Chevron – Because BP Wasn’t Drilling Deep Enough

Fifty miles off the coast of Louisiana, upwards of 100,000 barrels per day of oil are gushing from BP’s Deepwater Horizon well into the Gulf of Mexico. With the equivalent of one Exxon-Valdez seeping into the Gulf every three days, mass devastation of the wetlands, wildlife, and marshes surrounding the area is a forgone conclusion. Those who make a living in fishing industry, often through family businesses inherited from generations past, can only watch as their entire way of life is slowly consumed by the crude.

The catastrophe aboard the Deepwater Horizon was not supposed to happen; BP all but guaranteed the well’s safety, submitting in it’s 2009 exploration plan it was “unlikely that an accidental surface or subsurface oil spill would occur from the proposed activities.” If an accident were to occur, BP insisted, “no significant adverse impacts are expected … due to the distance to shore (48 miles) and the response capabilities that would be implemented.”

BP’s Gulf of Mexico Regional Oil Spill Response Plan fares no better in accuracy, the Public Employees for Environmental Responsibility (PEER) noting BP’s plan “is studded with patently inaccurate and inapplicable information … most notably the response plan contains no information about how to cope with a deep water blowout, … does not contain information about tracking sub-surface oil plumes from deepwater blowouts, … (and) lacks any oceanographic or meteorological information, despite the clear relevance of this data to spill response.”
Among the “outright inanities” found in the farcical plan is the inclusion of “sea lions, seals, sea otters (and) walruses” as “sensitive biological resources” in the Gulf, listing a Japanese home shopping website as a “primary equipment provider for BP in the Gulf of Mexico Region (for) rapid deployment of spill response resources,” and forbidding company spokespeople of promising “that property, ecology, or anything else will be restored to normal.” Perhaps the most egregious example of BP’s utter ineptitude at disaster response readiness lies in the contact referenced to monitor the impact oil would have on local marine and wildlife. Listed as the emergency contact is Dr. Peter Lutz, former biologist and university professor. The problem? Dr. Lutz died of pancreatic cancer in 2005.

The disaster in the Gulf can be traced back to the Bush/Cheney administration, and is a direct result of the incestuous relationship between Republican lawmakers and the oil industry. Between the years 2001 – 2008, the Bush White House cut funding to clean energy research and development, provided multiple tax breaks and subsidies to the Oil and Gas industry, approved drilling along coastal strip of the Arctic National Wildlife Refuge (ANWR), and lifted the decades old moratorium – put in place by George H.W. Bush – on offshore oil drilling. But by far, the single most destructive element of the Bush/Cheney energy platform was in allowing the industry to self-regulate.

“The Interior Department’s Minerals Management Service (MMS) – the agency responsible for managing oil and gas resources on the Outer Continental Shelf and collecting royalties from companies – decided in 2005 that oil companies, rather than the government, were in the best position to determining their operations’ environmental impacts. This meant that there was no longer any need for an environmental impact analysis for deepwater drilling, though an earlier draft stated that such drilling experience was limited.”

The fallout of these industry-friendly policies can be seen throughout the Gulf region; toxic subsea plumes comprised of oil and chemical dispersants; marshes, wetlands and wildlife saturated in heavy crude; pristine beaches spotted by a repeated deluge of tarballs.

As days turn into weeks, and weeks into months, the sense of helplessness felt by those directly effected by the spill has now engulfed an entire nation; All the while, the oil continues to flow, unabated, into the Gulf of Mexico.

Ironically, as North American attention is focused primarily on the crisis in the Gulf, drilling quietly began on an even deeper well some 430 km off the coast of Newfoundland and Labrador.

Located in the Orphan Basin, Chevron’s Lona 0-55 exploration well is being drilled in 2600 meters (8530 ft) of water; nearly twice the depth of BP’s 1500 meter (5000 ft) deep Deepwater Horizon well. Because this class of ultra deep exploration poses a substantially greater risk than did the BP rig, one would assume greater precautionary measures and safety procedures would be required to gain approval to drill such a well.

Such an assumption, however, would be incorrect.

The long standing rules governing offshore drilling in Canada were once rigorous, requiring oil companies to install specific safety equipment, such as certain types of blowout preventers and safety valves. So detailed were the regulations, they directed a wide range of procedures, from how companies were to carry out the cementing process, to how they should conduct pressure tests. Thorough environmental assessments were made by the federal government, and were mandatory prior to awarding a drilling contract.

But much like the Bush/Cheney administration, Prime Minister Stephen Harper and his Conservative colleagues have implemented industry friendly policies, gutting environmental oversight, and handing over regulatory duties to the industry friendly boards.

Under policy changes that came into effect late 2009, deep well operators are asked to “set environmental-protection goals, list the equipment they will use to achieve those goals and disclose their plans for inspecting, testing and maintaining such gear;” Governmental inspection and specific safety equipment installation is no longer required.

Environmental protections were the target In March 2010, when Harper shifted assessment duties from the Canadian Environmental Assessment Agency, to the pro-industry National Energy Board (NEB). Environment Minister Jim Prentice was also given free rein to severely limit, essentially cancelling environmental assessments on any given project; a move he argued would “get good environmental outcomes,” but without “delaying and frustrating projects through unnecessary red tape.”

Another component of Harper’s watered down legislation deals specifically with emergency response plans; particularly the requirement of relief wells. Prior to the 2009 regulatory changes, Oil companies were mandated to present a detailed list of contingency plans as well as identify a specific rig to drill a relief well. Required information about the stand-by rig included its “operating capability, its location, contractual commitments, state of readiness and the schedule for mobilization to the well site.” Now, as a result of Harper’s regulatory revisions, the requirement for thorough, detailed relief well plans no longer exists.

Because Chevron is drilling at record depths, reaching farther into the deep than has ever before been attempted, the policy changes enacted by the Harper government are a grave cause for concern. But beyond the weakened set of rules governing the oil industry are specific questions surrounding Chevron, and the federal-provincial agency – the Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB) – who approved, and is regulating, the Lona 0-55 well.

Like the NEB, who’s industry insider members include a member of the Canadian Petroleum Hall of fame, the C-NLOPB has come under fire for it’s close ties to the Oil and Gas sector. C-NLOPB chairman and CEO Max Ruelokke is a veteran of the offshore oil industry, and at the time of his 2005 appointment to the C-NLOPB he was general manager of AMEC Oil and Gas.

Between 2000-2008, AMEC was “delivering deepwater Gulf of Mexico production to market” including “engineering, procurement, inspection, construction management, health, safety and environment, action tracking, quality assurance / quality control, environmental support, and flow assurance.”

Location – Gulf of Mexico and Louisiana, US.
Client – BP.

According to project manager John Barnes, AMEC “developed and implemented an innovative health, safety, and environmental management system; successfully managed stakeholder interfaces; and ensured minimal impact on Louisiana’s environmentally sensitive wetlands – a great result.”

Even as Ruelokke witnesses the disaster with the BP well, the former AMEC general manager sees no additional risk with Chevron’s well; Nor does he support a drilling moratorium. Newfoundland and Labrador Premier Danny Williams, a Conservative who in 2006 blasted Harper for being “in bed with the oil industry,” is himself downplaying the potential impact of a spill, suggesting “the colder water and thicker crude in the Orphan Basin would mean the oil would sink to the bottom instead of washing toward the coast.”

The assurances of the safety of the Lona 0-55 rig, including Ruelokke’s claim “we would never allow (a disaster like is happening in the Gulf) to happen. Our policy, procedures, training, equipment are such that it will not happen,” are simply not supported by the facts.

Subsequent to the grilling of the five major oil companies (Chevron included) by Washington lawmakers, it became apparent that BP’s ineffective, error riddled emergency plan was identical to the plans of the other four oil companies; identical in that they were literal photo-copies of one another, bound behind different company logos. In essence, the flawed contingency plan BP had in place at the time of the blowout is the same flawed contingency plan currently in place by Chevron; Even as it drills the world’s deepest offshore oil well.

Furthermore, the failure of the blow out preventer on the Deepwater Horizon has raised concerns about a repeat occurrence on the Lona 0-55, who’s blow out preventer “has shortcomings that could hamper efforts to respond to an emergency.” This is a problem, Chevron says, they “are aware of.”

Wonderful.

The apparent lack of concern by the Conservative government, the federal and provincial regulatory boards, and Chevron itself regarding the unprecedented depth of Lona 0-55 is particularly puzzling given that in 2005, Chevron’s own report warned it could not clean a major spill:

“Physical recovery of spilled oil off the coast of Newfoundland will be extremely difficult and inefficient for large blowout spills. First, the generally rough sea conditions mean that containment and recovery techniques are frequently not effective. Second, the wide slicks that result from subsea blowouts mean that only a portion of the slick can be intercepted.”

For a province that boasts how “few fishing destinations in the world rival Newfoundland and Labrador,” the grave impact on the fishing industry in the event of a spill has yet to resonate with Premier Williams. The staggering cost of the clean up effort, given Chevron’s admitted inability to handle a blow out, would also leave taxpayers on the hook for the vast majority of the clean up effort. In Canada, oil companies are only liable for up to $40 million – that’s $35 million less than the U.S. liability cap of $75 million.

The parallels between BP’s Deepwater Horizon well and the risky game being played off the coast of Newfoundland and Labrador are worrisome. Though the oil industry boasts advancements in drilling technology and the ability to explore in ever deeper waters, there has been little progress made toward making drilling safer.

The consequences of failing to invest in safety technology for drilling are clearly laid out in a report by MSNBC’s Rachel Maddow. In comparing techniques currently being used to try and stem the leak in the Gulf to the techniques employed 31 years ago in a similar well blow out, Maddow uncovers the failure of the oil industry to match advancements in drilling safety with advancements in drilling capabilities.

“The Ixtoc rig erupted in the middle of the night in 1979 in June, as it was drilling for oil in the Gulf of Mexico. The drilling was being done by a company called Sedco. It later became known as Transocean-the operator of the rig that blew up this year in the Gulf of Mexico. The reason the Ixtoc explosion turned into a massive uncontrolled leak 30 years ago is because the well‘s blowout preventer malfunctioned. Does it sound familiar? The blowout preventer failed to stop the Ixtoc leak and what followed was an environmental disaster the likes of which the country had never seen before … Nine agonizingly long months after the Ixtoc well exploded, a pair of relief wells finally allowed the engineers to cap the leaking well.” [...]

“Same busted blowout preventer, same ineffective berm, same underwater plumes, same toxic dispersants, same failed containment domes, same junk shot, same top kill-it‘s all the same technology. The Ixtoc well, which couldn‘t be plugged for nine months, was in roughly 200 feet of water. Now, in 2010, we‘re using the same exact techniques to try to plug a well that is leaking in 5,000 feet of water.”

Now with Chevron drilling in 8,530 feet of water, the chance these failed maneuvers would effectively stop a leak at even greater depths is virtually non-existant. The Lona 0-55 well off the coast of Newfoundland and Labrador carries with it a higher degree of risk than did either the Ixtoc or Deepwater Horizon wells; Still, the tested, effective response measures necessary to mitigate those risks has yet to be developed. With Oil companies raking in profits of billions of dollars every year, there is no excuse for the failure to invest in drilling safety technology. Furthermore, the catastrophic impacts resulting from weakened regulatory policies should serve as a lesson to all who wish to move beyond dependence on foreign oil. North America cannot drill its way to energy independence, nor can it rely on scant offshore oil reserves as a stable source of energy. The only way to achieve energy independence is through advancements in renewable energy technology. While the need for fossil fuels will remain well into the future, we can limit our dependance on oil through innovation, investment and a clean energy strategy.

In order to prevent another Deepwater Horizon disaster, strict regulatory policies must be put in place. No further drilling contracts should be awarded until adequate safety technology is developed, and demonstrated to work, at the depths oil companies wish to drill. Tax breaks and subsidies to the industry also need to end; The money, in turn, invested in clean and renewable sources.

If we hope to make real advancements toward a clean energy future, bold action is required from both government and citizens alike. Time and again, world leaders have proclaimed the need and the desire to break the oil addiction. Unfortunately, the tangible action necessary to achieve this lofty goal have been few and far between. Desire, intention, and imagination can only take society so far; Now, a firm commitment and a clear course of action are what’s required to attain a future without a dependance on fossil fuels.

To quote essayist V. Havel, “It is not enough to stare up the steps – we much step up the stairs.”

Cross-posted at rabble.ca

UPDATE: June 25, 2010

I received this message from Annie Roy on behalf of Environment Minister Jim Prentice, requesting a correction:

Subject: [Corrections] Minister Prentice corrects a fact on environmental
assessment

Minister Prentice would like to correct a statement in the article entitled “Chevron – because BP wasn’t drilling deep enough” by Alheli Picazo which appeared on June 21, 2010. With the proposed changes to the Canadian Environmental Assessment Act, the Minister of the Environment would not have the authority to cancel an environmental assessment as stated in the article. The changes would provide the Minister of the Environment with new authority to focus an environmental assessment on key components of a project, if appropriate. The discretion is intended to provide legal certainty and to ensure that resources and efforts are invested where it matters the most.

While Mr. Prentice may not like what I’ve written, my reporting on his powers to allow projects to go essentially without a thorough environmental assessment is accurate.

From the Globe and Mail: [...] legislation giving Environment Minister Jim Prentice wide-ranging powers to scale back the scope of any assessments. Under the changes, Mr. Prentice could limit environmental reviews to parts of a contentious project, and not evaluate the development in its entirety.”

Here is the key phrase in the legislation:

15.1 (1) Despite section 15, the Minister may, if the conditions that the Minister establishes are met, determine that the scope of the project in relation to which an environmental assessment is to be conducted is limited to one or more components of that project.

2 thoughts on “Chevron – Because BP Wasn’t Drilling Deep Enough

  1. George HW Bush’s connection to the 1979 Ixtoc I disaster so similar to the current gulf oil spill.

    Source:

    http://www.fundinguniverse.com/company-histories/Zapata-Corporation-Company-History.html

    Zapata Petroleum Corporation, an oil exploration company, was created by George H. W. Bush in 1953…Its primary historical interest may be its ties to the 41st President and insights into his governmental affiliations and the workings of US government…Early Business History, 1953-1966
    Bush had been working for Neil Mallon, CEO of Dresser Industries (now merged with Halliburton)…In 1960, Jorge Diaz Serrano of Mexico was put in touch with Bush by Dresser.
    They created a new company, Perforaciones Marinas del Golfo aka Permargo…Zapata’s filing records with the US Securities and Exchange Commission (SEC) are intact…but records for the years 1960-1966 are missing.
    Source: http://openjurist.org/767/f2d/1140/sedco-inc-mobile-drilling-unit-sedco-v-petroleos-mexicanos-mexican-national-oil-co-sa
    (Court case between Bill Celments Sedco and George HW Bush’s Permargo :)
    11.“The charter party contains several examples that the parties anticipated a possible blowout of the IXTOC I well. Clause 25 refers to a “wild well.” Clause 24 specified: Permargo’s obligations to indemnify Sedco for “loss or damage arising from pollution or contamination.” Such anticipations are exactly the kinds of damage at issue in this lawsuit” (Sedco is now known as Transocean)

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