Leaking Oil Well Lacked Safeguard Device

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Leaking Oil Well Lacked Safeguard Device
By RUSSELL GOLD, BEN CASSELMAN And GUY CHAZAN

The oil well spewing crude into the Gulf of Mexico didn't have a
remote-control shut-off switch used in two other major oil-producing
nations as last-resort protection against underwater spills.

The lack of the device, called an acoustic switch, could amplify
concerns over the environmental impact of offshore drilling after the
explosion and sinking of the Deepwater Horizon rig last week.

The accident has led to one of the largest ever oil spills in U.S.
water and the loss of 11 lives. On Wednesday federal investigators
said the disaster is now releasing 5,000 barrels of oil a day into the
Gulf, up from original estimates of 1,000 barrels a day.

U.S. regulators don't mandate use of the remote-control device on
offshore rigs, and the Deepwater Horizon, hired by oil giant BP PLC,
didn't have one. With the remote control, a crew can attempt to
trigger an underwater valve that shuts down the well even if the oil
rig itself is damaged or evacuated.

The efficacy of the devices is unclear. Major offshore oil-well
blowouts are rare, and it remained unclear Wednesday evening whether
acoustic switches have ever been put to the test in a real-world
accident. When wells do surge out of control, the primary shut-off
systems almost always work. Remote control systems such as the
acoustic switch, which have been tested in simulations, are intended
as a last resort.

Nevertheless, regulators in two major oil-producing countries, Norway
and Brazil, in effect require them. Norway has had acoustic triggers
on almost every offshore rig since 1993.

The U.S. considered requiring a remote-controlled shut-off mechanism
several years ago, but drilling companies questioned its cost and
effectiveness, according to the agency overseeing offshore drilling.
The agency, the Interior Department's Minerals Management Service,
says it decided the remote device wasn't needed because rigs had other
back-up plans to cut off a well.

The U.K., where BP is headquartered, doesn't require the use of
acoustic triggers.

On all offshore oil rigs, there is one main switch for cutting off the
flow of oil by closing a valve located on the ocean floor. Many rigs
also have automatic systems, such as a "dead man" switch as a backup
that is supposed to close the valve if it senses a catastrophic
failure aboard the rig.

As a third line of defense, some rigs have the acoustic trigger: It's
a football-sized remote control that uses sound waves to communicate
with the valve on the seabed floor and close it.

An acoustic trigger costs about $500,000, industry officials said. The
Deepwater Horizon had a replacement cost of about $560 million, and BP
says it is spending $6 million a day to battle the oil spill. On
Wednesday, crews set fire to part of the oil spill in an attempt to
limit environmental damage.

Some major oil companies, including Royal Dutch Shell PLC and France's
Total SA, sometimes use the device even where regulators don't call
for it.

Transocean Ltd., which owned and operated the Deepwater Horizon and
the shut-off valve, declined to comment on why a remote-control device
wasn't installed on the rig or to speculate on whether such a device
might have stopped the spill. A BP spokesman said the company wouldn't
speculate on whether a remote control would have made a difference.

Much still isn't known about what caused the problems in Deepwater
Horizon's well, nearly a mile beneath the surface of the Gulf of
Mexico. It went out of control, sending oil surging through pipes to
the surface and causing a fire that ultimately sank the rig.

Unmanned submarines that arrived hours after the explosion have been
unable to activate the shut-off valve on the seabed, called a blowout
preventer.

BP says the Deepwater Horizon did have a "dead man" switch, which
should have automatically closed the valve on the seabed in the event
of a loss of power or communication from the rig. BP said it can't
explain why it didn't shut off the well.

Transocean drillers aboard the rig at the time of the explosion, who
should have been in a position to hit the main cutoff switch, are
among the dead. It isn't known if they were able to reach the button,
which would have been located in the area where the fire is likely to
have started. Another possibility is that one of them did push the
button, but it didn't work.

Tony Hayward, BP's CEO, said finding out why the blowout preventer
didn't shut down the well is the key question in the investigation.
"This is the failsafe mechanism that clearly has failed," Mr. Hayward
said in an interview.

Lars Herbst, regional director of the Minerals Management Service in
the Gulf of Mexico, said investigators are focusing on why the blowout
preventer failed.

Industry consultants and petroleum engineers said that an acoustic
remote-control may have been able to stop the well, but too much is
still unknown about the accident to say that with certainty.

Rigs in Norway and Brazil are equipped with the remote-control
devices, which can trigger the blowout preventers from a lifeboat in
the event the electric cables connecting the valves to the drilling
rig are damaged.

While U.S. regulators have called the acoustic switches unreliable and
prone, in the past, to cause unnecessary shut-downs, Inger Anda, a
spokeswoman for Norway's Petroleum Safety Authority, said the switches
have a good track record in the North Sea. "It's been seen as the most
successful and effective option," she said.

The manufacturers of the equipment, including Kongsberg Maritime AS,
Sonardyne Ltd. and Nautronix PLC, say their equipment has improved
significantly over the past decade.

The Brazilian government began urging the use of the remote-control
equipment in 2007, after an extensive overhaul of its safety rules
following a fire aboard an oil platform killed 11 people, said Raphael
Moura, head of safety division at Brazil's National Petroleum Agency.
"Our concern is both safety and the environment," he said.

Industry critics cite the lack of the remote control as a sign U.S.
drilling policy has been too lax. "What we see, going back two
decades, is an oil industry that has had way too much sway with
federal regulations," said Dan McLaughlin, a spokesman for Democratic
Florida Sen. Bill Nelson. "We are seeing our worst nightmare coming
true."

U.S. regulators have considered mandating the use of remote-control
acoustic switches or other back-up equipment at least since 2000.
After a drilling ship accidentally released oil, the Minerals
Management Service issued a safety notice that said a back-up system
is "an essential component of a deepwater drilling system."

The industry argued against the acoustic systems. A 2001 report from
the International Association of Drilling Contractors said
"significant doubts remain in regard to the ability of this type of
system to provide a reliable emergency back-up control system during
an actual well flowing incident."

By 2003, U.S. regulators decided remote-controlled safeguards needed
more study. A report commissioned by the Minerals Management Service
said "acoustic systems are not recommended because they tend to be
very costly."

A spokesman for the agency, Nicholas Pardi, said the decision not to
require the device came, in part, after the agency took a survey that
found most rigs already had back-up systems of some kind. Those
systems include the unmanned submarines BP has been using to try to
close the seabed valve.
—Jeff Fick contributed to this article.

F\from the WSJ

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