Daily Archives: April 19, 2012

Greg Palast on the BP Coverup

Greg Palast

Two years before the Deepwater Horizon blow-out in the Gulf of Mexico, another BP off-shore rig suffered a nearly identical blow-out, but BP concealed the first one from the U.S. regulators and Congress.

This week, EcoWatch.org located an eyewitness with devastating new information about the Caspian Sea oil-rig blow-out which BP had concealed from government and the industry.

The witness, whose story is backed up by rig workers who were evacuated from BP’s Caspian platform, said that had BP revealed the full story as required by industry practice, the eleven Gulf of Mexico workers “could have had a chance” of survival. But BP’s insistence on using methods proven faulty sealed their fate.

One cause of the blow-outs was the same in both cases:  the use of a money-saving technique—plugging holes with “quick-dry” cement.

By hiding the disastrous failure of its penny-pinching cement process in 2008, BP was able to continue to use the dangerous methods in the Gulf of Mexico—causing the worst oil spill in U.S. history. April 20 marks the second anniversary of the Gulf oil disaster.

There were several failures in common to the two incidents identified by the eyewitness. He is an industry insider whose identity and expertise we have confirmed. His name and that of other witnesses we contacted must be withheld for their safety.

The failures revolve around the use of “quick-dry” cement, the uselessness of blow-out preventers, “mayhem” in evacuation procedures and an atmosphere of fear which prevents workers from blowing the whistle on safety problems.

Robert F. Kennedy Jr., president of Waterkeeper Alliance and senior attorney for Natural Resources Defense Council, said, “We have laws that make it illegal to hide this kind of information. At the very least, these are lies by omission. When you juxtapose their knowledge of this incident upon the oil companies constant and persistent assurances of safety to regulators, investigators and shareholders, you have all the elements to prove that their concealment of the information was criminal.”

The first blow-out occurred on a BP rig in the Caspian Sea off the coast of Baku, Azerbaijan, in September 2008. BP was able to conceal such an extraordinary event with the help of the ruling regime of Azerbaijan, other oil companies and, our investigators learned, the Bush Administration.

Our investigation began just days after the explosion and sinking of BP’s Deepwater Horizon oil rig on April 20, 2010 when this reporter received an extraordinary message from a terrified witness—from a ship floating in the Caspian Sea:

 “I know how …. Would not be wise for me to communicate via [official] IT system, ….”

When the insider was contacted on a secure line, he stated that he witnessed a blow-out and the panicked evacuation of the giant BP “ACG” drilling platform.

To confirm the witness’ story, British television’s premier investigative program, Dispatches, sent this reporter under cover into Baku, Azerbaijan, with a cameraman. While approaching the BP oil terminal, the Islamic republic’s Security Ministry arrested the crew.

To avoid diplomatic difficulties, we were quickly released. However, two new witnesses suddenly vanished, all communication lost with them, after they confirmed the facts of the 2008 blow-out. Both told us they had been evacuated from the BP off-shore platform as it filled with methane.

Furthermore, witnesses confirmed that, “there was mud (drill-pipe cement) blown out all over the platform.” It appears the cement cap failed to hold back high-pressure gases which, “engulfed the entire platform in methane gas,” which is highly explosive.

In both cases, the insider told us, BP had used “quick-dry” cement to cap their well bores and the cost-saving procedure failed catastrophically.

On April 20, 2010, BP’s Deepwater Horizon explosion in the Gulf of Mexico killed 11 oil rig workers, injured 17 others and released about 4.9 million barrels of crude oil for three months into the ocean. This disaster devastated the Gulf region’s economy, and threatened—and continues to threaten—the health of its residents and the environment.

We have learned this week that BP failed to notify the International Association of Drilling Contractors (IADC) about the failure of the cement. (British companies report incidents as minor as a hammer dropped.) Notification would have alerted Gulf cement contractor Halliburton that the process of adding nitrogen to cement posed unforeseen dangers.

In fact, this past December, BP attempted to place the blame and costs of the Gulf disaster on Halliburton, the oil services company that injected quick-dry cement into the well under the Deepwater Horizon. BP told a federal court that Halliburton concealed a computer model that would show that, under certain conditions, the cement could fail disastrously.

Following the Deepwater Horizon explosion, it became clear that nitrogen-laced mud can leave “channels” in the cement, allowing gas to escape and blow out the well-bore cap. However, that would have become clearer, and risks better assessed, had Halliburton and regulators known of the particulars of the Caspian blow-out.

We have also just learned that the cement casing itself appears to have cracked apart in the Caspian Sea. The sea, we were told, “was bubbling all around [from boiling methane]. You’re even scared to launch a life boat, it may sink.”

This exposed another problem with deepwater drilling. BP had promoted Blow-Out Preventers (BOPs) as a last line of defense in case of a blow-out. But if the casing shatters, the BOPs could be useless.

BP has gone to extraordinary lengths to conceal the story of the first blow-out, and for good reason:  If the company deliberately withheld the information that it knew “quick-dry” cement had failed yet continued to use it, the 11 deaths on its Gulf rig were not an unexpected accident but could be considered negligent homicide.

Kennedy told me, “This is a critical piece of information. The entire government is basing its policy on the assurances of this company that this process can be done safely and it never failed before. This is what they were telling everybody. Yet, the whole time they knew that this was a process that had failed disastrously in the Caspian Sea.”

Why haven’t these stories come out before? This week our witness explained that in Azerbaijan, “People disappear on a regular basis. It’s a police state.”

But even in the U.S. and Europe, BP and other industry workers are afraid to complain for fear their files will be marked “NRB,” for Not Required Back­­—which will end a workers’ offshore career. Jake Malloy, head of the Offshore Oil Workers Union, reached in Aberdeen, Scotland, independently confirmed statements of the whistleblowers. He noted that companies create an atmosphere of fear for one’s job with the “NRB” system and its latest variants, which discourage reports on safety problems.

BP refused an interview for this investigation, though the company responded to our written questions regarding the Caspian blow-out. Notably, the company does not deny that the blow-out occurred, nor even that it concealed the information from U.S. and UK regulators. Rather, the company says there was a “gas release”—a common and benign event, not a blow-out. As to the accusation of concealment, BP states:

“BP has shared findings from its investigation into the incident with the Azerbaijan government, [Azerbaijan] regulators, its partners and within BP.”

While BP says it issued a press release at the time of the September 2008 Caspian blow-out, the company did not tell the whole truth as reported by workers and witnesses.

The BP press release of that day admitted only that, “a gas leak was discovered in the area of” the platform when, in fact, it was an explosion of cement and methane, say our witnesses, “which engulfed the platform.”

BP later stated that all operations on the platform were suspended as a “precautionary measure,” suggesting a distant, natural leak. In fact, the workers themselves said that, like the workers on the Deepwater Horizon, they were one spark away from death, with frightened minutes to escape.

While BP called the evacuation a by-the-textbook procedure, in fact, said our witness, “It was total mayhem,” and that a lifeboat rammed a rescue ship in the chaos. U.S. government investigators in the Gulf cite BP’s confused and chaotic evacuation procedures for possibly adding to the Deepwater Horizon’s death toll. Information about the 2008 blow-out should have led to improved procedures and possibly could have saved lives.

More seriously, BP PLC’s official filing to the U.S. Securities Exchange Commission, which requires reporting of all “material” events in company operations, again talked about a “subsurface release,” concealing that the methane blew out through its drilling stack.

Both the safety of quick-dry cement (which some drillers won’t use) and deep water drilling itself were in contention before the April 20, 2010 Gulf blow-out. In fact, the U.S. Department of Interior was refusing BP, Chevron and Exxon the right to expand the area of their deep water drilling in the Gulf over safety questions.

However, BP and the industry conducted a successful lobbying campaign to expand deep water drilling. BP’s Vice-President for operations in the Gulf, David Rainey, testified before Congress in November 2009, five months before the Deepwater Horizon explosion that, “Releases from oil and gas operations are rare.” Rainey assured Congressmen that reliable “well control techniques” such as cement caps will prevent a deep water disaster.

Rainey made no mention to Congress of the blow-out in the Caspian Sea which occurred a year before his testimony.

BP itself states that if not for Halliburton’s quick-dry cement failures, the Deepwater Horizon would never have blown out.  Halliburton defends itself by saying that BP’s methods created air channels in the cement that caused it to fail.

Notably, BP’s court Motion states, “Halliburton has deprived the Court and parties of uniquely relevant evidence.” BP claims that hiding the information about problems with the cement caused the loss of lives.

Kennedy suggests that if Halliburton’s withholding evidence was deadly, so was BP’s concealment of the cement failure in the Caspian.

Stefanie Penn Spear, editor of EcoWatch.org, says that BP’s hiding evidence ultimately led to, “The biggest oil spill in U.S. history. It entirely turned the Gulf Coast economy upside down and threatened—and continues to threaten—the health and livelihoods of the people in the Gulf region.”

How is it that a major oil disaster, a blow-out that shut down one of the world’s biggest oil fields and required the emergency evacuation of 211 rig workers could be covered up, hidden from U.S. regulators and Congress?

The answer:  pay-offs, threats, political muscle and the connivance of the Bush Administration’s State Department, Exxon and Chevron.

For that story, read Part 2 of Greg Palast’s investigation BP Covers up Blow-Out—Bush, Big Oil and WikiLeaks on EcoWatch.org on April 20.

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Re-prints permitted with credit to EcoWatch.org and the author.

Greg Palast is the author of Vultures’ Picnic (Penguin 2011), which centers on his investigation of BP, bribery and corruption in the oil industry. Palast, whose reports are seen on BBC-TV and Britain’s Channel 4, will be providing investigative reports for EcoWatch.org.

Ezra Klein on the Budget Tango

Wednesday could have been the day that the budget debate turned bipartisan. Instead, it was the day that the debate proved itself immune to attempts at bipartisanship.
At 2pm, Kent Conrad, chairman of the Senate Budget Committee, began marking up the Simpson-Bowles plan. “What I am proposing is not partisan,” he said in a statement. “I am trying to break from the ‘business as usual’ practice that has gone on for too long.” But ‘business as usual asserted itself in a hurry.

As the Committee’s Republicans pointed out, this was a peculiar kind of mark up: There were no amendments allowed, and no vote scheduled. “I’ve got to say how deeply disappointed we are that we can’t go forward with the kind of mark up that seems justified, that we can’t offer amendments, that we can’t offer alternatives,” said Sen. Jeff Sessions, the Budget Committee’s top Republican.

But Sessions wasn’t looking to pass the bill. He hated it. Hours before the hearing, the minority web site for the Committee, which Sessions’ staff controls, led with this headline: “Chairman Conrad’s Budget Proposal: More Taxes Than President’s Budget, No Spending Cuts, No Structural Reform.” Their Twitter account was similarly harsh: “Note: Relative to the House fiscal commission plan that failed 38-382, Chairman Conrad’s plan spends $671bn more and taxes $899bn more.”

This is what the White House, incidentally, always argued would happen if they embraced Simpson-Bowles: As soon as Republicans got saw the tax increases (not to mention the defense cuts) embedded in the proposal, they would run the other way, and while they ran, they would be calling the Democrats tax hikers over their shoulder. And that’s pretty much what’s happened in both the House and Senate efforts to consider the plan.

Republicans are agog that Senate Democrats have been so absent in the budget debate. They can’t believe that, in a period of record deficits, Senate Democrats won’t offer a vision and defend it through a normal budget process.

But they don’t want Senate Democrats to pass a budget. After all, they loathe everything Obama and the Democrats have even hinted at putting forward. They want Senate Democrats to offer a budget that they can attack. They want a budget process where they can force Senate Democrats to take embarrassing and uncomfortable votes. And then, ideally, they want that budget to fail, as that way, they can keep making fun of the Democrats for their inability to pass a budget.

Senate Democrats, who feel that the work of the budget was done when the 2011 Budget Control Act set spending levels for next year, look at this plan and don’t exactly see the upside for them. Plus, they see a different, and more consequential, budget fight coming.

Consider the amendments Sessions wanted to offer. The Hill reported that one would have repealed the health-reform law. Another was related to the GSA scandal. A third would have lowered pending limits below the levels the two parties agreed to in the 2011 Budget Control Act.

That last one is the most important: On Wednesday, the Obama administration sent Congress a letter saying the president would veto any appropriations bills that didn’t attempted to undercut the Budget Control Act. To Democrats, that bipartisan deal, which ended the debt-ceiling standoff, set spending for the next two years, and the GOP is reneging on its word. Republicans counter that they consider the BCA as a ceiling on spending, not a floor, and they have every intention of trying to cut spending further.

Which is all to say that, on Wednesday, Conrad tried to do what so many in Washington said was necessary: Move to Simpson-Bowles. Make this debate bipartisan. Instead, Simpson-Bowles got trashed by Republicans and jammed into a protected, partisan process by Democrats. And the GOP provided more evidence that they want to undercut the Budget Control Act, which means we’re headed to a showdown over appropriations, and soon. Attempts at bipartisanship, in other words, showed just how partisan this issue really is.

Mario Piperni on the Conservatives

Quote of the Day: Modern Conservatism

April 18, 2012 By

No More Mister Nice Blog:

…the unreported story of our times is that birtherism isn’t an isolated example of paranoid lunacy taking hold of a disturbingly large segment of the population — in fact, modern conservatism is driven by multiple lunatic theories that are precisely as delusional as birtherism.

True…but the mulitple lunacies have been reported time and time again. The problem is that the people who should be paying attention aren’t listening to anyone whose first name isn’t Rush, Glenn or Sean.

The theories:

  • Birtherism
  • Obama is a Muslim
  • Obama is a Communist
  • Obama is the anti-Christ
  • Obama eats little white babies on Tuesdays (made that one up…but not by much)
  • Tax cuts for the rich create jobs
  • Homosexuality is a perversion and can be cured with prayer
  • The Tea Party is a grassroots movement
  • Corporations are people
  • Bush, Palin and Bachmann have functioning brains
  • Abstinence education prevents teenage pregnancies
  • Climate change is a hoax
  • The GOP in its current state is a serious political party
  • FOX News is fair and balanced
  • The Affordable Care Act creates death panels
  • Creationism is science
  • Evolution is a flawed theory

And on it goes…the delusional theories of a self-destructing political party.