Deepwater Horizon - Transocean Oil Rig Fire


#7461

Motion: Toss BP supervisors’ manslaughter charges - seattlepi.com
By JANET McCONNAUGHEY, Associated Press
Updated 6:14 pm, Thursday, September 26, 2013

http://www.seattlepi.com/news/texas/article/Motion-toss-BP-supervisors-manslaughter-charges-4847490.php

NEW ORLEANS (AP) — Lawyers for two BP rig supervisors charged with manslaughter in the Deepwater Horizon disaster say the indictment should be dismissed because prosecutors accuse the men of violating standards that didn’t exist when an explosion killed 11 workers on April 20, 2010.

Robert Kaluza and Donald Vidrine are scheduled for trial June 2 on 11 counts each of involuntary manslaughter and “seaman’s manslaughter.”

They have pleaded not guilty to charges that they botched a key safety test and disregarded abnormally high pressure readings that prosecutors described as glaring signs of trouble before the blowout of BP PLC’s Macondo well.

Federal rules at the time “did not even mention — much less require” the test in question, according to a 33-page memorandum filed with the motion on Thursday.

“This case involves a highly technical field, in which courts should be particularly suspicious of second-guessing under ‘standards’ that have been developed after the fact,” they wrote.

A Justice Department spokesman did not immediately respond to a request for comment.

U.S. District Judge Stanwood Duval has not ruled on an earlier motion to dismiss the charges. He heard those arguments Sept. 18.

Prosecutors contend that BP should have investigated the pressure readings even though the Transocean drill crew explained them and even though no rules or industry standards required the BP workers to do more than they had been told, the attorneys argued.

Transocean was the rig owner.

“With perfect hindsight, the government has constructed a new standard for this prosecution — one that did not exist on April 20,” they wrote.

That makes the law’s application in this case unconstitutionally vague, the attorneys said.

“The purported ‘standards’ on which the government relies — take ‘necessary’ precautions to control the well, and ‘be safe’” are not clear, they wrote.

The explosion that killed the rig workers triggered the nation’s worst offshore oil spill. A separate trial, resuming Monday, will look at just how much oil gushed into the Gulf of Mexico in the 86 days before the well was capped and what BP and its contractors did to stop the flow.


#7462

BP trial over the 2010 oil spill reopens, revisits talk of flow rates, ‘top kills’ and ‘junk shots’ | NOLA.com
By Mark Waller, NOLA.com | The Times-Picayune
on September 30, 2013 at 1:43 PM, updated September 30, 2013 at 2:50 PM

After a five-month break, the BP trial resumed in New Orleans on Monday (Sept. 30) for its second phase, with lawyers accusing the oil company of failing in its disaster preparations and attempts to stop to the 2010 Gulf of Mexico oil spill, and a BP lawyer countering with descriptions of extensive efforts amid uncertain conditions.

Rows of lawyers spread out before U.S. District Judge Carl Barbier to begin the four-day discussion of BP’s approach to stopping the gusher. Next week the proceedings will turn to the subject of determining how much oil leaked into the environment, which in turn informs the size of the fines BP could pay. The first phase in the spring covered BP’s and its partners’ liability based on how they drilled the well before the April 2010 blowout.

“BP’s plan was nothing more than a plan to plan,” said plaintiffs’ attorney Brian Barr in opening statements.

Barr said the company’s 600-page disaster response plan included only one page on controlling the source of a blown out well, and its employees lacked training on that scenario.

“BP knew of the gaps in its ability to control the source of a deep water blowout,” Barr said.

The company began drilling relief wells early in the three-month oil spill crisis, but Barr said that lengthy process “should be considered a measure of last resort. For BP, relief wells were a matter of only resort.”

Barr said the plaintiffs’ case will show that BP long knew the solution that ultimately worked – capping the ruined blowout preventer stack that was billowing oil with a new one – was the best option and could have ended the gusher sooner.

Then Brad Brian, an attorney for Transocean, the owner of the doomed Deepwater Horizon rig and an opponent of BP in this part of the case, accused BP of focusing on an approach called the “top kill” – shooting the blown oil stack full of heavy mud and bits of debris in a bid to clog it up – when the rate of oil flowing from the opposite direction in the well made the chances of success unlikely. The debris-shooting portion was widely referred to as the “junk shot.”

“BP pressed ahead and falsely claimed that it was a slam dunk,” Brian said. He said the company was knowingly announcing greatly underestimated amounts of gushing oil, volumes that made the top kill futile.

“BP could not admit the larger truth that the flow rate was too great,” Brian said, citing examples of company officials estimating 5,000 barrels per day when ranges reached all the way to 100,000 barrels per day and the top kill would only work with 15,000 barrels or less.

“BP could not admit the larger truth that the flow rate was too great,” Brian said.

BP lawyer Brian Brock, however, questioned the logic of asserting that the company would put considerable resources, including ships, piping systems and the attention of hundreds of employees, into a method it knew would fail but couldn’t admit because of low-balled flow rates.

“It defies common sense to accept that BP would undertake to execute a top kill procedure knowing that it would not work,” Brock said.
“Our source control efforts in shutting down the Macondo well were extraordinary,” Brock said.

Brock also attacked the idea that flow rate estimates changed the course of events.

First off, he said, the rates and conditions were always uncertain. “Decisions had to be made in the absence of information,” he said.

The next step after the failed top kill attempt, Brock said, was to collect as much oil as possible, which he argued was not the behavior of someone trying to conceal higher flow levels.

Arguing there were better approaches in hindsight, he said “is Monday morning quarterbacking at its worst.”

Brock said BP spent more than $1.6 billion on its response efforts, pursuing every reasonable option, including several strategies simultaneously and always staying mindful to avoid a move that would have made matters worse.

He said the option of installing another blowout preventer on top of the failed one was not feasible as quickly as the plaintiffs’ suggest.

And he said experts will confirm that the company’s explanation for why the top kill failed - ruptured discs in the well - was plausible in itself and not a cover-up of flow numbers.

“Our well control plan is consistent with every other operator in the Gulf of Mexico,” Brock said.

Before the lunch break on the first day back for the BP trial, the first expert witness spoke.

John Wilson, a fluid mechanics specialist, testified that BP’s models were showing higher flow rates than what the company was reporting to the government, news media and public.

“The momentum kill is very much dependent on flow rate,” Wilson said about the part of the top kill that involves pumping in drilling mud. “You need enough force to overcome the momentum of the upward flowing well.”

“I saw no evidence that it was a slam dunk,” that the top kill would work, Wilson said.

The Associated Press contributed to this report.


#7463

Blog: Will Kurt Mix, Criminal Defendant in the BP Deepwater Horizon Incident, Go Free?

Bruce Thompson
September 30, 2013

http://www.americanthinker.com/blog/2013/09/will_kurt_mix_criminal_defendant_in_the_bp_deepwater_horizon_incident_go_free.html

Former BP engineer Kurt Mix was the first, and for some time only, person criminally charged in the Deepwater Horizon incident. He has a court date October 2nd. A good possibility exists that the court may vacate the charges against him. Kurt Mix was called upon to stop the flow of oil after the rig had sunk. Therefore, he played no part in the tragic loss of 11 lives. He did not create the mess. He was tasked with cleaning it up.

As previously noted the question is, Was BP’s Kurt Mix a Criminal or a Hero? Fortune’s Walter Pavlo has been following the course of the legal maneuvering and wrote a column Prosecutors Gone Wild. He savaged the prosecutors, most of whom have already jumped ship on the prosecution, returning to lucrative private sector practices before facing the prospect of losing in court. He wrote:
"Maybe it’s just me, but based on this “evidence”, how could someone in a case like Mix’s even get indicted? Recently, we found out and it provides a view as to how the grand jury was presented information in the case.

In a grand jury proceeding, prosecutors present their case, bring in a few witnesses and the grand jury chooses to indict or not. The grand jury is part of our Fifth Amendment right [“no person shall be held to answer for a capital, or otherwise infamous crime, unless on a presentment or indictment of a Grand Jury . . . .”]. Okay, that sounds fair, but here is how Mix was indicted; testimony from two FBI agents that:

  1. Mix had received several “legal hold notices” instructing him not to delete texts or voicemails, and;
  2. After receiving those notices, Mix had deleted text messages and voicemails.

First, the grand jury was never told that the “legal hold notices” that Mix received were BP, not government (federal law), notices regarding document retention. That notice gave Mix discretion as to whether or not to preserve materials that he would “reasonably believe” were relevant to the spill. One would hope that people cannot be indicted, jailed, for violating company policies."

He added
"Perhaps realizing that Mix had some good points that could lead the judge to dismiss this case prior to trial, prosecutors decided to link Mix to more misdeeds. On September 9, prosecutors, newly assigned to the case, stated that they intend to show that Mix misled the Obama administration’s Secretary of Energy by providing inaccurate information on the amount of oil coming from the Macondo well. The “offense” happened on May 23, 2010 when a PowerPoint presentation was put together by BP to brief government officials and concerned executives during an overview of the spill situation. It was, “a slide deck that was not created by Kurt Mix; was presented at a meeting at which Kurt Mix was not present, to which he was not invited, and of which he was not aware; and was, in any event, not misleading in any respect,” according to documents filed last week by Mix’s attorneys. In fact, on the one slide that cites, in small print at the bottom, work calculations attributed to Mix, his first name is misspelled, “Kirt”.

Prosecutors further alleged that Mix, knowing that early efforts to stop the well’s flow of oil were in vain, kept quiet in the control room while in the presence of government officials, thereby obstructing the efforts to stop the spill."
The Magistrate in the case Judge Stanwood R. Duval Jr. has issued an order and opinion in which he sets a high bar for the prosecution.
The Court notes that some of the evidence listed by the government in its supplemental disclosure may be problematic with respect to whether the evidence is relevant. For instance, relevance may be disputed with respect to evidence that defendant “was in the control room during the Top Kill procedure, yet he again failed to raise the flow rate discrepancy”; that “defendant did not share with the government his observation during Top Kill that it was failing because the flow rate was too high and the orifice was too big”; that the document vendor’s representative asked defendant “whether there were any other locations beyond his computer files where potentially relevant electronically stored information as defined in the legal hold order may be saved”; and that defendant allegedly falsely stated that there was not another such location. Doc. 471, p. 5. Even if the government establishes the relevance of the evidence, it would still need to establish that the probative value of the evidence is not substantially outweighed by undue prejudice to Mr. Mix.

The Court further advises the government that with respect to the evidence of the slide deck, if the evidence is to be admissible, the government will have to establish, among other things, a proper foundation for that evidence consistent with the Court’s prior rulings, e.g., that Mr. Mix in fact helped prepare the slide deck a slide within the deck, or knew that his information was being used in the slide, and that he knew that the slide deck was being distributed to government or quasigovernmental personnel.
There is no doubt that Mr. Mix was deeply involved in the source control effort.

But it helps to put oneself in his shoes. On Saturday April 24, 2010 he received an email from William Burch detailing twelve possible failure paths for “7” x 9-7/8 Casing Annulus Flow". It is Exhibit 3905 from the ongoing trial in Judge Carl Barbier’s court. The key thing to understand is that despite there being twelve possibilities, none of them was relevant. There was ZERO flow through that annulus. We know that because when the relief well finally intersected that annulus at a depth of 17,200 feet, there was no oil or gas to be found. Both the government and Halliburton admitted as much when the Feds accepted Halliburton’s guilty plea to the destruction of computer simulations indicting that the number of centralizers used did not have a material effect on the well’s annular integrity.

The next hearing is set for October 2nd? Will Kurt Mix go free?


#7464

Second phase of BP trial over the 2010 Gulf oil spill focuses on flow rates, ‘top kills’ and ‘junk shots’ | NOLA.com
By Mark Schleifstein, NOLA.com | The Times-Picayune

on September 30, 2013 at 8:25 PM, updated September 30, 2013 at 11:47 PM

The second phase of the BP Deepwater Horizon accident and oil spill trial resumed in New Orleans on Monday (Sept. 30), with attorneys for private plaintiffs teaming up with BP contractors Transocean and Halliburton to accuse the international oil giant of failing in its disaster preparations and its attempts to stop the flow of oil, and BP attorneys arguing that the company spent billions of dollars to staunch the flow amid uncertain conditions.

Seats in U.S. District Judge Carl Barbier’s courtroom were at a premium at the beginning of a four-day discussion of BP’s efforts to halt the flow of oil, with lawyers taking up space on the courtroom floor and in all of the seats usually reserved for jurors, and reporters and the public vying for space in the audience.

Next week, the proceedings will focus on how much oil leaked into the environment, which in turn informs the size of the fines BP could pay. That part of the trial will pit the federal Justice Department against BP and its drilling partner, Anadarko Exploration Co.

The first phase this spring focused on the liability of BP and its partners during the drilling of the well and the period between April 20 and April 22, when the Macondo well blew out, sparking a fire and explosion that sank Transocean’s Deepwater Horizion drilling rig, killing 11 workers and beginning the oil release.

“BP’s plan was nothing more than a plan to plan,” plaintiffs’ attorney Brian Barr said Monday in an opening statement for the “aligned parties,” the private plaintiffs and the BP contractors.

Barr said the company’s 600-page disaster response plan included only one page on controlling the source of a blown-out well, and its employees lacked training on that scenario. “BP knew of the gaps in its ability to control the source of a deep-water blowout,” Barr said.

The company began drilling relief wells early in the three-month oil spill crisis, but Barr said that lengthy process “should be considered a measure of last resort. For BP, relief wells were a matter of only resort.”

Barr said the plaintiffs’ case will show that BP long knew the solution that ultimately worked – capping the ruined blowout preventer stack that was billowing oil with a new one – was the best option and could have ended the gusher sooner.

Then Brad Brian, an attorney for Transocean, the owner of the doomed Deepwater Horizon rig and an opponent of BP in this part of the case, accused BP of focusing on a doomed approach called the “top kill” – pumping heavy drilling mud, along with debris called a “junk shot” aimed at clogging the interior of the equipment stack, into the well to push back the flow of oil.

The company announced publicly and told senior government officials that a comparatively small amount of oil was flowing from the well, small enough to be controlled by top kill, when internal estimates showed the flow was dramatically greater, enough to guarantee failure.

“BP pressed ahead and falsely claimed that it was a slam dunk,” Brian said. “BP could not admit the larger truth that the flow rate was too great,” he said. While company officials were saying only 5,000 barrels a day were being released, the company’s own estimates ranged as high as 100,000 barrels per day.

In videotaped depositions shown to Barbier on Monday – he’s weighing the evidence without a jury – former U.S. Geological Survey Director Marcia McNutt exclaimed, “Oh, wow!” when shown an internal BP memo dated before the top kill procedure she helped approve. The memo said the flow could be as high as 100,000 barrels, well above the 15,000 barrels recommended as the highest flow rate for the procedure.

Shown an internal BP email from about the same time that warned workers that no one was to receive top kill flow data “outside the circle of trust,” McNutt said, “I guess I’m not in the circle of trust.”

Former Energy Secretary Steven Chu, who oversaw a team of scientists advising the federal government on its approval of BP’s attempts to shut off the well, said in his videotaped deposition that he was unaware that BP was releasing internal estimates showing the well was flowing at a much higher rate than senior BP officials were telling him.

Asked what he would have said at the time if he’d known BP had more information about the flow rates that wasn’t being shown to federal officials, Chu said, “It would have started a conversation somewhere along the lines of, ‘We’re here to help you. We need all the information that’s relevant.’”

A third videotaped deposition, of BP flow expert Mike Mason, focused on an incident when he was called into a senior BP official’s office after mentioning one of the high flow rate estimates in an interoffice email and was told to speak of them only with other BP officials in person.

“Next time you have an idea or a thought like this email note, we would appreciate it if you would walk over and discuss it with us,” Mason said he was told by BP executive Jasper Peijs.

That meeting occurred just before a May 13-16 meeting with representatives of several federal energy laboratories about how best to close off the well. Mason said he did not mention the higher flow rates during that meeting.

In BP’s defense, lawyer Mike Brock questioned the logic of asserting that the company would put considerable resources, including ships, piping systems and the attention of hundreds of employees, into a method it knew would fail but couldn’t admit because of low-balled flow rates.

“Our source control efforts in shutting down the Macondo well were extraordinary,” Brock said.

Brock also attacked the idea that flow rate estimates changed the course of events. First off, he said, the rates and conditions were always uncertain. “Decisions had to be made in the absence of information,” he said.

The next step after the failed top kill attempt, Brock said, was to collect as much oil as possible, which he argued was not the behavior of someone trying to conceal higher flow levels.

Arguing in hindsight that there were better approaches, he said “is Monday morning quarterbacking at its worst.”

Brock said BP spent more than $1.6 billion on its response efforts, pursuing every reasonable option, including several strategies simultaneously and always staying mindful of avoiding a move that would have made matters worse.

He said the option of installing another blowout preventer on top of the failed one was not feasible at the rate of speed that the aligned parties’ attorneys said was possible.

And he said that as BP calls its experts to testify, they will confirm that the company’s explanation for why the top kill failed – ruptured discs in the well – was plausible and was not a cover-up of flow numbers.

“Our well control plan is consistent with every other operator in the Gulf of Mexico,” Brock said.

Monday’s first expert witness was John Wilson, a fluid mechanics specialist called by the aligned parties’ attorneys to testify that BP’s internal computer models were showing higher flow rates than what the company was reporting to the government, news media and public.

“The momentum kill is very much dependent on flow rate,” Wilson said, referring to the pumping of drilling mud into the well as part of the top kill procedure. “You need enough force to overcome the momentum of the upward flowing well. I saw no evidence that it was a slam dunk,” that the top kill would work, Wilson said.

In cross-examining Wilson and other witnesses, BP attorneys tried to show that BP officials gave one or more of the higher flow estimates to senior federal officials or lower-level scientists advising them. They also tried to suggest that federal officials should have been coming up with their own estimates of the flow rate to inform their decision-making.

Under the Oil Pollution Act of 1990, the federal government is required to partner with the responsible party, in this case BP, in fighting an oil leak.

For instance, a BP attorney asked several times whether Wilson had reviewed government estimates of the oil flow and how they were made before the top kill procedure. No, Wilson said, he was not asked to review that information as part of his expert witness report, which focused only on BP’s actions.

The BP attorneys tried again with the aligned parties’ second witness, Gregg Perkin, an engineer with Engineering Partners International. Perkin testified that the top kill method, including its junk shot effort, was doomed to fail because the company was trying to pump the mud and junk through a 3-inch-wide pipe to close a 16-¾-inch well that was flowing at a pressure strong enough to not even allow the material into the main well.

“The analogy I use is taking a box of raisins and damming the Colorado River with it,” Perkin said.

He agreed that there was risk that if that method worked, of causing a “hard shut in,” where the pressure of oil from below would be shut down so quickly that it could fracture the earth below, causing fissures allowing the escape of oil. But that’s not what happened, he said.

Perkin also questioned the reasons BP gave for its failure – that the mud had caused “rupture disks” to fail, allowing the mud to escape into the well without stopping the flow of oil.

The consequences of giving that reason for the failure, though, was that BP then nixed the proposal to turn to the “BOP-on-BOP” solution, simply connecting a new blowout preventer to the top of the failed preventer and slowly shutting off the flow of oil.

By raising the rupture disk failure concern, he said, BP argued incorrectly that installing the second preventer would cause the underground formation to rupture, which would threaten the ability of drilling a second relief well.

Federal officials, including Chu and McNutt, not knowing the accurate cause of the failure, agreed with BP’s logic and delayed what was installed as the ultimate solution to the blowout in July, Perkin said.

BP’s attorneys used Perkin to introduce evidence they hope will show the government actually was using its own data to make those decisions, though.

They pointed to a memo from McNutt on May 25, 2010, when she headed the government’s flow rate technical group, as an example. “Multiple lines of scientific evidence agree that the release is at least 14,000 to 20,000 barrels of oil per day,” the memo said.

But Perkin said he believes the memo was aimed at public opinion, not deciding whether the top kill was to be performed, and cited its next sentence: “We believe that a statement like this will be much more helpful to emergency responders than the current 5,000 barrels per day, is honest, and yet is not as alarmist as the 70,000 bbls that has been picked up by the media and is demonstrably wrong,” the memo said.

Perkin said he believes all the information in the memo was based on the lower estimates BP gave to the government.

BP’s attorney tried again with a memo from Carol Browner, then energy and climate science adviser to President Barack Obama, to White House staffers – including deputy chief of staff Jim Messina and political adviser David Axelrod – explaining that the BOP-on-BOP method had been rejected after the top kill failure.

“Our scientists have determined that the risks are too great to shut the well in from the top,” the memo said.

Again, Perkin said the memo reflected BP’s advice to the government, rather than independent research by government officials leading to its decision against BOP-on-BOP.

The trial continues Tuesday with more expert testimony from witnesses called by the aligned parties.

Staff writer Mark Waller contributed to this report.


#7465

Testimony at BP oil spill trial targets response : NorthJersey.com
TUESDAY, OCTOBER 1, 2013 LAST UPDATED: TUESDAY OCTOBER 1, 2013, 3:41 PM
BY MICHAEL KUNZELMAN
ASSOCIATED PRESS

http://www.northjersey.com/news/crime_courts/Judge_hears_claims_BP_lied_to_feds_about_oil_spillv.html?page=all

NEW ORLEANS (AP) — An employee of the company that owned the doomed Deepwater Horizon drilling rig testified Tuesday that he was surprised when BP scrapped his team’s design to stop the gusher in the Gulf of Mexico.

Robert Turlak, a Transocean Ltd. manager, was a witness for his employer at a federal trial that is focusing on BP’s response to the April 2010 well blowout. BP’s trial adversaries argue the company could have sealed the blown-out well much sooner if it had employed a capping strategy that Turlak and others had devised. It was ready for installation in early June.

BP ultimately used a capping stack to stop the spill July 15 after several other methods failed.

Turlak said he never heard why BP scrapped his team’s design.

“We were so close. We had come a long way,” said Turlak, Transocean’s manager of subsea engineering and well control systems.

During the first few weeks after the spill, engineers focused on two methods for stopping the flow of oil: Capping the well was one option. The other, called “top kill,” involved pumping drilling mud and other material into the Deepwater Horizon rig’s blowout preventer.

Turlak’s team was working on a strategy that was called “BOP-on-BOP” because it lowered a second blowout preventer on top of the rig’s failed one.

Turlak called it the “obvious solution,” but BP said it wasn’t a viable option because it could have made the situation worse and hampered other strategies if it failed. BP said the capping stack that later sealed the well was specifically designed to land on the well system above the blowout preventer.

BP employed the “top kill” method in May 2010, but it didn’t stop the flow of oil. The company says its adversaries have ignored evidence that the “BOP-on-BOP” option wasn’t approved or ready for safe installation before “top kill.”

The trial’s second phase opened Monday with claims that BP ignored decades of warnings about the risks of a deep-water blowout and withheld crucial information about the size of the spill. Plaintiffs’ lawyers claim BP knew the “top kill” strategy was doomed based on higher flow rate estimates that the company didn’t share with federal officials at the time.

U.S. District Judge Carl Barbier, who is presiding over the trial without a jury, also heard videotaped testimony Tuesday by a manager employed by cement contractor Halliburton. Richard Vargo, who assisted on the top kill attempts, said he didn’t learn until later that BP didn’t believe the procedure would work given the high flow rates.

“I’m pretty angry,” Vargo said, choking back tears.

During opening statements, BP attorney Mike Brock said the company’s efforts to stop the flow of oil were guided by an overriding principle: “Don’t make it worse.” Turlak said that was a “reasonable philosophy.”

The trial’s first phase, which ended in April, focused on the complex chain of mistakes and failures that caused the blowout.

The second phase is divided into two segments: The first centers on BP’s efforts to cap the well. The second is designed to help Barbier determine how much oil spilled into the Gulf.

The government’s estimate is some 70 million gallons more than what BP says spilled. Establishing how much oil leaked into the Gulf will help figure out the penalties the oil company must pay. Billions of dollars are at stake.

Eleven workers died in the explosion on the rig that was triggered by the blowout.

University of California-Berkeley engineering professor Robert Bea, an expert witness for plaintiffs’ attorneys, testified that BP didn’t spend any money before the Deepwater Horizon disaster to develop technology for controlling a deep-water blowout. At the time of the Macondo blowout, the company’s oil spill response plan simply called for assembling a team of experts to assess the situation while drilling a relief well to halt the flow of oil.

“This is a ‘think about it when it happens’ plan,” Bea said.

During cross-examination by a BP lawyer, Bea acknowledged that other offshore operators had virtually identical plans for responding to a spill. Other companies didn’t have capping stacks suitable for deep-water usage, either, Bea said.


#7466

BP Wasn’t Prepared for Deepwater Blowout, Witness Says - Bloomberg
By Allen Johnson Jr. & Margaret Cronin Fisk - Oct 1, 2013 11:01 PM CT,

BP Plc (BP/) wasn’t prepared for a blowout at its deep-water Macondo well in the Gulf of Mexico, a safety expert who studied the 2010 oil spill told a judge who is assessing how well the company reacted to the disaster.
BP didn’t spend money on deepwater source control before the April 20, 2010, blowout and neglected process safety management, Robert Bea, a retired engineering professor from theUniversity of California, Berkeley, who was called as a plaintiffs’ witness testified yesterday at the nonjury trial over the efforts to contain the spill.
“You can never forecast and predict everything that is important,” Bea told U.S. District JudgeCarl Barbier in New Orleans. “‘I don’t know what to do’ is never an excuse in mature process safety management.”

Plaintiffs suing BP over the disaster are asking Barbier to find the company failed to properly prepare for a deepwater blowout or respond quickly enough once it occurred. His decisions in this phase of the case, over the size of the spill and efforts to contain it may add or subtract billions of dollars from BP’s ultimate bill for the incident.
The company didn’t vary from industry standards in preparing for source control of a deepwater blowout, Bea acknowledged under cross examination from a BP lawyer yesterday. Bea said in a pretrial report that BP’s pre-disaster plans to mitigate a failure were inadequate.
Mike Brock, a lawyer for London-based BP, asked Bea yesterday if the company’s source control plan was the same as those by rivals Shell Oil Co. and Exxon Mobil Corp. (XOM) Bea had earlier praised plans by BP’s competitors.

‘Cut-and-Paste’
“It looks like they were all written by the same group using cut-and-paste technology,” Bea replied. The industry seemed to handle blowouts on a “case-by-case basis,” he said.

The blowout of BP’s Macondo well off the coast of Louisiana in April 2010 killed 11 people aboard the Deepwater Horizon drilling rig and set off the largest offshore oil spill in U.S. history. The accident sparked hundreds of lawsuits against BP, as well as Transocean Ltd., owner of the rig that burned and sank, and Halliburton Co. (HAL), which provided cement services for the project.

In the first phase of the case, also heard by Barbier without a jury, the judge considered evidence of fault for the disaster and whether any of the companies’ actions in causing the blowout and subsequent spill reached the level of gross negligence. A finding of gross negligence would trigger higher fines for BP and punitive damages for all three defendants. Phase two, which began Sept. 30, covers the size of the spill and BP’s efforts to contain it. Decisions in phase two of the trial would mean billions of dollars to BP.

40 Percent
A finding by Barbier supporting BP’s assessment that the spill was 40 percent smaller than the government’s estimate might shave as much as $7.5 billion from the $18 billion in maximum fines the company faces under the U.S. Clean Water Act.
A finding that BP’s actions let the spill continue longer than it might have may save its co-defendants, Transocean Ltd. (RIG) and Halliburton Co., as much as 70 percent of any judgments against them.

Plaintiffs suing BP, including the states of Alabama and Louisiana, claim that the company wasn’t ready for the blowout. The well was finally capped on July 15, 2010, through the use of a device called a capping stack. The plaintiffs claim BP should have had this device available before the blowout.
The co-defendants, Transocean and Halliburton, have aligned with the plaintiffs in alleging that BP delayed capping the well by misrepresenting the size of the spill. An early attempt to cap the well, called Top Kill, was doomed to failure because the flow rate was too high, the co-defendants and plaintiffs contend.

Monday ‘Quarterbacking’
BP has countered that it did everything it could to stop the flow of oil as quickly as possible. Critics who suggest otherwise are engaging in “Monday morning quarterbacking at its worst,” Brock said in his opening statement Sept. 30.
BP was attempting to balance its desire to cap the well with the “guiding principle” not to make the situation worse, company executive James Dupree testified yesterday. Dupree, chief operating officer of resource development, led BP’s source control efforts after the well blew.
“We were very intent on not making the situation worse,” Dupree said.
“What do you mean by, ‘Do not make things worse?’” BP lawyer Hariklia Karis asked him.
“We didn’t want to lose options to kill the well,” he said.

Rejected Method
BP rejected a proposed method, called BOP-on-BOP, which would have landed a second blowout preventer onto the lower portion of the failed Deepwater Horizon blowout preventer, because it would have precluded using an alternate solution if that effort failed, the company said in court papers. BP instead tried the Top Kill approach.

“BOP on BOP was not ready,” Dupree testified yesterday. There were “several engineering issues” with the Macondo well that made the BOP on BOP a problematic method, he said.
He was worried about the impact of lowering a massive blowout preventer weighing several hundred tons onto the disabled BOP, he said.
“I was concerned about the weight of the BOP on top of the BOP,” he said, adding later: “There were particulars and unknowns down at the bottom of the well.” BP worried about fracturing pathways to the sea floor, he said.

Spill Response
The length of the spill response shows BP wasn’t prepared for source control, plaintiffs’ witness Ed Ziegler, a veteran oil and gas operator, testified yesterday. Ziegler, a consultant with Safety United Inc. in Houston, said he had drilled thousands of wells worldwide.
“The requirement is that the source flow be abated as soon as possible,” Ziegler said under questioning by Halliburton lawyer Prescott W. Smith. “BP had a well that flowed for 87 days,” Ziegler said.

The well could have been capped in seven days if the company had invested in a source control plan, Ziegler said. “They spent zero dollars on source control.”
A blowout preventer, or BOP, could have been assembled “with off-the-shelf” equipment in several days and the cap installed during a week’s time with one day to spare for “contingency,” he said.
BP kept changing plans to stanch the Macondo well and even changed drilling ships as staging areas, Ziegler testified. “By the time they capped the well in mid-July it was their sixth different plan.”

‘Changing Plans’
He said none of the previous plans – such as Top Kill – were ever finished. “They kept changing plans in mid-stream.”
On cross examination, BP lawyer Karis expressed incredulity, starting with Ziegler’s credentials.
“You hold yourself out in many fields,” Karis told the witness, including ergonomics, road construction, lightning on oil rigs, hospital safety, accident reconstruction, ventilation systems and circular saws. Ziegler said he was an expert in oil-field safety and that weather-permitting, he could have capped the well in a week.

BP asked Barbier after the trial adjourned today to throw out the claims that the company’s preparations for a spill were inadequate and its response afterward extended the flow of oil.
``The aligned parties have not proven that any BP conduct was negligent, let alone grossly so,’’ the company’s lawyers said in a court filing, seeking judgment for BP as a matter of law.
The case is In re Oil Spill by the Oil Rig Deepwater Horizon in the Gulf of Mexico on April 20, 2010, 10-md-02179, U.S. District Court, Eastern District of Louisiana (New Orleans).


#7467

Appeals court gives BP a win in settlement dispute | wtsp.com
AP
4:37 AM Oct. 3, 2013

http://www.wtsp.com/news/article/338268/81/Appeals-court-gives-BP-a-win-in-settlement-dispute

NEW ORLEANS - A federal appeals court on Wednesday revived BP’s claims that a judge’s interpretation of a settlement over its2010 oil spill in the Gulf of Mexico could force the company to pay billions of dollars for bogus or inflated claims by businesses.

A ruling by a divided three-judge panel of the 5th U.S. Circuit Court of Appeals threw out U.S. District Judge Carl Barbier’s rulings on the dispute between BP and attorneys who brokered the multibillion-dollar settlement in 2012. The panel sent the case back to Barbier with an order that he craft a “narrowly-tailored injunction that allows the time necessary for deliberate reconsideration of these significant issues.”

BP argued that Barbier and court-appointed claims administrator Patrick Juneau misinterpreted terms of the settlement. Plaintiffs’ lawyers countered that BP undervalued the settlement and underestimated how many claimants would qualify for payments.

In the panel’s majority opinion, Judge Edith Brown Clement said BP has consistently argued that the settlement’s complex formula for compensating businesses was intended to cover “real economic losses, not artificial losses that appear only from the timing of cash flows.”

“The interests of individuals who may be reaping windfall recoveries because of an inappropriate interpretation of the Settlement Agreement and those who could never have recovered in individual suits for failure to show causation are not outweighed by the potential loss to a company and its public shareholders of hundreds of millions of dollars of unrecoverable awards,” Clement wrote.

Judge Leslie Southwick wrote a concurring opinion. Judge James Dennis wrote a partial dissent, largely disagreeing with the other two.

“Because BP has not satisfied its heavy burden of showing that a change in circumstances or law warranted the modifications it sought, the district court correctly affirmed the Administrator’s decision rejecting BP’s argument and actions to modify the agreement,” Dennis wrote.

Clement said Barbier had no authority to approve the settlement of a class that included members who sustained losses unrelated to the spill and or didn’t suffer any losses at all, as BP alleges. The settlement is “unlawful” if Juneau is interpreting it to include such claimants, she wrote.

“Why would BP pay to resolve claims that cannot be plead?” her opinon asks. “The myth of ‘global peace’ through payment of admittedly non-spill-related claims is a legal nullity that cannot remedy this deficiency. There is no need to secure peace with those with whom one is not at war.”

Clement concluded Barbier should craft an injunction that ensures claims for losses directly resulting from the Deepwater Horizon disaster continue to be paid, while those that didn’t are not compensated “until this case is fully heard and decided through the judicial process.”

BP spokesman Geoff Morrell said the company is “extremely pleased” with the ruling. He added that it “affirms what BP has been saying since the beginning: claimants should not be paid for fictitious or wholly non-existent losses.”

“We are gratified that the systematic payment of such claims by the claims administrator must now come to an end,” Morrell said in a statement.

The April 2010 blowout of BP’s Macondo well off the Louisiana coast triggered an explosion that killed 11 workers on the Deepwater Horizon drilling rig and led to millions of gallons of oil spilling into the Gulf. Shortly after the disaster, BP agreed to create a $20 billion compensation fund that was administered at first by the Gulf Coast Claims Facility, led by attorney Kenneth Feinberg.

After the settlement was announced last year, Barbier appointed Juneau to take over the process of evaluating and paying claims.

The settlement doesn’t have a cap, but BP initially estimated that it would pay $7.8 billion to resolve the private claims. Later, the company said it no longer could give a reliable estimate for how much the deal will cost.

Lead plaintiffs’ lawyers Steve Herman and Jim Roy said they were pleased that "the vast majority of class members will continue to be paid in a timely and expeditious manner.

“We look forward to working with the Claims Administrator and the Court to determine the best way to get the affected claims processed and paid as soon as possible,” they said in an emailed statement.

Juneau said he is pleased that the 5th Circuit “addressed this important issue.”

“As the court-appointed Claims Administrator, it is my job to implement this Settlement Agreement as directed by the Court. This is what we will do,” he said in a statement.


#7468

BP trial to focus on scientists’ spill estimates - National - theindependent.com Mobile

http://www.theindependent.com/news/national/bp-trial-to-focus-on-scientists-spill-estimates/article_bbb7d052-e716-561d-b52d-0824a41a3c1e.html?mode=jqm
By MICHAEL KUNZELMAN | Updated Yesterday

When BP used a capping stack to seal its blown-out well in the Gulf of Mexico, the device didn’t just shut the source of the nation’s worst offshore oil spill. Its pressure gauge also provided scientists with crucial data about the rate that crude that was spewing from the well when engineers finally killed it in July 2010.

Experts for BP and the federal government used the pressure gauge data in calculating how much how much oil spilled into the Gulf during the 87 days it took to plug the well. But each side will provide a federal judge with very different estimates when the second phase of a trial resumes Monday for litigation spawned by the spill.

U.S. District Judge Carl Barbier is scheduled to hear three weeks of testimony from dueling experts to help him calculate how much oil spilled into the Gulf _ a key factor in determining how much more money BP and its contractors owe for their roles in the deadly disaster.

Justice Department attorneys will try to persuade Barbier that the pressure gauge on the capping stack provided the best set of data about the flow of oil from the well.

“The pressure data, collection rates, and geometry of the capping stack are by far the most accurate and reliable sources of information on flow rate, and were recognized as such by all parties at the time,” they wrote in a pretrial filing.

BP, however, says the government’s experts ignored other important data. Company lawyers say its experts used a “proven methodology” that doesn’t require “simplistic and unverified assumptions about flow conditions.”

“In contrast, the United States’ experts employ unproven methods that require significant assumptions and extrapolations in lieu of, and even directly inconsistent with, the available data and other evidence,” company attorneys wrote.

The Deepwater Horizon drilling rig was working at the site of BP’s Macondo well off the Louisiana coast when the well blew out April 20, 2010. The explosion on the rig killed 11 workers and set off a massive fire. The rig sank less than two days later to the bottom, about a mile below the Gulf surface.

The Justice Department’s experts estimate 4.2 million barrels, or 176 million gallons, spilled into the Gulf after the blowout. BP has urged Barbier to use an estimate of 2.45 million barrels, or nearly 103 million gallons, in calculating any Clean Water Act fines. Both sides agree that 810,000 barrels, or 34 million gallons, escaped the well but were captured before the crude could pollute the Gulf.

Under the Clean Water Act, a polluter can be forced to pay a maximum of either $1,100 or $4,300 per barrel of spilled oil. The higher maximum applies if the company is found grossly negligent, as the government argues BP should be. But penalties can be assessed at amounts lower than those caps.

Using the government’s figures, a maximum penalty if the company is found grossly negligent could total $18 billion. Using the company’s figures, that maximum penalty would be around $10.5 billion.

For the trial’s first phase, Barbier heard eight weeks of testimony about the causes of the April 2010 well blowout.

Barbier divided the trial’s second phase into two parts. For the first segment, he heard four days of testimony last week about BP’s efforts to cap the well. He set aside 12 days of testimony for the second segment, which will consist almost exclusively of technical testimony by experts.

Government experts believe the oil was flowing from the well at a higher rate shortly after the blowout than it was when the well was sealed with the capping stack.

“Basic principles of oil production hold that reservoir pressure depletes and flow rates wane over time,” Justice Department attorneys wrote.

BP’s experts concluded that flow rates increased over time, due in part to the erosion of steel rams on the rig’s blowout preventer. Martin Blunt, a BP expert who is a professor of petroleum engineering at Imperial College in London, also took other factors into consideration, including the “compressibility” of the rocks in the reservoir BP was drilling.

“In assessing the data, Dr. Blunt uses a conservative lens,” BP attorneys wrote. “Dr. Blunt accounts for fundamental geological facts and principles of physics acknowledged by United States experts but omitted in their flow calculations.”

Calculating the rate that oil was flowing from the well has been a contentious issue from the beginning of the disaster.

Marcia McNutt, who was director of the U.S. Geological Survey at the time of the blowout, led the government’s Flow Rate Technical Group and frequently interacted with BP officials while its engineers scrambled to seal the well. In videotaped testimony shown to Barbier last week, McNutt said it didn’t appear that anyone from the government was inside BP’s “circle of trust” when it came to sharing data about a procedure called “top kill” that failed to seal the well.

McNutt also said it took longer for her team of scientists to arrive at a flow-rate estimate because they got poor data from BP.

“Did you feel that BP was not a willing partner when it came to flow rate?” a lawyer for Deepwater Horizon rig owner Transocean Ltd. asked McNutt.

“There was this tenseness,” McNutt said. “It was almost kind of a chill in the room when flow-rate issues came up.”

Timothy Crone, a professor of marine geophysics at Columbia University, was the lead researcher on what was billed in September 2010 as the first independent, peer-reviewed study of the leak’s volume. Crone and a colleague analyzed underwater video to arrive at an estimate that closely mirrors the federal government’s current calculation of how much oil escaped the well.

Crone said he is surprised the topic is still being debating three years later.

“The majority of scientists who worked on the problem are in agreement,” he said. “I can understand why BP wants to make it a question again, but in my opinion it’s not.”


#7469

A billion-dollar question: How much oil spilled into the Gulf during the BP disaster? | Star Tribune

http://www.startribune.com/business/226761921.html?page=all&prepage=1&c=y#continue

(See paragraphs within the >>>>>>>>. <<<<<<<. Describes some of the differences in arriving at estimates.)

NEW ORLEANS — For weeks after BP’s massive 2010 oil spill in the Gulf of Mexico, people across the globe were captivated by a live video feed from underwater cameras that showed the company’s blown-out well belching plumes of black crude into the water.

On Monday, more than three years later, clips from the spill cam were projected on a screen in a New Orleans courtroom while lawyers for BP and the federal government quarreled over how much oil gushed out of BP’s Macondo well during the 87-day crisis. The images helped some of the scientists calculate how much oil polluted the Gulf.

Determining how much oil spilled is a multibillion-dollar question for U.S. District Judge Carl Barbier, who is presiding over the trial involving the deadly Deepwater Horizon rig explosion and the nation’s worst offshore oil spill. The judge ultimately could decide how much more money BP owes for its role in the disaster.

Government experts estimate 4.2 million barrels, or 176 million gallons, spilled into the Gulf. BP has urged Barbier to use an estimate of 2.45 million barrels, or nearly 103 million gallons, in calculating any Clean Water Act penalties. Both sides agree that 810,000 barrels, or 34 million gallons, escaped the well but were captured before the crude could pollute the Gulf.

Under the Clean Water Act, a polluter can be forced to pay a maximum of either $1,100 or $4,300 per barrel of spilled oil. The higher maximum applies if the company is found grossly negligent, as the government argues BP should be. But penalties can be assessed at amounts lower than those caps.

Using the government’s figures, a maximum penalty if the company is found grossly negligent could total $18 billion. Using the company’s figures, that maximum penalty would be around $10.5 billion.

During opening statements Monday for the latest phase of the trial, lawyers for BP and the government outlined conflicting scientific theories to explain their different estimates.

Justice Department attorney Steven O’Rourke accused BP experts of “cherry-picking” data and disregarding information collected during its spill response efforts.

“The evidence will show that those theories are not valid,” said O’Rourke, who noted that the government’s estimate would make BP’s oil spill roughly 16 times larger than the 1989 Exxon Valdez spill in Alaska, which dumped 11 million gallons of oil into the Prince William Sound.

BP lawyer Mike Brock said the government’s estimates don’t account for the uncertainty of flow conditions between the April 20 blowout and the July 15 capping of the well.

“BP will present information and opinions based on known data — known data before the spill and known data after the spill,” he said. “It’s an industry standard approach to resolving or solving a problem like this.”

>>>>>>>>>>Government experts estimate that oil started flowing out of the Macondo well at a rate of roughly 62,000 barrels per day but dropped to a rate of 53,000 barrels per day when BP used a capping stack equipped with a pressure gauge to seal the well. O’Rourke said four government experts employed four different methods and reached strikingly similar estimates.

“Why four different methods? Because this is an unusual problem,” he said.

Conversely, BP’s experts concluded that flow rates increased over time, due in part to the erosion of steel rams on the rig’s blowout preventer. Brock said the government based its estimate on the flawed theory that erosion of cement, drill pipe and other obstructions in the well ended within hours of the blowout.

“The government has not accounted for events within the well on a day-by-day basis,” Brock said.

Brock showed Barbier excerpts of email exchanges between government officials in an effort to show that they were under pressure from President Barack Obama’s administration early in the spill to quickly estimate its size. One of the officials suggested they could determine the flow rate over time by “backtracking” from a current estimate.

“That is the flaw in the methodology they’ve employed here,” Brock said.<<<<<<<<<

O’Rourke urged the judge to disregard BP’s efforts to portray government scientists as “political hacks.”

“There was no conspiracy. There was no government agenda,” he said. “They were there to get the right answers and to help.”

The Deepwater Horizon drilling rig was working at the site of BP’s Macondo well off the Louisiana coast when the blowout triggered an explosion that killed 11 workers. The rig sank less than two days later to the bottom, about a mile below the Gulf surface.

For the trial’s first phase, which ended in April, Barbier heard eight weeks of testimony about the causes of the April 2010 well blowout.


#7470

Documents and transcripts of the trial, phase 1 & 2: http://www.mdl2179trialdocs.com/


#7471

Justice Department rests in second phase of BP oil spill trial | NOLA.com
By Mark Schleifstein, NOLA.com | The Times-Picayune
on October 09, 2013 at 7:41 PM, updated October 10, 2013 at 3:16 AM

Justice Department attorneys rested their case Wednesday in the federal civil trial of BP and Anadarko Petroleum Corp., as the firms and the government continued to argue over how much oil was released into the Gulf of Mexico in the 87 days following the April 20, 2010, blowout of BP’s Macondo well.

Justice attorneys finished questioning experts who support the government’s contention that the oil spill resulted in the release of at least 4.2 million barrels of oil into Gulf. BP and Anadarko have maintained that only 2.45 million barrels of oil were released, and are set to begin making their case Thursday.

U.S. District Judge Carl Barbier is presiding over the trial without a jury, listening attentively and interrupting at times with his own questions about the often mind-numbing testimony describing the physics and mathematical equations that experts from both sides have used to estimate the flow of oil.

BP’s estimate would result in maximum fines of $2.7 billion, billion, if Barbier decides the company and its drilling partners acted with simple negligence, or $10.5 billion if the companies committed gross negligence in their actions during the drilling of the well and in stemming the flow of oil after the blowout.

If the government’s estimates are adopted, the maximum fines for simple negligence could rise to $4.6 billion, or $18 billion for gross negligence.

Testimony so far, and the questioning of the government witnesses by BP attorneys, indicated Barbier will be relying largely on educated guesses in determining how much oil was released.

Mohan Kelkar, a petroleum engineering professor at the University of Tulsa, in Oklahoma, testified that Kelkar concluded that between 4.5 million and 5.5 million barrels of oil were spilled by the time the well was finally shut down on July 15, 2010. Kelkar used information about the physical size of the Macondo oil reservoir, BP’s pre-drilling estimates of the amount of oil in the reservoir, and pressure readings in the well as it was being drilled before the accident and when it was capped to arrive at the estimate.

But the numbers Kelkar used for each of those factors, and the assumptions he used for the way the oil flowed to the surface were questioned carefully by a BP attorney.

As is often the case in civil trials, BP used its questioning of Kelkar to lay out parts of its own case for the smaller flow rate, pointing to what it contends are incorrect assumptions.

For instance, just as occurred on Tuesday, BP questioned Kelkar’s use of a higher measurement for the compressibility of the rock formation containing the oil. Kelkar used a reading of 12 “microsips,” the term used for compressibility measurements, while BP’s experts contend the reading was 6 microsips, which would result in less oil flowing to the surface.

BP attorneys were able to get Kelkar to admit that it would be just as reasonable to use 6 microsips during their questioning, but a Justice attorney later got Kelkar to agree that he’d chose 12 as a middle number, and that 18 microsips, which would have resulted in even more oil escaping from the well, might also be correct.

Kelkar also adopted an earlier Justice witness’ conclusion about how much liquid oil should be counted as entering the Gulf, again resulting in a higher number of barrels. As oil moves to the surface from the high pressure, high temperature environment of the Macondo reservoir, nearly 3 miles below the surface of the Gulf, chemical processes cause gaseous elements in the oil to separate out, leaving only about 50.6 barrels at the surface for every 100 barrels in the formation, according to the formula Kelkar used.

But BP contends a different formula should be used that would result in only 44.5 barrels reaching the surface for every 100 barrels in the formation. Again, the difference could mean big dollars in the ultimate fines set by Barbier.

Barbier also heard an alternate method of estimating the oil release from Justice expert witness Mehran Pooladi-Darvish, a vice president of engineering at Fekete, an oil reservoir engineering consulting firm.

Pooladi-Darvish used measurements on July 15 of the flow of oil from the well through the stacking cap used to shut it down as the starting point of his computer modeling, and combined it with estimates of the flow of oil from the well. His estimate is between 5 million and 5.3 million barrels of oil.

Pooladi-Darvish, under questioning from a BP attorney, said he included provisions for several factors that BP experts say would result in a much smaller flow of oil - erosion of metal parts in the blowout preventer and in the riser pipe that once led to the Deepwater Horizon drilling rig that exploded and sank after the blowout.

BP’s experts contend that the metal pieces in the blowout preventer stayed in place for a lengthy part of the oil spill, eroding very slowly. The result would have been a smaller area through which the oil could flow, and thus less oil.

They contend the riser also was slow to erode away, and that a kink caused by its collapse to the seafloor also reduced the flow of oil.

But Pooladi-Darvish insisted that his modeling indicated only a small reduction in the amount of oil from both factors.

BP will begin presenting its witnesses on Thursday, with their testimony likely to extend into next week. Justice attorneys may then call rebuttal witnesses, if necessary.

Barbier is then likely to ask both sides to summarize the evidence presented to him during this second phase of the trial, including last week’s testimony focusing on efforts made by the companies to halt the flow of oil. He also has not yet ruled on issues raised during the first phase of the trial, which focused on whether BP and its drilling partners acted with simple or gross negligence.

In determining the amount of fines under the Clean Water Act, Barbier also must answer eight questions contained in the law, including whether BP and its drilling partners took actions to reduce the damage of the spill and whether the amount of the fines will hurt their business.

Those decisions are not likely to be announced until sometime next year.


#7472

The Barrel blog

While much of the testimony of experts surrounds physical pressures acting on the oil deep beneath BP’s Mississippi Canyon well, the suggestion has also been made that there was another kind of pressure at work in determining a flow rate and a final spill figure — political pressure.
Mike Brock, an attorney representing BP and Anadarko, BP’s partner in the well, recounted a July 30 meeting where the key government players are struggling with the complex data surrounding how much oil had spilled from the well and at what rate.
At that meeting, Brock told Barbier, the officials are told that the White House wants a number released for publication in Sunday’s newspapers. Rumors swirling around the all-important number had to be squashed with an official estimate. After much discussion, the 5 million figure was agreed upon, at least as a number to be released publicly.
“As far as US government negotiations with BP, this is good enough,” an unidentified official is quoted as saying, according to Brock’s opening statement.
“This five million figure that they’re using in this case now is one that was designed to be a quick and dirty number for negotiation purposes, but not good science,” Brock said.
Brock quotes another unidentified government official as saying at that meeting: “They’ll settle, so it doesn’t matter.”
But BP has not settled and the complex but critically important testimony continues.


#7473

The $750,000,000 Missing Comma? - Insurance - United States

http://www.mondaq.com/unitedstates/x/269290/Insurance/The+750000000+Missing+Comma

Last Updated: October 15 2013
Article by Keith B. Letourneau
Blank Rome LLP

In April 2010, the mobile offshore drilling unit (“MODU”) Deepwater Horizon suffered an explosion and catastrophic fire that led to the rig’s sinking, the loss of eleven lives, and the largest oil spill disaster in U.S. history. The event sparked an onslaught of litigation, which was consolidated in a multi-district litigation (“MDL”) proceeding in New Orleans. Transocean Offshore Deepwater Drilling Inc. (“Transocean”) owned the rig and insured it through Ranger Insurance Co. Ranger provided $50 million in general liability coverage, and underwriters from London market syndicates provided four layers of excess coverage worth $700 million. The Ranger and excess policies contained materially equivalent terms. BP America Production Company (“BP”) had entered a Drilling Contract with Transocean to employ the rig to exploit the Macondo well. Various BP companies were included as additional insureds under Transocean’s policy.

In a short-lived decision, In re Deepwater Horizon (Ranger Insurance, Limited v. Transocean Offshore Deepwater Drilling, Inc.), 710 F.3d 338 (5th Cir. 2013), the Fifth Circuit held that the umbrella insurance policy, and not the indemnity provisions in the Drilling Contract, controlled the extent to which BP was covered for operations under the Drilling Contract.

The Drilling Contract required Transocean to maintain insurance covering its operations per Exhibit C to the contract, which obligated Transocean to name BP and its affiliated companies “as additional insureds in each of [Transocean’s] policies, except Worker’s Compensation for liabilities assumed by [Transocean] under the terms of this Contract.” While the parties agreed that the Drilling Contract constituted an “Insured Contract” under the policy, the insurers sought declaratory judgment that they owed no additional insured obligation to BP with respect to pollution claims emanating from the Macondo well. BP argued that it was an additional insured under the policies, and that the policies alone—and not the Drilling Contract’s indemnity obligations—governed the scope of BP’s additional insured coverage.

But for a missing comma, the world was lost? The insurers argued that their additional insured obligation was limited to liabilities assumed by Transocean under the Drilling Contract’s terms. Because the Drilling Contract did not impose indemnity obligations upon Transocean with respect to pollution-related liabilities, the lower court found that BP was not covered under Transocean’s policies for such liabilities. The Fifth Circuit, however, found that the phraseology in the highlighted language above only applied to the Workers Compensation policy because no comma followed the word “Compensation.”

Nonetheless, the Fifth Circuit noted that under Texas law (Evanston Ins. Co. v. ATOFINA Petrochems., Inc., 256 S.W.3d 660 (Tex. 2008)), so long as the indemnity agreement and insurance provisions are separate and independent, the court looks to the applicable insurance policy, not the underlying service contract, to ascertain whether additional insurance coverage exists.

The Fifth Circuit also considered its earlier decision in Aubris Resources LP v. St. Paul Fire & Marine Ins. Co., 566 F.3d 483 (5th Cir. 2009), which, relying upon ATOFINA, similarly held that a separate indemnity clause does not apply to limit the scope of insurance coverage. In the final analysis, the Fifth Circuit held that it does not matter how the indemnity provision reads, for it is the language in the policy itself that dictates the extent of additional insured coverage, and because the policy did not exclude pollutionrelated liabilities from such coverage, BP was entitled to that coverage under Transocean’s policies.

The missing comma, as it turns out, was just that after all, except that on August 29, 2013, the Fifth Circuit panel thought better of its decision, unanimously withdrew it, and asked the Texas Supreme Court to weigh in. In re Deepwater Horizon (Ranger Insurance Limited v. Transocean Deepwater, Inc.), No. 12-30230, 2013 WL 4606533 (5th Cir. Aug. 29, 2013). On petition for rehearing, the panel decided that no controlling Texas Supreme Court precedent existed. The court noted that uncertainty over the scope of the Texas Supreme Court’s opinion in ATOFINA precipitated its decision to certify two questions for that court’s consideration:

Whether [ATOFINA] compels a finding that BP is covered for the damages at issue, because the language of the umbrella policies alone determines the extent of BP’s coverage as an additional insured if, and so long as, the additional insured and indemnity provisions of the Drilling Contract are “separate and independent”?
Whether the doctrine of contra proferentem applies to the interpretation of the insurance coverage provision of the Drilling Contract under [ATOFINA] given the facts of this case?
While BP argued that the additional insured and indemnity provisions were separate and independent, the insurers and Transocean argued that the Drilling Contract’s indemnity clause differed markedly from the one in ATOFINA. Specifically, while the ATOFINA indemnity clause broadly required ATOFINA to be named as an additional insured, the Drilling Contract’s indemnity clause only required BP to be named as an additional insured to the extent of liabilities assumed in the Drilling Contract. Thus, the indemnity clause and additional insured provisions were not separate and independent, but inextricably intertwined. Moreover, the policy at issue required the existence of an “insured contract,” where none was required in ATOFINA.

The Fifth Circuit concluded that “because there are potentially important distinctions between the facts of the instant case and ATOFINA, the outcome is not entirely clear.”

Not forgetting about the missing comma in the Drilling Contract’s additional insured clause, the court next addressed whether a longstanding Texas interpretative rule governing insurance policies applies to sophisticated parties. In Texas, when an insurance provision susceptible to more than one reasonable interpretation exists, the court must choose the one that benefits the insured, even if the more reasonable interpretation favors the insurer. The court noted that the Texas Supreme Court has never recognized a sophisticated insured exception to the foregoing rule, but perhaps it should given that the parties here were all “highly capable contractors.” However, the insurers were not involved in drafting the Drilling Contract, and thus construing ambiguities in that contract might not be appropriate, though they were involved in drafting the insurance policy’s additional insured clause.

The answers to these questions posed to the Texas Supreme Court promise to illuminate how contractual indemnity and additional insurance clauses in separate contracts and policies will be construed and crafted in the years to come, and whether a missing comma is worth $750,000,000.


#7474

Ex-Halliburton manager pleads guilty to destroying evidence in Deepwater Horizon spill | AL.com

By The Associated Press
on October 15, 2013 at 11:14 AM, updated October 15, 2013 at 2:06 PM

NEW ORLEANS (AP) — A former Halliburton manager pleaded guilty Tuesday to destroying evidence in the aftermath of the deadly rig explosion that spawned BP’s massive 2010 oil spill in the Gulf of Mexico.

Anthony Badalamenti, 62, of Katy, Texas, faces a maximum sentence of 1 year in prison and a $100,000 fine after his guilty plea in U.S. District Court to one misdemeanor count of destruction of evidence. His sentencing by U.S. District Judge Jay Zainey is set for Jan. 21.

Badalamenti was the cementing technology director for Halliburton Energy Services Inc., BP’s cement contractor on the Deepwater Horizon drilling rig. Prosecutors said he instructed two Halliburton employees to delete data during a post-spill review of the cement job on BP’s blown-out Macondo well.

Last month, a federal judge accepted a separate plea agreement calling for Halliburton to pay a $200,000 fine for a misdemeanor stemming from Badalamenti’s conduct. Halliburton also agreed to be on probation for three years and to make a $55 million contribution to the National Fish and Wildlife Foundation, but that payment was not a condition of the deal.

The April 20, 2010, rig explosion killed 11 workers and led to the nation’s worst offshore oil spill.

In May 2010, according to prosecutors, Badalamenti directed a senior program manager to run computer simulations on centralizers, which are used to keep the casing centered in the wellbore. The results indicated there was little difference between using six or 21 centralizers. The data could have supported BP’s decision to use the lower number.

Badalamenti is accused of instructing the program manager to delete the results. The program manager “felt uncomfortable” about the instruction but complied, according to prosecutors.

A different Halliburton employee also deleted data from a separate round of simulations at the direction of Badalamenti, who was acting without company authorization, prosecutors said.

Halliburton notified investigators from a Justice Department task force about the deletion of data. Efforts to recover the data weren’t successful.


#7475

BP experts explain how they gauged the 2010 oil spill, government looks for faults, at trial on Thursday | NOLA.com

By Mark Waller, NOLA.com | The Times-Picayune
on October 17, 2013 at 1:52 PM, updated October 17, 2013 at 9:53 PM

Thursday morning at the BP oil spill trial continued with experts called by the company explaining techniques they used to estimate the size of the 2010 deep-sea discharge and U.S. Justice Department lawyers scrutinizing them for faults in their methods. BP argues 2.45 million barrels made it into the Gulf of Mexico while the government estimates 4.2 million, setting up arange of possible fines that spans billions of dollars.

BP called Srdjan Nesic, a chemical engineering and metal erosion expert, to describe how he used the dimensions of the stack of equipment on the sea floor in its original state with the dimensions of the gear after it was recovered following the Deepwater Horizon oil rig explosion and ensuing spill to determine that sand pumping through the hemorrhaging blowout preventer caused it to erode from the inside and poked holes in the pipe on top of it.

“It was a gradual process that for the most part it just went progressively from the initial state to the last state,” Nesic testified in a presentation bolstering BP’s argument that changing conditions in the well equipment increased the flow over time, which contradicts the government’s portrayal of how the spill unfolded.

Nesic described photos of parts recovered from the sea floor. “These pictures are quite, quite drastic examples of massive erosion,” he said.

He reviewed the holes that eventually poked into the riser pipe, sending new jets of oil into the sea. “It tells us that sand production and erosion was happening on that date and well beyond that date,” he said about a hole that appeared on May 19, 2010, a month after the blowout.

Nesic also explained computer simulations he conducted material coursing through the pipe, using laser scanning to copy the shape of the pipe that bent after the explosion.

“We released the swarm of particles and watched how they moved through this geometry,” he said, as tiny blue dots moved through his animation.

He said his starting and ending points, based on the condition of the blowout preventer when it was unscathed and the equipment’s damaged state afterward, gave him strong reference points.

Justice Department lawyer Anna Cross, however, worked to puncture his approach by pressing him on the lower degree of certainty about exactly how the data should fall in the middle of a 10-day period Nesic studied between the two more certain points. Nesic stressed that his trajectory of erosion unfolding over days still was informed by data, even if it was less solid than the end points.

“I didn’t just wave my hands or use some guess,” Nesic said. “It doesn’t mean that I just did it without calculations.”

Cross also raised the point that he relied on another expert’s numbers for how much sand the well was producing without checking it himself, although he said that sort of check is outside his expertise.

The day started with the government’s cross-examination of a BP witness who began testifying Wednesday, Michael Zaldivar, president and founder of Houston-based evoleap, a firm that advises oil operators on how oil flows. Zaldivar presented a picture of alternating pulses of oil and gas billowing from the well, a concept called “slug flow,” a factor that BP lawyers are using to portray restrictions on the amount of oil flowing and inject complications into measuring conditions of the leak, making it difficult to judge how much oil escaped under the government’s methods.

Pressed by a government lawyer about his calculations on how the sizes and shapes of holes affect the flow rates he measured, Zaldivar insisted he used scientifically proven and industry-standard methods.

“I’m now a believer hydraulic diameter,” he said of a key concept he used. “I’ve used it multiple times throughout my career. It matches and is accepted in industry.”

“There’s a large body of research around characterizing leak holes and the specific diameter,” he said.

“You cannot then cherry pick one number that you like out of my model and then plug it into a relationship.”


#7476

Experts at BP trial try to poke holes in opposing theories of how much oil soiled the Gulf in 2010 | NOLA.com
By Mark Waller, NOLA.com | The Times-Picayune

on October 17, 2013 at 9:24 PM, updated October 17, 2013 at 9:38 PM

http://www.nola.com/news/gulf-oil-spill/index.ssf/2013/10/experts_at_the_bp_trial_thursd.html

On what might have been the penultimate day in the latest convening of the BP oil spill trial, the company on Thursday presented experts who focused on undermining the oil-counting methods of the U.S. Justice Department’s experts, and government lawyers in turn scoured theBP testimony looking to expose faults, all with a judge’s decisions on millions of barrels of oil and potentially billions of dollars in fines on the line.

BP called Adrian Johnson, a mechanical engineer with expertise in oil and gas hydraulics who works for a firm that provides modeling software for the behavior of fluids in oil and gas production systems. Johnson criticized scientists who produced studies for the government on how much oil gushed from the Macondo well in 2010, saying they failed to factor numerous uncertainties and changing conditions in the well throughout the massive, three-month Gulf of Mexico crisis.

The government experts, Johnson said, used unreliable data from the failed “top kill” effort to jam the hemorrhaging well and the “top hat” project that collected some of the oil that erupted after the Deepwater Horizon rig exploded and sank, killing 11 workers and setting off the historic spill. Among the uncertainties, he said, was how the bits of rubbery “junk” pumped into the well during the top kill affected the oil flow afterward.

“We don’t know what that top kill material was doing over time, over the top kill period, and how it was moving around,” he said.

Echoing other BP witnesses, he said government experts failed to factor in wear in the deep-sea equipment stack from sand pumping through and ignored videotaped alternating pulses of oil and gas that billowed from the leak, also influencing how much oil was issuing forth.

“We’ve got lots of changes in the system,” Johnson said. "We’ve got geometric changes. We’ve got temperature changes.

“Those inputs in this case are changing through time,” he said. “That puts huge uncertainty into the whole problem.”

He said some of the government witnesses, who testified earlier in what has been a three-week run of the trial, failed to use models widely accepted in the oil and gas industry. And he questioned the assumptions underlying their calculations, such as estimates showing smooth trajectories of oil amounts discharging over time.

“Their estimates really are very, very inaccurate,” he said.

The federal government, based on its experts’ reports, says 4.2 million barrels of oil got into the Gulf. BP and its experts say it was 2.45 million. Where U.S. District Judge Carl Barbierdecides to set the number could change possible fine amounts for BP by billions of dollars, higher or lower.

At the end of the day, government attorney Tom Benson began cross-examining Johnson, picking at his methods of analysis, prompting him to acknowledge an error in one calculation and asking if his software had ever been used to model this exact situation before.

“Well it’s a pipe within a pipe,” Johnson answered. “It doesn’t matter whether it’s a drill pipe or what it is.”

The cross-examination will continue on Friday. And although Barbier had scheduled another week for the trial, lawyers for both sides said Thursday that they think they can wrap up this phase by the end of Friday.

This second phase of the trial first covered BP’s efforts to stop the gusher and thenturned to quantifying how much oil escaped. An almost two-month first phase in the spring looked at the steps leading to the well blowout.

Before Johnson took the stand, the judge heard from Andreas Momber, an expert on concrete and cement materials, about cement work in the well that might have restricted the flow of oil and what he described as a lack of scientific backing for government experts’ estimates of how cement eroded with the coursing oil and sand.

Touching on territory that the judge and opposing lawyers warned was close to the topics covered in the first phase of the trial, government lawyer Scott Cernich pressed Momber on the fact that he was not addressing the subject of flow rates, that he was assuming the cement in the well was fully set and that he does not have experience in conducting an oil field cement job. Momber stressed he is an expert on the same types of materials used.

BP also called Srdjan Nesic, a chemical engineering and metal erosion expert, to describe how he used the dimensions of the pipe system on the sea floor in its original state with the dimensions of the gear after it was recovered to determine that sand pumping through the ruptured blowout preventer caused it to erode from the inside and poked holes in the pipe leading from the top.

“It was a gradual process that for the most part it just went progressively from the initial state to the last state,” Nesic testified in a presentation bolstering BP’s argument that changing conditions in ground down well equipment increased the flow over time, which contradicts the government’s portrayal of how the spill unfolded, including a suggestion that most erosion occurred quickly and soon after the blowout.

Nesic described photos of parts raised from the bottom of the Gulf. “These pictures are quite, quite drastic examples of massive erosion,” he said.

He reviewed the holes that eventually popped into the riser pipe, sending new jets of oil into the sea. “It tells us that sand production and erosion was happening on that date and well beyond that date,” he said about a hole that appeared on May 19, 2010, a month after the initial accident.

Nesic also explained computer simulations he conducted of material shooting through the riser pipe that once led to the oil rig, based on laser scanning to copy the shape of the pipe that bent after the explosion.

“We released the swarm of particles and watched how they moved through this geometry,” he said, as tiny blue dots moved through his animation on screens in the courtroom.

He said his starting and ending points, based on the condition of the blowout preventer when it was unscathed and the equipment’s damaged state afterward, gave him strong reference points.

Justice Department lawyer Anna Cross, however, worked to puncture his approach by pressing him on the lower degree of certainty about exactly how the data should fall in the middle of a 10-day period Nesic studied between the two more certain points. Nesic stressed that his trajectory of erosion unfolding over days still was informed by data, even if it was less solid than the end points.

“I didn’t just wave my hands or use some guess,” Nesic said. “It doesn’t mean that I just did it without calculations.”

Cross also raised the point that he relied on another expert’s numbers for how much sand the well was producing without checking it himself, although he said that sort of review is outside his expertise.

The day started with the government’s cross-examination of a BP witness who began testifying Wednesday, Michael Zaldivar, president and founder of a Houston-based firm that advises industry operators on how oil flows. Zaldivar presented a picture of the alternating bursts of oil and gas billowing from the well, a concept called “slug flow,” another factor that BP lawyers are using to show how oil itself was restricted and how complicated conditions of the leak made it difficult to judge how much oil escaped under the government’s methods of monitoring data from different points during the gusher.

Pressed by a government lawyer about his calculations on how the sizes and shapes of holes affect the flow rates he measured, Zaldivar insisted he used scientifically proven and industry-standard methods.

“I’m now a believer in hydraulic diameter,” he said of a key concept he used. “I’ve used it multiple times throughout my career. It matches and is accepted in industry. There’s a large body of research around characterizing leak holes and the specific diameter,” he said.


#7477

BP rests its case in Gulf spill trial’s barrel-counting segment | Susan Buchanan

(This article is published in “The Louisiana Weekly” in the Oct. 21, 2013 edition.)

Phase Two of the Macondo spill trial ended Friday in U.S. District Court in New Orleans as BP rested its case in the barrel-counting or quantification segment. With Judge Carl Barbier presiding, BP and Anadarko called their witnesses last week after the U.S. Justice Department rested its case the previous week. According to BP’s defense, 3.26 million barrels spewed into the Gulf after the Deepwater Horizon exploded in April 2010. The United States says it was 5 million barrels, including what was collected. Data presented in the quantification trial will determine how much BP is fined under the Clean Water Act.

On Tuesday, petroleum engineering professor Curtis Whitson of the Norwegian University of Science and Technology at Trondheim, under questioning from Hariklia Karis for BP, said he and others built a model for the Macondo reservoir’s fluids. Whitson said that his group also evaluated a model developed by thermodynamics expert Aaron Zick and saw serious flaws in it concerning shrinkage. Whitson calculated a shrinkage factor of 42 to 44, depending on how solubility was treated. That meant 42 to 44 barrels reached the ocean’s surface for every 100 barrels that rose from the Macondo formation below. Liquid barrels at the surface are called stock-tank barrels. Justice Dept. witness Aaron Zick, who testified the week before, estimated more liquid reached the surface. BP maintains that less oil was left in the barrels that surfaced than the feds do.

Questioned Tuesday by Mike Brock for BP and Anadarko, rock mechanics Professor Robert Zimmerman at Imperial College in London said he analyzed Macondo reservoir data, collected by Houston-based Weatherford Laboratories, to gauge pore-volume compressibility. He said the Macondo rock was weakly consolidated sandstone. “My estimate of the average compressibility of the rocks in the reservoir was 6.35 microsips,” Zimmerman said. The oil industry uses microsips as a measure of compressibility. The higher the microsips, the greater the amount of oil thought to be in a rock formation, meaning more of it could escape. For awhile during the spill, BP scientists recommended using 12 microsips for rock compression at the Macondo site. But BP’s defense this fall has focused on a figure of around 6 microsips, suggesting less oil was in the reservoir.

Petroleum engineering professor Alain Gringarten at Imperial College in London, queried Tuesday by Martin Boles for BP and Anadarko, said he evaluated total discharge from the Macondo well in two steps. He calculated permeability from pre-spill data at the reservoir level. Then he used his permeability calculations, along with pressure measured during the spill and the well’s shut-in afterwards, to figure discharge. “I found that the permeability of the reservoir is 238 millidarcies and that the cumulative discharge of oil is between 2.4 and 3 million stock-tank barrels,” Gringarten said. Millidarcies are a permeability unit used by engineers. Gringarten also estimated that 810,000 barrels had been collected at the Macondo site.

In the Phase Two trial, BP has relied on several expert witnesses from Imperial College in London, with which it has research ties.

Reservoir engineering director Robert Clifford Merrill, Jr. at BP Exploration in Houston was questioned Wednesday by Martin Boles for BP. Merrill said his Macondo spill work included estimating pressures amid flow-rate uncertainty. In modeling with his team early in the spill, he used 6 microsips for the Macondo’s rock compressibility. But in early July 2010, the team also experimented with 12 microsips in its calculations. After the well’s July 15, 2010 shut-in, Merrill used 6 microsips for rock compressibility and said he supports that number now because it was the measured value.

Multiphase flow expert Michael Zaldivar, president and founder of Evoleap, LLC in Houston, was queried Wednesday by Barry Fields for BP and Anadarko. Zaldivar said the well’s sunken riser pipe in late April 2010 caused a “slug flow,” or alternating exodus of oil and gas from the Macondo reservoir from May 13 to 20, 2010. The riser pipe had a kink with holes in it. Based on riser-end-flow and kink-leak-flow modeling, Zaldivar calculated a well flow rate of 24,900 to 35,900 stock-tank barrels per day from May 13 to 20, with a best estimate for that period of 30,000 bpd.

Professor Srdjan Nesic, director of Ohio University’s Institute for Corrosion and Multiphase Technology, said Thursday he was asked by BP to examine how metal erosion affected the well’s flow rate. Questioned by Mike Brock for BP and Anadarko, Nesic said for the April 22 to May 27, 2010 span, he considered “geometries of interest”–the blind sheer rams, casing sheer rams, the upper annular and a kink in the riser–in his computations. Those parts didn’t erode at the same rate, and erosion in the various parts didn’t have an equal impact on the flow rate, he said.

“I’ve concluded that this erosion of the elements of the blowout preventer and the kinked riser were so significant that if the BOP was the sole and the biggest restriction to flow, the flow would have doubled over this period of time that I’ve analyzed,” Nesic said.

Andreas Momber, research head at engineering company Muehlhan in Germany and an expert in cement erosion, was queried Thursday by Bridget O’Connor for BP and Anadarko. Cement in the well eroded slowly and may have hindered the oil flow for a substantial part of the spill, Momber said. He said it was scientifically unsound for U.S. Justice Dept. witnesses to have claimed that cement could have eroded in a little over 48 hours after the disaster, letting the oil flow.

Mechanical engineer Adrian Johnson, manager at UK consultancy FEESA and a former BP employee, was questioned by Matt Regan for BP and Anadarko Thursday. He discussed difficulties in hydraulic modeling for the Macondo well. “We have geometric changes, we have temperature changes, we potentially have flow-path characteristic changes, productivity index changes, pressure changes,” Johnson said. “So you need to do a rigorous model for each point in time that you’re going to try and calculate a flow rate.” The use of constant values for those factors in modeling by Justice Dept. witnesses made their flow estimates inaccurate and too high, he said.

Under examination from Tom Benson for the United States, Johnson admitted that FEESA in July had billed BP $2.4 million for its Macondo analysis. Johnson also said he owns 13,000 shares of BP stock.

On Friday, three witnesses for the U.S. Justice Department rebutted testimony by BP witnesses. Instead of making closing comments Friday, the parties involved will submit post-trial briefs. Judge Barbier said he hopes to announce due dates for those briefs Monday.

Barbier heard the trial without a jury and must decide how many barrels spewed. He will decide if and when to hold proceedings for penalties under the Clean Water Act and other federal laws. And sometime ahead, damage claims by Louisiana, Alabama and other Gulf states are expected to be heard in U.S. District Court.

Under the Clean Water Act, fines against BP could range from $1,100 per barrel spilled if simple negligence is found to as much as $4,300 a barrel if the company is considered grossly negligent. BP’s CWA penalties could be as high as $18 billion. Eighty percent of those fines will be directed to economic and ecological restoration along the Gulf Coast.


#7478

Public Statistics for the Deepwater Horizon Economic and Property Damages Settlement

October 23, 2013

http://www.deepwaterhorizoneconomicsettlement.com/docs/statistics.pdf[/url

Public Statistics for the Deepwater Horizon Economic and Property Damages Settlement
October 23, 2013

LEGEND:

  1. Form Begun - Includes electronically filed registration or claim forms for the period of time between the moment a claimant or his attorney has initiated the submission of a form and moment they complete that filing by submitting the electronic signature. This definition also includes hard copy registration or claim forms where the DWH Intake Team is in the process of linking the scanned images and has not yet completed the data entry on that form.
  2. Form Submitted - Includes electronically filed registration or claim forms after the claimant or his attorney completes the electronic signature and clicks the submit button. This definition also includes hard copy registration or claim forms where the DWH Intake Team has completed both the linking of scanned images and the data entry on that form.
  3. Unique Claimants with Form Submitted - Counts the unique number of claimants with at least one Claim Form Submitted for each Claim Type. Because claimants may file claims for more than one Claim Type, the sum of all Claim Types will not equal the count of total unique claimants.
  4. Notices Issued - The count of Notices Issued in Table 4 counts each unique claim issued a Notice only once. For claims issued multiple Notices, this report uses the following hierarchy when counting the claim: (1) Eligibility Notice if the claim has been paid; (2) Most recent active Notice if the claim has not been paid; (3) If the claim has been closed it will not be counted as an Eligibility Notice unless the claim has been paid. The count of Notices Issued in Chart 5, counts all Notices Issued and reports claims with multiple Notices once for each Notice issued. Because of this, the totals reported in Table 4 do not match the totals reported in Chart 5.
  5. Payment Information - The timing of payment can be affected by a number of factors. Even after the DHECC receives a Release, delay in receipt of a W-9, or in receipt of the Attorney Fee Acknowledgment Form can delay payment. In addition, any alterations or omissions on the Release Form, or an assertion of a third-party lien against an award amount, can delay payment. As a result, this report will show a higher number of Accepted Offers than Amounts Paid.
  6. Note: The Claims Administrator continually monitors the status of all claim filings. Through this process, the Claims Administrator may find duplicate claims from the same claimant. In such cases, the Claims Administrator will close the duplicate claim and only process the remaining valid claim. This report excludes duplicate claims from all counts of claims filed.

#7479

Virtual information hub to put a cork in future oil spills - The Daily Cougar
http://thedailycougar.com/2013/11/14/virtual-information-hub-put-cork-future-oil-spills/

UH is establishing a virtual research center in collaboration with two other Texas universities in order to prevent another oil spill like BP’s 2010 Deepwater Horizon incident.

The Ocean Energy Research Institute will act as an information-sharing liaison between government, science, academic and industry organizations, as outlined by the Bureau of Safety and Environmental Enforcement, and will be a joint project between the University, Texas A&M University and the University of Texas.

A $5 million federal grant will enable these three universities to research and implement offshore drilling safety and environmental protection during their five-year contract, according to BSEE in its grant proposal.

Ramanan Krishnamoorti, chief energy officer and professor of chemical and bi0molecular engineering at UH, is one of the co-principal investigators who came up with the idea, drafted the plan and compiled researchers for the OER Institute, which will be virtual. He emphasized that all three universities are entering into this project equally and will serve key functions, though their specific roles are still being defined.

“This is a huge task; not any one institute or individual could do this. Together, we’re better at being able to communicate,” Krishnamoorti said.

UT Petroleum and Geosystems Engineering Department Chair and professor Tad Patzek sees a bright future for the OER Institute.

“(The institute) will be a place to do cutting-edge research. The institute will not be a brick-and-mortar building — it will be a virtual institute run at the universities,” Patzek said in an interview with The Daily Texan.

The Ocean Energy Safety Advisory Committee of the Department of the Interior said it began brainstorming about this institute during the cleanup of the Deepwater Horizon oil spill as it realized the need for regular information sharing. It has since conducted discussions and eventually a recommendation that led to a grant proposal and applicant evaluation. A&M, UT and UH presented a joint proposal and won the national bid, which Patzek said was a big deal.

The oil and gas industry is continually developing new technologies, prompting this need for increased communication among field experts and government regulators. With the rate that technology is moving, Krishnamoorti said the OESAC will provide the materials and structures for a rapidly adapting industry.

The OESAC will publish quarterly reports, as outlined in its grant proposal, allowing all involved fields to keep up-to-date on energy developments and risks.

Deputy Secretary of the Interior David J. Hayes sees this as a step toward the future of the oil and gas industry, where information sharing will continue to grow in importance.

“As we continue to expand domestic energy production, this institute will enable all segments of industry, government, academia and other stakeholders to stay informed about and engaged in changes in offshore energy development as they occur,” Hayes said in an interview with BSEE.


#7480

Feds struggle to get smaller oil companies, contractors to follow new offshore safety rules

http://www.wwltv.com/news/eyewitness/davidhammer/Off-shore-safety-Hammer-231778631.html