August 22, 2010 in Nation/World

Feds to grill BP executives in fourth proceeding

Investigators heading to Houston this time
Rong-Gong Lin Ii Los Angeles Times

LOS ANGELES – Federal investigators on Monday are expected to confront executives and managers of BP and rig owner Transocean about catastrophic failures in well design and disabled safety systems that may have played a role in the deaths of 11 crewmen on the ill-fated Deepwater Horizon.

The joint U.S. Coast Guard-Interior Department investigation into the April 20 blowout has amassed a trove of testimony during three previous hearings in Louisiana and this week moves to Houston, the hub of the nation’s oil and gas industry, where BP and other companies linked to the disaster have offices.

The earlier proceedings elicited gripping narratives from rig workers who described their escape from the fiery explosions and evidence of cost-saving managerial decisions that probably compromised safety.

The outcome of this federal investigation is potentially significant. If the probe uncovers criminal misconduct by companies involved with the well, the panel can offer its findings to the U.S. Department of Justice, which is conducting a criminal probe.

The panel boosted its legal heft last week by adding retired U.S. District Judge Wayne R. Andersen and Coast Guard Capt. Mark R. Higgins, an attorney, to the team. Their courtroom experience may help the panel cut through the increasingly time-consuming process of questioning witnesses, which is frequently interrupted by scores of lawyers representing a dozen companies and individuals.

A fifth proceeding may be held after key equipment, including the well’s blowout preventer, is recovered from the bottom of the Gulf of Mexico. The Coast Guard, which is charged with investigating deaths at sea, conducts the hearings much like a trial, with witnesses under oath, cross-examination and exhibits. The panel will report its findings by January.

A key witness scheduled to testify is Halliburton’s technical adviser, Jesse Gagliano. Halliburton was hired by BP to cement the well. An e-mail from Gagliano warned BP two days before the explosion that the company’s well-design plan posed a “SEVERE” risk of gas flow, according to previous testimony. Such a gas surge is suspected to have pushed a bubble of combustible methane through a drill pipe, exploding in the belly of the massive rig.

Warnings about the integrity of the well and the rig’s safety systems were ignored or disregarded, according to multiple witnesses. Federal investigators have suggested that critical decisions were made to save time and money.

“In engineering, we talk about who makes the decisions: MBAs, or engineers? This is an example of an MBA decision,” said University of Southern California professor Iraj Ershaghi, an expert in petroleum engineering who has followed news accounts of the accident.

“In other words, ‘Let’s do this, and save us two days.’ Economic optimization is the basis of major disasters.”

In earlier hearings, testimony illustrated the financial and time pressures BP was under to finish the exploratory phase of the drilling, which included sealing the well and moving the floating oil rig to a different site. Drilling was six weeks behind schedule, costing BP at least $21 million in leasing fees alone.

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