ProPublica: Energy & Environment

Fracking Tales: Stories From the Frontlines of Gas Drilling

2010-06-22T10:48:29-05:00

Since we launched, we've been reporting on the environmental threats of drilling in natural gas reserves around the country. (Here’s a good primer on the process of hydraulic fracking that is used to release the gas.) The potential risks of hydro-facking have been gaining attention, and we wanted to point to two on-the-ground stories that have recently come out.

This month's Vanity Fair has a long piece, "A Colossal Fracking Mess," on the human and environmental effects of the drilling. It follows Dimock, a town in northeastern Pennsylvania, where residents are fighting the hydraulic fracking that they say has contaminated the town's aquifer. The story reports that the water supply is so harmful that the town is "now known as the place where, over the past two years, people's water started turning brown and making them sick, one woman's water well spontaneously combusted, and horses and pets mysteriously began to lose their hair." We reported on Dimock multiple times last year. Our lead reporter on gas drilling, Abrahm Lustgarten, wrote that Dimock was "ground zero for drilling the Marcellus Shale, a prized deposit of natural gas that is increasingly touted as one of the country's most abundant and cleanest alternatives to oil."

Also, last night HBO premiered the film Gasland, a feature-length documentary that looks at how communities across the country have been affected by fracking. Filmmaker Josh Fox started his reporting when he was asked to lease his own land for drilling. In a much discussed scene, the film shows sink water with such high levels of methane, it ignites on fire from the small flame of a cigarette lighter.

Here's a trailer of the film:

Trailer

Read the Internal Document that Contradicts BP’s Claims on Oil Flow

2010-06-21T14:49:28-05:00

Sasha Chavkin

Rep. Ed Markey has been among BP's toughest critics in Congress following the Deepwater Horizon blowout, accusing it, among other things, of lowballing its estimates of oil flow.

On Sunday, Markey was at it again. As you may have read, the Boston Democrat released an internal BP document that shows that early company estimates for worst-case oil flow scenarios were far higher than the company has ever acknowledged -- up to 100,000 barrels per day if all containment mechanisms were to fail. Take a look at the document for yourself.

The document is not dated, but a statement from Rep. Markey that accompanied its release said that BP's oil flow estimate at the time the document was made available to Congress was 5,000 barrels per day, and its worst-case scenario was 60,000 barrels per day, figures the company provided for much of the month of May.

The 100,000-barrels-per-day scenario contrasts sharply with the company’s public pronouncements at the time.

“I think those estimates of 70,000, with due respect to the experts, don't match the many, many experts and scientists that are involved in this in a unified way," Bob Dudley, BP’s managing director and the newly anointed chief of the company’s spill response, said on MSNBC on May 14. "It's not just a BP estimate ... 70,000 feels like a little exaggeration, a little scare-mongering."

OSHA Director: Offshore Cleanup Workers Will Get More Training

2010-06-21T10:57:57-05:00

Sasha Chavkin

Last week, we reported that experts and health officials are concerned that Gulf cleanup workers aren't getting enough safety training. On Thursday, C-SPAN asked the head of the Occupational Safety and Health Administration about our reporting -- and he agreed that "more training is needed" for many spill responders.

We spoke with OSHA's director, David Michaels, after that interview, and he said the agency is working with BP to increase the safety training for workers on vessels at sea.

Michaels said he did not know exactly when the new classes would begin, but said it should be within days: "We've moving as quickly as we can."

The course will increase in length from four to eight hours, and will address new subjects including workers' rights and protection from chemical hazards, Michaels said. Like the current training, it will be taught by contractors hired by BP, with monitoring and advice from OSHA.

The longer classes will be provided to offshore workers in the Vessels of Opportunity program -- which employs local boat operators and crews in cleanup activities -- but not to shoreline responders who are cleaning the beaches. In his appearance on C-SPAN, Michaels said that by the time oil reaches the beaches, it has been weathered long enough that it has "lost all of its volatile chemicals," eliminating the risk of airborne exposure.

"We're aiming for the workers on the Vessels of Opportunity, whose exposure to weathered oil has increased," Michaels told us. He said the additional training is crucial because these workers are now collecting oil-soaked boom at sea in addition to laying fresh boom. (Last week, a health official involved in planning the training told us that the current curriculum doesn't include chemical inhalation, the health effects of dispersants, or the risks of direct contact with weathered oil.)

There are currently 2,630 local boats in the cleanup program, according to the latest data from Unified Command, the interagency spill response team made up of BP, Transocean, the Coast Guard and numerous federal agencies. The Unified Command's website has no information about the total number of people on the boats, and a Unified Command spokeswoman said she did not have that information.

As we noted last week, the Louisiana health department is tracking complaints from cleanup workers who are continuing to report health problems that they believe are related to chemical exposure, including vomiting, dizziness, and nose and throat irritation.

Michaels also dismissed concerns raised in recent reports by McClatchy Newspapers that OSHA's ability to ensure compliance from BP is hampered by limits on his agency's jurisdiction, which extends only three miles offshore. He said that OSHA's participation in the Unified Command allowed it to protect worker safety beyond its usual boundary.

"We are working through the Unified Command system," Michaels said. "Just because there is a line three miles out there, that has no impact."

An OSHA spokesman told us that the agency would provide us with more information -- including the curriculum of the new course -- as soon as it became available. We'll update you when we hear more.

New Documents Show BP Made Little Progress on Alaska Safety Issues From 2001 to 2007

2010-06-18T14:28:49-05:00

Abrahm Lustgarten

Six years after a scathing 2001 internal review of BP's Alaska operations found that the company wasn't maintaining safety equipment and faced "a fundamental lack of trust" among workers, a follow-up study concluded BP had made little headway in addressing those concerns.

The 2007 review, obtained by ProPublica, is based on a survey of more than 400 BP workers and contractors across Alaska greater Prudhoe Bay drilling fields. Three of four workers surveyed said that BP's maintenance program was still not aligned with BP's business priorities. Workers said that while BP had chipped away at communication and training concerns, it had not reduced maintenance backlogs of key equipment.

Those findings take on new significance as Congress hears testimony from BP executives about what the company has done to improve its safety record and address a litany of operations failures over the last 10 years. In testimony yesterday, BP CEO Tony Hayward said that he had made significant changes in the company since taking the reins in 2007 and that he had focused on safety "like a laser."

The conclusions of the report were crystallized in two PowerPoint slides and a series of graphics that were given to ProPublica by a former senior BP manager. Their validity was confirmed by Marc Kovac, a current BP employee who was part of the original 2001 review team and helped conduct the 2007 follow-up and presented the data to senior management.

Nearly 80 percent of the workers interviewed for the 2007 study said that gas and fire detection systems -- perhaps the most important equipment to saving lives and among the most critical in preventing an environmental disaster -- were either not functioning or were obsolete.

"We found that 50 percent of everything that was originally brought up was not fixed, it was ignored," said Kovac. "BP plays the time game. People forget and they know that. So as long as they file reports and do investigations and produce paperwork, they know that people will eventually go on with their business."

Last week ProPublica disclosed that a series of internal BP investigations, including the 2001 Operational Integrity Review, had found that the company valued production and profits ahead of safety and maintenance. The reports, combined with internal e-mails obtained by ProPublica and several external government reviews of the company, showed that over a period of more than 10 years BP had allowed conditions of facilities to deteriorate in order to save money, and that it retaliated against workers who raised concerns about them.

The disclosure of the 2007 follow-up to that report stands in contrast to BP's public statements from 2001 to 2007, which asserted the company had learned from its mistakes in Alaska and seized the opportunity to change.

BP did not respond to requests for comment for this article, but in a statement made in early June about the apparent pattern of recurring issues at BP operations since 2001, BP spokesman Toby Odone told ProPublica that the "premise about continuing worker safety complaints is essentially groundless."

Gulf Cleanup Training Ignores Advice From Health Agency, Official Says

2010-06-17T13:05:46-05:00

Sasha Chavkin

As we've reported, workplace safety experts have expressed concern that Gulf oil spill responders aren't getting enough safety training. On Wednesday, we spoke with a federal official who said the four-hour safety course that BP is providing to Gulf cleanup workers lacks basic information on health risks and is too short to cover the necessary material.

Joseph Hughes, director of the worker training program at the National Institute for Environmental Health Sciences, said the course fails to incorporate important information. Among the subjects not included are chemical inhalation, the health effects of dispersants, and the risks of direct contact with weathered crude oil.

Hughes' agency, part of the Department of Health and Human Services, helped develop the training. "We tried to recommend what we thought the right training topics were, but all of those were not included," he said.

As we reported on Wednesday, cleanup workers are continuing to suffer health problems that they believe to be related to chemical exposure, including vomiting, dizziness, and nose and throat irritation.

Hughes also said the course's four-hour duration -- a fraction of the 24-hour training usually required for cleanup workers who may be exposed to hazardous materials -- is insufficient and rests upon a faulty interpretation of safety regulations. In 1990, the Occupational Safety and Health Administration issued a directive following the Exxon-Valdez disaster that allowed the minimum training to be cut to four hours for workers performing low-risk tasks such as beach cleanup.

"The idea of the Exxon-Valdez exemption is that they would not have direct contact with crude oil or weathered oil," Hughes said. However, he said that some spill responders receiving the four-hour training, such as booming and skimming workers on vessels, are "definitely having direct oil contact."

BP spokesman Toby Odone stated that the safety trainings are appropriate for the work people are doing. "Training for Vessels of Opportunity and shoreline workers is 4+ hours and includes properties of oil, insect bites, heat, marine operations such as laying and collecting boom," Odone wrote in an e-mail. The Vessels of Opportunity program employs local boat operators and crews in cleanup activities.

Odone also wrote that workers going into oiled areas are accompanied by a technician with 40 hours of training, and that the training was approved by the government. "It was developed with OSHA and approved by OSHA and the US Coast Guard," he wrote.

OSHA is in charge of monitoring workplace safety for the cleanup. We at ProPublica have been trying to get in touch with officials there since Monday to discuss the safety trainings, but haven't yet gotten a response.

Hughes said that his office is pressing Unified Command -- the interagency spill response team that consists of BP, Transocean, the Coast Guard and numerous federal agencies -- to implement an eight-hour training course for those at greater risk of contact with hazardous materials. The course would include the chemical exposure curriculum that is not provided in the current trainings.

"The group that I'm still concerned about is the booming and skimming workers," Hughes said. "There's an effort under way to increase the training of those workers that's being discussed at the highest level."

On Wednesday, Aubrey Miller, senior medical adviser in Hughes' agency, testified to a House subcommittee that OSHA is "working with BP to develop a new eight-hour curriculum for worker safety and health training," according to a transcript of his remarks provided by the agency.

Hughes said he had not heard any dates for when this eight-hour training program would start.

As it stands, Hughes said the training goes against the precautionary principle -- the concept that the possibility of harm is enough to warrant action to reduce the risks to public health.

"We thought it was backwards," he said of the current curriculum, "that it had a reduced amount of protection for workers."

Rise in Offshore Spills Raises Wider Questions on Drilling

2010-06-10T13:59:48-05:00

Sasha Chavkin

The catastrophe unfolding in the Gulf of Mexico has been portrayed as a one-of-a-kind disaster, a perfect storm of bad equipment, bad planning and bad luck.

But it’s far from the only spill that’s taken place this year – or even the only spill occurring in the Gulf right now.

On June 7, the Mobile Press-Register reported that the Ocean Saratoga rig has been leaking into the Gulf since April 30. Interior Department spokeswoman Kendra Barkoff confirmed the next day that “small amounts of oil” were leaking from the wells beneath the rig, about 10 miles from Louisiana’s southeastern coast.

Taylor Energy, the well’s owner, said in a statement that it was engaged in an “ongoing well intervention plan” with the government to fix damage caused by Hurricane Ivan in 2004, and that no significant new spill had occurred.

The Deepwater Horizon isn’t the only recent spill for BP, either. On May 25, according to Reuters, an accident on the Trans-Alaska pipeline spilled thousands of barrels of oil and forced the pipeline to be shut down for more than three days. BP is the largest owner of the pipeline operator, controlling 47 percent. (Read our story about BP’s troubled history in Alaska and its other U.S. operations.)

In addition, there was the Jan. 24 spill in Port Arthur, Texas, when an Exxon-Mobil tanker collided with an outgoing vessel and dumped nearly half a million gallons of oil into the Gulf.

If it seems as if oil spills – and particularly offshore spills in US. waters – are on the rise, that’s because they are.

A USA Today analysis of federal data found that spills from offshore oil rigs and pipelines have more than quadrupled in the last decade. From the 1970s to 1990s, offshore facilities averaged four spills per year of more than 50 barrels. From 2000 to 2009, the annual average soared to 17.

The report also found that the rate of oil being spilled was increasing faster than the growth in production. From USA Today:

In the 1980s, an average of about 2,900 barrels of oil and other toxic chemicals spilled a year. That figure rose to more than 4,400 in the 1990s and to more than 6,100 in the 2000s. Offshore oil production increased during that time, but the rate of barrels spilled per barrels produced continued to increase.

The company with the most spills in the last decade was BP, which had reported 23 spills of over 50 barrels without counting the Deepwater Horizon blowout.

Why are offshore oil facilities spilling more in recent years than they have in the past?

One possibility is that regulators haven’t been able to keep up with the surge in offshore drilling. The Washington Post reported Thursday morning that the Minerals Management Service has only seven more inspectors now that it did in 1985, even as offshore drilling projects have skyrocketed. From the Post:

Although the number of exploration rigs soared and the number of deep-water oil-producing projects grew more than tenfold from 1988 to 2008, the number of federal inspectors working for the Minerals Management Service has increased only 13 percent since 1985.

A message left for MMS this morning has not been returned.

Stefan Mrozewski, a drilling engineer with Columbia University’s Borehole Research Group and a former oil industry employee who once worked on the Deepwater Horizon, said the increase may in fact be driven by a very different dynamic – better voluntary reporting of spills by the industry.

Oil companies and service companies in the Gulf of Mexico “have – at least over the past 10 years – been extremely conscientious about report [sic] spills, incidents, hazards, etc,” wrote Mrozewski in an e-mail. “I would venture that the same attitude did not prevail in the 90s, and certainly not in the 70s.”

David Miller of the American Petroleum Institute, a trade association for the oil and gas industry, said that offshore drilling was heavily regulated by the government, citing the MMS’s extensive guidelines for deepwater drilling.

“There’s quite a few regulations that the industry has to follow to be in compliance with the MMS,” said Miller.

Another possibility is that oil is simply harder to reach now – that increased consumption has led companies to turn to deeper waters and riskier procedures to satisfy the ever-expanding demand for energy.

“While the point of “peak oil” may or may not have been reached, what Michael Klare, a professor at Hampshire College, has dubbed the Age of Tough Oil has clearly begun,” wrote the New Yorker’s Elizabeth Kolbert on May 31.

Years of Internal BP Probes Warned That Neglect Could Lead to Accidents

2010-06-07T21:00:41-05:00

Abrahm Lustgarten and Ryan Knutson

A version of this story was co-published with The Washington Post.

A series of internal investigations over the past decade warned senior BP managers that the company repeatedly disregarded safety and environmental rules and risked a serious accident if it did not change its ways.

The confidential inquiries, which have not previously been made public, focused on a rash of problems at BP's Alaska oil-drilling unit that undermined the company’s publicly proclaimed commitment to safe operations. They described instances in which management flouted safety by neglecting aging equipment, pressured or harassed employees not to report problems, and cut short or delayed inspections in order to reduce production costs. Executives were not held accountable for the failures, and some were promoted despite them.

Similar themes about BP operations elsewhere were sounded in interviews with former employees, in lawsuits and little-noticed state inquiries, and in e-mails obtained by ProPublica. Taken together, these documents portray a company that systemically ignored its own safety policies across its North American operations - from Alaska to the Gulf of Mexico to California and Texas.

Tony Hayward, BP's CEO, has committed himself to reform since taking the top job in 2007. Top BP officials would not comment for this story, but spokesman Tony Odone said that in March an independent expert reported that BP has made "significant progress" toward meeting goals set in 2007 in response to a deadly Texas refinery explosion. Odone said the notion that BP has ongoing problems addressing worker concerns is "essentially groundless."

Because of its string of accidents before the recent blowout in the Gulf, BP already faced a possible ban on its federal contracting and on new U.S. drilling leases, several senior former Environmental Protection Agency debarment officials told ProPublica. That inquiry has taken on new significance in light of the Gulf accident. One key question the EPA will consider is whether the company's leadership can be trusted and whether BP's culture can change.

The reports detailing BP's Alaska investigations -- conducted by outside lawyers and an internal BP committee in 2001, 2004 and 2007 -- were provided to ProPublica by a person close to BP who believes the company has not yet done enough to eradicate its shortcomings.

A 2001 report noted that BP had neglected key equipment needed for emergency shutdown, including safety shutoff valves and gas and fire detectors similar to those that could have helped prevent the fire and explosion on the Deepwater Horizon rig in the Gulf.

A 2004 inquiry found a pattern of intimidating workers who raised safety or environmental concerns. It said managers were shaving maintenance costs with the practice of "run to failure," under which aging equipment was used as long as possible. Accidents resulted, including the 200,000-gallon Prudhoe Bay pipeline spill in 2006, the largest ever spill on Alaska's North Slope.

During the same period, similar problems surfaced at BP facilities in California and Texas.

In 2002, California officials discovered that BP had falsified inspections of fuel tanks at a Los Angeles-area refinery and that more than 80 percent of the facilities didn't meet requirements to maintain storage tanks without leaks or damage. Inspectors were forced to get a warrant before BP allowed them to check the tanks. The company eventually settled a civil lawsuit brought by the South Coast Air Quality Management District for more than $100 million.

In 2005, an emergency warning system failed before a Texas City refinery exploded in a ball of fire. BP's investigation of that deadly accident -- conducted by a committee of independent experts -- found that "significant process safety issues exist at all five U.S. refineries, not just Texas City." It said "instances of a lack of operating discipline, toleration of serious deviations from safe operating practices, and apparent complacency toward serious process safety risk existed at each refinery." BP spokesman Odone said that after the accident the company adopted a six-point plan to update its safety systems worldwide. But last year the Occupational Safety and Health Administration fined BP $87 million for failing to make safety upgrades at that same Texas plant.

It is difficult to compare safety records among companies in industries like oil exploration. Some companies drill in harsher environments. And bad luck can play a role. But independent experts say the pervasiveness of BP's problems, in multiple locales and different types of facilities, is striking.

"They are a recurring environmental criminal and they do not follow U.S. health safety and environmental policy," said Jeanne Pascal, a former EPA debarment attorney who led the investigations into BP. "At what point are we going to say we are not going to do business with you any more, bye? None of the other supermajors have an environmental criminal record like they do."

***

Since the late 1960s, BP has pulled oil from underneath Alaska, usually without problems. But when the company pleaded guilty to a felony conviction in 1999 for illegal dumping at an offshore drilling field there it drew fresh scrutiny to its operations and set off a cascading cycle of attempted -- and seemingly failed -- reforms that continued over the next decade.

To avoid having its Alaska division debarred -- the official term for a cancellation of contracts with the federal government -- BP agreed to a five-year probationary plan with the EPA. The company would reorganize its environmental management, establish protections for employees who speak out about safety issues, and reform its approach to risk and regulatory compliance. The company pledged to improve its conduct and reform its safety and maintenance programs.

Less than a year later, employees complained to an independent arbitrator that BP was letting equipment and critical safety systems languish at its Greater Prudhoe Bay drilling field. BP, in the spirit of reform, hired a panel of independent experts to examine the allegations.

The panel identified systemic problems in maintenance and inspection programs -- the operations that keep the drilling in Prudhoe Bay running safely -- and warned BP that it faced a "fundamental culture of mistrust" by its workers, in part because senior management lacked a structure of accountability.

"There is a disconnect between GPB (Great Prudhoe Bay) management's stated commitment to safety and the perception of that commitment," the experts said in their 2001 operational integrity report. "Correcting these underlying causes is essential ... for ensuring long term operational efficiency and mechanical integrity. Without a concerted effort to address these basic issues, any other action will provide only temporary relief."

According to the report, "unacceptable" maintenance backlogs ballooned as BP tried to sustain profits in the aging North Slope even though production was declining. The consultants concluded that BP had neglected to clean and check pressure valves, emergency shutoff valves, automatic emergency shutdown mechanisms and gas and fire safety detection devices essential to preventing a major explosion. It warned management of the need to update those systems, which "have a potential immediate safety impact or that pose an environmental threat."

It also warned that emergency shutdown systems would need to be operated manually, that there may not be enough staff to do so, and said that even if closed, the isolation valves were known to leak.

"Workers believe internal leak-through of isolation valves is a significant problem and under certain circumstances may pose a potential hazard to workers and equipment," the report stated.

In May 2002 -- less than seven months later -- Alaska state regulators underscored the panel's critical findings in a tersely worded order warning BP that it had failed to maintain its pipelines. Alaska struggled for two years to make BP comply with state laws and clear the pipeline of sedimentation that could interfere with leak detection systems.

Soon after, BP hired another team of outside investigators to check complaints made by workers on the North Slope. The resulting 2004 study by the law firm Vinson & Elkins warned that pipeline corrosion endangered operations on the Slope.

"Due to corrosive conditions present at the Greater Prudhoe Bay oilfield and the age of the field, corrosion control is and has been a major issue for BPXA," the study said.

It also offered a harsh assessment of BP's management of health, safety and environment concerns raised by employees. According to the report, workers accused BP of allowing "pencil whipping," or falsifying inspection data. The report quoted an employee who said BP workers felt pressure to skip key diagnostics, including pressure testing, cleaning of pipelines and checking for corrosion, in order to cut costs.

"To reduce staff workload it was suggested by BPXA management not to rebuild the pulling equipment as often ... and possibly not pressure test the equipment," BP employee Marc Kovac wrote in a safety complaint filed with the company. "This obviously would increase the potential for equipment failure resulting in equipment damage, environmental spills and injury to workers."

The report said that the manager in charge of corrosion safety in Alaska at the time, Richard Woollam, had "an aggressive management style" and subverted inspectors' tendency to report problems on the pipeline.

"Pressure on contractor management to hit performance metrics (e.g. fewer OSHA recordables) creates an environment where fear of retaliation and intimidation did occur."

Woollam was soon transferred, but the damage was done.

Two years later, in March 2006, disaster struck. More than 200,000 gallons of oil spilled out of a corroded hole in the Prudhoe Bay pipeline into the snow, the largest spill ever on the North Slope. Inspectors found that the steel pipe -- the inside of which hadn't been inspected in years -- had been corroded to dangerously thin levels along nearly 12 miles of pipeline. It was exactly the kind of situation BP's auditors and Alaska officials had feared.

When Congress held hearings into the cause of the spill later that year, Woollam pleaded the Fifth Amendment. He now works in BP's Houston headquarters. Reached at his home in Texas this week, Woollam referred questions to the BP press office, which declined to comment on the matter.

***

In August 2006, just five months after the spill at Prudhoe Bay, a pipeline safety technician for a BP contractor in Alaska discovered a two-inch snaggle-toothed crack in the steel skin of an oil transit line. Nearby, contractors were grinding down metal welds, sending a fan of sparks shooting across the work site. The technician, Stuart Sneed, feared the sparks could ignite stray gases, or the work could make the crack worse, so he ordered the contractors to stop working.

"Any inspector knows a crack in a service pipe is to be considered dangerous and treated with serious attention," Sneed told ProPublica. "The crack could have created a hellacious leaker with people grinding on it."

Sneed believed that the Prudhoe Bay disaster had made BP management more amenable to listening to workers concerns about potential safety problems. The company had replaced its chief executive for North America with Robert Malone and had ordered him to make fundamental changes. Malone quickly focused on reforming the company's culture in Alaska.

But instead of receiving compliments for his prudence, Sneed -- who had also complained that week that pipeline inspectors were faking their reports -- was scolded by his supervisor for stopping the work. According to a report from BP's internal employer arbitrators, Sneed's supervisor, who hadn't inspected the crack himself, said he believed it was superficial.

The next day, according to multiple witness accounts and the report, that supervisor singled out Sneed and harassed him at a morning staff briefing. Within a couple of hours, the supervisor sent emails to colleagues soliciting complaints or safety concerns that would justify Sneed's firing. Two weeks later, after a trumped up safety infraction, he was gone.

During the investigation BP inspectors substantiated Sneed's concerns about the cracked pipe. The arbiter also investigated Sneed's account of what happened when he reported the problem. Not only did the report confirm his account, but it determined that he was among the best at his job.

The investigators interviewed dozens of workers and according to most of them Sneed "was likely to be the most careful technician on the Slope with respect to safety and quality of his inspections. If there was corrosion in existence... he would find it," said the report, which was authored by Washington, D.C., attorney Billie Garde and environmental investigator Paul Flaherty and delivered to BP executives in late 2006.

So why would BP want to get rid of one of its most effective inspectors? The report echoed BP's internal investigations from 2001 and 2004, finding, once again, that BP pressured its contractors and employees in order to save money.

"Many of the people interviewed indicate that they felt pressured for production ahead of safety and quality," the report stated.

Contractors received incentives to list large numbers of completed inspections, the report found, something Sneed said routinely led workers to falsify their reports. Contractors also received a 25 percent bonus tied to BP's production numbers. With fewer delays, more oil would be pumped, and more cash would flow to companies executing the work under BP supervision.

The message to workers was clear.

"They say it's your duty to come forward," said Sneed of BP's corporate policies and public statements, "but then when you do come forward, they screw you. They'll destroy your life."

"No one up there is ever going to say anything if there is something they see is unsafe," he added. "They are not going to say a word."

The following year saw another shakeup at BP. The company had already replaced its chief executive of Alaskan operations with Doug Suttles -- the man now in charge of offshore operations and cleanup of the disaster in the Gulf. In May 2007 it also named a new global CEO, Tony Hayward, a 25-year BP veteran.

But worker harassment claims continued to be made in Alaska and elsewhere, and more problems with the Alaska pipeline systems also emerged.

In September 2008, a section of a high pressure gas line on the Slope blew apart. A 28-foot-long section of steel -- the length of three pickup trucks -- flew nearly 1,000 feet through the air before landing on the Alaskan tundra. Sneed had raised concerns about the integrity of segments of the high-pressure gas line system before he left the company. If the release had caught a spark the explosion could have been catastrophic, said Robert Bea, a University of California Berkeley engineering professor who has worked for BP on the North Slope.

Three more accidents rocked the same system of pipelines and gas compressor stations in 2009, including a near explosion that could have destroyed the entire facility. According to a letter that members of Congress sent to BP executives, obtained by ProPublica, the near miss was the result of malfunctioning safety and backup equipment.

BP spokesman Tony Odone said BP is continuing to roll out a company-wide operating management system that helps track and implement maintenance. He said the company reduced corrosion and erosion-related leaks in Alaska by 42 percent between 2006 and 2009.

***

As BP battled through the decade to avoid accidents in Alaska, another facility operating under a different business unit, BP West Coast Products, was having similar problems.

For years the BP subsidiary that refined and stored crude oil was allowed to inspect its own facilities for compliance with emission laws under the South Coast Air Quality Management District, the agency that regulates air quality in Los Angeles. The thinking was that companies had the technical knowledge and that self-inspection was cheaper and more efficient.

But in 2002, eight years after the program began, inspectors with the management district thought BP's inspection results looked too good to be true. Between 1999 and 2002, BP's Carson Refinery had nearly perfect compliance, reporting no tank problems and making virtually no repairs. The district began to suspect that BP was falsifying its inspection reports and fabricating its compliance with the law.

The management district sent its own inspectors to investigate, but when they tried to enter BP's plant, the company turned them away. According to Joseph Panasiti, a lawyer for the management district, the agency had to get a search warrant to conduct inspections required by state law.

When the regulators did finally get in, they found equipment in a disturbing state of disrepair. According to a lawsuit the management district later filed against the company, inspectors discovered that some tanker seals had tears that were nearly two feet long. Tank roofs had gaps and pervasive leaks, and there were enough major defects to lead to thousands of violations.

"They had been sending us reports that showed 99 percent compliance, and we found about 80 percent noncompliance," Panasiti told ProPublica. "It was clear that no matter what was said, production was put ahead of any kind of environmental compliance."

Panasiti sued BP for $319 million, alleging, among other things, that emissions from the refinery forced nearby schools to be evacuated on two separate occasions. After 24 months of litigation, BP settled out of court, agreeing to pay more than $100 million without admitting guilt. Colin Reid, the plant's operations manager during the prosecution, was later promoted to a vice president position at a BP office in the United Kingdom. Reid recently left BP; he did not respond to requests for comment.

Allegations that BP or its contractors falsified safety and inspection reports are a recurring theme. Similar allegations were attributed to workers in BP's 2001 and 2004 internal reports on Alaska, but the internal auditors stopped short of confirming that fraud had occurred. The 2004 Vinson & Elkins report, titled "Report for BPXA Concerning Allegations of Workplace Harassment From Raising HSE Issues and Corrosion Data Falsification," says investigators did not thoroughly examine those allegations and couldn't conclude whether fraud had occurred. But the report extensively quoted workers who described how it was done.

As recently as 2006 a North Slope worker told a BP investigator that he suspected tests had been faked after an inspection team produced 2,500 completed reports from a weekend's work in remote territory. In 2007 another North Slope safety engineer brought in to examine a pipeline system quickly identified a pattern of problems in an area that had received clear inspection reports for the previous five years.

***

In August 2008, Kenneth Abbott accepted a job with a BP contractor as a project control leader on the Atlantis, a monstrous deepwater drilling rig in the Gulf of Mexico that is significantly larger than the Deepwater Horizon rig that sank in April. The Atlantis is capable of producing more than eight million gallons of oil a day from the ocean floor.

Abbott supervised a staff of six charged with doing internal audits and making sure the rig machinery was built to specifications and had the documents and instructions necessary to operate safely. It was an important job on one of the world's most advanced drilling platforms.

Yet it quickly turned sour. In a debriefing with the person who last held the post, Abbott was told that BP did not have final design drawings ready to deliver to the crews that would operate the Atlantis in the Gulf, Abbott said in an interview with ProPublica.

Final design drawings, called "as-built" drawings, are considered an essential safety component. They prove that a piece of equipment -- say a shutoff valve or an engine winch -- was built the way it was supposed to be. Those drawings are thus the final checks to make sure the equipment operates properly. They also serve as instruction manuals for emergencies. If there is a fire on deck or a blowout, for example, operators under extreme stress and danger can use the design drawings to find the hidden kill lever that can shut an engine down before it explodes.

Abbott told ProPublica that as-built documents had been issued for only 274 of more than 7,100 pieces of equipment, the equivalent of constructing a house without having an architect or engineer sign off on the blueprint.

In May, Abbott filed a lawsuit against the Minerals and Management Service in federal court in Texas aiming to force the regulatory agency to stop Atlantis operations until BP could prove the documents are in place. He is not seeking monetary damages or compensation.

In the court filings, he said that some of the most critical spill-protection infrastructure, including the wellhead documents, hadn't been approved. None of the sub-sea risers -- the pipelines and hoses that serve as a conduit for moving materials from the bottom of the ocean to the facility -- had been "issued for design." And the manifolds that combine multiple pipeline flows into a single line at the sea floor hadn't been reviewed for final use.

Abbott -- an engineer with 30 years of experience completing design documents for companies like Shell and General Electric -- said the completion of "as-built" documents is standard for the industry. Machinery is designed, approved for manufacturing, checked to make sure it was built properly, and then approved for final use. If BP didn't provide the documentation to its workers in the field, it would be a stark exception.

Yet to Abbott's surprise BP's engineers resisted completing the process.

"I just hit a lot of resistance form the lead engineers," Abbott told ProPublica. "They got really angry with me. They wanted to shortcut the system and not do the reviews, because they cut short the man hours."

Abbott estimates BP saved $2 million to $3 million by streamlining the process.

"There seemed to be a big emphasis to push the contractors to get things done and that was always at the forefront of the operation," Abbott said. "I felt there had to be balance. You had to have safety because peoples' life depended on it. My management didn't see it that way."

Abbot's complaint wasn't the first time the company had been warned about not maintaining as-built drawings. According to BP's internal 2001 operational integrity report conducted in Alaska, as-built documentation wasn't being maintained at the company's Prudhoe Bay operations either.

It was among the issues BP executives were encouraged to fix after the audit of their operations there nearly a decade ago.

BP declined to discuss Abbott's allegations, telling ProPublica it does not comment on pending legal matters. In a previous statement made to federal investigators, BP said the drawings were updated and in place before the Atlantis began operating. The Minerals and Management Service is reportedly investigating Abbott's claims and Congress has also launched an inquiry that is still in progress.

A BP ombudsman letter written by Billie Garde and obtained by ProPublica confirmed Abbott's allegation that the company had violated its own safety and management protocol by not completing as-built documentation. The ombudsman's office has not yet investigated Abbott's claims about the specific pieces of equipment that lacked documentation because Abbott didn't make that information available until he filed the lawsuit last month.

Shortly after he raised his complaints to BP management, Abbott lost his contract to work with BP.

***

Among the most important pieces of safety equipment that BP was criticized for not having in place in Alaska, according to its own 2001 operational integrity report, were gas and fire detection sensors and the emergency shutoff valves that they are supposed to trigger.

When gas leaks from a pipeline break or a blowout near a running engine, it's a lot like stomping on the accelerator of a car: The engine will suck up the fuel vapors and scream out of control. Gas sensors are critical to preventing an explosion, because they can shut down a rig engine before that happens.

Now investigators are learning that similar sensors -- and the shutoff systems that would have been connected to them -- were not operating in the engine room of the Deepwater Horizon rig that exploded in the Gulf of Mexico.

In sworn testimony before a Deepwater Horizon Joint Investigation panel in New Orleans last month, Deepwater mechanic Douglas Brown said that the backstop mechanism that should have prevented the engines from running wild apparently failed -- and so did the air intake valves that were supposed to close if gas enters the engine room. The influx of gas from the well gave the engines "a more volatile form of burning mixture," he said, and caused them to rev out of control. Another system was supposed to kick in and shut the engines down, but that system also failed. He said the engine room wasn't equipped with a gas alarm system that could have shut off the power.

Minutes later, the Deepwater Horizon rig exploded in a ball of fire, killing 11 workers before sinking to the seafloor, where it left a gaping well pipe that continues to gush oil and gas into the Gulf.

The investigation into that massive spill is still under way, but these revelations -- plus evidence that BP skipped key parts of the drilling process intended to prevent a blowout to save roughly $5 million -- echo the problems that BP's auditors, attorneys and investigators have identified in the past 11 years.

Over the next few months, the Department of Justice will decide whether what happened in the Gulf violates criminal or civil laws intended to protect the environment. Separately, EPA investigators are considering whether to end BP's ability to do business with the federal government, a sanction that could cost it billions in revenue. The investigators say a pivotal question in that investigation will be whether BP's record over the past decade amounts to a corporate culture of "non-compliance."

ProPublica Director of Research Lisa Schwartz and researcher Sheelagh McNeill contributed to this report.

Cleanup Boats Sent to Shore After More Workers Get Sick

2010-05-27T12:45:04-05:00

Ryan Knutson

This post has been updated.

All 125 commercial vessels working to clean up the oil spill in the Gulf of Mexico have been ordered back to shore temporarily after four workers on three separate vessels became ill, according to a Deepwater Horizon Response press release.

It's unclear whether the crew members were working with chemical oil dispersants, which have been criticized for their toxicity. Our calls to officials in the region have not yet been returned.

The sick workers said they had headaches and chest pain, and were nauseated and dizzy. One was taken by helicopter to a hospital in Marrero, La., another was taken by boat and two were taken in an ambulance, according to the press release.

The current symptoms mirror those of other fishermen who were hired by BP to help clean up the spill, as we pointed out earlier this week. The dispersants BP is using to break up the oil have many health risks of their own. Earlier this month, the EPA told BP to stop using the chemicals and to switch to something else, but BP says there is no better alternative.

Update, 5/27:

According to Captain Meredith Austin, the Coast Guard deputy incident commander, controlled burns were being executed and aerial dispersants were being used in the vicinity of the affected workers, but no dispersants were being sprayed within 50 miles of the workers.

"It's important to keep in mind there are other factors which may potentially cause these symptoms," Austin told reporters on a conference call this evening. She named the smell of petroleum, heat and fatigue as possible causes for the symptoms.

Workers were not given respiratory protection equipment because according to Austin, prior air sampling performed in the area concluded that the level of chemical exposure was permissible.

Photo of the Day: Oil Ashore

2010-05-25T11:05:54-05:00

Krista Kjellman Schmidt

With its one-month anniversary passed, the Gulf oil spill has reached the shoreline, and it isn't pretty. Today's photo depicts the onshore efforts of a BP cleanup crew as it took shovels and garbage bags to the shores of Port Fourchon, La. BP CEO Tony Hayward visited the beach on Monday with reporters in tow and said BP was committed to cleaning up "every last drop." But with 32 national wildlife refuges at risk of being affected by the BP oil spill, officials from Texas to Florida are worried that cleanup, if possible, may come too late.

Check out our slideshow of photos from the Gulf oil spill, which we update daily.

EPA Officials Weigh Sanctions Against BP’s U.S. Operations

2010-05-21T12:27:30-05:00

Abrahm Lustgarten

Officials at the Environmental Protection Agency are considering whether to bar BP from receiving government contracts, a move that would ultimately cost the company billions in revenue and could end its drilling in federally controlled oil fields.

Over the past 10 years, BP has paid tens of millions of dollars in fines and been implicated in four separate instances of criminal misconduct that could have prompted this far more serious action. Until now, the company's executives and their lawyers have fended off such a penalty by promising that BP would change its ways.

That strategy may no longer work.

Days ago, in an unannounced move, the EPA suspended negotiations with the petroleum giant over whether it would be barred from federal contracts because of the environmental crimes it committed before the spill in the Gulf of Mexico. Officials said they are putting the talks on hold until they learn more about the British company's responsibility for the plume of oil that is spreading across the Gulf.

The EPA said in a statement that, according to its regulations, it can consider banning BP from future contracts after weighing "the frequency and pattern of the incidents, corporate attitude both before and after the incidents, changes in policies, procedures, and practices."

Several former senior EPA debarment attorneys and people close to the BP investigation told ProPublica that means the agency will re-evaluate BP and examine whether the latest incident in the Gulf is evidence of an institutional problem inside BP, a precursor to the action called debarment.

Federal law allows agencies to suspend or bar from government contracts companies that engage in fraudulent, reckless or criminal conduct. The sanctions can be applied to a single facility or an entire corporation. Government agencies have the power to forbid a company to collect any benefit from the federal government in the forms of contracts, land leases, drilling rights, or loans.

The most serious, sweeping kind of suspension is called "discretionary debarment" and it is applied to an entire company. If this were imposed on BP, it would cancel not only the company's contracts to sell fuel to the military but prohibit BP from leasing or renewing drilling leases on federal land. In the worst cast, it could also lead to the cancellation of BP's existing federal leases, worth billions of dollars.

Present and former officials said the crucial question in deciding whether to impose such a sanction is assessing the offending company's culture and approach: Do its executives display an attitude of non-compliance? The law is not intended to punish actions by rogue employees and is focused on making contractor relationships work to the benefit of the government. In its negotiations with EPA officials before the Gulf spill, BP had been insisting that it had made far-reaching changes in its approach to safety and maintenance, and that environmental officials could trust its promises that it would commit no further violations of the law.

EPA officials declined to speculate on the likelihood that BP will ultimately be suspended or barred from government contracts. Such a step will be weighed against the effect on BP's thousands of employees and on the government's costs of replacing it as a contractor.

Even a temporary expulsion from the U.S. could be devastating for BP's business. BP is the largest oil and gas producer in the Gulf of Mexico and operates some 22,000 oil and gas wells across United States, many of them on federal lands or waters. According to the company, those wells produce 39 percent of the company's global revenue from oil and gas production each year -- $16 billion.

Discretionary debarment is a step that government investigators have long sought to avoid, and which many experts had considered highly unlikely because BP is a major supplier of fuel to the U.S. military. The company could petition U.S. courts for an exception, arguing that ending that contract is a national security risk. That segment of BP's business alone was worth roughly $4.6 billion over the last decade, according to the government contracts website USAspending.

Because debarment is supposed to protect American interests, the government also must weigh such an action's effect on the economy against punishing BP for its transgressions. The government would, for instance, be wary of interrupting oil and gas production that could affect energy prices, or taking action that could threaten the jobs of thousands of BP employees.

A BP spokesman said the company would not comment on pending legal matters.

The EPA did not make its debarment officials available for comment or explain its intentions, but in an e-mailed response to questions submitted by ProPublica the agency confirmed that its Suspension and Debarment Office has "temporarily suspended" any further discussion with BP regarding its unresolved debarment cases in Alaska and Texas until an investigation into the unfolding Gulf disaster can be included.

The fact that the government is looking at BP's pattern of incidents gets at one of the key factors in deciding a discretionary debarment, said Robert Meunier, the EPA's debarment official under President Bush and an author of the EPA's debarment regulations. It means officials will try to determine whether BP has had a string of isolated or perhaps unlucky mistakes, or whether it has consistently displayed contempt for the regulatory process and carelessness in its operations.

In the past decade environmental accidents at BP facilities have killed at least 26 workers, led to the largest oil spill on Alaska's North Slope and now sullied some of the country's best coastal habitat, along with fishing and tourism economies along the Gulf.

Meunier said that when a business with a record of problems like BP's has to justify its actions and corporate management decisions to the EPA "it's going to get very dicey for the company."

"How many times can a debarring official grant a resolution to an agreement if it looks like no matter how many times they agree to fix something it keeps manifesting itself as a problem?" he said.

Documents obtained by ProPublica show that the EPA's debarment negotiations with BP were strained even before the April 20 explosion on the Deepwater Horizon rig. The fact that Doug Suttles, the BP executive responsible for offshore drilling in the Gulf, used to head BP Alaska and was the point person for negotiations with debarment officials there, only complicates matters. Now, the ongoing accident in the Gulf may push those relations to a break.

Discretionary debarment for BP has been considered at several points over the years, said Jeanne Pascal, a former EPA debarment attorney who headed the agency's BP negotiations for six years until she retired last year.

"In 10 years we've got four convictions," Pascal said, referring to BP's three environmental crimes and a 2009 deferred prosecution for manipulating the gas market, which counts as a conviction under debarment law. "At some point if a contractor's behavior is so egregious and so bad, debarment would have to be an option."

In the three instances where BP has had a felony or misdemeanor conviction under the Clean Air or Clean Water Acts, the facilities where the accidents happened automatically faced a statutory debarment, a lesser form of debarment that affects only the specific facility where the accident happened.

One of those cases has been settled. In October 2000, after a felony conviction for illegally dumping hazardous waste down a well hole to cut costs, BP's Alaska subsidiary, BP Exploration Alaska, agreed to a five-year probation period and settlement. That agreement expired at the end of 2005.

The other two debarment actions are still open, and those are the cases that EPA officials and the company have been negotiating for several years.

In the first incident, on March 23, 2005, an explosion at BP's Texas City refinery killed 15 workers. An investigation found the company had restarted a fuel tower without warning systems in place, and BP was eventually fined more than $62 million and convicted of a felony violation of the Clean Air Act. BP Products North America, the responsible subsidiary, was listed as debarred and the Texas City refinery was deemed ineligible for any federally funded contracts. But the company as a whole proceeded unhindered.

A year later, in March 2006, a hole in a pipeline in Prudhoe Bay led to the largest ever oil spill on Alaska's North Slope – 200,000 gallons -- and the temporary disruption of oil supplies to the continental U.S. An investigation found that BP had ignored warnings about corrosion in its pipelines and had cut back on precautionary measures to save money. The company's Alaska subsidiary was convicted of a misdemeanor violation of the Clean Water Act and, again, debarred and listed as ineligible for government income at its Prudhoe Bay pipeline facilities. That debarment is still in effect.

That accident alone -- which led to congressional investigations and revelations that BP executives harassed employees who warned of safety problems and ignored corrosion problems for years -- was thought by some inside the EPA to be grounds for the more serious discretionary debarment.

"EPA routinely discretionarily debars companies that have Clean Air Act or Clean Water Act convictions," said Pascal, the former EPA debarment attorney who ran the BP case. "The reason this case is different is because of the Defense Department's extreme need for BP."

Instead of a discretionary debarment, the EPA worked to negotiate a compromise that would bring BP into compliance but keep its services available. The goal was to reach an agreement that would guarantee that BP improve its safety operations, inspections, and treatment of employees not only at the Prudhoe Bay pipeline facility, but at its other facilities across the country.

According to e-mails obtained by ProPublica and several people close to the government's investigation, the company rejected some of the basic settlement conditions proposed by the EPA -- including who would police the progress -- and took a confrontational approach with debarment officials.

One person close to the negotiations said he was confounded by what he characterized as the company's stubborn approach to the debarment discussions. Given the history of BP's problems, he said, any settlement would have been a second chance, a gift. Still, the e-mails show, BP resisted.

As more evidence is gathered about what went wrong in the Gulf, BP may soon wish it hadn't.

It's doubtful that the EPA will make any decisions about BP's future in the United States until the Gulf investigation is completed, a process that could last a year. But as more information emerges about the causes of the accident there -- about faulty blowout preventers and hasty orders to skip key steps and tests that could have prevented a blowout -- the more the emerging story begins to echo the narrative of BP's other disasters. That, Meunier said, could leave the EPA with little choice as it considers how "a corporate attitude of non-compliance" should affect the prospect of the company's debarment going forward.

ProPublica reporters Mosi Secret and Ryan Knutson and director of research Lisa Schwartz contributed to this report.