The federal government today issued a second set of citations to BP accusing the oil company of violating safety and environmental regulations while drilling the Macondo well that fatally blew out last year.
BP said it would appeal the new notices, which zeroed in on alleged problems with the company’s management of the well, including an accusation that the company continued drilling even when risks jumped outside government-approved boundaries.
The “incident of non compliance” notifications sent to the firm today build on earlier allegations that BP, Halliburton and Transocean together ran afoul of 15 offshore regulations in drilling, designing and cementing the well last year.
The three companies already face up to $45.7 million in fines for those earlier citations, which were issued in October and based on the conclusions of a federal probe of the Deepwater Horizon disaster.
Today’s citations go further. The Bureau of Safety and Environmental Enforcement issued the newest violation notices to BP today after taking a closer look at how the Macondo well was drilled.
Bureau director James Watson said the new citations were a result of that deeper dive.
“Further review of the evidence demonstrated additional regulatory violations by BP in its drilling and abandonment operations at the Macondo well,” Watson said in a statement.
“Our federal regulations exist to ensure safe and environmentally-responsible activities,” Watson added. “We will continue to be vigilant in enforcing those regulations.”
The safety bureau today sent BP five citations and accused the firm of violating two different regulations governing work on the outer continental shelf (in the case of one of those regulations, the violation is alleged to have occurred four times, in different sections of the Macondo well).
According to the safety bureau, BP violated a rule requiring the company to conduct an accurate pressure integrity test at the 13-5/8” liner shoe. The bureau also argues that BP violated a separate regulation four times, by failing to suspend drilling operations at the well when work slipped outside the safe drilling margin that had been identified in the company’s government-approved permit to drill.
That drilling margin represents the difference between the pore pressure exerted by oil and gas in the underground formation and the countervailing weight or pressure of drilling fluids at the site.
BP said it would challenge the violations before the administrative Interior Board of Land Appeals.
“The issues raised in today’s INCs regarding drilling margins and related integrity testing played no causal role in the accident,” BP spokesman Scott Dean said in a statement. “BP intends to appeal these INCs, as well as those issued several weeks ago.”
Each violation carries a penalty of up to $35,000 per day per incident. In the case of the oil spill, violations may have covered just one day or up to 87 days — the time crude was gushing into the Gulf — creating a maximum potential tab per incident of $3.05 million.
The new violations could add anywhere from $175,000 to $15.23 million to BP’s tab, on top of the $21.32 million in penalties the company was facing from the citations issued earlier. With today’s action, the government is ratcheting up BP’s potential civil penalties for the alleged offshore drilling violations to $36.6 million.
Rep. Ed Markey, D-Mass., said the potential fines are a drop in the bucket for companies such as BP that can spend $1 million daily renting a rig to drill in the deep waters of the Gulf of Mexico.
“These new violations reinforce BP’s culpability for their oil spill, but it is just a drop in the ocean of fines that the company still must pay to the American people for the worst environmental disaster in our history,” Markey said. “Today’s fines are unfortunately nothing more than a slap on the wrist for an oil giant like BP — the equivalent of a parking ticket on a Bentley.”
The safety bureau’s sanctions are separate from fines and penalties expected under the Clean Water Act, which could reach $21 billion for BP, based on estimates that 4.9 million barrels of oil gushed into the Gulf after its Macondo well blew out on April 20, 2010. The failure triggered a lethal explosion on board Transocean’s Deepwater Horizon drilling rig, killed 11 workers and unleashed the worst oil spill in U.S. history. Halliburton was responsible for cementing work at the site.
The incidents of non compliance kick off a long process of assessing civil fines.
Of course they are, the government’s new cash cow, on top of the billions in taxes they get from oil companies and drillers every year. Gota pay for the trillion dollar bank bailout spending and for green companies that go broke anyway, as well as replacing GE not having to pay taxes. It will never end until the companies go out of business…which is what the gov’t wants. We’ll end up importing most of the product. They’ll find a way to fine them for every screw in a platform, after their people change the standards.
Sounds like someone needs some campaign money.
“Halliburton was RESPONSIBLE for cementing work at the site.”
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Not legally Jen. They PERFORMED the cementing work, but BP by contract is ultimately RESPONSIBLE.
You oil and gas guys probably know better, but I still think Halliburton is at fault for a shoddy cement job. Also, there was more oil down there (higher well head pressure) than they thought.
Honestly don’t care what happens to BP. If they violated their permit in any way, they deserve to be fined heavily.
I think BP is a sorry excuse for an oil company and gives the other companies a bad name. BP has proven to be nothing more than a joke based on their history. They should not be allowed to drill anywhere in the Gulf for years to come. They should be fined 10 percent of their profit over 10 years or go back over the pond.
$15 million ?? All BP’s CEO has to do is give up his stock awards for the next year or two…that will more than pay the fine…
Trail_Tramp:
Thanks for your comment. As you noted, I didn’t say “Halliburton was *legally* responsible for cementing work at the site” — just that “Halliburton was responsible” for it.
Perhaps it would have been more artful — or less subject to another connotation or interpretation to say it another way — but I only meant to communicate that Halliburton conducted cementing work at the site.
BP contracted Halliburton to do so; Halliburton was then responsible for completing that part of the work at Macondo.
The government makes the regulations so layered and complex that in some cases they are mutually exclusive; you have to be out of compliance with some of them in order to be in compliance with others. Their goal is to trip up a company so that they can be fined. The feds always have the last word, but what do they ever do to add value to this economy? For the record, there isn’t a better company in the oil industry than BP and it is very doubtful any other company could have responded like they did to the blowout, the spill, and the restoration taking place.
@WriterDude…the problem with the cement job appears to have been the execution of the cement job not the quality of Halliburton’s cement material. They (being everybody involved) may have damaged the float valve in the casing shoe allowing the cement in the bottom of the casing to leak out. Even if that was what happened, BP is still ultimately responsible for the cement job and at fault for assuming they had a properly sealed wellbore. Also, the reservoir was normally pressured.
This stuff will be tied up the courts with appeals, etc. and will drag on forever. BP will end up paying attorneys more than the amount of these fines. And our huge federal government bureauracy has probably already wasted and definitely will waste more than that.
kn – the trillion dollar bank bailout that GWB passed?
@ Jennifer: I know you are working hard and I appreciate the job you are doing. I use to be a journalist myself. Houston is an oil town and you are writing to a tough audience. With all the lawsuits flying back and forth between BP and Halliburton right now, the term “responsible” takes on a much more significant meaning. BP contracted with Halliburton for the cement jobs and that contract would clearly state that BP assumes all liability regarding that cement job, short of an actually defect in the material. BP was in charge of the execution of the cement job and thus “responsible”. #30#
Trail_Tramp, Jen wrote a comment back about your issue. Legally responsible and responsible (i.e. performed) are two different things. I think you are looking to literal at the word.
Well I am an old oil and gas guy. Dad was with Humble form the start.
Anyone defending that hack of a brittish owned gang of the world is ours to crap on Company doesn’t know the trac record of those louts or is ought and paid for..
That board of directors is and alwayds has been operating under the old “sun never sets on the Brittish Empire” axiom. Meet em then , know who they are now.
Worst saftey record by far – more purposeful violations than all offshore and inshore companies combined.
The decison to cheaply “dispurse” the spill with more chemicals( and actually finding a way to profit by purchasing that stuck with it since it is iligall to use now dispersant inventory OWNED by board members but ILLEGAL in all other EU countries) instead of collecting it the the most expensive yet time proven most effective way was a slap in the face of this country.
The cheers that all is ok because so much more than thought “evaporated” was intellectually dishonest and actually board discussed as a great news to placate the ignorant and idealogical hypnotized that do not seem to, or do not care to , understand ehat is taught to school aged children-t evapoate does not mean “go away” , it meand change to vapor.
Pick your poisen fools. Better yet saddle up to your garage gas can and take a nice whiff- that is evoparation. But we have them discussing that with glee- not for the effects of “evaporation” but rather how the “bloody dumb blokes will buy it without reservation”, to restate the quote.That is who you are dealing with with that operation.
No self respecting oil and gas man from a blue chipper in this counrty or elsewhere will gladly do biz with BP if at all possible. Why people cannot understand that group give the industry a bad name inside and out i do not know.They do not care about any long term consequences and I am telling you even EXXON who i destested and fought tooth and nail during the buyout and therea, gets the need to consider the future.
My dad officed right underneath the Petroleum club in the Humlble building,with a suit and tie, but could give you the name of every Katy Rice farmer who let us easement thru their fields.
With todays new specially exempted from the Clean Air and Water Act act natural gas industry ( Thank Cheney, i spend millins keeping my neighbors properties clean and still profited enuf ) your local farmer is just someone to dump spent frag water on. Little wonder we buy Rice from Asia now. And peroleum from BP.
Short term profits usually mean long term losses.
Any ecomomist will tell you non remewable resources are to protected at all costs.
I hope BP gives the US govt the middle finger. $20 billion and you want more? ExxonMobil would have fought for years and never paid a dime.
@Dan…I’m looking at the word as a former journalist. It not just a matter of a word’s definition, but context as well, (i.e. fines, settlements, lawsuits, etc.)
Safety procedures not in place. Subquality work, Neglegence..BP should be fined.
Blue collar & White collar crimes should be punished.
BUT I’m sick & tired of self-rightgeous Govt. agents & agencies that
are gleefully pointing their indignant fingers at everyone but themselves.
Our 14 Trillion Dollar deficit is a crime! Yes the wolves are guarding
the henhouse.
Mikey:kn – the trillion dollar bank bailout that GWB passed?
AND how many trillions have been added since BO took office, how about
25% INCREASE in 3 Years. GWB made mistakes, BO took the notch up a mile.
kn – Let me get this straight. You think that companies such as BP are a cash cow for the government, because they like to excessively tax and impose fines on these companies. And you also think that the government is doing this to drive the companies out of business, so we can import the products for outside the US?
If the government is trying to drive these companies away, wouldn’t that be the end of their cash cow? I don’t think your logic works here. I hate to break it to you, but not only is BP a British company, but we also import most of our oil from overseas anyway. Because our supply is paltry by comparison.
I know you really really want to make our government a bad guy here, which isn’t far from the truth as it is far from efficient or fair, but when oil companies are some of the most profitable companies in the world, they will be paying some of the highest taxes in the world. It’s common sense and basic math. Also, a company such as BP should be held accountable for one of the largest man-made environmental disasters the world has seen. There is a reason these companies are heavily regulated – so events such as the Deepwater Horizon spill don’t happen. The rules weren’t followed in this case, and…oops. Well, you know the rest.
jarded – this is a logic free zone.
The problem with any type of “production” industry (drilling, manufacturing, whatever it is), is that Safe Practices and Procedures go out the window when the suits scream for “more, more, more” and the blue collars either produce it, or get fired. While the collars push to meet that ever increasing production goal, the company they work for and they, themselves sacrifice the MINIMUM safety standards for whatever job they are doing. While those workers paid for this with their lives, the companies HAVE paid fines, and are probably facing other lawsuits. My questions were, and still are, what were the shifts these guys were working? 12+ hours most likely, did they get days off while on the rig? NO, it’s generally XX days on/X days off. Our Government should not fine BP, Transocean or Halliburton any further than they have already fined them. Why not? Because there are, as a previous posting said, so many rules, that to be in compliance with some, you are totally out of compliance with others.
Where is Tom Fowler: I believe I emailed him months ago about a cover up…but he didn’t think it was realistic. If I proved otherwise; can I have his job?
I apologize…he must be on vacation.
There is a reason that Transocean CREATED a tech support dept. within or one or two months of the Horizon incident. I am not one to believe in coincidence…unlike some lawyers.
As a born researcher with time on my hands I did find out a thing or two.
Sincerely,
Justice at Work
P.S. Details and EData comes with a cost…but then: who ever investigated the barrells of acid dumped into Lake Houston when I asked for help?
Huh?
Jason, Tom Fowler left the Houston Chronicle a few weeks ago for another job.
Sorry Dan X. McGraw, I didn’t recognize who you were when I posted my reply. Please don’t take it the wrong way. I don’t think being a “former journalist” makes me an expert on news copy, but it certainly makes me opinionated about news copy. It stays in your blood.
So, according to BP spokesman Scott Dean, an underweight drilling fluid column and uncontrolled well bore fluid intrusion “played no causal role in the accident”.
‘Book em Danno – Murder 1’
Sorry to hear Tom left. Good luck to him.
Another shakedown by the Federal government?
To everyone bad mouthing BP, you have no idea what your talking about. Do you have any idea how many people BP has working for them in the United States ? Do you know how many family’s are supported by them ? BP is no different than any of the rest except they take better care of their employees than the rest do. Two other large oil companys have had spills since BP but have you made a big deal out of it ? Hell no you have not.
Do you even know the spills I’m talking about ? The oil business is not like baking bread, when things go wrong it can be very bad. It happens at every plant and rig. Everyone needs to look at all the good things BP has done for our country before they open their mouth with stupid opinions. Everyone has one and they all stink. Who do you think first found oil in the middle east ?
Hey Fed Fuzz … GET OVER IT ! The Gulf is back to normal, it’s time you idiot desk-jockys found a new whipping-boy.
BP has made such big blunders that they need to be under the microscope. Look at the CSB Report for the Texas City Refinery explosion in 2005:
http://www.csb.gov/investigations/detail.aspx?SID=20&Type=2&pg=1&F_All=y
Merged, but cut back on positions & maintenance there? Then, there was the lack of basic cleaning pig runs on the North Slope in 2006. This is pretty basic maintenance for a crude oil pipeline, but BP skipped doing it for many months. Then, the line corroded out. World crude oil prices spike from the shutdown.
Then, BP didn’t bother to get another pipeline heater in Alaska in 2009, & shipped crude without one. Oops, the produced water froze, shutting that line down.
Yes, many people may work for BP, but the BP Management does not seem too bright. Yes, O&G is a risky business, but poor maintenance should not add to the hazards!