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Drilling in the Bight: has BP learnt the right lessons from its Gulf of Mexico blowout?
The Guardian newspaper recently hit a wall of non-response when it raised concerns about the possibility of an oil well blowout in BP’s proposed drilling operations in the Great Australian Bight.
The facts are that bolts on drilling rigs used in other parts of the world have been found to be defective, with the potential to fail catastrophically. When asked whether its operations were at similar risk, BP referred The Guardian to its subcontractor, Diamond Offshore, which reportedly failed to respond to emails and phone calls.
Whether or not these technical concerns are justified, this is a public relations disaster for BP, Diamond Offshore and even for the Australian industry regulator, the National Offshore Petroleum Safety and Environmental Management Authority.
BP, in particular, can ill afford such bad publicity. Six years ago it suffered a disastrous blowout of its Macondo well in the Gulf of Mexico, which killed 11 men and caused more than US$40 billion of environmental damage along the US coast.
It’s perfectly understandable that people will ask whether the same thing can happen in the Great Australian Bight.
Lessons learnt?BP claims to have learnt the lessons from the Gulf of Mexico incident, and to have incorporated them in its drilling plan for the Bight (as outlined in section 6 of its environmental overview). However, the lessons it refers to are drawn from its own report on the accident, which dealt primarily with technical issues rather than the underpinning organisational factors.
Other major reports and commentary have identified a range of organisational failures that contributed to the blowout. BP has not shown that it has learnt these bigger lessons.
One of these organisational causes was the system of bonus payments made to employees at all levels, which created continual pressure to minimise costs and maximise drilling speeds. A key performance indicator when calculating employee bonuses was “days per 10,000 feet of well drilled”.
These incentives generated pressure to ignore anomalies or warnings that things might be amiss, and to just get on with the job. Of course, BP is not alone in this – these are industry-wide practices. But to satisfy a sceptical public, BP needs to show that it has addressed this issue.
Second, BP was using the wrong indicators of risk, which meant that it was systematically misleading itself and others about the risk of blowout at the Macondo well.
Its primary indicator was the number of cases of “loss of containment” – that is, incidents when oil was spilled into the sea from a hydraulic hose or other piece of equipment. Of course these spills are environmentally undesirable, but the number of these relatively minor incidents does not in itself indicate a risk that the well will blow.
Far more significant is the number of “kicks” – incidents in which operators temporarily lose control of the well and high-pressure fluids begin forcing their way towards the surface. If operators do not act quickly to control kicks, they can develop into blowouts, and indeed this was one of the contributing factors in the Gulf of Mexico blowout.
Here is another relevant indicator. Drilling wells involves pumping cement down at various times to seal joints, and to plug the bottom of the well when drilling is complete but the well is yet to begin production. Cementing jobs sometimes fail, and in fact the regulator in the Gulf of Mexico found that half of all blowouts were initiated by a cementing failure.
The number of cementing failures would therefore seem to be an important indicator of risk. BP again needs to show it has developed a list of key risk indicators for its proposed drilling operations in the Bight, and that things such as employee bonuses will not work to counteract this system.
Bending the rulesOne of the most insidious processes that contributes to many major accidents is the “normalisation” of substandard practices. Typically, this happens when people start taking shortcuts with no penalty, which gives the impression that strict compliance with safety regulations or standard engineering practices is unnecessary. Eventually, however, an unusual set of circumstances may catch them out.
Some companies have a formal process for authorising deviations from the standard practice, in cases where strict compliance seems unnecessary or onerous. In isolation, such deviations may seem to involve a negligible increase in risk, but if the number of such authorisations is not controlled, the cumulative increase in risk may be considerable.
After the Gulf of Mexico disaster, BP itself proposed that the number of authorised deviations from approved engineering practices be treated as an indicator of risk, and that this number should be kept as low as possible. It would be good to know if this principle will be applied to its drilling activities in the Bight.
Another critical lesson from the Gulf of Mexico spill is that senior managers should ask the right questions when they visit operational sites, as they routinely do. Senior managers were actually touring the rig that was drilling the Macondo well at the time of the blowout. But they failed to ask any questions about how well the rig was controlling the blowout risk. Had they done so, the accident might never have happened. Has BP learnt that lesson? It is not one that was identified in its own report, so we cannot be sure.
Accident prevention depends on understanding and counteracting the human and organisational factors that lead to accidents, as well as the technical ones. The documents that BP has publicly released about how it intends to drill in the Bight describe how it has learnt the technical lessons, but are silent on the human and organisational lessons.
Spelling out these lessons, and whether BP really has learnt them, might give the public more confidence in the drilling proposal.
Andrew Hopkins is the author of Disastrous Decisions: The Human and Organisational Causes of the Gulf of Mexico Blowout_.
Andrew Hopkins is the author of a recent article published by (but not funded by) the Australia Institute, titled "From climate pariah to climate saviour? What the petroleum industry can do about climate change".
Kangaroo Island's choice: a new cable to the mainland, or renewable power
Can Kangaroo Island's pioneering spirit be harnessed in the push for renewable energy? Dider B/Wikimedia Commons, CC BYSouth Australia’s iconic Kangaroo Island, the site of Australia’s first free settled colony, could pioneer a new age of renewable energy, according to our new research.
The first hardy settlers in 1836 had to decide whether to go it alone with a settlement on the island or revert to the mainland. Today, the 4,400 or so people who call the island home face a similarly stark choice: energy independence, or continued reliance on the mainland.
On one hand, the ageing existing cable could simply be replaced, at a cost of between A$22 million and A$50 million. This is the “preferred network option” proposed by the local electricity distribution network, SA Power Networks (SAPN).
On the other hand, SAPN is also currently considering an alternative mix of local wind, solar and biomass generation, complemented by diesel generation, battery storage and demand management.
Simple vs smart?The new cable option is straightforward and well understood, if a little uninspiring. The local renewable power supply option means energy independence, more local investment and economic activity, and a boost for the tourist mecca’s clean, green brand. But it also requires solutions to a series of tricky technical and regulatory issues, at a scale never before attempted in Australia.
To help inform this crucial decision by SAPN and the Kangaroo Island community, I and my colleagues at the Institute for Sustainable Futures (ISF) at the University of Technology Sydney yesterday published a study of the feasibility of renewable energy for the island.
We conclude that Kangaroo Island could be powered by 86-100% renewable energy for about the same cost as replacing the cable to the mainland.
We examined ten different electricity supply scenarios for Kangaroo Island. The direct costs of the three most interesting scenarios are shown below.
Kangaroo Island electricity supply scenarios: direct costs (net present value over 25 years).
Institute for Sustainable Futures
The most cost-effective alternative to a new cable is local supply of wind, solar photovoltaics and diesel generation, complemented by battery storage and “demand management”. This hybrid solution could supply the island with 86% renewable energy for only A$10 million more than a new cable option. This option would also meet SAPN’s tight deadline of being able to meet the island’s entire electricity demand by December 2018.
For a further A$13 million, 100% renewable power could be provided by displacing the diesel with biomass generation technology fuelled by local, currently unharvested plantation wood. We estimate that this system could be established within five years.
Both the hybrid and 100% renewable options could actually cost Kangaroo Islanders less than the new cable over a 25-year period, if we factor in indirect impacts such as savings in local network charges.
Kangaroo Island electricity supply scenarios: direct and indirect costs (net present value over 25 years).
Institute for Sustainable Futures
So with the cost of the different options roughly comparable, the choice of power supply will probably depend on other factors. These include the preferences of the local community; how the costs, benefits and risks are shared; and the level of support from key stakeholders including SAPN, government and regulators.
For local generation to be cost-competitive, SAPN’s funds earmarked for the new cable would need to be redirected to support local generation and demand management. However, the current regulatory system creates barriers to SAPN providing this support.
For example, SAPN can earn a net financial return on investment in network assets such as a new undersea cable over their 30-40-year life. But if, instead of investing in a new network asset, SAPN spends money on supporting local supply options, then at best it can only retain a few years' savings by deferring capital investment.
Another challenge for local electricity supply is ensuring that local electricity suppliers do not abuse their monopoly by price-gouging customers if and when the existing cable eventually fails. Two possible ways to guard against this are by sharing community ownership of generation assets, and by periodic tendering of retail services.
For a local electricity supply solution to proceed it requires strong support, from both the Kangaroo Island community and SAPN. It would also require a major third party, such as the SA Government or the Australian Energy Regulator, to help reduce the barriers to SAPN adopting a more innovative non-network solution.
Renewable futureA balanced local electricity supply solution and a transition to 100% renewable power could deliver a range of economic development and other benefits to the local community. But it will require market testing to confirm the costs, and stakeholder and community consultation to develop a suitable regulatory and business model.
It is unclear who would provide the time and resources for such leadership, but the SA Government and the Kangaroo Island Council are two possible candidates.
Addressing such barriers in the context of Kangaroo Island would provide not just an inspiring local solution, but a powerful precedent for supporting local renewable energy initiatives throughout Australia.
Within months of their arrival in 1836, most of the original Kangaroo Island settlers had left to set up the new mainland colony of South Australia. But a few enterprising souls stayed on. We will soon see if that pioneering Kangaroo Island spirit prevails when it comes carving out Australia’s clean energy future.
A community forum will be held on September 22 in Kingscote, Kangaroo Island, to share the study’s findings and canvass community views about future power supply options.
Chris Dunstan is a Research Director at the Institute for Sustainable Futures (ISF) at the University of Technology Sydney. ISF undertakes paid sustainability research for a wide range of government, corporate and NGO clients. The Towards 100% Renewable Energy for Kangaroo Island study was funded by ARENA and RenewablesSA with assistance from the Kangaroo Island Council.
Oil disaster investigator alarmed by BP Great Australian Bight response
Exclusive: Bob Bea, who investigated Deepwater Horizon, blasts BP and Australian regulators, calling their response to concerns about faulty equipment an ‘early warning sign’ of a potential disaster
A leading global expert on oil disasters has said the response to concerns about potentially faulty equipment in offshore drilling planned for the Great Australian Bight by BP is an early warning sign of problems that could potentially lead to disasters.
Bob Bea, an emeritus professor and founder of the center for catastrophic risk management at Berkeley, said what BP, its subcontractor Diamond Offshore Drilling and the Australian regulator had said in response to concerns about faulty bolts was “very alarming”.
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Eco Home Stirling w/ Jason Garrod & Susan Goodwood | Sustainable House Day Showcase 2016
A 14 yr old sustainably built house demonstrating most of the accepted passive design principles of the time, such as northth orientation, good insulation, double glazing, and thermal mass. It’s a healthy, low toxin and recycled build and family friendly design with open plan and central kitchen and hearth.
It shows features that worked well and those that didn’t, and some that they have added along the way, such as PV and skylights. Great perspective from folks living in a sustainable home for over a decade!
Sustainable House Day Showcase 2016 Collaborators
Event Partner:
Recycled Interiors & Sustainable Home Hub - recycledinteriors.org
Event Sponsors:
City of Adelaide - adelaidecitycouncil.com
Sustainability House - sustainabilityhouse.com.au
Brocante in the Barossa - brocante-in-the-barossa.com
Hills Sustainable Gardens - hillssustainablegardens.com
Accumulus Energy Group - accumuluseg.com
Media Partner:
Environmental & Science Media - esmedia.com.au
Cast: AdelaideSBN and ESM
Tags: Sustainable Living, Sustainable Design, Sustainability, Green Homes, Australia and Adelaide
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