Trying to shirk responsibility for oil disaster, BP CEO predicts ˜lots of illegitimate lawsuits because ˜this is America.

HAYWARDBP is financially responsible for the massive oil spill in the Gulf of Mexico, so it is desperately trying the limit the financial and legal fall out. The company tried to buy off coastal residents and local fishermen hired to help clean up the mess with payments and jobs in exchange for signing a waiver promising not to sue.

Tony “What the hell did we do to deserve this?” Hayward, CEO of British Petroleum, the Goldman Sachs of Big Oil, is at it again, as TP reports in this repost.

Alabama’s attorney general and Secretary of Homeland Security Janet Napolitano both decried the waivers and asked BP to stop circulating them, prompting the company to admit it had made a “misstep.” The company has vowed to pay all “legitimate” legal claims from residents or businesses who suffer from the disaster, but BP CEO Tony Hayward insultingly told the Times of London yesterday that because “this is America,” many of the claims will be “illegitimate“:

Mr Hayward reiterated a promise that BP “will honour all legitimate claims for business interruption”. Asked for examples of illegitimate claims, he said: “I could give you lots of examples. This is America “” come on. We’re going to have lots of illegitimate claims. We all know that.”

On Monday, Hayward told Good Morning America, “This wasn’t our accident. “¦ This was a drilling rig operated by another company. It was their people, their systems, their processes. We are responsible not for the accident.”

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19 Responses to Trying to shirk responsibility for oil disaster, BP CEO predicts ˜lots of illegitimate lawsuits because ˜this is America.

  1. catman306 says:

    Spin, Baby, Spin!

  2. mike roddy says:

    No surprise here. Hayward. Blankenship, Tillerson, and Limbaugh all sound the same.

    They’re not even human, really. As Ian Murphy once explained, this makes sense when you realize that we share 90 per cent of our DNA with pigs.

  3. Bob Wallace says:

    There seem to be three or more different, and seemingly separate, corporations involved in this mess.

    As I understand it (and I haven’t been following the business part carefully) BP hired a separate corporation, Deepwater Horizon, to drill the well. Deepwater Horizon hired a different corporation, Halliburton, to do the concreting work around the pipe. And I would suppose even a different corporation supplied the BOP which may or may not have failed.

    You have a problem with your brakes. You take your car to your dealer and have it repaired. Driving away from the dealership your brakes abruptly fail and you slam into another car. Who pays? You? The dealership? Possibly the company that built the faulty part that failed?

    BP jumped in a took responsibility for cleaning up the oil. That may or may not have been their responsibility. They might have decided that if the mess was not dealt with in a timely fashion they might suffer more business problems down the line, and the cleanup cost was a reasonable expense they should encumber.

    But that does not mean that BP is the company which would be held responsible for damage costs once this case reaches court. Until we know who is actually responsible we might want to hold off throwing the rope over the branch….

  4. Paul K2 says:

    Although I am not a drilling engineer, I worked for an oil major in oil and gas production as an engineer for 15 years (including offshore experience), and I must say I am disappointed that the oil companies drilling in the GOM didn’t prepare better for a subsea blowout on an exploratory well. This well had depth of about 23,000 feet below sea level (18,000 foot well located under 5000 feet of water). There have been numerous blowouts on exploratory wells drilled to depths greater than 18,000 feet in the region; but they have been on land or shallower water. The odds of a blowout on exploratory wells to this depth are likely higher than 1 in a 1000 and almost as high as 1 in a 100. Most risk assessments look at risks at levels of 10 or 100 chances per MILLION.

    Another way to improve the accuracy of the risk assessment, is to look at recent near misses. BP had a near miss in 2003 when a riser parted on a Thunderhorse well; the BOP activated and prevented a subsea blowout. If that BOP hadn’t been able to close, that incident would have been the first GOM major subsea blowout.

    Given the number of deepwater exploratory wells drilled to these depths, it was very likely that one would eventually blow out. We should have been prepared for that eventuality.

    Here is the link for the near miss on a Thunderhorse well:
    Thunderhorse Near Miss

    Check out the picture of the piece of broken riser landing near the controls for the BOP. In any case, the Company is almost always the responsible party in these accidents. The procedure for cementing, using tools to set devices in the wellbore, and displacing the mud in the riser with seawater (thus eliminating the ability of the mud weight to control the well by creating a significant underbalance on the Macondo well) are all written or approved by BP.

    Even though the cement job apparently failed, and the BOP failed, these possible occurrences should have been foreseen and planned for. BP will have a difficult time saying that they were not responsible for this blowout.

  5. Ted Nation says:

    Joe, this is off topic but related to responsibity for this ecological and economic disaster.

    Yesterday the Washington Post published an article indicating that the MMS under Salazar and Obama had issued a Categorical Exclusion exempting BP’s OCS operations in the Gulf from the NEPA process. I realize that the real opportunity for the government to have prevented this disaster occurred during the NEPA review of the lease sale under GWB but this recent action by MMS and the Interior Department certainly complicates the politics of the situation. I would appreciate it if you could use your experience in government to provide some background to this decision and its ramifications.

  6. Brian says:

    Cost of greenwashing BP’s image to “Beyond Petroleum” – more than $100,000,000.

    Cost of one acoustic trigger for the BOP that may very well have prevented this mess – $500,000.

    Cost to the people, to the wildlife and to the Gulf itself – Priceless.

  7. Brian says:

    Also, as to the liability….BP owns the oil coming out of the seafloor, therefore they likely own the consequences of that oil being spilled all over the Gulf.

    Transocean, Halliburton and Deepwater Horizon are liable to BP, and if they messed up, they may have breached their contracts with BP and incurred liability. It will be up to BP to bring in those parties.

    And a message for BP’s CEO, there will be plenty of legitimate claims too, so bring your wallet.

  8. Paul K2 says:

    I just re-read my previous comment, and I should clarify that I am talking about exploratory wells that encounter a significant oil and gas deposit… the chances would be somewhat reduced if dry holes are included.

    Regarding the cofferdam: I actually think this will work. It appears the cofferdam is well designed; even to the point where they thought of circulating warm water and using methanol to avoid hydrates and ice. Too bad this device hadn’t built ahead of time…

    Regarding other solutions: It is good thing the riser held together as well as it did… way beyond design specs. If the riser had landed and broken off on top of the BOP, the blowout flow would likely be higher. The idea that BP was looking at earlier, to remove the riser, and place a second BOP on top of the first, seems to have been placed on a back burner. Based on the damage we can assume has be done to the BOP under an uncontrolled well flow, the integrity of the original wellhead assembly is questionable. Using a 15,000 psi rated BOP was a bit light for this well in the first place. If they blocked the flow, the integrity could be compromised (a second blowout could occur).

    For those interested, this site did a rough calculation to look at what kind of pressures could be present at the wellhead when the flow is shut off. But please recognize that the engineers and drillers on that site are speculating without having full information. Since this was a tight exploratory hole (initially… now, one could say, “the cover has been blown off”), BP should have most of the really important information literally at their fingertips. The real time data from the well was sent to the Houston HQ, and likely has been saved on their systems.


    Re: Transocean fire
    « Reply #360 Yesterday at 6:22pm »

    Yesterday at 5:49pm, offshorelegend wrote:
    On another site, there is a thread that takes you to a survivors interview I am sure others have heard it, the guy gives a good indication of what happened.

    Some other facts are that the well was drilled with 14ppg mud.

    Not ignoring the rest of your post but just to focus….

    The liner shoe was in the reservoir-ie: abnormal pressure

    But assuming scenario for :

    -normal pressure gradient (0.465 psi/ft)

    -csg shoe @ 18360 ft
    -water depth 4920 ft
    -air gap 80 ft
    -ie: riser 5000 ft

    -MW @ 14 ppg
    -S/W grad @ 0.445 psi/ft
    -rock strength @ 0.71 psi/ft
    -static overbalance @ 100 psi

    Lots of assumptions, but based on these I get :

    – Normal formation pressure = 13266 psi
    – Riser hydrostatic = 3640.00 psi
    – SW hydrostatic = 2189 psi
    – Static BHP =13366 psi

    If the riser is displaced with SW :

    Reduction in BHP = 1450 psi
    Which will reduce BHP to 11915 psi.

    IF and only if no Riser margin was not factored into the well fluid below the mudline prior displacing the riser with SW.

    ie: under-balanced by 1350 psi…….and reminder again this is for normal formation pressure.

  9. Chris Winter says:

    Somewhat tangential, but relevant:

    I notice that two ships, the Glomar Challenger and Glomar Explorer, have extensive records of deep-water drilling all over the world. The Glomar Explorer, as you may recall, raised a Soviet ballistic missile submarine (or part of it) from deep in the Pacific. Both ships were designed by Global Marine — which is now Transocean. So there is at least a heritage of success in difficult deep-water operations there.

  10. Rabid Doomsayer says:

    The legal fees of the legitimate claims are going to be huge. This is going to play out for a long time to come, it will go on and on.

  11. Frankie Valejo says:

    Carol Browner, Obama White House climate czar, “put nothing in writing, ever” … Carol Browner, former Clinton administration EPA head and current Obama White House climate czar, instructed auto industry execs “to put nothing in writing, ever” regarding secret negotiations she orchestrated regarding a deal to increase federal Corporate Average Fuel Economy (CAFE) standards. Rep. James Sensenbrenner, R-WI, is demanding a congressional investigation of Browner’s conduct in the CAFE talks, saying in a letter to Rep. Henry Waxman, D-CA, that Browner “intended to leave little or no documentation of the deliberations that lead to stringent new CAFE standards.”

    Should BP have used the same standards as Carol Browner at the EPA?

  12. lizardo says:

    Correction to Bob Wallace’s comment #2. Correct that several companies involved, but Deep Water Horizon was the name of the “ship” which was the drilling platform rig, which had been towed out there, as is the one which is headed out there or now on site nearby to drill the relief well. The Deep Water Horizon was owned by Transocean.

    I have a long draft of why BP is at fault, but the short version is that BP is responsible if they didn’t bother to do a seismic survey even if this was a known productive field (the Macondo) in which they owned a tiny leased block. Because the blowout was initially it appears caused by gas pressure. The blowout preventer didn’t close, seems to have closed finally when the rig sank and the signal was lost. Which was the fail-safe engineering principle at work, a valve that is set to default to a safe setting. But then the oil starting leaking again.

    So, jury still out on what was done down there right or wrong (which might be Halliburton’s bit), but Transocean’s job was up top and it doesn’t appear so far that they did anything wrong, and at least are so adamant about crew safety that they’d drilled their folks so that evacuation was very fast and successful, and the 11 lost are presumed by those who know about drilling new wells from these rigs, to have been killed by the initial blast.

    The failure of the blowout preventer (BOP) might not be manufacturers fault, but might have been excessive gas pressure or gas/oil pressure as they aren’t rated up to infinity.

    I don’t know what the law says, but by Golly if they had got it into a pipeline instead of into the Gulf of Mexico’s waters, that would have been BP’s oil.

    Re #6, The signal from the rig to the BOP at the wellhead was not lost until the effects of firefighting finally tilted the rig over (plus fire effects). It is not clear that the signal was the problem, thus that a separate acoustic signal from a ship would have helped. That firefighting was not so much to put out the fire (since it was essentially the spewing gas and oil burning) as to keep down the heat and put out oil burning on the surface in order for command surface boats operating the Remote Operated Vehicles (ROVs) to go down and try to robotically close the tall hydraulic stack of huge valves that is the BOP.

    Re Paul K’s comment at #8. I was a bit disturbed to read that a possible new BOP to be placed over the old or somewhere was also 15,000 psi as that was what the one that failed was. Your stating that this was a bit light for this well sort of confirms my suspicion that there was an unknown configuration at this site that resulted in higher than anticipated pressure of the entrained gas, and also possibly the oil. This might be a function of depth, might be something to do with the geology under there. But without a proper assessment beforehand (am I assuming something that’s not possible) is it feasible that BP assumed that a seabed oilfield that was already tapped elsewhere had already vented all the excess gas it was going to?

    Or is the gas always a component of the oil, period, and not something that tends to get trapped up at the geological ceiling (which is of course not dead flat)?

    I’m also unclear about where the three leak points are. I know one has been capped, maybe using some kind of valve (is that maybe where the second BOP went? and is the dome that’s more like a square silo going to go over one leak point or two?

  13. Bob Wallace says:

    “I have a long draft of why BP is at fault,”

    That must be quite the trick as, apparently, we don’t know why the disaster happened. Nor do we know the legal structure under which the various separate corporations were operating.

    Back to my original suggestion. How about we don’t form up the lynching party until after the trial?

  14. lizardo says:

    I’m sorry, I didn’t meant to be jumping the gun, but have been struggling to understand more about offshore drilling and spent many hours reading up and now know what I don’t know a whole lot better than I did.

    I am concerned that we not lose sight of the fact that the entire oil cycle is always a disaster waiting to happen, not to mention the impact on our climate.

  15. Paul K2 says:

    My perspective isn’t to look to assign specific blame to any one component or person/ company in this accident; I am looking at this accident a bit differently.

    Management’s job is to assess risk versus reward for projects like this, and if the company (and industry) significantly underestimated the risk on these deepwater tracts, then they end up making poor decisions. And worse, they neglect to fund, engineer, and develop mitigating technologies and systems needed to prevent a major environmental and economic disaster as the BP Macondo blowout. BP claimed the chance of a major spill from a subsea blowout was infinitesimal, which to me means the chance of a blowout on THIS particular well is in the range of 1-10 chances in a million.

    I don’t see how the probability could be that low. Even if we consider this well a delineation well instead of an exploratory well, since other Macondo wells have been successful, there still is a risk to stepping out into a new 3 mile by 3 mile block. But beyond simply looking one well at a time, the correct way to make good management decisions is to consider the entire deepwater exploration and development program in the GOM. As I pointed out in my comment, there have been numerous blowouts on deep wells in the GOM region. Go back to look at the series of blowouts in the onshore Tuscaloosa trend in southern Louisiana in the late 70s. the wells were targeting prospects around 20,000 below sea level, and until they began using 20 kpsi (and even 25 kpsi) equipment, there were some serious blowouts from these overpressured zones. Even shallower zones have had some serious blowouts. The Bay Marchand blowout in 1970 released more oil than the Santa Barbara subsea blowout in 1969. The industry eventually got a handle on reducing blowouts from these kinds of projects, and reduced the odds.

    But deepwater tracts with subsea wellheads and BOPs pose more difficulty with well control, and the risk probabilities seems to have been seriously underestimated. As addressed very well in a more recent Climate Progress post by Dr. Beamish, the industry has underinvested in developing solutions and technology to deal with spills and problems with deepwater drilling. This a management error, and doesn’t depend on pegging the specific causes for this blowout and spill. Oil company management teams need to address this deficiency, and quickly.

  16. Bob Wallace says:

    Interesting (to me) read…

    “The deadly blowout of an oil rig in the Gulf of Mexico was triggered by a bubble of methane gas that escaped from the well and shot up the drill column, expanding quickly as it burst through several seals and barriers before exploding, according to interviews with rig workers conducted during BP’s internal investigation.

    While the cause of the explosion is still under investigation, the sequence of events described in the interviews provides the most detailed account of the April 20 blast that killed 11 workers and touched off the underwater gusher that has poured more than 3 million gallons of crude into the Gulf.”

  17. dangsthurt says:

    Imagine I had a large angry dog in my backyard. I know that if the dog escapes it will hurt people, especially little children. This dog hates children. Then, unfortunately, the dog escapes and it hurts people, especially children. People want to sue me for the damages caused by the dog.

    I reply: It was my dog, but its not my fault. Go sue the people who made the fence that was keeping my dog in my backyard.

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