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Spill panel chief: BP, partners need 'top-to-bottom reform'

The Republican co-chair of the presidential panel studying the causes of the Gulf oil spill lashed out at BP and its contractors, calling them safety "laggards" who are "in need of top-to-bottom reform."
Image:A panel with representatives from BP, Transocean and Halliburton, give their views before the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling
Representatives from BP, Transocean and Halliburton answer questions before the presidential commission on the Gulf oil spill on Monday. The three companies on Tuesday drew the harshest words yet from the panel.J. Scott Applewhite / AP
/ Source: msnbc.com staff and news service reports

The Republican co-chair of the presidential panel studying the causes of the Gulf oil spill lashed out at BP and its contractors on Tuesday, calling them "laggards" on safety who are "in need of top-to-bottom reform." Experts, meanwhile, questioned several BP decisions made just before the April 20 blowout.

"Each company is responsible for one or more egregiously bad decision," Bill Reilly said in opening comments on the final day of the commission's last hearing before it issues a final report in January. The companies he was referring to are BP, which owned the well; Halliburton, which performed critical cement work on the well; and Transocean, which owned the rig used to drill the well.

BP, in particular, he noted, "has been notoriously challenged on matters of process safety."

The harshest words yet from the commission followed comments by former BP chief Tony Hayward acknowledging that the company was unprepared for the disastrous Gulf of Mexico oil spill.

In an interview with the BBC, Hayward said company's contingency plans were inadequate and "we were making it up day to day."

Reilly, a former Environmental Protection Agency chief under during the George H.W. Bush administration, said Monday's session of staff reports "uncovered a suite of bad decisions: failed cement tests, premature removal of muds underbalancing the well, a negative pressure test that failed but was adjudged a success, apparent inattention, distraction or misreading of a key indicator that gas was rising toward the rig."Both Reilly and fellow co-chair Bob Graham sought to clarify comments made Monday by the commission's chief counsel that investigators did not find any evidence that the companies  cut corners on safety to save money.

They said that does not mean that the three companies placed enough emphasis on safety.

"The problem here is that there was a culture that did not promote safety ... leaders did not take risks seriously enough, didn't identify risks that proved to be fatal," said Graham, a Democrat and former U.S. senator from Florida.

"There were a series of actions which are difficult to explain in this environment," Graham added. "To just select one, the fact that there were three different temporary abandonment plans adopted in the week before" the rig blast "is illustrative of the fact that the lack of consistent planning for safety."

Reilly noted that the investigators "didn’t rule out cost, just said they weren’t prepared to attribute mercenary motives to men who cannot speak for themselves because they are not alive. But the story they told is ghastly: one bad call after another. Whatever else we learned and saw yesterday is emphatically not a culture of safety on that rig. I referred to a culture of complacency and speaking for myself, all these companies we heard from displayed it."

Referring to BP, Halliburton and Transocean, Reilly added that "the evidence is they are in need of top-to-bottom reform. We are aware of what appeared to be a rush to completion at Macondo, and one must ask whether the drive came from that made people determine they couldn’t wait for sound cement, or the right centralizers. We know a safety culture must be led from the top, and permeate a company."

Reilly spoke before industry experts testified about their analysis of the practices aboard the doomed Deepwater Horizon rig. Federal regulators also testified Tuesday afternoon about potential changes to safety rules.

Experts questioned BP's use of a single plug in the process. Charlie Williams, a chief scientist with Shell Energy Resources Inc., said the company used a minimum of three plugs in its deepwater wells.

BP also chose to fill the well with seawater, rather than heavy drilling mud, leaving it vulnerable to an upsurge of oil and gas — a condition that is not allowed for exploratory wells drilled in other places, experts said. The company also chose not to use mechanical plugs, devices put inside the pipe that also can block oil and gas.
Many of the decisions would have required additional time and materials, said Steve Lewis, an advanced drilling technology engineer with Seldovia Marine Services who reviewed BP's drilling plans, federal permits and communications on behalf of the commission.

"I know there was pressure on these people to get done and move on," Lewis said. "The apparent shuffling and scrambling was not really necessary."

The April 20 explosion aboard the rig killed 11 workers and kicked off the worst oil spill in U.S. history.

The commission's chief engineer, Richard Sears, wrapped up the hearing by outlining seven managerial findings, including muddled lines of authority and a compounding cascade of small problems that ultimately caused 11 people to die and millions of gallons of oil to spill.

"This is something that built over hours if not days, weeks, months. The companies involved each had data. They were each responsible for operations, and if data had been shared differently and operations had been carried out differently, I believe this disaster could have been prevented," Sears said. "And for whatever reason...it didn't happen that way, and it's sad."

Ex-BP CEO defends own actions
Hayward said BP was "not prepared to deal with the intensity of the media scrutiny" it faced as millions of barrels of oil poured into the ocean and washed up on shore.

Hayward left his post last month after taking much of the flak for BP's poor public handling of the disaster. Gaffes including his statement that "I want my life back" were ridiculed in the U.S. media and seized on by critics of BP.

Hayward said he was "pretty angry" at the personal vilification.

"If I had done a degree at RADA (The Royal Academy of Dramatic Art) rather than a degree in geology, I may have done better, but I'm not certain it would've changed the outcome," he said.

He defended his much-criticized decision to take part in a yacht race with his family at the height of the crisis, saying he had not seen his son for three months and had only been aboard for six hours.

"I'm not certain I'd do anything different," Hayward said.

Hayward said BP had found itself unable to borrow from international investors during the spill crisis, threatening its finances. He said that before a meeting with President Barack Obama at the White House in June, "the capital markets were effectively closed to BP."

"We were not able to borrow in the capital markets, either short or medium term debt at all, " he said. "It was a classic financial crisis issue."

Hayward's successor, Bob Dudley, told the program that "these were frightening days" for BP.

"With a company the size of BP, its reputation, what it does — you almost can't quite believe how close you are" to financial disaster, he said.