Gulf Watchers Tuesday - 95% of BP's Atlantis engineering docs not approved - BP Catastrophe AUV #585

Topics: BP Atlantis whistleblower alleges false claims, BP Says U.S. Withholding Evidence of Extent of Oil Spill, P Workers Can’t Sue Retirement Plan Over Spill Loss, Judge Says, BP oil spill trial plan could change, Gulf Oil Drilling To See Busiest Year Since 2010 BP Spill, TNK-BP Ukraine Cuts Half of Jobs in Reorganization After Losses

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It shouldn't come as a surprise to anyone that the Department of Interior's industry-captive Minerals Management Service (now the Bureau of Ocean Energy Management, Regulation and Enforcement) didn't find anything amiss with as-built documents on BP's Atlantis being AWOL. They were every bit as responsible for this serious safety shortcoming as BP. Having accurate, as-built documents on site is not some sort of meaningless bureaucratic requirement. It is an absolute necessity for proper maintenance. It is even more critical on a rig like the Atlantis that is chock full of bleeding edge technology where even experienced personnel will have difficultly knowing how to keep equipment in good repair. There is nothing safe or sensible about making them work by guess and by golly. The courts are the public's last resort when government regulators are nothing more than willing rubber stamps for the businesses they are supposed to be regulating. There aren't many judges who are willing to take on the powers that be to act in the public's interest so it's very likely that there won't be the independent safety review that the public and Atlantis workers rightfully deserve. BP Atlantis whistleblower alleges false claims April 05, 2012, 11:42 AM     Updated: Thursday, April 05, 2012, 4:59 PM A whistleblower who has complained for years that BP didn't maintain proper engineering documents aboard its Atlantis oil platform, in violation of federal regulations, has now additionally claimed that BP lied to the government about whether the design of most of the platform hull was ever approved by registered engineers. Whistleblower Kenneth Abbott has filed a motion for summary judgment against BP in federal court in Houston. The central piece of Abbott's complaint took a hit last month when Interior Department regulators performed a surprise visit to the Atlantis, "inspected hundreds of essential components on the Atlantis facility and confirmed that Atlantis is in compliance with agency regulations and is operating safely," according to BP. But Abbott also argues that BP made false claims in 2002 when it certified to the federal Minerals Management Service that registered engineers had approved Atlantis' design. Because of that, he contends that BP owes the U.S. the full value of the Atlantis oil field, which it leases from the federal government. … Last year, the Interior Department's report essentially found that documents were disorganized but not missing the way Abbott alleged. Investigators reviewed 3,400 engineering drawings and interviewed 29 people connected with the rig operations and found several deficiencies in the documents. It also said BP failed to file documents with the government showing changes it had made to its production safety system. BP was cited with an infraction, but did not have to pay a penalty and has since provided the required drawings. The director of the offshore regulatory agency at the time, Michael Bromwich, said that in spite of the document deficiencies, Abbott's claims that workers were put at risk were "without merit." Abbott served as a BP contractor on Atlantis, a $2 billion oil-and-gas production rig 190 miles south of New Orleans, when he allegedly discovered the required documentation was missing. He reported to a BP ombudsman in 2009 that the rig didn't maintain required "as-built" drawings of the systems and structures on the rig. The ombudsman, retired federal Judge Stanley Sporkin, later substantiated Abbott's concerns that the project was not following its own plan. Abbott's latest filing quotes from Sporkin's confidential report, which states that BP engineers grew "annoyed" at Abbott in December 2008 when he kept insisting that they follow the regulations and transfer as-built drawings to the platform. But a letter from Sporkin's deputy to Abbott also states that the ombudsman did not do a comprehensive audit of the documents and found that concerns about document problems pre-dated Abbott's time working on the project. … Based on documents gathered during discovery for the case, Abbott claims that 95 percent of the "as-built" engineering drawings used to build the platform were never approved by licensed engineers. While BP sought and received a special approval from MMS to use unstamped designs from a Swedish firm, it never asked for such a waiver for the vast majority of the designs of major components by a Korean shipbuilding company.

This is the point where the public will pay dearly for Secretary Chu's decision to shut the Macondo in rather than forcing BP to produce it which would have provided an accurate flow rate. The fact that the government was singing from BP's hymnal early on about the ridiculously low flow rates that BP was claiming will provide bunkers of ammunition for BP lawyers. Lacking good data, even legitimate early estimates of the flow rate were more by guess and by golly than being accurate scientific assessments. No doubt BP lawyers will have a field day with those as well. While the truth and BP are total strangers, in this case I wouldn't be surprised if the government is trying to keep documents from BP. I would expect there is quite a bit in them that would be helpful to BP and embarrassing to the government. BP Says U.S. Withholding Evidence of Extent of Oil Spill Mar 30, 2012 12:10 PM CT BP Plc (BP/) said the U.S. government is withholding evidence that would show the oil spill from the Macondo well in the Gulf of Mexico was smaller than claimed. BP has identified 10,000 documents, out of more than 80,000 the government sought to suppress, that relate to estimates of the April 2010 spill, the London-based oil producer said in a filing yesterday in federal court in New Orleans. The U.S. estimated in August 2010 that 4.9 million barrels of oil, plus or minus 10 percent, spilled into the Gulf after a rig exploded. “Despite the United States’ declaration that it was ‘ground truth,’ the Aug. 2 estimate was in fact the fourth official estimate” to be released, BP said in the court filing. BP said March 2 it would pay at least $7.8 billion to resolve private plaintiffs’ claims for economic loss, property damage and injuries. A magistrate judge in New Orleans today predicted a multiphase trial over liability for the spill will still go forward. David Nicholas, a BP spokesman, declined to comment immediately on the filing. Wyn Hornbuckle, a U.S. Justice Department spokesman, also declined to comment. … The law provides for fines of as much as $1,100 for each barrel of oil spilled as a result of simple negligence, often described as a failure to exercise ordinary care. The maximum fine will increase to $4,300 a barrel if BP or the other defendants are found to have been grossly negligent, meaning a conscious action or omission caused the spill. … U.S. Magistrate Judge Sally Shushan expects the liability case to proceed, she told lawyers for BP; Transocean Ltd. (RIG), the Venier, Switzerland-based owner of the Deepwater Horizon drill rig that exploded; and Halliburton Co. (HAL), which supplied cement for the rig, as well as attorneys for the federal and several state governments. “I think we’re going forward with the remainder” of the liability case over the explosion, and then the government’s environmental claims will be heard in a separate phase of the trial on “source control” for the oil spill, Shushan said at a hearing today. “That’s my position and I’m sticking to it.” … The accord BP reached this month with businesses and individuals is to be paid from a $20 billion trust set up in 2010 for victims. BP has set aside $37 billion to cover spill costs. The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, MDL-2179, U.S. District Court, Eastern District of Louisiana (New Orleans).

It would seem that companies can be as reckless as they wish regarding safety leaving their employees holding the bag in their retirement funds. Securities laws seem to be useless in preventing even egregious corporate misbehavior. BP Workers Can’t Sue Retirement Plan Over Spill Loss, Judge Says - Bloomberg BP Workers Can’t Sue Retirement Plan Over Spill Loss, Judge Says Mar 30, 2012 11:01 PM CT BP Plc employees can’t sue managers of the company’s retirement savings plan over losses related to the 2010 oil spill in the Gulf of Mexico, a judge ruled. U.S. District Judge Keith Ellison in Houston yesterday threw out least eight employee lawsuits that sought to recover millions of dollars in losses that BP’s employee retirement plans allegedly suffered from the largest offshore oil spill in U.S. history. The suits questioned plan managers’ investments in BP’s shares. “Examining the fluctuations in BP’s stock price suggests that plaintiffs’ losses were only temporary,” Ellison wrote in his 42-page ruling. “BP’s steady revenue stream and expansive worldwide operations belie plaintiffs’ contention that the Deepwater Horizon explosion and subsequent spill were a threat to the viability of the company going forward.” BP officials said today the U.S. government is withholding evidence that would show the spill was smaller than claimed. BP disputes the government’s estimates that that about 4.9 million barrels of oil spilled into the Gulf after a rig exploded. U.S. Environmental Claims The London-based company is facing litigation over its handling of the Macondo well off the coast of Louisiana, including environmental claims by the federal government and several states, which could result in as much as $17.6 billion in fines. Earlier this month, it agreed to pay at least $7.8 billion to settle private plaintiffs’ claims related to economic loss, property damage and personal injuries. Guy Potvin, a BP’s spokesman, declined to comment on yesterday’s ruling. Ron Kravitz, co-lead counsel for the BP employees in the lawsuits, said in a telephone interview, “We’re reviewing our options on behalf of the participants in the BP plans.” … Ellison concluded that BP employees couldn’t produce enough evidence of wrongdoing on the part of the retirement plans’ managers to justify taking their claims to trial. ...

Unsurprisingly, there is disagreement about how to proceed with the BP trial after BP settled with private litigants. It seems odd that Judge Shushan is entertaining the idea of taking up the issue of fines before determining the cause of the Deepwater Horizon/Macondo catastrophe. One wonders if anyone even cares or if getting their hands on fine money trumps any new information that might come forth in trial that would help prevent encore tragedies. Why Halliburton is so all-fired determined to take up the issue of "source control" mystifies me since they were responsible for the failed cement job. BP oil spill trial plan could change Published: Wednesday, April 04, 2012, 10:15 AM Now that BP has a proposed settlement with a large class of plaintiffs in the federal oil spill case, the U.S. District Court in New Orleans is considering changing the way the case should move forward. For the first time Friday, parties to the lawsuit openly considered changing the trial plan to move up BP's largest liability, the U.S. government's civil penalty claims under the Clean Water Act. For the first time Friday, parties to the Gulf oil spill lawsuit openly considered changing the trial plan to move up BP's largest liability, the U.S. government's civil penalty claims under the Clean Water Act. U.S. Magistrate Judge Sally Shushan asked the attorneys general from the affected Gulf Coast states, led by Alabama and Louisiana, to propose schedules for discovery if the court were to keep the plan of taking testimony on what caused the April 2010 oil spill, or, alternatively, if it were to go directly to considering the government's imposition of fines. The proposed settlement with most private economic damage and medical claims plaintiffs, estimated by BP to cost about $7.8 billion, is not the biggest ticket item BP and its co-defendants are facing. The Clean Water Act fines could more than double that amount, if the responsible parties are found to be grossly negligent. Clean Water Act fines are based on the amount of oil spilled, pegged by the government at 4.9 million barrels, with 800,000 barrels collected at the wellhead. The resulting 4.1 million barrels discharged into the water would translate to about $17.6 billion in fines if gross negligence or willful misconduct is proven. BP contests the size of the spill and has recently filed documents in court challenging the U.S. to disclose documents about the quantity of oil spilled. Complicating matters, the second phase of the trial was supposed to be about "source control," or the efforts to contain and cap the flow of oil. Lawyers for BP's cementing contractor Halliburton, which is a co-defendant in the case, argued Friday that the government's pollution fines can't be addressed without first answering questions about source control. The parties are scheduled to meet again with Shushan on April 13, just a few days before the final terms of the private-party settlement are supposed to be finalized. There is still no date set to begin the actual trial.

There will be eight new deepwater rigs in the Gulf this year despite the fact that there any changes to make such rigs safer have been nothing more than window dressing. High gas prices provide a difficult political climate to make the necessary changes to increase safety for deepwater drilling. Gulf Oil Drilling To See Busiest Year Since 2010 BP Spill 04/10/2012 6:59 am NEW ORLEANS, April 10 (Reuters) - Gulf of Mexico oil drillers will be busier this year than at any point since the BP oil spill in 2010 that upended their industry and soiled their reputation along with parts of the marshy Louisiana coast. Eight more deepwater rigs are expected in the Gulf this year, based on what oil companies tell contractors including Transocean, Ensco and Seadrill. Such an influx would bring the active deepwater count to 29, just short of the level before the well blowout two years ago this month that killed 11 people and destroyed a Transocean rig. … More Gulf activity could help President Barack Obama, ahead of the Nov. 6 election, as he tries to fend off charges from some Republicans and the industry that drilling has not recovered after the spill due to new rules and slow permitting. The Obama administration imposed a four-and-a-half-month moratorium on deepwater drilling after the oil spill. That gave way to a longer spell when regulators grappled with stricter rules and allowed little drilling to take place - oil men deride that period as the "permitorium." … The pace of permitting remains choppy. Business group Greater New Orleans Inc found that an average of three permits a month were approved in the November to January period, compared with nearly six a month in the year before the spill. … But Elgie Holstein, who was oil spill response coordinator at the Environmental Defense Fund, said a serious review of drilling practices was vital given the lives lost in April 2010, even if not everyone was happy with the delay. "As the complexity and challenges of drilling in deeper and deeper waters grew, the government's ability to supervise the industry waned," he said. "I don't think there can be any disagreement that we needed to fundamentally revisit what the rules of engagement are in some of these frontier areas." … "Good activity in the Gulf of Mexico accrues to this region, so we'd certainly expect to see things at least holding their own or getting better here," David Williams, chief executive of drilling contractor Noble Corp, said on the sidelines of the Howard Weil Energy Conference in New Orleans. ... Such optimism is bolstered by the eight rigs slated to begin work in the Gulf in 2012, starting with Noble's Globetrotter I this month, which will be the second Noble drillship to go to work for Royal Dutch Shell Plc here in as many months. Cobalt International Energy Inc, the fourth-largest deepwater Gulf player, is drilling a well now and plans three more this year, even though the private-equity-backed start-up made headlines for its huge discovery in Angola. … Obama wants to scrap billions of dollars in tax breaks for the biggest oil companies, yet pressure to open up drilling with oil prices so high makes cracking down on the industry a tough task. Last week the administration said it would automate applications for onshore drilling permits, which it expected to slash review times by up to 80 percent. Of course, increased drilling will do little, if anything, to push down gasoline prices, which tend to rise in the summer. …

After its idiotic business dealings in Russia BP is losing money. It should be noted that BP commented that it will be focusing on marketing with nary a word about safety. I wonder how long it will take for something truly awful to happen at the Linik refinery. TNK-BP Ukraine Cuts Half of Jobs in Reorganization After Losses Apr 9, 2012 7:31 AM CT TNK-BP Ukraine is cutting half of its staff and making its Linik (TLNICRUD) oil refinery a separate unit as part of a “radical” business change after net losses in the past two years. TNK-BP, Russia’s third-biggest oil producer, will cut administrative spending in Ukraine, focus on marketing and keep a representative office, the Kiev-based division said in an e- mailed statement today. The Linik refinery will be made into a separate unit after being halted in March for repairs for an indefinite period because it was unprofitable, TNK-BP Ukraine said today. The Ukrainian operations had a net loss of $68 million in 2010 and $23 million last year, according to the statement. ...

PLEASE visit Pam LaPier's diary to find out how you can help the Gulf now and in the future. We don't have to be idle! And thanks to Crashing Vor and Pam LaPier for working on this!

Previous Gulf Watcher diaries:

3-27-12 03:00 PM	Gulf Watchers Tuesday - BP's Fingerprints Found At Dead Coral Crime Scene - BP Catastrophe AUV #584	Lorinda Pike
3-20-12 05:00 PM	Gulf Watchers Tuesday - Whistleblower asks court to shut down Atlantis rig- BP Catastrophe AUV #583	peraspera

The last Mothership has links to reference material.

Previous motherships and ROV's from this extensive live blog effort may be found here.

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