Carbon Wars

Published — April 20, 2018 Updated — Today at 7:26 am EST

Eight years after Deepwater Horizon, is another disaster waiting to happen?

One ripple effect of the 2010 Deepwater Horizon disaster, pictured above, was the formation of an offshore regulator. But that agency, the Bureau of Safety and Environmental Enforcement, has struggled to police the industry. Gerald Herbert / AP

A safety watchdog formed after BP oil spill could be the next Trump administration casualty

This story was produced in collaboration with NPR.

Introduction

Within seconds, a bright, white flash erupted on the lower deck of West Delta 105 E, an oil-production platform positioned a dozen miles off the Louisiana coast. Disoriented, one crewmember found himself 10 feet away from where he had been working before he blacked out. Another likened the impact to a sledgehammer blow to his head. A third told investigators he felt like he’d been hit by an 18-wheeler, his hard hat, glasses and earplugs knocked off in the blast.

For a fourth, death came instantly. Jerrel “Bubba” Hancock, a 24-year-old father of two, was the closest to the hatch of a large metal tank when flammable vapors ignited, unleashing a fireball the afternoon of Nov. 20, 2014. He died of blunt-force trauma to the head and chest.

Hancock’s death during a maintenance job could have been avoided, federal investigators concluded in late 2016. Safety lapses leading up to the accident were laid bare in a 73-page report by the Bureau of Safety and Environmental Enforcement (BSEE), a little-known agency within the U.S. Department of the Interior responsible for policing the sprawling offshore industry. It was the sort of comprehensive post-mortem for which BSEE had been designed.

But the agency has faced crippling challenges on several fronts, from staffing to its ability to hold companies accountable. Born in the wake of 2010’s Deepwater Horizon explosion — which killed 11 workers and dumped millions of barrels of oil into the Gulf of Mexico — BSEE has struggled to implement safety regulations that are now under threat of being rolled back. The agency’s team of roughly 130 inspectors is responsible for conducting 20,000 inspections annually across 2,000-plus facilities from the Gulf to the Alaska coast. Its annual budget of $204 million is about a third of the cost of the sunken Deepwater rig.

Under the Trump administration, the fate of the small bureau — and its roughly 800 employees — is also in doubt. As the White House and the Interior Department pursue “energy dominance,” opening more federal lands and waters to drilling than ever before, BSEE’s status — along with the safety reforms that helped empower it — has become increasingly tenuous. Concerns over the agency’s potential demise have swirled on Capitol Hill for months, buoyed by Interior Secretary Ryan Zinke’s calls for deregulation, restructuring and his controversial pick to lead BSEE: Louisiana native and longtime oil-industry ally Scott Angelle, who has pledged to take the bureau “from an era of isolation to an era of cooperation.”

Companies have welcomed the change. Randall Luthi, head of the National Ocean Industries Association, which represents the offshore sector, is a fan of the agency’s “better dialogue” with businesses. “No company wants to have an accident,” said Luthi. “Safety and good economics go hand in hand.”

The bureau has always strived to take a collaborative approach with industry, but critics worry BSEE is going too far. “I do have a problem when the relationship becomes so cozy that it’s not an arm’s length relationship anymore,” Michael Bromwich, BSEE’s first director, said in an interview with the Center for Public Integrity and NPR. “I’m concerned that that’s what’s happening now.”

Safety advocates agree that conditions offshore have improved under BSEE’s watch. But the agency has faced hurdles over the years, troubles that predate the Trump administration. Reports by the Government Accountability Office in 2016 and 2017 detailed how the bureau suffered from poor leadership, relying on a series of pricey outside consultants to determine priorities and strategic goals. Auditors also found a key program aimed at improving the bureau’s inspections had been beset with delays over several years and the agency had missed a critical opportunity to staff up. The bureau has had difficulty attracting employees, competing directly with higher-paying oil and gas companies for technical experts.

Weeks after the 2016 election, the agency was dealt a blow in the courts, which sided with industry and ruled that BSEE had no authority to hold contractors — like the companies working on West Delta 105 E in 2014 — liable for violations that could lead to spills, injuries or deaths. By early 2017, the agency appeared to have abandoned what was once a priority: getting industry to report near-misses with the aim of averting catastrophes.

The consequences of an ineffective regulator ripple far from Washington. Oil workers are seven times more likely than the average U.S. worker to die on the job, according to a 2013 study by the Centers for Disease Control and Prevention.

‘We kiss our families goodbye’

The first explosion on Transocean’s Deepwater Horizon rig hit at 9:50 p.m. on April 20, 2010. Video captured 4,800 feet below the surface of the Gulf of Mexico showed grayish-orange oil gushing so fast from BP’s Macondo well it looked like steam from a locomotive. Desperate to contain the leak caused by the blast, scientists and engineers shot tires and golf balls underwater in a failed attempt to plug the well. Researchers initially estimated crude oil was spilling at a rate of 5,000 barrels per day; the actual number was closer to 50,000.

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After 86 days, the well was temporarily capped on July 15, 2010, ending the first chapter of what would become the largest and most expensive environmental disaster the U.S. petroleum industry had ever seen.

But the Interior Department was also reckoning with a debacle of its own. A high-profile ethics scandal uncovered in 2008 continued to cast a shadow on the agency’s Minerals Management Service, which, awkwardly, oversaw both offshore leasing and enforcement. Investigations uncovered coziness between MMS employees and the companies they regulated, ranging from lavish gifts and self-dealing to cocaine-and-sex-fueled industry events

With Deepwater making national headlines, Interior officials could no longer ignore MMS’s fundamental conflict: generating revenue from offshore drilling while simultaneously regulating the industry. Oversight had taken a back seat to leasing and it showed. MMS had fewer than 60 inspectors to cover 3,000-plus offshore facilities and had never established an environmental enforcement program.

In October 2011, MMS was dissolved and three separate agencies — including BSEE — were formed to take its place.

The man now running BSEE delivered a rallying cry following the disaster that led to the agency’s creation. Just days after the well was capped, Angelle took to the Cajundome stage in Lafayette, Louisiana, and bellowed, “Enough is enough! And it’s time to quit punishing innocent American workers to achieve some unrealistic political agenda.” He wasn’t talking about safety problems. He meant the moratorium on deep-water drilling imposed by the Obama administration in response to the spill.

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“We proudly do what few other states are willing to do,” Angelle, the state’s then-lieutenant governor, told the cheering crowd in the 13,500-seat arena. “We put on our hard hats and our steel-toe boots. We kiss our families goodbye, and we begin the tough work of exploring, producing, processing, storing, refining and transporting the fuel to energize the great United States of America.”

Handpicked by the Louisiana Oil and Gas Association to headline the “Rally for Economic Survival,” Angelle was key to helping overturn the moratorium. After the rally, Angelle spearheaded the “Back to Work Coalition,” coordinating with lobby groups like the American Petroleum Institute to reverse the ban that same year. His efforts elevated his profile within the Republican party, though he subsequently failed in bids for governor and U.S. Congress.

BSEE declined requests by the Center and NPR to interview Angelle, or others, about BSEE’s safety mission and how it comports with the Trump administration’s “energy dominance.” An agency spokesman wrote in an email that he was “told not to respond” to written questions sent by the Center for Public Integrity.

In a written statement to NPR, the agency said Angelle is “laser focused on safety,” and that this is not at odds with also focusing on robust production. BSEE said starting this month, it is increasing the time its inspectors spend on offshore oil and gas facilities.

In a March press release, Angelle also said he wanted “BSEE’s programs and processes to be the best in the world, and I’m not afraid to subject them to scrutiny to determine where improvements are needed.”

Not ‘just a strange and unprecedented event’

To this day, Angelle — like many of the hardline industry voices — casts the BP disaster as a fluke. But safety experts have argued since 2011 that the problems that doomed Deepwater — like faulty equipment and disregard for safety protocols — are far more common than companies admit.

“It’s just not accurate to point to Deepwater Horizon and say, ‘Well, this is just a strange and unprecedented event unlikely to recur,’” said Bromwich, a former Justice Department inspector general who oversaw the bureau’s formation in 2011 and now runs a Washington-based public affairs firm. He pointed to a special presidential commission that investigated the disaster and found the Macondo blowout was not an isolated incident. Previous close calls could have been just as catastrophic had it not been for luck.

Among the report’s recommendations was the creation of an offshore safety group similar to a watchdog formed by the nuclear power sector after Pennsylvania’s Three Mile Island reactor partially melted down in 1979. Within months of the report’s release, the American Petroleum Institute — a lobbying powerhouse representing more than 650 corporate members — founded the Center for Offshore Safety in Houston.

“We quite specifically in our report said, ‘We recommend this not be done within the American Petroleum Institute,’” said Don Boesch, a University of Maryland professor of marine science and a commission member. “Even though it’s long been dealing with safety, it’s lobbying, it’s doing politics instead. So, who would believe it?”

The commission’s report in 2011 found that regulators hadn’t kept pace with the offshore industry, which was increasingly outsourcing work to contractors while drilling deeper and deeper. Although the U.S. had the highest rate of offshore fatalities globally, it had the lowest rate of reported injuries, a “striking contrast” suggesting significant underreporting by industry, according to the commission.

API has long opposed offshore reforms, arguing that industry should be allowed to self-regulate. Over nearly a century, the trade group has developed a plethora of voluntary industry standards covering everything from drilling liquids to refining.

But when BSEE tried to revamp its workplace safety rules and make some of these API standards mandatory, the process took the agency six years. Boesch said the hope was that API’s offshore center would help build consensus and speed adoption of regulations. It didn’t work out that way.

In 2016, API opposed the bureau’s well-control rule, which standardized measures such as blowout preventers, claiming it would saddle the industry with $30 billion in unnecessary costs. The regulation — which also took several years to develop — was ultimately criticized by safety advocates for being too weak. The U.S. Chemical Safety Board, which investigates industrial accidents, urged revisions that would “give BSEE more explicit authority.”

Neither API or its Center for Offshore Safety responded to requests for comment. API’s offshore center was enlisted early on to help develop the bureau’s near-miss reporting system, a confidential program that tracks close-call incidents like equipment failures. Launched in 2015, SafeOCS (for “outer continental shelf”) was modeled on a similar program used by commercial airlines. Despite guarantees of anonymity for companies that file reports, SafeOCS languished.

Just before the 2016 presidential election, Doug Morris, BSEE’s chief of offshore regulatory programs, described industry response to the program as “lukewarm.” During a conference in May 2017, Morris again lamented lackluster participation in SafeOCS. “We built it, and nobody came,” he said. As of last November, only three of 88 companies operating offshore had signed on.

BSEE refused to make Morris — who previously worked for API as a managing attorney — available for an interview. It also declined to answer any questions about SafeOCS.

Activity in the Gulf has drawn down in recent years due to low oil prices and a surge in onshore production, but experts predict it will pick up soon. Amid the downturn, offshore accidents continue to make headlines. In October, a broken pipeline from a platform leaked roughly 672,000 gallons of oil in the largest Gulf spill since Deepwater. In December, a worker off the coast of Louisiana died after getting pinned against a bar known as a stanchion. BSEE is investigating the February death of an offshore contract worker killed while handling fire-fighting equipment.

In media interviews last year, Angelle faulted the Obama administration for not doing enough to bolster near-miss reporting.He pledged to better promote the program and formed a special team to figure out why it hasn’t caught on.

‘A return to complacency’

The agency has also faced setbacks in its attempts to hold contractors liable. When Michael Bromwich was brought on to overhaul offshore regulation in June 2010, he was surprised to learn that violations historically had not been issued to contractors — even when it was clear that they, not platform owners, had engaged in misconduct.

Interior’s authority, he was told, stopped at leaseholders, despite the ubiquity of contractors and the inherent dangers of deep-water drilling. Eighty percent of offshore workers killed from 2003 to 2010 were contracted employees, according to CDC data. So was Bubba Hancock, killed in 2014.

“The fact that we had unilaterally decided to grant immunity to all non-operators was a misguided act of administrative grace,” Bromwich told an industry crowd in 2011, vowing to continue BSEE’s new policy of holding contractors liable. The first violations the agency issued to contractors went to Transocean and Halliburton, two companies involved in the BP spill.

The point of the speech, Bromwich said in a recent interview, was to tell industry it could no longer “get away with murder.”

“It was really kind of going into the lion’s den and telling them, ‘We’re coming after you,’” he said.

But industry fought back and won. In USA v. Black Elk Energy Offshore, the U.S. Court of Appeals for the Fifth Circuit ruled the government had no authority to bring criminal sanctions against contractors for their role in a 2012 explosion that killed three workers and left an oil sheen in the Gulf. In Island Operating Co., Inc. v. Jewell, the Interior Department fined Island for its role in a 2012 near-miss in which two workers dived 40 feet off a platform to escape a chemical fire, but a trial court agreed with the company that the government also lacked authority to bring civil sanctions and Interior did not pursue an appeal.

Island had especially strong backing for its case. Joining in support was the U.S. Oil and Gas Association and the National Ocean Industries Association, the group headed by Luthi, the former Wyoming legislator who served as MMS director from 2007 to 2009 and investigated the sex and drugs scandal. Representing Island was Bracewell LLP, a top-dollar law firm known for vigorously defending the oil industry.

Island did not respond to multiple requests for comment. In an interview, Luthi said that it’s up to companies to ensure the contractors they hire are safe. “As a leaseholder you’re the one who is ultimately primarily responsible for what goes on,” said Luthi. “The leaseholder becomes the regulator to ensure all the standards are met.”

Contractor safety was one subject area BSEE officials asked the National Academy of Sciences to study in 2016 as part of a review of the bureau’s inspection program. But in December, Secretary Zinke abruptly suspended the study, drawing the ire of environmentalists and safety advocates. In March, Zinke announced several initiatives to ensure “responsible energy development” such as increasing the time BSEE inspectors spend offshore.

The explosion that killed Hancock in 2014 is proof that “not adhering to the basic tenets of a safety culture can lead to tragic results,” then-BSEE director Brian Salerno wrote in a 2016 memo. According to the agency’s report, a switch powering a unit called a heater-treater hadn’t been turned off, despite assurances by an employee of Island Operating Company, a firm contracted by platform owner Fieldwood Energy LLC to handle daily operations. Hancock worked for a cleaning company hired by Fieldwood to wash down the unit. At the time of the accident, Island was a contractor for 625 structures in the Gulf.

Island did not respond to multiple requests for comment.

Fieldwood CEO Matt McCarroll wrote in an email to the Center for Public Integrity, “We have no higher mission or responsibility than the safety of our operations, employees and contractors.” The company also provided documents in which it asserted that Hancock and the company he worked for, Turnkey Cleaning Services, were responsible for safety failures that led to the accident.

While BSEE found that Turnkey did not effectively follow safety procedures, the agency concluded that power flowing through the unit was the “probable cause of the ignition” that led to the explosion.

Dale P. Martin Jr., who is listed as the principal of Turnkey, did not respond to calls for comment. Fieldwood, which filed for bankruptcy protection in February, is currently appealing several safety citations BSEE issued to the company as a result of the 2014 explosion.

The night of his death, Hancock’s body was airlifted to New Orleans and transported 150 miles west to Abbeville — the city where he and his wife, Kayler, fell in love and raised their children. Three days before Thanksgiving 2014, she laid her husband to rest.

“I was mad at everyone on that platform,” Kayler said by telephone. She settled a wrongful-death case against Island and Fieldwood last year for an undisclosed amount. “I needed justice for my children,” she said. “I felt like they owed me the world, because they took the world away from me.”

NPR reporter Jeff Brady contributed to this story.

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