I'm pleased to welcome you to today's C.
J. P.

Silas Conoco Phillips symposium
in ethics and leadership.

I want to welcome our guests.

And colleagues which include of
course Georgia Tech faculty.

Staff and students and

I want to issue a special welcome to
our friends Dr and Mrs Then cell.

It's appropriate to thank
Conoco Phillips for

sponsoring this lectureship in ethics and
leadership.

We believe that's an important
part of our program.

And what I want to do in telling you
about this is to encourage you to look

at the back of the flyer that you were
many of you were handed as you came in.

That tells why we have a program
in ethics and leadership.

What it means to us as a school.

Why we think it's important for
our students for our programs for

what we try to advance as part of
chemical and bomb like in engineering.

I also want to take just a second to.

Describe for some of you who do
not know who C.J. Pete Silas

is I want to tell you a little bit about
him and I'm going to do so very briefly.

I'm.

Somebody It was a piece

of us was is the retired chairman and
C.E.O. of Philips petroleum company.

Which is the predecessor of
course the Conoco Phillips.

He's a member of
the Georgia Tech Hill society which

he is a member of that
because of the lifetime

of giving that he's he's
had with Georgia Tech and.

Particular level of philanthropy
that he's been involved with.

He served as chairman of the National
Campaign steering committee for

the campaign for Georgia Tech
which ended in two thousand and

that many of us are enjoying
the benefits of that campaign

resulted in over seven hundred million
dollars being raised for Georgia Tech and

Pete was a major part of the effort
that led to that philanthropy.

Unusually for someone with his background.

He also was inducted into
the Georgia Tech Athletic Hall of Fame.

In one thousand in two thousand and
eight he was recognized by

the American Institute of chemical
engineers as one of the twenty five

most influential industrial executives
in the history of chemical engineering.

And before his retirement in
one nine hundred ninety four.

Pete was recognized by Forbes magazine

as one of corporate America's
most powerful people.

Most importantly for those of you
who are students at Georgia Tech.

He is an alumnus of the school and

obtained his bachelor's degree here in
one thousand nine hundred fifty three.

So in beginning today's program.

I'd like to ask.

Professor Dennis Hess who
has guided this program for

a number of years to come forward and
introduce our speaker.

Well it is certainly my pleasure.

Today to introduce Dr already stands
already is the two thousand wells or

Conoco Phillips.

SILAS program an ethic.

To move your ship.

Dr Stan sellers had a most
distinguished life and

career he was born in Harlem
during the Depression.

He attended New York City
public schools and

ultimately enrolled in
the City College of New York

where he graduated magna cum laude
with a degree in chemical engineering.

He subsequently accepted a job with S.
So for those of you that

aren't as old as some of the rest of
us are that translates into Exxon.

At his bay way refinery after
approximately one year he decided to

pursue an advanced degree and
so he enrolled at a little

known Northern School at his MIT and
his thesis

work involved the transport of oil and
water in porous media under the direction

of Alan Michaels some of you may recognize
that name as one of the early proponents

of membrane separations graduated with
a Ph D. in one nine hundred sixty two and

joined mobile very worked for
the next ten years in the research area.

Now in one nine hundred seventy Arni was
invited by MIT to join its faculty as

a visiting associate professor
of chemical engineering

at MIT He taught a graduate level
course informative Amex and continued

some of the work that he had initiated at
Mobile on the use of the Lotus charges or

plasmas for the promotion of
chemical reactions and surfaces.

Arnie was very far ahead of his time in
exploring the controlling factors involved

in plasma science and technology as well
as the use of plasma surface reactions and

their application to a variety of
industries plasmas were only starting to

be considered for use in the microwave
products industry at that time and

they quickly became the preferred method
of patterning and the positing films.

Fact even after forty years this
topic continues to be a critical

area of research development and
production.

Because these this charges are used
in a wide variety of areas

including integrated circuits photovoltaic
devices and microfluidic devices.

It was really Arnie's vision and

insight that resulted in him
initiating this type of program.

One of his students.

David Lam used the background he gained in
our news group to start land research and

this is one of the primary manufacturers
of plasma equipment worldwide.

Although MIT offered Arnie a tenured
position he decided to return

to mobile and it didn't take mobile
too long to recognize his acumen for

business management and leadership.

He served as manager for planning for
mobile chemical followed

by a position as vice president of mobiles
expanding plastics and film business.

In one thousand nine hundred eighty began
the first of two vice president sees that

he held that mobile first V.P.

of exploration and production for
mobiles U.S. operation.

In this position he managed a five billion
dollars business that employed five

thousand workers in the second
position he served as V.P. of

international exploration and production
in this assignment he led negotiated and

signed the what is now seventy billion
dollar agreement with the government of

Qatar to produce liquefy market and
ship natural gas to worldwide markets.

While at Mobil Arnie was the designated
mobile team executive for Georgia Tech.

He told Ron Russo as he delivered mobiles
annual monetary contribution to C.A.G..

That he wanted to play a role
in helping Georgia Tech.

Runs not one to let that
go by very easily and so

Ron subsequently ask Arnie to serve
on our external advisory board.

Ron told me he was most taken with Arnie's
ability to address problems direct.

And almost immediately reduce
them to the key essence.

Ron subsequently asked me to consider
joining the faculty in county

which to which Arnie
replied I'll consider that.

So nine hundred ninety three already
retired from Mobile and decided to spend

some time at his home in Connecticut
to decide what he wanted to do next.

Fortunately for our school he decided
to take Ron up on his suggestion and

in one thousand nine hundred four.

He took a position as professor
of chemical engineering here.

He very quickly became an outstanding
an invaluable contributor

to education scholarship overall
operation and direction of the school.

Just to give you a couple specifics as
to what he did when he first got here

developed an economics course provided
perspective to specialty operations center

offered numerous students career advice
assisted students in the development of

an investment club served as a mentor to
junior and senior faculty members and

develop a course in engineering ethics and
leadership.

In fact it's this latter topic on
leadership of course that he's

going to discuss today.

He retired.

If you can call the schedule that he keeps

a retired schedule from
Georgia Tech in two thousand and

four as America's professor and
Turner servant leadership chair.

Now Arny's been quite
extensively recognized for

his many contributions to chemical
engineering at Georgia Tech

to the chemical engineering profession and
to the United States.

Again to give a couple examples.

He was selected by the Georgia Tech
students as the outstanding chemical

engineering professor of the year in
both one nine hundred ninety seven and

two thousand and four.

He's the recipient of a national
award in Kemi practice by AI C.A.G..

US black engineer an I.T. management
named Tim black engineer of the year.

One nine hundred ninety two.

In one thousand nine hundred
seventy was chosen by AI C.H.

he is one of one hundred chemical
engineers of the modern era.

He's a licensed professional engineer and
was elected to the National Academy

of Engineering in one nine
hundred ninety seven.

Soon after the B.P. oil spill which is
the title of his talk this afternoon

National Academy of Engineering ask
that he serve on a committee that was

commissioned by the U.S. Department
the interior to investigate the cause of

the rig explosion that resulted in one
of the worst spills in U.S. history.

Most recently September of last
year President Obama appointed him

to the National Science Board.

This is the governing body of
the National Science Foundation.

The board serves as a policy advisor
to the president and Congress and

oversees N.S.F.
seven billion dollars annual budget.

So now we're pleased that Arny's wife

Connie Newton Stan cell
was able to join us today.

Connie is an extremely talented and
well recognized artist.

Her art work is quite frequently part of
shows at various galleries in the U.S. and

the slide into law.

This one.

So in just a little background in two
thousand and ten she was selected for

membership in the National Association
of Women Artists

this organization was founded in
one thousand nine hundred nine and

has quite a distinguished roster of
artists listed her artwork was chosen for

inclusion in the spring two thousand and
twelve edition of studio visit magazine.

This jury to artists magazine is
distributed to two thousand and

sure readers and
gallery assists throughout the U.S..

Welcome.
It's good to have you here.

So what does Dr Stan cell
do when he's not leading

high level committees teaching
students mentoring students and

faculty designing new courses and
assisting US science and technology.

Well for
one thing takes a spare time to serve

as president of the Millbrook Owners
Association for his community.

For another thing he's quite an avid
sports fan particularly A.G.T.

Georgia Tech baseball and
basketball fact he and

Professor Tasia seldom missed games
when he was at Georgia Tech and

his attendance at these Games has
been well documented and archived.

So you can see for watching that this

was a this was a double overtime loss the
direct attack experience to North Carolina

in fact we believe that's the main
reason he decided to leave Georgia.

Now those of us that have interacted
on a regular basis with with Arnie

are aware of his let's say sometime
strong difference of opinion

with the views expressed in editorials and
news items by the New York Times.

So given these kinds of feelings.

You can imagine our surprise
when we saw a recent headline.

I'm OK We wish you luck with that.

Please point.

Well to doctor on the stand.

So thousand twelve on the football.

Thank you very much.

Hello.

OK.

And.

OK.

You.

OK Thank you.

I didn't realize you had
all that information.

Dennis that's incredible.

OK.

It's my real pleasure to be here today.

And I thank you very much for
selecting me for the Silas lecture

being back here in Georgia Tech
brings back many fond memories.

So thank you very very much.

I first got started.

Being involved with the B.P. oil spill.

When the U.S.
Department of Interior asked me and

five other engineers to consult
on near term steps to improve.

Offshore drilling safety.

We consulted.

With the department.

And we put together a report
that went to President Obama.

And this would be for

a news conference by President Obama
on May twenty eighth two thousand and

ten so it was barely a month after the
accident took place in the Gulf of Mexico.

We worked hard to finalize a report.

That laid out some near term within
ninety days steps that could be taken.

And these were announced by the president.

And have been implemented.

I was asked to be present
at the news conference.

Where those with
the announcement was made but

I was unable to Unfortunately I had
a long term commitment to be in Europe so

missed out on being at
the news conference.

I was to be there with one of the other
engineers to brief reporters on the.

Particular steps that we were recommending

after that the National Academy of
Engineering form the study group.

And I was involved with that.

And now we've looked at the accident
the tragedy really long term

to come up with recommendations for

improvements in safety
such that such a tragedy.

You would never ever happen again.

We met.

In a number of places we went down
to New Orleans we went to Houston.

We heard testimony from
workers on the rig.

We visited equipment manufacturers
we went out to a drilling rig and

the Gulf of Mexico that had a similar
configuration of the drilling rig that had

the problem that was involved
in the tragedy with B.P. and

we met with the management of B.P.
in Washington had a hearing with

them as well as with a key
contractor that B.P.

used Trans Ocean the well was supervised
and B.P. had the responsibility.

But they used the contractor
to actually drill the well.

And and that contractor Trans Ocean.

Their employees did have
a significant role and

what transpired and we also had hearings
with Halliburton who was responsible for

cement services and you'll see
the significance of that and a little bit.

Let me start first by giving
you a little background the put

the accident into context.

You can see this about nine
hundred fifty in the U.S.

Gulf of Mexico fifty thousand wells
have been drilled four thousand and

one of depths of one thousand feet or
more.

So we've been drilling deep wells and

seven hundred and water depths of
five thousand feet or more so.

It was not unusual for in the to drill
such a deep well as the B.P. oil well.

There's been excellent performance only
seventeen hundred barrels of oil have been

spilled over the last forty
years before the B.P. blowout

where oil surged up the well of five
million barrels before it could be stopped

in the Mexican side of the Gulf of
Mexico the Mexican oil company Pemex.

Spill three million barrels.

Thirty three years ago.

This is of significance and

that it's been thirty three
years since a large oil spill.

Not only is it infrequent you
don't want any oil spill.

But that there is no
evidence from that spill

similar quality of oil as any
impact on the environment.

After thirty three years of course
the current spill will be monitoring of

the environment and extensive testing
to see what the impact long term.

Right now there's no or
oil visible oil that speak of.

Things look quite clean.

But then the long term effects
are what folks have study.

The least and royalty payments
to the United States government.

Large sums of money two hundred
billion dollars direct employment one

hundred fifty thousand you put a multiple
on that for people who are employed and

support services for the offshore industry
you're talking in excess of five hundred

thousand jobs in the Gulf of Mexico
as a result of the activity.

I have some experience in
terms of contributing to

some of that money and that.

At.

Mobil.

When I was involved with running the U.S.
exploration and production.

We.

Bed on a lease out in the Gulf of Mexico.

We've been there twenty
five million dollars and

we bid on a block the blocks
are about five thousand acres.

And when we bid.

Other companies also who look at

the geology below the water
as we were they can be it.

Of course.

And the highest bid wins but

that bid allows you to just
have the right to drill a well.

And then after you wind a bit.

Then when you drill the well and

my day it mobile it was another
thirty forty million dollars.

In the case of the B.P. oil well.

B.P. one the least.

Paid around forty million dollars and
the winning bid.

Then B.P. was faced with another
one hundred million dollars.

That was going in to just test
whether there's oil and natural gas.

Down there.

So it's big bets.

And it's only one in four success.

And that even that is only because
of the technology improvements

in fact of what you're doing is you.

The government will put up
like recently twenty million

acres at a time and
companies then survey that with

seismic both send sound waves down
the place you are come back up.

You have hydrophones to pick
up the sound you hear pretty.

And you can deduce that there may be
structures down here that my old boy.

If you saw the seismic traces.

You would believe that we
would bet that kind of when I

when I first of all want to thank you for
us to invest.

Thirty million dollars for
a back up with a computer.

Of course heart.

You can sharpen those signals.

The United States has
been the world leader.

And this technology little We're finding
more and more oil but computer processing.

Technology models of
the structures is what's doing.

That's resulting and
the Gulf of Mexico oil production alone is

one they have they have barrels a day and
you can see as thirty percent of U.S.

production and
ten percent of the natural gas production.

Here's the situation.

Unfortunately on April twenty
second two thousand and ten.

The drilling rig again which is owned
by Trans Ocean who is hired by B.P.

The drilling rigs call
the Deepwater Horizon and

it is tethered by a lone riser down to
the seabed to the top of the well up and

oil and
natural gas are gushing up that long rise.

They did ignite from movie
machinery on the rig exploded and

then this intense fire this virus
fuelled continuously by oil and

natural gas gushing up
from the from the well

this well this raid was out
fifty miles from shore.

So we have workers who go out to the rig
they spend three weeks on and really all.

By the way there is generally no
problem in filling those drops

the and this situation here.

It was not such a terrible tragedy.

That he was so intense it weaken
the structure and the rig is now starting

to same dimensions that's
roughly four hundred people.

And three hundred feet.

Deep.

Trying to give you an idea of
what went wrong and pardon my

freshman peer peer pressure
trying to give a schematic.

To try to explain it without getting into
too much detail as to what went wrong.

Clearly this is a schematic for
this dimension here.

Water depth that the seabed
five thousand feet.

Thirteen thousand feet down to where
the oil and gas reservoir was discovered.

But the well itself is only
seven inches in diameter

down at this point where
the boiling gas reservoir.

Even up here with a well is got a larger
diameter that's only three foot diameter.

So if this were a scale.

This would look like
a single line through line.

But with the expanded view give
you an idea of the key systems

that might help explain what happened.

You have mud which is simply water and

clay all boiling clay
that I made up in a tank.

There are pockets pumped
down the drill pipe.

There's a drill bit here when you're
drilling the well it moves and

lubricates that bit.

It moves the rock cuttings on up.

And there's a little line here showing
the return of the mud with Iraq or

any sort of my tank.

There's a separation that takes place.

Of those rock cutters.

Then the oil is then
recycled back down the well.

So this is going on.

This mud not only does that.

Function but a very key function you.

I can imagine over this distance of
eighteen thousand feet where the oil and

gas reservoir was found all of
this other is not productive.

Was found eighteen thousand feet and what
the density of this mud which is greater

than water you're talking ten thousand
pounds per square inch down here.

So ten thousand pounds really
the reservoir itself is

about nine thousand pounds
per square inch pressure.

So you need that heavy heavy iron fast.

Load to hold it back.

A key point in the well of
is that as you drill it.

And I just try to just highlight this
when you get into too much detail that.

You drill it in sections.

Let's imagine we haven't gone
down below this depth yet and

we're just at this point.

So what you do away as New Line which you
drill the well bore with the steel pipe.

So he has the wall of the pipe.

Here is the wall the pipe but then you
get cement behind that steel pipe.

To secure it and prevent fluids.

Coming up in the area between the steel
pipe and the rock face or be here.

So that's the cementing step and

concept what you do to get
the cement is that you stop them.

I promise you pump instead
inject cement slug here

a volume of cement and then you follow
it start the mud pump again and

push the cement down to where you want and
if you have not yet

you hadn't yet drilled down below this
point then the mud comes down and

then goes up by the cement comes down and
then goes up on either side.

Then you stop that it said.

And that's how you
cemented the individual.

So everybody is happy.

There has been a big discovery.

There are now ready to do what's
called temporary abandonment.

You can't keep the mud in there
while the floods it may where

everything is quite say but
you're vengefully got to get the mud out.

Because you don't want to
produce this oil and gas.

You're going to want to them.

When you're ready to produce it after you
have your markets are assured you that if

you want to come back and
perforate this man and

allow the oil and gas to come through.

So you gotta get the mud out of there.

If you take the mined out then the only
thing you have that is secure and

this sealing this oil and
gas reservoir is the cement.

And you've got to rely upon
the cement to handle this pressure.

So since it's a key step you
test whether this cement

is has high integrity or if it will seal.

And the way you do it is just simply.

Stop them put in some water
now inject ocean water.

Indeed here.

The ocean water is lighter than
the five and as it makes its end with

the mud this column gets to feed lower and
lower density.

And hence the pressure and
side here falls below

ten thousand pounds per square inch cut
down to eight thousand pounds per square.

So now you've got to double
to feed from the oil and

gas frozen for pushing on the cement
to try to go in the wild and

you're going to test whether this cement
hole course you can't keep the mud if so

a test was done it and
all you do is you stop everything

after you've gotten the mind out and
the pressure is lower in here.

Or we just see a pressure builds up and
you monitor the pressure in here.

And you see if it builds up if it
builds up you know wildly we asked

coming through the cement.

Well the test showed
the pressure building up.

So then tried another test shows
the pressure is building up.

So then I said gee well maybe I
were doing something wrong less

prior monitoring the pressure.

Another way and they tried monitoring
rather than through this drill pipe

tried monitoring through this line here so

many lines up that well this
is called the kill line.

And this one goes up to here they
bonded to the pressure in here and

then they didn't see any increase
in pressure through this life.

So they concluded the well was safe.

But then they had to explain
why they got such a result.

And the senior driller Trans Ocean
man with a lot of seniority and

a lot of clout and influence with workers.

He said he had seen something like this.

Port where you had such fury.

And he called it the fire effect and.

The B.P. man it was.

Had the last second.

Person to translate killed off work for
Trans Ocean work.

He was compared just by this theory.

That the Trans Ocean really came up with.

And that's called the latter effect.

There is no scientific or

engineering basis that anyone can
come up that supports that theory.

If the manager on board

should have text based with
the experts on shore and he did not.

And he said OK let's go ahead.

East thought Yeah made sense and

they can take you through remove all
the mud and it wasn't long that oil and

gas start coming through here as
this column in here at the lower and

lower back pressure on
the reservoir oil and

gas gust up through the drill
pipe on to the drawing room for

it came on up through this line into
my tank and over a flooded back and

more on to the drilling rig for
ten minutes before the explosion

the workers were there with mud and oil
and gas all around them and nobody through

the emergency bottom and that is it's hard
for you to see this the blowout preventer.

There's a sheer plate here.

Jack just hops across the well you
seal it and then the birds that

I show I dyed it so that you could just
see its location but it's a solid plate.

That's activated and
will cut right through the drill pipe.

So.

Ten minutes during that ten minutes
actually could have been saved and

the well.

Had a good chance to be blocked off.

Right at this point and secured.

It wasn't done in.

Ten minutes went by and
it really exploded.

Once it exploded.

This area here got jammed up.

And you weren't able
to ever stop the flow.

Even after the explosion.

Even after the tragedy when people
went back to try to stop the flow of.

Coming up and
here to try to stop it if they could

because the place could not see the whole
process because this drill pipe.

Yes.

There's a place but not particularly.

So clearly there are things
that be a back up system.

Of the and
the industry has worked on that.

The beat manager who was involved.

Did not have a lot of experience with
who we should really he was bored out.

With very little time with fact proof.

The man who had to be relationship
to be the man who was the manager

was sent off to one hard to believe.

Well controlled school.

It was a regulatory requirement that
after a certain amount of time to got

to go to school.

And so just very seasoned gentleman who
had a good equation with the workers and

the reputation.

He was not present.

Now you have a new man there.

And you've got the chief drill of
a Trans Ocean saying the flattery.

So we ended up losing
having a discontinuity.

In the leadership.

To back up for

the field he is the system that
the industry has now put together.

You have to start with here's
the blowout preventer the well.

A Well that's while and going crazy.

You would come on the top of the blowout
preventer which sits on the seabed and

put a cap on that we get into too much
detail on how you get that cap down here.

If you do secure that cap on to

the well a lot was learned from
the tragedy of the B.P. oil spill.

I did get a cap down here and
secured over these the.

Distances and water there.

I dock this is five
thousand feet of water.

I die or can only handle one thousand
over a human to go in turn valves and

make connections so
robotic vehicles are used to come down and

float around and have the vices that
will turn valves and make connections.

You make the connection going to the wild.

And then flow.

Instead of now going up into
the sea is captured by this

of these leaks that go into a manifold
that can then take the oil and

gas in this case you've got to
capture points these tankers here

capture the oil and
gas they where the gas hold the oil and

then Perry articulated a shovel tanker
comes and through take off there too late.

Oil on this thing.

So this is a question of two
riders working on an oil spill but

now you're capturing the oil and
preventing it from going into the ocean.

So the system is up and
running is cost a billion dollars

The industry all participated and
paid into it.

It's on standby.

It can be at the site within three
days and tied into a wide A wild.

Well.

The status is.

There was first a six month moratorium
on drilling in deep water for

that President Obama put in and
that was in early June of two thousand and

ten and that was the employment of say
from practices that we had recommended.

Go in place.

But since that time of
drilling has rebounded to

the par of B.P.
has spent twenty two billion folks are.

For cleanup and restoration which is
progressing well if you go to the site

you will not see the oil.

The best I could find the latest was that
it some areas if you step on the soil or

I'm sure you might have some
oil come off the top but that's

nothing that obvious is just a long
term effect on that could see

light at the center of that is now being
assessed and Big Pete may end up paying.

We'll have additional payments for
sure but including fines.

They may have an additional
fifteen billion or so

as thirty seven billion dollars in
terms of the entire corporate world.

BT have seen Transocean the company
that was drilling the rig and

saying that they were incompetent and
have and they have also sued Halliburton

did the cement drop they were claiming
that the cement wasn't of good quality and

both of those companies are suing B.P.
It's a lot of money involved here.

And as you told the lawyers to go one
step at a time but that's all right.

The lawyer is going to
want to come out on.

The tragedy go in your back
away from all of the facts.

Eleven men and

their lives of the shooter twenty fifth
level on board and seventeen more.

And clearly we can't let
something like this happen again.

Recommendations like B.P.
one one that all companies trouble

because when a target
turns out eighty percent

of all serious enough
real accidents like this.

Both Paul and India where there.

It's just wind and some other tragedies
eighty percent are caused by human error.

And so how do you get human error
if somebody makes a big mistake.

In the case of the B.P..

Well clearly an error made in

Turkey dangerous key test
whether the cement ceiling.

And it gets to a culture which is easy.

It's easily said word.

But it is an attitude and I believe
that safety is most important and

all that they that you do all of them as
they should believe that no shortcuts.

No Blacks procedures.

When.

Folks are under pressure time pressures.

It's easy to have that be
something that you go into.

It's apical.

Strong safety car culture tax lives in
the environment you can see the point.

Virtually human error which is really
because of the big one but it's a big

leadership challenge because you're
talking about pretty specific disciplines.

Some companies that are known for their
discipline that discipline gets older into

how you actually operate your business and

other aspects aside safety you
could end up stifling creativity.

Growth of your employees.

So is it easy to go too far but

it is something that you must
emphasize that each company company.

Struggles with.

It's it's something that you.

Have by doing each worker reinforce each
other in terms of how you think their job.

And for
someone who's a manager in the chain.

If they insist on.

Safety.

No short cuts no lax proceed.

They will have a tough
time in that company.

And folks wanting to work for them

unless the overall management supports
that we are serious about this.

So it's easy especially in these days
where micro-managers are terrible for it.

You'd never want to be
known as a Michael manager.

People feel they can't do
anything without probably So

there's a tendency to be a little looser.

And have people say nice things about you
if you're not a micro-manager but you need

the support of the total organization and
the leadership that organization.

To say safely.

We want no short cuts.

No lax procedures.

A clear definition of approval of
authority and accountability is important.

This is a big leadership challenge for
us in the DAY TO DAY's decision making and

it seems if everyone isn't in charge.

Nobody's in charge.

So folks get together to talk about it and
then they make a decision but there's

got to be someone who is accountable
in the case of the B.P. oil spill.

Should the manager on the rig the B.P.
manager have been to one to

say yes to this test result or should have

been very clear as to where the bar code
of guarding was at such spurious result.

And certainly that new manager could have
felt some pressure to save gas or head.

But you can't have that it's got to be
very clear who's making the decision.

And this is in vogue now to have
teamwork and so on which is good.

But we've got to be very careful about
nailing down authority and accountability.

WILL BE OUR a need for
my future for will be OK design for

the current blowout preventer is.

It's unreliable.

And it's been added to
like Topsy over the years.

And you need to start with
a clean sheet of paper.

And I think they'll be progress on that.

Increase in education certification
standards for critical weird supervisory

positions you can see that and
more in-depth realistic training for

emergencies you should not
have workers standing around

where Mike is on the platform
on the going rate for gas and

cursing Paul and horsing all around it and
nobody threw a blowout preventer.

When I was down and
Houston in her testimony every worker

said We're a power to take action
if we take the rate is at risk.

We are empowered to throw the button for
follow ups but

not a single worker did that.

So it has to be then that having training.

And emergency simulated situations so
that that can be locked in.

We need at least two sheer Aarons I showed
you that little dotted line on the earlier

Gar gram That was one shear ram
the cut across the drill quite

clearly you needed at
least two maybe three.

So at one gets jammed you've got others.

It's just kind of St Paul the cement you
can test the quality of the cement and

how well it has hardened by running
an acoustic tool down the well and

that was not done on the B.P.
while the specifications of the cement.

More needs to be determined
to nail down on that and

then with the problem they had with
getting a well intense worry of an event

that needs to be tightened up on
stands and a standby generator.

It's important it's right.

Next to the main generator provides a lot
of lectures to do to rid the ring is

held on station by a G.P.S. system.

It takes the signal from a satellite and
thrusters move it holding on.

When the explosion talk appliance the main
generator when the lights went out

electricity was lost and then
the bridge started to drip and I think

that put added stress on that pipe that
helped cam that pipe into the blowout.

And then we do recommend

the industry design that I showed
you before chapter and well kept.

I will.
Although I'm not so

in a few sentences part of the herd

the place may very well

underline that life that

left appears to be made without
a protocol for about making but

that has to be something
then that has to do with

what we got that behind us for
was there a lot

of it in you to work on this and
improve the technology.

I just like to make a closing
comment which is tangential to this.

I just can't resist dentist said.

And Ron knows some of my colleagues who
are tech now we have like I would say.

Chuck you know the New York Times
has weak law and

then five stars and then we go or
you know how they read it.

We both go there is it clarity.

So I probably should I know
are advised not to get it but

wear something really
quite straightforward.

We have oral phrases that
have gone up tremendously for

about twelve to a hundred dollars oil for

our eighty five ninety or
will not be at that price.

There is no reason for
all the people at that even Saudi Arabia.

What would happen if we got
thirty forty dollars a barrel.

But if you want to give me one hundred
dollars a barrel and I'm willing to take

sixty or seventy I'll take it so you say
well what is wrong with this person.

Why is it that oil is hundred dollars
when there is no fear of loss.

If you do not.

And of course the oil price.

Obviously all you know
drives together put it.

OK So why is that we don't have
any lines at the service that.

So clearly there's got
to be another force.

Well you may know ninety percent of
the trading in oil and oil prices

are not set by Exxon Mobil they're not
set by Saudi Arabia their problem.

It's set by the speculative.

So ninety percent of the trade and
oil is done or

people finding out their computers
they don't need the oil but

what they're trying to
do is get a spread so

you buy a contract that would say that you
would pay for that thirty days from now.

At play.

But what you do is you watch from your
computer your fingerprints go out two

dollars a barrel of oil what you have
your contract for you go and sell and so

you buy and sell try to buy low sell high
oil price goes up and it feeds on itself.

And before you know it.

People make huge amounts
of money turning me off.

So for one physical barrel
that you use in a refinery.

You're ten people that came by itself.

This isn't problem.

Well why can't we stop that.

Why can't we were part of that more
money be put down when you buy

a contract you can just get
the contract with hardly any money

then what about putting
thirty percent of the value.

I don't know as it applies.

I care because when you bet on
the oil what thirty percent one time.

For your supposedly deal.

So we are driving ourselves the world
they are serious the oil price is set

by they call it the market but
it's by integrating the community.

So maybe we'll get this straightened out.

It used to be that way with grain and
the early ninety's and

the from one thousand nine hundred
seventy eight years where trade and

the speculators got into that so
that was put out

by just simply saying you don't need
it physically you can participate.

So we can do that.

Say if you don't physically
want to spoil music.

You can't participate.

Only ten percent of the market could
be right now you're talking forty

percent of the market for these people or
as I said ninety percent per year anyway.

New York Times give you a better
job explaining that fact.

Thank you.
Noah.

We do have time for one or two questions
on the what was the ignition source and

there's any other commendation about
separating ignition sources yes

yes there have been the ignition
sauce was the main generator

that when the explosion took place.

You know as natural gas gases
went into the generator.

It caused the engines to speed up and

there was a circuit breaker at higher
engines and that circuit breaker way.

Gave off a spark that
an explosion took place.

I've asked that on your point.

I've asked Should there be
a recommendation to make that whole area.

The engine keep it on that
very positive pressure.

I've been coming through the room.

I've got oxygen in there but
keep up the pressure on it.

Have a five out so
that gas is tried again which

I think that that is not
rigorous enough obviously gas.

So that's something that's
under study how can we

make that that made their
console a generator

that we can make it so

army of comment and
then a question the comment is

I sort of assumed will be done.

This is introduction of you the New York
Times reached a new low by inviting you to

be a member of the editorial board but
everything's good.

I think that with all the other

question I have is I really
picked up on your statement

in the your talk about responsibility
if everyone is in charge.

Nobody is in charge.

It seemed to me that there were people on
the rig The There was a chain of command.

It broke down and

literally in your talk you made
the comment that anybody on the rig can

cause the blow up to activate
the blowout preventer.

So.

I was left wondering was there really
a chain of command or or or not.

I think Point well taken.

Because it was a fuzzy.

I mean you may not be
the best decisions being

made by weapons on

something with so many on that like
in terms of the various testing and

more people and
therefore further on your point.

It should have been defined at this
level decisions are made when you

have the result in terms of whether
the well sealed and it was not very fussy.

Yes people

want to sure they were part of what
is the black and they asked the guy

who came up with the top of it tried to
interview the workers who were involved.

A lot of garbage.

Absolutely and he was

point other aspect of.

Yes.

OK My question relates to investments and

safety technology one observation that
has been made is that essentially since

the problem of the Exxon Valdez
oil spill technology had

not been updated and all of a sudden
another big event happens and

a lot of money is poor into
developing better technology and

one billion dollars put aside to come up
with this fancy new capping technology.

Am I correct in this that there is very
reactive technology development and

how could we as an industry or
encourage the industries to be much

more perfect much more proactive in this
and actually invest money continuously in

upgrading their safety and response
technology rather than waiting for

the next big blowout as I go what
do we do to prevent this one.

Yes Well that's that's correct.

I totally totally agree with you.

It has to be ongoing.

It's easy to say I think
certainly something like

forty billion dollars already get
the attention of the end of history that

stations are being made on a monthly

whole lot of that kind of thing but
you know privately I

mean you don't want to kill the people on
the rig they didn't want to I mean they.

But they made this stupid very
well this word is like they

know the use of our culture has
radiate and then you have to follow.

Not only technology but
finally what you've got to have and

it's a game that will often a lot of

media and the point Bob was
making that was making about.

America and Fox.

I think in view of the hour we
will cut off questions here and

I want to invite everyone to a reception.

That's going to be held two
floors up from this level and

I'm sure that Dr Stan cell will
be available to address any

questions that you have during
the reception but before we break.

I'd like to present you
on with this plaque.

Presented in honor of
the Conoco Phillips C.J.

Peete solace program in ethics and
leadership.

By the school of chemical and
bomb like your engineering

Georgia Institute of Technology and
of course it's given to Arnold F.

stem cell my congratulations and
thank you very much for her

but I want to just hear and
it actually is more than an anecdote

on the point of why I ended up going or
you know Larry.

But on the day that terrible day.

Workers on the rig were given
the honor of seven years that was

time well they could have their
radically through the fourth time.

But it was a fake that that
is that present or him out.

That day and they were all in voice.

They were higher up in the chain.

They were on board when they explode.

They were not brought in and

these were people who came up to change
the way I think we've got a problem there.