Offshore industry must confront is own denial

The presidential spill commission has concluded that a “failure of management” led to last spring’s disaster in the Gulf of Mexico, which won’t surprise anyone in the oil industry. Ever since the accident happened, other oil companies have been quick to point out that BP, the operator of the well that blew out on April 20 and killed 11 men aboard the Deepwater Horizon rig, has a reputation for cutting corners.

The spill commission found that BP didn’t have adequate safety controls in place and that it didn’t ensure its engineers were making sound decisions in the months leading up to the accident. One commission member told the BBC that BP had “a whole sequence of poor decisions with unfortunate consequences when put together”.

But the commission’s finding go much farther, extending the poor oversight of the drilling operation to rig owner Transocean and to Halliburton, which handled the cement job. Those companies were both working under BP’s purview, of course, but the commission found some disturbing things that go beyond this one project:

The blowout was not the product of a series of aberrational decisions made by rogue industry or government officials that could not have been anticipated or expected to occur again. Rather, the root causes are systemic and, absent significant reform in both industry practices and government policies, might well recur.

We’ve seen bits of this creeping out in testimony conducted before the Coast Guard and the Bureau of Ocean Energy Management, Regulations and Enforcement this summer. For example, rules for maintaining blowout preventers, a key safety device on rigs, weren’t followed consistently.

Even now, the industry’s most common defense is to tout its safety record. The result has been a sense of complacency that’s crept over the industry even as it moves into deeper water and drills more complex wells.

BP, of course, was quick to latch onto the findings, to argue that this disaster could have happened to any of its deepwater rivals. But the commission’s findings reveal a two-pronged problem. One is issues with BP itself, and the other is issues with the industry overall.

Even if BP’s poor decisions on well design and other planning laid the foundation for the problem, it’s clear that equipment and procedures long thought to prevent a disaster, didn’t work. It’s also clear the industry had lulled itself into thinking it didn’t need a response strategy for such as disaster because one wouldn’t happen.

BP has shown consistent denial in addressing its safety lapses. The question, though, is whether the offshore industry is willing to confront its own denial.

Here’s the advanced chapter of the report, which will be released in full next week:

Chapter 4

Photo: An oil mass floats in the Gulf of Mexico near Orange Beach, Ala., on Friday, June 18, 2010.  (Kari Goodnough/Bloomberg News)