Call to halt Great Australian Bight oil drilling amid faulty equipment fears
Exclusive: MPs and activists want BP’s exploration licences to be suspended over ‘very critical safety issue’ identified by US regulators
The Guardian - Sunday 11 September 2016 19.00 BST - by Michael Slezak
Oil rigs poised to begin drilling in the Great Australian Bight could use faulty equipment that US regulators say is very likely to cause a “catastrophic incident” like the 2010 Deepwater Horizon spill in the Gulf of Mexico.
With no assurances the faulty equipment can be avoided in the Bight drilling, and safety plans that probably rely on faulty equipment already approved, parliamentarians and conservationists are calling for any approvals of BP’s pending environmental plans to be halted, and its exploration licences to be suspended, until the problem has been solved.
The Great Australian Bight is a virtually pristine unique ecosystem, bounded by the world’s longest southern-facing coastline. Much of it, including the region BP proposes to drill, was included in Australia’s commonwealth marine reserve network. The federal government concluded it was a “globally important seasonal calving habitat for the threatened southern right whale”.
It is also a crucial foraging area for threatened Australian sea lions, threatened white sharks, tuna and migratory sperm whales. A government-commissioned report in 2003 found it was of “international significance for ecologists and conservationists”.
Around the world since 2003 enormous bolts that secure offshore oil equipment to the seafloor have been snapping in half or coming loose, with US regulators describing the problem as a “very critical safety issue” and working with industry to replace more than 10,000 of the bolts in US waters.
But in Australia, where regulators appear set to approve BP’s environmental plan– key parts of which are not available to the public – to drill in the middle of a commonwealth marine reserve, the regulator couldn’t point to any action it had taken to protect against potentially massive underwater oil spills caused by the bolt failures.
BP Australia refused to answer specific questions put to the company about the bolt failures, referring Guardian Australia instead to Diamond Offshore.
Diamond Offshore did not respond to emails or phone messages.
A spokeswoman for the National Offshore Petroleum Safety and Environmental Management Authority (Nopsema), which regulates offshore oil and gas operations in Australia, told the Guardian the only action it had taken in relation to the issue was more than three years ago, when it requested operators to reveal whether they were using a particular batch of bolts from one manufacturer.
That appeared to be the minimum possible course of action Nopsema could take, since those particular bolts produced by GE had been subject to a global recall. But the problem has affected three different types of bolts from three different manufacturers, suggesting the issue was industry-wide or “systemic,” according to US regulators.
Tony Burke, Labor shadow minister for environment and water, was environment minister when the marine reserve in the Great Australian Bight was established. He said: “The more I look at this application, it is fast looking like a project and a process without precedent. It would be extraordinary if there is new and relevant information from the United States, for the Australian government to issue an approval without considering it.”
Nick Xenophon, senator for South Australia and leader of NXT, said he and his team would be pushing for this issue to be examined in a Senate inquiry, and called for the assessment processes to be halted until it had time to examine the issue.
“The environmental plan is obviously predicated on certain safeguards being in place. If there are allegations of systemic problems with the bolts then the whole process must be on hold until the any risks form these bolts are assessed,” Xenophon told the Guardian.
“The problem here is even if the risk is minuscule, the consequences are catastrophic,” he said.
The Greens South Australian senator, Sarah Hanson-Young, said: “The fact that BP won’t rule out the use of these dangerous, substandard bolts is concerning. The entire process has been so secretive and opaque from the beginning that even basic information like this has been impossible to come by.”
“Clearly we need to get to the bottom of what exactly is going on here and whether these questionable bolts will be used,” she said.
The Wilderness Society’s national director, Lyndon Schneiders, said: “It’s now time the Australian Government acts and stops any new offshore oil drilling activities, including using its powers to suspend BP’s exploration permits in the Great Australian Bight.”.
BP has outsourced its drilling in the Great Australian Bight to Diamond Offshore Drilling Inc, which in the US has experienced bolt failures and is working to replace many of them.
In January Brian Salerno, the director of the US Bureau of Safety and Environmental Enforcement (BSEE), wrote to the American Petroleum Institute, saying: “The fact that these failures involved equipment from the three primary manufacturers of this equipment suggests that this is a systematic industry problem that requires immediate attention.”
The peak body for the oil and gas industry, APPEA, sent the Guardian a statement, suggesting the only action the industry had taken was to respond to Nopsema’s query about the one batch of bolts that were subject to a global recall. “No operators reported using the batch in question,” it said.
Despite the US industry taking considerably more action than is apparent in Australia, the US regulator said even that wasn’t enough. “I am concerned that the industry is not moving quickly enough given the potential for a catastrophic failure,” Salerno said.
While the industry has moved to replace thousands of bolts in the US, Nopsema wasn’t aware of any bolt replacements in Australia.
A spokeswoman for Nopsema told the Guardian that it had a “non-prescriptive” regime, where the regulator relied on the operator to produce a “safety case” that ensured that risks were reduced to a level that was “as low as reasonably practicable”.
It was understood BP’s contractor, Diamond Offshore, had received approval from Nopsema for its safety case, despite nobody knowing what exactly the causes of the bolt failures were or whether any bolts were free of the faults.
Some of the bolt failures have occurred in “blow-out preventers”, the failure of which was responsible for the 2010 Deepwater Horizon oil spill in the Gulf of Mexico – the largest oil spill in history, also at a BP well.
In July Salerno wrote about the bolt failures, saying: “That we have not had a major incident so far may be due to luck more than anything else. How long that luck will last is not a question I think any of us is comfortable answering.”
But unable to discover the root cause of the failures, the US regulator has convened a massive interagency group, involving 17 agency partners, including Nasa, to investigate the matter.
In August, Salerno said in an interagency meeting about bolt failures: “We know we have a problem, and suspect it may be a more widespread problem.”
Other officials in the agency have warned a bolt failure could lead to a catastrophe on the scale of BP’s Deepwater Horizon spill, which killed 11 workers and released millions of barrels of oil into the Gulf of Mexico.
BP has not released its oil-spill modelling for its operations in the Great Australian Bight, but independent modelling commissioned by the Wilderness Society has shown even a relatively small “low-flow” oil spill from one of BP’s wells in the Bight could impact the entire southern coast of Australia, as well as Tasmania.
That would affect a large fishing and tourism industry in the region, as well the globally significant ecosystems.
BP has already had its environmental plans rejected twice by Nopsema but the documents have not been released, so the reasons for rejection are unknown.
Nopsema usually only allows environmental plans to be resubmitted twice but BP has split its application into two separate proposals, potentially resetting the counter.
Schneiders said the US regulator had made it clear the subsea bolt problem could cause a repeat of BP’s Gulf of Mexico oil disaster and was working with industry to fix the problem but Nopsema had done nothing.