Competitor points to BP-driller relationship

Jul 12, 2010 By SETH BORENSTEIN , AP Science Writer

(AP) -- The first public hearing by a presidential oil spill panel Monday zeroed in on the relationship between BP and the company it hired to drill the now exploded rig.

In an effort to fight a new drilling moratorium, a rival drilling executive and a Louisiana congressman said other oil operators shouldn't be tarred because of one bad apple: BP's Deepwater Horizon rig.

Larry Dickerson, president of a rival drilling company, told commissioners that the April 20 explosion and resulting oil spill were "the result of reckless operating mistakes."

He said errors were likely made in monitoring drilling mud, in decisions on when to use the blowout preventer and about whether BP PLC or its contractor, Transocean Ltd., was in charge of safety.

BP Senior Vice President Kent Wells testified at the start of the two-day hearing about what BP was doing to try to stop the leak. None of the seven commissioners asked him about the causes of the rig explosion, and Wells did not discuss the question of blame.

U.S. Rep. Steve Scalise, R-Louisiana, also in arguing to lift the drill ban said: "The vast majority of companies were doing things in a much safer way than BP was doing."

Dickerson, president of Diamond Inc., which is the No. 2 deepwater drilling contractor, said on the wells they run, they would stop work immediately if something goes wrong. That's even if a customer, like BP, wants to keep going.

"It appears that somebody may not have adequately monitored what's coming out of the hole," Dickerson said. He said he didn't have first hand knowledge but based his comments on media reports.

In Washington, the Obama administration issued a revised moratorium through Nov. 30 on deep-water offshore drilling Monday to replace the one that was struck down by the courts as heavy-handed.

Interior Secretary Ken Salazar made the announcement, arguing that a pause is still needed to ensure that oil and gas companies implement safety measures to reduce risks and are prepared to handle spills.

Commissioner Fran Ulmer, former lieutenant governor of Alaska, said there needs to be "a higher standard of decision making" on drilling rigs about safety.

Dickerson said his company has had to shut down drilling in the name of safety. He said it is important that his operators have a "hands on the brakes" and not have to go back and forth with the customer.

"There's a natural friction between safety and caution and meeting schedules," Dickerson told reporters. "We need to resolve that in favor of safety."

Usually it is, but the BP spill is obviously different, he said. He declined to say who was to blame: BP, a sometime client of his, or Transocean, a competitor.

Dickerson's testimony turned the focus of the first day of commission hearings from the effects of the spill to who's to blame. Dickerson was at the commission to tell them what a hardship the president's drilling moratorium was. But in criticizing what the Obama administration calls a "pause" in drilling, advocates placed the blame on BP.

In explaining why drilling is still safe and there's no need for a blanket stop to drilling, Dickerson pointed to how unusual the BP rig situation is.

Most of Monday's hearing was about the economic effects of the oil spill and the oil drilling moratorium that followed it.

Dickerson, who's company is down from 10 rigs to seven because of the moratorium, said the stoppage is "a slow-motion domino fall" in his industry.

Sen. Mary Landrieu, D.-La., told commissioners that the moratorium is costing jobs.

"120,000 people could be out of work in Louisiana alone," Landrieu said. "This is a very serious issue."

Commission co-chairman William Reilly, a former head of the U.S. Environmental Protection Agency, said the panel has no control over the moratorium, which is a Department of Interior policy. But the Interior Department on Monday said one of three reasons for the moratorium was "The collection and analysis of key evidence regarding the potential causes of the April 20, 2010 explosion and sinking of the Deepwater Horizon offshore drilling rig, including information collected by the Presidential Commission and other investigations."

The spill itself is causing non-oil businesses to lose jobs.

That impact could go from an environmental disaster to an "economic calamity," said Michael Hecht, president of Greater New Orleans Inc. Hecht said one airline said reservations "dropped 45 percent month on month."

Keith Overton, representing Florida restaurants and hotels, said bookings were down 25 percent, costing billions of dollars. He blamed the media for giving the public the false idea that much of Florida's beaches are oiled.

"Our economy is being stifled because of these perceptions," Overton said.

While commissioners didn't ask questions of BP or Coast Guard officials about the cause, they talked about finding the answer to the question of why.

Commissioner Cherry Murray, dean of engineering at Harvard, said in a personal statement that she thought it might be an issue of people's natural proclivity "to become complacent."

Before the commission started, co-chairman and former Sen. Bob Graham said the panel wants to find out if the BP explosion was "an outlier" or something that could be more common.

Explore further: Agricultural research extends carbon capture depths 

More information: Oil spill commission: http://www.oilspillcommission.gov/

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Caliban
5 / 5 (4) Jul 12, 2010
The fact of the matter is that the majority of these companies operate in precisely the same manner- but, until now, the consequences of failure have not been so likely to be catastrophic, or escape attention. One need only look to Nigeria to put the lie to this guy's claims.

And this isn't the first downed-rig incident in drilling history- or even in the Gulf of Mexico- either, much less pipeline failure, tanker disaster, etc. et c.

What you are witnessing is the gust of FEAR blowing down these people's necks, as they see the window for exploiting this resource, at ever increasing price(= ever increasing profit), shrinking with the awakening of public understanding that fossil fuel MUST be replaced, and soon. The end of the era of MASSIVE profits with minimal oversight and liability approaches with ever increasing speed.
SDMike
1 / 5 (1) Jul 14, 2010
Democrats can turn an accident into a disaster. Now they are turning a disaster into an economic tragedy. We have deep water drilling because democrats prohibited shallow water drilling. Every human endeavor becomes more difficult, more dangerous, less profitable, and less likely to succeed when politics is involved.
dieseltaylor
5 / 5 (1) Jul 14, 2010
SDmike - Without Government controls you really think that corporations would be safer! History suggests otherwise.

BP's safety record is the worst of all the majors, and most of its problems are in the US. The takeovers of Amoco and Arco are part of the problem as it would seem sweating assets has a higher rating than safety. BP has been caught fasifying safety inspections at least twice so I have no doubt it is a rotten apple in the barrel.

I suppose sdmike you are correct in a way as if the Government did not regulate then BP would not need to do any inspections whatsoever
Caliban
not rated yet Jul 14, 2010
We have deep water drilling because democrats prohibited shallow water drilling. Every human endeavor becomes more difficult, more dangerous, less profitable, and less likely to succeed when politics is involved.


SDmike-

Care to show us where BP has become LESS profitable in the last ten years? Or any major?

And what about subsidies? You can certainly quibble about the exact amount of taxpayer-funded assistance that the fossil fuel industry receives, but you can't quibble about it being a very large amount. Here's just one assessment:

http://cleantech....node/554

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