Federal officials said that a criminal information charging Halliburton with one count of destruction of evidence was filed in federal court.
Halliburton has agreed to pay the maximum fine, be on probation for three years and continue to co-operate with the government’s criminal investigation, said the news release, which did not specify the fine amount. The Texas-based company has also made a voluntary 55 million dollar (£35 million) contribution to the National Fish and Wildlife Foundation.
Halliburton was oil giant BP’s cement contractor on the drilling rig that exploded after a well blow-out, killing 11 workers and spilling millions of gallons of oil into the Gulf.
Around May 2010, the company directed a programme manager “to run two computer simulations of the Macondo well final cementing job using Halliburton’s Displace 3D simulation programme to compare the impact of using six versus 21 centralisers”, the news release said.
Halliburton recommended to BP the use of 21 centralisers in the well, but BP decided to use six instead, said the news release. The simulations indicated there was little difference between using six and 21 centralisers, but the programme manager “was directed to, and did, destroy these results”, federal officials say.
Similar evidence was destroyed in a subsequent incident in June 2010, said the Justice Department.
The news release said: “Efforts to forensically recover the original destroyed Displace 3D computer simulations during ensuing civil litigation and federal criminal investigation by the Deepwater Horizon Task Force were unsuccessful. In agreeing to plead guilty, Halliburton has accepted criminal responsibility for destroying the aforementioned evidence.”
The plea agreement and criminal charge both arise from a criminal investigation by the Deepwater Horizon Task Force. Halliburton and BP have blamed each other for the failure of the cement job to seal the Macondo well.
During a trial, BP asked a federal judge to sanction Halliburton for allegedly destroying evidence about the role that its cement slurry design could have played in the blow-out. The company announced in April it was trying to negotiate a settlement over its role in the disaster.
If you externalize the costs of a business activity, it means other people pay the costs—environmental, social and otherwise—and you get the profits. It goes on all the time in extractive industries such as oil and natural gas and mining. And, it is also a natural strategy for manufacturers who dump their pollution into the air and the water.
It’s even practiced in finance where the executives of Wall Street banks have managed to collect the bonuses made off a phony boom in the last decade and saddle taxpayers with the losses of the inevitable bust caused by bad and often fraudulent loans, misleading derivative contracts, and leveraged speculation in stocks and commodities.
If the loopholes are there, you can be assured that people in business will take advantages of them. That’s exactly what is happening in the business of shale gas drilling. Drillers are exempt from federal clean air and water regulations under a bill shepherded through Congress in 2005 by none other former Halliburton CEO Dick Cheney in his capacity as the then vice president of the United States. (Halliburton is one of the world’s largest providers of drilling fluids for shale gas drilling and other oil and gas drilling operations.)
That means the drillers can externalize the environmental costs of these hazardous fluids and other materials needed to fracture the shale and thereby free the natural gas. They can foist those costs on nearby residents in the form of ruined water supplies, toxic air pollution, poisoned land, and health problems for humans and animals.
The environmental and health horrors associated with shale gas drilling are now in the news on a daily basis. But I have begun to think about the issue in another way. All of these externalized costs have an energy cost. And, the toxic fracturing fluid—millions of gallons of which are pumped into each and every shale gas well—will stretch out the time frame during which such costs are borne.
No one knows what will happen to the half of that fluid which never returns to the surface during operations. There is concern that it could migrate to drinking water aquifers and destroy the drinking water not just for the few who happen to live near a drilling site, but for people living in huge swaths of the United States by polluting water sources for large cities such as New York.
Now, of course, that water could be cleaned up if it becomes toxic. Already shale gas drillers are having to provide filtering systems for people whose well water has become contaminated. In some cases, even this isn’t enough, and water must now be trucked in to families whose water is no longer fit to drink even with filtering.
In order to judge whether shale gas will provide any net energy to society, we must first decide where to set its system boundaries. It is hard to know exactly where to stop spatially: Should we, for example, include the energy needs of a family dependent on a worker at a subcontractor that provides software services to the driller? But, it is even harder to know what time frame to use.
One thing is certain. The legacy energy costs of doing shale gas drilling will not disappear anytime soon. The country and its people could be paying the externalized costs of such drilling decades after it ceases to provide any material benefit to society.
If New York city is forced to expend considerable energy to purify its water to clean out toxic chemicals leaching from wells in its watershed 50 years from now, how shall we then judge the presumed bounty of energy that shale gas supposedly represents?
The same kinds of questions have been raised about nuclear energy. If one takes into account the entire energy cost over time of building, operating, decommissioning, and then protecting decommissioned plants and their wastes—wastes that will remain dangerous for conceivably tens of thousands of years—it is possible to understand why some people claim that nuclear energy provides no net energy to society. Rather, it burdens future generations with huge legacy energy costs. We who are alive today get to externalize the energy costs of nuclear power by foisting them on future generations. This is probably the only way that one can consider nuclear power—as it is currently configured—an energy source rather than an energy sink.
I believe we may ultimately find that shale gas is nothing but an energy sink. It will provide net energy for a while to those who are living now while burdening future generations with huge cleanup costs that, in terms of energy, may equal or exceed the energy gain we are currently receiving from this supposedly “clean” energy source.
As the founder of a microbrewery, Gov. John Hickenlooper (D-CO) is among our nation’s top experts on quirky libations. Which is why it wasn’t surprising to find him telling a U.S. Senate committee that he drank a glass of fracking fluid produced by Halliburton:
“You can drink it. We did drink it around the table, almost ritual-like in a funny way,” he told the Senate Committee on Energy and Natural Resources. “It was a demonstration…they’ve invested millions of dollars in what is a benign fluid in every sense.”
Move over bacon-infused bourbon! Some elements of the fluid remain secret, but with the help of Halliburton’s public disclosures, you can recreate The Hickenlooper for whomever you’re fracking this Valentine’s Day:
* Add 9 parts water to a shaker.
* Add Tributyl tetradecyl phosphonium chloride at a concentration of 0.3 gal/1000 gal. According to Halliburton, this substance “May cause eye and skin burns. May cause respiratory irritation. May be harmful if swallowed. May be harmful if inhaled.” That may be why there’s currently a fracking moratorium in New York State, but that’s what makes this a prohibition cocktail.
* Add 1 part sand. Halliburton recommends “premium white” sand, but you can go mid-shelf if you’re on a budget.
* Shake well and serve!
On the 20th of April 2010, the Deepwater Horizon oil rig blew out in the Gulf of Mexico, killing eleven men instantly, then destroying 600 miles of coastline. On 9 September 2010, a natural gas pipeline exploded in San Bruno, California, burning eight to death, one of several recent pipeline explosions in the USA. In 1992, in Chicago, a gas pipe leaked and 18 houses exploded, incinerating three people.
What do these deaths have to do with plans for “fracking” for natural gas in Ireland?
Everything. It was my job to investigate these three explosions, the Deepwater Horizon and California explosions as a reporter for the UK Channel 4’s Dispatches, the earliest as a US government investigator. In all three cases, the deaths were preceded by the same reassurances about the safety of drilling and piping that I read now in the debate about fracking in Ireland.
First, the Deepwater Horizon. Eleven men died when the ‘mud’ – drilling cement meant to cap the wellhead – failed and methane gas blew out the top of the pipes and exploded. The Shannon Basin is not the Gulf of Mexico, but your safety will be just as dependent on Halliburton’s mud.
Can we trust Halliburton’s reassurances? The owners of the Deepwater Horizon have told a US court that they’ve discovered that Halliburton hid critical information that the well cement could fail. Halliburton denies the cover-up. But cover-up or not, the cement failed as it has several times recently in the US in wells drilled for fracking. In all cases, including the contamination of water supplies in Pennsylvania (where some residents could set their tap water alight with a match), drilling was preceded by mollifying studies indicating that all was safe. But they failed to see all the looming dangers.
In Ireland, you haven’t even done the studies. The University of Aberdeen study for the Irish Environmental Protection Agency has been played as some kind of endorsement for charging ahead with fracking in Ireland – but this is not the case if you actually read the study. The University study is, in fact, a long series of warnings that proposed drilling methods, the local geology and the potential impacts on water quality all require studies not even begun. It also points to the necessity of creating a regulatory system not now in place which can cope with watching thousands of explosive, toxic well-sites.
The Shannon river basin is a truly eyebrow-raising place to blindly drill thousands of wells. It’s located in proximity to one of Irelands few major aquifers (your drinking water supply) and the drilling will be relatively shallow. Where I live in the State of New York, the government, though a major booster of fracking, has banned the fracking of shallow shale deposits and banned the process from all locations near our aquifers. The US experience is not comforting.
Horizontal fracking (as proposed for Irish deposits) requires explosive charges to be fired along miles of pipe underground (and under houses and water supplies) followed by the pumping of fluids at high pressure through these pipes. The result has been man-made earthquakes. Buildings don’t fall down, but cracks bring hydrocarbon poisons into the aquifers. In the vast uninhabited wastes of the American Dakotas, we simply abandon water systems. Where in Ireland can you do that?
And then there are the pipelines. The fracked gas doesn’t get to market by carrier pigeon. Ireland has had virtually no discussion of the difficulties, danger and cost of running hundreds, and ultimately, thousands of miles of gathering pipes. I’ve been investigating the horror of pipeline explosions for three decades now and the problem is exponentially worsened by the new web of lines created by fracking. Highly explosive transport systems require an elaborate system of on-site government regulation which Ireland does not have and cannot now afford. And it’s simply too easy for the PIGs to cheat.
A PIG is a Pipeline Inspection Gauge, a robot that looks like a mechanical porker with wire whiskers that crawls through pipes hunting for corrosion, cracks, leaks and trouble. When the PIG ’squeals’, the pipes must be dug up and replaced. And that’s frightfully expensive.
It especially frightens the executives who have to pay for pipe replacement. So, what I’ve found and reported is that the providers of software and its users are aware that the PIGs’ diagnostic computer code, which converts the squeals of the PIG into warnings, has flaws which understate dangers. And the results have been horribly predictable: Despite the reassuring noises from the PIGs, pipes have leaked, polluted, exploded and killed.
Is there a safe way to frack? Probably: but not profitably; and certainly not within the geology of a little emerald isle. I am weary of appearing at scenes of death and destruction when cement fails, pipes crack and tremors spew poisons only to hear a gas or oil company executive’s PR flack issue an apology. I doubt those apologies will sound better in Gaelic.
Re-prints permitted with credit to the author.
Greg Palast is the author of Vultures’ Picnic (Penguin 2011), which centers on his investigation of BP, bribery and corruption in the oil industry. Palast, whose reports are seen on BBC-TV and Britain’s Channel 4.