Halliburton Cut Costs and Corners with Well Cement they Provided to BP

There is further evidence that corporate greed is at the root of the Gulf oil disaster.  In particular, the president’s oil spill Commission recently charged the infamous corporation Halliburton with cutting corners and costs on the cement it provided for BP’s Deepwater Horizon well.  This is the same company that has paid millions to former vice-president Dick Cheney – even during his time in office.  Halliburton’s corporate culture of corruption and cronyism can clearly be implicated in causing the worst environmental disaster that America ever experienced.  It is important that the Oil Spill Commission receive subpoena power to get to the bottom of who knew and did what and when.   This article collects the latest press coverage of this new information.  At the end is an early (May 1) article that also implicated Halliburton for it’s faulty cement.  Click below to learn more.

Oil Spill Commission finds Halliburton’s cement was unstable, failed several tests before Deepwater Horizon disaster – October 28, 2010, David Hammer, The Times-Picayune

National Oil Spill Commission investigators have found that the Halliburton cement used to seal the bottom of BP’s wild Gulf well in April was unstable and was used despite multiple failed tests in the weeks leading up to the massive well blowout.  What’s more, the commission investigators found Halliburton knew about the problems and used the cement mixture anyway. …

Rep. Ed Markey, D-Mass., who has been seeking subpoena power for the Oil Spill Commission, saw it as a watershed finding.  “The fact that BP and Halliburton knew this cement job could fail only solidifies their liability and responsibility for this disaster,” Markey said. “This is like building a car when you know the brakes could fail, but you sell the cars anyway.” …

A commission staffer, who was authorized to speak for the commission in a news briefing but was not permitted to give his name, went a little further.  “Had the cement done its job, the hydrocarbons would have been isolated and there should not have been a blowout,” he said. …

Halliburton had a contract with BP to supply the Deepwater Horizon drilling rig with the nitrogen-infused cement it would use April 19-20 to seal the sides of the well. Halliburton has said publicly that the cement passed stability tests before it was used.  But the Oil Spill Commission investigators, through a review of previously undisclosed documents and interviews, have determined that the first three tests Halliburton ran on the foam cement were all failures. …

Halliburton only provided BP with the data from one of the three tests for which it had results before the cement was actually poured in the well. The one set of results Halliburton shared with BP was from February, two months before the accident, when the final conditions in the well and even the size of the hole were not known.  The data from that test showed the cement was unstable, but when Halliburton sent the results to BP by e-mail March 8, it only sent the numbers, no analysis, and there was no indication that Halliburton mentioned it was a failed test. …

The March 8 e-mail from Halliburton to BP was eerily similar to a separate report by the cementing contractor just two days before the accident that also included alarming information that wasn’t noticed. That report contained Halliburton models warning of a severe risk of gas flowing into the well if BP didn’t use more stabilizing equipment in the well bore. But the warning was placed deep inside the report, and key BP engineers have testified that they never bothered to read the report until it was too late.

BP, Halliburton Knew Oil Spill Cement Unstable:  Despite this, both companies went ahead and used that same cement at the Macondo well.  Oct 29, 2010

BP and Halliburton knew weeks before an explosion tore through a BP rig in the Gulf of Mexico that the cement mix they planned to pump into an undersea BP well was faulty, a probe found.  But they went ahead regardless, and the unstable cement that Halliburton poured into BP’s Macondo well to secure the casing on the sea floor was fingered by a commission set up by President Barack Obama as one of the key causes of the April accident.

“Halliburton and BP both had results in March showing that a very similar foam slurry design to the one actually pumped at the Macondo well would be unstable, but neither acted upon that data,” Fred Bartlit, chief counsel to the oil spill commission, said in a letter outlining the commission’s first findings.  “Halliburton (and perhaps BP) should have considered redesigning the foam slurry before pumping it at the Macondo well,” the letter said. …

Two of the tests were conducted in February and one at the beginning of April, just days before the rig exploded. None of the tests found the cement to be stable.  A fourth test was set up, probably in mid-April after Halliburton learned that the results of the previous test had been “unfavorable,” the report said.  “Halliburton personnel again modified the testing procedure and this time — for the first time — the data indicated the foam slurry design would be stable,” the report said.

But the results of that test would not have been available before the blowout on the well, meaning that when Halliburton pumped cement into the BP well, it probably did so “without any lab results indicating that” what it was doing was safe, the report said.

“This is like building a car when you know the brakes could fail, but you sell the cars anyway,” said Congressman Edward Markey, chair of the energy and environment subcommittee in the House of Representatives’ Energy and Commerce Committee. “We now know what BP and Halliburton knew, and when they knew it. And we know they did absolutely nothing about it.  “The fact that BP and Halliburton knew this cement job could fail only solidifies their liability and responsibility for this disaster,” he said.

Gulf Oil Spill: There’s Something About Halliburton By John Aloysius Farrell – October 29, 2010

What is it about Halliburton? Are there corporate rewards for behaving badly?  Not just badly. Badly with self-destructive, short-sighted enthusiasm.

Even if they didn’t care about the ecological damage, you would think that somebody at the company, having gotten back the third separate test showing that the cement it was planning to use on BP’s deepwater drill in the Gulf of Mexico was unstable, would have said: “Hey guys, we could kill some good guys, put a big hurt on the economy of the southeast United States, and give the oil industry and offshore drilling a big black eye!”

But nobody stopped it. The cement cap failed. Eleven workers died and the Gulf got wasted by the oil spill. Even BP is ticked off, and turning on its fellow energy firm. It was BP that first alleged that Halliburton was having problems getting the cement to stabilize in the weeks before the disaster. Now the federal commission investigating the catastrophe has confirmed BP’s findings. Halliburton, in turn, blames BP.

I thought free market economics–you know, survival of the fittest–was supposed to weed out the lame and inefficient. Yes, Halliburton’s stock plunged at the news. But the firm will be back, I suspect. Halliburton seems to find its way. I guess there is an exception to the rules of capitalism if you’re politically connected. And helping to feed our energy jones.

The Latest Gulf Outrage. NY Times Editorial – October 28, 2010

We have known for some time that a flaw in the cement used on BP’s Macondo well contributed to the disastrous April 20 explosion in the Gulf of Mexico. What we did not know, until now, was that both BP and Halliburton, the company BP hired to cement the well, appear to have been aware that the mixture was prone to failure — and went ahead anyway. …

BP has identified the inadequate cement job as a major factor in the explosion and faulted Halliburton, on which it obviously hopes to offload some of its legal and financial responsibilities. The report has plenty of blame to go around. And it leaves the clear impression that two of the most important players in the risky world of deep-water drilling were doing their job on the cheap. …

There is no doubt that the mixture actually used was fatally flawed. The report emphasizes that faulty cement was only one of a cascade of events, including the failure of the blowout preventer. This investigation is far from over. What we know so far is deeply unsettling and good reason for the commission to keep probing.

Halliburton’s Gulf Oil Spill Admission: Critical Test Skipped On Deepwater Horizon Before BP Oil Spill By CAIN BURDEAU | 10/29/10

A federal judge is ordering tests to be performed as soon as possible on cement Halliburton Co. used to seal the BP well that later blew out catastrophically in the Gulf of Mexico.  U.S. District Judge Carl Barbier said some of the components may be “deteriorating over time” and that tests should be done “as soon as reasonably practicable.” …

Halliburton’s cementing work on the well has jumped to the forefront of investigations into the explosion. On Thursday, the president’s oil spill commission said tests performed before the blowout should have raised doubts about the cement used to seal the well.  The cement mix’s failure to prevent oil and gas from entering the well has been identified by BP and others as one of the causes of the accident. …

Specifically, Barbier wants tests on 1 quart of ZoneSeal-2000 and 2 gallons and 1 quart of SCR-100 in Halliburton’s possession.  On its website, Halliburton describes SCR-100 as a “cement retarder” that helps make a “uniform slurry consistency from batch to batch.” SCR-100 is “synthetically manufactured, which guarantees product uniformity,” the company says.  ZoneSeal is the product name for Halliburton’s foam cement, a slurry created by injecting nitrogen into cement to secure the bottom of the well. The decision to use foam cement has been criticized by outside experts.

Contractor Accused of Flawed Job on Rig:  Halliburton Shares Hit by Panel Report By BEN CASSELMAN And SIOBHAN HUGHES – OCTOBER 29, 2010

Halliburton has previously blamed BP for failing to heed its advice on the design of the well and failing to do all the necessary tests, while BP has said that Halliburton’s cement mixture itself was to blame.

Investigators cautioned that their findings don’t let BP off the hook, noting that cement failures are relatively common. It is up to the well’s owner—BP, in the case of this well, called Macondo—to test the cement and fix any problems, they noted.  “The story of the blowout does not turn solely on the quality of the Macondo cement job,” investigators wrote in a letter to members of the presidential commission probing the disaster.

Halliburton’s contract makes it unlikely that Halliburton will face much liability for the disaster, said Matthew Conlan, an analyst for Wells Fargo Securities. But the latest revelations could hurt Halliburton’s reputation, he added. “The integrity of their product is being questioned and the integrity of their advice is being questioned.”

BP could benefit if investigators determine that Halliburton’s cement design was faulty, experts said.  Under federal pollution laws, BP will face much higher penalties if it is found to have been “grossly negligent” in the spill. Such a finding is less likely if several different companies share the blame.

Halliburton has long denied responsibility, saying BP ignored its warnings that the cement job would likely fail if BP didn’t use more “centralizers,” devices that keep steel pipe centered in the hole to ensure the even distribution of cement. Halliburton also said BP broke with industry best practices by failing to clean out the well fully before pumping cement and by failing to test the cement after the job was completed.

As the investigation has developed, however, Halliburton’s version of events has drawn more scrutiny. In testimony before a different federal panel, Halliburton engineers acknowledged that they never warned the well could blow out if the centralizers weren’t used and that they never explicitly recommended that the cement test be run.

Halliburton in spotlight in gulf spill probe – May 01, 2010|By Margot Roosevelt, Los Angeles Times

Investigators delving into the causes of the massive gulf oil spill are examining the role of Houston-based Halliburton Co., the giant energy services company that was responsible for cementing the deepwater drill hole, as well as the possible failure of equipment leased to British Petroleum. …

In a statement Friday, Halliburton said: “It is premature and irresponsible to speculate on any specific causal issues.… The cement slurry design was consistent with that utilized in other similar applications… [and] tests demonstrating the integrity of the production casing string were completed.”

After an exploration well is drilled, cement slurry is pumped through a steel pipe or casing and out through a check valve at the bottom of the casing. It then travels up the outside of the pipe, sheathing the part of the pipe surrounded by the oil and gas zone. When the cement hardens, it is supposed to prevent oil or gas from leaking into adjacent zones along the pipe.

As the cement sets, the check valve at the end of the casing prevents any material from flowing back up the pipe. The zone is thus isolated until the company is ready to start production.

The process is tricky. A 2007 study by the U.S. Minerals Management Service found that cementing was the single most-important factor in 18 of 39 well blowouts in the Gulf of Mexico over a 14-year period.

Halliburton has been accused of performing a poor cement job in the case of a major blowout in the Timor Sea off Australia last August. An investigation is underway. …

The company had four employees stationed on the rig at the time of the gulf accident, all of whom were rescued by the Coast Guard. It had completed the final cementing of the well and pipe 20 hours before the blowout April 20.

But at the time of the accident, “well operations had not yet reached the point requiring the placement of the final cement plug, which would enable the planned temporary abandonment of the well,” the Halliburton statement said. …

Joe Leimkuhler, past president of the American Assn. of Drilling Engineers, said it was difficult to speculate about the role of cementing in the accident. “The process to place the cement in the well is very similar from job to job, but the details that make up the risk and challenges are specific to each well. You really need the details of the well design and the formation characteristics.” He added that only the companies involved have that information.

Some speculation has centered on methane pockets frozen into crystallized formations beneath the seabed that could be warmed by the cementing process and become unstable. A 2009 Halliburton presentation to the drilling engineers association described the challenges of methane hydrates, asking: “When do hydrates become unstable?” and “Will cement hydration cause this outcome?” The presentation noted that “gas release is a challenge for safety and economics.”

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