Friday, October 29, 2010

Halliburton supplied faulty cement, says panel

image Already a popular target of left wing activists due to its ties to the equally magnetic target Dick Cheney, Halliburton may now be forced to shoulder some of the blame for the Deepwater Horizon rig blowout and ensuing Gulf of Mexico Oil Spill.

The National Oil Spill Commission has determined that the cement supplied by the company was unstable and unfit for use, despite testing showing that it was not the Right Stuff.

WASHINGTON (AP) - Tests performed before the deadly blowout of BP's oil well in the Gulf of Mexico should have raised doubts about the cement used to seal the well, but the company and its cementing contractor used it anyway, investigators with the president's oil spill commission said Thursday.

It's the first finding from the commission looking into the causes of the April 20 explosion that killed 11 workers and led to the largest offshore oil spill in U.S. history. And it appears to conflict with statements made by Halliburton Co., which has said its tests showed the cement mix was stable. The company instead has said BP's well design and operations are responsible for the disaster.

If this holds up, it should be a huge relief for BP, to the tune of tens of billions of dollars in potential fines under the Oil Polution Act of 1990.  BP already faces tens of billions in fines under the statute, but if findings show that the company was grossly negligent, the fines increase and BP is on the hook for billions more.

BP, in its own internal investigation, also found flaws with the Halliburton cement cocktail, and the latter company promptly objected to that study’s findings.  The Commission’s determination could go a long way to giving BP a way to argue against fines for negligence.

I would look for some of the state governments, environmental activist groups and trial lawyers to cry foul over this development. It takes an awful lot of money off of the table and gives less credence to gross negligence as a cause of action.