The companies involved in the BP oil spill had made decisions to cut costs and save time that contributed to the disaster, a US panel has found.
In a 48-page report, the presidential commission wrote that the failures were “systemic” and likely to recur without industry and government reform.
But it said BP did not have adequate controls in place to ensure safety.
A stream of evidence shows that “a culture of complacency” rather than a “culture of safety” prevailed at BP, Transocean Ltd. and Halliburton as they worked on the ill-fated Deepwater Horizon drilling rig, according to the chairmen of the presidential commission investigating the oil spill in the Gulf of Mexico.
The panel’s investigators uncovered “a suite of bad decisions,” many still inexplicable, involving tests that were poorly run, alarming results that were ignored, proper equipment that was sidelined and safety barriers that were removed prematurely at the high-pressure well, said William K. Reilly, who is co-chairman of the commission with former Democratic Sen. Bob Graham of Florida.
“Each company is responsible for one or more egregiously bad decisions,” said Reilly, who was an administrator of the Environmental Protection Agency under President George W. Bush.
A team of federal investigators known as the “BP squad” is assembling in New Orleans to conduct a wide-ranging criminal probe that will focus on at least three companies and examine whether their cozy relations with federal regulators contributed to the oil disaster in the Gulf of Mexico, according to law enforcement and other sources.
The squad at the FBI offices includes investigators from the Environmental Protection Agency, the U.S. Coast Guard and other federal agencies, the sources said. In addition to BP, the firms at the center of the inquiry are Transocean, which leased the Deepwater Horizon rig to BP, and engineering giant Halliburton, which had finished cementing the well only 20 hours before the rig exploded April 20, sources said.
While it was known that investigators are examining potential violations of environmental laws, it is now clear that they are also looking into whether company officials made false statements to regulators, obstructed justice or falsified test results for devices such as the rig’s failed blowout preventer. It is unclear whether any such evidence has surfaced.
BP Plc plans to appoint Robert Dudley to succeed Tony Hayward as chief executive officer as the board looks to recover the company’s position in the U.S., two people with knowledge of the matter said.
Dudley, the director of BP’s oil spill response unit, is ready to be announced as the company’s first American chief on July 27 and to take the helm Oct. 1, one of the people said, asking not to be identified because a final decision hasn’t yet been made. The decision was reached in discussions with board members about how best to take BP forward and rebuild its U.S. position, the person said. The BP board meets tomorrow to “rubber stamp” the plan, the second person said.
“The fact he is American should help to keep things a little more straightforward in his dealings with the U.S. administration,” Ted Harper, who helps manage $6.8 billion at Frost Investment Advisors in Houston, said today. He doesn’t hold BP stock. “Dudley’s most important task will continue to be making sure that the well is capped.”
Watch….[as the following people speak] from New Orleans Roman Catholic Archbishop Gregory Aymond, Margaret Dubuisson of Catholic Charities of the New Orleans Archdiocese, and Rev. John Dee Jeffries, pastor of the First Baptist Church of Chalmette, discussing the spiritual toll of the oil spill crisis for people along the Gulf Coast.
An alarm aboard the Deepwater Horizon oil rig that could have alerted workers to fire and explosive gas had been silenced before the 20 April explosion, a senior rig technician has said.
Mike Williams told a hearing that managers wanted warning sirens and lights silenced because they did want workers disturbed by false alarms.
He said the alarm had been partially shut off months before the blast.
Tests on BP’s newly capped Gulf of Mexico oil well show pressure has been building up slightly as hoped with no signs of leakage, BP says.
BP vice-president Kent Wells said rising pressure “is giving us more and more confidence”. Tests, however, could be extended beyond Saturday.
The new cap has managed to stop the flow of oil for the first time since a 20 April explosion killed 11 people.
John Rotonti, Felix’s owner, would not let the bar go dry. He bought oysters from Florida and Texas to supplement the meager harvest from Louisiana.
Still, a shucker can only do so much in the face of an environmental disaster of mammoth proportions.
Close to closing time, Mr. [Keith] Chancley, who on a good day last year might have made $200 in tips, took a measly $4 out of the tip bucket after the total was split with the rookie shucker (three years on the job) and the novice shucker (a dishwasher in training).
“We’ve got to take the good with the bad,” said Mr. Chancley, a 35-year veteran. “I tell the other shuckers around town ”” we’re a close group ”” just weather the storm. Take it as a time to heal your cramped hands and your soul.”
As the oil continues to spill in the Gulf of Mexico, what to do about off-shore drilling and the regulation of the oil industry is cause for debate in Congress and among coastal residents. Now add to this another dimension: religion.
The Southern Baptist Convention has used notably strong language to call on the government ”” and its own congregation ”” to work to prevent such a crisis again.
In a resolution, the Convention called on the government “to act determinatively and with undeterred resolve to end this crisis … to ensure full corporate accountability for damages, clean-up and restoration … and to ensure that government and private industry are not again caught without planning for such possibilities.”
Dr. Russell Moore helped pass that resolution….
Ron Greve expects the worst is yet to come in the oil spill drama that is haranguing beach towns all along the US Gulf Coast. So, like a growing number of residents, the Pensacola Beach solar-cell salesman took a hazardous materials class and received a “hazmat card” upon graduation.
Those cards, says Mr. Greve, could become critical in coming weeks and months. In the case of a hurricane hitting the 250-mile wide slick and pushing it over sand dunes and into beach towns, residents fear they’ll face not only mass evacuations, but potential permanent relocation.
Storm-wizened locals know that it can take days, even weeks, for roads to open and authorities to allow residents to return to inspect the damage and start to rebuild after a hurricane moves through.
BP’s effort to contain the oil spill in the Gulf of Mexico suffered another setback Wednesday, when a discharge of liquid and gases forced the company to remove the containment cap that for three weeks had been able to capture much of the oil gushing from its damaged well.
Adm. Thad W. Allen of the Coast Guard, at a briefing in Washington, said a remote-controlled submersible operating a mile beneath the surface had most likely bumped a vent and compromised the system. Live video from the seafloor showed oil and gas storming out of the well unrestricted.
This was yet another complication in BP’s two-month-old struggle to contain the tens of thousands of barrels of oil spewing into the gulf.
The oil spill catastrophe in the Gulf of Mexico must be a lesson in humility for all human activities, not only for the energy industry, a Vatican spokesman said.
Jesuit Father Federico Lombardi, director of the Vatican press office, spoke on the latest episode of Octava Dies about the crisis in the Gulf of Mexico following an April 20 well blowout on the Deepwater Horizon offshore oil drilling platform.
“It is difficult to calculate the dimensions of the disaster, but they are certainly enormous and continue to grow,” he said.
“There come to mind other grave environmental disasters connected with human activity,” the priest observed, “like those of the chemical factory in Bhopal, India in 1984, or that of the nuclear reactor in Chernobyl in Ukraine in 1986, which caused a number of deaths and serious harm to people.”
He continued, “What is striking in this case is the sense of impotence and slowness in finding a solution in the face of the disaster, on the part of one the largest and most well-equipped multinational oil companies in the world, but also on the part of the most powerful country on earth.”
That said, the most worrisome long-term economic impact of the Gulf spill lies elsewhere: The catastrophe is adding to the gradual erosion in trust in U.S. professional elites and major institutions, from government to business. It has hardly inspired confidence to watch the White House scramble to prove that President Barack Obama wasn’t as detached from the crisis as he often seemed, or to witness the inability of the world’s best oil engineers to stop the underwater gusher.
Confidence in the economy’s commanding heights has taken a beating following a long run of scandals and malfeasance. The list includes everything from the Enron and Worldcom failures, Bernie Madoff’s massive fraud, the subprime loan mess, the government rescues of Fannie Mae, Freddie Mac, and AIG (AIG), the controversy surrounding Goldman Sachs’ (GS) collateralized debt obligations, and so on. The Tea Party movement may grab all the attention with its antigovernment rhetoric, but surveys have repeatedly shown that its sentiment is widely shared. For instance, a series of long-run surveys by the Pew Research Center find that only 22 percent of those surveyed say they can trust government. That’s about the lowest measure in half a century. The ratings are similarly abysmal for large corporations and banks and other financial institutions: respectively 25 percent and 22 percent.
Trust isn’t as easy to measure as land, labor, and capital. It’s more like a recipe or a software protocol that allows for economic exchange and all kinds of innovation. Nobel Prize Laureate Kenneth Arrow famously remarked that “virtually every commercial transaction has within itself an element of trust.” Societies with high levels of trust are fertile ground for developing large corporations and innovative enterprises. Low-trust societies feature people who don’t like to do business with folks outside their family or community; smaller, family-run companies are the norm.
…beyond speculation about this crisis’ political impact lies re-confirmation of this far more critical reality: As the oil appetite of the world (not just the U.S.) continues to grow, the difficulty in finding enough to go around is growing, too.
Oil will remain an indispensable energy source for decades to come. America must boost domestic production of it within reasonable regulations.
But the Gulf mess is a vivid reminder of the environmental — and economic — hazards of offshore drilling. Those risks are particularly pertinent for South Carolina. We depend heavily on tourism dollars generated by our healthy beaches and coastal wetlands. It’s discouraging to see some of our state’s prominent elected officials, including both of our U.S. senators, remaining supportive of drilling off our precious shores. It’s also frustrating to see so many Americans buying into the myth that “environmental chic” is to blame for the Gulf catastrophe — and for our dangerous dependence on foreign oil.
Long ago, oil virtually leaked from the ground in Texas and Oklahoma. Now it leaks in massive quantities from a mile below the water in the Gulf.
And now we must develop new sources of energy — and a stronger commitment to conservation.
The Prime Minister called for the company to be protected from excessive compensation claims as President Barack Obama made it agree to potentially unlimited damages.
BP provisionally agreed the biggest compensation payment in corporate history, setting up a fund worth at least £13.5 billion to cover the damage caused by its leaking oil pipe in the Gulf of Mexico.
But the US president last night made it clear that BP’s payments could be just the start, warning that the company could still face lawsuits from individuals and American states.
[Russell] Moore served as chairman of the resolutions committee this past week in Orlando when Southern Baptists gathered for their annual national meeting. Thus, in addition to dealing with scores of internal SBC issues, the convention expressed its concerns about the unfolding catastrophe in the Gulf of Mexico.
Noting that the Bible teaches that those who harm the vulnerable should be held accountable, the convention called on “governing authorities to act determinatively and with undeterred resolve to end this crisis; to fortify our coastal defenses; to ensure full corporate accountability for damages, clean-up, and restoration; to ensure that government and private industry are not again caught without planning for such possibilities; and to promote future energy policies based on prudence, conservation, accountability, and safety.”
It urged Southern Baptist churches to recruit waves of volunteers for clean-up crews, just as they did after hurricane Katrina.
The resolution stressed that “our God-given dominion over the creation is not unlimited, as though we were gods and not creatures, so therefore, all persons and all industries are then accountable to higher standards than to profit alone.”
The White House and BP tentatively agreed on Wednesday that the oil giant would create a $20 billion fund to pay claims for the worst oil spill in American history. The fund will be independently run by Kenneth Feinberg, the mediator who oversaw the 9/11 victims compensation fund, according to two people familiar with the deliberations.
The agreement was not final and was still being negotiated when President Obama and his top advisers met Wednesday morning with BP’s top executives and lawyers. The preliminary terms would give BP several years to deposit the full amount into the fund so it could better manage cash flow, maintain its financial viability and not scare off investors.
The talks have been complicated by the fact that BP’s ultimate liabilities for the cleanup and lost business are unknowable since the two-month-old leak of its well in the Gulf of Mexico could be spewing oil for months more. To date, BP has spent more than $1 billion on containment, cleanup and claims from the Coast Guard, fishermen, oil workers and other businesses from Louisiana to Florida.
Since late last week, the negotiations have been closely held given the market sensitivity for BP, which has seen its stock lose about half its value since the spill. BP’s next dividend for shareholders is another issue on the table. Some members of Congress have called for blocking any dividend payments, though the legality of such action is in dispute, or for putting the dividend in another escrow account pending payment of claims to victims. Either option would be problematic for many institutional investors and pension funds with stock in BP.
Terry Vargas is living with the oil. Nearly three weeks ago, the third-generation shrimper pulled into port in Grand Isle, in southeast Louisiana, with a catch worth $1,400. But that was before authorities closed the rich Delta waters to fishing, thanks to the massive oil spill that has swamped the shoreline. Like many furloughed Louisiana fishermen, Vargas took a check from BP ”” part of the energy giant’s promise to Gulf Coast residents to “make things right” in the wake of the biggest environmental disaster in U.S. history. It was for $5,000, an amount Vargas says he can make in two nights during a good shrimping season. Still, $5,000 is better than nothing, but Vargas knows it won’t cover his expenses now or in the uncertain weeks ahead. So he has taken on carpentry jobs ”” the only paying work he can find ”” and today is building a small shed among the houses on Grand Isle, many of which stand on stilts, stork-like, to endure the inevitable floods.
Vargas thinks about the hurricane season that began on June 1 ”” forecasters predict a major one ”” and remembers when Katrina hit and left a pile of sand in his living room. Hurricanes pass; people evacuate, and then they rebuild. But the spill is a disaster of a different kind. He worries about a storm hitting the oily waters, raining crude on his hometown. “If that oil comes ashore,” Vargas says, “it’s all over.”
I think [Mark ] Mykleby’s letter gets at something very important: We cannot fix what ails America unless we look honestly at our own roles in creating our own problems. We ”” both parties ”” created an awful set of incentives that encouraged our best students to go to Wall Street to create crazy financial instruments instead of to Silicon Valley to create new products that improve people’s lives. We ”” both parties ”” created massive tax incentives and cheap money to make home mortgages available to people who really didn’t have the means to sustain them. And we ”” both parties ”” sent BP out in the gulf to get us as much oil as possible at the cheapest price. (Of course, we expected them to take care, but when you’re drilling for oil beneath 5,000 feet of water, stuff happens.)
As Pogo would say, we have met the enemy and he is us.
But that means we’re also the solution ”” if we’re serious. Look, we managed to survive 9/11 without letting it destroy our open society or rule of law. We managed to survive the Wall Street crash without letting it destroy our economy. Hopefully, we will survive the BP oil spill without it destroying our coastal ecosystems. But we dare not press our luck.
We have to use this window of opportunity to insulate ourselves as much as possible against all the bad things we cannot control and get serious about fixing the problems that we can control. We need to make our whole country more sustainable. So let’s pass an energy-climate bill that really reduces our dependence on Middle East oil. Let’s pass a financial regulatory reform bill that really reduces the odds of another banking crisis. Let’s get our fiscal house in order, as the economy recovers. And let’s pass an immigration bill that will enable us to attract the world’s top talent and remain the world’s leader in innovation.
A specially outfitted ship ventures into deep ocean waters in search of oil, increasingly difficult to find. Lines of authority aboard the ship become tangled. Ambition outstrips ability. The unpredictable forces of nature rear up, and death and destruction follow in their wake. “Some fell flat on their faces,” an eyewitness reported of the stricken crew. “Through the breach, they heard the waters pour.”
The words could well have been spoken by a survivor of the doomed oil rig Deepwater Horizon, which exploded in the Gulf of Mexico in April, killing 11 men and leading to the largest oil spill in United States history. But they come instead, of course, from that wordy, wayward Manhattanite we know as Ishmael, whose own doomed vessel, the whaler Pequod, sailed only through the pages of “Moby-Dick.”
In the weeks since the rig explosion, parallels between that disaster and the proto-Modernist one imagined by Melville more than a century and a half ago have sometimes been striking ”” and painfully illuminating as the spill becomes a daily reminder of the limitations, even now, of man’s ability to harness nature for his needs. The novel has served over the years as a remarkably resilient metaphor for everything from atomic power to the invasion of Iraq to the decline of the white race (this from D. H. Lawrence, who helped revive Melville’s reputation). Now, 50 miles off the Louisiana coast, its themes of hubris, destructiveness and relentless pursuit are as telling as ever.
For too long, we evangelical Christians have maintained an uneasy ecological conscience. I include myself in this indictment.
We’ve had an inadequate view of human sin….
We’ve had an inadequate view of human life and culture.
What is being threatened in the Gulf states isn’t just seafood or tourism or beach views. What’s being threatened is a culture. As social conservatives, we understand”¦or we ought to understand”¦that human communities are formed by traditions and by mores, by the bond between the generations. Culture is, as Russell Kirk said, a compact reaching back to the dead and forward to the unborn. Liberalism wants to dissolve those traditions, and make every generation create itself anew; not conservatism.
Every human culture is formed in a tie with the natural environment. In my hometown, that’s the father passing down his shrimping boat to his son or the community gathering for the Blessing of the Fleet at the harbor every year. In a Midwestern town, it might be the apple festival. In a New England town, it might be the traditions of whalers or oystermen. The West is defined by the frontier and the mountains. And so on.
When the natural environment is used up, unsustainable for future generations, cultures die. When Gulfs are dead, when mountaintops are removed, when forests are razed with nothing left in their place, when deer populations disappear, cultures die too.
KIM LAWTON, host: Repercussions from the Gulf Coast oil spill dominated the news again this week. President Obama pushed BP to do a better job of resolving the crisis and taking responsibility for the damages. Meanwhile, religious groups have been holding a series of prayer vigils across the country. Participants are praying for an end to the environmental disaster. They are also offering prayers for those who have been most severely affected. The crisis has taken a devastating toll on people involved directly and indirectly in the fishing industry. Several faith-based groups have been mobilizing to provide assistance. Joining me now is Margaret Dubuisson of Catholic Charities of the Archdiocese of New Orleans. Margaret, thanks for being here. Tell us a little about the needs you’re serving right now.
MARGARET DUBUISSON (Catholic Charities of the Archdiocese of New Orleans): Well, Kim, we have five centers set up in the fishing villages in the archdiocese of New Orleans. We’ve seen about 8,000 people so far, fishermen and their families who’ve come in just looking for help, looking for support, looking for financial assistance in some way. The BP claims process is a little cumbersome, and it is going to take some time. So Catholic Charities has been able to provide direct assistance and food much more quickly and put that in the hands of the fishermen through these five emergency relief centers.
Twice a day, precisely at 10 a.m. and 2 p.m., alarms ring on dozens of cell phones, alerting those participating in the Rev. Jim Woodard’s week-old Internet prayer initiative to spend one minute praying for relief from the BP Gulf oil spill.
In Meraux, Cesar Lopez rises each morning at 4:30 a.m. and says the rosary, as he does every day, remembering especially to pray for relief for families stricken economically by the spill.
And in Violet, a coalition of Christian pastors has begun laying plans to pray with out-of-work fishers at least three mornings a week in Shell Beach, Delacroix and Hopedale as the men gather before dawn to learn whether BP will put them to work that day.
“Whatever BP decides to do, that’s down the road,” said Brandy Shelton, who lingered after the Sunday service at Christian Fellowship in Violet.