It's a well-known story.
On the night of April 20, 2010, the Transocean Ltd. rig Deepwater Horizon was approximately 40 miles off the Louisiana coast drilling a well for BP PLC in the Macondo oil and gas play. At around 10 p.m., a series of equipment and operator errors led to natural gas shooting out of a blowout preventer and immediately exploding, starting a disaster with severe consequences.
Eleven people died and between 3.2 million and 5 million barrels of oil were pumped into the water over the next 87 days after the greatest environmental disaster in the history of the Gulf. It cost BP billions of dollars in damages, dramatically reshaped the company and the regulations for the oil and gas industry, and harmed the livelihoods of thousands of people.
"The Deepwater Horizon accident forever changed BP. We will never forget the 11 people who lost their lives, nor the damage caused," spokesman Jason Ryan said, noting the company spent $69 billion on the disaster.
Ten years later, BP remains one of the biggest players in the Gulf. Former CEO Bob Dudley said the company was producing more than 300,000 barrels of oil equivalent per day in the Gulf in May 2019, with plans to increase production to around 400,000 boe/d by the mid-2020s.
But the company says its operations are much safer. BP said it created a Global Wells Organization that ensures "appropriate and consistent safety standards" are followed worldwide. Any operator who drills a well for BP must train on simulators before it goes offshore, and it is then monitored around the clock from a center in Houston.
Still, new leadership at the company is now focused on becoming cleaner and greener. BP plans to move away from oil and gas in the long-term, hoping to achieve net-zero greenhouse gas emissions across its operations by 2050 or sooner.
"The Deepwater Horizon tragedy in 2010 tested us to the core," new CEO Bernard Looney said in a February call. "Ten years on, we're a safer, stronger and more disciplined company. And we learned some hard lessons that we will never forget. We learned that we don't always have all the answers. We learned that we don't always get it right. We learned that we can't do everything on our own. Relationships, partnerships, friends really matter. And we remember those lessons in this new decade where the big challenge for BP is the one that the world faces, and that is climate change."
A more environmental conscious BP would be welcomed by some who believe too little has changed in offshore drilling and safety culture. In a report released in conjunction with the 10th anniversary of Deepwater Horizon, the environmental group Oceana said very little had changed on rigs operating in the Gulf.
"Decades of poor safety culture and inadequate government oversight laid the conditions for the BP Deepwater Horizon disaster," the group said. "These conditions have not improved and that expanding this industry to new areas puts human health and the environment at risk."
The federal government, however, said its oversight is in a vastly different place than 10 years ago. Advancements in technology help regulators anticipate risk and improve response. The offshore regulator, the Bureau of Safety and Environmental Enforcement, or BSEE, now oversees operational safety, pollution prevention, spill response and cleanup, as well as spill planning and preparedness for offshore operations.
"Safety is in everyone's best interest," BSEE spokeswoman Sandy Day said in an email. "Under this administration, BSEE has been a leader in bringing operators and stakeholders together to improve safety and environmental protections offshore through innovation, collaboration, and the use of best available science and best practices."
'Culture of complacency'
The concerns Oceana raises today, however, echo the findings of investigations in the aftermath of the disaster.
One of the first discoveries in the ensuing investigation was that deepwater drilling operations were largely uncoordinated, with no unified safety plans or procedures to follow. A report by the U.S. Department of the Interior, released in 2011, was damning in its assessment of both BP and Transocean's operation of the rig.
"The loss of life at the Macondo site on April 20, 2010, and the subsequent pollution of the Gulf of Mexico through the summer of 2010 were the result of poor risk management, last‐minute changes to plans, failure to observe and respond to critical indicators, inadequate well control response, and insufficient emergency bridge response training by companies and individuals responsible for drilling at the Macondo well and for the operation of the Deepwater Horizon," the DOI said.
The U.S. Coast Guard, which also released a report on the causes of the explosion and oil spill, said the tragedy was caused by "numerous systems deficiencies, and acts and omissions by Transocean and its Deepwater Horizon crew that had an adverse impact on the ability to prevent or limit the magnitude of the disaster." The Coast Guard indicated that several design flaws and mistakes made by the Deepwater Horizon crew led to the failure of the rig's massive blowout preventer and allowed the natural gas to surge up to the surface.
The DOI said the problems on Deepwater Horizon went well beyond mechanical. The agency's report, which laid ultimate responsibility at the feet of BP, said there had been "a number of problems involving personnel with responsibility for operations" on the rig. A major reorganization of authority on Deepwater Horizon, which had been completed just days before the explosion, had changed responsibilities and left no clear pecking order.
Even before the federal government reports were released, it was becoming clear deepwater drilling operations suffered from disjointed operational methods that varied from company to company, weak federal regulations and an overall lack of oversight. In its findings, a presidential commission into the incident derided a "culture of complacency" and said many of the steps taken to improve safety would have to be taken by the industry itself.
The American Petroleum Institute, International Association of Drilling Contractors, Independent Petroleum Association of America, National Ocean Industries Association and the U.S. Oil and Gas Association teamed up to develop four joint industry task forces, which developed standards for operational procedures, equipment and drilling activities. Many of those standards were adopted as part of new federal regulations by the Bureau of Safety and Environmental Enforcement.
"As a result of this work and the extensive resources devoted to safety that continue to draw on the best minds in the industry and government, we've established a multi-layer system with many redundancies to help prevent accidents to intervene and stop a release that may occur, and to manage and clean up spills," API Upstream Director Erik Milito said in 2012.
The industry and the federal government also agreed to create the Ocean Energy Safety Institute, located at Texas A&M University in College Station, Texas. A five-year, $5 million agreement was reached in 2013, but the institute remains in operation today. The Center for Offshore Safety was also created, with the sole purpose of helping improve safety measures for oil and gas producers.
"We've been creating our documents and tools so everyone can use them," the Center for Offshore Safety's executive director, Charlie Williams, said in 2014. "People that aren't members are using them and building better safety measures. That's just what we wanted — we wanted the industry to do this in a more common way."
The industry continued to be prodded by the Obama administration to focus on safety, but changes to how the government dealt with offshore drilling were slow in coming. Even though the administration tightened some rules after a six-month moratorium on offshore drilling in 2010, the DOI's Office of the Inspector General released a report in 2013 indicating 25 of 64 recommendations made to the BSEE had not been implemented. A well safety rule would not be implemented until 2015, and a blowout preventer rule until 2016. That rule was quickly modified ― critics claimed it was weakened ― by the Trump administration in 2017.
Even though nothing similar to the Deepwater Horizon incident has occurred in a decade, environmental groups continue to express concern that safety standards remain too lax. Those groups have asked the government to stop allowing industry to explore further offshore in deeper water, fearing a repeat of the disaster.
BSEE says it is prepared for industry moving into deeper water and maintaining a state of readiness is a top priority. "BSEE regularly conducts unannounced oil spill drills and tabletop exercises with operators ... to review their ability to assess a subsea well control situation and mobilize the proper subsea containment and intervention equipment in a timely manner," Day said. "BSEE is continuingly adjusting its workforce and inspection methods to be the most efficient and effective."
Years of finger pointing, lawsuits and fines
BP's stock was at $60.57 per share on April 20, 2010, and dropped 51% by June 9, its lowest level since 1996. It has not reached $60 per share since. Two oil price collapses have damaged the company's share price, but much of the impact was due to the fallout from Deepwater Horizon.
The British giant would liquidate approximately $40 billion worth of assets to help pay for the costs related to the explosion and subsequent oil spill, including more than $14 billion on cleanup efforts along the Gulf Coast. BP was also hit with a $20.8 billion fine by the U.S. government in 2015, the largest civil fine of all time. The company paid a $5.5 billion Clean Water Act penalty, plus interest; it also paid $8.1 billion in compensation for natural resource damages and $4.9 billion to the states of Alabama, Florida, Louisiana, Mississippi and Texas.
BP, Transocean and Halliburton Co. ― the well designer ― would all settle with the government but took one another to court in the process. BP sued Transocean for $40 billion in 2010; that case, along with a lawsuit against Halliburton, would drag on until 2015, when all sides decided to drop their cases against the other.
The major blame was assigned to BP, which a federal judge found to be "grossly negligent" in its handling of the Macondo well.