BP Chief Executive Tony Hayward told shareholders last week that the well technology that should have prevented the Gulf oil spill wasn't failsafe. Yet, industry knew this for years. And Hayward let his company continue to drill.
Bad PR is not the reason BP Chief Executive Tony Hayward should be in trouble today; corporate integrity is.
Forget Hayward's snafu last week, the one the idiot press made much about, when the man in charge of the company smearing the Gulf of Mexico with crude oil said, "There's no one who wants this over more than I do. You know, I'd like my life back."
Hayward was just being honest then and stating what a lot of people in the Gulf of Mexico are thinking as BP's undersea volcano continues to gush oil. With the amount in the water now up past twice that of the Exxon Valdez spill in Prince William Sound, who wouldn't want the disaster to be over with?
No, honesty about feelings is not Hayward's problem. This is: His statement to investors in a conference call Friday when he said the oil industry needs a "paradigm shift."
"We need better safety technology," he said. "For example, the blowout preventer which this incident has shown is not failsafe."
There are two things wrong with this statement. The first is that the oil industry has known for years that the failsafe devices in blowout preventers -- the rams designed to shear the drill pipe and seal a well in the event of a catastrophic blowout -- were inadequate.
The U.S. Minerals Management Service warned of this years ago. It has been discussed at oil drilling conferences around the globe for at least a of couple years. And a truly failsafe blowout preventer has been in the design stage for at least five years, first with Devon Energy and Cameron, and now with Chevron and Cameron.
Houston-based Cameron is one of the major, global producers of blowout preventers, or BOPs, as they're commonly called in the industry.
Cameron and Chevron are supposed to be at this moment testing what Chevron has called an alternative well kill system, or AKWS, which is another way of saying "a BOP that is indeed failsafe."
It didn't take an enterprising reporter more than a few days to learn about this, or discover from talking to oil-drill rig operators that they've long known that existing BOPs won't shear joints where drill pipe is welded together, won't shear the pipe if there are tools in it (which now appears might have been the case deep below BP's sunken Deepwater Horizon rig in the Gulf), and might not shear new, high-tensile-steel pipe, especially at extreme depths. The Deepwater Horizon, it is worth noting, was drilling 5,000 feet beneath the surface of the ocean.
All of which brings us to the second and most important problem with Hayward's statement during that conference call with investors: Either he didn't know when he took the job as BP chief executive that the BOPs the company was using beneath its drill rigs weren't failsafe, or he is now trying to pretend -- "for example ... this incident has shown (it) is not failsafe" -- that he didn't know.
It's hard to say which is worse. Tony Hayward gets paid $4.6 million a year to run BP. He should be expected to know more about the huge risks to his company posed by an oil leak than some poorly paid reporter in Podunk, Alaska.
If that reporter can find out in a matter of days that everyone actively involved in oil drilling knows BOPs aren't failsafe, shouldn't Hayward have figured this out from about day two on the job?
Wouldn't he think to ask someone, "Hey, what's the greatest risk facing our company at this time?"
At this point, there is little doubt what his engineers would have told him: A deepwater blowout.
Everyone in the drilling business -- EVERYONE -- knew they were pushing into a new frontier in the Gulf of Mexico. Drilling deepwater isn't quite as difficult as venturing into space, but it's close.
People were working at the limits of technology where things can be expected to go wrong, and they did.
Everyone in the drilling business -- EVERYONE -- also knew that there were and are flaws in existing BOPs. Highly experienced drillers have tried to explain this away by noting that if they do everything right they'll never need to use the "failsafe" shear-ram in the BOP to shear and seal a well.
Read more of this story at AlaskaDispatch.com.