>> the interesting question is not so much whether it was or was not a negative-pressure test. the question is why these express men out on that rig talked themselves into believing that this was a good test that had established wealth and integrity. you see, none of these men out on that rig want to die. none of the men out on that rig want to jeopardize their own safety. none of the men out on that rig on to jeopardize the safety of the men and women they work with day in and day out. the collection is why did they come to this conclusion. we may never know the answer to that question. many of the individuals who made those decisions, members of the rig crew, participated in those

discussions, died in the explosion. others suffered severe medical injuries or are suffering from such severe medical conditions that have sadly been unwilling to talk. and others have asserted their fifth amendment right not to testify. so we may never know. but we do have some information. we have snippets from witnesses who walked in and out of the rig floor that night during those three hours, and we have the data itself. so at this point i would like to go over in more detail what that data look like and what information we have that might explain why the rig crew and well site leaders there that night came to this decision. so let's start to run a negative-pressure test on macondo. here's the setup, those three lines going up from the b.o.p. we have the riser and the annular preventer is labeled. the first thing the crew is going to do after running the drill pipe in is to displace the

mud out of these three lines. now, that's not terribly significant for us except to note that at some point the rig crew is going to use the kill line during these procedures. so at this point they're setting up the test. and like i said before, they're going to displace mud with sea water above the b.o.p. this is the first thing to note at this point. the spacer. the spacer here was unusual. bp wanted to use some leftover materials that they had on the rig sitting around into different tanks. a significant bottom of leftover materials. these materials were what was known as lost circulation

materials. lost circulation materials are a viscous fluids that you can ask we put solid particulate matter into that you send down into the well when there has been a loss of circulation or loss of return of event. that material can actually patch or clock up any of the holes in the formation. bp had some of this stuff lying around on the rig and wanted to get rid of it. now, here's a quirk environmental regulation. if bp does not send these materials got into the well, it has to dispose of it as hazardous waste back on shore. if there's an exception to that requirement, for water-based drilling fluid. so bp wants to send these meters down into the well, certainly can back up the surface, where they can overboard them. because of that exception. there's no dispute that was the decision bp had made here. that in itself is not a problem, but what's perhaps more

problematic is nobody had used these combine materials as a space or before. so the mud engineers from ms walkover consulted, and they said it should be okay, but everybody acknowledges that they had not used these materials spacer before. the other thing to keep in mind about the spacer is that it is very heavy, these materials, 16.5 pounds per gallon. that's almost twice the density of sea water. you recall the seawater is pushing the spacer back up. when you have a lighter fluid trying to push a much heavier fluid, the concern is that heavier fluid will drop down into the lighter fluid. and so it may come down some of the testing that is done later. keep that spacer in mind. so the rig crew gets the space or and lead to of the annular preventer and closes the annular preventer and. so at that point the crew sees

what some ways they expect to see this residual pressure of leftover in the well. they go to bleed it down. they open up the drill pipe, bleeding off some fluid, but here the crew does something unusual. they stop. and they stop at 1250. we're not entirely sure why they do that. but we have a clue. the clue is that they kill line, which also has a pressure gauge, was there at 1250. so the rig crew may have wanted to see if the drill pipe in the kill line with equilibrium. because again they should be the same pressure. 1250 on one should mean 1250 on the other. so at this point the rig crew opens up the kill line just to see perhaps if the pressures are equal. something odd happens. the pressure on the kill line goes down to 6.5. the pressure on the drill pipe goes up to 1400. it doesn't make any abstract

will sense given that the should be communicating with the same vessel. so next the crew then try to bleed down the pressure on the drill pipe. fluid is coming out, and they bleed down the pressure but they can't get it below 260. everything is okay. they should be able to get it to zero. but they can't get to below 260. this indicates very clearly that there is a leak somewhere in the well. it does it say where, doesn't say what it is, but there is a leak. so the rig crew shots back into the drill pipe and the pressure goes back up again. keep going. now this point the crew noticed something. they noticed that the fluid level, stop, they noticed the fluid level in the rise has been dropping. somebody walks over on the rig

crew, put a flashlight down in, sees the fluid level has dropp dropped. and what they realized was the annular preventer is leaking. it wasn't close quite enough. so the crew pressures of on the annular preventer to close at full. but what's happened now is some of the heavyweight spacer we talked about, that material has now leaked down below the annular preventer. but at least the crew has now solved one possible -- one possible reason why there might be a leak. okay, so the go to try to test again. so the crew bleeds off the drill pipe, and this time it does go down to zero. water is flowing. they didn't close in the drill pipe to watch what happens. the drill pipe pressure comes back up again. this is starting out not to make sense. and to indicate that there is,

in fact, flow coming up from the well. so what does the rig crew do? the rig crew then decided we will try to bleed off the pressure on the bill pipe to the killing of which you can do. and they get the drill pipe pressure down to zero. and then they shut it in again. and the drill pipe pressure goes back up to 1400 psi. now at this point, according to witness testimony, there was a discussion on the rig floor. and according to certain bp witnesses, and again, some of this is in dispute, but according to some of the bp witnesses the transocean rig crew explained why they were getting his 1400 psi in the drill by. they attributed the cause is something called the bladder effect.

and here is what lee lambert who is a bp well site leader sean grimsley said about the bladder effect, or at least how it was explained to him by the tool pusher on the rig floor. what was mr. andersen sang about the bladder effect, can you tell us? that the mud and the writer, remember, although heavily much, would push on the annular preventer has been pressure downhole, which would in turn be seen on your drill pipe. so that was the explanation. maybe the mud in the riser somehow is pushing on the drill pipe increase these pressures. but what we know now is that everybody who looked at this agrees, the bladder effect does not exist. to the extent such an effect might exist, it certainly would not explain the data that the crew was seeing that night. it wouldn't explain why the pressure would keep coming back up. so after these discussions, and again, there's dispute as to whether they actually took

place, one of the bp well site leader said, let's move attest to the kill line from the drill pipe. and the reason given was that when bp submitted its application, setting forth its temporary abandonment procedures, it indicated, for whatever reason, that it would run the negative-pressure test on the kill line. so one of the well site leaders said let's move to the kill line. so they did. they opened up the kill line. they get a little bit of flow, which then stops. and like i said before, everything at least on the kill line then look to good. but they never reconcile the fact that there's that 1400 psi that is still on the drill pipe.

now, the enduring industry here is that why on earth was there 1400 on the drill pipe and zero on the kill line? how can those two things possibly be reconciled? well, there are a number of possibilities that people have loaded. one is spacer. we all know that there was a leak in the annular preventer, and that space are actually leaked down below. some of that spacer could have gotten into the kill line. and remember the purpose of that spacer, the material was to patch holes and claude michel. there is a possibility that that's basic, over time, claude that killing. another possibility is that a valid was closed wrong. we don't know what the explanation is for this difference that but the fact is there's no good explanation or that difference. if you can't explain to 1400 psi, it's not a good negative-pressure test.

so then the question is, why would these men, not have realized this was a bad negative-pressure test. and just to show your, 1400, this is what it should have looked like in a perfect but why would these men that have realized this was a bad negative-pressure test? nobody really any industry or in government had set forth any procedures governing with a negative-pressure test did, how to conduct it or how to interpret it. so for instance, the mms which was deregulatory agency in charge of deepwater drilling in the gulf of mexico have no regulations governing procedures for conducting or interpreting a negative-pressure test. indeed, there were no regulations requiring one at all. one can make the i can that the crew that night, bp and the crew, had they not conducted a

negative-pressure test would have been violating no regulations. bp, while it requires a negative-pressure test in these situations, doesn't have any set procedures, nor does it train its well site leaders in particular procedures. and john guide said it could be different on every single rig, depending on what the team agreed to. similarly, transocean come a day to require a negative-pressure test in these situations, but they also have no set procedures or no training for their people. at least prior to this event. now, the final thing, final two things i'd like to say on a negative-pressure test. one is the process point come and that is it appears to us that at no point in time during that three hours that anyone on the rig floor callback to shore. to say, boy, we are getting weird readings, there's a problem here, can you help us out.

it doesn't appear that anyone from bp did that, it doesn't appear that anyone from transocean did that. and that is a process concerned that we race for the commission to take into consideration. one other point. the parties have come as you might imagine, wanted us to assess blame on this. whose responsibility was it to interpret that negative-pressure test, who signed off on it? bp has said it was transocean responsibility as the rig crew in the first instance to do so. transocean has said that it is bp's responsibility as the well site leader to sign off on the test. that's not our job. we are not trying to assess blame or fault or and reliability. the only point we want to make is that those men, the well site leaders, and the rig crew that night at 8:00, i'll had convinced themselves, and agreed, that this was a good negative-pressure test. and there's no indication to any of us thus far in the evidence

that anybody spoke up and said there are problems, we shouldn't go ahead. so it is o'clock at night, and passionate 8:00 at night and the crew is going to move on, with the temporary abandonment procedures. and that which is pulled forward and animation explaining what the next best that these were planned to be. so once the crew and well site leaders greenlighted the negative-pressure test, the next that that was plan was to displace the riser entirely. so it was to keep pushing seawater up the riser, pushing the mud out. because against the deepwater horizon is going to be leaving, going to be taking its riser and it needs to get rid of the heavyweight mud. the next step would then have been to set the service cement plug, the 300-foot, 30 story building cement plug.

once that was done, bp within, and the rig crew, which set the lockdown sleeve, stopped right there. is one thing to note about the lockdown sleeve. you will see there's all the drill pipe hanging beneath it. when it is being set. the reason for that is the lockdown sleeve, 100,000 pounds of weight. to be set. and the way the bp chose to achieve that 100,000 pounds of weight was to hang basically 3000 feet of drill pipe. and because bp wanted to set the lockdown sleeve last, that is why they need to set the service cement plug so d. they needed that 3000 feet of space to accommodate the weight of drill pipe to set the lockdown sleeve. keep going. finally, once the lockdown sleeve is set, the crew would pull up the riser and the blowup prepare and going to the next job.

now at this point, i would like to make a few comments about a particular temporary abandonment procedures that bp chose, and a sequence that they chose to put the steps in from getting to point a to point b. because we think they introduce a certain ou of risk in a situation that may not have been necessary. and i'll talk about two points year. first, we've talked a little bit about it already but it is the removal of the 3000 feet of heavyweight mud. remember, that mud is exerting a force down on the bottom of the well. it's helping out essentially the cement job your it doesn't have enough force to of these hydrocarbons at bay once you pull up, and there's no more heavyweight mud in the riser. but still it helps. so the more seawater you remove, the more stress you are actually

placing on the cement job. so the decision to displace that much blood with seawater was a decision to stress the cement job perhaps more than was necessary. and it is a decision that puts a real premium, not only on the cement job, but on the test of the cement job, the negative-pressure test. here it says basically eliminates 1128-psi of additional downward pressure. so that's one thing. two, oh, and there has been uniform testimony that setting the service in a plug 3000 feet deep was not only unusual, but, in fact, unheard of. and here's some testimony that you can look at. the second problem with these procedures, not problems, something to introduce additional risk, is that bp chose to displace the mud from

the riser before setting that cement plug, or some other barrier. so once the negative-pressure test is passed, the plans would have the crew move right into displacement. and what happens at this point is that the ups open. it's wide open. is a straight shot from the bottom to the rig. this again puts a very large premium on the cement job at the bottom and a negative-pressure test to test the integrity of the cement job at the bottom. if that cement job fails, the only thing you've got in the way of that will prevent her. and the blowout preventer depends on human, depends on a human, basically on the rig. if a human doesn't notice that there are problems down here, such that the b.o.p. should be shut in, and hydrocarbons get past that b.o.p., then you've got a problem.

we believe that bp, in order to lessen the risk, of the situation could have either set the served cement plug before displacing the riser to great a second barrier of flow, or put in a mechanical plug of some sort. but to put it another barrier to flow during this time of the well. the last point i'd like to make is a process one. what is of additional concern to us is that the procedures for temporary abandonment were changing up until the very last minute. so, on april 14, 1 of the engineers at bp says says that the temporary abandonment procedures. and i'll just go through these very briefly. as of april 14, a procedure was to run your drill pipe down the 3000 feet below sea level, then set your service cement plug. so at that point it would have been a barriers that. only once that barrier had been

said with a be a negative-pressure test, and then with the crude displace the mud in the rising. so that's as of april 14. a barrier would be in place for displacing the mud for the riser. fast forward two days to apri april 16, and the procedure has morphed. now the negative test is first. then you go into the whole of the feet which means you don't need into, it was a different type of negative-pressure test. at that point in time to displace much in the riser, you monitor the well, and then you set service cement plug. so now they have moved putting in the barrier from before the displacement, to after the displacement. let's go now fast forwarding to april 20. and this is the ops note that was actually sent by the engineers to the rig on the morning of april 20 setting forth what a temporary abandonment procedures would be. and at this point you will see at again that service cement

plug being set last. now there have been additional changes. first they're going into the hole at 8300 feet, then they are displacing like we talked about before the negative test, running the negative test, then displacing, then setting that cement plug. and as it turned out, this is where the blowout occurs. before that cement plug was ever set. the process point here is, it is not clear to us why decisions on these procedures are changing in the last week before the blowout. it strikes us at certain times and with certain issues we have to change things on the fly because drilling conditions and change. but this type of temporary abandonment procedure, it doesn't appear of these preliminarily to us, should have been changing up until the very last minute. last slide. this is a note from april 28th

interview of robert kaluza, he was one of the bp well site leaders out there that evening on the rig. and he says of this sequence of april 20, it was a different sequence. the team in town wanted to do something different. mark was on vacation. they decided we could use the displacement and negative test together, combine displacement and negative test. don't know why. may be trying to save time. at the end of the wel speeding . so what's important about this is, it appears that at least mr. kaluza was not in on those conversations, or told about why these procedures might be changing, or in fact if they had changed. and with that, i'd like to go back to 8:00 from the deepwater horizon to the point that the crew was about to start displacing the riser. >> now if the commissioners please, we're running a tablet. it is quickly important that

everybody understand this, it's complicated stuff. i understand the commissioners want to keep going. >> we do. >> we will take a short lunch break if necessary. >> i said earlier, i want to be sure you don't confuse what mr. kaluza said with what i said earlier. i said, we see no instance where a decision-making person, or group of people, sat there aware of safety risks, aware of costs, and opted to give up safety for cost. there are people that make observations by what they thought what other people might be doing, and, you know, i'm not saying, we do not say everything done was critically safe. we are saying, and people have said, evil traded safety for dollars. >> we've studied the hell out of this. we welcome anybody that gives us something we miss. we don't see a person or three

people sitting there at a table, considering safety and cost him and giving up safety for cost. we have not seen that. and you have to be sure you understand that. now, we're going to kick protection. this is transocean's, they've got a volume this pic on how you operate in deepwater, which is impressive indeed. they say a kick is when oil gaskets in the well bore. that, the driller, that's a transocean cursing, you see him sitting in his chair, has to continuously monitor what's going on. if there's a kick, the drill has to shut the well and quickly. speed will determine the severity. as i said early and i'll show you one more time later on, yet trigger aims really happen fast. at the bottom, what might be three or four barrels of gas, by the time he gets to the surface because of pressure is less, it

is moving like hell, it will be wrote. it is powerful beyond the. you see the impact of these, of these gas influx is just eroding away carbon steel all the way up to the surface. this really happens fast. was oil and gas get in the riser, you have to almost no time to act. and that's important to understand. remember, i showed you at the beginning the rotary with the oil and gas came up on the rig, and i showed you a little the last shack nearby. this is the driller's shack. this is the driller. he is sitting there and he has a screen in front of him. and he can choose what is to be on that screen and how it's to be displayed. the fact that he can choose what's on the screen is important, he comes we so far do not know what was on the screen like that that night. we don't know what was on the screen because it went down with the rig. we don't know how it was set up.

we will be asking questions as to what they think it showed, but we only have a secondary source as to what the cake evidence really was. here's a better shot of the driller screen. >> we've all been out on the rig's. some of the commissioners, commissioner murray went out on the rig with us. now, if you look your often cited as another screen another screen. that has what's called sperry sunday. the trailer has a transocean high-tech data to transocean high-tech data is gone. sperry-sun is a subsidiary of halliburton. sperry-sun keeps separate information available here. it's also available shoreside at bp's office there. if you went into the macondo office that bp had that night, you could've seen the sperry-sun

dated there. there was nobody in the bp macondo well office that night that everybody had gone home. okay, we can stop this now. this is the sperry-sun data. and the information as to what was happening with the cement job failed at the bottom of the well, create a kick is here. let's zero in a little bit. this is the information. and what we do here is to move it sideways, because every time you bp displays this information, they take it, sideways, and expanded. that's because it's easier to see that way, and that's okay. so here's drill pipe pressure. here's a pressure. here's the sperry-sun information. this is a little complicated.

we don't know that anybody in the world saw this specific information that night. it was available in the driller's shack. it was available in the halliburton mud loggers shack which i showed you. it was available back short side in houston, but we don't know that anybody was looking at it. because the driller remembered, had this information available, but would have been looking at the t.o. screen, not this. so it's a little, it's difficult for us to surmise what this information shows when we don't know anybody ever looked at it. but what it does show is this. here, and i try to imagine myself having been there for eight hours in that chair, watching this stuff, and i imagine, is this a big deal. well, here it is, here is turned sideways and spread outcome at the drill pipe pressures, the pump pressure is constant. yet but drill i've pressure is

increasing. a slight increase, it's subtle. now, if the driller knows that there at the same time displacing heavier fluids, mud with lighter fluid, seawater, then maybe it makes this upward move of the drill pipe pressure more significant. and one of the points we're going to make here is that this system depends on the right person watching this information at the right time, having enough knowledge about all the other activities that are going on the rig to interpret it the right way, and to act very rapidly. a defense on -- it depends on everybody basically one person getting everything right at the right time when you have to move fast. at any rate, we've talked to a lot of people here about

whether, if they were sitting there, people in the industry generally, and because i don't have subpoena power, i have to look you in the eye and tell you i'm telling what people told me. i can't subpoena people and put him under oath. i wish i could. i think it's damned important, but that's the way goes to people in industry have said to us, of course, we would have noticed that. that's a kick detection. we want to move faster to i press them like i impressed myself here. and people than begin to say, i don't know that at least about this first one. the second one is interesting because they turn off the pumps totally to perform a test. the pumps are off, not the drill pipe pressure is going up quite a bit. we've met with t.o. at length, and they've given us a lot of data in useful explanations that can explain why it's beginning,

some of this happen, but nobody can say that in the court of this period federal pipe pressure wasn't going up when the pumps were off. and most people we talked to throughout the industry say, that's a kick and it should have been detected, and somebody moved fast. explosion occurred at 2149, this is the 2110-2112, a half hour to act. the b.o.p. could be closed in 46 or 47 seconds. so we will be talking about this later, but when i looked at this, and i'm just an ordinary person, i said gee, with all the skills with ms and people have, isn't there a better way to display this information so that it is clear and we have all the rhythms that point when things are heading in the wrong direction. now, this is a little bit unfair because i'm talking about the

sperry-sun data. and the data the drill was looking at was the t.o. did. and maybe that t.o. data was a lot clearer than this. maybe it wasn't as clear. maybe it was digital information, easier to pick up. we which are like to know that but we don't. i would expect i guess that the t.o. screen just common sense would be better with sperry-sun because it is their big and their investment and money, but i don't know that. is just sheer, total guesswork. but that's the critical thing that would be good to know. now, one of the issues, we know that was a kick than. we know hydrocarbons were coming through the cement job that it not been remediated, could it be remade if people have decided to, but it was that we know that was a leak. remember i told you earlier that

we would discuss with the leak occurred. did it come up the annulus here, or did it come up the shoe? let's go to the next one. okay, this is casing hanger seal. >> we've talked to dril-quip. they made is that they are very cooperative. these guys have some of the best engineers i've ever met, and i've been in this business a long time. and they say there is no damage to the casing hanger seal's adult. they are pristine. if the leak came up the annulus, there will be some damage to the casing hanger steals. remember i told you he would be blown away by the power of this gas under pressure coming up through the riser carrying stance and everything. this is the way the inside of the case looks when it is made in the factory. this stuff is so strong that on the inside quarter inch deep slots have been totally blown

away by the force of your own gas coming up through that casing. amazing the force of the stuff. but the inside is totally eroded, and the outside is pristine. bp agrees that the leak was up issue, not the annulus. i think t.o. agrees we're not sure about how burton, we'll ask them today. they may say we don't have a dog in that time. we don't know that. but that's what we will be doing this afternoon. at any rate, we feel, and more important dril-quip he was sitting that just told us their view is that the leak came up the shoe and not the annulus. they say that the flow from the annulus had been the and this would've come from these holes, you see what that pressure can do in a big area. these overhauls web just been torn apart if it come up from the annulus. more evidence our way. now, there's been a discussion

here of what happened at the very end. transocean was good enough to prepare this slide for us, which shows the kinds of activities that were going on. the negative test took three hours. they did it two or three times. sean grimsley has told you about the discussion. at 8:00 they deem it done, wrongly, even odiously that we have to keep repeating, nobody thought they were taking a chance. nobody thought that these negative test had been screwed up. for one reason or another they convinced themselves that a faulty test had actually succeeded. critical point in this thing. now, you will have a chance to look at this, and we will not go to these at length. transocean has given us this, but it shows the activities that were going on from 8:00 when they begin displacing the riser,

again, on the midterms, when you take the seawater out of the riser, when you take the mud out of the riser and put in seawater, and there's less pressure holding in oil and gas at the bottom of the formation. and anyway, we see different activities that were going on. it will be up to the commission to decide if those were too many activities. if all being done by different people at different times. if you should have rules about complex activities going on so everybody knows what everybody else is doing, that's part of the regulatory aspect of this. now, here's the diverted. here's the mud-gas separator. remember that the hydrocarbons come up here. the crew has a choice of sending the stuff that is coming up. but is now on the rig floor. mud is there because the

pressure of the reservoir is pushing mud at first it is about comes up first, gasset coming up next. when gas comes up, that's really bad. so the crew could send this stuff to the mud-gas gooseneck. mud-gas separator. mud sometimes has gas in it. you can't separate the mud from the gas, put them up back in the mud pits and that the gas overboard and you are fine. the mud-gas separator is a very relatively lightweight piece of apparatus. the mud-gas separator in no way could have withstood the pressures that were coming up from the bottom of the well. and it didn't, and there's a question here as to whether it's the crew, had diverted it overboard. if he needed a come as soon as they saw problems, instead of sending it in the mud-gas, they sent it overboard, would that have stopped the explosion? would it have mitigated it? we have some information on

converters. -- the burgers. the burgers. gases in the riser now. the issue is bp says the t.o. crew might have done better if they sent it overboard instead to the mud-gas separator. time is happening rapidly as would all doing in hindsight now. let's see what the existing knowledge was on diverters. this is transocean document, handling gas in the riser, bad thing. if there is rapid expansion -- expansion of gas in the riser, the diverters must be closed and thrown overboard. if you're looking at the t.o. manual it you are really impressed by. everything anybody could ever imagine is in there. richard and i will tomorrow

we'll talk more about it because as one looks at, everything under the sun is covered. it's hard to see at a particular place somebody saying, if you see that, do this. this is not said by way of criticism that people tried like hell in this manual to get it right, but it may be that when time is short, there might've been different ways to make clear exactly what should've been done done in a short period of time. we will get to that tomorrow. there's a report on diversion, 1992-2006, 16 of 20 diverted uses were successful. the success rate for diverters is a very high. go to the next. and this is one we've covered before. we all know now that a little gas at the bottom and a lot of gas at the top, we have seen the erosion. we can cut to the chase.

let's just cut to the next slide. we are now going to the blowout. hydrocarbons on the rig. and that's where the initial explosion is. there's been talk of can you fireproof a rig, production rigs are a lot of attention is paid to every light fiction being sealed, things like this. drilling rigs are not as fire protected. anybody who has any engineering at all knows that gas and air create the perfect substance for

an explosion. to an ordinary person, not a big expert, if you have huge balkans of highly a flammable gas, explosive gas coming up into the riser, and extreme high pressures mixed in a perfect air mixture, it's pretty likely something is going to happen. this is what happened. transocean tries its darndest to be sure that people knew that problems could be caused when wells underground. transocean had had an earlier well control problem in the north sea. i've agreed with transocean as lawyers that this slide accurately reflects what was learned from that explosion. transocean and the wells offers

analyze the event, and you're the conclusions they reached. heidi jones is required when you have one barrier under balanced. we had the only barrier we had that night was the cement in the senate had failed to negative-pressure test, although nobody knew it, and the well was under balanced. so people knew there was one barrier, the well was under balanced, and that called for heightened vigilance. what everybody on the crew that everybody knew that this was something you have got to really be careful. now, what is high vigilance? what are the five steps you ought to take? should you have your hands somewhere? i don't know, but we all agree that t.o., that's a lesson they learned and communicated to the people. secondly, they say it twice. you've got to recognize when the well is under balanced picture have to be aware the well is

under balanced. and you have have heightened vigilance. again, i say a lot of this depends on the right person with the right knowledge and the right background and the right extras being in the right place at the right time and seeing the right information and making a decision quick. finally, remember i showed you the sperry-sun kick information, the red drill pipe pressure going up, and i said the problem is it gets confusing that that is not probably what the truth was looking at. one would hope the drug was looking at information that was clearer than that, but we don't know that. we can't assume it until somehow we try and figure that out. but transocean new that they had to highlight to the driller what the kicked detectors are when you're not going. they were not drilling. they were kicked detectors. somersault, some were less

subtle. again this is a wonderful observation, but how do you highlight it? these are some of the issues the commissioners will begin with. they are not easy issues. i don't in the commission, their task here. last two hours. it is 8:02. the bp is open. the cement which we now know was flawed is the only barrier. the negative-pressure test is over. it has been wrongly interpreted as successful when everybody now agrees it was unsuccessful. they begin to remove the heavy mud, which under balances the well and allows the hydrocarbons to come up. 50 minutes later bp calculates, through their, they have some software called olga which we have not unpacked yet, you know

what i mean by that, we haven't gone through a to figure it out. we assumed that it is sensible and nobody has really quarreled with some -- i put a. bps conclusions and most people don't disagree with. now the well is underbalanced. it took 50 minutes a day at the heavy mud and putting in the seawater to underbalanced the well. that means if the cement job is failing, the hydrocarbons we'll start entering the well. okay, our -- a little at that, nine minutes after that, we have this subtle increase. there is will pipe pressure. symptoms are starting to show up. again on the sperry-sun data, keep saying this but it's easy to get confused, we do not know what transocean's drummer was looking at. now we get the pumps are off and that we see the drill pipe pressure going up more steeply.

the bp is open. the senate is the only barrier. hydrocarbons are coming in the well. they're going to get in the drill pipe. when they get up and drill pipe about the b.o.p. there is nothing you can do to stop that. went there about the bp you cannot stop the influx of hydrocarbons. 2138, bp reports actuates that hydrocarbons are now in the riser. that bp is open, they are above the bp, if you shut the bp down, you still have a mile of riser full of hydrocarbons. imagine the blog. they are going to come out of the rig. even if the b.o.p. is shot at that point, you will probably have a big explosion. now, would that have solved some of the later problems? maybe. 2140, but actually is coming out on the rig floor. the mud is in the top in the riser, the hydrocarbons are coming up under enormous

pressures. they are pushing the mud out on the rig floor. now the annular preventer is activated that's that big tie that closes, i showed you are going, seemed like a week ago, close the annulus. so the crew, transocean's crew operated in at 2141, bp says this is the first kick -- this is the first action taken by the group when they physically see the mud coming up on the floor. we don't know if that is active. i'm just telling you what bp says. there are disputes between bp and transocean, who said what to who win. there are disputes between how burden, bp and who said to who win. there are disputes. if the commission place, about who has responsibility for what. we have sat down with everybody. we get a lot of arguments. this is where subpoena power,

senator, would be helpful, because it's going to be hard to resolve those of us i can sit people down in a room in a very professional gentlemanly way and cross examine him and find out, you know, what's believable and what is not be able we're that anybody is what i've know reason to believe so far. high power. annular preventer activated. a nearby ship, the damon bankston, if you go out to these wells, there are all these chips working about it. you got to the north sea there will be 20 standoff chips. it's like a small community out there. the drill crew does exactly the right thing. they think of his ship. it is an exposure to the wanted to get involved. they say move back, something bad is going on. gas comes out on the drill floor.

you see how fast this happens. 2138 they are in the rising. eight minutes later the gas is up. first explosion, power loss. things happen fast. this word brings to light those last couple of hours and was going on. you see clearly that it's when the negative-pressure test is wrongly concluded to have worked, and they start removing the mud, put pressure on the hydrocarbons released, that's when everything starts going south. now, i said earlier we would give this group, and we've given them already, the bp, halliburton ntl, our preliminary tactical conclusions. and we begin the afternoon, i will say if anybody want to comment on any of these, they're free to comment.

if they want to comment, fine. if they don't want to, they don't have to. .com making doesn't mean they can agree. they can submit a paper within five days, as long as it wants, with every kind of idea under the sun in a. and if we ever get subpoena power we would use those papers to cross examine people for the. i don't mean that any threat. it's just a statement which would be a good thing to do. okay. preliminary. that means we will change unless someone gives us information that we are wrong, not i have told all the parties at the beginning of this back in august that i would to you exactly what we are thinking, so nobody is surprised and you've had every chance in the world to prove, tell us how we screwed up and how we are wrong. we don't think we are, but everybody makes mistakes. flow path was exclusively through the shoe track and that the casing. the cement, may be contaminated, may be dpl shoe track, and in some portion of the annulus

space failed to the height of current agreement, the and is spacing is what walls off the hydrocarbons of the hydrocarbons couldn't get in unless something happened there, channeling contamination something. pre-jump laboratory data should have prompted redesign. we look at some of these differing results. we think maybe more time could have been spent getting consistent results. remember that most of the lab reports show that this stuff works better if you stir for three hours in the laboratory before you foam it aired on the rig, you don't store it for three hours before you foam it. you foam it and then you send it down the well. the sequence is different that it may be scientifically that foaming and then taking that long trip down the well is to get the same scientific result as first conditioning it for

three hours and informing it. we don't know that. the negative-pressure test -- oh, some tools might have identified the failure. most operators would not have on the tools at the time that they would have relied on negative-pressure test. the halliburton passionate bp conceded in its report that maybe if they've done a risk assessment at that time, all of the things we showed the commission earlier, although cement issues, maybe they would have run the cement block instead of running passionate -- said halliburton home. we don't know that. the negative-pressure test repeatedly showed the primary senate job had not isolated hydrocarbons. we think sean grimsley drove that home. despite showing that, bp and t.o. treated the negative-pressure test as a success.

bp's temporary abandonment procedures introduced additional risk. setting down at 3000 feet instead of 300 feet reduces the pressure of holding the hydrocarbons at the bottom of the well. bp had good reasons for doing that, which you heard, but we feel and we're ready to be talked out of it if we made a mistake, i keep saying this, i don't have anybody after january 11 saying, you know, you miss something, fred, tell us now. we think that setting the temporary abandonment plug, 300-foot plug, that low instead of 300 feet, introduced some additional risk. people have told us looking at this that the simultaneous activities and the nature of the monitoring equipment may detection more difficult during riser displacement.

if there's something that i'm blessed about than others, it is this one because you can argue endlessly over the effect of moving mud around in these parents that we have heard this enough times, that that is a prevented conclusion we are confident we are prepared to make. nevertheless, the kid indications which i should you through drill pipe red lines were clear enough that if observed, would have allowed the rig crew to have responded only. the irony here is we don't know what the tos driller was looking at. i would hope the information would be at least as good as halliburton's sperry-sun information. was the rig crew recognize the influx, there were options that might prevent or delay the explosion. diverting overboard, explained the burgers. instead putting this stuff up to the mud-gas separator, saying it overboard. and triggering the emergency

disconnect earlier might have shot in the well and limited the impact of an explosion. and there aren't issues as to whether the emergency disconnect would have worked, other things would afford, with the cables damaged, there's a lot of complexity in this, and that's why we say might have shot in. data conclusions regarding the b.o.p. should have weighed results of a rented b.o.p. examination and testing. i'm sure you are care more about the b.o.p. as i said, five times, it's premature. and, finally, and it really is important, i mentioned this three times, you distinguish what i'm saying, as we stand here today and we've asked everybody, we don't see where a man or two men, or a group of men were making one of these decisions, and they had in their mind that if we do it this way it will be safer, if we do it this way it will be cheaper. we're going to do the cheap way instead of the safeway.

we haven't seen that. we know, commissioners, that a million have dollars a day is a lot of money, even in the united states government today. and the idea that a case delay cost causing the and half dollars is overhanging the people on the rig they want to do a good job but they don't want to risk their lives or the lives of their buddies that at the complex sort of matrix or that the matrix is they want to be efficient, and they want, they don't want to waste money, but they don't want their buddies to get killed, or themselves. i've been on a lot of rates. i do not beat anybody on these rigs, i don't think people sit there and say well, this is really dangerous but the guys in london will make more money. i don't think they think that way. i think it is more competent than that, okay? so, what we are saying is that human beings that made the decision, shoreside and on the big, we don't see a concrete

situation where a human being made a trade off of safety for dollars. thanks so much for your attention. and adding it will be as good a number of questions of the panel. >> thank you, fred, sean, sam, for that tour de force. we will resume at 1:30. that is in 30 minutes. see you then. [inaudible conversations] [inaudible conversations] [inaudible conversations] [inaudible conversations] . .

can't do [inaudible conversations] [inaudible conversations]

[inaudible conversations] >> daylong live coverage of the national commission on the deepwater horizon the oil spill, looking at the findings in the investigation of the explosion of the macondo oil well. as the commission is taking a break, and tell one time go 30 we are opening our phone lines to get your thoughts on the investigation on some of the testimony you have heard today. the numbers on the bottom of the

screen, (202)624-1111 if you live in the eastern or central timezone, (202)624-1115 or the colors in the mountain and pacific timezones and for gulf coast residents, the number set aside for you 202624076 oh, taking a break until 1:30 eastern. this is the first of two days of hearings as commission members continued their probe into the incident. not forgetting those who died during the april 20 explosion. we thought earlier today chief counsel fred bartlit who wrapped up testimony just before the break. as he was starting his presentation, he requested a moment of silence for the victims. 11 people died. estimates of 200 million gallons of oil were released into the gulf after the explosion. again the numbers on your screen (202)624-1111 for those in the eastern and central timezone,

(202)624-1115 or callers in the mountain and pacific sounds and for gulf coast residents (202)624-0760. our first caller is jimmy and sherman, texas. >> hello? >> go ahead, jimmy. >> caller: i am sorry? when the president got on the tv and how we asked for somebody to show them how to cap that off on the oil was coming out of the gulf, coming out of the pipe, they didn't know how to cap it off, right? i called my conquers men and told him i would do it. i was a plumber for almost 50 years. i said i don't know what they will do but-- but i knew how to do plumbing and that flange down there, the pilot that broke off they tried to get around it where they could cap it off. okay, told them to unscrew those bolts to hold that flange down and make up another flange with

a foul on top of it so you could take it off and set it to one side and put that flange on top where the old flange was ample that that down and reach up and turn the valve off. it worked. i think i'm the only one that told him about it but i don't know. >> host: thanks for your call. next houston, texas. houston, do we have you? >> caller: hello? >> host: go ahead, sir. >> caller: i'm watching this thing here on, you you know this investigation and you will need some people on that committee up there that has got field experience. it seemed to me like there are so many things, especially this last guy, this last speaker of it before they broke for lunch, i don't remember his name but he had no-- homebase. i don't know what his background is. it sounds like he is a lawyer of some sort, but i have been in

the business for 40 some years and i know that a lot of things were said they were absolutely incorrect and i don't know if he had been boondoggle by halliburton rbp or what, but-- >> host: what kind of work do you do? >> caller: he is not doing a very good job, i don't think, in presenting this stuff. he keeps talking about the mud coming out of the drill pipe, you know should they have done anything about that? well, the mud in the riser, they should have diverted it. they don't have a choice, if it is in the riser the only place they can go with it is diverted. >> host: can you tell us what kind of work you do? what kind of work do you do? >> caller: right now i'm retired. i was a drilling supervisor for exxon for 40 some odd years. >> host: thanks for your call. on to another call from dallas. go ahead, dallas.

dallas, texas, do we have you? >> host: i'm not from texas. i am from florida. >> host: go ahead sir. >> caller: i was wondering, on these rigs, when they are out there in the gulf, what are you doing in bad weather? i mean how do they protect these rigs from boats running into them? i mean after they get the wells drilled and stuff? >> host: a good question. thanks for calling. the next call is another call from dallas. go ahead, dallas. caller, are you there? >> caller: i'm calling from new york city, i am sorry. not dallas. first of all i would like to say that the presentation i think especially by the young man, sean i believe his name was, i think it was excellent. i didn't understand what had gone on with the explosion up

until this particular point. it was an excellent presentation. secondly, i don't think it was that hard to understand, once it was laid out the way it was, i think the average person could have a very good understanding of what went on, and thirdly, i really disagree with the last gentleman, the last lawyer that spoke, the chief counsel, that he couldn't see that people made bad decisions intentionally based on the cost of closing down or abandoning the well. you have to consider the fact that people have jobs they are trying to protect and if they are told to do things a certain way, even though they think it might e. risky, think they would do what they were told. i don't think that somebody would risk their job or their livelihood and tell a boss or a supervisor, especially one with power within bp or t.o., i am not going to do it this way or they might mention that it is

unsafe but if that supervisor tells them, you do it the way i tell you to do it i think they are going to do it that way. , and i agree with the second gentleman who called. i think the commission should have some people on board, who understand what is going on here, who have some kind of background in the oil drilling business, because i think it came down to money and time versus safety, and i think they aired on the side of safety. >> host: that was his team that was established in thanks for your call. that was the theme established early and repeated frequented by chief counsel fred bartlit and bp didn't weigh the cost of safe procedures before they acted, and we cote mr. barlow. he said to date we have not seen a single incident where a human being made a conscious decision to favor dollars over safety, and then daniel beck male who is a louisiana attorney suing bp and a number of others over the

oil spill called the findings about money not jeopardizing safety absolutely absurd. the commission is in a lunch break and they will return at one time go 30. while the break is continuing we will go back and hear those opening remarks from chief counsel fred bartlit fromthing earlier today.okay, now >> now we will start, i will begin the run through, and when we get to the summit issues, sam sankar will take over her go when we get to the negative tests and the temporary tr abandonment issues, sean et's grimsley will take over. so let's go. now, we will first talk about the rig itself, and because we are we are all familiar with itt that so everybody is on the same page and they know where it was and what was unique about it. we will then talk about what it is like to drill offshore wells generally.d than the macondo timeline andtho

then we will come to the cement issues, some recent questions raised aboutso cement, the temporary abandonment issues, kick detection, kit detection, kicked means we is the term hydrocarbons that hydrocarbons are gas and oil. of course, you will see gas expand rapidly as it comes to the surface. if gas comes to the surface, it gets on the rig, that's bad. when gas gets in the well, and the rise, that's called a kick. as we go through these terms, a lot of us have never heard before, i will be sure to explain to them. and we will talk about the blowout itself. okay, here's the gulf of mexico, his houston, his temper, here's new orleans, here's the macondo will. the gulf last year. the gulf last year, there were $170 billion worth of oil and gas produced. most people aren't aware if

there is a very dense network of wells, pipelines, subsea manifolds, a whole community of helicopters, offshore vessels, a huge industry here. generally speaking, deepwater, we're talking but here begins about 1000 the, water deaths of 10,000 the. the water depth here was 5000 feet, a mile down. then they went down 13,000 feet into the formation underneath the seabed, what we call the mud line. okay. now here's the deepwater horizon. isn't the mississippi canyon that it's actually canyon that was formed as the mississippi river came out eons ago. here's the 5000 feet of water. here's the rig. here's the famous b.o.p., the blowout preventer.

and now we go down to seabed and other 13,000 feet, what we will be talking about, this is where the pay sands are. this is where oil and gas is. and the oil business they can't pay because that's where the payoff for drilling the well is. so down here 18,360 feet aren't hydrocarbons they were drilling for that has been established for by seismic work, work of geologists and the like. what happened occurred right down here. bottom of the well. this cemented you see here, and you'll see enough cement today you'll be sick of it, but this thing that down here is where the leak occurred, and we'll be spending, we'll have big blowups and animation showing what happens down there.

you'll hear a lot of names. we all know bp, transocean was the owner and operator of the rig. they have a lot of rigs all over the world. halliburton, among other things, does cementing. m-i swaco is an schlumberger company that handles the drilling mud. you will learn more about what drilling that is and what the purpose of it is. schlumberger was on the well the day of the explosion to do certain logging, and that, we will discuss that. and halliburton unit called sperry sun capture data, the data that was on the rig and that night, went down with the rig, but halliburton had a sperry sun unit that was sent shoreside. they caught the town, or houston, or shoreside. certain data which was saved and there are some certain data about that. oceaneering, the work down there at the bottom is done by these robots, oceaneering did it.

dril-quip made wellhead casing hanger's. you will see pictures of dril-quip equipment. they been very cooperative. and top engineers and they've helped us interpret what happened with that equipment. and, finally, the famous centralizers you've heard about were made by weatherford. now, in 50 years of trying cases i've learned what people hear names, they learn track of them, they can't keep track of where they are and that kind of thing. so what we've done is this. we have a chart of the onshore, sometimes you see people called out and down passionate in town. on the onshore chart, the people, transocean and halliburton have who was on the rig that night, bp well site

leader's, the transocean team operating the rig, halliburton personnel. to make it easier to keep track, we put around the room these big charged with all these names on it again as far as i'm concerned it's okay if you get confused what's going on to walk up and take a look at this. it's important that everybody understands what's going on. at the breaks you can walk up and look at it and get a feel for it. we won't talk about all these people today, but we have done this so that everybody can follow the names and follow what's going on. of course, as we go through this will also explain who the players are and who they work for. all right, now we will learn a little bit about this rig, generally. this is the deepwater horizon rig. it's a drilling rig. a lot of people don't know there's production rigs that stay on station for longtime and have a lot of dry gas separate and things on board, pipeline shoreside. this was a drilling rig that was going to drill down to passionate originally was going to go down to 20,000 feet.

they ended up going down to 18,360. it's easier to understand the rig when you do in this sort of a cartoon fashion. high as a 40 soar building, giant derricks on-topic and and a 400 tons or more. almost as long as a football field in two ways. helicopter pad. pipes stored. now we're getting to where the action happened. okay, this is the drill floor. here is the road repaired this is where the well is drilled, and when you hear the mud came up, the gas came up, and the explosion started, that's where it is. the true shack with the drillers are is pretty close. and you will see pictures from

the inside of the drill shack of the people sitting there, like the captain of a 747. they've got all of the controls and they sit in chairs. they work long shifts, 12 hour shifts monitoring all this information. this is the mud longer shaft, which is halliburton. you hear about the diverted which can under some circumstances divert oil and gas over board there's a made it doesn't end up on the rig. and that my guest separator byte, if you have gas, natural gas, at the mud you can separate it here, get rid of them that gas up your and put the mud in the mud pits. now, a lot of people look at this and they think that this is the deck and then there's not much else. this is one of the lower decks, the moon pool is this business that's been run a long time and are turned years ago somebody look down there at night and saw a reflection of the moon coming

up and it's been called the moon pool ever since. the mud pits are important because with a drilling mud is regulated and stored in the mud pits, it is taken from the mud pits, it is moved around in the mud pits and that sort of thing. we will hear a lot more about drilling mud in a moment. this rig is more complicated than it initially looks. the first place, it's not anchored. there are some rigs in the world that are anchored by tension leaks. some by cables. this rig is a ship, it floats. it's not anchored. it gets positioning signals from a satellite that receives the positioning signals and then there are computers on board that operate these big thrusters underneath. and these thrusters keep the

deepwater horizon over the well. this is the rise of echoes down through the moon pool. when you're on it you are not really conscious you are on a ship that is a big thing and it is heavy, but the technology is amazing because this thing is not towed around and can actually sail away and go to the next location. it has a captain just like any ship has. and, of course, that's one of the reason the coast guard has been involved in the district you get an idea, it's kept on station by these thrusters. we tend to put the death appear. now we are going down the riser to the seabed. this is a mile down. when you're down there it is black dark, can't see anything. it's 32 degrees. we've had to artificially

illuminate it here. the b.o.p. -- this is the seabed. sometimes called the mud line. this is the b.o.p., a blowout preventer, which is, you hear more about come is a stack of towels to shut down the well in emergencies but also used for different tasks and functions during the drilling of the well. it's not just an emergency device. the blowout preventer sits on the well had come and then the drilling -- it goes down here through the sands through the formation. so we're already down a mile and we're going down another 13,000 feet, another two and a half miles or so. casing string. now we will go down. now, down at 18,360 feet, the temperature rsis 265 degrees

fahrenheit. the pressures are size 14,000 psi. when you get all the way down there, to pull up the drilling equipment takes 18 hours. so if you want to do something down to come it takes 18 hours to put the drill string. putdowns new tools, go down for many, many hours and do the work, another 18 hours up, and, of course, then back down again. so when you do work down there, it takes a lot of time. it won't surprise you to learn that the out of pocket all in costs, for someone like bp, a running one of these rigs is about a million and a half dollars a day. and, of course, if you're taking four or five days running drill strings up and down to do work, that's a cause. now, i'm going to say something now and i will say it again at the end. to date we have not seen a single instance where a human

being made a conscious decision to favor dollars over safety. i will talk more about that later, but it's important to keep that in your mind as ago. there's been a lot said about it. this is one of the most important issues. we have not found a situation where we can say, that man had a choice between safety and dollars, and he put his money on dollars. we haven't seen a. and if anybody has anything like that, we, of course, welcome it. okay, here's the pace and again. this is where the action was and you hear a lot about what happens down here. now going to talk about drilling offshore wells, because there are a lot of unique technologies and truly brilliant engineering and called in the endeavors. there's the b.o.p.

we will talk about it and explain some of these functions, so when we get down towards the end, it's 50 feet high. there's a six-foot man, weighs about 400 tons, costs about $25 million. the b.o.p. travels with the rig. this is the rising b.o.p. -- a rising b.o.p.. horizon b.o.p. as we stay, the house i can open and close on the drill pipe. you hear about the annual preventers. we will see them operate in a moment. these are the control pods you read about in the papers. up i grant and close on the pie.

the blind shear ram is the last resort in shutting down the well in an emergency. the blind shear ram as you will see actually slices through the pipe. these rams weigh maybe, a blind shear ram may wait 1400 pounds. very hardened steel, and we will show how they operate now. and okay, the pullout prevented sets out the well head on the sea bottom. the drill string comes down to it. drill pipe. now we will show you, first show you how the annual preventers operates, you will hear a lot about it. hydraulic pressure comes up year. when it comes up, this black

deal here is like a giant 18 wheeler truck tire made out of the heart is robert you've ever seen in your life. it's almost as hard as the plastic, and when you want to close the annual preventers, you pressure of these deals, these arms go up and it squeezes this giant hard rubber tire into the annual us. you hear more about the annual is, and keeps any hydrocarbon pressure, anything from coming up outside the drill by. it does not close the drill by. it closes the area around the drill by. okay, let's look at the bible or the pipe ram. -- variable boer ram. the variable more ram begins to close off the annual's and fits tightly around the close by then closes all. is what we'll call the annual is there. and here's the blind shear ram.

this is the last resort when you true grit, it cuts through the drill pipe and a hydrocarbon, oil or gas or anything can come up the drill by. and you will hear, the drilling, the driller sits there in his chair, a big red button behind him, he can push that big red button, and that energizes the blind shear ram and and about 40 seconds later it's got to the drill pipe and the well a shut down in that regard. now, although you've heard a lot about the b.o.p., you may be surprised to know that we're not going to talk much about the b.o.p. and the reason for that is this. the government has retained a norwegian engineering company to analyze the b.o.p., and it's a two or 3 million-dollar contract

and they'll analyze this thing from soup to nuts. it's not done yet. some hoped it would be done by now, but it is not. and for us to speculate on what happened with the b.o.p., was it energized, did it work? if it didn't work, why? all these issues that it would be very premature for us to speculate when some reasonable period of time we will know hopefully what happen. so we will not talk about the b.o.p. said but because it is not productive. we will be talking about when it's to be triggered and who is supposed to do what. but we will not be talking about any failure mode in the b.o.p. today. now, what a lot of people don't understand is, people, people think that there's these pools of oil and gas down there and

you drill down and you stick a straw in a you suck it up. it's nothing like that at all. down here these pay zones are pores in rock. and it's pretty hard rock. it's like a hard sandstone that you can stand on, and the rock is full of pores and the pores of oil and gas in them so there is extreme high pressure, you will see. so as you are drilling down here, you are drilling down to get to the pay zones so that you can, here comes the drill, as you get into the pores here, you can start getting on and gas out. stop it. this is very important. the brown color here is drilling mud. drilling mud is maybe 14 half pounds per gallon. you will see that the weight can change. drilling mud is used to take the cuttings from the drill bit and get them off the bottom as much

comes to the top, he goes over a screen, the mud goes through and the cutting stays so you don't get the bottom of the well just full of all of these cuttings. the drilling mud also served to keep the fluid, the gas and oil, under pressure in the reservoirs at bay. because the drilling mud is designed so that the weight of the drilling mud counterbalances the pressure of the fluid. the red arrows will always be the weight of the drilling mud. the green, the pressure of the fluid. so when you come down to one of these layers of hydrocarbons, oil and gas, the drilling mud, people continually monitor these pressures and they keep the drilling mud and await such that it is have enough to keep the green on it and gas under pressure from getting into the well bore. and one of the key issues we

will be talking about again and again is the tension between keeping the drill mud at exactly the right weight, getting it too heavy and, or getting it to life. if it's too light, the green on gas comes into the well. if it's too heavy and actually fracture the side of the well. it gets heavier than what's called a fracture radius and we will see that. but it's important understand that pay sands, the pay area we are drilling for is raw, actual rock with pores in it that contain this fluid under pressure. okay, now we're talking generically about drilling a deepwater drilling. here's the drill bit. here's the previous casing. here's the pressure in the formation. at this height it might be sea water pressure. we are going down.

the cuttings are going a. the brown is the drilling mud. the pressure of the mud has to overbalance the pressure in the formation. so the weight, the heavier the mud is, the easier it is to keep the hydrocarbons from getting into the well. you do not want obviously to get oil and gas in the well at the wrong time. while you are drilling come it would be really bad to get oil and gas in the well. if it does get in the well, it is what is called a kick and it can be sent to the top because if the pressure starts coming in here, it will change everything all the way up to the talk -- top, and they will say, pressure has changed, there is a kick. so what we do is we continually increase the mud weight as the pressure gets bigger. pressure is here, gets bigger, mud weight gets bigger, mud weight is bigger. and there's a mud engineer at

the surface. here it was someone called him i swaco which was a schlumberger sub. the mud engineers continually change the weight of the mud as they go down and get information on the formation. okay. now this is important. you will see, you will notice when you look at these pictures of the well, it's like a telescope. keeps getting smaller and smaller as we go down. the reason for that is that, as you get down here and the pressure is higher, if that might pressure keeps getting higher and higher and higher, the blood pressure which is needed, the mud which is needed down here, to counteract the pressure could be so high up here that it cracked the formation. so as you get deeper and the mud weight gets heavier and heavier, periodically you run a casing. casing is just a circular piece of steel that comes down, and

after you run the casing, which is here, then you run cement down the center. the senate goes to the bottom of the well, turns the corner and goes up the side. so the casing is thoroughly cemented in. and you'll see, every time you see a picture of a welcome you will see these from the top on down. you see casing cement, casing senate, casing cement. and as you'll see in a minute, this isn't the bottom of the well. you have to keep doing this. so they will have to drill this out when they did this casing cement. when it's at the service it doesn't take so long. when you're setting casings at the bottom it could take 18 hours to bring up the drill pipe, put on a casing, bring up the casing tool, but the drill pipe back down. it could take a couple of days to do some of these things. now, this is key.

here's the pressure. remember that the hydrocarbons are in the rock that there under very high pressure. as you go deeper, the pressure gets higher and higher and higher. this is the fractured radio. the fractured rating is the amount of pressure that will take to put a hole in the formation. if you put a hole in the formation or crack it, bad things can happen. you can lose some of your drilling mud. you can losing it. they don't want to break the formation of the vote of the. and as they drill down here, you will see their continually changing the mud weight to stay in between the green line and the blue line. that is one of the secrets of deepwater drilling. keep the red night in between these two lines as you go down, continually fine-tuning it up on

the surface. the mud engineer is doing this, changing the mud, mixing the mud so it's exactly the right weight so it keeps out the green pressure and doesn't break through the blue formation. that's one of the keys. here's a place where it is coming very close. to the poor pressure. and when you get to a place where you are challenging these two, that's when you put in another casing. up comes the drill string. down comes the casing. down comes the cement. and it always turns the corner and goes up. now there's something i want to explain right now. this is hard for a lot of people to grasp right away. this area here is called the annulus. this is out the center of the

casing, and this is called the annulus. it looks pretty big, but we brought this out here, and train it will take this around and show people, but the annuals is a very small. this is the casing in the center. this is the formation, and we have to pump cement as you'll see into this small area. at the bottom, this might be 1000 feet of cement. that's as high as 100 story building. it is an art, to be sure that all of this is the was cement, all the way around. there's no gaps. the gaps are called channels that we will talk about that later. but this is pretty much to scale. and we look at these it looks like it is a big wide thing. it is not easy to get cement all the way a round here at the small little annulus over the

height of a 100 story building. shawn will just take this up and down the aisle so everybody can see it. the commissioners are of course aware of this. we're shown the commissions at testimony earlier today from chief counsel bartlit. we will leave it at this point as members, commission members are just returning from a lunch break now. up next a panel discussion with representatives from bp, transocean and halliburton. this is live coverage on c-span2. >> gentleman as i said earlier, we were going to give you a chance to comment on any of the conclusions. if you don't comment that doesn't mean you admit them. it means that right now you were not prepared to add something.

people can add material later into our web site within five days and we will consider it. we might talk to again about the just want to go through this again. first, the flow path was through the shoe track and up the casing, not the annulus. we know bp agrees with that because we read the report and mr. ambrose to have a position on that? >> fred, we get a little more amplification? >> that is unusual. >> it may be a first for you. >> is out that better? >> it is. >> view of view on whether the flow path was through the annulus are like bp said in a report up through the shoe track? >> just from the work we have done today we agree with the most likely path of hydrocarbons. >> are you doing further work? >> we continually look at new evidence has it comes than such as when the seal simply was pulled and when we can come to final conclusions we will determine the final answer. >> you both look at the seal assembly that came up, the one

that i showed on the screen and you feel that is your view that the leak came up through the shoe track? mr. fargo and mr. halliburton, do either of you have an opinion regarding where the flow path was? >> i'm sorry, fred. i need to enter a. melcher asks that people speak into the microphone and began when they are the first to answer questions to introduce themselves. >> yes, i'm john and service coordinator for spirit drilling and i'm not really in a position to contested either way. >> b- richard vargo. i am the gulf of mexico cementing manager for the region, and i do disagree with the conclusion that a strong. >> do you think bad the lead came up the annulus? >> i think it was initiated at the annulus, yes sir. >> what do you base that on? >> basically there a few pieces of data that they have and i

think that has been shared already but basically as a result of the cementing operation and displacement, we believe that gas and oil was pushed up the annulus. if you go back before the actual incident. >> excuse me a second. put the long string up there so we can see what we are talking about, please. i'm sorry to drop. >> that is fine. if you go back before the casing was run and the cleanout trip was run after the logging, this noted that there was 1200 units of gas was circulated out of the well prior to them coming out of the whole. this is with the mud in the whole obviously. once casing made it on the bottom and circulation, doing the bottoms up circulation was not performed, i believe that gas was allowed to coalesce in that area as they started to pump mud down, down the drill string ghana to the casing and up into the annulus. that position those fluids all throughout and trained all throughout the annulus.

what that does is, we indicate there is no losses, you are essentially taking that pressure from downhole and essentially carrying that are sure up into the annulus, up towards the base of the seal assembly and that is roughly 13,000 psi plus or minus. at the point of come at the end of the cementing operation obviously we had indicated to bp and i think it has been common to 30 been brought up that we felt like there was going to be a channel present potentially in the cementing operation, which would then allow communications for those fluids to continue to. >> let me just interrupt sir for a second, only to set the stage. vp concluded in its report that there were no leaks from the reservoir, either before or during the cement operation. i take it that you agree with that? >> there was no leaks. >> no leaks of hydrocarbon. the hydrocarbons do not enter the well before or during the

cement operation. >> well i disagree with that. >> when do you think the hydrocarbons into the well? >> i believe into the well while redoing the center-- cementing operations because remember the well was very much and in balance and we know from the prior trip that gas had coalesced inside the wellbore so i believe goss was contentedly coalescing inside the wellbore and after we did the cement java displaced it, it was pushing that gas and oil up into the annulus and bringing up towards the seal assembly to the top near the b.o.p.. >> do i understand halliburton's view is that when the cement operation began, that there was, there were hydrocarbons in the annulus here? and as the cement came out and turned the corner, it pushed these hydrocarbons up the annulus. >> yes sir. is my view that as we began the cementing operation, that gas and oil was present there and we continue to push that up into the annulus and you drove that pressure from the base of the pay sands and drove that

pressure all the way up to the seal assembly, roughly 13,000 psi. as you indicated before during the negative test, prior to the negative tests we did the casing test and we agree the casing test was successful. if the casing test was successful and we had had gas and oil coming in through the shoe track, she pressured up and did that casing test, you would see anomalies in that casing test because you would be pressuring up gas which would pressure up at a different rate and you would have liquids pressure up, so you would have a change in slope of that pressure test. we don't see that in the pressure test so i don't believe anything has centered inside the casing at that point. >> is it your position that hydrocarbons never entered the well through the halliburton cement job that they were

present and pushed appear in those were the hydrocarbons that exited on the wellbore? >> i believe the hydrocarbons when of the annulus and as i said they made that to the seal assembly. remember after the cementing operation we sealed the seal assembly. as soon as you create the negative tests and you reduce that pressure of the hydrostatic mud on the seal assembly essentially what you are doing is removing that pressure and you are going to created differential across that seal assembly. think about the 13,000 psi and you have roughly 343600 psi. sitting on top. that is the mud weight pushing down on that 13,000 psi. that results in 9500 psi acting upon the seal assembly. when you now evacuate that mud and you put seawater inside the riser, you then take off that margin and now you have a resulting pressure that is acting up that is almost 11,000 psi. that 11,000 psi is then acting on that entire seal assembly from the 22-inch all the way into the nine and 78, roughly

237 inches square for an area. if you run those calculations you are roughly looking at close to 2.5 million pounds of force that is now acting up on that seal assembly. the casing inside the 14.5-pound per gallon mud weighing down in that mud weighs roughly 750,000 pounds. you end up having a resulting force up of 1.5 million pounds. i believe the blowout was initiated from gas and oil coming enduring the negative tests and coalescing the b.o.p. area with the rapid influx, once started, believe you had a failure point at the nine and seven eighths by 7-inch casing which is a week and in the casing and i think that is one fluids then began to move up the casing. >> so you think during a negative test, hydrocarbons got in here, came up here in cayman? >> no. the hydrocarbons were sitting up at the seal assembly are ready. as a result of the cementing

operation displacement so they are sitting up there waiting. want to do the negative test and you create that pressure differential across the seal assembly now you have the seal assembly lift up at at that gas and oil bend coalescing inside the b.o.p. area. then you went ahead and you circulated out after the negative testing and you thought everything was okay because the gas and oil is already there. you are not going to have gas and oil migrate 18,000 feet from the shoe assembly after the pressure test, all the way of that casing and then cause the blowout. i believe the gas was present in the annulus and that that is what caused the initial blowout. subsequent rapid flow of the fluids moving uppotentially part of the nine and seven eighths by 7-inch crossover which was the week point in the casing. >> is this is where you are looking? >> yes sir. that is a rough, quick assessment, sir. >> do you have any comment on that? >> only to go back to the work that we did in our report. this topic as to the influx to

the shoe covered extensively in the report. i was very confident when the report was issued two months ago today, that had been, that the flow path-- we demonstrated that with well flow modeling matching the surface pressure data and then confirmed it with additional information that became available to demonstrate that it had not come up the annulus. and since that report has come out, there there is then further confirming information, not the least of which is the picture you have here which demonstrates you did not come up around the seal assembly. >> do you understand the point mr. barber was making? >> i could not follow the logic of his description. >> i guess i would respectfully suggest mr. fargo you give us a written piece on this.

i think i get the outline of what you are saying. it is new to me anew to everybody and then we allow the other party to examine it and do whatever mapping common on it and allow you guys to comment in return. >> we will. thank you. >> let's go back to our-- our conclusion. the next conclusion is cement, potentially contaminated or displaced by other material in the shoe track and in some portion of the annulus space failed to isolate the hydrocarbons. i know you agree with that, mr. bly and i guess mr. ambrose, do you? >> phil ambrose with transocean. presently, we have looked at some level of the cement that it is outside of our area of expertise so differ today to

address this issue. >> mr. vargo maybe you disagree with that also? let's put it up again, please. cement failed to isolate hydrocarbons and annular space. >> i agree that it did not isolated. >> so you agree with proposition number two? thank you. our next point is the pre-job laboratory data should have prompted a redesign of the cement slurry. mr. bly do you have a view on that? >> i think it is worth making a comment on this because there has been new information since we concluded our report. when our report came out, we had signaled that we felt this was the case, and we saw, or we didn't see evidence that some critical information had been looked at in the testing, and used in the design process. that was particularly around from stability and other

matters. and that was our view at the time of our report. i was interested to see the letter that came out within the last 10 days from the commission that seemed to concur with that, and in fact that there may have been even further information that wasn't available. so i think this is a very very important point. >> mr. ambrose? >> again i have to differ at this point. >> mr. vargo, in hindsight today, do you agree without looking at it now come or disagree? >> based on the laboratory results at the time of the job i believe those results were adequate to continue with the job, however depending on which lab tests you are looking at, obviously there was a lot of design that was working towards the point when we actually executed the job. >> well do you agree or disagree with that conclusion, number three, tentative conclusion?

>> i would say we are still looking into it right now. >> thank you. the next point is the cement evaluation tools might have identified the pending failure. let's first ask, and i don't know if there are sufficient expertise, but is it true that a cement and valuation tool, the one that sam showed, would have been able to identify cement? is that true or not, or don't you know? >> i'm not an expert. the experts to work on this on my team suggest that it might bet that it is much-- a much more reliable test. >> so, bp agrees with what sam said in most people to do the test later on? >> you said in your report that bp had done a risk assessment at the time, you might have done the cement blog at the time rather than waiting is most

people do. what is the risk assessment that bp could've done at the time that you are referring to in your report? >> the criticism that we raised was that we didn't see any individual point that was wrong. the cbo was, you know, a matter of engineering judgment that we did believe given the nature of this job, the team could've done a more formalized risk assessment. that may have fled to cpl if they thought it was appropriate at the time and included other measures. >> we put up the list of issues pertaining to the nature of this job earlier, to the cement work, with a formal risk assessment involves going through all of that-- those factors as a group or as taking them one at a time? >> i think the way that the 13, that you showed calmness and probably how would have actually worked because i think there wan those. the first few work to do with the nature of drilling in the

gulf of mexico and the difficulties. those were well understood and in fact inform subsequent decisions around the choice of foam cement by the cementing contractor and many thing so i think some of those things would be in there but i don't believe the 13 is actually how someone would have sat down and looked at it. >> i'm not familiar with the term formal risk assessment. is that a process that is used within bp? >> there are a number of different processes that can be described as formal assessment. >> would be good to get some idea because you said in your report and of course be agreed that we are going to stick with your report, he said in your report that if you had done a formal risk assessment, you might, might have in your words, run a cement bond log. can you tell us in a nutshell what would the formal risk assessment have amounted to? >> what we were thinking about

was that there was a number of factors that the team saw that indicated they were okay. as was reported earlier this morning, there were reports back from the rig that said look the cement job went well, etc. so at face value there was a lot of evidence that things were okay. as my team went back through it, they said that was all right but there were some factors here. the low difference between lift pressure that was described ephedra, that we said you know in hindsight, those could have caused the team to think a bit more carefully about it. that was really the nature of that area of the report. >> mr. vargo do you have a few on the utility of cement evaluation tools or cement bond log's? >> i think cement evaluation tools are good and identifying what they call a cement bond log tool that can use ultrasonic type tools to identify top

cement and yes they are effective in identifying cement and foam cement and conventional cements as well. >> let's turn to fit the monster of on top of cement because people may have forgotten why that is important. you told us the cement bond log could have value in identifying top of cement. let's look at that. i know i catch you by surprise but that is the way it goes. while you are looking for that, let's go to the next one and we will come back to it. this is my fault, not hers, believe me but negative pressure tests repeatedly showed that the primary cement job had not isolated hydrocarbons. i take it you all agree with that? >> yes, sir. >> yes, yes, yes, yes.

despite those results bp and t.o. personnel treated the negative pressure test is a complete success. and meeting with you, the t.o. people mr. ambrose, i have seen a difference emerging as to whether your people maybe i've seen it, i may be wrong, whether your people maybe didn't take a position on it and you wanted to put with bp the head in responsibility and that is allows the question but i want to know is, mr. ambrose do you agree that vp and t.o. personnel treated the negative pressure test is a complete success? >> i think when you look at the negative test there are a lot of confusion at that period of time industry standard is that the operator will provide approval for negative testing. >> the operator is bp? >> our personnel do not have the experience or the authority to prove or disprove a negative test, and so when the approval

came back that there was a good negative test aarp teeple proceeded on the face that was a good test. speak to your people know what a negative test is? >> certainly in the course of normal business we understand what a negative test is. >> do you do them all the time? >> when you look at the structure of negative tests, the operator will design a negative test and we will set that negative test up to that design and then their interpretation of that test in the experience in the interpreter of that test aligns with the operator. >> did your people on the well that might have the training and ability to interpret a negative pressure test? >> interpretation is the responsibility of the operator. >> that wasn't my question, was that? my question was not his responsibility was. my question was did they have the training and experience to interpret a negative test?

>> i can't sit here and tell you today if they did or did not have the training experience to do the interpretation which is the role of engineer. >> as far as you know them today, you don't know whether the t.o. personnel we have listed here had the experience and training to tell if a negative pressure test is successful or not? >> in this particular case there were convocations with regards to been a good test which i'm sure we will get into in some detail. with the depth that it was being displaced to and the complications of the spacer, when 2020 hindsight we look at this today, we can say that when the test was set up on the drill pipe to monitor, it was getting great results, that we believed it was communicating with the formation. when the decision, you know when the crew was told to change that line up to the kill line, that spacer placement became ever so

important but may have been overlooked, and that added confusion and in that regard, the test became complicated. >> were your people, did they have the training and experience that transocean people to look at that 1400 pounds that was stuck on the drill pipe and draw a conclusion that was the meaning of it? >> today, i don't know because we haven't been able to talk to those people as to what they were thinking or how they may have discussed that situation. >> mr. bly i take it you agree with the second to the last bullet? >> yes sir, we covered this again in some detail in our report, tends to go back and piece together every step that it happened and our conclusion was that there had been a number of discussions between vpn transocean personnel. it appear that they were trying to do this test correctly but at the end of the day they misinterpreted the results. >> is under transocean's policies, even if, arguendo

assuming this comet was bp that was supposed to the primary interpretation, if your guys, your people on the rig saw a test they believe had failed, they would say so, would they? >> absolutely. >> you have any reason to believe mr. bly, that the t.o. personnel along with your people also leave the negative pressure test was a success? >> i believe they both thought the test was a success, yes. >> this is one of these areas commissioners where would be useful i supposed to sit people down under oath. i told you yesterday that i would try to point out areas where heavy subpoena power and the ability to cross-examine people might be useful. this is an example. you have seen the facts developed.

now, bp's temporary abandonment procedures introduce additional risks. we don't quantify the additional risks. do you agree or disagree with that mr. bly? >> i don't exactly agree. in our work, we went through what turned out to be the critical things we thought had contributed here. ..

>> so it seems to me there's two things that happened here. one was the decision to set a cement plant in seawater, which is the decision says you will search icy water before the plugged -- >> let me stop you for a second. your initial plan wasn't to set into seawater. so the initial plan, sorry to interrupt you, the one you would have been working on for a long time, isn't that true, initial abandonment plan? >> i can't tell you for a fact that i don't remember. up but i was just going to mark the setting of plug and seawater is a pretty common practice. i think many any industry would say that's a good way to get a firm of plug. >> original you're going to set in mud, right? >> i can't remember that detail. that was said this morning and -- >> megan, can you put a sean sequence? people do set plugs in mud,

don't they? >> i think there is a mixture. >> some in seawater, is that your expense, mr. vargo? >> in mud or see water, depend. >> you guys are the guys is that these? >> yes, sir. >> how long we set them in mud as opposed to see water? >> typically at the top 300 feet to seawater and then set the plug at other areas in the well obvious you are setting them in mud. >> you said you typically set the 300 feet. we know this was set down to 3000. how many plugs have you set in your experience, your career? >> many. >> thousand? >> sure, thousand. >> can you quantify for the commissioners in some way how often you set the plug as low as at 3000-foot plug was that your? >> i've never seen once that this deep for. >> your whole career? >> my whole career. >> here's the original april 14

e-mail that you're going to set the cement plug in mud at that time, do you recall that no? >> i recall from the smartest discussion. >> all right. is having a plug in mud would work, your guys would have made the initial proposal to say tonight, would they? >> i think there is engineering choices you're making throughout the course of these things. >> was that a yes, sir, a no? >> i don't know what was in their heads. usb two state delayed about what you're thinking it was decided that i can do. i can tell your engineering choices that you may, and i think setting in mud is something that happens sometimes, and sometimes people choose to set them in seawater. >> who is mr. morel? is he an engineer? >> yes. is a bp engineer. >> vice president? who would've been part of the decision to initially set the cement plug in mud other than mr. morel? >> that would have been the

engineering and ops team i think would've worked together together on those kinds of decisions. >> you do that to qualify to make a decision like that? >> yes, i do. >> so if looking to make his initial decision to set it in mud later changed it, if they are qualified, then we can't say, can do, that it was was a mistake to set it in mud? >> i didn't say that. >> i know you didn't. but it's not a mistake to set it in mud, right? >> i don't believe so. it's an engine in trade off decisions. >> people set them in mud all time and it works, is that true? >> i agree. >> now, the reason that you didn't set the cement plug a 300 feet in mud was because you want to thank all that drill pipe on, and setting the lockdown, right? >> i think that's a separate decision. that decision had to do with the depth of the plug setting as

opposed to the decision to set it in seawater. >> but moving the upper plug up from 300 feet, to some 3000 feet, they take a lot of the mud out of the well, didn't it? >> it increase the under balance on the well, that is correct. >> when you replacement with seawater that is called under balancing the welcome right? and increasing to announce means there's less force at the bottom of the well holding the hydrocarbons in. does the panel agree with that? >> yes. >> yes. >> let's go to the next page of our conclusions. >> we haven't completed the point. you know, what i said was, it was more drawdown, there's no reason at all to believe increases the risk. if the plug had been set at, you know, 502-d below the mud line

the wealth still would have been underbalanced. and if that, if the flow indicators had been this in the test, the same thing would've happened. so i think, i think the point and the reason i have taken an exception to it is, it's making a judgment about a very small change in risk that i think is not, you know, wasn't a causal factor in this. >> that may be. you're saying there is a small change in risk but you don't think was a causal factor. >> i think it's our duty to engage how much of a change in risk there actually was. once it's under balance it will float you don't catch it. if you miss the negative test, the same thing will happen. spent as a total of your council, the purpose here is not to argue or cross-examine. and i would be perfectly willing to accept a short paper from bp on why there was no increase in the risk by going down to 3000 feet. or if so the risk was small and inconsequential. if you want to submit that, the

purpose of this as a commissioner we told the commissioners yesterday, so you can see the differences that emerge. and if we need for the work, we will invite submissions, okay? okay, a number of simultaneous activities for the made kick detection more difficult revisor displacement. i think in your report, mr. bly, he said that might've been the case. you weren't certain about what you said it might happen. transocean was good enough to give us a slide which we used. i guess you prepared, mr. ambrose, you and your team. here it is. we will start with mr. vargo. you probably don't have any opinion on whether any kick detection was obscured by all the other activities going on, i take it? >> i would agree with that statement. the number of simultaneous activities most of them would have obscured a lot of the data

that would normally be used to evaluate a kick. >> mr. bly, i have carefully read your report, and you don't reach a conclusion on whether the simultaneous activities did ask your it. you offer the opinion that it might. do you have anything to add to that censure report was filed? >> knows for the primary thrust of our findings and work was that we believe the well was in a condition where it could flow for quite some time. 40 or 50 minutes before the event. and that indeed was flowing, and that through the course of that, for whatever reason, those conditions were not observed and acted on it till quite late into the event. and you're right, we said it's possible that the activities that were going on may have made it so that the crew didn't notice it but we also said that we didn't have to, because we believe the well was

monitorable, even with the simultaneous activities. >> you didn't try to put yourself in ahead of any particular person. you just opine that what was going on. i take it you disagree with that. is this routine, these kind of activities at the end of a well, mr. ambrose because i think the term simultaneous operations may mean something different. it's more, the activities your talk about in this regard are really sequential activities, required to finish the end of the well. the chart as you can see, it does show that a lot of these things are sequential in nature and they are just necessary steps to make sure that we can temporarily abandoned the well. >> did you say very normal end of the well sequence of activities? after the point where we start noted the well control activities. >> right. >> so yes, we do in our analysis

also agree that the underground point happened to the or 8:00. excuse me, just before 9:00. there were different things happening during that time. >> bp said 8:52? >> that was our estimate. 10 minutes till. it's one of the things you said in your opening remarks you have to get to the heads of the people that were on the rig. to understand. and, unfortunately, we can't do that. we can only suppose maybe was going through our crews headed that way. what i can say this point is when you look at the trends, on a minute by minute basis, 20/20 hindsight, see trends that when the driller took actions he saw trends that he expected to happen. and, you know, there were points in time where things clashed. as example of that, when the trip tank was empty into the fold on towards the end of that period where the flow just

started coming out, it's, coincidence is not your best principle time. he did your, the necessary thing at that point to put the 14 low base mud those in his trip tank back into the mud pit system. it's just unfortunate that at that point in time it and asked what was the biggest implode at that point. >> you know, that's an interesting point i hadn't thought of, and -- have you, has transocean given attention to, since this, you said there was a coincidence in that the actions regarding the trip tank could have massed what is going on. have you thought about any different ways of conducting these end of the well activities that could avoid, like you said, an unfortunate coincidence with the path -- pass what was going on? >> we haven't concluded our investigation yet. you know, just as little three

weeks ago with your assistants receive more information that helped us understand better what was happening the last hour. and it till we get all the facts, it's hard to make those kinds of -- >> fair enough. before the commission's report is due in january, december you think more about the event of the well activity and have any concrete ideas for how you could segment them to avoid that, things like that unfortunate coincidence you told us about, we would appreciate it and receive and consider it. >> okay. we will continue to be cooperative with the investigation. >> let's go back. by the way, let's go to those, megan, to the chart that has the red line and the pump line i call the kick chart. this is something that we could talk about a lot.

it is true, isn't it, that t.o. representation on the driller's screen of these events, you don't know what it looks like as you sit here today? >> the driller's screen, i mean, it's very high-tech system when what to do not was i think i could impression of what that looks like. they are very customizable. so depending on the operations at time, the drug had been looking at the screens in any want of different formats. so today, you know, we don't know. for the high-tech, those systems went down with the rig. so we can only suppose that he was looking at something similar to what we provided to the commission. >> for the record, commissioners, t.o. refers to their system as the high-tech system. that is just their internal lingo for that. would you expect the driller to

have been looking at, on your system, at some come in my be different, the data might be presented differently, but some indication of drill pipe pressure? >> the driller would have had saint-thiebault or pressure on your screen, yes. >> would you expect him to be monitoring that at all times during this period? >> i think when you look at, particularly machine chess, i think that's what the areas where you're talking about -- >> why don't you explain to the commissioners she just because that was something i mentioned briefly but didn't explain. >> machine test was a period where shortly after 9:00 the 14th out oil base mud is coming back into the mud pit and they're expecting that the 16-pound water-based space is about to arrive back. which were doing a shutting down your pumping operations to look for the interface to make sure that you have 16-pound mud back at the top of the riser because that is the point where you've

been discharged overboard after that point. so shortly after 9:00, mud pumps were shut down for a period of about four and a half minutes. so i think this is where you have to go minute by minute with the driller to understand what you may or may not have seemed when it comes to the driller's screens. precisely after the mud pumps are shut off, it was almost 60 seconds of constant, steady drill pipe pressure. and so a natural tendency, and we'll talk with goes on the rig to say how would you go about this period of time, this four and have minutes to get an idea of maybe what would happen. and having looked and seen 60 seconds of constant pressure, that would have told him that things appeared constant in the well. and then when he confirmed that he may have turned to do the next up in the process, which was lined up another mud pump to

pump down the kill line's. >> let me be sure i understand. and i appreciate forthrightness of your remarks. you're saying that people might look at this for 60 seconds, and if it looked okay, either of these, they might turn to do something else and not be focused at all times on those lines, we don't know that. we're really guessing, but you are using her judgment based on somebody who's been in the business a while, is that what you're telling a? >> we are doing our best to estimate that we can't talk to do week. >> does everybody on the panel agreed that in hindsight, this was just be good for you, with a the sperry-sun, an expert with sperry-sun data, we spend time with him as the commission places, anybody in the world knows more about this data, we appreciate you coming here. do we all agree that anytime we

are putting heavier fluids and instead of lighter fluid, and the drill pipe is steady, that what to a layman is a small increase was an indication that the hydrocarbons were coming from the reservoir into the well, do you agree with that? >> the expectation would be that if hydrocarbons were introduced into the annulus, that yes, you would see a decrease in pressure while pumping. >> so you agree that looking at this, for example, an experienced sperry-sun person like you would have wondered what was going on down there, would have been a cause to make further inquiry? >> if it were represented in this fashion, and if a law grad been looking at screen and concentrate on the standby pressure, they would have seen that ramp up, mud, and given pause and would pick up the phone and call ago. it's not necessarily an indication of a kick, per se,

but it would be something to investigate. >> would this second period on the sperry-sun data be more of an indication of a kick than the earlier one that we have? >> again, if it were presented in this fashion. along the chapter on the left is the actual logged that they were watching on the horizon. and the standby pressure, especially that first increase, it basically draws a straight line. and is very difficult to spot that 100 increase over that extended period. using that particular presentation. now, this being a fairly unconventional response to a kick, and i said no, but when you're receiving a cake you would expect a drop in the pressure, this in fact increase from the standby pressure. so it's not your typical indicator of a kick.

but again, it is something to give pause. >> you point to something that concerned us as a layman, engineers, but not expert in your business, and that is, the difficulty of somebody sitting there at the end of an eighth hour of his shift in seeing any trend here. was the fact the crew was putting displacing heavy mud with lisc water have given more significance to that line? >> again, you would expect a slight drop in standby pressure. and the rate of drop would depend on the flow rate in. but yes, if i may, i would like to just clear up a little something regarding the data itself and how you'd actually be watching this. we refer to this data a lot as real-time data, but in the strictest sense it's a real-time as you're watching it. it's no different than watching a ballgame live and sing everybody that it doesn't matter

if the replay is two minutes later or two hours later in the news. when you're looking at the replay, it is no longer life. so the data that we are looking here while it was collected in real time and monitored in real-time, we are now no longer looking at it in real-time. and to do this data and to watch this data in real-time is a definitely different than going back post job looking at it. so when you're staring at these traces, you'll have to wait significant number of minutes in some cases to notice a certain trend. for instance, this 100-pound increase. it's not something that would be normal. >> we were at one time. did we ever animate this one slowly, i can't remember that. i know we have got one on this one, and i pointed out today that whenever bp wants to explain this data, they take a sense of it sideways and stretch it out. do you agree as the expert here

on sperry-sun data, that turning it sideways is stretching out, enables you to see things that might not be as apparent in the original vertical? >> yes. you can emphasize certain traces, certain responses and make them look more or less significant. >> megan, your great. here's -- let's sort of start up your. and keep going. this is his first kick line he. and that is sort of what he would be seen as it traces down there, right? >> right. >> and it is your view that i guess that is as clear as it could be? >> yes. the displays you have turning it sideways and changing the sces and changing the timeframe, those will work in situations like this when you're trying to do an analysis. but they're not really conducive to proper break monitoring. the scales that are chosen for

this plays out in the mud logging checkup at least i'm not the way with the ones that were presented to the drill, but the mud loggers will seect the scale. go select the presentation that is no sufficient to them for identifying certain anomalies. to present that sideways comparison now on the much reduced and exhumed and skill on the sand by pressure would make it very difficult for them to track large increases or decreases of standby pressure. what you end up with is reach the top of the skill and you have to either wrap it up from the bottom or it would just hit a peak and flatly. you don't want to see that when you're monitoring the well. >> here's another, here's a sideways one going more slowly. and, of course, we all know that this is not the way it was presented on the sperry-sun data. one thing i've never been sure of, i should've asked this before, transocean has its data, its own system. why in the world is sperry-sun

-- who pays sperry-sun to keep separate data? >> bp. >> why don't they just use the dod to? >> most data was the t.o. date that the standby pressure that you see in the sperry database was actually transocean's data that was collected in the high-tech system and transmitted to us in real-time and stored in our database. most of the data that is in the sperry database was transmitted to as real-time from the transocean. some of the data that was not transmitted to us, that was a result of our own sensors, was the flow out, the gas, you know, and there were a couple of standby transducers located around the rig for our service. but the tank volumes, the flow in, the public stroke indicators, the choke and kill brushes, the standby pressures, all of that was collected by transocean and transmitted to

sperry for storage. >> mr. bly, maybe you can tell us, deal already has data. it with a a simple matter by limited to send that shoreside for your people to look in the room there. why we do not have the t.o. data sent shoreside, i just there is, but pay extra to have the other group sent sperry-sun data shoreside? >> i think if you look at the totality of what he's used, sperry-sun mud logging information for it, it is not well control is one part of that. there is geological information et cetera, et cetera so there's a lot of things issues for. i think that is the reason why it in particular is sent into the beach. >> mr. ambrose, do you know, it's interesting, i never focused before mr. disc letter just told us that this drill pipe i've been focusing on came from transocean. do you have that same information, your mud logger had the zeros and ones that make up,

or was it an analog system? >> several of the sensors are transocean sensors. the question that we have had is, which ones? we've never received the map that says which particular centers on these charts were being measured from saint -- transocean sensors. something we haven't had. yes, you know, these are, the sensors are, it is standby pressure from transocean but i think the difference that you will find out what the things we talked with the national, regarding animate some of this was something you want to do, they said, well, our system, this is one of the big differences, monitors and records things five times a second. this is every five seconds. so there's a 20 times the difference in the sample rate and that's one of the reasons why it is different in that

regard. and we still do not understand some of the way it's been presented. and that it is average data. so it is not the original points, so to speak. and again, it's just, it's not exactly the same data. >> trend data rather than by point by point data? >> acted that we're not exactly certain how it is average or presented. we are using it to the best of our ability but some of it appears to be averaged. >> let me inform the commission to anybody with a head on their shoulders would say isn't there a way to take the existing data, which we now know came in part from transocean, and g the transocean model that has been made and put the zeros and ones in there and so the commission could no weather, you know, exactly what the group was looking it. >> we've been told, some people don't want to do, others think it is difficult to do. obviously, if i were you, men

and women, i would want to know that. so that might be something we might want to pay more attention to. on my field i don't have any answer. do you think, mr. ambrose, it's possible from an engineering point of view to take his data and put it in the software that drove the t.o. technical high-tech data so we could get some a better look as to what your drill was looking at? >> it's possible. >> we've asked that to a few roadblocks everywhere still asking that. >> well, i think the commission would agree it would be worthwhile pursuing this particular issue after this meeting, maybe the commission could lend some weight to our viewers in my efforts to resolve this problem. you think, and i'm saying this now that any provocative way, but if i were the only of the rig, you guys, i would want my

high-tech data to be as valuable as possible. we all can see, i think some of us agree with message is clear, that some of these of his data are hard to pick up by a driller. do you have any opinion as to whether the t.o. high-tech system on the rig that night would have presented this kick information in a clear our more dramatic or favorite format than the sperry-sun data was presented? do you have any idea at all? >> until we can re-create the screens, i think it's premature to stick it on what they may or may not look like. the other dilemma with this is that we don't know exactly how the driller would have had it set up that night. we cannot estimate that based on what makes of other drillers on the rig would have typically done in the same situation. it's an unfortunate thing that we won't know exactly what it looks like, but i think with the more effort we may be able to look at what speed is anything

the commission can do to back in that effort, they will be within reason, obviously. okay, let's go on to the next -- by the way, how many different places on the rig with the t.o. high-tech it had been displayed. we know it's in the driller's shack that any other places on the rig that might? >> the high-tech data was broadcast on the closed-circuit television system, so any tv on the rig, and state rooms or offices, would've had the same data a fable to it. it was in the tool pusher's office, on the drill floor, and it was also in the company man's office. >> do you know, i know you investigated this, do you know whether any t.o. employee at any level look at the t.o. high-tech data that night during this period, other than the driller and the drill shack? >> we do not know. at this stage.

>> and your data does not go shoreside? >> our data stays on the rig. >> how come? >> typically, this data is important to operators to maintain, you know, historic records of. was federal the rig, they can, i mean they own that data in some respects. so we have stored as an industry if ever retain mud line data. for ourselves. your data, if we're fortunate to have, we have a because it was shipped shoreside, right? >> yes, sir. expect how many different places on the rig that night was this data can have a different screens had this? >> it would have been the same as the high-tech data gets of them on the closed-circuit tv, had its own dedicated channel anybody wanted to see the spirit did with savages look at the tv. >> have you got anybody, one

single person on the rig that night that says yes, i actually saw this sperry-sun data? >> no, sir. i had access to the personal has been very limited spent and i guess your answer is the same, mr. vargo? >> yes, sir. >> let's go onto the next point, please. >> the kick in the workload enough that, if observed, would have allowed the rig crew to respond earlier. and, of course, we are stuck with not knowing what was a third. isn't agreed or disagreed that if the sperry-sun data had been observed by somebody skilled in interpreting the data, they either would have allowed to respond order, are might have

allowed to respond for you. do you have an opinion speak was just. we said we be there were indications. >> mr. ambrose, do you have an opinion? >> under the circumstances that you just outlined, yes, i would agree with that. >> yes. i would say the indicators as absurd would have noted, been noted by an experienced. out of the i would necessarily call some of those indicators clear, but yes. if those they would have. >> clear enough. we're trying to get it right here. >> correct spent if there's a better way to phrase it, if any of you have better ways of phrasing this deal to get perfect, just submit it to us and we'll consider it. we met with all of you endlessly. >> we've made lots of changes to make sure we get accurate. we have funded by everybody and we will keep doing that, i promise. now, the next point is once the influx was recognized, bp says i

think i was at 21 when the mud came up, do you think it was recognized? >> that's when we did it first happened. >> there were several options that might have, might have prevented or delayed explosion and/or shut in a well. you saw the information i put up on diverting overboard. we know your view. you don't say it would have. you say it might have. mr. ambrose, this is your company's document. it says it is a rapid expansion of gas in the writer you've got to get it overboard. your people know once gas gets about the bp things happen real fast? abbott knows that in your business? >> yes. >> so they know that there's a time to move fast. correct? >> yes. >> are your people trained to use the diverter in certain

conditions? >> i think when you look at this, you have to look, again, you outlined quite well at the beginning, this particular case, just to put in perspective, was a 550-ton freight train hitting a brick floor. things happen very quickly. and then it was followed by what we estimate to be a jet engines worth of gas coming out of the rotary. so it was -- >> you mean the whole fuel supply? >> as if a 757 jet engine of gas was coming from the rotary. that's the order of magnitude. >> do you agree with that? is that a useful analogy for the commission? >> once it was allowed, the well was allowed to get out of control, it was a very, very dynamic thing. i don't agree with the characterization, however, that

it was happening very quickly and instantly. i mean, the importance of recognizing that came to the bottom of the well and had displaced anti-well bore of mud from the bottom up for it to happen, and that those indicators for at least 40 minutes before it happened. so that to me is an instant, that's a very long period of time in this business. now, once he got into the rise and begin to move, absolute. it was a very dynamic unloading of the well. >> mr. kaluza is on the well that night, right? >> he was on the rig that night, yes. >> was mr. vidrine on the well or shoreside? >> both of those german or on the ridge that evening. >> so you had to well site leaders. can you tell us, the panel a little bit, the commission so that about their qualifications to become a well site leader for vb? >> i don't know what these

potato guys, if they're into his or not. some are very generally speaking, multiple years to moving to deepwater corals multiple years of expect working up through the ranks. these fellows have both been working in offshore and deepwater operations for many years. i care number exact. i think bob kaluza was a lease eight in 10 and mr. vidrine was more than that. >> well, we are here pointed out, you heard me say repeatedly that the system depended on a person being in the right place at the right time looking at the right information drawing the right conclusion. i take it you all agree with that, right? >> right. >> yes. >> why, instead of having a trailer for kill being the only person to look at this, why weren't mr. kaluza and mr. -- what were they doing at the time? how come they weren't assigned, one of them to look at this data as it came in? they are highly engineered,

well-trained. why rely on one person. they are on the rig, why not have been look at the kick information as it comes in? >> well, the leadership on the rig is providing a broad, you know, oversight management of the well, making sure the well is delivered to standard. the process of monitoring the well is an active and minute by minute activity. it happens through the course of each stage of the drilling operation. as described in, you know, i think recognize any industry and described in transocean book, you need someone to be actively looking at each minute as you drill the well or circulate fluids through the well, or what have you. and that's what the purpose of the driller in the drill shack is. >> i've asked this question, the commission is interested, everybody in the industry says the same thing.

that is, a lot people say this, not everybody, i say but you're always going to be wrong. and i've always said, this is important, why not have come you get to these experienced people, why not have two eyes on this data, which mr. gisclair told us can be hard to trigger, instead of just one pair of eyes? people have asked me to ask you that question. >> i can get a few. it's not something we covered exclusively in the report, but i think in many cases that -- >> again, the rule is that we said we're going to stick to import. if i ask a question that you think is unfair, goes beyond the, you don't have to answer that. that's the rule. >> i can give it to you. i mean, i think on the brakes you to see two sets of eyes. there is a trailer, and in this case there's sperry-sun and in our case mud logger provides more information. so i think there are multiple

eyes that are looking at it on these wells. >> do we know if you're mud logger, mr. gisclair, that night was watching this information? >> he was at his station. he was monitoring the rig. i don't know what point he was looking at that specific displ display. >> it needs to be made clear to the commission, please, that there is these screens are different all the time. the drillers can pick different parameters. they can display them in different ways. they can pick the things they want to see. they are very flexible and it's almost like a videogame. you can put anything what you want. you can make it look the way you want. and that's why we have such a hard time, all of us, mr. ambrose and i have talked about our service and can't figure that. we all want to know what's on there, but we can't know it.

okay, the director. -- diverter. did the crew ever use a diverter too overboard the hydrocarbons, mr. ambrose? >> we don't know for certain. yet. we have studied the information. we all agree that they did go to the mud-gas separator first, let it this stage we don't know yet if they have ever switched to the fold the first onboard. >> is a two like i said today that mud-gas separator is a pretty fragile piece of equipment compared to the diverter in terms of pressures and volumes, jet engine fuel coming at? >> and can handle a substantial amount of flow, but in this case again, it goes back to the speed which i was referring to earlier. if this is, this event once and start to unfold, accelerated very rapidly. and what may have been okay

additionally on the mud-gas separator, quickly as the fluids began to accelerate up the well bore and hit the drill floor, would have surpassed with a mad cast separate could have handled spent like i said today -- >> at that point, it is impossible to say. >> i have read through your manual and i'm impressed by the attention to detail in it. i may have missed it, but is there a specific instruction given to drillers that if in doubt divert overboard? anything like that? what is and what you want the drills to have him ahead about when they dump the stuff overboard and when to use a lesser tactic? >> when you go to the manual, it will basically reference if you suspect or think that you have gas in your riser, then you should too overboard. so the question is, did he suspect or think that he had gas in his riser? and if you look up the steps

that he took, that we can now see in the data, towards the end of the event, his initial response of closing the annual was the appropriate first normal response. he did that. >> and dewey is in the drill shack that i? >> that's correct. who we lost. we lost him. >> that was a normal first response, and then goes on to say if you continue to get flow at that point, there's one of two things that could be the problem. it could be that either gas is in your riser and expanding, or your and your could be leaking and you could still be getting gas fluid in addition to riser, and your annular. is next action was to close the ram which you can see in the data. and that's what caused the pressure increase from 9:47 onward. mr. ambrose is a once the mud came up on the floor, do we prevent in the shack close the

annular. and they can tell that by looking at pressures and mr. bly agrees with that, isn't that correct? >> we say we believe that was likely, the last event. >> and in a little while after, it wasn't entirely holding any close one of the pipe rams the close around it, and that is shown in the pressure. so he took two actions when the hype passionate hydrocarbons, writes because he took three. because he diverted. we still have not included on did ever switched to overboard. >> now my question is this, if there's mud on the floor, he closes the annular, is it likely, if you have an opinion that the pressures, the sand, guestco everything coming up that you just couldn't get the -- the annular just wouldn't shut under those conditions? >> we have done an extensive look at the recover to riser

joint, and the pieces of drill pipe came out of that joint. when you look at the tool joint, can you put up i once lied for the two of joint? we believe that, of course, it is a lot of force going at that point was quite great. this is what a normal tool joint would look like, this is one of the recovered pieces the damage which is opening it up from the riser. but this gives you a perception of what and don't be note usoco pipe looks like. flip to the next one. the emotive area that you see in the middle, we believe that this piece was closed in that upper annular of the riser, of the b.o.p. and this is what happened when they close the b.o.p.

the hook load, if you look at that trend, -- >> please tell the commission with a hook load is. >> hook load is the weight of the drill string that you can measure. the hook load decreased during this period of time where everything started happening fast. fluid started moving quickly. this particular tool joint, which was positioned we believe a rigidly between the two annular some of the upper and lower annular, moved upward into the upper and your when he close the annular, it's not just a rubber piece. there are some metal fingers that position that and squeeze that, that close. the thinkers contacted the tool joint and that cause is watching or erosion to occur. and outflow to continue. >> was the annular here and is aghast rushing past the annular that it is or was it the other

way around speakers that's correct. it would've been moving from left to right specs of the annular easier if it is close or part close of some gases are getting through it. and these gases are so powerful they just be rooted this piece is too. is this carbon steel? >> it's and s. 135-psi material. >> pretty good stuff. this is just several minutes. this gives us on idea of what a couple of minutes of the sand coming up your can do to steal like this. okay, do you have any more comments on this, mr. ambrose? >> it just goes back to the speed. could have anticipated or no, and is one of the questions will have a long time, what was he suspect he was coming at him. he took all the action that were normal and appropriate.

it's just unfortunate that the magnitude of this event, it overcame the equipment. >> i'm kind of an ex-engineer but i was floored when i heard how fast this stuff happen. do you train your tool pusher's and your drillers to appreciate the speed with which things can go south your? >> i think all i think all of our tool pusher's that work on deepwater wells understand the magnitude. >> let's go back, please, make into our conclusions. one of our conclusions was diverting overboard, using the diverted, not the mud-gas separator, might have prevented or delayed the explosion. do you agree with that, mr. ambrose? or you just don't know? >> i do know there's a way you can tell. the magnitude of this event was too great. the question is would be

deferred or packer which is another large rubber elephant on the rig floor have withstood a massive amount of mud that was coming at it and see water. and then again, the slip joint packer and itself is raised to the same level, and we sitting here today can't say whether or not it would or would not have. it's something we will continue to look at and when we had conclusions we will let you know, share it with your. >> i think everybody agrees that final technical cluj and regarding -- regarding the b.o.p. should wait until we can learn about the b.o.p. do we agree with that? is sounds like -- >> i will share with you that we do believe the b.o.p. worked within the time limits on the evidence we've seen so far. and we would be happy to share that with you. >> so you have done work which indicates that the b.o.p. worked. that is, that the annular close was supposed to close, the upper

annular, is that a yes speak was within its design limits, yes. >> that the variable of type ramp closed, as evidenced by the increasing by pressure. you don't think that the shear ram was ever close to? >> we do think it was close, but after the explosion by the automatic mode of functioning. >> do you think, this is probably an unfair question, i'm just curious, do you think when the b.o.p. comes up and out these norwegians are looking at, there will be enough left of the upper annular for example, to look at it and figure out what happened? >> i can take a position on it yet. >> we've not been able to look. we know that from the pictures that were taken on the back of the q4000 service us when they do pictures looking downward, into the b.o.p., we saw what we were expecting what would've happened in the event.

>> in other words, that blind shear ram was close, you see wash battered? >> correct. you have to consider that the drill pipe at that point, we believe that it failed, and severed. so you would have had flowing well through that half-inch drill pipe at a point in time when the blind shear rams would've close on the. so it is somewhat like snipping a firehose with a pair of scissors. we do that, it's under pressure it's going to shoot out sideways. and that blind shear ram is not designed for that particular condition. that would have the road away the rubber seals on the side of the blind shear rams as they were closing. and you saw what it did to metal. so the thought that rubber would have survived in that particular case on the blind shear ram under these high flow conditions is unlikely. finally, you heard me say and i worded it in a very specific way that we have seen no evidence that particular man or groups of

men we're making a decision and cautiously had a safety focus and a dollar focus and chose dollars over safety. we're not talking about profits or do things that real people making real decisions that have any of you seen on the rig any evidence on the rig that night that anybody made a decision that favored dollars over safety? >> no. >> no, sir. >> no, sir. >> okay. that completes my go around. and sam will not ask questions that you will be glad, mr. vargo, to talk more about cement. >> let's take a break. i'm sorry. it's not my prerogative. [laughter] >> you've been quite in charge today. let's do take a 15 minute break. [laughter]

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[inaudible conversations] >> we are bringing you live continuing coverage looking at the findings of the investigation of the explosion of the macondo oil wells in the gulf of mexico. the commission of the deepwater horizon oil spill taking a short unexpected break until about three can. a 15 minute break. we will resume with more testimony from bp transocean and halliburton, officials and representatives at that time. this is the first of two days of hearings as the commission members continued their probe into the incident. we will continue with live coverage tomorrow. we believe they will get underway at 9 a.m. once again. in the meantime the story from politico this afternoon. bp panel wants subpoena power. federal investigators are saying they are hamstrung trying to get to the bottom of the causes of

the gulf of mexico oil spill because congress hasn't granted them subpoena power. fred bartlit who you have her testify today is the lead counsel for the national convention on the oil spill contained during the hearing today. we expect that we will hear more testimony from mr. bartlit this afternoon. as work on this commission continues. wow this break is underway we will get remarks now from commission co-chair former senator bob graham and william reilly, they were guests late in october on our "washington journal" program. hear what they have to say. host: on your screen, the two co-chairs of the national oil spill commission, senator bob graham, and william reilly, the former epa administrator for the bush administration from 1989 to 1993. welcome to both of you. thank you for being here.

i want to begin, if i could, with where you both are, where your commission is in this process of putting out your report. it is due out in january. the president is asking for it. you have finished your public hearings. mr. reilly, please talk about where you are in the process. guest: we are about halfway through. our report is due january 11. we then will have two months to communicate it. we have completed hearings in new orleans and in washington. we have had an extensive list of presenters, public officials, and our organization group leaders and others. a number of people from the region -- i think we have been careful to include the people most affected by the spill. next month, november 8, we'll have a full presentation of the details of what actually happened on the rig, the decisions that were made and the

consequences for the technology, for the breakdown. then we will go to serious writing, and we will have recommendations no later than early december for the president. we will meet with the president late in november and let it all rollout in january. host: you will let him know privately sort of what you're -- guest: we will meet with the president to let him know some of the directions we are going, some of the recommendations, and i'm sure that the white house will be public about some of those. host: senator graham joins us from miami this morning. what happens after you put the report out in january? you will have a couple of months to communicate that report. how are you and mr. riley -- mr. reilly and the rest of this report count? how will you make sure that your

reforms and suggestions get passed congress and the administration? guest: the first that is the findings that support the recommendations, and do they make sense. are they persuasive to important decision makers, starting with the president. then congress, other members of the administration will be involved in implementing. number two is we will have an extensive set of activities with the american people. we have a number of presentations to university audiences and other groups that have had a special interest in this issue. one of the things that we have not really talked about is what several other conditions, including the 9/11 commission and now the weapons of mass destruction commission have done, and that is set up some capacity to continue to influence public opinion on the topic after you go out of official business, which for us

will be two months after january 11. that will be another way which a group can continue to press the importance of and the relevance of the recommendations that they are making. host: we are talking with former senator bob graham, talking to us from miami this morning, the co-chair of the national oil spill commission, along with william reilly, the epa administrator from the first bush administration. senator graham, you said it will be the quality of your report that you think will make a difference. mr. reilly, do we need to name names, then? guest: we need to be specific, a truly to the proximate cause, of who did what. for that we would certainly name company names. beyond that, no, i would expect that we would be more policy-

oriented than the justice department may be in its lead oregon -- it's later o investigations. host: there will be a lot of legislative father and a report, you said. senator gramm, can you give us an idea of where it -- senator graham, can you give us an idea of where that will be? guest: congress -- last summer it did not pass the senate. when the congress reconvenes, this will be among their higher priorities. some of the issues are going to relate back to the last big oil spill, which was exxon valdez. after that, congress passed legislation that was very much focused on the specific circumstances of exxon valdez,

an accident that occurred by a tanker that went aground, spilled hundreds of thousands of gallons of oil into a small bay in alaska. much of the current legislation oil spill is based on that scenario. we had quite a different situation occur on april 20. we had not an oil spill by a tanker, but rather a rupture of a drilling rig, which is operating almost a mile below the surface of the water, where there were very few contained in capabilities on site, and there was an immediate scramble to try to hold the damage down i think much of our report and recommendations will be focused on how to be able to respond to an incident without being unduly

specific as to what the details of that will be, because i am confident that unfortunately there will unfortunately be another oil-related accident, but it will be neither like exxon valdez or like the april 20 bp spell. host: mr. reilly, when it comes specifically to the management service, what will it be? guest: with respect to the adequacy of the regulatory process, the training, the performance capability of inspectors, i think we can infer that we will have strong recommendations with the reform of that enterprise. secretary salazar has already undertaken some of that, and we expect some of the things that he has said to us, that there will be proposals for better

training. it is extraordinary that on-the- job training have been on most or all of what the inspectors have ever had, with the most sophisticated technology of cementing and centralize servers and all sorts of things that the inspectors have acknowledged in interviews that they have not been trained to understand. we will have a lot to say about that. host: critics of this commission process are saying that these conditions do not have any impact, and looking ahead to the midterm elections, after the midterm elections, people are saying republicans, people in your party, if they take control of the house, they're not likely to pass any of the reform suggestions that you all put out. guest: after the exxon valdez, oil pollution reforms were passed. the most noted recommendation was a new institute for nuclear power operations to serve as the

best practice monitor, funded by the industry for the nuclear industry. so i think the homeland secretary and the department came out of the tom keane commission, the 9/11 commission, so i would be reasonably optimistic, certainly not at all our recommendations will be taken, but they will be taken seriously given the seriousness of this catastrophe. host: let's turn to phone calls. the two co-chairs of the national oil spill commission are with us this morning. go to c-span.org, and in our featured links section, we have all of our coverage of the gulf oil spill. tennessee, you are first. caller: first of all, i would like to know what ties to the oil industry new board members have personally. if and when there is another horrific spill, the length of

time to plug the hole is outrageous. nothing less than immediate stoppage of the spill is acceptable. host: senator graham, why don't you begin. guest:, we have followed all of the ethics rules. we all filed false financial disclosures. i'm convinced that the seven members of this commission -- we have all filed false financial disclosures. i am convinced that the seven members of this commission -- we have all filed full financial disclosures. as to the need to have immediate response, i could not agree more. one of the things that occurred here was a deep water spilled for which there had not been much preparation, and took an indoor merely to long period of time while the oil was gushing into the of of mexico,

creating serious damage immediately, and we do not know just what the consequences of the remaining residue of oil might be over the future. one of our recommendations will deal with how to move quickly to contain the spill and thus limit the damage. guest: i do in fact have a history. i have been a member of the board of comical philips company. not implicated or involved in any way in this issue -- of the nocophillips company. not implicated or involved in any way of this, and i took a leave of absence. i felt i which i started to because of that relationship. te it turned out the present liketf the fact that one member of thes commission didio have a detailed background and history with the industry inac knowledge of it. e with their respect to the rapidity we can expect nextct te -

should there be a next time or this kind of spill -- we are increasingly impressed, certainly informed by both the deputy secretary, david hayes, of the interior department, and bp indirectly, that they are much better prepared. the kind of experience that we just had would allow them to use the technology that they developed successfully to stop >> that was william riley. he co-chairs the present commission looking into the april oil spill. he is cochair along with former senator bob graham. we expect closing remarks from them later this afternoon's testimony wraps up on this first day of the public hearing. commissioners are taking a break right now. we expect to hear more from bp, transocean and halliburton representatives when they resume. while we have a few minutes, we will squeeze in some of the opening remarks at co-chairs

graham and reilly from today's session and then we will bring you back here to live coverage.r e> i as a commission we havee hv been charged by the present witi helping the american people understand the root causes of c the largest oil spill in american history, a disastera dl that claimed the lives of 11 workers lives of 11 workers on the deepwater horizon rig. we have held four public meetings thus far, and numerous site visits. >> we've heard from the people of the gulf, learned about regulation of offshore drilling, examined the important issues of response and gulf restoration, and had her first occasion to deliberate on key findings. today, it we turn to an important piece of the puzzle. our chief counsel, mr. fred bartlit, will give an overview of what he and his team have learned to date about what happened on the rig. i believe this will be the

clearest presentation the american people were received to date on what led to this tragedy. fred bartlit is the right man for this job. he is widely respected, a tenacious lawyer, enormous credibility, thanks to his unquestioned reputation as a straight shooter. his experience with the this issue is very deep. he led influential investigation of the last major disaster on an offshore rig, the piper alpha explosion in 1988 in the north sea. the commission that investigated the columbia shuttle disaster made a very important point. complex systems failed in complex ways. there is a natural tendency to focus on one crucial position or misstep as the cause of the disaster. but as they observed, doing so gives a dangerously incomplete

picture of what actually happened. we will learn for the next two days that many ways in which this complex system failed. we are not looking for scapegoats, but we do believe we have an obligation to uncover all relevant facts. only by understanding what happened can we extract the important lessons from the deepwater horizon disaster. there is much that we know now. there are still areas of uncertainty and disagreement. these meetings will go a long way to bear in mind where we stand. i want to personally thank him and on behalf of commission, mr. bartlit and his dedicated team for the work so far. i would also like to thank our witnesses today for their cooperation with the commission. i would now turn the gavel over to co-chair, mr. bill o'reilly. >> thank you, bob. good morning.

the disaster in the gulf undermined public faith in the energy industry, in government regulators, and even our ability as a nation to respond to crises. as a commission, it is our hope that a thorough and rigorous accounting, combined with constructive suggestions for reform, can help restore public trust. our prior meetings have confirmed that investigations -- that investments in oversight, safety, and response capabilities failed to keep pace with the rapid move in to deep water. it appears in at least some quarters but this is a real joy culture exhibited in attention and a false sense of security. over these next two days we will be looking in detail at what happened on the rig. our investigative staff has

uncovered a wealth of specific information that greatly enhances our understanding of the factors that led to the blowout. one question i think we all have and have had from the beginning is, to what extent this was just a unique set of circumstances unlikely to be repeated, or was it indicative of something larger? in other disasters, we find recurring theme's of missed warning signals, information silos, and complacency. we out prejudging our finest no one can dispute that industry and government together have an obligation to ensure that such a set of conditions offshore must be subject to a safety culture that is protective of lives, livelihoods, and the environment. extracting energy resources to

fuel our cars, heat our homes, our industry, and light our buildings, can be dangerous. our reliance as a nation on fossil fuels will continue for some time. in the boulder new oil and gas discoveries lie, not on land, but under the water. the risk taken by the men and women working in energy exploration benefit all americans. we owe it to those who manage and accept those risks to ensure that their working environment is as safe as possible. over the next two days, we will learn from fred bartlit, sean grimsley and others, about what went wrong on the deepwater horizon. this detailed account of what led to the loss of 11 lives, the largest oil spill in american history, will guide our thinking as we move to final deliberations on findings and recommendations.

so today, we are fulfilling the first of the fundamental task, and most fundamental task that the president gave to us in the executive order establishing this commission. and that is, determined the cause, find out what happened. i will be most interested in the lessons we may learn today that help inform the commission's recommendations for the future for how we create policies, prevent something like this from ever happening again. i want to remind all of you here that the information that you will be exposed to today that was gathered by our investigative team was achieved without the power to subpoena witnesses or evidence. i compliment the companies whose cooperation made this possible. i can't limit the fred bartlit whose reputation earned the kind of trust and cooperation that this displays. and to those two senators who

blocked this commission from receiving subpoena power, let me just say, i hope that you are presently -- pleasantly surpri former senator bob graham and william reilly from earlier today, live closing remarks from them expected as a part of today's session with a commission looking into the april oil spill in the gulf of mexico. while commissioners are continuing their break, but when they return we expect to hear more from bp, transocean and halliburton, representatives. the "washington post" today has been covering this story and they have kind of honed in on one of the key points that the chief counsel fred our lead has been continuing to make and the story is titled, money concerns did not drive the bright-- horizon decision. this is steven munson's article. chief counsel for the oil spill commission said today concerns

about money didn't drive key decisions made on the deepwater horizon drilling rig before the april 20 blowout because the mass oil spill and killed 11 people. the conclusion is good news for vp which has been widely criticized for letting concerns about the roughly $1.5 million cost of the drilling rig affect choices that might have prevented the blowout. while we do expect more testimony from the commissioners when they return, and we will bring live coverage to you at that time. right now presentation by sean grimsley. he is the deputy counsel to the chief counsel, fred bartlit. this is part of his testimony from earlier today. >> we have heard quite about-- quite a bit about cement and cement testing. what i would like to do now is reset the stage and bring it back to the deepwater horizon on april 20. shirley after midnight on the morning of april 20, the rig crew and cementers finish the cement job.

f5:45, the halliburton cement or on the rig e-mailed back to shore and says the cement job went well. at 7:30 a.m., bp concludes the cement job went so well that they actually decided to send home the contractors that have brought out to the rig to perform the cement evaluation tool. 14.5 hours later, correctly 9:49 p.m., the first explosion on the rig, so it is critical to understand what happened in that 14.5 hours. so what is the crew doing on the rig after the cement job? they are moving to the next phase of the well, the temporary abandonment phase. the temporary abandonment phase is basically just the procedures that the well undertakes or the rig undertakes to get from the picture of the well on the left to the picture you see on the right.

what i think many people may not realize is that the deepwater horizon does not actually produce the well. it does not extract hydrocarbons, oil and gas, from the well. it drilled the well and ultimately will cement it in, but ned up, to leave it for a production or completion rig to come back at some later date. the process by which the deepwater horizon buttons up that well is called temporary abandonment, bringing it from the picture on the left to the picture on the right. you will see obviously there are quite a few differences between those two pictures. first you'll notice the rig is gone. the rig has taken its riser with it. all the mud, the heavyweight mud that is in the riser is gone, along with the rig, and also the rig brings with it its blowout preventer. so you see here there is no blowout preventer, so it is critically important that this well is going to be sitting there in the gulf of mexico without a blowout preventer,

that the rig crew ensures that well has integrity and is fully buttoned up. some of the other difference is you will are cement plugs. and this is basically a 300-foot plug of cement. a 30 story building of cement that the rig crew will put in place before they actually temporarily abandon the well. and that cement plug acts as a backup, a backup barrier just in case anything happens with this cement down at the bottom. if hydrocarbons began to leak and they will be stopped by that surface cement plug. but notice above that surface cement plug is seawater, and in this case we will talk a little bit more about it later, bp chose to run a very deep surface cement plug. the depth here is 3000 feet below the mud line, and rather than keep heavy mud in that space, bp chose to fill it with

seawater. heavyweight mud is about 6 pounds per gallon heavier than seawater, so the decision to replace all of that heavyweight mud there with seawater took a substantial amount of pressure from out of the well that was otherwise pushing down and helping to hold the hydrocarbons at day. the last point i want to make on this slide is the lockdown sleeve. the lockdown sleeve that is represented here by these two black ox is which obscured the drill here, the skier a tremendous amount of engineering technology so i'm not trying to change your short here, but for present purposes all we need to know is that lockdown sleeve actually locks the long string casing in place. it's lots it to the wellhead so at no.then will the casing actually lift up, and you may ask yourself how one earth is the casing going to lift up? there are hundreds of thousands of pounds, millions of pounds perhaps the casing.

well it has to do with the completion and production of the well. when a production rig actually comes back to produce this well, it is bringing up very hot hydrocarbons, of this production string and they are also moving somewhat quickly. the heat in the movement can actually create lips and if the list gets great enough, believe it or not, this casing string can actually be lifted up so the lockdown sleeve's purposes to prevent that from happening during the completion or production phase. now one thing i would like, one myth i would like to deal with-- there has been a lot of talk in the media about this lockdown sleeve and the fact that it was not said before the time of the blowout. there have been questions as to whether bp should have set this lockdown sleeve earlier in the procedure. i will tell you if there is anything unusual about the lockdown sleeve here it is that

bp was going to set it at all during this phase of the well. typically, lockdown sleeve's are not actually placed until the completion or production rig comes back to produce the wealth bp for whatever reason a decision here to set the lockdown sleeve at this stage. now going forward whether it may or may not make sense that they should be an additional safety measure when drilling rigs are out there drilling these wealth, that is another story, but just keep in mind it would not have been unusual at all for bp not to have set a lockdown sleeve at all before the deepwater horizon a so again, temporary abandonment, getting the well from what you see on the left to the end of the cement job is what you see on the right which is when the rig is going to move away. so the first up in the temporary abandonment sequence is to test the integrity of the well. as you might imagine, you want

to make sure there are no leaks in this well when the deepwater horizon picks up and moves away, so there are a variety of tests that the crew will undertake to make sure the well has integrity. the first is called the seal assembly test. the seal assembly test basically test the seal, which is right here between the casing and the well had and again dissemination -- animation obscures a substantial amount of very high-tech engineering but suffice it to say there is a space there that needs to be sealed, so the crew needs to test the casing hanger seal assembly and this is how they do it. first, they are going to isolate the space right here in and create a closed container. they do that by running a journal string down with a packer. this packer right here seals off the top of the well from the bottom. the next thing they will do is

this close these variable bore rams. these variable bore rams as fred discussed earlier are part of the b.o.p.. they actually close around the pipe and create a sealed so at this point you have created what should be a close pressure vessel. the rig then pumps down pressure through one of these three lines and you have seen these three lines. we haven't talked much about them but they are basically pipes that run from the b.o.p. backup to the rig, and those pipes allow the rig crew to send fluids down into the well and bring fluids back up without having to rely solely on the drill pipe or the riser. so those pipes are used for a variety of different activities-- back it up please-- one of which is the seal assembly pressure tests, so the crew will pump pressure down into this closed vessel, close the valve at the top of the rig and then watch for some. back of time to make sure that the pressure holds. if the pressure holds, and you

can be sure or it least have a very good idea but those seal assembly's, seal assembly's are doing well and holding pressure. and out here on the macondo they ran a seal assembly test and it passed and nobody disputes that it was a good test. so we will move onto the next test. which is the positive pressure test. the positive pressure test is testing something different. what the positive pressure test is testing is actually the integrity of the casing down in the well, and again with the crew does is pump pressure-- stop right there-- comes pressure down into the well and see if the pressure holds. of the pressure doesn't hold that indicates there is a leak. the way the crew sets up a test is to close now a different set of rams. this time the blind shear ram. fred talked a little bit before about the blind shear ram and

how it is used in an emergency to cut the pipe and shut in the well, but it is not just an emergency measure. it is actually use like many other parts of the b.o.p. for regular operations, this being one of them. so the crew shuts in the well, isolating the bottom from the top and pumps in pressure. the crew will pump in pressure for five minutes at 250 psi psi to watch if it holds. if it holds, then for 30 minutes the crew will pump in, or the crew will bend pump in 2500 psi of pressure and watch if it holds for 30 minutes. if it does that is a good positive pressure test and it indicates that you have good integrity, at least within the casing string down in the well. the crew at macondo performed a positive pressure test year. it went well, and nobody disputes that the positive pressure test here indicated that the casing had integrity.

the problem though with both positive pressure test and make casing hanger seal assembly test is that neither of them test the cement at the bottom. you see the positive pressure test, you are pumping pressure in here but they are these two wiper plugs at the bottom and they are actually on a ledge so when you are pumping pressure into the well you are pumping against those wiper plugs so the cement is not really seeing any of that pressure. there is only one test that was performed at macondo that actually tested the integrity of the cement at the bottom. that is the negative pressure test. now, because the negative pressure test is the only one that test the integrity of the cement at the bottom, it is a

critical test in the life of the well. not only is it the only when the that test cement but it is the last test actually performed, so here is testimony from john guide who was bp's well team leader for the macondo well. what is a negative test designed to evaluate? answer, it is also designed to save the float equipment and the cement actually, the cement inside the casing is holding in actually the casing itself. question, is that accurate. >> we are back live with more the public testimony into the deepwater horizon oil spill. testimony now from bp transocean and halliburton representatives for this part of the afternoon. this is live coverage on c-span2.

[inaudible conversations] [inaudible conversations] >> mr. commissioner please? one last question. there is a little issue of subpoena power you tell us is a burr under my saddle, and someone said that some legislators didn't want us to have subpoena power because we might be too hard on you guys or something like that. so, somebody at the break at the idea of saying to you three companies, and i know you can't speak for them, but would you be willing, something you made to think about, would you be

willing halliburton, t.o. and bp would you be willing to tell people in congress that you support our having subpoena power-- i'm not kidding. because it will obviously add to get to the bottom of this. we all agreed when we started this that we elect to those men and their families to get to the bottom of it, and we have to try to put aside some of our natural trial lawyer ethics and that kind of thing. so, you can answer now, fine but if you can't, we would like to know run the three companies, would you publicly support the commission giving us the subpoena power we need to clean up some of these areas i was talking to you guys about in the last hour and a half? anybody prepared to talk now? >> all i can say this point is i will have to take that back and discuss it more broadly with bp. >> that is okay with you? >> i've to say the same.

what i tell you is i think we have been very open and supportive of this and we will do absolutely continue that and i will take that back. >> pretty much the same, willing to meet with u.s. often and anywhere that you would like that i really couldn't answer for my company in that regard. >> i have informed counsel of the commission's requests and if any of them have a position we will listen. otherwise-- i sort of expect they say will-- they will have to go back to talk to their client. no comments? thank you, thank you for your cooperation gentleman. >> is the mic on? is the mic on? i would like to think over some of the questioning from fred now that we are back from the break. mr. vargo i wanted to start with you because you set forth an interesting theory that i don't think any of us had heard before about the flow path for the hydrocarbons. and i believe if we could put up that slide of the long string.

i believe you said that it was your view that the hydrocarbons, even before the cement job was said, were already being pumped up as the cement was being pumped down up this annulus. >> that is correct. >> okay, and i think you also said that they then were trapped up here but at some point there was a differential pressure. there are a differential pressure that was such that eventually broke through that seal. >> that is correct. >> okay. are you familiar as to plan and the process the casing hanger seal assembly is actually set? >> the seal assembly is that after the cementing operation is complete. >> okay, so at the point in time when the cement job is being poured and you say the hydrocarbons are coming up this annulus, there are no seal assembly appear, is there? been no, the flow path is out of the top of the casing.

one other point that i didn't make too before, which i admitted, is that in the operation of placement we are monitoring pressure on surface, so we are monitoring the actual placement of the cementing operation and i think you or someone else mentioned before that you are expecting to see cement lift at the end of the cementing operation. while that number, while it is a valuable number, it is also the trend that goes along with the actual watching of that displacement of the operation and typically what you will see us you are lifting a heavy or fluid in the annulus, you will see that pressure gradually increase. what we noted on the data from the cementing operation is that all through the displacement, that the pressures continuing to decrease which is completely against the trend analysis that the simulation program anticipates. the only way to have a pressure drop while you are displacing it at that point is that something is either less of a restriction in the annulus or something is

lighter in and the endless to cost that pressure to continue to drop so you don't see the actual trend, what you would expect to see the pressure increasing as you are lifting the cement. what you see is the pressure actually decreasing to the point where you end up with about 100 psi at the end of the job. that is the amount of lift i believe you indicate and that was indicated to bp. at the trend doesn't indicate that you are actually lifting a lot of cement. >> my question is a bit simpler. you acknowledge, you say that the hydrocarbons are actually being pushed up during the cement job, correct? >> that is correct. see how long does it take the hydrocarbons to get up to the annulus to the steel? >> if you look at the value of the displacement it is very close to the volume of the annulus. use the marker before to indicate at the beginning of operations and circulating and pumping operation of that would put the top of the fluids right across into the b.o.p., and that is correct.

you carried those fluids throughout the cementing operation of the annulus all the way up to the hangar assembly at the end of the cement job and that is when you go ahead and set your seal assembly. >> but that is what i'm curious about. the seal assembly is not actually set during the time of the cement job. >> the reason being that you have to circulate the mud out its interface while you are cementing. otherwise the mud has nowhere to go, right? >> that is correct. >> so why is it, if there is no seal appear during the cement job, when you say the hydrocarbons are actually coming up through the annulus, that the hydrocarbons didn't just go straight up through? >> because you still a pressure from the mud acting down on the fluids. immediately after the cementing operation you do set the seal assembly. when you have a barrier that is created at that point you haven't wafted down. what you have done is essentially set the seal assembly on top of the casing. >> but my understanding of what you said earlier, he said almost

the entire volume of the annulus events are related by the time the cement job got to the bottom. >> no, what you have done is as a matter of course pumping the mud in front of the cementing spacers, the cement and then the displacement that takes your marker from the base of the well in the set all the way up through the annulus to the point of the b.o.p. staff. that is when the cement job and and you set your seal assembly. >> so the hydrocarbons under your theory will have moved all the way up to right here at a time that job ens? >> that is correct. >> i'm curious when hydrocarbons are moving up like that, why wouldn't have been that they moved through the seal assembly? it hadn't been set at the end of the cement job. >> i said there was still pressure on there that is holding it back and immediately after the cementing operation you do set the seal assembly. >> so there was sufficient pressure in your mind and the riser to ask the whole back is 13,000 pounds a psi? >> i believe there was enough there that didn't allow to migrate a. you didn't have in any loss

returned throughout the cementing operation but yet to see the pressure drop all throughout the displacement of the cementing operation which is against what we would anticipate seeing, so something has to allow for that pressure to drop throughout the cementing displacement as opposed to the pressure increasing. that is the only relevant data of that i can see that explains the data. >> okay, sir your view is the hydrocarbons have migrated up to write about where the seal was and just as the hydrocarbons got there the casing hanger seal assembly was set. >> that is my opinion. >> after that point in time the hydrocarbons, there is so much pressure on the casing hanger seal assembly that it actually lifted it up? >> wants you evacuated the mud out of the riser and you displace it with seawater you then create a higher differential across that seal assembly which could be enough pressure for force to actually act in lift up the seal assembly and then allowed the gap that has coalesced at that point to

them migrate into the wellbore and be there to allow it to be circulated out once you start the swap out of the drilling fluid. >> you are aware that recently i think in the last month or so, we have actually brought up from from the bottom the casing hanger seal assembly from macondo. >> yes, sir. >> have you seen the pictures of that seal assembly? i would like to show one of those pictures, please. right here as i understand it, these two flanges are the metal seals in the casing hanger seal assembly, correct? >> that is correct as far as i know. >> when they are actually sealed inside of the wellhead, those metal to metal fittings fit inside of other metal, correct? >> yes, sir. >> so if this pull casing hanger seal assembly were to have been lifted up, those lives would have had to go past other metal, correct? >> the whole assembly would have had to have lifted up. >> do you see any damage on the

outside of this casing hanger seal assembly to suggest that those lifts actually were pushed up past other let's? >> i'm not an expert on this type of equipment so i can say it is or doesn't but it looks pretty good. >> looks pretty good to you? you would expect it to look like that if in fact it had been lifted up and dropped back down the? >> that i can't say. >> are you familiar with the lead impression total? >> a slam. >> what is it let impression to? >> something that fits the well to get an impression of something that might be looking up to fishing operations they know how to go back in a fish tool in the whole. >> my understanding is one use of the tool is to make sure at some point before you set the lockdown sleeve that the casing hanger seal assembly is in the spot that you wanted.

>> we are having technical difficulties. clearly we are having some technical issues with our signal from the national commission on the bp deepwater horizon oil spill. the two-day hearing taking place in the nation's capital. we are working on the problem and hope to return to live coverage in just a moment. this is c-span2.

again we are having technical issues with our signal from they grand hyatt hotel here in washington. as we been bringing at the first day of today's a coverage of the national commission on the bp deepwater horizon oil spill. this is a commission that was put together by the president and we do expect a report from the commission sometime in january. we are working to correct the problem, and we do expect more testimony from bp officials, also some from transocean and halliburton representatives. wildly way to reestablish connection to the hearing we

will go back to some testimony earlier today with the chiefwe counsel, fred bartlit who fred bartlit who you have heard many timesus today. >> now we will start. i willay begin the run-through, and when we get to the cement issues, sam sankar will take over take over. when we get to the negative test and the temperate abandonment issues, train eight will take over. so let's go. now, we'll first talk about the rig itself. we are also money with it, but everybody's on the same page so they know where it was and what was unique about it. we will then talk about what it's like to drill offshore wells, generally that and then the macondo timeline, then will come to the senate issues. some recent questions raised about cement, the temperate abandonment issues, kit detection, kicked means we is

the term hydrocarbons that hydrocarbons are gas and oil. of course, you will see gas expand rapidly as it comes to the surface. if gas comes to the surface, it gets on the rig, that's bad. when gas gets in the well, and the rise, that's called a kick. as we go through these terms, a lot of us have never heard before, i will be sure to explain to them. and we will talk about the blowout itself. okay, here's the gulf of mexico, his houston, his temper, here's new orleans, here's the macondo will. the gulf last year. the gulf last year, there were $170 billion worth of oil and gas produced. most people aren't aware if there is a very dense network of wells, pipelines, subsea manifolds, a whole community of

helicopters, offshore vessels, a huge industry here. generally speaking, deepwater, we're talking but here begins about 1000 the, water deaths of 10,000 the. the water depth here was 5000 feet, a mile down. then they went down 13,000 feet into the formation underneath the seabed, what we call the mud line. okay. now here's the deepwater horizon. isn't the mississippi canyon that it's actually canyon that was formed as the mississippi river came out eons ago. here's the 5000 feet of water. here's the rig. here's the famous b.o.p., the blowout preventer. and now we go down to seabed and other 13,000 feet, what we will

be talking about, this is where the pay sands are. this is where oil and gas is. and the oil business they can't pay because that's where the payoff for drilling the well is. so down here 18,360 feet aren't hydrocarbons they were drilling for that has been established for by seismic work, work of geologists and the like. what happened occurred right down here. bottom of the well. this cemented you see here, and you'll see enough cement today you'll be sick of it, but this thing that down here is where the leak occurred, and we'll be spending, we'll we will leave this here in return live now to the public hearing into the deepwater horizon oil spill. resenting right now is sean grimsley. he is the deputy counsel to chief counsel fred arlette and this is live coverage now on c-span2. >> yes, i thought it was and

they wanted to do another one. iraq and there is nothing wrong with doing a second test to confirm. question, the bp person, that is mr. kaluza wanted to do a second test. lancer, i didn't say that. does this indicate that at least mr. harold that night in his judgment had concluded that the first negative pressure test was a success? >> i'm not certain. there has been a lot of confusion about first test in second test. in our minds after looking at this for several months and 20/20 hindsight, really there was nothing moved around. we think it was juan tessa whether or not he was referring to the whole thing or the second we are not sure. at the end of the day, again the engineers that designed the attesting to approve it, and if you look at testimony from bp's on personnel such as mr. died, he agrees with that, that bp should have been the person that

interpreted this and their engineers. >> so i want to come to you mr. bly. do you agree that the bp of oil well site leaders are principally responsible at the end of the day for interpreting the negative pressure test? >> as we said in our report, what was clear to us was that both parties were actually involved in the discussions and the attempts to make sure that the test was done correctly and to interpret it, and in this case both parties agreed that it was successful. >> i think that brings up a point. when you look at the testimony that i think mr. bartlit had put up from lee lambert, they neither disagreed or agreed with the discussion. it was a call of faith and they took that to what we thought was bp. we had reason to believe there was a phonecall back to sure that mr. kaluza had gone into call that they were doing a second test.

so there is some discrepancy in that regard that we still have not had clarity on, but did they agree or disagree with the conversations, you no we have not way of knowing. >> one of our concerns as we look at what happened that night is that there seems to be something you are pointing, and i wonder if there was a clear chain of command as to who was supposed to be conducting this test and interpreting it. so mr. bly, this is a question and answer with mr. guide. he was asked was if mr. kaluza's and mr. vidrine's responsibility before moving on from that operation? answer, they were, whichever one was on tour at the time. one of the people who was supposed to determine of the neck of test was successful or not. do you agree with that statement? >> i think that is the right statement from a bpg perspective because they are the senior most people on the rig.

>> mr. bly do you agree that of the test i were performed at macondo that evening the negative pressure test was the only one that tested the integrity of the cement at the bottom of the well? >> yes, that aligns with what we said in our report, that is right. >> and mr. vargo do you agree as well that was the only test, the test of the integrity of the cement that might? >> yes, sir. >> i showed a long animation this morning and i want to make sure was right. i think you guys were probably watching. did you see anything that was incorrect about that animation that we went through showing how the precious went up and down and the decisions that were made? >> negative test. i couldn't track your every step of the way, and i couldn't quite tell if it matched with their timeline.

>> but nothing jumped out at anybody? i just want to make sure we have got it right. >> i didn't catch anything but i mean it was quite a lot of detailed you showed so i can't sit here and tell you it was exactly what we showed in our timeline. i just couldn't keep up with you. >> mr. ambrose? >> there are a lot of detailed over that two and a half hour. max i can tell the pressure gauge on your charge were exactly correct or not in timing. >> this bp mr. bly have a policy in place or did have a policy in place prior to this event where if people on the rig should call back when they are these types of data anomalies during testing >> it is an expectation that if people feel they don't understand what is going on or they need help that they will escalate and call back so absolutely. i don't know if it is a policy. is sort of the behavior we expect from people. >> there was no to your knowledge written policy saying this is when you need to call

back in these types of situations? >> in particular to the negative test, as we said earlier there wasn't a standardized way of describing how that was to be done. it was to be done and i think it was generally recognized you know that you are looking for pressure flow-back and in fact one of the things that we highlighted in our work and have recommended as that we do have a more formalized standardized way of doing that test to trigger when someone might need to call back and get additional input. >> given what you said was an expectation within bp that certain issues should be elevated with a call back to shore, do you think it live with that expectation this particular issue on this negative pressure test should have been called back to shore? >> i think, is hard for me to know, what the guys were thinking. it seems to me they felt that they had it in good shape and didn't need to consult higher input. >> mr. ambrose, similar question

to you. did transocean have been a policy in place at the time of this event that would have required its man on the rig floor to have elevated concerns that they were having with this data anomalies to higher-level management either on the rig or on shore? >> i don't believe there is in a policy with regard to negative tests on that, no. >> is there a similar expectation of transocean because it sounds like there was a bp, that when there were odd-looking anomalies in the data on an important test that it should be elevated up management either on the rig rebecca shore? >> adtran torsion in general we have what is called a stop the work, stop the job philosophy. if you have any concerns or are uncomfortable than anyone can do that. i think jimmy harrell demonstrated that a earlier that day. he believed the negative test was not a even going to be conducted and he said stop we are going to do that. that has been covered in testimony. so anytime there is an anomaly

that can't be explained or people aren't comfortable with, then they tend to stop the job and figure out what is going on and elevate back to where it needs to go. >> is this the type of anomaly though within transocean that you believe should be called and up the ladder either on the rig or onto shore? >> no, i can't say. every situation is a little bit different and i can't get into the heads of the guys that night to understand what they were thinking or how they interpreted this or looked at the situation. i think there was good faith that a lot of people looked at it, bp's engineers and well site leaders interpreted correctly and that they in turn went forward on that recommendation. >> now earlier in the presentation we pointed out that neither bp nor transocean had specific procedures governing how to conduct or interpret a negative pressure test. is that correct of at the time of the event mr. bly? >> yes, we said that in our

report. >> as for transocean without also correct? >> i believe that was correct. >> i know mr. bly said bp is taking perhaps remedial steps to fix that, to address that possibly in the future. transocean to your knowledge mr. ambrose doing anything to ensure that its crew understands how to conduct an interpreted negative pressure test? >> as you know we are still in the course of our investigation so as soon as we have all of fairfax and we conclude on the investigation we will make a report public and then we will decide how to proceed in the best interest. >> do you know mr. ambrose where people within transocean at least trained on how to conduct a negative pressure test or even what a negative pressure test was as part of their training? >> as before, i do not believe specifically and make a pressure test is covered in our training program. just in general work experience, they may have understood what negative pressure test was.

>> i would like to put up on the screen the application that ep submitted to the mms on april 16, setting forth its temporary abandonment procedures and which bp discussed or at least set forth the type of negative pressure test that it expected to perform. mr. bly i just want to ask you a question. is bad or does that describe the negative pressure test that was actually performed on april 20 at macondo?

>> yeah, i think it does. >> i want to just walk through this. so it's this negative test casing to see water gradient equivalent. so my understanding, my natural reading of that and i want you to correct me if i'm wrong but the negative pressure test will be performed before displacing that 3000 feet of seawater. what is your understanding of the phrase, see water gradient equivalent? >> i don't know if i'm going to be able to have a debate with you about the technical meaning of the steps in this. there are people that work on my team that could. i'm just not sure i can go through this with you. i will try but i'm not sure that i can answer the question you have got. >> the question is whether step one says you are actually going to displace mud with seawater down to 3000 feet before you

conduct the negative pressure test. >> i don't see the 3000 feet point on here is what i'm missing. >> in fact not until step to that the drill pipe is run down to 3000 feet below sea level, correct? >> that is the thousand 367. >> that is after the neck at a pressure test is described in the first bullet point, right? >> it appears to be, yes. >> so, if that is the case, is this consistent with a negative pressure test procedure that was actually run on the night of april 20? >> i understand your question. so the point is, on the night of the 20th they went straight to 8367 to do a test. >> after having displaced 3000 b. to c. whether whereas the permits a minute to mms they said we would do the negative test before the displacement?

>> correct. >> so the test performed on april 20 wasn't different than what was actually sent to mms on april 16? >> yes. >> now i think there has been some dispute as to whether there was-- i asked you about callback to shore and whether any were actually made during the kind of of the negative pressure test. i think mr. ambrose said there were calls back to shore made by bp. bp said there was no evidence of any such calls back to sure about the negative pressure test so i understand mr. bly's position from his report but mr. ambrose what is the basis for your statement that there were in fact calls by well site leaders or at least one well site leader back to shore during

the conduct of the negative pressure test? >> just in general discussion with few people on the rig, that mr. kaluza had gone down to the office to report back to sure that they were conducting a second negative test so on that aces we question whether or not a phonecall was made back to sure at that point for the reason of doing a second negative test. again, we have not been able to talk to mr. kaluza or vidrine or anyone else from bp or other third-party sites, so it is just based on testimony or discussions with transocean people. >> who are the transocean people you have those discussions with? >> i can't name them off the top of my head. we have done several interviews so we would have to look back of the notes. ..

>> if this is the case, did that happen, did that not happen? that's an open issue in our investigation right now. >> now, bp decided to use 400-plus gallons of spacer as part of the displacement procedure during the negative pressure test, and as i understand it, that was made up of two combined loss circulation materials that were up on the rig floor, or not floor, but up

on the rig. is that correct? >> that's correct. that's what we've got in our report. it was two pills that were put together, about 450 barrels. >> whose decision was it to use that material as spacer? >> i can't remember the specifics of how the decision was made. it was, i suspect that the well site leaders were involved, i believe that they asked the mud company to look at it and see if it was an appropriate procedure. >> do you know if anybody before on that rig or otherwise at bp or even m-i swaco for that matter had ever used the combination of these two materials as a spacer before? this. >> i, i don't know. >> in your investigation did your team do any analysis of whether these two terms could be combined and used effectively as a spacer? >> as part of our investigation, we went and looked at, you know, what that material would behave like when it was combined, yes. >> what was your conclusion as to whether it was appropriate as

a spacer? >> we didn't make that conclusion. we looked at what the material looked like, and it was, indeed, viscous and heavy. >> and so i think one of your not conclusions, but one of your hypotheses as to why there was zero pressure on the kill line is that perhaps that spacer, that viscous spacer leaked into the kill line and may have, in fact, clogged it, is that right? >> yeah, that's correct. the point of our work was, you know, which you outlined very clearly this morning was that there was this conflicting information about the 1400 and the 0. so we're very interested to understand how could, how could that have happened, how could you see that condition. one possible scenario was that there was blockage in that bill line, and our view was that one possible explanation of that was that the spacer could have done it, yes. >> looking back know what we know now, do you think it was advisable to use a spacer made up of loss circulation material

that might clog up one of these lines as a spacer? >> i don't know if it was advisable or not. i think if it had been placed above the b.o.p., not leaked past the b.o.p. to get across the stack and, therefore, have the opportunity to block the line, it would have made no difference. >> do you agree that it most likely would have been good practice or at least help with the the negative pressure test if once the crew had recognized there was a leak below the annular preventer such that spacer was getting down below the b.o.p. to have flushed out that spacer before continuing on with the negative pressure test? >> i can agree with that, yes. >> mr. ambrose, what is your view as to -- well, had anybody at transocean utilized these two materials as a spacer before? >> i, in general use, i don't know. we have not looked company wide to see if you can use loss

circulation material for spacers. >> is there any policy in place that would have required the transocean rig crew once they realized there were leaks to circulate it out, to make sure that they could get a good baseline for the negative pressure test? >> i don't believe there's any policy for that, no. >> do you think it would have been advisable given what we know now to have circulated out that spacer prior to conducting the negative pressure test? >> if you look at, if you look at the fist -- first set-up on the drill pipe whether there was spacer or not in the annulus space underneath the b.o.p. was not really a factor for conducting the test so long as the annular had been closed and sealed. it still, drill pipe being full of sea water gave a correct result in that it did flow back to the rig. i think that when you look at the switch that was made to the kill line kind of mid, mid plan

there, that that switch or that assumption that the spacer may not have been a factor was overlooked. and that that's, then, what caused the kill line to be overbalanced or marginally close to balance with the formation, with the spacer in the annulus space. >> by which the decision was made to utilize this spacer, this loss circulation material as a spacer. was that a management in change process? was there a rigorous vetting process, or was it ad hoc? >> i'm sorry, we may have covered this in the report, i just, i simply can't remember the details to your question. i'll have to come back to you on that. >> okay. is that the type of decision that would have been subject to a rigorous exchange process at bp? >> not necessarily. i think that's the type of

decision where you would look at, you know, there'd be a pretty reasonable basis for the people on the rig to make a judgment and say, we need a spacer. you made the point earlier you need a viscous spacer to separate the oil base mud and the sea water that you're circulating out. that material's, you know, appropriate for the spacer, let's get a check with the mud people and test it, and, you know, and i think that would be within the bounds of what you would expect people on the rig to be able to make. i don't see that as a decision that would have necessarily driven you to a formalized or highly-detailed lnc. >> and just to be fair, the engineers at m-i swaco are in charge of those fluids, right? yeah. there wasn't a discussion there, they thought about it and asked people what was appropriate.

>> i suggested that there may have been other problems that were caused by use of this viscous spacer. and that is that it may have affected the pumps after the spacer had been used during the negative pressure test s that right? >> what we saw, if you look back to the 19th when they were displacing the cement, the cement, the plugs -- you call it -- they bumped or they landed into the shoe on time, and what that means is when you look at the stroke, the mud pump strokes that it took to pump that fluid down to the bottom of the well, the estimated number of strokes were very close to what actually happened. so that would tell you that your pumps, your mud pumps were running at the expected efficiency. what, in your analysis of the mud pit data and looking at what

happened when the spacer was being pumped, what we saw were lower pump efficiencies than what were p assumed during the displacement. and that likely led, then, to the spacer being underdisplaced and set up for the negative test. >> so you think the spacer may have affected the pump efficiency of the pups thereafter? >> it lookses that it did. we have not been able to do any test with mud pumps with the same type of spacer. if the loss circulation material, you know, if -- it could have affected the pump liners and their efficiency. what i can say is that the data, the day the that show -- data showed that approximately 450 barrels of fluid should have been pumped, but if you look at the pit data,422, 25 barrels of fluid were pumped during the course of pumping out the

spacer. so our conclusion, you know, tentative, is that the spacer did lead to some inefficiency in the mud pumps when setting up for the negative test. >> and just to put this in context, if there are inefficiencies with those mud pumps, later on during other operations you may not have a really good view of the amount of fluids you're actually pumping down into the well, and it may confound the ability to see whether there is, in fact, a kick, right? >> weal you're on your -- while you're on your mud pits, the volumes would be hard to read, yeah. >> okay. do you have data on that issue that you'd be willing to share not only with the commission, but with others so that they could study it? >> we've provided to the commission, we're not 100% finished with it, and when we complete our report, it will be made public. >> okay. could we put up the slide of the

temporary abandonment procedures and namely the one that shows the three that are right next to each other, april 14th, 16th and 20th? this >> okay, i've got it. 570. >> so this is a version of a slide that i showed earlier during the presentation which shows how the temporary abandonment procedures changed

over the last week leading up to the blowout. mr. bly, you'll agree that the procedures did change in terms of the series of steps was going to be that the team had planned at macondo? >> yes. as i said, i don't remember all the detail in the report, but i'll take your word for it that the displays you put up demonstrate that it changed. >> okay. is it typical for something such as the temporary abandonment procedures to be changing this significantly up in the last week before they're planned to be used? >> i can't speak -- i don't know. i don't know what would be typical for this particular detail. >> okay. is the temporary abandonment procedure something that's suck. to a management of of -- subject to a management of change process at bp or at least was it before this event? >> if there was something that was changed that was felt to change the safety profile of the

well, then you would say, yes, you would see a management change for that. if it's a minor change, it's not felt to change the risk profile, then you would say, no, or it would be an informal management change. >> and who at bp would make the decision as to whether something was sufficiently racier to trigger -- riskier to change the management process? >> the engineering team and the operations team in town. >> so as far as you know did anybody besides just the immediate engineering team have any input into the changes in the temporary abandonment procedure in the last week before the blowout? >> i don't know. >> could we go to the picture of the displacement with only one barrier? so mr. bartlit or fred asked you some questions about setting the cement plug 300 feet deep. i'd like to ask you about

another aspect of the temporary abandonment procedures that we had identified as being potentially more risky than was necessary. and that is that after the negative pressure test the crew, according to the plan, was to open the b.o.p. and then begin to displace all of the mud and spacer from the riser ultimately leaving 8,000 feet of sea water and mud below it. do you recall that part of the presentationsome. >> yes. yes. >> and do you agree that at this point in time with the p.o.p -- b.o.p. open that the only other barrier is the cement job at the bottom? to flow from the -- >> i agree that the only other permanent barrier is the cement job, but clearly at that time you've got operational barriers including monitoring the well. and if there's an indication that the well's getting out of

balance, closing the b.o.p. stat. >> okay. so you got -- but the only mechanical or physical barrier at that point in time is actually the cement job at the bottom of the well? >> that's correct. >> so would you agree that this design whereby there is not a second mechanical or physical barrier puts a real premium on both the cement job and the negative pressure test that evaluates it? >> help me with what you mean by premium. >> well, again, because the cement job at the bottom is the only physical barrier, you're going to want to make sure that that's good and tested and proven, right? >> yes, absolutely. if your point is that the negative test is very important to demonstrate the integrity of that seal at the bottom, i absolutely agree with that. >> well, would you agree it's even more important in a temporary abandonment sequence where there is no plan to put another barrier in place before there is displacement of the

riser with mud? >> more important than very important? >> yeah. [laughter] >> i don't know how to, how to measure that. it's very important. >> okay. now, bp could have set a cement plug prior to displacing the mud from the riser, is that right? >> will yes, that would be, that is a choice that could be made, yes. >> do you know what the reason was that bp chose not to put in the cement plug prior to displacement of the mud from the riser? >> i don't remember all the evaluations, but i understand that it's a common engineering choice to set the cement plug in sea water, and i think that's fairly common in the industry x the reason for that -- and the reason for that is when you do that, you have a better chance

of getting a high quality cement plug. setting the plug in mud which is the alternative can lead to contamination issues, etc., so you have a chance of having a lower quality cement plug. >> and to be fair, we've heard that as well, that people trust cement jobs oftentimes in these situations more where they're done in sea water rather than mud. but isn't it true that there are other types of plugs that one could is set as a barrier? for instance, a bridge plug or some other mechanical barrier. >> yeah. i believe that's true. >> so if bp was concerned about setting a cement plug in mud as opposed to sea water, it could have exercised the option to set a mechanical barrier of some sort in mud without having to displace 3,000 feet of sea water. >> you're asking me about alternative designs which i can only agree. i mean, if you wanted to set a plug in there, you could set a plug in there, yes. >> well, you had said you didn't think there this was a more lay-

particularly risky idea when all things were set together. do you know if the team planned to use bridge plugs that could be set in mud? >> i don't happen to know if they looked at that during the design phase, no. >> okay. we talked about whether, and these are my words, this particular sequence put a premium on the negative treasure test, but do you think it also puts, in my words you understand what i meant, a premium on monitoring up on that rig? because, again, the only way that b.o.p. gets closed is if somebody hits a button, isn't that right? >> well, as we've outlined in the report, in our view there were critical things that failed, the cement at the bottom, the monitoring and the time to activate the b.o.p.. so i think -- i don't know quite how to say i agree with the premium. but all those were very important barriers to have in place as well as with every well actually. >> but by reducing down to only

one physical barrier, these procedures were, perhaps, more dependent than others on humans monitoring that test, is that right? >> yeah. , that's fair. i mean, i've been clear about what i thought the controls in place were for this operation. and that those are the things that, you know, fundamentally failed to allow the initiation to go through to the accident. if you're asking me is it possible in hindsight to go and create more, you know, potentially another barrier for safety in here, yes, it may be possible. and, in fact, if you look at the recommendations that we've made to bp which have been accepted, there's clearly things you could focus on in the negative test itself to sort of try to put more protections in here. so if that's the point of your

question, i can, i can agree with that. >> yeah, and ultimately that's where we're going. do you think going forward it may make sense to, perhaps, reconsider whether another barrier should be put in, a physical barrier that doesn't rely on human frailty, to protect against any problems down here at the bottom in the cement? >> in the aftermath of an event like this, you have to go back and rethink everything. you know, clearly it was believed there was many protections in place here. i believe that's true. i demonstrated in my report which ones failed, and, yes indeed, you would go back and say is there ways to put more control barriers in place. and can that may include the one you're suggesting. >> mr. ambrose, do you have any views on the temporary abandonment procedures that were put in place on april 20th? >> it goes -- from what we've

seen when you look at the evolution of the plans, there was a lot changing. i think there's a question of oversight and review of those plans along the way. the plan that was originally outlined that we've seen, and we don't -- to be clear -- we don't really understand the logic behind the changes. we've only seen a typed-out sheet of paper with the plan. but the plan that was typed out on the 14th is a much more conventional procedure for doing a displacement. those plans were never seen before the one, i believe, that arrived on the 20th which added the complexity of doing the displacement before setting a cement plug. you know, had the one on the 14th been run, the consequences would have been much different than what they were at the end of the day. so it's, the evolution that

changes, and i think it goes to one of the -- this isn't about one thing. it's about multiple things and multiple changes along the way, and the evolution of those procedures whether or not it got, it was recognized, the risks that were changing is one of the questions that we have from our investigation. >> well, just one last follow-up with you, mr. ambrose. that april 20th ops note was sent out to the rig, right? >> i believe it was at 10:43 a.m.. >> okay. and at some point members of the rig crew understood what the procedure were going to be for going forward that day, right? >> it would have been in the meeting, yes. >> so your people on that rig understood what the sequence was going to be. >> at -- yes. however, the ops note did not include the spacer that was added. sometime, and we don't have evidence and don't know when, but the spacer was added into the plan sometime between the

10:43 ops note and the displacement. >> putting aside the spacer, your folks on the rig knew that morning what the temporary abandonment procedures and the sequence of events were going to be from that ops note, correct? >> when they received it and they discussed it, then they would have known about it, yes. >> did anybody, to your knowledge, from transocean on the rig that day voice any concerns about the riskiness of those temporary abandonment procedures? >> so far those that we've talked to, no. the ones that we cannot talk to i don't know what they thought of the plan. >> but as of right now you have no evidence that anybody from transocean on that rig or otherwise voiced any concerns about the riskiness of these particular temporary abandonment procedures? >> i'd have no specific knowledge of somebody standing up and saying that, no. >> okay. now i'd like to turn it over to sam sankar, and he's going to ask some questions about cement. >> i'm going to suggest that we

take a five-minute break to switch equipment. >> okay. >> be if that's okay with the commission. >> yeah, that's fine. >> are just to switch equipment. >> five minutes. [inaudible conversations]

>> taking a break, a recap of some of what happened today, "the new york times" writing that the lead investigator of the panel said he found no evidence that anyone involved in the drilling of the well had taken safety shortcuts to save

money. fred bartlit jr., disputed the findings of other investigators including members of congress who have charged that bp and its main partners, transocean and halliburton, had cut corners to speed the completion of the well which costs $1.5 million a day to drill. and "the politico" writing that federal investigators say they're ham strung by trying to get to the bottom of the causes of the gulf of mexico spill because congress has not granted them subpoena power. fred bartlit jr., again, complained today he's working at times off secondhand information. continue to cover this today on c-span2, and tomorrow day two of this hearing. we'll be back here live at 9 a.m. eastern time on c-span2. [inaudible conversations]

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>> so i want to return for a moment to talk about the cement again. just to reorient you here, the cement that we're talking about now is the cement on the very bottom of the well, what's called the primary cement job. there's cement at all these other levels in the higher parts of the casing as well, but for now what we're talking about is the final cement job. and i want to ask a few questions to see if we can get agreement on some of our general points that we made during the course of the overall presentation. the first one is is -- is about cementing in general, and many of the folks that we talked to in the industry, they all said a primary cement job shouldn't be considered complete until it's been completely tested or otherwise evaluated.

is that something we can all agree with, mr. bly? >> i think the final tests are very important, yes. >> mr. ambrose? >> agree with that, yes. >> and mr. sinclair? >> i would agree. >> i would agree you can't conclude a cement operation until you've done all the testing and actually done a bond log to ascertain you have isolation. >> so your position would be that even a negative pressure test is not enough, until you have a cement bond log -- >> right. it's my opinion that, okay, it's my opinion that there's two parts to cementing, there's placement and there's actual hydraulic isolation of the zones of interest. so, obviously, placement is getting it there, zonal isolation, high hydraulic zonal isolation is the other part, and you can confirm that with a negative test and also with a london bond log, and i think the bond log is a better means.

my opinion. >> would you agree, though, in this many instances industry operators would wait until at least 48 hours before running that bond log? >> yes, i do agree. >> so the bond log you're talking about is not a bond log immediately after the cement job. >> that's correct. >> so if i understand you correctly, what you're saying is the system of the cement can't really be verified until, in some cases, 48 hours after the cement job is placed. >> that's correct, sir. >> so is it halliburton's view, then, that a primary cement job can never be relied upon until 48 hours after it's done? >> no, sir. it's my opinion that you use the data that you have from the cementing operation to ascertain whether you have a successful cementing job. one of those means is to look at the pressure response while you're placing the cement and look at your lift pressure. that's one indication, obviously, to look at whether you have returns once you're done and complete with the

cementing operation, when you bleed back the casing and close the floats that you have isolation in the float shoe, and then eventually when you go back to gob back to in the production phase to go after the reservoir that you run a bond log, those are all the ways that you properly ascertain a good cementing operation. if you were going to drill out the shoe and drill ahead, then you would run a formation integrity test to test the integrity of the cement as well -- >> primary cement job now. >> primary cement job. >> so i do want to drill down on this a little bit more, sorry about the metaphor there. are you saying, then, that you can't rely on a primary cement job until you have run a cement evaluation log? you can't rely on a primary cement job as a barrier -- >> can't rely on zonal isolation until, i think, you've run a bond log. that's my opinion. >> so is it halliburton's position, then, that relying on the primary cement job in this

well was itself a problem? >> i think prior to the operation we had a good indication that we were going to have channeling during the cementing operation, and then that was going to cause problem with zonal isolation, so that's my opinion. >> but you're suggesting, i think, that even with all the indicators being good it's halliburton's position that a primary cement job done by halliburton can't be relied upon until a cement bond log is done which can't be done for at least 48 hours after the job is pumped? >> to achieve zonal isolation, yes. >> another point that i think may be of general agreement is about whether this was a complex cement job at macondo. mr. bly, would you agree that this was a complex cement job for which the accuracy of the placement of the cement was very critical?

this. >> yes. we said, i think, exactly those words in that report or very similar to that. >> mr. ambrose? >> cementing is really outside our area of expertise, so our opinion on it, complex or not, probably differs on that. >> well, that's an interesting point. i do want to follow up on that a little bit. mr. ambrose, is there anything that your crew does on the rig to learn about the kind of cement job that is being done while they're there on the rig? is. >> you're referring to training or -- >> i'm referring to situational awareness. is there anything in your policies or manuals that requires your drillers, your oims to be aware of the kind of cement job that is being pumped while they're supervising the drilling monitoring screens and other equipment? this. >> okay. i think as far as awareness, clearly, they would be aware of what was being done, what type of job was being done, whether or not nitrogen was being

injected or not. for the specifics of the cement operation as far as waiting time, channeling, any of those issues, typically we're not involved in the those discussions or issues, and that's, that's not, i would say, uncommon. so we wouldn't have all of the details, so to speak, but we'd have a general awareness of what was going on. >> so if i understand you right, this means that the drillers -- the guys who are operating and monitoring protection equipment -- aren't aware at the time they're monitoring this whether the cement job that's being pumped is come protect, simple -- complex, simple, high risk or low risk? >> i don't know if we have it in those categories, and i'm not sure i can respond to that particular question today. >> well, let me ask a simpler question, do you think it would make sense for the drillers, the people monitoring the equipment, to have some awareness of the complexity or riskiness of the cement job that's being pumped in a situation where it is

providing primary cement and zonal isolation? >> i somewhat step back to the facts of where we are in the investigation. the, you know, we haven't seen any indication that a kit or any major loss circulation event occurred during the cement job. whether or not that should be a change in the future, i think, is something once we have our complete understanding of the investigation that we'll decide. >> that's fair. i should return to the original question, then, with mr. vargo and mr. sinclair. do you agree this was a complex cement job in which the accuracy of the placement was critical? >> i believe the, i believe that the job was critical for placement. as far as calling it complex, i believe that it's more complex than a conventional cement job that doesn't include nitrogen, but it's a fairly routine operation that we perform on a regular basis in the gulf of mexico in deep water.

>> mr. sinclair, i should just say i know you're from sperry-sun, and you're a subsidiary of halliburton, and i'll assume unless you raise your hand on some of these cementing questions, you prefer i direct these questions to mr. varga, is that fair? >> thank you very much. [laughter] >> do you agree that this primary cement job failed to isolate the hydrocarbons in the well? >> i agree. >> mr. ambrose? >> based on a conclusion that flow happened up the casing, yes. >> mr. black? >> yes. >> now, mr. bly, do you agree that the hydrocarbons -- i shouldn't -- well, your report says you believe that the hydrocarbons were not flowing out of the well at the time of the cement job. is that correct? >> yes.

we analyzed both before and during the cement job and concluded that there was no hydrocarbons flowing at that time. >> and, mr. ambrose? >> same. >> mr. vargo. >> i believe there was no flow, that's correct. >> so at the time of the cement job, and i think this may be an important point for the public to understand, at the time when the cement job was complete when the fluid was still in the well, everybody here agrees that the well was, as they say, static. it was not flowing, there was no influx from the reservoir at that point. is that correct, mr. bly? >> that's correct. >> does anybody disagree with that point? one thing that i think we've found in our investigation is that given the posture of the parties -- and it's understandable at some point, people advocate positions with some amount of certainty and we in a somewhat neutral posture have had some difficulty finding

the same level of certainty in some of the positions. on cement in particular one of the problems we face is that this cement down here is a long way, it's a long way down the macondo well x now it's been further isolated by more cement in the well itself. so many of the forensic clues that we might have to look at that cement after the fact are going to be hard to reach. so given the fact that we all agree, it appears that the primary cement job failed to isolate the hydrocarbons, do you agree there is no way to be sure beyond any doubt why the cement failed to isolate the hydrocarbons? mr. bly? >> beyond a shadow of a doubt is the question? >> to a certainty. >> i suppose it's impossible to know to a certainty, yes. >> mr. ambrose? >> again, you know, cementing is

outside of transocean's area of expertise, and we've had very limited amount of data or information on the cement, so it's hard for us to -- >> fair response. fair response. mr. vargo? >> i believe the cementing operation did not isolate the hydrocarbon zone. that was shown in modeling that was done prior to the operation, and i would have no reason to believe that we would have isolation especially in account of the fact that we had hydrocarbons blowing out from the well. so i believe that there was no isolation of the reservoir. >> that's an answer to a question, but it's not answering my question. my question, of course, is was there any way to be sure why the cement didn't do its job? >> because we did not have the ability to centralize the pipe properly. the hydraulic simulations indicated that we had channeling prior to the operation, so i believe that is reasonable information to indicate that we

did not have isolation. >> can you be clear about that? >> now, today -- it's my opinion, sir. >> i'll take that as a no. you can't be sure. >> do you believe that there was isolation? i mean, i don't believe that there was isolation -- >> i think we all agree there was no isolation, my question is whether we can be sure about why it happened. >> i believe that it's due to the fact that we had pipe laying on the low side of the hole and that a channel was created in this which there was a mud channel that was existent in the well, cement channeled up and did not isolate the zone, and that's why you didn't have isolation. >> is there a way for us now to go down in the well and find out whether that was, in fact, the case? >> i don't believe there is. they've, they've plugged and abandoned the well. >> we do have two bits of, at least that i know of, two bits of forensic evidence that could be analyzed in the coming months. one is rocks, i call them rocks although we're not exactly sure

what they are, materials that landed on the ship that was asked to leave the side of the deepwater horizon during the blowout. and some rocks actually landed on the rig or, i'm sorry, landed on the ship, and they are currently in usgs possession. and they're being tested. i'm wondering whether any of you have a position on whether or not the data from those rocks will be instructive or could be instructive on what happened at the bottom of the well or whether there's something that's purely irrelevant at this point. mr. bly? >> it's difficult for me to answer. i don't know if i'll have a view on those rocks. >> i'll just ask mr. vargo on this. >> i don't know. i mean, i guess we'll have to analyze it and see what comes back. >> and how about the one-and-a-half gallons of cement, dry-blend cement that remains from the deepwater horizon that was sent back to halliburton's lab just before the blowout and that remains, i

believe, still in halliburton custody at this point? >> right. that's correct. we do have some cement and additives and water that are in our possession, and we're waiting for -- >> am i correct that it's roughly one-and-a-half gallons or so? >> i believe that's the volume that's remaining. >> do you believe testing that cement could provide any information about what might have happened at the bottom of the macondo well? >> i believe, it's my opinion, that it could. >> so there's some value testing that. >> i think so, yes, sir. >> mr. ambrose, i don't know if you have a view on this. >> again, defer to cementing efforts on that one. >> fair enough. and can mr. bly? this. >> well, as we highlight extensively in the report, we looked very hard at this question about cement, and based on what we saw in the early part of our investigation, we had questions about the stability of the cement, the stability of the foam cement, and it's well documented. we did testing and concluded

that in all likelihood the cement fundamentally failed. it was unstable. i believe, it was said this morning that the test done by chevron on behalf of the commission came to the same conclusion, so i think it might be useful to do more testing. i think we've got a pretty clear understanding of what happened, though, in that the cement was not stable. >> i'd like to ask a question about the role -- how bp treats it cementing contractors on these rigs. what to bp was halliburton's role as the cementing contractor at the teachwater horizon -- deepwater horizon? >> well, i mean, you know, we hire them as one of the -- if not the leading cementing contractor in the world to provide advice cementing services, design and pumping

services for these wells, for these deepwater wells. >> and in bp's view is the design done by bp and executed by halliburton? >> in an iterative process, bp provide the well bore, pressures and configurations and things, halliburton provides the proposed cement designs to go with that. >> does bp determine other parameters about the job including the top of cement, rate of cement flow, things like that? >> i don't know who determines rate of cement flow, if that's a hall halliburton proposal or bp. bp would typically describe where they wanted the top of the cement to be, yeah. >> so i guess it take it generally that bp views halliburton as providing expert services in the cementing process, is that correct? >> yes, sir. particularly when you're dealing with specialized products like foam products. i mean, those are very specialized cementing products.

>> mr. vargo, i'm curious about halliburton on the same issues. when an operator like bp hires halliburton to cement a well, what does halliburton view it role as being? >> halliburton's going to provide the cementing services as well as other pressure-pumping services on the rig. we're going to provide the designs for cementing the wells, we work with, we work with the operator, the engineer involved, we'll also work with the cementing specialist that's inside bp, and it is a collaborative effort throughout the design and execution phase of the well to determine the best, the best process and products to use to create zonal isolation. so that's how we work together. >> do you recommend the procedures that you're going to use to cement the well? >> we'll, we will make relations on procedures. typically, bp has the final call

on the actual procedures that are cruised on the ex-- used on the execution of the job. >> so you do provide some advice on the kinds of parameters and kinds of things that should be considered during the course of a cement job, is that correct? this. >> yes, sir. >> do you ever predict the success of a cement job or suggest whether or not it'll achieve zonal isolation? >> we give -- yes, we can provide the results of the similar -- simulations and give them what we believe is, you know, a good, reasonable estimation of the success of the isolation prior to it being done through the simulations that we run. >> so the simulation sounds like, is the primary advice that, the primary vehicle for giving the advice. >> that's one of the avenues, yes, sir. >> okay. i'm just curious, what is a cement job like this on deepwater horizon cost? this. >> for this particular job, i don't know the exact number, but i would say about $45, maybe

$50,000. >> i do see some higher numbers in here, and i will confess i don't know if they're correct. i'll put them up on screen, and you can tell me whether they're, they're right. >> sure, that's fine. >> so on one page here that's one number, 98,635.92. that's the first page. i'm going to go to the second page which i'll represent to you is the page on which the foam cementing costs are outlined, and those are here. and that's 88,000. so you can correct me later if i'm wrong about this, it seems to us like the cost of this job was nearly $200,000. is that a high cost foam cement job?

>> i would say that's, that's probably fairly equal to the other type of work that we do. there's two different types of foam cementing operations that we conduct usually on surface and conductor pipes which those are very large types of cementing operations. the smaller casings, the deeper in the well, obviously, less volume, so there's typically a lower cost in cementing those, and this is just the revenue that we charge bp. yes. so i would say, you know, it's probably relatively close to another typical type of cementing operation that's a foam cementing operation at those depths. >> approximately $200,000. >> approximately. >> who recommended the nitrogen foam cement on this job, mr. bly, do you know? >> i don't know which individual did -- >> i don't mean any individual, i'm curious where the origin of the idea of using foam cement came from on this job. >> well, it comes from halliburton.

they proposed the best way to do a job like this, and foam is one of the things that they promote as very good for dealing with, you know, poor pressure, fat gradient and flow conditions. >> and, mr. vargo, what's your view of who recommended the use of foam on this job? this. >> i'm not exactly sure, but under these conditions where you have a poor fracture gradient, where you have the potential or loss returns, this type of product it's adjustable so that if we put the system out there, we can adjust the design based on the fractured radiants that we see out there. it's not like you're putting one cement out there with one density. we have the ability to adjust it, so i would assume -- and i don't know 100% for sure -- but i believe we did make the recommendation to run this type of system. >> you said earlier when you make a relationing like this, you still look at the operator to make the final decision on whether or not your recommendation should be used.

right? this. >> right. we'll use recommendations, and they'll either ask us to continue on or to potentially change that. >> do you treat different operators differently based on their level of experience with your services? >> i don't think we treat them differently. we have different -- we work for different operators that have varying levels of experience inside their organizations. as you mentioned before, chevron. they, obviously, have their own lab and cementing specialists. shell does as well, exxonmobil does, bp has cementing specialists. and then we have operators that we work for that have very little cementing experience, and we're relied upon for pretty much all of the recommendations. >> would you -- where would you put bp in the spectrum of organizations in their sophistication specifically with your foam cement in deepwater? >> they're one of the operators that we use foam cementing on. many of the deepwater operators

that we work with use foam cementing in the surface and conductor pipes. there are a couple of operators that use it in the, in the latter part, latter stages of the well which is the deeper sections. >> so we asked halliburton for the data on foam cement jobs they've done in the gulf of mexico. they came back with a spread sheet and, again, this can all be corrected if i have this wrong. the spread sheet we looked through, and we saw that there were 393 total foam cement jobs that had been done in the period from 2002 to 2010. that sounds like a pretty large number, but if you look here at the 33, the 33 as we understand it -- and, again, we stand to be corrected in the future -- only 33 of those were on that final production string in the last string of casing where you're trying to achieve zonal isolation of a hydrocarbon layer. and of those 33 only four were

for bp, the rest were for shell. so based on this,, mr. bly, would you characterize bp as being somewhat inexperienced with using foam cement in the gulf of mexico? doctor i don't know if we're -- >> i don't know if we're inexperienced, but that's probably the right number at that depth, yeah. >> so at this point for macondo bp, was, would you say relatively inexperienced with the use of foam cement at these depths? >> yeah. we had to rely on halliburton to give us good advice, yes. >> and was halliburton aware of the experience? in. >> i believe so. >> duke that would have or should have -- do you think that would have or should have increased the level of advice you were giving to them on this job? >> i think we're making recommendations based on what we think is the right job for the well, and under these conditions i think the design engineer that was working with bp made the

assessment that this was the best recommendation, and that was recommended. and he worked with the drill team and the cementing specialists to vet out the job and to prepare for it. >> can we put up the slide with the situation at the time of the cement job? in again, this is probably very familiar to you since we spent a lot of time on it this morning. what we were trying to communicate here was there were a number of issues that the crew should have known about at the time of the cement job, difficult conditions, forced to stop drilling earlier than planned. that's a simple way of exmaining the fact -- explaining the fact that there was not a whole lot of room below the casing in an area called the rat hole that is used as a way of helping with your cement job. i'm simplifying somewhat, but we can use that for now. there was low circulating pressure, no bottoms-up and a host of other issue that is

you've -- issues that you've already heard us discuss. i think, mr. bly, your report explains that many of these were risk factors that, in hindsight at least, your team could have assessed in a different way, a better way. is that fair? >> yeah. as i hinted at this morning, i think some of those risk factors arelinked to others. the first three are that you should be focused on a cement foam. i think that's exactly what was done here. you know, we asked for advice and how would we do that. so i simply struggle with the notion of having these be kind of a random list. i think some of them are contingent on others. >> mr. vargo, were your team members aware of any of these issues ahead of time during the course of designing the cement job? >> yes. our personnel work in-house with bp and the drill team, so i would say that they were aware of many of these things.

>> were they aware that there was going to be a low cement flow rate? >> as we came closer to the job, i believe the rate at which we were going to displace the job was reduced to insure that we wouldn't exceed the fractured radiant on placement of the job, and i believe that occurred relatively close to the cementing operation -- >> but they were aware at the time they pumped the job. >> yes, sir. >> and, in fact, the last on opticem models reflected the correct flow rate for the job, correct? >> i believe that's correct, sir. >> and the crew volume, your crew was aware of the total amount of volume pumped down the well? >> right. this was a relatively small volume of cement. >> were you aware of the lack of the bottoms-up circulation? >> yes, sir. >> were you aware that they'd had difficulty converting flows? >> yes, sir. >> and, of course, you were

aware of the centralizer issue. >> yes, sir. >> did your crew raise any of these issues to bp as possible concerns with the cement job? >> i'm not certain if they did or they did not. >> well, i can tell you, sure, they raised the centralizer issue. >> yes, that i know they raised. >> do you know if they raised any others? >> no, sir, i'm not aware of that. >> so the only issue you know that they raised was the issue of the low number of centralizers. >> yes, sir. >> out of all, out of all the things that they knew about in the cement job. >> i think that the in-house engineer that works with bp, i mean, i think they're continually discussing all of those things. some of those things occurred right before the cementing operation, the difficulty to convert float equipment, the low circulating pressure after conversion, i mean, these things were occurring on the execution of the cement job, so these didn't occur before in many