Lessons from Deepwater Horizon tragedy continue to unfold


April 20 marked the one year anniversary of the Deepwater Horizon tragedy, the  massive explosion and fire on an offshore drilling rig that killed 11, injured 16 and unleashed the biggest maritime oil spill in history.

By the time the gushing wellhead was capped on July 15, the public had been treated – if that’s the right word - to 83 days of non-stop media coverage featuring millions of words of reportage, commentary and rank speculation presented over often-vivid footage of the spill. Beyond the images of oil-soaked birds, frantic hotel-keepers and mournful shrimpers whose livelihoods had been disrupted were questions about what the continuing environmental drama meant not just for British Petroleum but for entire the oil and gas industry. Some pundits went so far as to speculate this spill might be the beginning of the end for fossil fuel as an energy source.

As Mark Twain once famously declared, “Rumors of my death have been greatly exaggerated“ – and the industry has not only survived but will undoubtedly prosper, albeit with an increased focus on safety and environmental stewardship.

At the last minute before the one-year anniversary, a flurry of lawsuits were filed by virtually all the parties involved, with each company pointing the finger at the other guy. This timing of this legal equivalent of a circular firing squad was mandated by requirements imposed by the fact the spill took place at sea, bringing the affair under the mantle of maritime law.

As those with potential damage claims arising from the Eagle Otome incident in the Port of Port Arthur in early 2010 learned, maritime law marches to the beat of its own legal drummer even when the body of water is the intracoastal canal.

BP filed lawsuits seeking over $40 billion from Transocean, owner of the Deepwater Horizon rig; Cameron International, the maker of the failed blowout preventer on the well; and Halliburton, the cement contractor on the well.

In its complaint against Transocean, based in Vernier, Switzerland, BP accused them of “misconduct” and asserted, “The simple fact is that on April 20, 2010, every single safety system and device and well control procedure on the Deepwater Horizon failed, resulting in the casualty.”

There appears to be some support for BP’s position. The same week the lawsuit was filed, the US Coast Guard released a 288-page report that detailed Transocean’s poor maintenance, inadequate training and the bypassing of alarms and automatic shutdown systems that prevented the crew from shutting down the runaway well after it blew. The report said these deficiencies led to a chaotic abandonment of the blazing Deepwater Horizon rig.

"The investigation revealed that Deepwater Horizon and its owner, Transocean, had serious safety management system failures and a poor safety culture," the Coast Guard report concluded.

For its part, Transocean filed a counter-suit against BP insisting “that under the drilling contract for Deepwater Horizon, BP has agreed, among other things, to assume full responsibility for and defend, release and indemnify Transocean from any loss, expense, claim, fine, penalty or liability.”

In the lawsuit BP filed against Halliburton, they charge their former partner with “improper conduct, errors and omissions, including fraud and concealment” concerning the cement used in the well.

BP asserted, “The record is clear that Halliburton's misconduct contributed to the accident and spill, and BP has filed this action to preserve its legal rights."

In their counter-suit, Halliburton also said they were contractually indemnified because the other parties' actions or omissions were to blame and called BP "negligent, grossly negligent, and/or acted with willful misconduct."

The Halliburton filing also said, "BP utterly failed to meet its duties and obligations, and knew so at the time… BP recklessly sacrificed safety for monetary savings and gain. BP carelessly ignored failed well integrity test results to move forward with procedures that put the well into an underbalanced condition that led to the blowout."

In addition, BP was also sued that week by its minority partners in the well, Mitsui subsidiary Moex Offshore and Anadarko Petroleum. Both said they should not be liable for any of the damages or cleanup costs related to the accident.

The intense legal wrangling was not the only commemoration of the one-year anniversary of the Deepwater Horizon oil spill. Secretary of the Interior Ken Salazar issued a statement on April 20 that said, “Today, we remember the eleven men who died in the Deepwater Horizon explosion.  They were sons, fathers, husbands and brothers... Today, we also recognize the thousands of women and men who have worked tirelessly and relentlessly over the last year to contain the spill, clean marshes and coastlines, rehabilitate wildlife, and put the Gulf Coast on the path to restoration.  We honor their service and sacrifices for our country.”

Meanwhile, the political and social fallout from the spill has taken some unexpected twists and turns. The ban on deepwater drilling in the Gulf announced by Salazar in May and lifted early in October no doubt imposed hardships on rig operators, their customers and employees, but its impact was not as dire as many predicted.

By Feb. 3 of this year, the New Orleans Times-Picayune newspaper reported, “While a backlog of drilling permits in Washington continues to feed oil industry angst, new data shows that more rigs are in the Gulf of Mexico than before the BP oil spill, indicating that operators might have more confidence in the future than they are letting on.”

In the months since the well was capped, learned observers have been able to gain some perspective on what happened at Deepwater Horizon, with valuable insights gleaned from such diverse sources as the conservative website Weekly Standard and The New Yorker.

Writing for the Weekly Standard, Andrew B. Wilson agreed with the conclusion of experts who said the Gulf oil spill was a preventable disaster but added, “Politicians may demand that oil rigs, artificial heart valves, airplanes, and other useful devices be made absolutely safe, but in the real world that engineers deal with, there is no such thing as 100 percent safety. Owing to human error in operating a system, or to some flaw in the original design, accidents are going to happen.”
Wilson also chided BP’s top management for what he called their “history of ‘green-washing,’ or playing up to environmental activists, while taking a cavalier attitude toward risk management in the operation of oil rigs, refineries, and other facilities.”

Whatever BP action or inaction that may have contributed to the disaster, Raffi Khatchadourian’s piece for The New Yorker detailed the scope of the company’s response.

“BP began to acquire matériel on a vast scale,” he wrote. “Every week, responders were using roughly three million hazmat suits, far more than the world’s supply, so Logistics teams scoured the globe for stockpiles and alternatives to make up for the shortfall… By midsummer, more than eight hundred skimmers had been mobilized by the shore and around the wellhead” in what was described as “the largest offshore-skimming operation in the history of spill response.”

Khatchadourian also acknowledged the response of some state officials.

“Louisiana officials, meanwhile, opened barriers restraining the Mississippi River; the water’s outward force appears to have greatly prevented the oil from penetrating too deeply into certain bayous,” he added.

Wilson gave credit to a higher authority.

“If there was an unexpected hero to the story, it was Mother Nature,” he observed. “In the first few weeks after the blowout, BP CEO Tony Hayward was excoriated in the news media for stating that the ‘Gulf of Mexico is a very big ocean’ and ‘the environmental impact of this disaster is likely to be very, very modest.’ It now appears that he was right. The Gulf oil spill is, indeed, much less of a calamity than most people expected. Said one environmental scientist in late July: ‘Mother Nature is doing what she is supposed to be doing and we’re losing most of [the spilled oil] to microbial degradation in the open ocean.’ By early August, an oil slick that had been the size of Kansas had all but disappeared, idling hundreds of skimmers.”

Khatchadourian said he believed the intense media scrutiny was essential in generating public pressure to resolve the crisis.

“Call it hysteria or call it a fully mobilized civil society: something was accomplished, and the Gulf is in better shape for it,” he insisted. “And looking back on the season of Deepwater Horizon, one wonders what else we might be able to engineer, or just make less dirty, if we put our minds to it, and yell a little.”

Taking on gambling, taxes and the Alamo

As the Texas Legislature hurtles toward the mandatory, sine die end of the biennial session on May 30, the situation in Austin remains fluid even as the extreme budget crunch colors every debate with the possible exception of the social and political legislation that the enlarged Republican majority will undoubtedly pass this session.
While the number of veteran reporters covering the Lege has been greatly diminished in recent years, the multiplicity of blogs, Web reporting and online access to legislative deliberations has expanded insights into the process. Presented here are reports on current issues before the House and Senate, gleaned from those sources, personal interviews and a little guesswork based on past performance.

— James Shannon

Gambling’s last gasp?

Although a bill to permit a statewide referendum on casino gambling has been declared dead on arrival since before the start of the legislative session, it appears the comatose patient may still have a flickering pulse. But prospects for such legislation remain in critical condition.
A poll released March 28 showed 86 percent of respondents want to be allowed to vote on whether to allow casinos slot machines across the state. The Texas Gaming Association officials who commissioned the survey said an expansion of gambling in Texas could generate more than $6.6 billion in revenue and more than $1.2 billion in taxes a year and create nearly 40,000 new full-time jobs.
Complicating the struggle are some serious issues in each legislative branch. On the House side, longstanding family gambling interests effectively prevent Speaker Joe Straus (R- San Antonio) from taking a lead role in legislation promoted by that industry.
In the Senate, gambling prospects – even for a referendum – face a major hurdle in Sen. Robert Duncan. The Lubbock Republican, an implacable gambling foe, chairs the State Affairs Committee. Lt. Gov. David Dewhurst has referred all gambling bills to that committee, which could effectively kill the already slim chances for gambling in this session.
As for the notion gambling could help soothe the state’s budget woes, Duncan reminded lawmakers any additional revenue would not come for several years and indicated he did not plan to hold hearings on the gambling bills.
Trial lawyers learn the best way to avoid hearing an answer you don’t like is to not to allow the question to be asked, which would apparently apply to Duncan’s view of a referendum that would likely result in some form of voter approval for gambling.
As if the equation was not complex enough, there are differences among the groups who support gambling. The Texas Gaming Association favors Las Vegas-style casino gambling while Win for Texas, a group that includes the racetrack owners, wants to install video-lottery terminals at the 13 racetracks in the state. That bill, HB 2111, makes no mention of allowing Las Vegas-style casino gaming in Texas.
The San Antonio Express-News blasted Duncan in a recent editorial that noted, “Texans are already gambling in casinos and playing slot machines at racetracks. They’re just doing so in states other than Texas. A 2007 report from Texans for Economic Development found that Texans gambled about $2.4 billion in other states. … But if Duncan has his way, voters will never have a chance to consider any of the 17 legislative proposals that would tap that revenue.”
The Express News, a Hearst newspaper along with the Beaumont Enterprise and Houston Chronicle, concluded, “When it comes to gambling, Texans are plenty grown up. They can decide for themselves whether the benefits of an expansion of gaming in the Lone Star State outweigh the costs. Texans should be able to determine whether their gambling dollars help pay teachers and pave roads in Texas or in Louisiana, Oklahoma, New Mexico and Nevada. What they don’t need is paternalistic lawmakers thwarting the legislative process.”

Texas to increase taxes on 28,000 small businesses?

Will Newton is executive director of the National Federation of Independent Business/Texas, the state’s leading small business association. He is sounding an alarm as he calls on lawmakers to keep their promises of no new taxes as they begin considering the next biennial budget.
“Make no mistake about it,” said Newton. “If the Legislature does not extend the $1 million exemption during this session, 28,000 small businesses will see a tax increase in 2012.”
In 2009, the Texas Legislature increased the business tax exemption for small businesses to $1 million in gross receipts, up from $300,000 in gross receipts. This exemption increase spared 40,000 small businesses from paying the state’s business tax in 2010 and 2011.
The exemption is scheduled to drop back down to $600,000 in gross receipts in 2012. In Texas, there are 28,000 small businesses whose gross receipts fall within the range of $600,000 and $1 million, according to the Texas State Comptroller of Public Accounts.
“As Congress considered extending the Bush-era tax cuts last year, the case was made that inaction to extend the cuts would result in a tax increase,” Newton added. “By eliminating the exemption for 28,000 small businesses, Texas will be imposing a new tax on them. Period.
Extending the exemption will cost the state roughly $150 million over two years. But NFIB/Texas argues that the state provided a revenue stream when it passed the exemption in 2009.
“The fact is, this exemption was fully funded in 2009 and we should not have to continue finding new sources of funding. Lawmakers need to stick to their promises of no new taxes.”

Remember the Alamo

In a session where Texas lawmakers struggle with an unprecedented budget deficit, there is still time to remember the Alamo. A House committee is considering bills that would impose changes on the Daughters of the Republic of Texas (DRT), a nonprofit group that has operated the shrine to Texas liberty since 1905.
Last year, the Texas Attorney General’s office launched an investigation of the group following allegations of mismanagement. Although the results of the investigation haven’t been made public, DRT members appeared before the House Committee on Culture, Recreation & Tourism to defend their group.
Also making an appearance was Sarah Reveley, a former DRT member who said she was the one who complained to the AG about potential mismanagement and wants the group of which she was once a member removed from Alamo operations.
Two bills authored by Rep. Ryan Guillen, D-Rio Grande City, would both transfer oversight of the Alamo to the Texas Historical Commission and allow admission to be charged there.
This proposal is complicated by the steep budget cuts already facing the Texas Historical Commission, but it appears the handwriting is on the wall for the end of free admission to the historic site in the middle of downtown San Antonio.

Wild Game Dinner April 14

Fundraiser at MCM Elegante to benefit Hughen Center

Zona Jones presents a wild game dinner prepared by cowboy chef Grady Spears on April 14 at the MCM Elegante, beginning at 6 p.m.  Spears was named one of the top Five Chefs of 1998 by “Restaurants and Institutions” and Rising Star of 1999 by “Restaurant Hospitality Magazine.”

Spears was working as a manager in a restaurant in Marathon, TX when a chef quit during a weekend’s dinner rush.  He took over the stove and a culinary star was born.  His work has been widely praised in the New York Times, Texas Monthly, P.O.V., Martha Stewart Living, Country Homes, and Southern Living, to name a few.

The menu for the evening’s repast is definitely not chuck wagon stew.  The game being served at this feast is lucky to be paired with mouth-watering sauces and glazes.  Imagine wild boar ribs with Parker County peach glaze, coffee-rubbed venison loin with East Texas blackberry jam, Hill Country mixed grill of bock battered bog white quail with cider adobo, in addition to appetizers, side dishes and desserts.

Coach Bum Phillips and his wife Debbie will be the guests of honor at the dinner.  The Phillips will be joined by former Houston Oilers Dan Pastorini, Hall of Famer Elvin Bethea, David Carter and Willie Alexander.  Other notable football players include Beaumont favorites Jordan Babineaux, "Goose" Gonsoulin, Gary Hammond, and Alois BlackwellAdditional guests include Al Caldwell, Bob West, and the official Texas Sports Hall of Fame Artist Robert Hurst.

The evening’s entertainment will continue the country theme.  Daryle Singletary has a well-deserved reputation as an authentic country songwriter and singer, including hits such as “I Let Her Lie,” and “Too Much Fun.”

Singletary will be joined by a special unannounced guest performer, which has prompted wild speculation about the identity of the singer to be named later.

There will be an auction during the evening.  A wide array of musical and sports memorabilia, trips and art will be available.  Anyone wishing to capture a daughter’s or granddaughter’s heart should note the autographed photo of Justin Bieber.

Auction Items:

Garth Brooks autographed guitar

Taylor Swift autographed guitar

Houston Oiler authentic helmet autographed by Bum Phillips, Dan Pastorini, Earl Campbell and 19 other Oiler players

Houston Texan authentic helmet autographed by Head Coach Gary Kubiak and Wade Phillips

Trip for 2 to Nashville for the 2011 CMA Country Music Awards

Hyatt Regency Paris Madeleine 5-Night Stay with Airfare for  (2)

Sonoma VIP Wine Experience Features Chauffeur, Winery Tours, 3-Night Stay with Airfare for (2)

NASCAR Car Racing Experience with 4-Night Stay and Airfare for (2)

America's Cup Stars & Stripes Experience in San Diego 4-Night Package with Airfare for (2)

Beatles Album autographed by Paul, Ringo, and George

Aerosmith autographed drum head

Muhammad Ali print autographed by Ali and artist Leroy Nieman

Snoopy as Red Baron sketch autographed by artist Charles Shultz

Photo autographed by Justin Bieber

Apollo 11 astronaut photo autographed by Armstrong, Collins, and Aldrin

Robert Hurst prints

Tickets for the dinner are available from the Hughen Center 
at 409-983-6659.  They are $125 each.