Bp “deep Water Horizon” Oil Spill

White Paper Executive Summary Presentation

BP “Deep Water Horizon” Oil Spill

Patricia Turman

Bowie State University

PRO 600

 Communicating, Problem Solving, and Leading in Professional Fields

Fall 2016

Abstract

This report is intended to inform readers about the BP Deepwater Horizon Oil Spill that occurred on April 20, 2010. It will inform readers about when the spill happened, why it happened, and what the short term and long term effects of the spill have been. The research in the report highlights a few key things.  First, the oil spill had significant impacts on wildlife, people, and industries. Some impacts are still being discovered today and others have not yet been seen, but will arise as time goes by. Second, the financial and public relations costs for the responsible party, BP, are large and continue to grow even over six years later. BP’s handling of the situation might not have been the most effective, but they did work tirelessly and spent billions of dollars in the recovery effort.

Based on the research found, it was determined that mistakes are what led to the spill and that all of the oil industry should learn from this disaster to help ensure that another oil disaster does not occur. We recommend:

• All oil companies provide safety and protocol trainings
• Test machines constantly to be ahead of any potential malfunctions
• All oil companies should have proper insurance and reserve funds to be able to pay and respond quickly to potential disasters
• If a disaster does occur, the company should handle the situation with honesty and willingness to right their wrong in any way that needs to be done.

The “Deep Water Horizon” Oil Spill

On April 20, 2010 while drilling an exploratory oil-well Macondo in the Gulf of Mexico, a “blow out”, defined as an uncontrolled release of pressurized oil and or gas from a well, took place unexpectedly. The blow-out would cause an initial explosion and later fire that would ultimately destroy the drilling platform. Because of this tragedy, 11 members of the crew loss their lives.  Other members of the crew were injured in the accident and the un-capped well spilled oil into the Gulf of Mexico for months before it was stopped. An official cause for the oil rig explosion has yet to be determined, but the well was located more than five thousand feet beneath water’s surface (The Ocean Portal Team). Due to the well’s depth and location, scientists were unable to access the core of the explosion for quite some time. Many signs point to oversights and shortcuts that were taken by workers and ultimately led to the explosion. According to author David Coburn, BP had a reputation for taking on high-risk situations and were responsible for a number of safety violations with the Occupational Safety and Health Administration (2010, p. 76). Those who are closely connected to the oil industry have stated, and Coburn agrees that “it was an accident that was totally preventable” (p. 76). When an accident this catastrophic is preventable, it is clear that mistakes were made and signals were overlooked. This event resulted in the loss of both lives and revenue, and has had far-reaching ramifications for this region of the country. Compared to another large oil spill, the Exxon Valdez Oil Spill on March 24, 1989, which went through over 20 years of litigation, this disaster has proven to be much larger in scope and complexity.

Slow Reaction to Clean Up

The company BP has been heavily criticized for its reaction and efforts after the oil spill. Oil would pollute the Gulf of Mexico for months, causing extensive environmental contamination. Before the leaking oil well was sealed, an estimated 5,000 barrels of oil spilled in to The Gulf of Mexico.

BP tried unsuccessfully to contained the well with various methods, such as deployed boons and the burning of the oil on the surface of the water. Dispersant chemicals were added to the oil in hopes to minimize the effects, but oil began washing to shore and contaminating the surrounding ecosystem. Marine wild-life and other animals became covered in oil, in addition to the loss to costal industries that depended on the gulf for business such as fishing and tourism. BP hired local fishing vessels to help in the recovery efforts, as clean-up crews worked for months attempting to remove the oil.

Damage Control

In the weeks and months following the disaster, many looked to BP for answers—namely, the government, environmentalists, and local business owners. Much of their damage control had to be handled financially. The truth of the matter is that the oil spill happened and they couldn’t take it back. Instead, they had to try to make it up to those who felt the strongest impact. BP poured millions of dollars into the local economy as they paid for advertisements to bring customers and tourists back to the area following the clean-up, and funded recovery projects aimed at restoring natural habitats and wild-life. If their own business were to recover, they had to win back customers who were hurt or effected by the spill. It was reported that a settlement with the federal, state, and local governments would require them to pay $18.7 billion (Robertson, Schwartz, Perez-Pena), in addition to the marketing and public relations costs required to recover their own image. BP is a well-known organization and the fact that they had to take on the responsibility of the disaster, financially and otherwise, did considerable damage to their brand. BP also did not help their case with their hesitant reporting in the months following the accident. It is speculated that BP “has consistently given the lowest estimates of how much oil gushed into the Gulf” (Mole, 2015, p. 24). Outside researchers have found drastically different accounts of the amount of oil spilled, and those discrepancies further indemnify the company’s brand and call into question the company’s integrity.

Ongoing Clean Up Efforts and the Impact of the Spill

Initially, a “high-tech robotic submersible” (Ocean Portal Team) was brought in, to manage the clean-up. This machine was programmed to navigate and collect information about the oil, and allowed for a closer look at the extent of the damage than any aerial views would provide.  Workers spent months attempting to plug the well and then clean the Gulf. Scientists and researchers have continued to collect data since the start of the spill over six years ago, and there are still may unknown factors. It appears that “some species in the Gulf are struggling while others are doing fine (Mole, 2015, p. 22). Most of their findings indicate that the effects are subtler, and not an obvious, dramatic impact (Mole, 2015, p. 22). Now, a little over six years later, most industries have bounced back, but not all. Tourism in the Gulf Coast area is resuming, but a complete recovery is not yet in sight. As a result, BP is still held financially responsible for investing in the devastated economy of the Gulf Coast. It is also important to note that because the total extent of the damage is still being researched, it is impossible to know exactly how far recovery efforts have come.

Safety Protocol Violations

During the investigation by the CSB in 2010, it was found that despite having a generally safe record, the rig failed to pass a critical inspection. The Bureau of Ocean Energy (BOE), the designated inspecting organization, noted the rig’s safety shortfalls. According to reports following the accident, a quarter of required safety inspections were not conducted, and the rig was noted to have received citations for noncompliance on several occasions. Later reports also show that during the time of the accident, the crew was behind on their set drilling schedule, and several recommended procedures were not followed to industry standards.

In drilling, centralizing devices are used to stabilize well bore because during drilling, the well is not straight. The company Haliburton recommended a total of 23 centralizers be installed for the well in questions, but BP chose to only install six. The lack of stability from the centralizers made the seal around the bore hole considerably weaker. A cement bond test was also recommended before proceeding, but BP chose not to have one conducted.

 In the oil drilling industry, the term “kick” refers to pressurized oil and gas surpassing the protective cement wall of a well. During drilling, gas, oil, and drilling mud traveled up the riser, creating a “kick”. Initial efforts to close the well failed, as it was determined that a valve on the blow out preventer failed. There had been earlier reports about a defect in the device, but the reports were ignored by management. It was later found that the blowout preventer device malfunctioned and caused a large buildup of pressurized mix of gas, oil and sediment to explode. The deficiency of the required inspection of the device demonstrated negligence on the part of the operators of the rig and BP’s management.

Based on the findings of several reports, conclusive evidence has determined that, over time, a series of missteps contributed to significant safety issues and the resulting explosion. Dr. Robert Bea, an experienced accident investigator, believes “this disaster was preventable, had existing progressive guidelines and practices been followed" ("Deepwater Horizon rig: What went wrong?", 2016).

Fines, Settlements and Lawsuits

The “Deep Water Horizon” oil spill caused an unprecedented number of litigation claims. Some claims have yet to be decided on as the time to fully settle this case is unknown. The civil penalties and fines are totaled in billions of dollars. The following summary of fines were EPA related: