An oil-drilling procedure called cementing is coming under scrutiny as a possible cause of the explosion on the Deepwater Horizon rig in the Gulf of Mexico that has led to one of the biggest oil spills in U.S. history, drilling experts said Thursday.

The process is supposed to prevent oil and natural gas from escaping by filling gaps between the outside of the well pipe and the inside of the hole bored into the ocean floor. Cement, pumped down the well from the drilling rig, is also used to plug wells after they have been abandoned or when drilling has finished but production hasn't begun.

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Regulators have previously identified problems in the cementing process as a leading cause of well blowouts, in which oil and natural gas surge out of a well with explosive force. When cement develops cracks or doesn't set properly, oil and gas can escape, ultimately flowing out of control. The gas is highly combustible and prone to ignite, as it appears to have done aboard the Deepwater Horizon, which was leased by BP PLC, the British oil giant.

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The scrutiny on cementing will focus attention on Halliburton Co., the oilfield-services firm that was handling the cementing process on the rig, which burned and sank last week. The disaster, which killed 11, has left a gusher of oil streaming into the Gulf from a mile under the surface.

Federal officials declined to comment on their investigation, and Halliburton didn't respond to questions from The Wall Street Journal.

According to Transocean Ltd., the operator of the drilling rig, Halliburton had finished cementing the 18,000-foot well shortly before the explosion. Houston-based Halliburton is the largest company in the global cementing business, which accounted for $1.7 billion, or about 11%, of the company's revenue in 2009, according to consultant Spears & Associates.

The whistleblower, whose name has been withheld at the person's request because the whistleblower still works in the oil industry and fears retaliation, first raised concerns about safety issues related to BP Atlantis, the world's largest and deepest semi-submersible oil and natural gas platform, located about 200 miles south of New Orleans, in November 2008. Atlantis, which began production in October 2007, has the capacity to produce about 8.4 million gallons of oil and 180 million cubic feet of natural gas per day.
It was then that the whistleblower, who was hired to oversee the company's databases that housed documents related to its Atlantis project, discovered that the drilling platform had been operating without a majority of the engineer-approved documents it needed to run safely, leaving the platform vulnerable to a catastrophic disaster that would far surpass the massive oil spill that began last week following a deadly explosion on a BP-operated drilling rig.
BP's own internal communications show that company officials were made aware of the issue and feared that the document shortfalls related to Atlantis "could lead to catastrophic operator error" and must be addressed.
Indeed, according to an August 15, 2008, email sent to BP officials by Barry Duff, a member of BP's Deepwater Gulf of Mexico Atlantis Subsea Team, the Piping and Instrument Diagrams (P&IDs) for the Atlantis subsea components "are not complete." P&IDs documents form the foundation of a hazards analysis BP is required to undertake as part of its Safety and Environmental Management Program related to its offshore drilling operations. P&IDs drawings provide the schematic details of the project's piping and process flows, valves and safety critical instrumentation.
"The risk in turning over drawings that are not complete are: 1) The Operator will assume the drawings are accurate and up to date," the email said. "This could lead to catastrophic Operator errors due to their assuming the drawing is correct," said Duff's email to BP officials Bill Naseman and William Broman. "Turning over incomplete drawings to the Operator for their use is a fundamental violation of basic Document control, [internal standards] and Process Safety Regulations."

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Last May, Mike Sawyer, a Texas-based engineer who works for Apex Safety Consultants, voluntarily agreed to evaluate BP's Atlantis subsea document database and the whistleblower's allegations regarding BP's engineering document shortfall related to Atlantis. Sawyer concluded that of the 2,108 P&IDs BP maintained that dealt specifically with the subsea components of its Atlantis production project, 85 percent did not receive engineer approval.
Even worse, 95 percent of Atlantis' subsea welding records did not receive final approval, calling into question the integrity of thousands of crucial welds on subsea components that, if they were to rupture, could result in an oil spill 30 times worse than the one that occurred after the explosion on Deepwater Horizon last week.
In a report Sawyer prepared after his review, he said BP's "widespread pattern of unapproved design, testing and inspection documentation on the Atlantis subsea project creates a risk of a catastrophic incident threatening the [Gulf of Mexico] deep-water environment and the safety of platform workers." Moreover, "the extent of documentation discrepancies creates a substantial risk that a catastrophic event could occur at any time."
"The absence of a complete set of final, up-to-date, 'as built' engineering documents, including appropriate engineering approval, introduces substantial risk of large scale damage to the deep water [Gulf of Mexico] environment and harm to workers, primarily because analyses and inspections based on unverified design documents cannot accurately assess risk or suitability for service," Sawyer's report said. He added, "there is no valid engineering justification for these violations and short cuts."
Sawyer explained that the documents in question - welding records, inspections and safety shutdown logic materials - are "extremely critical to the safe operation of the platform and its subsea components." He said the safety shutdown logic drawings on Atlantis, a complex computerized system that, during emergencies, is supposed to send a signal to automatically shut down the flow of oil, were listed as "requiring update."

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Federal regulators learned in a 2004 study that a vital piece of oil-drilling safety equipment may not function in deep-water seas but did nothing to bolster industry requirements.

The equipment, called shear rams, is supposed to seal off out-of-control oil and gas wells by pinching the pipe closed and cutting it.

As oil companies drilled wells in deeper water, the shear rams had to become stronger and manufacturers responded. But the federally commissioned study questioned whether enough was known about the force required to shear off a pipe at these depths to set proper standards.

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The Interior Department's Minerals Management Service, which regulates offshore drilling, questioned whether shear rams were strong enough to shear through a pipe.

In two offshore incidents in 2001, the rams didn't work as expected. The agency issued new rules in 2003 instructing the oil industry to make sure the rams would work reliably.

In 2004, a study commissioned by the MMS raised significant questions about the ability of rams to cut through the stronger pipes used in deep-water drilling. Those thicker pipes—as well as the shear rams—must withstand the enormous pressures found at 5,000 feet below sea level.

The study noted there was no agreement on how to determine if the sheer rams would work properly in deep-water conditions.

Only three of 14 newly build rigs had blowout preventers that were able to squeeze off and cut the pipe at the water pressure likely to be experienced at the equipment's maximum water depth, the study noted.

"This grim snapshot illustrates the lack of preparedness in the industry to shear and seal a well with the last line of defense against a blowout," the study said. The study's authors, under contract to the federal government, did not respond to repeated calls for comment.

The study singled out Cameron for relying on calculations to determine the needed strength of shear arms using "shear forces lower than required or desired in many cases." Mr. Amann, the Cameron spokesman, declined to comment.

Despite the study, the MMS didn't issue any new regulations requiring that shear rams be beefed up. MMS spokesman Nicholas Pardi said the 2003 rules—which required operators make sure the shears were strong enough but didn't provide guidance—were the agency's last look at the issue.

While the cause of the explosion is still under investigation, the sequence of events described in the interviews provides the most detailed account of the April 20 blast that killed 11 workers and touched off the underwater gusher that has poured more than 3 million gallons of crude into the Gulf.

Portions of the interviews, two written and one taped, were described in detail to an Associated Press reporter by Robert Bea, a University of California Berkeley engineering professor who serves on a National Academy of Engineering panel on oil pipeline safety and worked for BP PLC as a risk assessment consultant during the 1990s. He received them from industry friends seeking his expert opinion.

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Based on the interviews, Bea believes that the workers set and then tested a cement seal at the bottom of the well. Then they reduced the pressure in the drill column and attempted to set a second seal below the sea floor. A chemical reaction caused by the setting cement created heat and a gas bubble which destroyed the seal.

Deep beneath the seafloor, methane is in a slushy, crystalline form. Deep sea oil drillers often encounter pockets of methane crystals as they dig into the earth.

As the bubble rose up the drill column from the high-pressure environs of the deep to the less pressurized shallows, it intensified and grew, breaking through various safety barriers, Bea said.

"A small bubble becomes a really big bubble," Bea said. "So the expanding bubble becomes like a cannon shooting the gas into your face."

Up on the rig, the first thing workers noticed was the sea water in the drill column suddenly shooting back at them, rocketing 240 feet in the air, he said. Then, gas surfaced. Then oil.

"What we had learned when I worked as a drill rig laborer was swoosh, boom, run," Bea said. "The swoosh is the gas, boom is the explosion and run is what you better be doing."

The gas flooded into an adjoining room with exposed ignition sources, he said.

"That's where the first explosion happened," said Bea, who worked for Shell Oil in the 1960s during the last big northern Gulf of Mexico oil well blowout. "The mud room was next to the quarters where the party was. Then there was a series of explosions that subsequently ignited the oil that was coming from below."

According to one interview transcript, a gas cloud covered the rig, causing giant engines on the drill floor to run too fast and explode. The engines blew off the rig and set "everything on fire," the account said. Another explosion below blew more equipment overboard.

BP spokesman John Curry would not comment Friday night on whether methane gas or the series of events described in the internal documents caused the accident.

[Minerals Management Service] records show that from 2001 to 2007, there were 1,443 serious drilling accidents in offshore operations, leading to 41 deaths, 302 injuries and 356 oil spills. Yet the federal agency continues to allow the industry largely to police itself, saying that the best technical experts work for industry, not for the government.

Critics say that, then and now, the minerals service has been crippled by this dependence on industry and by a climate of regulatory indulgence.

“Everything that’s done by the oil industry is done for profit,” said Senator Bill Nelson, Democrat of Florida, who demanded this week that the Interior Department investigate these backup safety systems. “Throw in the fact that regulators have taken a lax attitude toward overseeing their operations, and you have a recipe for catastrophe.”

Last year, BP, the owner of the well that blew up in the gulf, teamed with other offshore operators to oppose a proposed rule that would have required stricter safety and environmental standards and more frequent inspections. BP said that “extensive, prescriptive” regulations were not needed for offshore drilling, and urged the minerals service to allow operators to define the steps they would take to ensure safety largely on their own.

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Numerous Congressional and internal investigations have called the oversight agency badly mismanaged and at times corrupt. It has been rocked by regular scandals, including disclosures in 2008 that agency officials took bribes and engaged in drug use and sex with oil industry officials. And its own scientists have said that senior agency officials in recent years revised staff reports to eliminate environmental concerns that might have complicated oil-company drilling applications for offshore sites in waters near Alaska.

“Problems at M.M.S. did not originate in this administration or its predecessor,” said Representative Darrell Issa of California, the senior Republican of the House Oversight and Government Reform Committee. “There is a bureaucracy and dysfunctional culture that has to be held accountable.”

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Questions about the blowout preventers — which BP executives have said are at least partly to blame for the April 20 accident — date at least to February 2000, when a rig in the Gulf of Mexico spilled oil into the sea after a crew member accidentally pushed the wrong button, severing the connection between the rig and its blowout prevention device, known as a BOP.

“The rig was not equipped with a secondary system capable of securing the well in the absence of the primary BOP controls,” said a federal report on the accident.

To combat this serious safety flaw, the agency warned oil companies in 2000 and again in June 2009, after yet more problems emerged with a blowout preventer, reminding them that they needed to have “a reliable backup system in place.” But the agency never tried to write regulations that would detail the requirements for the backup systems.

Instead, over a decade ago, with the industry’s support, the agency reduced the frequency of inspections of blowout preventers to once every 14 days from once a week, citing the disruptions that these tests caused to oil drilling and extraction efforts.

In the absence of government regulations, all 23 of the oil drilling rigs currently working in the Gulf of Mexico rely on a backup device known as a remotely controlled submersible vehicle to turn on the blowout preventers if primary controls fail. That was the case with the Deepwater Horizon rig as well.

But a consultant hired by the mineral service in 2003 warned that these machines were frequently unreliable during blowouts, moving too slowly and often lacking power to do the job.

Worse, the same consultant concluded in a federally financed study that even if rig crews managed to turn the blowout preventer on, the most critical safety component inside these machines — the shear ram, which is meant to cut quickly through the well pipe to stop the flow of oil and gas — was often not strong enough to cut through the modern pipes that drilling rigs use.

“This grim snapshot illustrates the lack of preparedness in the industry to shear and seal a well with the last line of defense against a blowout,” said the September 2004 report, written by West Engineering.

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Transocean, the company that operated the Deepwater Horizon rig for BP, has been cited twice in recent years by the authorities in Britain for failing to properly maintain a blowout preventer and related testing equipment on an offshore drill site there, with officials saying in November 2006 that the device “failed in service, exposing persons to risks that endangered their safety.”

Minerals Management Service officials have also pointed to statistics showing a decline in the number of offshore oil drilling blowouts and fatalities in recent years.

But in an interview this week, senior officials of the agency said that in light of the April accident, they could not confidently assert that the long-identified shortcomings with the blowout preventers had been resolved adequately

Good post. I've suspected this since day one. At present, it's tough to make any precise determination, but I would bet that BP/Deepwater Horizon are being conservative with their estimates. Unfortunately, only time will tell.

Regarding the stock: If you look at what happened to Exxon after their spill in the late 80's (a similar if not a more devastating spill), you'll note that after the damage/litigation was over they went on to perform quite well.

C'mon Rhetta, hitch up the yaks. Time to move on to a greener lifestyle. It only took me 30 years wading thru the red tape. It's finally come in the mail! Our federal lands grazing permit!