Federal investigators to grill BP executives

Federal investigators on Monday are expected to confront executives and managers of BP and rig owner Transocean Ltd. about catastrophic failures in oil well design and disabled safety systems that may have played a role in the deaths of 11 crewmen on the ill-fated Deepwater Horizon.

The joint U.S. Coast Guard- Interior Department investigation into the April 20 blowout has amassed a trove of testimony during three previous hearings in Louisiana and this week moves to Houston, the hub of the nation’s oil and gas industry, where BP and other firms linked to the disaster have offices.

The earlier proceedings elicited gripping narratives from rig workers who described their escape from the fiery explosions and evidence of cost-saving managerial decisions that may have compromised safety.

The outcome of this federal investigation is potentially significant. If the inquiry uncovers criminal misconduct by companies involved with the well, the investigative panel can offer its findings to the U.S. Department of Justice, which is conducting a criminal investigation.

The panel boosted its legal heft last week by adding retired U.S. District Judge Wayne R. Andersen and Coast Guard Capt. Mark R. Higgins, an attorney, to the team. Their courtroom experience may help the panel cut through the increasingly time-consuming process of questioning witnesses, which is frequently interrupted by scores of lawyers representing a dozen companies and individuals.

A fifth proceeding may be held after key equipment, including the well’s blowout preventer, is recovered from the bottom of the Gulf of Mexico. The Coast Guard, which is charged with investigating deaths at sea, conducts the hearings much like a trial, with witnesses under oath, cross-examination and exhibits. The panel will report its findings by January.

A key witness scheduled to testify is Halliburton’s technical advisor, Jesse Gagliano. Halliburton was hired by BP to cement the well. An e-mail from Gagliano warned BP two days before the explosion that the company’s well design plan posed a “SEVERE” risk of gas flow, according to previous testimony. Such a gas surge is suspected to have pushed a bubble of combustible methane through a drill pipe, exploding in the belly of the massive rig.

Warnings about the integrity of the well and the rig’s safety systems were ignored or disregarded, according to witnesses. Federal investigators have suggested that crucial decisions were made to save time and money.

“In engineering, we talk about who makes the decisions: MBAs or engineers? This is an example of an MBA decision,” said USC professor Iraj Ershaghi, an expert in petroleum engineering who has followed news accounts of the accident.

“In other words, ‘Let’s do this, and save us two days.’ Economic optimization is the basis of major disasters.”

In earlier hearings, testimony illustrated the financial and time pressures BP was under to finish the exploratory phase of the drilling, which included sealing the well and moving the floating oil rig to a different site. Drilling was six weeks behind schedule, costing BP at least $21 million in leasing fees alone.

Panelists said that may have put pressure on the company to reject more time-consuming procedures to close the well. This week, BP employee Brian Morel will probably be asked to explain an e-mail message he wrote in which he rejected Halliburton’s suggestion to place 21 devices called “centralizers” in the well bore, opting to use just six.

Centralizers are doughnut-shaped sheaths that surround pipe and keep it from knocking into the side of the well bore. A properly centered pipe makes it easier to seal the well with cement, which should reduce the risk of a gas blowout.

Engineers widely agree that using more centralizers is safer than using fewer. But installing the devices takes time and money, and BP employees testified that such approaches are not always necessary.

In an e-mail, Morel defended the decision to use fewer centralizers, writing, “Hopefully, the pipe stays centralized due to gravity,” adding that “it’s too late to get any more product to the rig.”

Another key witness scheduled to testify is Mark Hay, a supervisor for Transocean, which owned the rig and leased it to BP.

One of Hay’s subordinates told the panel last month that Hay scolded him for taking the time to repair a gas safety valve that had been put in bypass mode. When operational, the device automatically cuts off unexpected flows of gas from the well into the rig.

“‘The damn thing has been in bypass for five years. Why did you even mess with it?’” Mike Williams, a chief electronics technician, recalled being told by Hay.

Williams also testified that the Deepwater Horizon’s critical fire and gas leak alarms had been disabled for at least a year because the rig’s chiefs didn’t want to be woken up by false alarms.

He described the rig as being in “very bad condition,” with overdue maintenance and unreliable computers.

In the gulf, meanwhile, engineers have finished pressure testing on the troubled well and said they would begin trying to fish out a piece of drill pipe remaining in the wellhead — an important precursor to replacing the faulty blowout preventer and permanently shutting down the well.

The pieces of the well removed during the so-called fishing procedure and the removal of the blowout preventer could be crucial to determining what caused the accident. The federal spill response chief, retired Coast Guard Adm. Thad Allen, in his order released Saturday directed BP to remove the equipment by methods that will “recognize and preserve the forensic and evidentiary value” in cooperation with Coast Guard authorities and criminal investigators for the Justice Department.

ron.lin@latimes.com

julie.cart@latimes.com

Times staff writer Kim Murphy in New Orleans contributed to this report.