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Report Confirms Deepwater Horizon's "Blowout Preventer" Failure; Prior Warnings from Whistleblowers Silenced

Shanna Devine, March 31, 2011

A report released by the Department of Interior last week confirmed suspicions that a Blowout Preventer (BOP) – a supposed fail-safe device on oil rigs – buckled moments before the explosion on the Deepwater Horizon last April, leaving 11 workers dead and millions of barrels of oil gushing into the Gulf.

The report, conducted by Norwegian firm, Det Norske Veritas, as part of the Interior Department’s investigation into the spill, concluded that there was a mechanical failure in the BOP’s so-called “rams”, which are supposed to cut the pipe coming up from the well in the event of the emergency. This action would shut the well and prevent the flow of oil and gas.

However, the 554-page analysis stops short of holding any player accountable for this fatal shortcoming. BP, which oversaw the operation; Transocean, which owned and was responsible for maintenance of the BOP and the rig; and Cameron International, which manufactured the failed device, were left nearly unscathed by the report’s findings. In fact, the New York Times reported that the day of its release, BP shares rose one percent, while Cameron’s fell by a nominal two percent, and Transocean shares remained roughly the same.

While these companies litigate over whose to blame, because of clever accounting tricks and the corporate tax structure, American taxpayers will foot an anticipated $10 billion of the cleanup -- which does not factor in the irrevocable environmental damage and human cost. Giving credit where credit’s due, the Obama administration did work with BP to establish a $20 billion dollar claims fund. In the fine print, however, that agreement included a deal that BP could keep whatever remaining funds were not used by 2013. Last December, during a TV interview, BP’s compensation czar attorney Kenneth Feinberg, who is administering the fund, said “it remains to be seen, but I hope that half the money would be more than enough to pay all the claims.”

While Feinberg’s DC firm has enjoyed $850,000 per month to oversee the claims process for Gulf residents, (approved) claimants are receiving an average $16,000 for this one-time “hand-up.” The fund has been riddled with complaints of backlogs and underestimating costs to local businesses. Just yesterday BP reported that it has misplaced a laptop containing personal data, including social security numbers, for thousands of Louisiana residents who’ve filed claims for compensation.

In the meantime, following the report’s release, BP and friends were eager to assert they acted lawfully -- courtesy of a semantic loophole. The fail-safe equipment comes with an important caveat: It will function properly if the size of the blowout falls within industry parameters. According to a BP spokesperson, the blowout preventer “was designed and tested to industry standards and customer specifications,” and Transocean said the findings “confirm that the BOP was in proper operating condition and functioned as designed.” It added: “High-pressure flow from the well created conditions that exceeded the scope of BOP’s design parameters.”

Put differently, the problem was not that the design standards were too lax; rather, the BOP failed because the pressure from the well was too great! Huh? Isn’t the precise purpose of the BOP to keep the lid on in the event of a major blowout?

BP’s statement that the BOP was “tested to industry standards” cannot withstand scrutiny, after whistleblower Mike Mason disclosed BP had been aware that BOP testing results were being falsified for years in Alaska. Mason disclosed that the standard five minute test to determine if the device could withstand high levels of pressure was only applied when state and federal regulators were present (50% of the time). The other half of the time, BP would reduce the testing time to 30 seconds and falsify the records to indicate that it underwent the full testing.

In effect, innumerable BOPs are only really tested during an actual blowout, when workers and the environment are guinea pigs at best…and collateral damage at worst. Rather than heed Mason’s warnings, which could have resulted in more reliable BOPs on future rigs (including the Deepwater Horizon), BP responded by firing him.

An investigation by the Energy and Commerce Committee last May found that the BOP on the Deepwater Horizon failed a negative pressure test four hours before the explosion.

This all gets very cynical. Oil companies press their trade associations to promote low safety standards, then use these low bars as a Get Out of Jail Free Card when the inevitable disaster follows.

BP’s indefensible track-record with whistleblowers (see Ken Abbott’s story on Atlantis -- another BP oil rig), paired with the dismal state of whistleblower protections for federal inspectors who witness these safety breakdowns has resulted in a lack of accountability (and corrective action) at each level tasked with ensuring the safety of offshore oil drilling. An IG investigative report released last May on the Minerals Management Service (MMS), a division of the Interior Department, unearthed conflicts of interest between regulators and big business in Lake Charles, LA, which is located just miles from the site of last April’s explosion. Findings included regular kickbacks from oil and gas companies to the MMS employees (tasked with inspection and oversight), and the revolving door syndrome. Consistent with Mason’s assertion that inspection results were often falsified, the investigation found that “some MMS inspectors had allowed oil and gas production company personnel located on the platform to fill out inspection forms.” Cited in the investigation, one manager summed it up: “Obviously, we're all oil industry. We're all from the same part of the country. Almost all of our inspectors have worked for oil companies out on these same platforms. They grew up in the same towns."

At best, industry’s standards may prevent average sized blowouts. But until there is proper equipment, as well as safe channels for workers and inspectors to warn when safety devises fail (in lieu of current incentives to turn a blind eye), we remain vulnerable to oil spills of epic proportions.

It's clear that last April’s BP oil spill could have been prevented. What’s not as apparent are the actions that individual workers could have taken to safeguard the public and our waters from this preventable tragedy -- and themselves from retaliation in the process.

To address this, GAP has launched Know Your Rights Gulf Coast Campaign to inform workers and inspectors of protected whistleblower activity and available rights. There are over 20 applicable whistleblower laws for oil drilling, production, and clean up. Whether you or someone you know witnesses illegality, waste, fraud, abuse, or public safety concerns during drilling or the ongoing clean-up efforts in the Gulf Coast, or any other violations elsewhere, contact GAP to learn your rights.

Shanna Devine is Legislative Coordinator for the Government Accountability Project, the nation's leading whistleblower advocacy organization.