04/23/2011 07:10 pm ET Updated Jun 23, 2011

Preliminary Deepwater Horizon Report Rips Transocean, Marshall Islands

Late yesterday, the Deepwater Horizon Joint Investigation board issued a preliminary report of its findings related to causes of the Macondo well disaster that come under the jurisdiction of the Coast Guard.  This report focused only on the vessel, its condition, and the actions of the crew that caused the explosions and loss of the rig; it did not focus on the causes of the loss of well control, which will come in the complete report due out in July of this year.

The report clearly places blame on Transocean for the explosions after the blowout due to poor training, corroded and poorly maintained equipment, and bypassed alarms and shut down devices.  The report also singled out the Republic of the Marshall Islands, the flag state of the Deepwater Horizon, for "abdicating its safety inspection responsibilities".  The report was an indictment on the status quo of the offshore industry that allows drilling and service companies to unnecessarily risk lives and the environment through complacency, and tax avoidance and substandard safety requirements.

In its criticism of the Marshall Islands the joint committee said:

This investigation also revealed that the oversight and regulation of DEEPWATER HORIZON by its flag state, the Republic of the Marshall Islands (RMI), was ineffective in preventing this casualty. By delegating all of its inspection activities to "recognized organizations," without itself conducting on board oversight surveys, the RMI effectively abdicated its vessel inspection responsibilities. In turn, this failure illustrates the need to strengthen the system of U.S. Coast Guard oversight of foreign-flagged MODUs, which as currently constructed is too limited to effectively ensure the safety of such vessels (a MODU is a Mobile Offshore Drilling Unit - ed.).

As we've talked about before, most drilling companies "flag" or register their vessels in countries other than the US, called flags of convenience.  The companies all say that they do that to make it easier to move the vessels around the world more readily, but like incorporating their companies in foreign countries to avoid US taxes, they flag their vessels in countries that allow lax safety inspections, training, and crew requirements.  Such is the case with all of Transocean's rigs and drillships (as well as most other companies') where they register their vessels in countries like not only the Marshall Islands, but Panama, the Bahamas, and the Caymans, as well as other countries with lax regulations and third-party contract inspectors.  Some countries, like the Marshall Islands, actually allow the vessel owner to select (and pay) its own inspectors.

Other key findings for causes of the explosions were:

  •  Failure to use the diverter line: The rig had 2 ways to keep wellbore fluids from coming onto the floor; one was a diverter, the dumps the oil and gas overboard.  The other was the mud gas separator (MGS) that is better for keeping mud and oil out of the water, but which is limited in capacity.  The crew chose the MGS, which was overloaded dumping a gas cloud over the rig.
  • Hazardous electrical equipment:  There was corroded and substandard electrical equipment in the engine room which likely caused the gas cloud to ignite.
  • Gas detectors: were not set to automatically activate the emergency shut down systems, and worse, the bridge crew was not trained in what to do when the alarms activated.  Had the rig's engines been immediately shut down, explosions could have been prevented or at least delayed.
  • Bypassed systems: Gas detectors were either bypassed or inoperable when the rig exploded.  Testimony demonstrated that standard practice was to "inhibit" their function so that, even though they were reported to the control panel, no alarm would sound.  The crew also bypassed the automatic emergency shut down system.
  • Design of Main and Emergency Power: The rig design was inadequate to prevent total shut down of power due to the proximity of the independent power and distribution systems.  In short, the explosions took out all the power.
  • Crew blast protection:  As I noted in my book, Disater on the Horizon, the worst injuries (besides the drill floor and mud room deaths) occurred in the crew quarters.  There was no blast protection between the quarters and the drill floor, causing virtual destruction of that area of the rig while crew members were sleeping.
  • Command and control of the rig:  A "clerical error" by the Marshall Islands allowed the Deepwater Horizon to by classified for a dual command structure.  This meant that when the rig was latched up and drilling, the Offshore Installation Manager (OIM) was in charge.  When the rig was underway, it was under command of the Master or captain.  This caused great confusion and delay during the emergency, with the Master actually asking the OIM for permission to activate the emergency disconnect system (EDS) to get off of the blowing out well.
Several other key mistakes and weaknesses caused the loss of the rig and additional injuries; one was a design flaw that powered the fire control system with only electrical power.  When the power was knocked out, so was the firefighting system.  Another was inadequate evacuation training,  resulting in 11 crew members being left behind on the rig in the confusion.  Additionally, the commission found that the rig likely sank due to damage during the explosions exacerbated by poor firefighting technique from the rescue ships that probably sank the rig by flooding it with water.

This first report from the Joint Investigation board is a stark view into the dangers of complacency, overconfidence, and a convoluted management structure resulting from years of success from cutting, both corners and cost.  It also highlights how minor failures can cascade into a catastrophe that is initiated from poor training and judgement.  It is clear that the US Government must change the basic rules of offshore drilling, from regulation of training and safety programs, maritime law and operating regulations, design and operations standards, and the financial incentives that are built into the system.  Inspection frequency and thoroughness must be improved and penalties for violations greatly increased.

Even as the BOEMRE continues to issue permits for operators to re-enter the deepwater for more drilling, few of these issues are currently being addressed, especially those surrounding operations in US waters by vessels flying flags of convenience.  Eliminating this particular loophole in maritime law is essential in assuring safer operations in the offshore, protecting American lives and jobs.

Bob Cavnar, a 30-year veteran of the oil and gas industry, is the author of Disaster on the Horizon: High Stakes, High Risks, and the Story Behind the Deepwater Well Blowout