with the government on another series of options to be able to direct and divert flow from the well. And we’re not far enough along to describe them, and it’s really up to working with the government to think about what the options are, but there are at least two other options to divert the flow.
RAY SUAREZ: The oil that you’re collecting, how come you have to burn some of it instead of loading it onto ships and taking it somewhere? At least if it’s not going into the Gulf, it can be oil somewhere.
BOB DUDLEY: So I don’t know if you’ve seen the photographs of the site itself, but there’s about five, six major vessels out there. There’s skimming vessels moving around; there are the supply boats. We’ve got simply the problem of not being able to put a very, very large vessel in there, in the middle of that city of activity. So we’ve got a series of vessels in there that can take the crude.
We lighter it off, which means we bring in smaller ships and pump it in and shuttle it away. But there’s simply a space limitation, and one of the vessels has a big flare on it. We always burn the gas, as well. So you have heat problems. And so it’s a space limitation over this well. It’s quite extraordinary the amount of equipment and men out there. And we’re constantly watching and maneuvering this, so there’s more than 1500 men out on the vessels working. Make sure they remain safe.
RAY SUAREZ: But space limitations again – there was assurance to the federal government allowing to drill in the first place. If you’re having space limited problems with the amount you’re pulling up from the bottom now. How are you ever going to collect four times as much oil in the event of a major discharge?
BOB DUDLEY: Well, the original spill was the assumption that major event discharge that spread out and then we responded. What no one anticipated was the need for two relief wells, three large vessels to contain and capture flowrates. It is something that no one envisions. If you talk to people in the industry, it is a remarkable response. An logistics and engineering effort to bring them all together in that space. No one anticipated that. There’s no plan in the world that that would have ended that and we’ve had to put together systems that normally take a year or two to engineer in really a month.
RAY SUAREZ: N.L. from California sent us this note. “What do you think of the attached video. How does it compare to your current efforts to suppress the oil spill?”
RAY SUAREZ: That’s been viewed 8.5 million times. I don’t know if you’ve seen it already. I suspect you have.
BOB DUDLEY: Well, I haven’t seen it. But people a with BP talk about it. Everyone, it makes their shoulders go down. They feel terrible about what’s happened. It’s an unusual way to talk about what is a very painful thing for people. And I think it’s deeply affected people at BP. They – not only this but just what’s happened on the beaches themselves.
It’s a company where people get up in the morning and for years have felt that they were – and feel that they are working for a company. And they go to work every day thinking they are doing some good. They want to bring energy to people. They want to do it in a safe way, a clean way. The company puts a lot of emphasis on solar and wind projects. It’s a very proud company of people.
So what’s happened here has shaken people. They’re quieter, they’ve very thoughtful. But they really are part of the fabric of America and they just feel bad. And I think videos like that, the expressions of pain and outrage at what’s happened are everywhere. And that’s a lighter way that people have put it. But it’s the same message. This is just not good.
RAY SUAREZ: Anthony writes from Hoboken, New Jersey, “At the hearing before Congress, Tony Hayward was evasive about the recklessness of how BP does business. BP violations greatly outnumber those of other oil companies. Why would you continue to violate rules again and again that led to this disaster?”
BOB DUDLEY: Well, if you look at the number of violations, this really results – starts to result as a tragic accident that BP had about five years ago in a place called Texas City, a refinery. And that has led to a number of violations, a large number of the violations.
RAY SUAREZ: So are you saying that the Texas City refinery led to charges for retroactive offenses?
BOB DUDLEY: Well, no. The violations that have and it took a number of years to go through that Texas City process. And there were a particularly large number of violations around that one incident.
And as a result of that accident, it shook the company up. The new management of the company who put in place the – almost the drive in the company about safe and reliable operations – became the way we started every meeting. That was the way we sat down and planned every project. This was just sort of getting itself deeply ingrained in the company. And that’s what’s so tragic about what’s happened now.
Given the size of BP, which is the largest oil and gas producer in the U.S. – there are other projects that you read about and hear about – there is nowhere that I believe that there was a systematic lack of emphasis and attention to safe and reliable operations for our people and equipment. That’s why it’s particularly difficult to watch what’s happened on this accident. But in terms of attention and lack of attention to safety, it’s just not our culture. It was very, very strongly built into what we do in the management systems of the company.
RAY SUAREZ: Yet there’s been pretty intense criticism of the way the company has handled itself in its dealings with the public, the tone, the messaging, the way it was explaining what it was doing – even whether or not your boss was participating in a yachting competition while people were watching that famous widget online with endless amounts of oil and gas pouring out of the floor of the Gulf of Mexico.
BOB DUDLEY: Yeah, I think our image – regardless of whether some statements were made that have created that image – until we shut the well off and we stop the oil leak and we get well into cleaning and clean up the beaches, I think – I know that BP’s reputation is just going to be scrutinized terribly, as it should be.
One of the reasons for setting up this Gulf Coast Restoration Organization is to try to send a signal to the country and the governors and the administration that, hey, we’re here for the long term. There’s no one going to cut and run in terms of BP containing its liabilities. It’s pouring resources and people into this. I hope down Ray, I hope down the road there is a story to be told about, you know, actually it’s a terrible, terrible accident that happened. And I do believe it could have happened to, I would say, any company, you know companies in the oil and gas industry. But people say, well, you know, actually they did step up right away. They didn’t try to hide behind the laws. They did set up the claims programs within weeks, that it will be regarded as quite an unusual corporate response.
I know it doesn’t feel that way now. But I absolutely believe that this is somewhat of an unprecedented corporate response. Nobody wants to hear that now. But I hope someday that people will see that. If this had happened to a company with less resources, I don’t know where this would have gone.
RAY SUAREZ: In this big complex of buildings that we’re sitting in, I’m bound to guess that there are whole departments that sit and pore over regulations, that file voluminous permitting documents and do negotiations for explorations sites and extraction sites. Are you anticipating, are you expecting, and already factoring it into the cost of doing business that you’re just going to get extra scrutiny for a while?
BOB DUDLEY: I think that’s right. And I think that’s not an unreasonable thing to expect. And I think what we need to do as a company is absolutely go back again and again and again and review our safety processes, our management processes, to make sure that we are in fact judged to a higher standard. And I expect that.
RAY SUAREZ: Gail writes from Seattle, Washington, “is BP soliciting suggestions from experts outside the company and the oil industry in trying to stop this catastrophe? How are solutions evaluated? Are solutions that do not allow for oil to still be captured seriously considered?”
BOB DUDLEY: We have – I was just visited with a group yesterday. We’ve received more than 110,000 suggestions and ideas for next steps, whether it’s engineering or collection or cleanup. We have in this building here, we’ve got 40 people who screen and categorize and screen them, look through them. And there’s been, out of 110,000, it’s been less than 1,000 that are – as many as 1,000 of those we have looked through, taken to the next step. We do the contracting with companies themselves. We had an event on the coast -
RAY SUAREZ: So some of them were of the type that people looked at and said, we didn’t think of that.
BOB DUDLEY: That’s right. They’ve been primarily on the cleanup and the spill response rather than the subsea engineering because, quite frankly, there’s such a tremendous amount of pressure data and historical data that we’re reviewing in great detail with the U.S. government and the national labs. And so the Department of Energy and Secretary Chu and his team – but it takes a great deal of time – have provided many suggestions that we’ve put in place.
One of them was the ability thorough some new equipment to go down and gamma radiography. And we’ve been able to X-ray the blowout preventers and helped us make decisions based on that as an example. Most of the suggestions that we’re implementing regard the spill response and cleanup.
RAY SUAREZ: Max writes, “What’s your reason for using private security to prevent reporters from talking to cleanup crew members? And what incentives are you giving your employees to stay silent or to the media to prevent them from discussing these suppression efforts?”
BOB DUDLEY: Well, this is a bit of an urban myth. We have a policy that anybody who is working on this has the right to talk with the media. And there is no suggestion that they can’t. But it persists and I’ve seen some of the tapes which show people that say we can’t because BP won’t let us talk. Just today, we have made an announcement and given all of the contractors and the subcontractors and the BP people pocket cards that has our media policy. And if anybody wants to question it, there’s the card.
Now, nobody is obligated to talk to the media. And a lot of people don’t feel comfortable or don’t want to. But in terms of a response by BP, it’s just not a problem. And we have also, Ray, 400 media and journalists that are embedded in the spill response organizations as well.
RAY SUAREZ: Jim Z. writes from Ann Arbor, Mich., “How is BP going to help the local small businesses that have BP-branded stations that are feeling the customer outrage? Will BP release station owners from their franchise contracts?” And certainly, that’s one of the ways that people far from the Gulf engage, encounter BP every day, their local network of stations.
BOB DUDLEY: Yeah, Jim raises a good point. Around the country, it varies depending on where you are in the country. There are some places where they’ve organized some boycotts. It’s a shame because these are independent franchise owners. We’re looking at this now. We want to make sure that, one, that our franchise owners which have the brand have full information of what’s happening. Try to allow them to be able to respond and communicate.
I can’t tell you what exactly the planning here is on the franchise owners. I can find out. But right now, I’ve mainly been working on the Gulf Coast itself.
RAY SUAREZ: What have they been telling the company? Are they feeling it out there?
BOB DUDLEY: It depends on the geography you’re in. Some of the geographies have been particularly difficult. And sometimes, it’s particular cities themselves. Some, the business hasn’t been affected. But it is not right and it is sad for those that are independent franchise owners that happen to carry a brand, a brand they were proud of. And this has happened and it’s affected their business. And you raise a good point. I’m going to go back and speak with our refining and marketing team to find out how they’re responding.
RAY SUAREZ: One viewer asks, “Is it true that warnings were raised as long as a year before the Deepwater Horizon disaster that the area of seabed chosen by the BP geologists might be unstable or, worse, inherently dangerous?”
BOB DUDLEY: Well, this is an area, Louisiana and the Deepwater where there’s many wells have been drilled. There’s nothing particularly unique about this well. And in terms of the unstable seabed, that’s not contributing in any way that I know of to this accident. This is not an unusual well, other than what’s happened with it. But in terms of its uniqueness, I think that’s a myth in terms of the sea bed.
RAY SUAREZ: And reports that I’ve read that there are fisheries nearby where there is ancillary oil that’s now leaking onto the ocean floor?
BOB DUDLEY: I’ve seen some of those reports. We’ve actually taken the ROVs and looked around to see if that’s right. That persists. Those are – I saw a Russian report that said that the seabed was permanently fractured and that there were submarines down there that knew that.
I mean, there are some pretty unusual reports out there. But there is no evidence at all about a fractured seabed and uncontrollable oil.
RAY SUAREZ: We got a lot of questions about COREXIT, the dispersant. Sonya asks, “Given all of the information on the toxicity of the COREXIT and the directives from the Environmental Protection Agency and the United States Coast Guard, why is it still being used?
BOB DUDLEY: So COREXIT is a dispersant that’s approved by the EPA. It has been used for a long time in the Gulf Coast. It’s been – I’ve been told that it’s one of the common dispersant that has been used by the Coast Guard for more than 20 years in the Gulf Coast. The toxicity levels – many things have a toxicity level, including dish soap. So there is a toxicity level to it.
It’s not far off of the toxicity levels of dish soap. And the lab tests show that. What it does is it takes the oil, breaks it into very, very small droplets which then increase the surface area. And the warm water has a lot of bacteria that can do its work and eat it. And that’s what it’s designed to do. That’s working.
But Sonya is correct. Nowhere in the world have we ever had this amount of volume for this period of time being put in the water. So it’s an unknown; we don’t know.
RAY SUAREZ: Well, that’s really the nub of the problem, isn’t it, that instead of having an incident where there is a finite amount of that then needs to be dispersed, we have more oil every day, day after day. And you might have to calibrate your response in a different way because you can’t keep dumping COREXIT into the water.
BOB DUDLEY: The tradeoff that is being made, really by the U.S. government regarding this, because we’ll do whatever they suggest we do. But the trade off of using dispersant on the oil that way which degrades it faster versus having black oil on the surface that then sweeps into the beaches and the marshes, that’s the tradeoff that’s being made here. So the tradeoff is that actually that dispersed oil will be better for the ecology and the gulf than having the black oil hit the beaches and marshes. And that’s the difficulty we have.
RAY SUAREZ: Gabriella asks from St. Louis, Mo., “The combined toxic burden of the spilled oil and the chemicals will cause long term illness in a potentially large number of people. Is there a plan in place to reduce exposure risk now and taking care of the sick and incapacitated in the long run?”
BOB DUDLEY: Well, it says ‘will’ as I think when you speak to people in the U.S. government, they don’t know that. I think that’s – we don’t know. We actually don’t know. Again, I would come back to the dispersant. The volumes are large. It’s something that we don’t know yet because it has never been done at that stage.
But it’s also not a high level of toxicity. So we just don’t know. We will measure it. We will work with health officials – we already are – today; We’re base-lining all kinds of activities around the Gulf Coast – the government is -so we know if it has that sort of impact. It’s too early to say, but we will know. We will learn and we will respond.
RAY SUAREZ: This brings us full circle, in a way, to where we started. And that is trying to get a universal number, the size of the liability. There have been chemical releases and fouling of soil and water in all kinds of industries and all kinds of places where many of the claims don’t come online until long after the initial event. And the company is still asked to assume some liability for this.
When you’re trying to do that and have some predictability as a business, how do you do that?
BOB DUDLEY: Well, I think the first level of uncertainty is being able to stop the leak because as long as that leak is going, in many ways it’s sort of an infinite problem; there is no way to stop it. So we get the leak stopped, then we clean up. There’s a lot of discussions about lack of transparency on rate. I have no doubt that we will study that and give all the data we have to everyone and a fine will likely be assessed to the company.
But being able to put some range on liabilities for a company like BP to make sure that they can plan its portfolio and – well, certainly we’ll have to sell some assets around the world to be able to be sure that we meet these commitments over time – is important because investors need to know that the company, one, is going to do what it said it was going to do. It has a way of seeing that the company can remain strong and viable with cash flows, meet these obligations and still grow is a very, very careful balance.
It’s in no one’s interest to see a company like BP not be strong enough to meet these commitments. And that’s part of what I’m going to be doing in the United States. That’s part of what BP’s management in London will be doing, is looking at how can we meet the commitments, stay a viable business, still attract investors, get back to the point where you can pay dividends to investors and it’s an aspiration. No question that coming out of this half a decade from now a stronger company, that people will look back and say, yeah, they did the right thing.
RAY SUAREZ: But even if you don’t put a foot wrong from now on, aren’t there going to be people in 2019 and 2023 and 2026 who come along and say, I ate fish from the Gulf or I worked around the materials; now I have nerve damage; now I have liver cancer. Is there a way to make the unpredictable predictable enough so that it doesn’t put a permanent brick on your business – because your share price has been battered in the last couple of weeks.
BOB DUDLEY: So there are very few analogies to this, but I’ll take one that American people are certainly aware of; it’s with the Exxon Valdez. It happened 21 years ago. Many of those claims and the suits – I think only ended this year in terms of finality to a degree with that event. I think that this one will go on for a long time. I mean, Exxon is a strong, viable American company today. What we need to do as a company is plan, anticipate – put funds and moneys aside so we can meet those liabilities and commitments and still steer a business that can be allowed to thrive in the future. And I don’t think we have any choice except try to find that right balance of meeting commitments and having a viable business.
RAY SUAREZ: MSabby writes from Oklahoma: “Why are the updates posted on the BP website vaguely worded? The live video feeds intended more to mollify than to inform in a meaningful way when there is not enough detailed, specific, concrete information about what we see there.”
BOB DUDLEY: So, Why I say to Mr. Sabby is that if they’re vague I’m going to go back and I’m going to talk to people and say, you know, sharpen them up and be clearer. I’m not sure exactly what he’s referring to. We have had a camera there looking at the area of the spill that’s coming out of the valve from the very beginning. But then there is about 14 robots down there and sometimes they move off; another one is in place; there is maintenance that needs to be done. We’ve had well operations where I’m sure some very strange things are happening on the screen and people can’t follow up. And we talked about that.
So, in the coming weeks, as we do additional things around that well head and change the flow, we are going to try to put in there sort of a bubble caption of what people see, how they are seeing it. We’re even talking about one of our engineers maybe having a verbal way of sort of saying, here is what’s happening now – because we realize it’s confusing.
RAY SUAREZ: And I’m glad you brought up that camera, because people have talked about being riveted by that image. And I’m wondering if maybe the company thought it was a good idea on day seven, eight or 14 when you thought you were going to take control of this thing. But now, in days 70, 71 and 72, it’s as much a blessing as a curse that people can still see that gusher coming out of the surface of the Gulf.
BOB DUDLEY: And it’s a good reminder for us, too. We see it and it puts a sense of urgency on everybody. You know, the age, here we are in 2010, the insatiable appetite for information, explanation, the almost instantaneous desire for this and knowing that, that’s why we put it out there. We knew that it was going to in some ways make our life more difficult in terms of, we were going to have to apply a lot of attention now to explaining what was happening. And we do. We put that out there.
The video feed division in the Department of the Interior, Department of Energy and Coast Guard and ourselves in the early days, and then we were asked to put feeds in to members of Congress and we’ve done that. People have said, well, we haven’t provided high resolution enough video. And we haven’t always been this quick to respond on those things. But we’re not hiding anything.
And we do not have huge staffs of people to respond to all of the information requests – but we’re trying and doing the best we can with this.
RAY SUAREZ: Bob Dudley is the president and CEO of BP’s Gulf Coast Restoration Organization. He has joined us at BP headquarters in Houston. Mr. Dudley, thanks a lot.
BOB DUDLEY: Thanks, Ray. Thank you for being here.
RAY SUAREZ: And thanks for joining us in this unique collaboration between the PBS NewsHour, YouTube and Google, your questions from around the country and around the world put directly to Bob Dudley. From Houston I’m Ray Suarez from the PBS NewsHour. Thanks for joining us.