Offshore Accidents Bring Few Penalties
In the five years before the Deepwater Horizon exploded, federal investigators documented nearly 200 safety and environmental violations in accidents on platforms and rigs in the Gulf of Mexico, describing a stunning array of hazards that resulted in few penalties.
Workers plunged dozens of feet through open unmarked holes. Welding sparked flash fires. Overloaded cranes dropped heavy loads that smashed equipment and pinned workers. Oil and drilling mud fouled Gulf waters. Compressors exploded. Wells blew out.
And yet, in their investigations of nearly 400 offshore incidents, Minerals Management Service officials failed to travel to one-third of the accident scenes, collected only 16 fines and did not investigate every blowout as their own rules require.
BP, the region's leading offshore oil producer, reported more accidents and blowouts than any other oil company operating in Gulf waters, followed by Chevron, the region's third largest off-shore oil producer.
BP has had at least 47 since 2005; Chevron 46, based on a Houston Chronicle review of accidents investigated by MMS in the last five years and a decade of government reports on blowouts of oil wells.
Each major oil company paid only a single fine related to violations linked to those incidents. Both Chevron and BP spokesmen defended their companies' safety records and said their employee injury rates are low.
Toby Ordone, a BP spokesman, said the high number of accidents “is presumably because we have the highest number of (drilling) licenses.”
Chevron spokeswoman Margaret J. Cooper said the company has won several recent safety awards from MMS and has a policy of proactively reporting “every incident, regardless of size or impact.”
The Gulf's second-ranked producer, Shell, had 22 reported accidents and has paid no related fines.
Rare to pay fines
It was rare for any oil company to pay penalties for problems found in accidents investigated by the MMS, records show. The agency can charge $35,000 per day per violation. But many proposed violations get reduced or dropped during behind-the-scenes reviews. Records show that most final payments were small and took a year or more to collect.
One of the biggest delays in fine collections involved BP. The company took five years to pay a fine associated with a 2002 debacle where two oil well blowouts struck the same drilling rig in three months.
MMS officials did not respond to repeated requests for information and comment for this story.
The federal agency, charged with overseeing offshore oil operations and enforcing safety and environmental rules, routinely collects more penalties for violations found in routine inspections than they do after investigations into similar problems that caused injuries, major damage or oil spills, records show.
Several companies have been fined for leaving unmarked open holes, yet others were not penalized after workers got hurt falling through improperly barricaded gaps in elevated platforms. Only three of about 30 companies identified as polluters in MMS reports have so far paid related penalties, records show.
The MMS manual, its rule book of sorts, says investigations are meant to prevent reoccurrences, rather than to punish.
A former veteran agency official agreed that fines are an important enforcement tool. But he also argued that investigators tend to learn more safety lessons from accident investigations than from inspections — and that companies tend to cooperate more fully if they don't fear being fined.
“To me investigations are a lot more beneficial than inspections,” said Elmer “Bud” Danenberger, former chief of Offshore Regulatory Programs for MMS. “You learn much more because they are showing you things that can go wrong in the system.”
After the fiery explosion that nearly destroyed a BP rig in 2002, investigators discovered critical safety equipment alterations made without MMS approval. Because of those alterations, explosive blowout gases weren't diverted safely out to sea, the agency concluded. BP declined comment.
5 blowouts in 18 months
Accident reports show that deepwater well blowouts also have become more common: Five were reported in the last 18 months in the Gulf of Mexico alone.
Those and other accident reports on previous blowouts show that problems found by investigators included difficulties with blowout preventers, safety valves, drilling mud and cement jobs. All are issues that resurfaced with the deadly Macondo well disaster in April that killed 11 aboard the Deepwater Horizon and spawned a spill considered the nation's worst environmental disaster.
During the investigation of a November 2008 accident, Chevron raised a concern about special deep-water risks after a well blew out, spewing tons of mud across the ocean floor 7,000 feet below the drill ship. Their comments, contained in the six-page MMS investigation, focused on a lack of “established guidelines” to protect equipment from the forces of deep water drilling.
More importantly, they suggested guidelines for the use of a special barrier against blowouts known as a “tieback string” – a special safety device not used in the Deepwater Horizon.
But in January 2009, the MMS district supervisor in Houma, La., closed the investigation without recommending any related safety alert, a tool the agency uses to inform all Gulf oil operators about issues uncovered in accident investigations.
The lack of a tieback string was a “root cause” of the April 2010 BP blowout and Deepwater Horizon disaster, believes Gene Beck, a well-known drilling expert who has examined BP well diagrams.
BP felt at the time that the system used was “acceptable”, and there was no industry standard for tiebacks, said spokesman Odone in an e-mail.
The MMS rules require investigations of all blowouts.
Yet, the Chronicle could find no proof that the agency did any formal investigation in at least nine of 28 blowouts reported to the MMS in the last five years. Known as “loss of well control” incidents, some might seem harmless, like gas bubbling from a shutdown well. But the consequences can be deadly.
In fact, agency records also show no evidence that MMS investigators visited the scene in about one-third of offshore accidents reported since 2005. In other cases, long delays in site visits were caused by unsafe conditions aboard damaged rigs, bad weather or hurricanes. But most delays and failures to go to accident sites are unexplained in reports.
Delays can undermine investigations since conditions and personnel change rapidly in offshore installations, attorneys and consultants who regularly review offshore accidents said.
Tom Mosele, a Houston-based attorney and engineer who frequently represents divers injured offshore, said delays give company officials the opportunity to destroy or remove records, including audio or video tapes, or send away important witnesses or victims.
A long history of lackluster reviews also has undermined confidence in the agency, attorneys and consultants told the Chronicle.
“I can't ever recall seeing a MMS investigation, or even a report to the MMS,” said Tony Buzbee, a busy Houston-based maritime attorney involved in the Deepwater Horizon and other cases. “I've handled literally hundreds of offshore injuries, including death, fires, rig collapses, etc.”
Nearly all investigations are handled by one or two investigators working in coastal district offices in Louisiana and Texas.
District MMS supervisors — overseen by a regional manager in New Orleans — review and generally sign reports for accidents in their territories and review fines, according to records and the agency manual. The same officials also oversee the government's oil leases.
Since the Deepwater Horizon accident, Interior Secretary Ken Salazar vowed to revamp the agency, perhaps separating investigators and inspectors from officials who issue leases and collect federal oil royalties.
The move might give regulators more independence. The question, though, is whether the changes would address offshore standards and investigative procedures that seem to fall short of those imposed on land by agencies like OSHA and the EPA.
The government's own archive of accident reports show unaddressed mistakes are repeated — sometimes by the same company. Reports also show that some companies simply fail to report accidents as required — though it's not clear how many get punished or fined for failing to report.
In 2005, the death of an offshore worker prompted a major MMS probe into how a worker aboard a liftboat was killed as he conducted repairs at a hurricane-damaged platform operated by Forest Oil company. That investigation prompted a 33-page report with photos, diagrams and comprehensive suggestions.
Yet, when a contract diver lost his foot in an accident in 2007 while working aboard the same liftboat at another offshore location, the accident was not promptly reported and the MMS did no formal investigation, MMS and federal court records show.