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BP’s cost cuts contributed to oil spill disaster, federal probe finds

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A 16-month federal investigation has concluded that BP’s efforts to limit costs on its mile-deep Macondo well in the Gulf of Mexico contributed to the blowout last year that killed 11 workers, sank the Deepwater Horizon drilling rig and created the largest oil spill in U.S. history.

The long-awaited report by the Bureau of Ocean Energy Management, Regulation and Enforcement catalogues dozens of mistakes, misapprehensions, risky decisions and failures of communication that led to the blowout and the 87-day spill that spewed nearly 5 million barrels of oil into the gulf.

The report also found fault among BP’s contractors, including Transocean, which owned the doomed rig, and Halliburton, which handled the cement job that failed to seal the bottom of the well before the blowout. But it says BP was “ultimately responsible” for safe operations at the Macondo well.

One of the key questions since the disaster has been whether BP engineers or managers traded away their safety margin to save on drilling costs. The investigators found that BP management rewarded employees for cost-saving steps and did not reward them in the same way for increasing safety. The inquiry found five examples of decisions by BP that cut costs, reduced drilling time and increased risk.

“BP’s cost or time saving decisions without considering contingencies and mitigation were contributing causes of the Macondo blowout,” the report declared.

Communication failures were rampant. Engineers in Houston did not know everything that was happening on the rig, and rig workers weren’t informed of all the concerns about the well in Houston. The report criticized “BP’s failure to inform the parties operating on its behalf of all known risks associated with Macondo well operations.”

The bureau conducted its inquiry in joint sessions with the Coast Guard, which released its report on April 22, the anniversary of the sinking of the immolated rig. The Coast Guard focused primarily on Transocean and found that the company had “serious safety management system failures and a poor safety culture,” a conclusion that Transocean disputed.

Although the report by the bureau does not change the established narrative of what happened on April 20, 2010 — the well design was risky, the cement job failed, gas infiltrated the well, a crucial test of the well’s integrity was misinterpreted and then the well blew out — it represents perhaps the most detailed cataloguing of all that went wrong on the rig and in Houston.

The investigators documented a well design that didn’t include enough barriers to oil and gas coming up the central pipe, iffy last-minute changes to the plan, a cement job that didn’t use very much cement, confusion about lines of authority and an “overall complacency” aboard the floating rig that may have kept workers from detecting that Macondo was about to erupt.

In a brief statement Wednesday, BP did not challenge the report’s conclusions and noted that it shared the blame with its contractors.

“BP agrees with the report’s core conclusion — consistent with every other official investigation — that the Deepwater Horizon accident was the result of multiple causes, involving multiple parties, including Transocean and Halliburton,” the statement said.

Jackie Savitz, a marine scientist for Oceana, an ocean conservation organization that opposes offshore drilling, said the report shows that BP “put profits before precautions. They let dollar signs drive a culture of risk-taking that led to this unacceptable outcome.”

Rep. Edward J. Markey (D-Mass.), a frequent critic of BP, said the report shows that “BP was more concerned about their bottom line than they were about what was happening to this well at the bottom of the ocean.”

The Macondo well had been problematic from the start as the crew drilled into brittle rock that caused losses of thousands of barrels of the drilling fluid, or “mud,” that is crucial to any such operation.

“With the known losses experienced in the well, BP’s failure to take additional precautions, such as establishing additional barriers during cementing, was a contributing cause of the blowout,” the report said.

The rig crew should have detected the unfolding disaster and taken different steps once the mud began shooting out of the well onto the rig, followed by gas, the report said. The entire operation should have been shut down long before the gas emerged and exploded, it concluded.

“The failure of the rig crew to stop work on the Deepwater Horizon after encountering multiple hazards and warnings was a contributing cause of the Macondo blowout,” the report said.

When things began to go catastrophically wrong that evening on the rig, the crew either waited too long to respond or took the wrong steps to cope with the surge of gas from the high-pressure hydrocarbon reservoir, the report said. For example, the report said, the decision to disconnect from the well and seal the pipe came too late, after an explosion had already disabled the cables and lines leading to the blowout preventer on the sea floor.

Transocean spokesman Brian Kennedy responded Wednesday, “We take strong exception to criticism of the Horizon drill crew, nine of whom perished fighting to save their fellow crew members and the rig, for the actions they took in the face of such an unprecedented emergency.”

Although the bureau did not call into question the safety of deep-water drilling in general, it recommended a number of changes in drilling practices and suggested that water depth matters when it comes to detecting and responding to a gas “kick,” which can lead to a blowout.

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