by Steve Coll
On April 19, 2010, Tillerson arrived at the Hilton Americas-Houston hotel and convention center to receive the Jesse H. and Mary Gibbs Jones Award for contribution to the international life of Houston. It was a typical appointment in an oil industry chief executive’s diary—a short hop on a corporate jet, a prepared speech before a sympathetic audience, a lunch of Cornish game hen and vegetables, and a roundtable talk with students from the University of Houston, Rice University, and the University of St. Thomas.
As the students snapped pictures of him on their cell phones, Tillerson was relaxed, giddy, and self-deprecating about his looks. One student asked if it was true that he and his wife rode motorcycles for fun.
“Pass,” Tillerson said, smiling.
Another asked about solar and wind power.
“ExxonMobil is not really against renewables,” Tillerson replied mirthfully. “We sell a lot of lubricant oil to the windmill operators. . . . The more windmills are built, the more oil we sell.”30
To the larger audience of about 750 Houstonians seated at banquet tables, Tillerson read out a philosophical defense of capitalist private enterprise and an explanation of ExxonMobil’s mission in the world. Job losses, bank layoffs, and housing foreclosures had swept the American heartland since 2008. Tillerson’s words reflected his Boy Scout optimism and Christian faith.
“The ‘service we render’ and the ongoing investments we make from our earnings are critical,” Tillerson said. “Simply put, delivering energy in a safe, secure and responsible manner improves the lives and opportunities of billions of people the world over. . . .
“When government and industry respect the rightful role of the other—and trust each other to faithfully fulfill their respective roles—progress is possible. . . . Deepening understanding and building trust between the public and private sectors is more important than ever. . . .
“Service . . . responsible . . . respect . . . trust . . . faithfully . . .”
He seemed to wish for ExxonMobil to be considered as a kind of public trust. He used the words “trust” or “mistrust” five times.
“Often the policy changes that are most damaging to entrepreneurs and innovation flow from a fundamental mistrust in the private sector,” Tillerson declared. He concluded, “Leaders in the private and public sector both have a responsibility to challenge the basis and perceptions for the mistrust.”31
He took in applause, shook more hands, and departed the Hilton in the midafternoon.
The next morning, April 20, 2010, at 8:52 a.m., on an offshore oil rig called the Deepwater Horizon in the Gulf of Mexico, a drilling engineer working for BP, Brian Morel, e-mailed his office in Houston, not far from where Tillerson had delivered his speech about trust between government and business.
“Just wanted to let everyone know the cement job went well,” Morel wrote.
David Sims, a BP drilling operations manager, e-mailed Morel and his colleagues at 10:14 a.m.: “Great job guys!”32
Twenty-eight
“It Just Happened”
Randy Ezell reached over from his bunk and touched a button to illuminate his electronic alarm clock. It read 9:50 p.m. He picked up his ringing telephone.
“We have a situation,” Steve Curtis told him. “The well is blown out. We have mud going to the crown.”
“Do y’all have it shut in?” Ezell asked. Ezell carried the title “senior tool pusher”; he was one of the more experienced hands aboard the rig that night. Curtis was an assistant driller.
“Jason is shutting it in now,” Curtis said. “Randy, we need your help.”
“Steve, I’ll be—I’ll be right there.”
In the darkness, the Deepwater Horizon floated on 4,992 feet of seawater in the Gulf of Mexico. It had been commissioned nine years earlier, one of a new generation of seagoing industrial robots designed to drill for oil in unprecedented saltwater depths. It was a towering, brightly lit metallic behemoth—almost 400 feet tall and 250 feet across. The rig had hovered for weeks over a BP-managed prospect called Macondo No. 252. The name referred to a fictional town in the Gabriel García Márquez novel One Hundred Years of Solitude. One hundred and twenty-six men and women were aboard the rig that night. Only six worked directly for BP; the rest, like Randy Ezell, worked for BP’s contractors and subcontractors, including two of the largest corporations in the global oil service industry, Switzerland’s Transocean and America’s Halliburton.
Ezell got up and lurched into the hallway. The explosions began: They were “take-your-breath-away explosions, shake-your-body-to-the-core explosions, take-your-vision-away explosions,” one of his coworkers said later. Ezell knew roughly what had happened. Drilling any oil well required managing the risk that trapped oil and gas under extreme pressure in the ground, when punctured by a drill bit, might escape uncontrollably and ignite. Since 2001, the workforce drilling for oil in the waters of the Gulf of Mexico—about 35,000 people altogether—had endured 60 deaths, 1,550 injuries, and 948 fires and explosions.
The blasts bounced Ezell off the bulkhead and left him trapped on the floor beneath debris. He twice tried to raise himself, but could not. The third time adrenaline jolted him. “I told myself, ‘Either you get up or you’re going to lay here and die.’” He raised himself.
Methane shooting through well pipes whooshed eerily in the darkness outside. Fire rolled in waves across the platform. Ezell heard calls for help and stayed behind as more explosions rumbled. He tended an injured coworker and then carried the wounded man to safety. He found coworkers lowering lifeboats and rafts into the water. He joined the exodus with Curtis.
On another part of the platform, Mike Williams, the Deepwater Horizon’s chief electronics technician, stood on the rig’s edge with Andrea Fleytas, twenty-three, one of three women working aboard. They watched as the life rafts and rescue boats pushed away onto water now illuminated by fire and searchlights. The two of them seemed to be marooned.
“It’s okay to be scared,” Williams told her. “I’m scared, too.”
“What are we going to do?” she asked.
Williams said they could either stay on the platform and burn to death or jump more than one hundred feet into the sea and hope for the best.
Williams jumped. He fell “what seemed like forever,” plunged into the water, resurfaced in a pool of greasy fuel, swam free, and found a rescue boat. The boat carried him to a larger vessel, the PSV Damon B. Bankston, which had responded to distress calls and pulled up nearby to collect survivors.
On the Bankston, Williams discovered Andrea was alive and well. Back on the rig, she had seen a last life raft lowering from the platform and had leaped in.
A roll call confirmed that eleven men were missing and presumed dead. As dawn approached, the Deepwater Horizon workers watched from the Bankston as the drilling ship burned and listed. It would soon sink to the bottom of the Gulf’s seabed.
BP later investigated the Deepwater Horizon accident and issued a report concluding, “A complex and interlinked series of mechanical failures, human judgments, engineering design, operational implementation and team interfaces came together to allow the initiation and escalation of the accident. Multiple companies, work teams and circumstances were involved.”
Mike Williams put it this way: “All the things they told us could never happen, happened.”1
BP’s catastrophe soon surpassed the Exxon Valdez wreck as the worst oil spill in American history. The Valdez had released 257,000 barrels of oil into Prince William Sound. The amount of oil released by the Deepwater Horizon’s blown well proved harder to measure, but eventually, the best scientific estimates held that almost 5 million barrels spilled before the well could be plugged. The Exxon Valdez had jolted America’s largest oil corporation to remake its safety, operations, and management systems. Over the ensuing two decades, within ExxonMobil, the wreck on Bligh Reef provided a kind of origins myth for internal reform and redemption, one repeated at employee meetings and safety minute rituals, as
well as to journalists and shareholder audiences. If ExxonMobil regarded itself now as straighter than straight, the corporation’s narrative went, it was only because it had known firsthand the terrible consequences of failed risk management.
ExxonMobil’s K Street staff often extrapolated the corporation’s relatively strong safety record into an argument to members of Congress and oversight agencies that industry self-regulation can work well, and that ExxonMobil’s self-regulation, in particular, was highly credible and should be relied upon by government and the public.
Twenty-one years and twenty-seven days after the Exxon Valdez struck Bligh Reef, the Deepwater Horizon blowout exposed what the bipartisan national commission that investigated the disaster would call “such systematic failures in risk management that they place in doubt the safety culture of the entire industry.” Deep-water oil exploration and drilling, in particular, involved “risks for which neither industry nor government has been adequately prepared.”2
The chain of errors that destroyed the Deepwater Horizon also exposed deep failures within BP and its contractors that were obviously not ExxonMobil’s doing or responsibility. Yet as had been the case in Prince William Sound two decades earlier, ExxonMobil and BP were linked in one critical aspect of the risk management system designed to protect America’s ocean ecosystems from oil disasters: response and cleanup.
The Mississippi River dumped sand, dead plants, and other precursors of fossil fuels into the Gulf of Mexico over millions of years. Freshwater delta flows sometimes produced pressurized traps of oil and gas offshore, as was the case off the Niger Delta in West Africa. The Gulf of Mexico’s salt domes held fossil fuels, as it turned out, as a result of many of the same ancient geological processes that had endowed onshore Louisiana and East Texas with oil riches. Early American oil geologists did not take long to follow the oil trail from Texas into the Gulf. Prospectors drilled the Gulf’s first offshore well in 1938.3 The returns proved compelling. Oil exploration in shallow Gulf waters delivered high rates of success—new wells struck oil twice as often as on Texas or Louisiana lands, and the volumes uncovered were often much greater. For a while, the only wells that made technical and economic sense were those that could be drilled in waters shallow enough to support a drilling platform anchored by pilings in the seabed. Profits incentivized innovation. In 1962, Royal Dutch Shell announced that it had invented a floating drilling contraption that would allow oil exploration in waters too deep to support a traditional platform. The deep-water oil era began—and it, too, boomed. Floating platforms spread from the Gulf to the Pacific Ocean and Alaska. Production from the Gulf of Mexico alone soared from 348,000 barrels per day in the year of Shell’s announcement to 915,000 barrels by 1968, almost 10 percent of America’s domestic total.4
On January 28, 1969, Union Oil Platform A-21 blew out in the Santa Barbara Channel. The spill soaked thirty miles of California beaches in oil. It was the early age of color television and dramatic visual news—moon landings, Vietnam jungle firefights, and televised presidential debates. Images of dead seagulls coated in oil and California beach enthusiasts mucking in tar beamed across national newscasts night after night, adding momentum to America’s burgeoning environmental movement. President Richard Nixon’s secretary of the interior, Walter Hickel, imposed a moratorium on all drilling and production in California waters.5
That decision initiated what became an undeclared, ad hoc system for controlling offshore drilling in American waters. If the waters to be leased for risky oil drilling adjoined states with tourism-dependent economies or voters who supported tight environmental regulation, drilling would be banned. But if the waters adjoined states with pro-oil politics, such as Texas and Louisiana, offshore drilling would be permitted and even encouraged. (Alaska, with its gung-ho pro-oil politics and its vast stretches of protected public lands and waterways, was a special political case; some offshore leasing proceeded there, but it was often contested.) Under a federal law enacted in 1953, individual states own and manage resources beneath ocean waters for three nautical miles from the shore, although Florida and Texas own nine nautical miles’ worth, because of old treaty claims.6 The federal government owns and manages the rest of America’s territorial waters, through the Department of the Interior. Even President Ronald Reagan, who was elected with a sweeping mandate to deregulate industry and spur economic growth, could not overcome America’s strangely Balkanized politics of offshore oil drilling. Reagan’s secretary of the interior, James Watt, initiated plans to lease oil in all of America’s oceans, but in the end, aggressive drilling went forward only in the waters off Texas, Louisiana, Mississippi, and Alabama. The eco-minded West Coast states of California, Oregon, and Washington wanted no part. Florida’s tourism and coastal real estate industries could not abide the risks of a Santa Barbara–scale spill, even though the state’s voters sometimes leaned Republican. Thus even Governor Jeb Bush, a scion of oil, would oppose offshore drilling for a time. On the Atlantic coast, Virginia, North Carolina, and New Jersey occasionally flirted with leasing Atlantic Ocean tracts for oil drilling in exchange for royalty revenue, but none of these states ever produced governors and political constituencies strong enough to go ahead.
After the Deepwater Horizon blowout, it became commonplace to observe that Big Oil had captured and weakened Washington’s regulation of offshore drilling, by influencing and outfoxing the weak and underfunded unit of the Department of the Interior, the Minerals Management Service, or M.M.S., which oversaw leasing and drilling in federal waters. It was certainly true that the oil industry outmatched M.M.S. regulators and that the industry muscled through an oversight system that relied heavily on self-regulation. But the weak regulatory system was also a consequence of the segregated American politics of offshore drilling.
The most powerful national environmental lobbies—the Natural Resources Defense Council, the Environmental Defense Fund, the Nature Conservancy, and the Sierra Club—did not focus heavily on the technical, regulatory, and risk management issues surrounding the Gulf’s Red State deep-water drilling operations. To the extent that the environmental lobbies worked on offshore oil issues, they focused more on preventing new leasing in Alaska or in the eastern Gulf, off Florida, where the oil industry sought to expand.
Also, as drilling boomed, Interior became the conduit for annual royalties that reached $23 billion in 2008, $17.3 billion of which was funneled to the deficit-burdened United States Treasury.7 This cash flow reinforced congressional complacency. Besides, in most years, shipping accidents accounted for much more oil pollution leaching into ocean waters than offshore drilling or associated pipeline leaks. All this created a pressure-free atmosphere around Interior’s Minerals Management Service. Compared with food safety, toy safety, mountaintop coal mining, climate change, air quality, or water quality, the rigors of deep-water drilling operations and worker safety in the western and central Gulf of Mexico did not attract great scrutiny—as evidenced by the high numbers of deaths and injuries that took place on offshore platforms.
Deep-water drillers “succumbed to a false sense of security,” as the national commission put it. One warning sign was the well-documented unreliability of blowout preventers. These were contraptions meant to function as last-ditch fail-safe devices to smother uncontrolled wells before they could blow. A Norwegian firm, Det Norske Veritas, published a paper that examined fifteen thousand offshore wells operating between 1980 and 2006. It found eleven cases where teams drilling deep-water wells, fearing a blowout, had switched on their preventer devices. In only six cases did the wells come under control—an apparent failure rate of almost 50 percent.8 The Department of the Interior commissioned studies by WEST Engineering Services in 2002 and 2004 that looked in detail at the workings of certain types of blowout preventers, including that deployed on the Deepwater Horizon, and found that in many cases, the preventers did not work as advertised. The findings illustrated, the authors of one of the Interior-commissioned studies wrote, “th
e lack of preparedness in the industry” to manage “the last line of defense against a blowout.”9
Complacency ran to the top of the American political system. While seeking the White House, Barack Obama excoriated John McCain for proposing to expand offshore drilling, because this would have “long-term consequences for our coastlines but no short-term benefits, since it would take at least ten years to get any oil. . . . When I’m president, I intend to keep in place the moratorium.” In office, he did not. An Interior Department review overlooked the evidence of weak fail-safe systems and implausible cleanup preparations, and, noting the lack of serious accidents to date, Interior secretary Ken Salazar recommended new leasing to the White House in early 2010. In a political trade-off made to advance climate change legislation pending in Congress, legislation that would never pass, Obama announced plans to consider drilling in previously closed areas of the south and mid-Atlantic Ocean and the eastern side of the Gulf of Mexico—if it were approved, this would amount to the largest geographical expansion of domestic offshore leasing in a generation. “I don’t agree with the notion that we shouldn’t do anything,” the president explained. “It turns out, by the way, that oil rigs today generally don’t cause spills. They are technologically very advanced.”10
In the sections of the Gulf open to drilling, Exxon was a laggard. Its annual reports and public affairs campaigns boasted about the cutting-edge technologies that made deep-water drilling so promising, but the truth was that ExxonMobil had for long missed many of the big opportunities in the Gulf. Humble Oil’s early exploratory offshore wells, drilled off Texas during the 1970s, were expensive busts. By 2010, Chevron had drilled many more deep-water wells worldwide, proportionate to its size, than ExxonMobil. At the time of the Deepwater Horizon accident, ExxonMobil had only a single drilling project under way in the region. The corporation’s major deep-water projects lay offshore in Equatorial Guinea, Angola, and Nigeria. This imbalance was not by design; ExxonMobil had simply missed out on the Gulf’s early deep-water boom.
