>> this is a point -- this is a point which the members opposite simply refuse to acknowledge, which is that for the 25% of lowest graduate earners, they will pay much, much less than they do now. that seems to me to be a strong indication of our progressive proposal. >> neither business today includes the equitable life payments. does the deputy prime minister -- is he aware of the anger and frustration of many thousands of equitable policyholders? and will he address that and hopefully with his people on all supports come to a more satisfactory conclusion for those equitable life policy orders? >> well, as he knows, under the previous government there was no prospective any compensation for equitable life policy holders. he will also -- he will also

know that the compensation package -- the compensation package we've announced in the comprehensive spending realm is far, far in excess of the compensation levels recommended by the independent review conducted. it is, of course, difficult. we would always like to provide more compensation but the compensation we are providing is much, much more than many people expected. >> thank you, mr. speaker. the times education supplement recently published a feature article stating how effective the pupil premium was going to be. does the deputy prime minister share my frustration that the party opposite that crossed that point of the coalition government -- >> we're grateful for the honorable gentleman. i think the pupil premium is a significant policy because what it does is it -- it puts an end to the system we inherited to labour where if you are a poor child -- if you're a poor child at school in one part of the country, you got a lot of extra

money allocated to your education but not if you're a poor child in another part of the country. this is -- this is a premium which is attached to children from poor backgrounds wherever they live. to lift their sense of aspiration and to improve the 1 to 1 tuition support they need to be able to get the fair chance in life that all children deserve in our country. >> up to 100,000 tenets -- how are they paying landlords in the tax and benefit system? >> i strongly agree that we should come down very hard on those unscrupulous landlords who frankly are profiteering from the last government. and for rents dependent on housing allowances have actually

increased by 3% and that's why we need to bring some sense and proportion to the way in which we adminster housing benefits which has more than doubled in size over the last several years. >> order. we come now to -- >> here on c-span2, we'll leave the british house of commons now as they move on to other legislative business. you've been watching prime minister's question time aired live wednesdays at 7:00 am eastern while parliament is in session. you can see this week's question time again sunday night at 9:00 eastern and pacific on c-span. and for more information go to c-span.org and click on c-span series for prime minister's questions plus links to international news media and legislatures around the world. you can also watch recent video including programs dealing with other international issues.

>> this year's studentcam competition is in full swing. make a 5 to 8 minute video on this year's theme washington, d.c. through my lens. up load your video to c-span before the deadline before juneau 20th for your chance to win the grand prize of $5,000. for all the rules on how to upload your video, go online to studentcam.org. >> up next more from the national commission on the bp deepwater horizon oil spill. yesterday the panel heard from an internal driller that the oil rig were pressured to complete work on the well. steve lewis was one of the experts who appeared tea commission yesterday. this is just under two hours.

[inaudible conversations] [inaudible conversations] >> good morning, everybody. and welcome to day 2 of this, the fifth meeting of the national commission on the bp deepwater horizon oil spill and offshore drilling. i'm hereby calling this order to order. i'm chris smith and i am federal official on this commission and i'm the deputy assistant secretary for natural gas at the united states department of energy. i'll be guiding us through a busy day of panels today.

before we proceed i'd like to familiarize everybody with the safety procedures for this building. in case of emergency or fire, you'll see the exits to my left to your right. please proceed out and to the left and up the escalators and there will be security personnel who will escort you out to the street. and that's the procedure in case for emergency. we'd also like to ask everybody to turn your blackberries or cell phones to vibrate or silent. the preds established this bipartisan commission to examine the root causes of the bp deepwater horizon oil disaster and provide recommendations on how we can prevent future accidents offshore and mitigate their impact should they occur. this committee is conducting its work in compliance with the federal advisory committee act which sets a high standard for openness and transparency and as such, today's hearings will be held here in this public forum and broadcast live by a video feed. before i hand the event over to

our two distinguished cochairs i would like to provide a quick summary of today's agenda. this morning we'll be hearing from a panel of experts on oil well drilling and operations featuring panelists from bayou petrophysics, shell energy resources, seldovia resources. and we'll break for lunch at 12:30 and at 1:00 we'll reconvene on two panels on regulation featuring panelists from ocean management regulation and enforcement followed by panel on industry safety culture featuring panelists from the shell oil company and from exxonmobil. starting at 4:00, we'll be hearing wrap-up comments from the commission's chief counsel, mr. fred bartlett. and the senior science and engineering advisor, richard sears. following closing remarks by our two cochairs, there will be public comments made from 5:00 to 5:30.

in addition, any member of the public who is wishing to make a public comment to this commission may do so in writing via the committee's website, which is www.oilspillcommission.gov. and at this point i would like to hand the floor over ever to our two co-chairman, bob graham and the honorable william reilly. >> thank you, chris. mr. chairman. >> good morning. the presentations and examinations yesterday uncovered a suite of bad decisions. failed cement tests, premature removal of underbalancing the well and a pressure test that failed but was judged a success. apparent inattention,

distraction or misreading of a key indicator that gas was rising toward the rig. our investigator team did not ascribe motive to any of those decisions and reported that they found no evidence that those flawed decisions were made to save money. they didn't rule out cost. just said they weren't prepared to attribute mercenary motives to men who made -- who cannot speak for themselves because they are not alive. but the story they told is ghastly. one bad call after another. whatever else we learned and saw yesterday is emphatically not a culture of safety on that rig. i referred to a culture of complacency yesterday and speaking for myself, all three companies we heard from displayed it. and to me, the fact that each

company is responsible for one or more egregiously bad decisions we're closing in on the answer at the question i posed at the outset of yesterday's hearing and that is whether the horizon macondo disaster was a unique event, the result of some special challenges and particular circumstances or indicates something larger? a systemic problem in the oil and gas industry? bp, haliburton and transocean are major, respected companies operating throughout the gulf. and the evidence is that they are in need of top to bottom reform. we are aware of what appeared to be a rush of completion at the macondo well and one must ask, where the drive came from that made people determine that they couldn't wait for sound cement or for the right centralizers?

we know a safety culture must be led from the top. and permeate a company. the commission is looking beyond the rig and not just to yesterday and what happened on april 20th but to the months and years that preceded it. bp has been notoriously challenged on matters of process and safety. other companies may not be so challenged. and today we will hear from two whose reputations for safety and environmental protection are exemplary. they will tell us, i believe, that safety and efficiency re-enforce one another and that their safety cultures have contributed to their profitability. both companies and their safety and risk management systems have received extensive examination

by the commission staff in meetings i have attended. they are very impressive. nevertheless, their rigs have been shut down in the gulf this summer just like those of other companies because of the performance to which they had not been implicated. the performance of bp transocean and haliburton. this has led us in the commission to learn from the nuclear industry, which has an institute that promotes best practices, re-enforces government regulation and polices the lagards and yesterday we heard from the lagardses. and yesterday we look back. today we hope to learn from the leaders and to look forward. and to look at companies which have learned from their own

crises and disasters and rose to become standard-bearers. thank you. >> thank you, mr. reilly. as co-chairman reilly has just said, today we are going to be focusing on the future, not the past. but the future is always influenced by our past experiences and so will we be. yesterday we had a very detailed description of the well drilling operation as well as the details of intercompany decisions and how those decisions played out and contributed to the ultimate disaster. there was -- in the news reports of yesterday's hearing, a statement that i think was stated in too broad of term.

the statement was that there was no evidence that there were conscious decisions made to trade off safety for profit. i agree with that statement as it relates to those things that occurred on the oil well rig itself. those men whose lives were going to be in the safety risk equation. there's certainly no evidence that they degraded their own mortality. i think the larger question is the one that co-chairman reilly has just focused on, and that is the reality is there were a series of almost inexplicable failures in the hours leading up to the disaster. there were a series of actions which are difficult to explain in this environment. to just select one, the fact

that there were three different temporary abandonment plans adopted in the week before the final execution of the plan is illustrative of the fact of the lack of consistent planning for safety. the problem here is that there was a culture that did not promote safety and that culture failed. leaders did not take serious risk seriously enough. did not identify risk that proved to be fatal. today we will be looking at the same issues as yesterday but from a different perspective including the perspective of some of the -- those within the industry with the best reputations for an effective safety culture. i hope that in the course of

this that we might have some new perspectives on what happened at macondo, what were the motivations that led to various decisions to be made. i might say one specific issue that i'm going to be interested in is why was the date, april 20th, so -- such a committed date? there were multiple reasons why it would have seemed prudent to have delayed the final actions until various safety measures, some of which were within a few hours of completion could have been available for consideration as to the wisdom of moving forward with the next step. that is just one of the questions which i hope will get

some additional intelligence upon today. with that, we will turn to the first component of our program today, which is the panel 2, experts on oil well drilling and operations. and for this presentation, mr. e.c. thomas, consulting petrophysicist and owner of bayou petrophysics. mr. thomas? >> thank you. >> also, mr. steve lewis, advanced drilling technology an implementation engineer,

mr. john roger smith department of petroleum engineering at lsu and darrell bourgeois of patrolling engineering research technology laboratory. mr. thomas? >> yes, sir. >> do you have an opening statement? >> commissioner, if i could for a moment, there will be three panel members here this morning. we also have charlie williams of the shell company who will be answering questions today. and just to give you a sense of what the format will be, this morning we're going to hear from five different deep water and nondeep water drilling experts in two separate panels. on various subjects relating to

well design and deep water drilling issues generally as well as macondo and the blowout. we will be splitting the panels into two. one in the first morning session which includes the individuals commissioner graham has just introduced and we will then have a second panel in the second morning session. while each of the experts is focused on a particular topic, we will be asking them to comment on other topics at various points during the presentation and unlike yesterday, we expect the commissioners, if you have questions, of any of these experts, to please go ahead and ask those questions. just to orient the commission, the topics for discussion today for the first morning session will be deep water geology and formation issues at macondo. mr. thomas will be speaking principally to that issue. well design generally, not specifically at macondo.

mr. williams, i believe, will be speaking to that issue. and then finally drilling operations and implementation of well design. not only generally but at macondo, mr. lewis will be speaking to that issue. in the second morning session, just to give you a preview, we will have a discussion once again with mr. lewis on precementing issues that you saw some of in the presentation yesterday. we will also be speaking with some other experts on the negative pressure test and temporary abandonment procedures. and finally we will be speaking with one of the experts on kick detection and response, both generally and at the macondo well. >> please the commissioners, i'll begin the process by asking some questions of the experts that we have. we can switch over to my slide presentation here. again, we have dr. e.c. thomas

who's a consulting petro physicist. and steve lewis with 40 years of field experience in drilling operations in various places. i want to start by talking a little bit about deep water and what makes deep water different and special with mr. thomas. mr. thomas, what do you do for a living? >> i'm a consulting petrophysicist. >> and can you tell us a little bit about your experience in the oil industry? >> i've worked as a research petrophysicist, then management of that department. then i went to new orleans to be a field engineer and then i served as the leader of those sections. i went to head office training and taught petrophysics in both the beginning, intermediate and

advanced sessions. and then went to head office to be a technical advisor to the vice president of technology. >> does your experience include deep water experience? >> yes, it does. >> i'm going to put up again the slide that we showed yesterday orienting people to what deep water might actually mean. so do you agree generally with this picture of where the boundary of deep water would be in the gulf? i'm not asking you to be sure about every specific but is that the generally accepted boundary line? >> the generally accepted boundary is 1,000 feet in those waters. >> and when did industry start drilling wells into deep water? >> in the 1980s. >> and we've heard some suggestions in the media else and that one of the reasons that industry went to deep water is because of concerns raised by environmentalists in shallow water, is that true in your view? >> absolutely not.

and >> and why did industry go to deep water? >> to put it simply, that's where the oil was. unique geological opportunities there. >> and speaking of those unique geological opportunities, i'm wondering if there's anything that comes with those opportunities. are there any challenges that you face in deep water? >> absolutely. the good thing is that we have hyperocity and high permanentibility and we end up with a much narrower margin between the core pressure gradient and the gradient of those rocks. >> am i right that the narrow poor pressure fracture gradient that you're talking about is some of the -- it's the same

fracture that makes it so attractive? >> it certainly provides the ability to have high reservoir energy and, therefore, high flow rates from the wells. >> can you give me a sense on an order of magnitude level on the difference of production of a deep water well to a well inside that line, a well on the shelf? >> roughly it's an arc of magnitude, say, from 2,000 barrels a day to 20,000 barrels a day. >> i'm going to move and show about the actual core pressure gradient at macondo. have you reviewed this chart or anything about the core pressure fracture rating at macondo? >> yes, i have. >> when you start drilling a well like macondo, do you know ahead of time what the fracture gradient is going to look like? >> we can only estimate it. >> so do the numbers change over the course of drill a well? >> yes, they do. >> and how does that affect your

operations at the well? >> we continually have to monitor all the signs that give us the clues as to, well, we are going to be exceeding the fracture gradient or not being overpressured. and we have to stay within that window. >> and how narrow was the window in numerical terms at macondo? >> well, by the time they were at their final point, it was about 1.8 or 1.7 pounds per gallon mud equivalent. >> and that's the difference between the pressure and the fracture gradient; is that right? >> that's correct >> now, i don't have a sense and maybe many people here don't have a sense of whether that is actually a small number and is 1.8 a small number to you. >> it is a small number to me. >> what's the rule of thumb for what you would like to have? >> well, in general we'd like it to be as large as mother nature

can make it. but if we can, we are happy to have at least 2 pounds per gallon separating the two. >> so what is having a 1.8-pound per gallon differential mean to you in terms of the complexity of the situation they were dealing with? >> basically, they were getting very close to not being able to drill any further at all. >> we discussed an email yesterday from mr. bobby godak at bp where he talked about a lot of things and he was explaining to some of the partners at the well the decision to call a total depth early and there was this line in there that said drilling ahead any further would unnecessarily jeopardize the well bore. what does that mean to you? >> in this case i think he was referring to the fact that they had planned to make this well a producer, therefore, if they wanted to drill any further to theirtated td then they would

have to set a liner. if they set a liner at this stage then they would not have been able to have had the well bore size to make the pursuits they wished to have. >> another issue we talked about yesterday was loss returns on april 3rd. at this well. are loss returns an indication of a narrow pore pressure and fracture gradient? >> it is one yes. >> and how did did they respond to the loss returns here at macondo? there's animation in the back just to prove the point just because we like it so much. >> as you can see, when we say loss returns we're talking about that reservoir is taking mud and to offset that, we inject materials that try to plug that up and not only do they use

regular loss circulation materials but they use some very advanced polymer materials to try to plug it. >> and is that a typical approach or an appropriate approach to deal with lost returns? >> yes, it does. >> does it get you back to the original state before you had a fracture or the lost returns to begin with? >> generally no. once you have parted the grains, then it makes it easier to do it the second time. >> so would it be fair to say then that this is something like a band-aid you're doing this but you're never going to be quite where you were before? >> yes. that's a good analogy. >> but nevertheless, is having that fix in place, is that sufficient to allow to you continue drilling? >> yes, it is. >> do you have an opinion on whether they -- the well was actually stable after they finished drilling to total depth based on your review of the materials?

>> in my opinion, it was stable. they had managed to stay within that window. at td, they had a stable well for four days. they logged and made several wiper trips inomhe well and the without any incident. >> so when you say that the well was stable at this point, does it mean that they have solved their problems and that from then on they would have been okay? ..and that from then on they would've been okay? >> well, they have solved that problem of getting down, but they could never ignore the fact that they are and a geological environment that had a very narrow pore pressure fracture gradient window. >> and does that mean, for example, i think about their process including cementing and running casings, those are issues they would have to -- >> they would be paramount. >> and how does having a narrow pore pressure fracture gradient window a fact that cement job? >> they would have to pay

particular attention that they were not exceed the fracture gradient due to the weight of the cement. >> and is that why they chose come in your view, to use lighter foam cement in this job? >> i believe that's so. spent and you heard me describe yesterday that cement job based on e-mails and reports of bp, a complex cement job, and a complex well bore. have you evaluated in your professional experience wells that were as complicated as macondo? >> yes, i have. >> where they drilled safely? >> yes, they were. >> and what is it that made macondo complicated that was similar to those of the wells? >> just repeat myself, it is really the very narrow margin between pore pressure and fracture gradient, and the very high deliverability of these blocks. so it's a unique geological environment really spent and on the other wells were describing

that were drilled safely, that were drilled safely, they were able to in there'll, they were able to negotiate these narrow pore pressure and fracture gradient concerns? >> yes. if you pay attention to the drilling you can certainly do that. >> if people want to go to the gulf of mexico to get more oil, where do they have to go? >> they're going to have to go to deepwater. >> is that because of the podunk issue that you described earlier that they produce more? >> that's just about the only unfilled acreage that is left. >> is inevitable when you go to deepwater you will have to face these narrow pore pressure and fracture gradient concerned. >> yes is, because of the geological environment that has put the rocks in that particular location. >> given that environment, does that necessarily drive you to more complicated well design wells? >> yes, it does. >> thank you, mr. thomas. i want to turn out to mr. charlie williams from shell. let me first ask charlie, what do you do for a living for sean?

>> on the chief scientist for well engineering and production technology, and i'm a technical consultant and technical advise her and advise on different major projects, and also do special technical projects and i also advise. >> at shell, do you guys also a similar view about the relative productivity at deepwater wells versus shelf wells? >> yes. >> do you consider deepwater to be a more challenging drilling environment than shallow water? >> in general. i mean, you can have challenging wells in either environment, but in general, you know, there's a unique challenges in deepwater. >> would you agree with mr. thomas' view that narrow pore pressure and fracture gradient is one of the challenges of? >> that's correct. >> what are some of the other challenges deepwater proposes? >> there's many, but certainly one aspect is simply because it's in deepwater. so you have currents, you have

water depth, you have conditions you have to design for big so you can do up with these dynamically positioned anchors or rigs, and it's a challenge to have the technology to do all of that correctly. it's a challenge because you have this long riser. you need to i think you need to deepwater. anand in most wells businesses d that we talk about that is so important to have in the well and maintained correctly, now exist not only in the well but in the riser. so managing, you know, but in the riser and managing that total system, total circulated system is different simply because you have 10,000 feet, or 2000 feet of riser to contend with. and then, of course, you have your blowout preventers on the ocean floor, quite a depth down. they have to do all of the work on those remotely with rovs. you have to, you know, if you want to do maintenance or

repairs, you have to pull those back out of the water over a considerable distance in the water depth. there are many challenges like that that aren't of course based on a shallow water or on short. >> and doesn't show therefore use different size teams ago to deepwater? >> yes. >> how many people typically professionals working to deepwater will? >> so typically you have a three drilling engineers. by the lead going into, to drilling engineers. you have the people that are going to be operationally on the rig, so usually six operations staff that are involved in planning the wells also. and you have any order of six to 10 subsurface people. so that would be better physical people, reservoir engineers, geophysicist, geologist and all the people that look at what the prospect looks like and actually help determine the location of where you're going to do. then you will be part-time people, technical people to come

in as well. >> in a typical team with the operating staff, you know, would be as much as 20 answered at least 15. >> and how long does it take this kind of a team to put together a plan to drill a deepwater will? >> it depends on what you're doing an exploration well where you have to do, you don't know as much about the environment and you have to determine those things in advance versus a development well where you already know a lot about the geology. but to answer the question, it's anywhere from eight months to as much as, you know, i hear, depending on the complexity. >> during the course of that time is the norm of the design would change? >> yes. >> and how does shell usually or how is your best practice the process of change those designs during the course of the process

of? >> is a defined collaborative process. as i mentioned the team is large, and so we bring in all these technical groups, including the operational people that will be involved in drilling the well. and they work, start out on what's the location of the wilner going to drill and start looking at all the complexities and challenges that we have to deal with in various designs that they really hold that design over this period we talked about come and see if you could change the position of the well, or you could change other aspects of the design, and would it be more optimum and could be better meet the challenges. and that involves over that whole period of time, and then at different stages in their we had even bigger reviews. and we will have a review, you know, recently i was we involved in a review. we brought in the entire contract rig crew, and they also looked at the well design. and so we looked for the maximum collaborative cooperative

environment. at the end of that process when we had chosen the design, then it's approved, and then it becomes the design that was used to execute the well. >> so you do involve the rig crew then at least sometimes in the design process? >> correct. >> how about the well site leaders? >> correct. >> and when you make changes, i assume there are some kind of changes that don't require this kind of process? >> yes. justice dr. thomas mentioned, as you're executing the well there are certain things you don't know exactly, for instance, the good predicting pore pressure but it may be different as you drill. and so as these things occur, you know, there are certain operational things that you do, like might change the mud weight two-tenths of a pound, go up or down, and there are certain routine operational changes. those made by the shell drill site leader, makes those kinds of operational changes that if

we make a change to the design basis of the, what we call the prognosis, that goes through the same approval process as a proven the original pron. agosta the same kind of consultation, back with the people in the office that did the original approval. and that people in our we note operating centers are also consulted when changes are made. and any particular, if it's changes that involve changing the head, so i guess we go back into these approvals the same way you approved the original design. >> would change the procedures for temperate abandonment process fall on one side or the other of the spectrum of major and minor? >> well, it would be particularly read doing those kinds of changes because it involves establishing barriers and one of our key design philosophies is maintaining the barriers and will. that includes the various they going to the temporary

abandonment. >> i want to put up a slide here that i think you gave me. and move the discussion over a little bit to to the trapped annuals issue i described yesterday. do we have the laser pointer somewhere? you can always count on her chief scientist to have a laser pointer. [laughter] it's a little dim but i think it will work for purposes of illustrating. the well we have, the well drawn we had which was very simple by drawing, doesn't show a trap and is in a deepwater drilling? >> that whitespace that is is above the cement and between the two cross-sections of white. >> so it's that white section in there, and this is the inside of

the well bore come and then the space outside between inside casing and the next for the outside casing, is that right? >> yes. >> thank you. so it's the space writer, correct? and here we are illustrated this is the well head, here is the mud line, so this would be the ocean floor here, and this is the formation into which we are drilling. >> and the important feature is it is sealed at the bottom and sealed at the top. >> so we discussed a little bit yesterday the prospect of heeding this space up, and can you describe briefly what makes that space heat up when you're producing a deepwater well like this? >> yes. the temperature in the zone you are producing, there's a temperature gradient that increases with depth like the pressure gradient. so that the heat in his own you're producing the temperature is hard. when you put the well of production, it's bringing up this hot production relatively high production. and then the heat is transferred

from that hot production into all of these two dealers that are on the outside of the well. and so it heats up this space along with everything else. >> so any get well because of whether it is in deep water, can have been annular pressure build up issued? >> correct. and what's unique to deepwater is your ability to control that pressure because of the seal that is in the well had housing. >> we talked a little yesterday, you may have seen about some of the methods for controlling this annular pressure build up. our burst discs one of those methods of? >> correct. >> and what do they actually do functionally? >> the first disc, they took a whole in the casing. and in that the service desk and the thickness and shape of that disc is designed to failed passionate fellow at a certain pressure and to relieve the pressure to the next outer

string. >> so it would be a whole functioning, in this casing has? >> yes. >> are there any drawbacks of using that kind of approach to managing any pressure build a? >> you know, there's advantages and disadvantages to all of the techniques. one of the complications with using first disc is that you are limited pressure in the casing is then limited to the burst discs. so can you have a higher pressure in that casing, then you know you delimited by the burst disc, not by the design rating in the casing which was higher than the burst disc. >> and why might you want to have a higher pressure in that casing? >> you know, if you have certain kinds of problems on the well where you wanted to circulate out, for instance, pressure that gotten in there and you want to circulate that out and re- kill the annuals or refill the annulus with the control fluid,

you could be limited by what pressure the burst disc. >> so burst discs are one pressure -- methods. are there other methods of the with it as well? >> the other techniques involve a limiting amount of heat that is transferred. to one of the very common ones is to insulated two beings so the two being that goes inside this final casing would be insulated. and that would allow the heat to travel with the production and limit the heat transfer to this annulus and thus the pressure build up. another possibility is putting an insulating fluids into that limit the heat transfer, and also you can put in different kinds of fluids and materials that have more compressibility than a liquid. >> in this space you should put in a compressible material? >> correct. >> going to a different issue, i wanted to talk about the choice

between using long strings and liars in deep well. you often have to make that choice between using a line and a long string? >> yes, it's accommodation. we use both long strings, fighters and tie back. the choice is, like all the other design choices you make on the well, it depends upon many factors, but in particular it depends on the uniqueness and the unique characteristics of the particular well that you're designing for. and some of the considerations are things like how long it would take you to run a long string versus a liner, compared to the condition of the well at the bottom of the hole, and whether certain things occurred on the bottom hole condition. you know, whether you have high confidence that you can get a long string run all the way to the bottom of the whole, because you know, you have to install the this on the top of a long string and you want that specs

are have to get all the way down to the bottom of the hole. >> you want to anger to be in the right place. and sometimes you want to be able to roll take -- rotate the price because of your decide that it's difficult to rotate a long string. string. to be easier to rotate a liner. >> what is that? >> it really turkey lies is the cement and certain cases can make this a bit more because it essentially a version of mixing down home. >> so that sounds like it's an issue about cementing. are there other issues about cementing a long string versus cementing a line of? >> the other key thing you look at in making this choice, and other geometry consideration because you surge that the cement down, you know, through whatever you're running the whole. if you run the long string or if you run the line it will go to your drill string and you lie when you circulate it. and just the size and spaces affects the pressures that you circulate out. so you do look at that.

but back to your question about the cement, if you have concerns that you might lose returned or partially lose returned string for cement job, the thing about a liner is that you can reestablish your barrier by putting a mechanical seen device or multiple mechanical sealing device on top of the letter. or squeeze will because we cementing which would be forcing cement down from the top of the liner. and this, the procedure is sometimes, in my opinion, more effective than perforating holes in the pipe which would be your other alternative. even though it is done both ways. >> would you saving in general it's a situation where you have a tough cementing situation to the formation is easy to cement a line in than a long string? >> if you're concerned that you will lose returned or might lose returned when you're cementing,

or running the liner, in my view, more straightforward on reestablishing the barriers. >> speaking of barriers i want to ask you about the barriers that use during temporary abandonment phase is of a well. in your view, when you temporary advantage and welcome what kind of barriers can you leave in place? what should you leave in place? >> well, typically in wells, typically in wells in deepwater, you know, our procedure would be to have a plug near the bottom. and when we say a plug, we normally set a mechanical plug with cement. and we would put that close to the bottom of the well, in particular we might want to put that if we have a liner top, put that above the liner top. and then we would put another one that's at an intermediate depth, and they would always have one at the service. one of the intermediate depth

would also have a mechanical device plus cement. the one at the surface would have a resin type plug. and also cement again. so it normally, you know, in our temperate abandonment feature, and for america procedures have 3.6 sometimes it may be as many as five logs depending on what you want to isolate. >> you have as many as five logs? >> a more typical with three. >> you spoke briefly, i want to inform the commissioners on this about the mechanical plug and the other partner can you explain the difference between those? >> i think people have seen in the diagrams, about running a packer or bridge plug. i think it is been referred to. these are not quite exactly the same, but for practical purposes it will be similar to what is called a bridge plug. so it would be a device that has slips on that bite into the casing and hold it in place, and then has a metallic mandrel

inside it, and it allows you to the cement below it and then you can close, there's an internal valve and you can put cement above it. >> doesn't rely on cement to achieve a barrier? >> no. you actually effectively have to, because you have a mechanical barrier also pressure seal in addition to the cement. >> doesn't make it easier to use the cement plug as well? >> yeah, it gives you a positive placement of your plug because you can put your top cement on top of this device, this mechanical device. so where it is placed, you know, you know exactly where it is placed in exactly the dimensions of it spent can you please mechanical plugs using mod? >> yes. >> can you placed cement box in my? >> yes. >> do have a few where the cement plugs can be set in synthetic oil based logs? >> yes. >> is as good as putting them in sea water? >> you know, you have to worry about, you have to be concerned

about spaces. it's done routinely in both. >> so to explain that, how do you in your view used a cement plug safely and since i -- synthetic oil based logs? >> you would want to have a space or between cement and the sense that it oil based mud to avoid the mixing. but it's routinely done on primary cementing and similarly, you can routinely do it when you place these plugs. common operation that successful. >> what's the advantage of leaving the mud in the well bore as a temporary? >> well, when your temporary abandoning the well obviously it's never out of balance during this entire september and abandonment procedures. so you have, you leave that to wait much in there, all of these operations you do, the well is under control just by virtue of to kill weight mud in there?

>> we've heard a lot, and i want to sort of move back to a given point that relates, you heard a lot yesterday, maybe did a lot yesterday about negative test procedures. do you consider a negative test procedures to be an important test to the well? >> i do. >> do you do it on every well before you had the temperate abandonment? >> no. >> no. what kind of wells do not do it on? >> well, you know, our common practice on a typical deepwater well where we drilled this single well with a floater, we do the temporary, you know, we do this temporary abandonment, and then we leave the kill weight mud in the well and the plugs in the well. we come back for the completion and drill out these plugs. and we do all of our displays and testing at that point in time. we test the plugs, but doing things like under ballast testing, we do later in the completion face. so we do it full of the kill

weight mud specs are you are leaving the well overbalanced in the temperate abandoning face, greg? >> correct. that's our design choice. >> if you are primary cement job fails in the kind of situation, what's the effect of having a primary cement job figure? >> if it happened or you're a temperate abandonment, the kill weight mud would keep the well under control. >> thanks, mr. williams. i'm going to move on now to mr. lewis and asking a few questions. mr. williams was kind of to come to us from shell to explain some tactical areas in which he is highly experienced, but he has not reviewed the details of the macondo well design of the macondo process. mr. lewis, by contrast was asked to look at precisely some of those issues. mr. lewis, what materials relevant to the macondo well design have you reviewed? >> i have reviewed the complete

sequence of drilling plans that were developed internally for this well, starting with the flange in 2009, before the marianas moved off of the well, continuing through the final plans for the temporary abandonment and the internal operations notes that were sent back and forth between the rig, and the office in town for those modifications. i've also reviewed the habitations or permit to go, for the applications for modifications that was abated to the mms. and i have reviewed the bp incident reports, specifically with emphasis on their review of the casing design for the original well plan.

i did that because that is the best access to the design, basis of design information that i can find. i've also reviewed the daily drilling reports, but primarily in the ddr review, concentrated on the last months of the well, with special emphasis on the last two weeks. >> based on your view, do you feel familiar with the process of the design of macondo well? >> i'm very familiar with the documentation of that design. i have some insight into the process, because the organization that mr. williams here described is similar to many that i have functioned in, and the basic philosophy of design as a circular process where one comes up with an initial design, the value which

the application of that design on the overall objectives of the well, are consistent to the industry. so yes, i would say i have an understanding. >> and looking specifically at the design choices that they made, is it fair to say, would you agree with charlie wiliams i should say, that there are lots of in pressure built like a? >> yes, there are. >> and were burst disc one of the methods? >> yes. the dp design of this well includes worst disk. >> in your view what impact do burst discs have on the function of the well overall? >> as mr. williams indicated, the first discs essentially be rate the pressure capacity of that string of casing. and if nothing goes wrong, that's not a problem. but if you find yourself in a scenario where you have an unexpected or suspected even

ingress of pressure into that angelos, actually either annulus that piece of casing is exposed to, you then have to rethink all of your actions at the lower pressure rating at the burst disc as opposed to pressure rating of that string of casing. operationally, the burst discs aren't a problem, if nothing goes wrong. >> so good burst discs have an impact on the way that you contain wells if something does go wrong? >> absolutely. >> are you going with the of protective casing any deepwater well such as this been? i believe i protective casing you're referring to what i call an intermediate casing, but yes, i understand that concept. and that basically is, that by design, your last string of casing before your production casing would be a long string going from just above your

production zone all the way back to your wellhead without liners hung in that string. >> what's the value of that protective casing? >> it gives you a more continuous pressure rating through that interval, and it eliminates the possibilities of failures at locations such as liner hangers. >> was there any education in your view that bp used a protective casing at macondo? >> no, and this design there was not what we would call a protective casing in that definition. >> you also heard, you heard mr. williams described his practice of leaving wells overbalance when you temporary abandoned mine. having reviewed the progress of the macondo well, was bp planning to leave the well overbalanced? >> no, they were not. >> is there any downside to

using the kill weight mud approach to overbalance a well as was described? >> there's a operational downside, no. there is a requirement for time and materials to accomplish that. >> is there any upside to leading a well underbalanced? >> in my mind, there's an extreme upside, in that you have the basic laws of physics then controlling that well for you as opposed to a mechanical. you are either statically overbalanced and you never bring the well underbalanced that it cannot float. >> i asked if there any advantage of leaving the well under ballast that am i correct passionate. [inaudible] >> no. none whatsoever. >> you also heard mr. williams described a number of plugs, mechanical and cement plugs he would typically use in a well, a deepwater well. how many plugs get bp -- bp used

to use before it abandoned the wealth? >> the design called for four. >> could have used more cement plugs in this will? >> yes, they could have. >> was that any operational downside to adding mechanical plugs or cement plugs in this will? >> the only operational downside becomes once again, time and materials. and then time and materials required to remove those floats when one returns to complete the well. >> i want to move over to talk all of it about well design. when you in your practice first design a will, how much detail do you put into the original initial well design? >> it's my thing that a well design needs to include as much detail as is technically as possible. the first thing one needs to define is what the well is going to accomplish. that tell you what the basic well should look like or whether

it's an expression well or at production well. and in each element of that wealth needs to go through a complete design cycle, going into the next element with complete design cycle that goes back and checks the application of that design, both on the previous abortion and the future portion of the well. so what should be, into my experience, a pretty complete engineering process. >> when you place some unplanned events in the case of a well, how does that affect your design? >> that implies the necessity to go back and completely we evaluate the design, both the portion of the well that is already been completed and what you had in mind for contingencies for compensating for those unplanned events. but you should go through that same design cycle of looking from top to bottom, and looking at the entire lifecycle of the well, and considering the

implications of those decisions. >> are you suggesting if you haven't unplanned event and you have to do with a contingency, you are partially redesigned the well from scratch it's because you're redesigning the well from that point forward, but back checking against the previous design to make sure that those two are compatible. >> is having an unplanned event like lost returns for example, impose any, make any changes to the way you think the rig crew should be operating as well in the field of? >> and unplanned event should reinforce the level of vigilance on the rig, and hopefully move people into thinking, looking ahead, thinking about what the next steps in the procedure are going to be. and making sure that they have the right equipment and the right personnel lined up to accomplish those steps. and making sure that they have the right equipment and the right personnel lined up to

accomplish those steps. nosteps. and making sure that they have the right equipment and the right personnel lined up to accomplish those steps. no, rather than focusing you on solving that the media problem, should also broaden your scope of vision to looking towards the future of that well. u. . you also have the opportunity at that point to bring in everyone else's all i and see if from thr other aspects of their entrance in the well you have done it an effective compromise there orterwards. >> and how about operationally or logistically?

half, at least, of drilling oil, and by that i mean you have to have the right equipment and the right people there at the right time to do the job. unplanned events imply an immediate need to reevaluate your entire logistic and material supply structure. >> so stepping back to look at macondo now, in your view having reviewed the initial design of the macondo well, was it adequately detailed? >> the initial design was adequately detailed for an exploration well. >> and how about the later design you saw as they evolved? >> i felt that they were deficient in detail, especially in light of the fact that by that point it had become fairly apart that this well was -- apparent that this well was going to be completed as a production well. >> and if you had additional detail, what would that have helped to do?

>> it would have helped, i believe, focus both the field and the office staff on the difficult and almost marginal nature of what they were attempting to accomplish here, brought in a heightened level of vigilance, allowed for proper timing to mobilize equipment and materials and possibly allowed further discussion of options. >> and that further discussion you're talking about, you heard mr. williams describe the process of involving the well site leaders and the rig crew in those design discussions. is that your view of how things should be done? >> absolutely. it's my feeling that the people executing that plan should understand the basis of design that it came from and be able to

suggest and input modifications if from their perspective and experience they're appropriate. >> and, again, in your view the subsequent design that bp did for this well, they include the kind of detail that would have allowed people in the field to think about those assumptions. >> this i do not believe they did. >> you heard yesterday from some of the explanations that i gave that bp didn't run a number of additional centralizers at one point because they believed or at least they didn't or believed they didn't have the right kind of centralizers available. having reviewed the process of the design at this point, was there enough time after bp chose to use the tapered long string to get enough centralizers of the proper kind? this >> if they had properly managed their materials acquisition process, yes, they had time to do that. >> so is it fair to say based on your comments about the value of design that the lack of centralizers could have been the result of an inadequate design process? >> at least the result of

inadequate communication about that design process, yes. >> you also heard me talk about the modeling of the cement design that was done and the decision not to rerun that model in the very last few days. is there any reason, in your view, not to rerun that model in the last few days before cementing the well? >> actually, in my view it's exactly the opposite. there's very many reasons to redo that design. >> now, in the last phase of the macondo well they were worried about the loss returns and the pressures in the bottom of the well, is that correct? >> that's absolutely true. >> in terms of well design, what are the different ways that you can keel with those -- deal with those kinds of bottom hole pressures? this. >> there are basically three elements that you can manipulate to adjust bottom hole pressure, and those are the weight of your fluids, the density of your fluids, the speed with which you

pump those fluids which controls the frictional pressure that that's producing and then you can adjust the geometry of the well bore through your design. >> so did you see evidence that bp was thinking,ing at least, about some of those things when they dealt with the bottom hole pressures that they had at macondo? >> actually, there's evidence that they thought about all those things. >> is it -- adjusting one of those things can influence the other things? this. >> definitely. it will have influence on the other aspects. >> and what happens, your review of the redesign process, is it proper to evaluate all those things at the same time? >> yes, absolutely. it's critical. this is an interdependent system. it's a machine, and if you change one cog in that machine, you have to consider whether or not it meshes with the others. >> and are there implications in the changing those cogs for the eventual value of the cement job at the bottom of the well?

this. >> yes, there are. >> you described, i think, an iterative design process here. i'm wondering if you think that design process also applies to the procedures that are used to build the well. >> they should, yes. >> and in particular, how about temporary abandonment procedures? >> those definitely should be designed to the same degree of rigor. >> the, some of the slides that sean showed the commission yesterday discussed through different temporary abandonment procedures that were used at macondo, and those three changes, i think, were all made within a week or so of the blowout. in your view, is that a lot of changes to be making in the final week? >> that's an unusual number of changes to make that close to the execution, a portion of a well that is, a, that critical and, b, been known to be a requirement for quite some time. >> so is there anything that would have prevented them from establishing the temporary abandonment procedures earlier

in the life of the well? >> no, there's not. >> do you think it would have helped if they had thought about it earlier? >> it would have allowed people to give the matter more thought in a less time-sensitive environment, and i think that would have been beneficial. >> and more generally, what are some of the other things that you consider essential at the end of a well activity to make sure that the process goes smoothly? >> well, a well is, is actually a pressure vessel. the design function is to control and contain the fluids that we are attempting to extract, and in the process especially of a temporary abandonment, but in every aspect of the well's construction process containment is paramount.

at the end of a well operation, there is, there are many things that need to be done in order to move forward, and there's also a natural human tendency to look towards the future operation and a tendency to lose focus on what we've just accomplished. it seems to me that at the end of a well it's even more important to maintain that vigilance and focus. >> have you ever worked on a well where you felt the vigilance or focus tapered off at the end of a well process? >> absolutely. >> is that just the way it works sometimes? >> it's the way it works sometimes, it's also an extremely variable thing. it can occur in any organization

that i've been associated with on the basis of the flow of both bad individual well operation and the other wells that the organization is dealing with at the same time. >> but i take it from your earlier comments that you would prefer a higher level of vigilance or at least a maintained high level of vigilance during those end-of-well procedures. >> yes, i would. >> what do you have to do with an organization to make sure you have that vigilance? >> you have to have, obviously, the resources in terms of manpower available. you need those same resources when you're designing a well, but you have to have the commitment to maintaining the mental focus on, on what you're doing. you have to have the commitment to paying attention to the present time as opposed to

worrying too much about the future. >> is there, in your view, sometimes a tendency for engineers to move on, think about the next job near the end of a well? >> yes, there is. it's a natural thing. >> mr. lewis, do you consider yourself an expert in if deepwater drilling? >> not really an expert in deepwater drilling. an expert in drilling generally, yes. >> have you drilled wells in deepwater? this. >> yes, i have. >> and have you followed at least the professional interest, the industry's move in the deepwater in the gulf of mexico and other -- >> yes, i have. >> what's your view of the industry's ability to deal with the risks and challenges presented by deepwater? this. >> i'm confident that the industry can meet those risks. >> and do you believe that the industry has done everything it can to meet those risks? >> no, i don't. i feel that the industry has done a very credible job, in

fact, a somewhat amazing job of being able to move into that environment and correctly, safely drill and complete a well. where i feel we have been remiss is in our development of the capability to respond to failures in that environment in a timely and safe manner. i also think that we have as an industry failed to cooperate internally in the development and adoption of appropriate best practice. there's, this is a very, very competitive industry, and more so than anything that i know of. of course, it's the one i know. [laughter] but the willingness to exchange

technical information is limited in that that technical information is a tool to use in our ultimate goal of, basically, making a profit for the owners. the need for that exchange of information, however, increases with the technical difficulty of our operations. the willingness as a group to define and adhere to best practices will require a acceptance across the industry spectrum of what is an acceptable level of risk. we've had one example described today of what i consider a very conservative but very appropriate abandonment procedure -- >> and that's the procedure mr. williams --

>> mr. williams' discussion there of multiple barriers and, more importantly, never leaving the well underbalanced. i have worked in areas where regulatorily you cannot leave a well underbalanced. >> what are some of those areas? >> well, alaska, for instance. state regulations require it. and in norway where i have abandoned wells, you're required to leave wells overbalanced there also. it's not required in our environment in the gulf of mexico by either practice, generally-accepted practice or regulation. so it's going to take, to my mind, an evolution of the industry to recognize and uniformly accept that the bar has to be raised here. we have to work to a higher standard of protection in this environment. >> if those things are done, do you think deepwater drills can be drilled safely? >> yes, i do. >> thank you, very much, mr. lewis. with that, i'll ask the commission to proceed with any questions it has for this panel.

>> chairman lowy? >> dr. thomas, are there, are there reservoirs with such concentrations, great concentrations of high pressure oil and gas that they just cannot be controlled when you tap into them? >> not to my knowledge. >> so any pressure situation can be managed successfully to ec tract hydro-- extract hydrocarbons? >> i'm not prepared to say any, but -- >> you've not seen any? >> not seen evidence of any. >> so there's no such thing as a well situation that, or a geological situation that poses too large a problem to even attempt to drill? this. >> not from a standpoint of pressure so far, but i can

imagine cases where there might be very narrow margins between poor pressure and fractured radiant such that they could not be drilled, but you would stop before you get there. >> and you would, you would be able to go some distance before you got there. you would not encounter that gradient problem initially right at the mud line, say, or at the formation, beginning of the formation? >> that is correct. >> do you, would you say anything about the formation of this well and the characteristics that it has and how it might compare to non-deepwater environments? we had a spill, a very long-lasting one, in mexico, and that was in something like 140, 50 feet of water some time ago.

is it your information that relatively shallow wells with formations relatively near the surface, also, can present just as many problems to manage as the deep ones? >> i have not reviewed that particular well, so i don't know the environment that they were drilling in. there are always possible geological complications that if one doesn't pay attention to, then all sorts of things can happen. but i think in the environment that we are in deep water, the geological environment while somewhat hostile yet at the same time is very uniform. >> do you have any observations

or impressions about alaska and the challenges that are presented there? that's relatively hallow water -- shallow water and relatively high formations and low pressure. is that, are there issues there that you think with respect to drilling are particularly difficult or challenging? >> i'm not an expert in alaska, sir. i do know that they have drilled wells successfully there without any incident. so i wouldn't expect there to be any problem, but i would have to defer to someone who's actually worked that environment. i have not. >> when you train people in industry, do you -- >> [inaudible] >> pardon me? >> i'm sorry to interrupt that we do have someone on the panel who has extensive experience in alaska, and without leaving your question, you might want to direct it to mr. lewis. >> fair enough. >> fair enough, right. >> operationally below the

portfolio o.p. -- b.o.p., alaskan drilling is not unusually hazardous. in fact, in many areas of the state it's fairly straightforward. the remote environment does imply some constraints. those can be managed through proper program planning and proper development of response technology. but on a subsurface basis, no, we were not in the areas that i have drilled which is actually extensive, i've drilled all over the state both onshore and offshore. it's not particularly tough country. >> i want to come back to an issue, i won't ask you, mr. williams, what you think about alaskan drilling. i think i know.

[laughter] when you, dr. thomas, when you train people in industry, when you train them to drill wells, do you, do you highlight or establish routine responses or protocols for certain kinds of experiences that they might encounter? do you teach them, for example, about how to recognize a kick in the system just to cite one example? and i wonder if there are others. >> i'm afraid i'm going to have to defer simply because i train in petro physics, i do not train -- >> in operations. >> -- people in drilling. so if someone else would like to answer that, i think they'd be more qualified than i would. >> okay. no further questions. >> are there other questions? >> yes.

>> [inaudible] >> thank you to the panel for providing additional insight for us this morning. i sincerely appreciate it. i found it very useful in the putting into perspective some of the things we heard yesterday, so thank you very much. i direct this question to mr. lewis, but if others on the panel wish to address it, that would be fine. yesterday we heard many things that raised questions that were not directly answered, but of all of them the two mysteries that were described i'd like to put before you and ask you if you have opinions about them. the first mystery was why in the world bp changed its temporary abandonment plan three times in the last week and what implications that had for safety. and secondly, why the experienced trilling crew and all of the others -- drilling crew and all of the others who were on this rig did not see the pattern of anomalies one after

another after another after another to get to that heightened sense of concern that they should have had? i know it's easy in retrospect, but mr. bartlit laid out a dozen things that should have put people on high alert, the final the negative pressure test which, obviously, failed but was declared positive. in retrospect, one has to sort of ask for both of these mysteries were they being driven by a sense of we're in a hurry, we have to finish this job, let's get on with it clouding one's ability to adequately assess the risk and put a premium on safety? i mean, that's one plausible answer, perhaps there are others. and i would just ask you from your many years of experience, mr. lewis, on rigs and doing drilling, why else then a sense of let's get this job over with would drive people to change the

plan at the last minute given how important that plan was to the safety of this temporary abandonment and why else would the rig crew ignore all of these anomalies that should have put them on high alert? >> we were going to do this. i can speak both generically to the drilling command and control structure, and i can speak to a certain extent to bp in that i have worked for bp both as a well site leader and a drilling engineer. i am around bp continuously on the north slope of alaska. they dominate what goes on in

the industry there. and i have read a number of internal communications from both field level to fairly senior management from the last year inside the bp structure with respect to the macondo well. and i've been there and done this in terms of designing, drilling and finishing a well. your question as to the changes of the abandonment plan over time, the only explanation i have for that is that it's a detail of the plan that was not necessarily known to be required when they first started the well. this was an exploration well with a possible production

completion. my suspicion is that -- well, it's not my suspicion, it's my belief that that detail was left unattended to probably due to the lack of availability of mental resources, engineering time. until it became apparent that it was going to happen, and then there was what i would have to describe as scrambling to catch up on that design. that opinion is based largely on the documents that i see and the fact that there was no, no real detail of abandonment in the initial plans. and then the -- thank you. thank you very much.

the final plans and the operations note while the engineering may have been adequate in those, the operational detail, to my mind, was totally deficient. what was sent to the rig did not include a procedure. it was simply accomplish these major steps however you feel like you want to. that's, that's totally inadequate in this environment. the only thing i can attribute that to is lack of engineering resources and lack of command and control of the process. process control breakdown. the question of why the people in the field did not twig to this e wednesday of questionable events -- sequence of questionable events and raise flags is much more difficult to address in that many of those individuals were killed in the incident. and then other individuals whose

positions one would think would require that cognitive process have not been available for answering those questions. i know that there was pressure on this group of people to get done and move on. i have seen internal bp communication at senior management level inquiring as to whether or not the well was going to be done in time, whether or not the rig would be released in time. and by in time in this case they had commitments to wells' regulatory commitments that were required to maintain, in one case, a viable lease that

required well work. the rig was needed on those wells to protect the assets of that other piece. the -- whether or not that concern at senior management level was verbally communicated down to the people in the field i cannot say, but pressure to move, to make progress is actually inherent in the business, and it takes a spaded conscious management presence to counter that. as i mentioned, we're very competitive. trillioner -- drillers drill