Translating executive-speak in the Gulf oil spill hearings

Executives from the three companies involved in a drilling rig explosion in the Gulf of Mexico three weeks ago did their best to deflect blame for the incident at a Senate hearing on Tuesday.

The leaders of BP, Transocean and Halliburton all expressed their corporations’ commitments to safety and sustainability, and promised to undertake thorough investigations of the spill. Each read from carefully prepared statements directing culpability for the blowout, which is now spewing more than 200,000 barrels of oil a day into the waters along the Louisiana coastline, at one another.

In an effort to dig beyond the sound bites and political posturing, Need to Know listened to the hearings and translated key portions of each executive’s testimony.

Lamar McKay, President, BP America

“BP is one of the lease holders and the operator of this exploration well. As operator, BP hired Transocean to conduct the well drilling operations.

Transocean owned the Deepwater Horizon drilling rig and its equipment, including the blowout preventer. … We are looking at why the blowout preventer did not work because that was to be the fail-safe in case of an accident. … The systems are intended to fail-closed and be fail-safe; sadly and for reasons we do not yet understand, in this case, they were not. Transocean’s blowout preventer failed to operate.”

Translation:

We’re doing our best to figure out why Transocean messed up. The piece of equipment that was designed to prevent just this sort of catastrophe didn’t work for some reason, and that reason may well involve negligence on the part of the owner, which happens to be Transocean and not BP. We’ll pay up for now, but soon we’re going to figure out why Transocean’s “blowout preventer” failed to, you know, prevent a blowout.

Steven Newman, President and CEO, Transocean

“All offshore oil and gas production projects begin and end with the Operator. When the Operator (in this case, BP) leases a parcel of land on the outer continental shelf (OCS) from the U.S. government, it must prepare and submit detailed plans specifying where and how a well is to be drilled, cased, cemented and completed based on its interpretation of propriety data, including geologic data from seismic surveys. … [T]he one thing we know with certainty is that on the evening of April 20, there was a sudden, catastrophic failure of the cement, the casing, or both. Therein lies the root cause of this occurrence; without a disastrous failure of one of those elements, the explosion could not have occurred. … Over the past several days, some have suggested that the blowout preventers (or BOPs) used on this project were the cause of the accident. That simply makes no sense.”

Translation:

It was totally not the blowout preventer. BP leased the land, and as part of that transaction, they were responsible for ensuring that the operation went smoothly. If there’s one thing we can all agree on, it’s that the operation did not go smoothly. An explosion would have had nothing to do with the blowout preventer owned by Transocean. It probably had something to do with BP which — did we mention? — leased the land.

Tim Probert, Chief Health, Safety and Environmental Officer, Halliburton

“Halliburton, as a service provider to the well owner, is contractually bound to comply with the well owner’s instructions on all matters relating to the performance of all work-related activities. … The construction of a deep water well is a complex operation involving the performance of numerous tasks by multiple parties led by the well owner’s representative, who has the ultimate authority for decisions on how and when various activities are conducted.”

Translation:

We just did what we were told by the company that owned the well, which, if it hasn’t already been made explicit, was BP, not Halliburton. And clearly, what they told us to do was not exactly right. Building a deep water well is an incredibly complicated, time-consuming process that involves multiple parties, except for Halliburton. Really, it was BP. Transocean was involved as well.

In an interview with Need to Know, Oliver Houck, a professor of law at Tulane University, said that under the Oil Protection Act of 1990, BP most likely bears most of the blame for the spill as the lessor of the Deepwater Horizon rig. But he added that BP may be able to divert some of the culpability to the other companies involved if it can prove that there were “contributing factors” to the explosion.

Such a battle, Houck said, could be quite illuminating.

“If this goes forward and BP then has to… in effect, sue its partners, you’re going find out pretty quickly who’s woofing and who’s telling the truth,” Houck said. “You’re going to get Halliburton’s experts against BP’s experts.  And you’re going to unpeel this onion pretty quickly.  And that could be a very healthy process.”

 
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