Oil Slick Musings

It’s been about a month since I prognosticated and reflected on the BP disaster in the golf.  Let’s see how things have unfolded.  My predictions:

• Political food fight
• Underestimated disaster
• Lack of “what if” on BPs part
• Where is the outrage?

First, I said politicians would engage in a political food fight while Rome burns.   Sure enough, less than a week after that post, the Senate Energy and Natural Resources Committee assembled a dog and pony show to poke executives of BP, Transocean, and Halliburton with a stick in the eye.  Actually, it was like a dog show alright – a dog fight that is – putting these three executives in a pen and let them go after each other.  Fortunately no one was hurt, physically.

This was purely for show.  They wanted to know how this happened.  What good does that do at this point or certainly at that point a month ago?  These senators probably don’t understand how hot dog cart works, let alone hyper complex deep sea oil drilling and the fluid dynamics involved.  At that early point in the game, the executives probably didn’t even know what exactly happened 5,000 feet below the surface.  They were probably lucky to have time to determine what happened on the rig.

Senator Sessions piles on by describing the spectacle had a lack of candor coming from the corporate execs.  How about this: there was a lack of KNOWLEDGE at that point, you bonehead.  Senator Murkowski said this will affect energy policy going forward.  More on this later.

Second, there would be a tendency to underestimate the enormity of the disaster.  The greatest sin of the federal government is not following their own laws.  After the Valdez disaster, the Oil Pollution Act of 1990 was signed into law to have the federal government equipped and ready for the next disaster.  You can guess what happened as a result of this law: pretty much nothing.  The feds had no fire booms to corral spilled oil and set it afire.  The US went begging around the world for equipment the federal statutes said we were supposed to have on hand.

For the first month, Washington just crossed its fingers and hoped for the best – like shooting the rapids in a canoe.  The worst thing you can do is freeze with the oars out of the water.  That will get you capsized.  Finally, Secretary of the Interior, Ken Salazar, bolts onto the scene declaring the feds will “keep their boot on the neck of BP”, to make sue they “giterdone”.  Now THAT is one thing the feds can do well: put their boot on your neck alright.  What an idiotic thing to say.  He later spews from his oral orifice “if we find out that they’re [BP] not doing what they’re supposed to be doing, we’ll push them out of the way appropriately”.  LOL!  Then what?  We send our fearless congress down to take over?

Senator Nelson of Florida says the administration should “completely take over” the mess.  Colin Powell says the federal government should move in “with decisive force”.   Whadayou talking about man? The government can take over a whacko cult compound somewhere in Texas, but an oil leak? With decisive force?  It seems to me a “decisive force” put the oil rig on the ocean floor.  I think the feds should remove some of their own agencies with decisive force – like the Army Corps of Engineers that has to do an environmental impact study before allowing the construction of berms to protect wetlands from the oil.  How stupid is that?

Lack of “what if” thinking on the part of BP; that water is already far down the stream.  On the flip side of this being such a careless error in design, it will be corrected such that this will never happen again.  Before Valdez, there were hardly any double-hulled tankers.  They are nearly all double-hulled now, with the exception of China, which seems to have trouble keeping lethal quantities of benzene out of its rivers.  Back to my Nuclear Navy experience; Why is the organization so hyper anal about safety?  Aside from the obvious reasons of getting people hurt or killed, if there was a nuclear accident, it would end the program.  Now that is WHAT IF foresight.

Where is the outrage?  It’s starting to grow exponentially.  I believe what held initial outrage down is that the president is Mr. Obama, the guilty private sector company is based overseas, and the great Satan, Halliburton, was actually trying to direct BP away from the course events on the rig that lead to the disaster. The usual villains weren’t present.  If it was Bush, Exxon-Mobil, and Halliburton…hoooo.  Hellfire and brimstone before the thing even sank.  However, this disaster is outliving the politics.  The Democrats are starting to eat their own with Exhibit A, James Carville.

Do I criticize the administration’s performance?  Not so much but they ought to shove federal bureaucrats out of the way and lock them up till this is over; or better yet, maybe lock them up until they are eligible for retirement.  A major problem with the country is people think the government should ride to the rescue for everything that goes wrong.  If we want the government to handle everything well, it will do nothing well.

Another thing that will be a mistake at best and a fiasco at worst is turning Eric Holder loose on a witch hunt in the region before the oil stops flowing.  Who is he going to pursue?  Probably engineers and their supervisors who know more about this particular situation than anyone on planet earth, which incidentally may not be Holder’s home.  This is just what we need – the people who need to spend every waking hour working to find a solution will be harassed by Holder, who has the demonstrated competence of Barney Fife and the subtle charm of a rabid bat.

Unfortunately my next prediction, actually a guarantee, is the feds will of course impose more regulation on the oil industry.  You may be thinking “damn right”.  But wait a minute.  We already had an entire agency (Minerals Management Service) with two missions (1) oversight to prevent disasters like this from happening and (2) to make sure the feds get their cut of the oil revenue.  Well guess what, these guys were going to ballgames and taking gifts on the largess of the companies they are supposed to be regulating.  And while they’re not at the ballgame, they were watching porn at work (not making this up).   So I ask, do we just need more of this, or another agency to look over the agency who’s supposed to be policing all this?  Oh wait, we already have that.  It’s called the Department of Interior.

One solution already has been to split the MMS into two: (1) a fee collecting arm and (2) a safety arm.  Why?  Because collecting money and safety are at odds with one another; it’s a conflict of interest.  Think about that.  What private sector business doesn’t have the same “conflict of interest”?  Go to nearly any manufacturing or labor/machinery intensive facility or even retail and you will see signs of xx days without a work-related injury.  As visitors, we have to even sit through safety training courses prior to going on site at some places.  Aside from caring for workers, injuries are just plain expensive and money losers.  And since when do these vagarious chums care about federal revenue?  What is in it for them?  Are they getting kickbacks?  Does the mafia control MMS?  Safety is number 1 out here.

Like the “solution” to this disaster, we will get laws that punish everyone but the guilty, ala Sarbanes Oxley as a result of Enron.  Nevermind that Enron broke a million laws already on the books.  But like doctors who fill prescriptions, legislators write bills, and a lot of really bad ones, because after all, they have to do something.  Innocent bystanders who follow the rules pay for the sins of the guilty to what end?  In this case everyone who uses transportation or buys things gets hit.  I.e., everyone but the Amish.

What will prevent this particular accident from ever happening again:  (1) BP pays for the cleanup, (2) determine what failed and/or failed to work, and (3) develop a method that is 99.9% assured of killing a well, with five more backups of equal probability of success in series.  This type of disaster will not happen again, if for no other reason, it will take billions out of shareholders’ hides to clean up this colossal mess.

written by Jeffrey L. Ihnen, P.E., LEED AP

Disaster in the Gulf

Like millions of people around the world, I have been following the slow nightmare that is unfolding in the gulf.  Many topics and thoughts come to mind.

First, our company mission is “make every project a positive experience for our clients”. It’s simple but guides everything we do.  When there is a potential mistake or an angry client calling or emailing us complaining about something we are involved with, it’s a code red in our office.  Engineers and managers meet immediately to plot the course of events leading to where we are and we clearly define the problem and plot a course to make amends.  We focus on the immediate problem and take corrective action later as necessary.

Unfortunately, as usual, the political class engages in a food fight while Rome burns.  Many politicians’ first reactions are to figure out how to get the political upper hand, not collaborate to mitigate the effects of the disaster.  Bush was tarred and feathered for Katrina as though he started the storm and drove it right into New Orleans on purpose.  It is true however, that corporate America, including Wal-Mart, was quicker to provide relief than the government.  This current disaster is in many ways very similar, EXCEPT it is unfolding in super slow motion.  It’s already been two weeks since this started.  It will be interesting to see how this administration is treated in the court of public opinion.  Thus far, it has mainly been right wingers flinging their verbal nunchucks, but apparently so has the New York Times!  Whoa.  So President Obama may be headed for a similar unfounded meat grinder.

Second, there is a tendency to underestimate the disaster.  This was true with Katrina and it is unfolding once again with this mess.  First it was a thousand barrels a day.  Then 5,000.  As of Saturday, it was floated that it may actually be 25,000 barrels a day.  One of the best business books I’ve read is “Winning” by Jack Welch, long-time CEO of General Electric.  He dedicates a chapter to crisis management and the first of five responses to a crisis is to assume it is much worse than it seems.  Again, I’ll refer to my days in the nuclear Navy.  The tiniest of “incidents” were formally reported and acted on.  This may include lessons learned, more training, somebody’s head rolls, or a procedure changes.  The incident might be the first in what would have to be about six mishaps carried out “perfectly” with precisely the right timing.  And, IF all that were to happen there may be equipment damage or worse.  There is safety mechanism on top of safety mechanism, but regardless of how many layers there are, mishaps are taken very seriously.

Which brings me to the third thing; apparently the rig lacked an emergency shut-trigger to close a valve because it was too expensive.  A 2003 report by the Minerals Management Service said these triggers “are not recommended because they tend to be very expensive.”   The trigger costs $500,000.  Let’s see.  At current leak rates and oil prices, about $500,000 worth of oil is currently leaking every day and it’s costing BP $6 million/day to manage the disaster.  The rig was worth $560 million.  $500,000?

For the love of Pete!  The government declares a $500,000 safety device is too expensive for private industry.  Wow!  Write that one down.  Is this the same government that shakes down 75-year-old grandmas trying to get on an airplane?

Aside from the government, it seems BP has major culpability in this disaster.  Mistakes and accidents always have, and always will occur.  This seems like a major oversight or act of negligence.  It seems like such an obvious safeguard – like dangling from the side of a building on a stepladder hanging from ropes 100 feet in the air – you use a safety harness in case of falling.  (You would have to see this to believe it but I watched it across the street while the telecom people were installing cellular phone transmitters on an elevator penthouse).  Any other oil companies that don’t use these devices can thank their lucky stars and better get with it.

Fourth, where is the outrage?  Exxon got whipped for at least 15 years after Valdez.  Maybe it’s because Valdez is pristine and nobody lives there.  This spill will affect millions on the coast and wreak financial havoc on a great many businesses, so what’s the big deal?

Every president since Nixon has run on a promise to reduce our dependence on foreign oil, but yet with the exception of recessions, our dependence has increased every single term.  Recessions don’t seem like a good way to reduce oil imports.

President Obama made the right decision a few weeks ago to allow for expansion of offshore exploration.  If we are going to reduce dependence on foreign oil, domestic production has to be part of the mix, like it or not.  The disaster with the Deepwater Horizon was borne of negligence and stupidity.  If somebody can engineer to dig an 18,000 foot well under 5,000 feet of water and move the oil ashore, somebody can surely find several ways to absolutely kill a leak.

written by Jeffrey L. Ihnen, P.E., LEED AP