BP Oil Spill: Macondo Well Could Have Been Shut in Within 24 Days!

BP Oil Spill: Plaintiffs’ Phase Two Post-Trial Brief

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Had BP Prepared for a Deepwater Blowout, With a Capping Stack Available on April 20, 2010,

the Well Could Have Likely Been Shut in Within 24 Days or Less

Tampa, FL (December 22, 2013) – Phase Two was divided into two segments: the Source Control segment and the Quantification segment. The Source Control segment was tried as a bench trial before the MDL 2179 Court beginning on September 30, 2013, and concluding on October 3, 2013. The Quantification segment was tried as a bench trial before the MDL 2179 Court beginning on October 7, 2013, and concluding on October 17, 2013.

On December 20, 2013, Plaintiffs submitted their Post-Trial Brief to address specific legal and factual issues raised by the Court and by the Parties based on the evidence admitted during the Phase One and Phase Two Limitation and Liability Trial. The following are excerpts from this brief.

Plaintiffs contend, “It was established at trial that BP consciously disregarded the need to prepare for an uncontrolled deepwater blowout and willfully extended the capping of the Macondo Well by intentionally concealing material information and affirmatively misleading the U.S. Government and others regarding the volume of hydrocarbons escaping from the well after the blowout.”

The question is whether BP’s overall conduct – as evidenced by not only the Phase Two issues of post-spill lying to the Government and pre-spill lack of preparedness, but also the Phase One issues of fast and reckless drilling, establishing and maintaining a dysfunctional leadership team, proceeding with the cement job without reliable test results, proceeding with the displacement despite a failed negative pressure test, refusing to correct known and persistent maintenance failures, and recklessly selecting, configuring, and refusing to upgrade the BOP – demonstrates a willful, wanton and reckless disregard for the environment, the property rights of others, and/or public health and safety.

With respect to the Phase Two evidence in particular, BP did not dispute the fact that BP did absolutely nothing in advance of the Macondo incident on April 20, 2010 to develop source control plans and equipment in preparation for a possible deepwater blowout. BP simply attempts to muster, in its defense, an argument that the Government allegedly “approved” of its lack of preparation and that others in the industry allegedly failed to do the same.

Based on the law and on the evidence submitted in the Phase One and Phase Two Trial, BP’s corporate conduct associated with the Macondo Well explosion, fire, blowout and resulting spill was willful, wanton and reckless, and was a direct result of BP corporate policies and/or with the knowledge, approval and/or ratification of BP officers with policymaking authority.

A Finding of Willful, Wanton or Reckless Conduct Should Be Made on the Series and Accumulation of Acts and Omissions Established by the Evidence Admitted in the Phase One and Phase Two Trial

As set forth in Plaintiffs’ Phase One Post-Trial submissions, an accumulation or series of negligent acts or omissions are properly viewed together in order to determine whether the defendant has acted out of gross negligence, willful misconduct, or a wanton or reckless disregard.

Hence, the burden is not on Plaintiffs to show that BP’s pre-spill planning, in and of itself, rises to the level of wanton, willful or reckless conduct. Nor are the plaintiffs required to show that BP’s post-spill intentional misconduct, in and of itself, caused or contributed to the uncontrolled flowing of the well for 87 days.

Rather, it is only Plaintiffs’ burden to show that BP’s (i) pre-spill failure to plan, combined with BP’s (ii) post-spill intentional misrepresentations and concealment – combined with BP’s (iii) fast and reckless drilling, with little or no regard for the safe kick margin, despite multiple kicks, and in violation of the MMS Regulations requiring a safe drilling margin; (iv) creating, maintaining and largely ignoring a dangerously dysfunctional leadership team, which embraced the corporate culture of cutting costs and maximizing profits; (v) proceeding with the cement job without a set of reliable test results confirming the slurry’s stability; (vi) proceeding with the displacement despite a failed negative pressure test; (vii) selecting, configuring, sequencing, modifying, and refusing to upgrade the safety critical BOP, which was not sufficient or appropriate for the Macondo well; and (viii) knowingly refusing to correct the persistent maintenance failures of safety critical equipment on the Deepwater Horizon – evidences a willful and reckless disregard for the environment, the property rights of others, and/or public health and safety.

The Phase Two evidence, in this respect, cannot be untethered from the Phase One evidence, in making the overall determination of BP’s state of mind with respect to the damages and effects of the Macondo disaster.

Nevertheless, the Phase Two evidence, standing alone, establishes that BP was wanton and reckless in both its pre-spill lack of planning and in its post-spill lying to the Government and others regarding the flow rate and source control.

It is Undisputed that BP Willfully and Recklessly Refused to Prepare for an Uncontrolled Deepwater Blowout, the Largest Known Risk in the Gulf

There is no question that it was foreseeable to BP that a deepwater well in the Gulf of Mexico could experience a blowout. Indeed, BP Management had identified the risk of a deepwater blowout as one of the highest risks worldwide, and the number one risk in the Gulf of Mexico. And both BP and the industry generally knew, beginning in 1991, that it was necessary to engage in deepwater source control planning and to develop deepwater source control capping equipment and techniques. Yet, BP Management admittedly spent no time or money preparing for a deepwater source control effort.  BP Management did not direct or provide for any training in deepwater source control. Nor did BP Management develop or acquire any capping equipment. It is clear, in sum, that BP’s pre-spill preparation was nothing more than a plan to make a plan.

Both Legally and Factually, BP Has Failed to Establish a Defense Predicated on an Alleged “Industry Standard”

Mere compliance with industry standards does not preclude a finding of gross or egregious conduct.   In this particular case, the entire industry recognized the need to develop capping stack equipment as far back as 1991. Indeed, an industry study predicted and diagramed at that time an uncontrolled blowout strikingly similar to what would occur at Macondo almost twenty years later. To the extent that companies other than BP may have also failed to adequately prepare for a deepwater blowout, this reveals nothing more than laxness, inefficiency, and inattention to innovation by other companies. Yet BP, a self-proclaimed “leader” in the industry, refused to invest a single penny into developing or acquiring the necessary equipment for post-spill source control.

As a factual matter, BP came far from proving that there was an “industry standard” to develop no pre-spill capping stack or other source control plans, equipment or technology. See, e.g., Maxey v. Freightliner Corp., 665 F.2d 1367, 1376 (5th Cir. 1982) (when considering whether a defendant has complied with an industry standard, “a district court must limit its consideration to evidence actually presented at trial”). Indeed, as noted, the industry was recognizing the need for such devices since 1991.

BP Knew For More Than Two Decades That Capping Devices Are The Best Available Technology For Controlling Deepwater Blowouts

Well capping techniques have been applied both on land and offshore locations and have historically proven successful in regaining well control in shorter durations and are preferred over the more time-consuming alternative of drilling a relief well. Capping devices have existed and been used in the industry for decades. Capping device technology is feasible, well proven and not novel. Indeed, the Macondo Capping Stack was assembled using current technology and “off-the-shelf” equipment.

Within a few days of April 20, 2010, representatives from BP, Transocean, Cameron and Wild Well Control, met at BP’s offices to discuss capping solutions. On April 27, 2010, Wild Well Control provided BP with a project memo that raised “Well Capping” and “Installation of Capping Stack on existing BOP” as options that should be considered. The memo also included a summary of procedures for installation of a capping stack onto the existing BOP.

Moreover, in response to U.S. Secretary of the Interior Ken Salazar’s request for ideas from the industry after the Macondo event, Apache Corporation responded on April 30, 2010, “[i]f the LMRP can be removed from the BOP, conventional wisdom would suggest that another subsea BOP could be placed on top of the Horizon’s BOP in order to close the well in.”

There was evidence presented at trial that capping stack devices had, in fact, been developed, deployed and utilized by others in the industry, using existing technology. The evidence showed that Cameron’s own BOPs had been used as capping stack solutions as early as the 1980s, and were actually used to kill wells in Kuwait. BP itself, in 2001, adopted well capping devices in Alaska as the best available technology. Indeed, BP concluded and certified that a well capping solution could mitigate the overall duration and extent of an uncontrolled blowout by 50%.

With respect to deepwater operations, the evidence established that at least two capping-type solutions had been previously utilized in deep water: (1) a blowout in Malaysia in 1988, and (2) the JIM CUNNINGHAM incident in the eastern Mediterranean in 2004, where a BOP-on-BOP technique was used. There was also evidence that Shell and Senta Drilling had capping devices available for a deepwater project off the coast of Brazil. And BP itself recognized the potential use of capping stacks in deepwater environments, identifying them as a “Level 3: Phase 2” solution in the January 2010 Gulf of Mexico Deepwater SPU Well Control response guide.

BP Violated Regulatory Standards

As set forth in Plaintiffs’ Phase One Post-Trial submissions, a defendant’s compliance with regulatory standards does not preclude a finding of gross or egregious conduct. Moreover, in Phase Two as in Phase One: (a) The Government relied largely on information that was provided (or not provided) by BP; (b)The MMS and Coast Guard officials were frequently overtaxed, understaffed, and of limited training; (c) There were several instances where BP’s conduct (or failure to act) went beyond the scope of what was ostensibly permitted under the specific regulation, application, or approval in question; (d) There were several instances where BP provided insufficient, inaccurate or misleading information to the Government; and (e) BP clearly violated MMS regulations.

Specifically, it was clear that the Oil Spill Response Plan (OSRP) ostensibly approved by the Government was directed toward efforts to try to contain and collect the oil once it reached the surface. The Oil Spill Response Plan was not intended to be a source control plan, and the regulations concerning the plan requirements expressly state: “Nothing in this part relieves you from taking all appropriate actions necessary to immediately abate the source of a spill.” As a factual matter, moreover, the evidence is clear that the Government expected BP to be able to abate the source of an oil spill as soon as possible. “The federal government has neither the skilled personnel nor the appropriate equipment to respond independently to an oil blowout in deepwater and must rely wholly on the responsible party.”

The Phase Two evidence further establishes that the Federal Government was relying on BP to provide the Government with source control information. In addition to lying to the Government with respect to the flow rate (to which BP pleaded guilty), BP also failed to comply with its pre-spill representation to the MMS regarding the training of its employees in source control response.

Far from establishing some type of a defense based on the alleged “approval” of its OSRP by the Government, BP clearly violated the regulatory requirements to: (i) take necessary precautions to keep the well under control at all times, 30 C.F.R. ¶250.401; (ii) immediately abate the source of a spill, 30 C.F.R. ¶254.5(c); and (iii) use the Best Available and Safest Technology (BAST), 30 C.F.R. ¶¶250.105, 107 and 401(a). At the end of the day, BP certified to the Federal Government in its Initial Exploration Plan for the Macondo well that it was capable of responding at the source to a worst-case discharge of up to 162,000 barrels of oil per day. BP was clearly not in compliance with respect to that regulatory certification.

Advance Preparation Would Have Unquestionably Allowed BP to Mitigate the Length and Extent of the Spill, Irrespective of the Particular Circumstances Surrounding a Blowout

Aside from the fact that a similar post-spill situation was specifically predicted by the Drilling Engineers Association in 1991, the evidence is clear that efforts prior to the spill would have reduced the duration and extent of the post-blowout event. BP representatives admitted that “it’s much better to have a plan in place” than to “create a plan … in the middle of a crisis.” Former CEO Tony Hayward and the leaders of the post-spill source control effort, Charles Holt and James Dupree, all admitted that BP did not have the equipment it needed in place, and were essentially creating plans on how to kill the well as they went along. It is because BP “didn’t have the equipment to attack a Macondo-type event” that “we had to engineer so many things simultaneously on the fly.”

Cameron personnel similarly confirmed that the lack of pre-spill planning resulted in “paralysis by analysis,” “running this show like a game of Scrabble,” having “no clue what to do next,” and “running around like chickens with their heads cut off.”

In sum, the evidence establishes that, had BP prepared for a deepwater blowout, with a capping stack available on April 20, 2010, the well could have likely been shut in within 24 days or less.

BP’s Intentional Misrepresentations and Omissions Combined with Multiple Other Causative Factors – including BP’s Own Reckless Failure to Prepare for a Blowout and Post-Spill Miscalculations and Mistakes – to Extend the Duration and Expanse of the Spill

The General Maritime Law clearly recognizes that multiple causative factors can combine and contribute to a harmful series of results. And, as set forth in Plaintiffs’ Phase One Post-Trial submissions, an accumulation or series of negligent acts or omissions are properly viewed together in order to determine whether the defendant has acted out of gross negligence, willful misconduct, or a wanton or reckless disregard.

Plaintiffs allege that BP’s intentional misconduct in concealing material facts, overtly misstating facts it knew were not true, and otherwise misleading the Government, together with other factors, including BP’s own pre-spill failure to prepare for an uncontrolled blowout, as well as BP’s (and/or perhaps the Government’s) post-spill misjudgments and miscalculations, all conspired to significantly delay the capping of the well.

BP’s Willful Misconduct in Lying to the U.S. Government (and Others) After the Spill is Relevant to the Overall Question of BP’s State of Mind, Even If It Were Found Not to be a Direct Cause of Any Delay

The Phase Two evidence establishes that BP’s willful misconduct in lying to the Government after the spill extended the blowout by a number of weeks. Yet, even assuming arguendo that there were no causal relationship between BP’s lies and the length or extent of the spill, (which is denied), such intentional misconduct would nevertheless be relevant to the ultimate question of whether BP acted with a willful, wanton or reckless disregard. See, e.g., Clements v. Steele, 792 F.2d 515, 516-517 (5th Cir. 1986) (“the ‘mental attitude of the defendant’ is what turns ordinary negligence into gross negligence” and can be inferred from the totality of the circumstances).