Day 1: BP fires back: Gulf spill caused by multiple failures, not only its own
NEW ORLEANS —British oil giant BP had identified a deep-water blowout in the Gulf of Mexico as a “high-level” risk prior to the 2010 oil spill, the former chief representative of the company’s U.S. operations testified Tuesday at a civil trial over the disaster.
“As an engineer I knew a blowout was possible,” Lamar McKay, the former president of BP America, testified in federal court in New Orleans.
Plaintiffs attorneys called McKay on the second day of the trial in an effort to show BP knew of the risks and ignored them, causing the worst offshore oil spill in U.S. history and the deaths of 11 rig workers.
McKay didn’t budge, insisting that it was Transocean’s safety management system that was used on the Deepwater Horizon and that well and rig operations were a “shared responsibility.”
McKay also said he believes his company’s response to the disaster has been appropriate.
“I think we have been very clear from the start that we would try to learn from this” and minimize the risk of it happening again, he said.
Exchanges between the plaintiffs attorney and McKay were testy at times. McKay declined to comment on some questions. McKay was expected to continue testifying on Wednesday.
Earlier in the day, an engineering expert who has done risk assessment work for the company attacked BP’s commitment to safety, its standards for drilling wells and how it responds to warnings about its operations.
Robert Bea, a University of California-Berkeley professor who was consulted by the White House commission that investigated the Deepwater Horizon explosion and Macondo well blowout and has produced several reports faulting BP and its partners for their attitude towards safety, was a crucial witness for plaintiffs suing BP.
That’s because he has an intimate knowledge of BP’s safety procedures since he was a paid consultant for the company for years before the Gulf disaster. He said he warned BP several times over the years to improve its safety procedures and culture.
Bea said BP ignored safety warnings and its own protocols before the oil spill, then issued an internal investigation report afterward that was “incomplete” because it didn’t fully analyze how management actions contributed to the disaster.
Bea said he would characterize BP’s failures in overseeing the Macondo well project as “tragic, egregious.”
“It’s a classic failure of management and leadership in BP,” Bea testified.
On Twitter: Live tweets from inside the BP oil spill trial courtroom
Bea said he had warned BP to look for problems.
“I called it being afraid,” he said. He later added, “Unfortunately, the message apparently didn’t get through.”
Plaintiffs attorneys at the civil trial over a web of litigation related to the disaster are using Bea’s testimony to hammer away at the so-called Bly report that BP issued on Sept. 8, 2010. They also want to show BP didn’t learn the lessons of past disasters involving the company, including the 2005 Texas City refinery explosion that killed 15 workers.
Bea said “the systemic management causes” of the Macondo well blowout and Deepwater Horizon rig explosion were absent from BP’s report in violation of its own process safety standards at the time. He said “management causes are crucial to understanding” failures of complex systems.
Bea also said that while BP considered process safety a bedrock of its foundation, it did not adhere to its own standards prior to the Gulf disaster. He said the failures extended all the way up to the board room and CEO’s office in London.
“It was exempted. Process safety was not implemented on the Deepwater Horizon project,” Bea said.
Asked about BP’s motivation for ignoring its safety standards, Bea said cost-cutting was at play. He was shown a 2009 email from BP engineer John Guide that said, “The Deepwater Horizon has embraced every dollar matters since I arrived 18 months ago. We have saved BP millions and no one had to tell us.”
Bea said the “every dollar matters” theme was embedded in BP’s mindset prior to the Gulf disaster. Bea said he specifically warned BP that “money isn’t everything” and BP should reward workers for preventing accidents as much as it rewards workers for driving profits.
In 2007, concerned his message wasn’t getting through, Bea said he told BP, “You still don’t get it. You have not implemented my recommendations. Process safety is deadly serious, and you’ve turned it into a traveling roadshow.”
On cross examination, BP lawyer Robert C. “Mike” Brock tried to show inconsistencies between Bea’s deposition in the civil case and his testimony at the trial. The exchanges between the two were combative at times.
Bea acknowledged there were some people at BP prior to Gulf disaster that he would give high marks for safety mindedness. He also said BP took a positive safety step before the disaster when its board of directors set up a safety committee.
Brock also tried to chip away at Bea’s testimony about BP’s cost-cutting mentality before the oil spill.
“Treat the money like it’s your own. That’s a good message to send, isn’t it?” Brock asked.
“Yes,” Bea responded.
Brock also got Bea to acknowledge that he is not an expert in how to drill deepwater wells and cement.
But, on the whole, Bea stood his ground on his belief that BP largely paid lip service to safety before the Gulf disaster and then dropped the ball at the most critical time.
“Statements from the top are important for the talk, but they have to be backed up by the walk,” Bea said.
One of his reports, produced Aug. 26, 2011, was admitted into evidence as his testimony began. Tuesday evening, however, BP filed an objection to portions of the report, including references to instances of prior, alleged improper conduct by BP, and evidence of prior civil, criminal, and regulatory proceedings against BP.
Bea, a professor emeritus in civil and environmental engineering, is co-founder of the Center For Catastrophic Risk Management. He also is a former engineer at Shell Oil.
Lawyers this week also are expected to play video footage of former BP CEO Tony Hayward’s deposition in the case.
During the first phase of the trial, expected to last up to three months, U.S. District Judge Carl Barbier in New Orleans will hear evidence on causes of the blowout and will determine how to allocate fault, which may or may not include percentages of blame.
The second phase will address the amount of oil that spilled.
Barbier also is expected to determine if the disaster resulted from gross negligence. Further proceedings could determine how much in punitive damages should be assessed, and separate trials could determine damage awards for individuals and businesses that opted out of a multibillion-dollar settlement last year between BP and private parties claiming economic or health damages.
Opening statements in the trial were presented Monday.
In blistering attacks on BP’s actions, corporate culture and motivations, lawyers for the U.S. government, Gulf states, victims and the company’s partners took turns accusing the oil giant of putting money before safety and causing the disaster.
BP fired back that multiple failures led to the disaster.
The finger-pointing and strong language set the tone for the start of a civil trial over a web of litigation stemming from the the disaster some 50 miles off the coast of Louisiana.
While the prospect of a settlement is still a possibility, BP faces a heavy price if the trial doesn’t go its way. Billions of dollars are at stake for a company alleged to have cut corners to save millions.
“Money mattered more to BP than the Gulf, much more,” Alabama Attorney General Luther Strange told Barbier in his opening statement at the bench trial. “Greed devastated the Gulf.”
BP owned the well that blew out a mile beneath the sea on April 20, 2010. It was leasing from Transocean the deepwater rig that exploded and sank.
On June 5, 2014, the Chemical Safety Board releases a two-volume report shedding new light on the cause of the Gulf oil spill. Agency investigators say the blowout preventer failed when a long drill pipe running from the rig down into the ocean floor buckled under high pressure coming up from the oil reservoir. In addition, the agency found U.S. regulations governing offshore safety -- even new rules set after the 2010 oil spill -- do not address many key safety devices.
Jacquelyn Martin / Associated Press
On May 21, 2014, BP announces that it will take the courtroom fight over its multibillion-dollar oil spill settlement to the Supreme Court. The London-based oil company argued that it has paid potentially hundreds of millions of dollars to claimants who were not affected by the 2010 Gulf of Mexico oil spill, violating its interpretation of the $9.2 billion settlement it reached with plaintiffs’ attorneys in 2012.
[Photo: People walk on the steps of the U.S. Supreme Court in Washington.]
On May 20, 2014, a federal judge rules that some BP investors can form a class to sue the company over allegations it misled shareholders on how much oil spilled into the Gulf of Mexico in 2010. The ruling followed the investors’ second bid to gain class certification needed for a securities lawsuit over allegations BP executives played down the amount of oil spewing from its blown-out Macondo well in early days of the 87-day disaster.
Seth Perlman / Associated Press
On April 21, 2014, a federal court sets Jan. 20, 2015 as the first day of the penalty phase of BP’s civil trial over the 2010 Gulf of Mexico oil spill. The penalty phase, during which U.S. District Judge Carl Barbier will listen to testimony from BP and government attorneys over the British oil company’s liabilities in the spill, will end around Feb. 5 next year, the court said.
Dave Martin / AP
On April 17, 2014, the Coast Guard cries foul over BP’s claim that active cleanup efforts to remove oil along the Gulf Coast shorelines have ended, saying the process is “far from over.”
[Photo: Mickal Vogt of Covington, La., uses a stick to place tar balls in a jar that washed up on the shore in Orange Beach, Ala., Saturday, June 12, 2010. ]
Tech. Sgt. Adrian Cadiz / AP
On April 15, 2014 -- nearly four years after the Gulf oil spill -- BP declares an end to cleanup operations that cost the company $14 billion and once covered 778 miles of shoreline on the Gulf Coast. The Coast Guard had finished its last patrols of the three remaining miles of beach that had been soaked in oil after a blowout at BP’s Macondo well blew out.
[Photo: In May 2010, ships move an oil boom into place near Cat Island off the Gulf Coast of Mississippi as part of Deepwater Horizon oil spill response.]
In March 2014, BP reaches a deal with the U.S. Environmental Protection Agency to end its 16-month suspension on doing business with the government. The deal allowed BP to bid on new drilling rights in the Gulf of Mexico for the first time in nearly two years.
[Photo: BP repairs its Mad Dog rig in the Gulf of Mexico in 2012.]
Jonathan Bachman / Associated Press
Kurt Mix, center, arrives at the Hale Boggs Federal Building in New Orleans. The former BP drilling engineer was convicted Dec. 18, 2013 of one charge that he deleted text messages from his cellphone to obstruct a federal investigation of the company’s massive 2010 oil spill in the Gulf of Mexico.
Gerald Herbert / Associated Press
Former FBI Director Louis Freeh leaves Federal Court after meeting with U.S. District Judge Carl Barbier, who appointed Freeh to investigate alleged misconduct by a lawyer who helped run BP's multibillion-dollar settlement fund for the Gulf oil spill. Freeh recommended Friday, Sept. 6, 2013, that the Justice Department investigate whether several lawyers plotted to corrupt the settlement program designed to compensate victims of BP's 2010 Gulf oil spill.
Gerald Herbert / Associated Press
Steve Newman, president and CEO of Swiss-based Trancocean Ltd., leaves Federal Court after testifying in New Orleans, Tuesday, March 19, 2013. Transocean was the owner of the rig Deepwater Horizon, which was being operated under contract to BP when BP's Macondo well blew out on April 20, 2010, setting into motion events that led to the nation's worst offshore oil spill. The Deepwater Horizon sank two days after the blow out.
Gerald Herbert / Associated Press
Lamar McKay, former president of BP America and current chief executive of BP's Upstream unit, leaves Federal Court after testifying in New Orleans, Monday, Feb. 25, 2013. McKay, who was president of BP America at the time of the Deepwater Horizon disaster, became the first BP executive to testify at the federal trial intended to identify the causes of BP's Macondo well blowout and assign percentages of blame to the companies involved.
Contributed Photo / Contributed Photo
A report by the National Wildlife Federation finds that the 3-year-old BP spill is still having a serious negative effect on the ecology of the Gulf of Mexico and its wildlife populations. Pictured: Smoke billows over a controlled oil fire off the coast of Venice, La., on May 5, 2010.
Sean Gardner/Getty Images
An activist holds a sign during a protest in front of the Hale Boggs Federal Building on the first day of the civil trial over the 2010 Gulf of Mexico oil rig spill on February 25, 2013 in New Orleans, Louisiana. Eleven men were killed during the accident and over 4 million barrels of oil spilled into the Gulf of Mexico in 2010.
Sean Gardner/Getty Images
Activists holds signs during a protest in front of the Hale Boggs Federal Building on the first day of the civil trial against BP in the 2010 Gulf of Mexico oil spill on Monday, Feb. 25, 2013.
Robert Kaluza, a BP well site leader from the Deepwater Horizon oil rig explosion, talks with his attorneys Shaun Clarke, left, and David Gerger, right, as they enter Federal Court before he is arraigned on manslaughter charges in New Orleans on Wednesday, Nov. 28, 2012.
Robert Kaluza, a BP well site leader from the Deepwater Horizon oil rig explosion, enters Federal Court before he is arraigned on manslaughter charges in New Orleans on Wednesday, Nov. 28, 2012.
David J. Phillip/AP
BP Senior Vice President Kent Wells rubs his eyes while testifying during the Deepwater Horizon joint investigation hearings Aug. 26, 2010. The hearings were held by the U.S. Coast Guard and the Interior Department's Bureau of Ocean Management, Regulation and Enforcement in Houston .
Demonstrators hold up signs on Capitol Hill in Washington on Monday, May 17, 2010, as BP America Chairman and President Lamar McKay, right, waits his turn to testify before the Senate Homeland Security and Governmental Affairs Committee hearing to assess the nation's response to BP PLC's Deepwater Horizon oil spill.
AP Photo/Haraz N. Ghanbari
A Capitol Hill police officer arrests Diane Wilson on Capitol Hill in Washington on June 17, 2010. BP CEO Tony Hayward was testifying before the Energy and Environment subcommittee on Oversight and Investigations hearing on the role of BP in the Deepwater Horizon explosion and oil spill.
Smiley N. Pool / Houston Chronicle
A protester's sign lies outside a meeting where residents were able to get face-to-face time with BP and government officials at one of a series of open houses in New Orleans on June 23, 2010.
John Moore/Getty Images
The letters BP, inscribed in sand and oil by a Greenpeace activist, are shown on a beach at the mouth of the Mississippi River on May 17, 2010 near Venice, La.
James Nielsen / Houston Chronicle
Melanie Driscoll, director of Bird Conservation for the Louisiana Coastal Initiative, holds up oil residue on April 8, 2011. The Louisiana Department of Wildlife & Fisheries gave a press tour to show the effects of the Deepwater Horizon oil spill in Port Sulphur, La.
Smiley N. Pool / Houston Chronicle
A cleanup worker, wearing a protective coverall and carrying a small scoop, punctuates an otherwise typical holiday beach scene as patrols the beach looking for tar balls on Independence Day 2010.Tourist business along the Gulf Coast all reported feeling the sting of lost income from a noticeable dip in tourism the summer following the Deepwater Horizon spill.
A member of Louisiana Gov. Bobby Jindal's staff reaches into thick oil on the surface of the northern regions of Barataria Bay in Plaquemines Parish, La. on June 15, 2010.
Crude oil from the Deepwater Horizon oil spill washes ashore in Orange Beach, Ala. on June 12, 2010. Large amounts of the oil battered the Alabama coast, leaving deposits of the slick mess some 4 inches to 6 inches thick on some parts of the beach.
Win McNamee/Getty Images
A brown pelican stained with oil takes flight while a bird rescue team tries to capture it for cleaning on June 5, 2010 in Grand Isle, Louisiana.
Patches of oil from the Deepwater Horizon spill are seen underwater in the Gulf of Mexico, south of Venice, La., on Monday, June 7, 2010.
Smiley N. Pool / Houston Chronicle
A boat is surrounded by oil near the site of the Deepwater Horizon explosion and oil spill on Tuesday, June 15, 2010.
A shrimp boat is used to collect oil with booms in the waters of Chandeleur Sound, La.
People gather near crosses for the 11 workers who died in the Deepwater Horizon oil rig explosion, during a vigil to mark the first anniversary of the BP oil spill on a beach in Grand Isle, La.. The large cross in the center is for the Gulf of Mexico.
Oil floats in the waters of Chandeleur Sound, La. two weeks after the explosion of the Deepwater Horizon oil rig in the Gulf of Mexico.
Oil from the Deepwater Horizon spill floats on the water as the sky is reflected in sheen on Barataria Bay, off the coast of Louisiana on June, 7, 2010.
The Deepwater Horizon oil rig burns in the Gulf of Mexico on April 21, 2010, more than 50 miles southeast of Venice on Louisiana's tip.
U.S. Coast Guard
Fire boat response crews battle the blazing remnants of the off shore oil rig Deepwater Horizon on April 21, 2010. The blowout in the Gulf of Mexico killed 11 people and sent 4.9 million barrels of oil gushing from the sea floor into the Gulf.
Robert Bea report on Deepwater Horizon blowout
Read ongoing FuelFix coverage of the legal trials surrounding the Gulf of Mexico oil spill:
Judge approves $1B civil settlement for Transocean (Feb. 19)
BP’s potential oil spill liability cut by $3.4 billion (Feb. 19)
Guilty: Transocean convicted in Gulf of Mexico oil spill (Feb. 14)
BP feud with US government over Gulf oil spill heats up (Feb. 13)
BP displays new Gulf of Mexico safety system (Feb. 12)
Documents: BP well-site leaders faced earlier indictment in spill case (Feb. 8)
BP completes $2.4B sale of Texas City refinery (Feb. 1)
Guilty: BP admits to causing deaths in spill disaster (Jan. 29)
Rig victim’s widow says Gulf disaster caused ‘inferno of grief’(Jan. 11)
Government accuses BP of being evasive on Gulf spill flow rate (Dec. 28)
Judge approves BP class action settlement (Dec. 21)