BP's $18BB gulf fine

[glass99]

Did the oilfield contractor (Hallburton + Transocean) have any consulting engineers work on the blow out protector? Is some poor firm who got paid $100k to design that BOP now on the hook for $18 billion?

If anyone hasn't seen the news about this:

http://www.nytimes.com/2014/09/05/business/bp-negligent-in-2010-oil-spill-us-judge-rules.html

 

[cranky108]

I noticed that gas prices have risen a little at the local station. So is this why?

Most oil drilling is a risk, and enviromental is just the newest, that will surely hit all of us in the bill fold.

 

[glass99]

cranky: yes, there are gigantic risks involved with oil drilling which BP will surely try to shed to their consulting engineer to the maximum degree possible. I mean, if someone at the engineer's office made a non-critical dimensioning error on one of the blow out preventer drawings, does that imply they are culpable in the eyes of the court?

 

[cranky108]

NASA once had a mistake caused by a manager ignoring the engineers. So not every engineering mistake is caused by an engineer (or at least a working class engineer).

A concern of mine is that an engineer with an MBA, no longer practices engineering, but seems to bring out there engineering degree only when convient.

 

[IRstuff]

"does that imply they are culpable in the eyes of the court?"

Depends on the quality of their lawyers. From a strictly technical basis, probably not, since they would have delivered to some design specification, which they should have passed. Since that's the criteria for product acceptability, the matter is closed, unless someone can show that the product design was faulty to the specification or that the specification itself was faulty.

TTFN
faq731-376

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Of course I can. I can do anything. I can do absolutely anything. I'm an expert!

 

[glass99]

IRStuff: I could see an argument along the lines of "even though your drawings and calculations were flawless, you should have specified maintenance intervals more frequently". They then drag out some expert who said they would have insisted the maintenance be every 5 minutes rather that every 3 months. Poor victim BP complains that they "trusted their experts", so the court gets confused because its too technical and just starts smearing blame around like peanut butter on toast.

 

[zdas04]

Predicting any outcome in this combination of a shark feeding frenzy and witch hunt is a bad idea.

Judges are under incredible pressure from the MMS and EPA and Coast Guard to shift ALL of the blame away from them to some private enterprise that can be blamed, vilified, and punished. I've talked to oil-field firefighting experts who said that their advice was absolutely ignored by the Coast Guard and all of the things that the CG was warned not to do (and they did anyway) led to the platform falling over and making the BOP inoperative and leading to the fire becoming a spill. If the oil-field fire-fighting experts (who were on site) had been listened to, this could have been a tragic loss of life and some burned hydrocarbons. Instead it is a media/judicial circus.

From the point the rig was on fire until the flow was stopped, the government stood in the way of competent action in the name of "being in control". If you want to put a face on the real villain in the piece I'd say it is Coast Guard Admiral Mary Landry. She will not face charges in this witch-hunt/feeding-frenzy.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. —Galileo Galilei, Italian Physicist

 

[glass99]

zdas: interesting about the coast guard messing things up. In addition to the $18B fine BP have another $25BB in cleanup and compensation costs. Its such a huge number that only an organization like the US government or BP could possibly hope to pick up the tab. Even a big contractor like Halliburton or Transocean would be overwhelmed by quite a margin. My fear is the ecosystem of small players who made little profit from it are going to be lumped with an unfair slice of the settlement.

Imagine if you sold $1000 worth of bolts to the BOP manufacturer, and your QA was slightly deficient. You can't show definitively that your bolts didn't cause the failure, and you can't afford $10MM in legal fees to show up in court and argue about it for 5 years, so what's your option?

 

[zdas04]

I'm not sure what the options of the nut and stud manufacturer who provided equipment that Cameron used in their BOP. The industry in general has begun to implement progressively stricter liability language in contracts. The last one I got from a major was so one-sided that I opted to pass on the work. The guy that took that job had zero intention of following the contract and if it ever comes back on him, his LLC will dissolve that day and there will be nothing for the major to seize.

When I started in this business virtually all deals were done on a handshake (contracts did sometimes follow, but they were formalities, the details were worked out before the handshake). My whole career working for a major (23 years ending in 2003) that was the way I worked--if I needed something, I bought it and the supplier was confident that I would pay for it. Since Macondo, no one is the least bit sure that anyone has the authority to authorize work without a contract. I recently had a Supply Chain Management type tell me that since I didn't get a P.O. prior to doing a tiny job that they couldn't pay me the $5k. I ended up a the VP level before someone could tell the fool to pay me. Contracts and P.O.'s are just getting more awful every year. I'm really wondering if I'm having any fun anymore.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. —Galileo Galilei, Italian Physicist

 

[glass99]

zdas: I still have fun, but I am just becoming more of a hard ass about contracts. The advantage that we specialists have over our bigger generalist clients is that we know more about our field than they do. Generalists will insist you sign the 100 pages of irrelevant garbage because they are taking a shotgun approach, but specialists will insist the client sign two sentences of something really decisive.

I note from the internet that one of the solenoid valves on the BOP was wired backwards, plus there was a flat battery.

 

[zdas04]

If the platform hadn't fallen over, both of those things could have been fixed by robots. They had every oil-field fire expert in the world at the fire (I think they even considered digging up Red Adair and John Wayne, but I'm not sure of that) and ignored their unanimous advice. The industry knows one heck of a lot more about fighting a rig fire than the Coast Guard. Without the politics this would have been tragic, but not a global tragedy.

David Simpson, PE
MuleShoe Engineering

In questions of science, the authority of a thousand is not worth the humble reasoning of a single individual. —Galileo Galilei, Italian Physicist

 

[cranky108]

The shame is the goverment is inserting itself into so many other things that it knows so little about, just to be in control.

And I doubt they will take any of the shame if something goes wrong with there rules.