BP's Deepwater Oil Spill - Impacts of President Obama’s Order Halting Work on 33 Exploratory Wells in the Deepwater GOM and Open Thread

This thread is being closed to new comments. Please comment on thread http://www.theoildrum.com/node/6604.

We are reading now that President Obama is asking for a $20 billion escrow fund:

BP Shares Sink After Senators Call for Escrow Fund

BP shares dived again Monday in London trading after a group of U.S. senators asked the company to set up a $20 billion escrow fund to cover costs of the oil leak in the Gulf of Mexico.

Below the fold is a summary of costs excerpted from a memorandum issued by the Louisiana Mid-Continent Oil and Gas Association on May 28, 2010. Art Berman is bringing this summary to our attention. (The two of course aren't directly comparable.) - Gail

The Presidential Order does not affect the 4,515 shallow-water wells, and it does not affect 591 producing deepwater Gulf wells.

Roughly 33% of nation’s domestically produced oil comes from the Gulf of Mexico, and 10% of the nation’s natural gas.

80% of the Gulf’s oil, and 45% of its natural gas comes from operations in more than 1000 feet of water – the deepwater (2009 data).

Suspension of operations means roughly 33 floating drilling rigs – typically leased for hundreds of thousands of dollars per day – will be idled for six months or longer.

$250,000 to $500,000 per day, per rig – results in roughly $8,250,000 to $16,500,000 per day in costs for idle rigs;
Secondary impacts include:
• Supply boats – 2 boats per rig with day rates of $15,000/day per boat - $30,000/day for 33 rigs – nearly $1 million/day
• Impacts to other supplies and related support services (i.e., welders, divers, caterers, transportation, etc.)

Jobs –

Each drilling platform averages 90 to 140 employees at any one time (2 shifts per day), and 180 to 280 for 2 2-week shifts
Each E&P job supports 4 other positions

Therefore, 800 to 1400 jobs per idle rig platform are at risk
Wages for those jobs average $1,804/weekly; potential for lost wages is huge, over $5 to $10 million for 1 month – per platform.
Wages lost could be over $165 to $330 million/month for all 33 platforms

Secondary impacts: Many offshore workers live in Louisiana. The state is going to see a decrease in income taxes and sales taxes that would normally be paid by those employees. (The state does not collect a sales tax on oilfield supplies and equipment used offshore.)

Companies Impacted:

Oil Companies Impacted

Shell has seven (7) exploratory wells that will be impacted

Others include:
Chevron (4)
Anadarko (3)
Marathon (2)
Noble Energy (2)
Eni US Operating Co. (2)
ATP Oil & Gas (2)
Statoil (2)
ExxonMobil (1)
Petrobras America (1)
BHP (1)
BP (1)
Kerr McGee (1)
Murphy (1)
LLOG (1)
Newfield (1)
Hess (1)

The 33 gulf wells where operations are suspended were the ones inspected immediately after the Deepwater Horizon blowout (per Interior Secretary Ken Salazar); in those inspections, “only minor problems were found on a couple of rigs”. Salazar believes “additional safety measures can be taken including dealing with cementing and casing of wells and significant enhancements and redundancies of blowout prevention mechanisms. Although these rigs passed the inspections, we will look at standards that are in place.”

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If any of the BP board even think of agreeing to a $20bn escrow fund, they'll be out on their ear with the shareholders baying for blood. A fund that would be used as a bottomless pit by a bunch of politicians looking to win the forthcoming elections via payouts to anyone that holds out their hand?

They would have to be nuts not to take this escrow idea directly to the courts.

No responsibility, no drill.

Too much responsibility for drilling, just sell oil to rest of world.

BP seems to be behaving like sorcerer's apprentices. They kind of know what what they are doing, but are over their heads with respect to dealing with things if they go wrong.

Some southern senator tried to defend the $75M liability cap by saying that higher liabilities would keep small operators out of the gulf. I think that is completely wrong. I don't want any organisation drilling who cannot shoulder the risk.

I think that setting up some sort of fund like this is inevitable. The tussle will be about how it is managed. Clearly BP can't afford to have it turn into a sugar bowl for local politicians. Ultimately the courts will have the say as to how the funds are disbursed.

If people think payouts are slow now, well you will look at the current times as the "good old days".

I agree that there needs to be some kind of long-term recovery fund set up by BP, to deal with the financial impact of this disaster into the future. The impacts are yet to be determined; BP needs to understand that their responsibility isn't going to go away by writing one check and saying "well, glad that's all taken care of now". While I don't know about the $20 billion amount, this fund needs to be managed by non-BP personnel and directed towards long term economic assistance as well as environmental mitigation/restoration.

The longer BP fights this, the more difficult the US' demands are going to be IMO.

The Manville Trust is a potential model for "ring fencing" some of BP's assets to pay for the damages. Information is available through Google. It's too complex to go into here at this time. But the Trust gives a starting place for thinking. http://www.mantrust.org/

Then let us put BP into receivership until the last claim is paid out.

Any residual will then be returned to the shareholders of record then.

I think $20 billion is *FAR* too small to cover all consequential damages (which can be trebled if gross negligence is proven). You appear to not understand the magnitude of this BP disaster !



Best Hopes for BP keeping it's promise to "Make it right".


Very dangerous situation. Brits feel it was the American rig workers (mostly coming from former Amoco anyway) which f**ked up with their cheap and fast style. Why should they pay for American mistakes. Americans did it all by themselves.

Probably it will be hard to find even one Brit or any other foreigner in the command chain for Deepwater Horizon. CEO most likely did not even know much more than the name of the rig. 90000+ workers worldwide, 30000 of them are Americans.

40 percent of shares are owned by Americans, the same as Brits. I doubt Brits have not much of an influence to the day-to-day BP America operations, other than broad guidelines and strategic plans agreed TOGETHER once or twice a year.

Americans seem also all too happy to start accusing Brits for their own mistakes, to start seizing the assets like they own the world and do whatever they feel like.

tim73, if this is a "very dangerous situation," people holding the attitude you describe are the ones making it so. As far as I can tell, folks in the UK are overwhelmingly the ones bringing nationality into the mix, while Americans are simply furious at the corporate (not national) culture BP evinced before, during, and since the crisis of April 20.

But apparently the minds of the "nationality sensitive" are so made up that nothing to the contrary will satisfy them. That's a shame.

(Disclaimer again, I'm British.) I'd be cautious about ascribing any such sweeping mass actions to the people of either nation, US or UK.

It's certainly true to say that some sections of the UK *press* -- three or four right wing papers, though not all right-wing papers went with this angle -- were making revolting efforts to portray BP as the victim of anti-British sentiment in America, especially last week. They were also trying to bully the shiny new Conservative Prime Minister (elected in May) into quote "standing up for Britain" unquote. (I posted some links on older threads.)

Please don't confuse what the (mostly vile) UK press says with popular consensus. There may be people thinking that way, but I've not seen or heard any sign of it.

FWIW, I've seen very little anti-British sentiment here on TOD, at least. (Then again, I stopped picking at the scab of FoxNews.com comments a few weeks back...) I think -- I hope -- most people here and there get it that, whilst it's obviously BP's screw-up and their responsibility to pay, they're a multinational, with equal 40% chunks owned by UK and US-based investors, and that we're living in a globalised world economy. I'm also dead certain that a similar blowout on a North Sea rig owned/operated by US-based corps would lead to a hell of a lot more anti-Americanism, and not just in the press. But I really don't think anyone here seriously thinks BP aren't responsible, or shouldn't pay every cent in damages and fines that they're in line for -- whatever the govt and courts decide that should be.

imipak (and tabbycat and any other Brits in attendance), thanks much for your comments. Betcha $5 that, if polls were taken today, they'd find several (well, probably many) millions more hardcore Anglophiles in the US than in Blighty herself. I'm one of 'em, and as you say, US distress with what BP (et al.?) caused is a completely different issue. Best wishes to you.


I am not from either country but to have the USA attacking the organisation that should be devoting ALL its resources to curing the problem is just plain dumb.

As they say, "Only in America"

This is a massive disaster being played out for political ends.

It can only end badly.

Meantime, America will have lost its most staunch allies by its treatment of foreign companies (Not just BP but also companies like Toyota and UBS have been monstered by this administration).

It is facile to protest that you are not attacking a nation when you set out to destroy a significant revenue stream for that country's retirees.

Wake up Mr Obama. You will either be part of the solution, or you will become the problem.

Per retired ARCO executive post here, as soon as BP took over, "baby Brits" started filling all management positions.

British Petroleum has had over a decade to correct any management failings, it appears that they made them worse.

As Chevron found out when they bought Texaco, you get the good with the bad (Ecuador) when you buy a company.

And all three admitted BP felonies were committed with British oversight.

And if BP is put into receivership till the last claim is paid out, the pain will be equally shared although the blame falls squarely on London.


PS: I have kept nationalities out of this, but it clear to me that Lord Browne is the central fountain of the corner cutting, safety be dammed and legalities are to be "worked around" BP culture. He did not hire replacements for retiring engineers, he STRONGLY pushed cost cutting and has some success with bribery in Kazakhstan.


"The fish rots from the head down".

And the financial markets loved him for it...

I've witnessed this happen first hand. I worked for a subsiduary of a large U.S. Corporation which was sold off to a British Corporation. Soon after top level heads, who had 'came up' through the ranks, rolled and in came the fresh college graduates waiving their degrees. Wasn't long before the entire operation went to hell.

NOT accusing "Brits". We're accusing the corporation, BP, for causing this disaster.

There's a huge difference as far as we Americans see it.

Agreed. No one cares what nationality the owners or workers are. They all bleed red blood and any will do.

This (nationalism) is the rusty wrench that slows the wheels of globalization. Our resources, our ecology, our national security...more to come in the not so distant future.

If the US is able to hold BP to financially culpable, when will the UK find some other way to get "pay back" from the US?

Hey, look at this article: BP unveils new oil spill plan as shares tumble

Read that article. BP plans to increase oil capture to 40,000-53,000 BPD soon and to 60,000-80,000 BPD within 6-8 weeks.

And BP told us this leak was "only" 5,000 BPD for a full month! That wasn't an American mistake. That was top level corporate policy to tell outright lies. Americans didn't make the decision to tell that lie. Your CEO did. How much is this well spilling? Why are they saying that even 80,000 BPD collection won't be enough to capture it all? You know, there is a wee bit of difference between 5000 BPD and 80,000+ BPD.

Don't say this is an American only problem. The entire BP corporate culture is involved here and has been involved in making public statements that, in light of subsequent facts, can only be considered either grossly incompetent or deliberate falsehoods. Take your pick but Americans didn't make those statements, BP, as a corporation did, whether the employees were American, British, or alien immigrants from Saturn.

BP wasn't the source of the original 5,000 bpd estimate - it was the US Coast Guard. If there was any question about that, Allen reportedly made it very clear during his appearance yesterday on one of the Sunday morning talk shows. Somebody posted a link to the video yesterday here on TOD.

rainyday said:

BP wasn't the source of the original 5,000 bpd estimate - it was the US Coast Guard. If there was any question about that, Allen reportedly made it very clear during his appearance yesterday on one of the Sunday morning talk shows.

Thank you for clarifying that.

Way back on May 13th (I think that was the date) I saw a technical update video from BP. During that update, Tony Hayward made clear to the audience that the 5,000 bpd estimate was not from BP. I believe he said it was from NOAA and the Coast Guard.

But for weeks we've listened as commenters here have repeated this claim that the estimate was all a BP lie to downplay the size of the leak.

I wonder how many of the "Bp lied!!" commenters will now admit they were wrong about the source of the 5,000 bpd day estimate? I predict very few.

and how many of the BP defenders will admit that BP never uttered a peep, even after the ROV feeds were made public and the world could see that 1,000-5,000 bpd was not a realistic estimate?

and how many will admit that it was not in BP's interest to see an increased number, since it would have resulted in increased fines for oil spilled?

There have been quite a few other posts here on TOD - mixed in with the "BP lied" comments - that clearly attributed the estimates to the CG and NOAA, not BP.

I wonder how many of the "Bp lied!!" commenters will now admit they were wrong about the source of the 5,000 bpd day estimate? I predict very few.

I think you may be right about the 5,000 bpd estimate. Here is what a BP executive said on April, 28th, in regards to the 5,000 bpd estimate:

However, Doug Suttle, chief operating officer for BP, said he believes the earlier leak estimate of 1,000 barrels a day is accurate.

I stand corrected. BP did not lie, saying there was only a 5,000 bpd leak. They lied that the leak was 5 times smaller than that.


BP stated it is sending capacity to recover those amounts. They do not say how much is blowing out

Please re-read the article

"BP plans to send more vessels to the spill site to increase its capacity to capture oil from the well from around 15,000 barrels a day now to 40,000-53,000 barrels by the end of this month and 60,000-80,000 by mid-July."

Capacity not capture.


I'm a Brit.

Brits feel it was the American rig workers (mostly coming from former Amoco anyway) which f**ked up with their cheap and fast style. Nope

Why should they pay for American mistakes. Nope

Americans did it all by themselves. Nope, well to be fair the MMS did f**k up just as much as BP did, but thats nothing todo with us Brits.

There are concerns about pensions, and reduced tax revenue. For the most part Brits love the USA and are just as appalled with this incident as you Yanks are.

There is a lot of anti-corporate feeling against BP, but there is a general anti-corporate meme going around the UK after the Banking crash.

Oddly its Obama thats making this a Brit Vs Yanks issue not us Brits, IE just another day in politics. Yawn.


i don't see it as a US vs. UK problem. It's a workers vs. management probem. The guys who worked on the platform seem to have wanted to do what was best.

BP Americas is worth about $25 billion. If you put that into receivership that's the max you will get. And there is no guarantee that you will get even that.

Bad idea if you think the liabilities are far above $20 billion.

Why should it be limited to BP Americas ?

Just like UK laws have no jurisdiction in the US so why should US laws have any in the UK. BP is probably withdrawing assets and firewalling BP USA and the rest of BP anyway.

This much easier said than done.

Well, BP is the drug dealer and USA is the drug addict, very badly so. I read somewhere that now because of the ban of US deep sea drilling, drilling ships are simply sailing to Africa and other places to start new projects. BP can also sell oil to China, so they kinda have the perfect blackmailing tool against USA.

Oh please........I hope that was sarcasm and not an honest belief. If not, why single out BP? There are so many others.....

A competent legal department would have them operating that way all the time.

Umm, perhaps you don't read the financial pages but even with the meltdown in their prices, BP's market cap is north of $95Billion today. That is well north of your $25B guesstimate.

Just figure in treble damages for gross negligence.


Just figure in treble damages for gross negligence.


And do we have to get a verdict in court first to prove gross negligence? How long will it take? I think the MMS hearing cast enough shadow that we really don't know what happened on Deepsea Horizon that day. have you guy really think through what putting BP USA into a recievership or supervision under BK court mean??? I bet no one invest in company in BK or see any action in BK court. And just keep mumblinig the term as if it will get everyone everthing we want.. In BK court, the judge is the king and they can reject and will reject any expense that they don't deem necessary for the survival of the entity. Every one will stand in queue and ligtigate and negotiate for years to decide who get what. Yes, government is at the head of the queue, but at most they will end up in owning the asset but that would be after years of ligitation and negotiation. do you want your fisherman, business owner etc. to wait for years before getting pay or tax payer to pick up the tab?? Do you want coastal damage to not getting any action after a few years? So please stop putting out this non-sense and focus on what this site is doing best, the discuss the technical detail of the spill and to educate all of us, newbie, in how thing will progress.. Life it not a movie (no nuke won't work...) and there is no simple solution on this problem. So stop pretending that we have all the answer only if we could force BK to go bk (I love to see US government trying to force BP into receivership in UK.. I think they will get laugh out of the country )...

I was suggesting putting the entirety of BP PLC (ALL of it) into receivership (likely in UK). Pay out all claims (including any punitive damages) and when all is said and done and ALL claims paid, return what is left to the shareholders of record.

Perhaps, after the $20 billion is exhausted, the USA will need to take BP/UK to the World Court if that would be a better venue than UK courts.

NOT a lawyer, but "piercing the corporate veil" to get to BP PLC seems plausible.

After all BP USA may be worth only $25 billion.



As I understand it, the federal government can initiate receivership proceedings, however the examples given make me wonder if they can in this case. In addition, if BP turns to the bankruptcy courts don't they take precedence? And if they do, there is an order for payments out. If they go into bankruptcy the unsecured creditors come up in 2nd place. I don't know how it would work in receivership.

BP Americas != BP.

Absolutely. We should stop the nonsense of privatizing profit and socializing loss.

We should be able to sell off every last piece of BP asset and use it to cleanup GOM. Afterall $20B is just 2 years worth of dividends for BP.

Ironically, the UK has been trying to force the Icelandic government to pay for private banks debt, while posturing so that BP may not pay it's own debts, even though it can well afford to.

What's wrong with this picture.

British hypocrisy, how quaint.


Fraud by US financial institutions brings a global financial meltdown and not one arrest, no paying back fines or helping the little man bankrupted by their actions. Instead they pay themselves bigger bonuses whilst countries around the world are hit.


15,000 dead by a US chemical company, and the US government protect them from actions such that they pay only $470 million in compensation, and the CEO is currently living it up in retirement, protected from prosecution by the US government.

Is it any wonder people smell something when suddenly; when the name 'british' is in the title, we suddenly get a witch-hunt - demanding the bankrupting of the company, and ignoring the parts played by Transocean and Halliburton? Sudden any wild media story is fair game, presidents are threatening to 'kick someone's arse' and 'US' companies quietly get written out before any culpability is determined.

Yep, there is something rotten in the state of Denmark.

There is no other country Americans like as well as Britain, I think not even Israsel. Other than some older Irish Americans, I have never met anyone in the US with the remotest anti-British sentiment. Americans love the Royal Family. We love that the Brits jump in side-by-side on our innumerable imperial adventures. Anyone who believes there was any significan measure of anti-British sentiment in the US prior to the leak is either ignorant of American sentiment, or delusional.

Of course, as charges and counter-charges of hypocrisy and rottenness fly back and forth across the Atlantic, it will be possible to stoke some anti-British sentiment in America (and some anti-American sentiment in the UK).

(Disclosure, Brit resident in the UK.)

I don't think it's fair to say that the UK gov has "postured that BP may not pay it's own debts" (unless you've a reference?)

Seems to me that the first fiduciary obligation of the directors and management is to protect the shareholders. That's law.

While I personally feel that BP should be held responsible for environmental damage and possibly criminal negligence, seeing some people claiming psychological damages in order to reap a windfall even at the expense of those with legitimate damages, makes me wish for a BP bankruptcy.

The culture of grift is just as bad as the culture of negligence, maybe y'all deserve each other.

The first priority should be to mitigate and repair the environmental damage, everything else is secondary.
It just seems that this venue is being blocked by the administration for political gain.

garyp seems to not understand what "Escrow" means. What it doesn't mean is "Lump 'o cash that one party gets to do with as they please at anothers expense." Look at how the term is used for construction or a downpayment of a house. Therefore, the comment is not valid. Escrow is money that is managed according to a contract AND with a final settlement at some later date. In theory, not all the escrow is spent and the money could be returned to BP. It's not a "bottomless pit by a bunch of politicians". In fact, the disbursements will most likely be by the same 3rd party claims management contractors who handle it now. The difference is that the money is already beyond BP's hands.

It actually works to the advantage of BP's board because it sets some kind of boundary which both the government and BP agree is "about right". From the stockholders point of view is a less bottomless pit than before since terms are macroscopically defined. However, if the crisis continues beyond "early august" there could be a demand for more funds in the Escrow.

As for "taking it to the courts"... one thing that is only been touched upon is the Presidents executive authority. He could simply seize BP's assets in their entirety in the interest of national security (80% of the militaries oil) and the multi-state nature of the disaster. Similar actions have been taken in the past, though probably not to this scale. It is a "Nuclear Option" that would create all kinds of blow back so I expect nobody wants to do that but it is a sword of damocles hanging over BP's head. BP's boards and executives know that someday they could be separated from all authority for a period of time. Federal Marshals and Secret Service (who also are responsible for treasury matters) could seize the property until the crisis has passed.

You will not see BP take this "directly to the courts". It would open a can of worms for BP, a discussion on the record they are not yet ready to have.

I know exactly what escrow means. It means "we relinquish control of this and put it in the hands of someone who is within your control". As such there is virtually no chance they would ever see any of that money again, and wouldn't have any opportunity to say "we're not paying because its Transocean's fault". The status quo would be to assume guilt, take the money, then go looking for more.

Plus I doubt you could find a truly independent arbiter in the US.

As I understand it, the value of the US assets is $25bn - so why would BP put at risk assets from the main company AND these assets, against the belief that someone might decide to be fair? As I understand it, separating out BP America's assets isn't easy, but I very much doubt they are going to be prepared to pay out even the value of the US assets, let alone more. Nor should they, from a legal or shareholder responsibility viewpoint.

Exxon have got their punitive damages for the Exxon Valdez spill down to $507.5million+interest.

This is a link to an online interactive map, that has just been launched by NOAA. It "integrates the latest data on the oil spill’s trajectory, fishery closed areas, wildlife and place-based Gulf Coast resources — such as pinpointed locations of oiled shoreline and daily position of research ships — into one customizable interactive map."

This is a link to a longer write up about it.

Awesome link. Thanks for posting this.

BP executives facing real charges, yet we hear nothing here?


You'll have to wait for Rick Sanchez to figure out how to get it wrong. Thanks for the posting the link; I hadn't seen it.

Rockman: Picking up from the now closed last thread, you said: "...make such efforts as safe as they could ever be." Does that make the level of safety outweigh the risks when there is so much potential long term and short term damage from a blow out (as we are seeing now)? You're qualifier "could ever be" leaves me more than a little queasy.

El -- Risk to reward is obviously dependent upon the person/company. For instance, for my oil company is the risk/reward acceptable? No...we'll never drill in the Deep Water and anything that even marginally increases the value of our reserves is beneficial. So for us (and 90%+ of all other oil companies) the risk isn't worth it. For the Federal gov't: they risk no money (as long as they collect fines/damages from accidents) and get around $10 billion/year in bonuses/royalty. Obviously well worth the risk for the feds. For our Nawlins buddy Allen no risk is acceptable.

Can't make flying or driving risk free. Can't make just about anything risk free. Thus my "safe as could ever be". Once you feel you've done as much as possible to elimante human error then you either accept the risks or not. We can chat about quantifying/minimizing risks all day long but in the end the public either goes with it or not. And thus go the politicians.

Rockman, well said.

To look at another industry - nuclear - after the 3 mile island the public said the risk is just not worth it. So they don't allow any new nukes to be built.

Infact I expect, the GOM disaster to haunt talk of new nuke plants as well.

Old anti-nuke activists like myself would like to believe that our protests and the Three Mile Island accident stopped nuclear power plant construction, but those were only two little nails in the coffin.

No nuke plant was started after 1971 and the reason was economics. The Waterford plant upriver from Nawlins was projected to cost $288 million in 1970 but by 1977 was expected to go over a billion dollars (it ended up costing around $2 billion, a typical price for a 1000Mw reactor at the time). Nuclear fuel also quadrupled in price by 1977. The competition from much cheaper coal and gas plants is what doomed large light water reactors.

A lesson there for the present --catastrophes and public outrage only go so far in changing policy. Economics is the 800 lb. gorilla we need to wrestle with if we want to wean ourselves from fossil fuels.

In Dallas, when Comanche Peak came on line, we initially got two monthly power bills. One was covered with coal dust - the fossil-fuel bill. It was cheap as could be. The other bill glowed in the dark - the nuke bill. It was sky high. The legislature had an immediate problem on its hands - outraged Texans. They had to meld the bills and greatly extend the time period over which the nuke would be recouped.

Economics ended nuke power in Texas. It could not compete with coal and natural gas. The anti-nukers would have been ignored by Texans forever. The price, not so much.

A 'Carbon Tax' is the ONLY way in the short term, to make Nuke/Solar/Wind Economically competitive, otherwise the 'Dirty,Cheap' option ALWAYS wins out.I do agree that the nature of this 'Worst Case' accident is also going to give people pause about Nuclear. Also IMHO the Nuclear industry hasn't done itself ANY favors by seeming to be more worried about Profits(In alot of cases) over safety. When will people realize that when you are doing Scary technology that worries the public, it is MANDATORY to be seen as being safety first?

For our Nawlins buddy Alan no risk is acceptable.

Not quite true. It is just that my risk tolerance is about 1/1000th of the risk tolerance of BP on April 19th. Perhaps equal to the risk tolerance of the other majors today >;-)

I expect GoM to have 25 more years of drilling (10+ years frantic post-Peak Oil, 10+ years wind down, searching for the last small reservoirs or the "bad chance" prospects rejected earlier).

If a repeat of BP type blow out has a 2% chance in the next 25 years, and a 99% chance of successful containment/top kill inside of a week, I could live with that. Maybe even higher risk than that.

I think the above risks are "doable" with a mix of best practices and improved practices.


Dang Alan...you're getting soft. What's wrong..oyster withdrawal? But I do get your point.

Rockman: Thanks for the reply. Well put. The balancing of risk/reward by the public will eventually determine the answer to how the reality of Peak Oil is negotiated. Lack of reliable information, lack of attention, and denial have all interfered with the public understanding of the risks/rewards involved. The BP blow out may have begun to alter these public shortcomings. But... "It's too soon to tell." —Zhou Enlai/Chou En-Lai, referring to whether the French Revolution (1789) was good or bad in a conversation with Kissinger in 1970.

Excerpt from the above story:

BP executives could face 15 years' jail

Jody Freeman, Professor of Environmental Law at Harvard Law School, told The (London) Times that if criminal negligence could be proved then "the law certainly provides for prison for environmental crimes".

She said that under normal circumstances, the maximum criminal penalty in such a case would be up to three years in prison, but in those where death and serious injury had occurred, as in the case of the Gulf oil spill, this could increase to 15 years.

The warning came as executives from Exxon-Mobil, Shell, Chevron and ConocoPhillips prepared to distance themselves from BP, according to planned statements seen by Financial Times sources.

In my little contact with the oil industry, I got quite a different impression of BP than of Shell, Chevron, and ConocoPhillips. (I have never had direct contact with Exxon Mobil.) When I visted BP's Natural Gas facility at Wamsutter, WY, it struck me as very strange that their head of safety was an independent contractor. When I asked how many injuries they had had in the past year, they could not ( or would not) tell me. (Other companies have been very proud of their safety records, and that is the first thing they wanted to talk about.)

Also, while other companies were quite open in what information they showed us, BP produced graphs with no numbers on the axes, so you really couldn't see what was going on, and then didn't want to give us reporters/bloggers copies.

So axes is the plural of axis. Axes vs. Allies sounds so much more like a war. I looked it up up. Good one. Pronounced Ak seez?

Graphs in PowerPoints must always go from the lower left to the upper right. Labeled axes are strictly forbidden. If your presentation is for management, increase the amount of white space.



Just from what I've seen of BP on TV etc., I sense that "something just ain't right".

Some companies can survive and get ahead with a "dysfunctional" work environment, but when a disaster strikes things become totally unraveled.

Maybe we're seeing something like that....

Gail et al -- granted it's way too early to be certain, but folks might want to scale back their expectations of any BP shore based managers even being charged let alone convicted of criminal charges. I base this upon my recent analysis of the BP supplied web site (http://energycommerce.house.gov/documents/20100512/Halliburton-Last.Two.... ). The BP post-blow out interpretation of the monitored drilling parameters indicates there was ample warning of the well flowing...almost an hour. This was very difficult for us with oil field experience to understand: even though the data indicated the well was flowing they hands onboard the rig continued to displace the drilling mud with sea water. Some would consider this action suicidal. This data stream would have been available for real time viewing by numerous hands onboard including the company man, the driller/tool pusher and mud engineer. It's still difficult to believe that it wasn't noticed but given the shut down rush typical at this phase as well as the assumption by many that the bottom cmt plug tested OK it possible.

So how does BP management deflect criminal charges? The rig had the system monitored sufficiently to indicate that a potential blow out was on the way. This data would have been displayed in such a manner that the right hands on the rig had access. I'm confident that BP can show resumes/training/certification of key personnel onboard such that they can't be accused of using unqualified individuals for such a complex operation. Some might make an argument that BP had instilled a sense of speed over safety. But the onboard hands not monitoring the system and identifying the potential problem saved BP no money. The decision to accept the bottom cmt test as adequate was a decision made by the onboard personnel. One could argue that the onboard personnel accepted a questionable cmt test to appease BP management. But if the onboard personnel did have any doubts about the safety of the cmt then they would have monitored the drilling parameters even more closely and thus would have seen the problem developing. The obvious rebuttal by their lawyers IMHO.

Again the very BIG IF: if we have the story right for the most part, there were indications that the well was kicking and a potential blow out on the way. Yet the onboard crew either didn't notice these indications or ignored them for some unexplainable reason. If this is anywhere close to accurate then it's difficult to see any BP management not onboard being held criminally liable. Onboard personnel may be a different matter. There may be any number of justifiable reason for putting the tar and feathers to various BP land based managers for other misdeeds. But the feds may not be able to stick the blow out on them.

Again, I have a very difficult time looking at the data and understanding how the hands onboard didn't see the trouble coming sooner. It's so illogical I still wonder if I'm seeing it wrong.

I agree. Vidrine and Harrell, jointly and severally.

Rock, would you care to make a SWAG as to what happened to the bottom cement plug? Pressure differential between the formation and the hole above the plug says it had to go UP, and if I recall, there was quite a distance between the location of the plug and the last known downhole position of the drillstring. That plug, or what was left of it, would have been going UP at a pretty good clip when it met the drillstring, right? Think any of it made it all the way up into the BOP, or am I way off in left field here?

Could have gone both up and/or down the annulus comfy. My first guess would be a downward failure with the oil/NG shooting up the production csg. Mostly because it seemed to blow so hard and so fast. And it might have failed downward or upward first and then broke the other way later. And the the flowing pressure and/or top kill might have broken down shallower cmt shoes. So many what ifs...so many.

So many what ifs...so many.

What is the current state of the art in terms of rules, regulations and such requirements for shoe tests nowadays Rock? Never did any cementing offshore, but the boys tended to get squirrelly when the now defunct MMS would show up to watch them.

"Again, I have a very difficult time looking at the data and understanding how the hands onboard didn't see the trouble coming sooner. It's so illogical I still wonder if I'm seeing it wrong."

RM: This and prior comments from you and others that something must be missing from the data, that it would have been suicidal for the crew to behave as it did, that something does not ring true, these comments lead me to question whether we have the whole picture.

You get the conclusion loud and clear, and you get one strong piece of evidence in support of it, but that piece raises more questions and does not resolve the matter on a gut level to experienced people: something's not right here.

When you have the party in control of the information letting out just enough to clear it of responsibility, but not enough to paint a coherent and complete picture, it's reasonable to suspect that something important probably is missing. What could it be?

Orders from the beach.

avonaltendorf wrote:

Orders from the beach.

But who would follow "orders from the beach" to commit suicide? That's the part I cannot understand.

It is a well-known problem in aviation that sometimes the pilot makes an error in judgment that can end up getting the crew and passengers killed, yet even though the error is noticed, no-one speaks up or takes action.

If you want to understand why, I suggest you read Influence: Science and Practice.

Driller Dewey Revette: "Let's get 'er done"
Toolpusher Jason Anderson: "Don't worry, I got it"
BOP Eng Pleasant: "Mr. Jason was convinced we didn't lose no mud"
Sr Toolpusher Ezell: "I was busy all day conducting VIP tour"
OIM Harrell: "That's what we got them pinchers for"

Let me edit that to say it is reasonable to suspect that something may be missing, not that it probably is.

I guess the other maxim is that the simplest explanation is often the correct one. But it should at least make sense for that to apply.

Rockman and Gail: I have no idea what the evidence will show, but, if BP on shore participated in any cover up (but who would do that??), they can quickly be involved in some nasty, nasty criminal legal issues. Hayward showed some signs of desperately trying to minimize the damages in public perception. His acts were not criminal that I know of but if he transmitted that attitude to the on shore BP people they could very easily fall off the legal cliff.

Again, I have a very difficult time looking at the data and understanding how the hands onboard didn't see the trouble coming sooner. It's so illogical I still wonder if I'm seeing it wrong.

I guess what I'm wondering is: if these guys weren't watching the data feed and if that is negligent practice...

does the rig insurer still pay? It's a $600 million dollar issue.

Yes, depending on what the actual coverages are. Insurance is offered primarily to cover liability resulting from human negligence. It is intentional and criminal acts that are typically excluded from coverage by the policy terms.

syncro, is that correct? I thought negligence was the criminal act - criminal negligence.

I have no idea what coverages they had on the rig. I am sure quite a complex array of insurance was in place. But generally speaking, damages caused by negligent acts are covered by insurance policies, whether for liability coverage, property damage, interruption of business, etc. Coverage is virtually always excluded, on the other hand, for damage caused by intentional or criminal acts, for obvious reasons.

Accidents and property damage are always attributable to a cause, whether it be a negligent act (or failure to act), an intentional act, a criminal act, an act of god, war, terrorism, etc. There is no such thing as a plane old accident.

Criminal negligence is a special creature. Usually, negligent conduct does not rise to the level of criminality because the intent to commit a crime is absent. Without criminal intent, there can be no crime. But there are laws surrounding dangerous activities where conduct typically described as extreme or gross negligence or reckless conduct (even though not intentional) rises to the level of criminality. It meets the criminal intent requirement because of the dangerousness of the activity and the likelihood of causing bodily severe injury or death if you do the activity negligently...like driving a car and killing people or blowing up a drill rig and killing people.

Could that level of culpability be sufficient to defeat insurance coverage for the rig under exclusions for intentional or criminal conduct? Yes it could. It depends on the policy language and the facts involved, though. It would have to be reckless AND criminal conduct at minimum most likely.

BP canceled its insurance three years ago. Now they are self-insured and will have to pay every dime that arbitrators or bankruptcy judges decree. It may be a good tactic for BP to declare bankruptcy to stave off lawsuits for claims against their assets. This declaration would certainly delay any resolution of claims for years.

Right now, BP isn't legally bankrupt. That fact creates a hurdle in all the "declare bankruptcy" talk.

Negligence is not a criminal charge - it is a civil finding which is part of what is needed to collect damages. Suppose I fall and break a leg in a supermarket - I can't collect damages unless the fall was due to some kind of negligence on the part of the supermarket, say having a loose tile.

Criminal negligence is something else altogether. It is why if you kill someone while driving drunk you get a criminal penalty, such as vehicular manslaughter. A finding of criminal negligence requires a criminal trial, guilt beyond reasonable doubt and so on.

I'm not a lawyer, so it is unclear to me what circumstances would cause BP to be found guilty of criminal negligence here.

There is also the question of gross negligence, or willful and wanton misconduct. This can trigger punitive damages. Generally this means to do something reckless with complete and utter disregard for the consequences.

BP is clearly negligent here. The interesting part is going to be seeing if any of the rest apply.

One state's version of the Model Penal Code: "Negligent endangerment (1) A person who negligently engages in conduct that creates a substantial risk of death or serious bodily injury to another commits the offense of negligent endangerment.
(2) A person convicted of the offense of negligent endangerment shall be fined an amount not to exceed $1,000 or imprisoned in the county jail for a term not to exceed 1 year, or both."

Will -- that's going to be a key question. While BP (i.e. the company man) is in charge of ops it's the TW driller who has THEIR DRILL PIPE in the hole pumping sea water down WITH THEIR PUMPS and watching the mud return INTO THEIR MUD PITS while being monitored BY THEIR EQUIPMENT. The driller is in charge of the hole. The company man isn't obligated to sit there and watch the driller do his job. So this is going to be a very contentious point when the investigation/trial begins IMHO.


"So how does BP management deflect criminal charges?.... I'm confident that BP can show resumes/training/certification of key personnel onboard such that they can't be accused of using unqualified individuals for such a complex operation."

I've lost count of the number of times I've had my resume and certificates scrutinised before being allowed into explosive atmopsheres (petroleum storage, gas plants and the like), and though I acknowledge your expertise & knowledge in the oilfield environment (I worked for several months on an onshore site, but that's all), I personally have often found it to be a "paper exercise". There's always a safety video to watch, for example, and a piece of paper to sign to say you've watched it. The piece of paper is very carefully scanned and filed - it's your signature they want, that's all. [Edit: this is of course just my personal opinion.]

I just came across this story and have posted it just to show how much more complicated the issue of "deflecting" criminal charges will become, imho, once the lawyers get their teeth into it.


The warning came as executives from Exxon-Mobil, Shell, Chevron and ConocoPhillips prepared to distance themselves from BP, according to planned statements seen by Financial Times sources.

Total's CEO suggests Big Oil is more frightened than distant.


FORTUNE -- As CEO of Total, the French oil giant that is the world's fifth largest publicly traded oil and gas company, Christophe de Margerie reigns an empire with operations in 130 countries

...We always knew this could happen and it did. But knowing that it might happen does not mean that it will necessarily happen insofar as we do all we have to do to prevent it. BP (BP) is the number one company in the Gulf of Mexico. It's not Shell. It's not Exxon (XOM, Fortune 500). It's not Chevron (CVX, Fortune 500). It's not Total (TOT). It's BP. BP is number one. So if there is one company who is experienced with the Gulf of Mexico, it's a little bit frightening for the rest. But the first thing we need to do is stop it. And treat it. And then we can talk about who is responsible.

I think a better operational solution is to start different teams looking at BOP issues, cementing practices, parallel drilling, deepwater spill subsea containment, deepwater spill surface containment, etc.

All teams should include input from oil companies, service industries, product manufacturers, and oversight organizations. They should review the current state of the art, all related testimony from DWH, and then brainstorm together to determine the best path forward.

They should then report:

1) What to change immediately: Testing, Oversight, etc. This uses additional resources and procedures to mitigate risk while technologies are being developed.

2) What to change ASAP: Product development, etc. Deadlines to implement. Allows continued operation while developing new capabilities. (For example perhaps: BOP design for redundant shear rams: initial design in __ days, final design in __ days, prototype for testing in ___ days, implemented on all wells within __ days, risk mitigation plans to allow operation until solution is implemented.)

3) When regulatory changes are expected (__ days to study and report?)

And throughout the land that team shall be called ROCKMAN, INC. And its praises will be sung by the happy villagers as they offer their virgin daughters unto these new Masters of the Universe.

Sorry 3...inside joke from a few threads ago.

ROCKMAN, INC., an IRC 501c (3). Only virgin daughters? Limited imagination, eh?

Looks like some good ole boys figured out that it is a lot easier to skim tarballs than it is to pick 'em up off the beach.

Nice story with pictures at http://ht.ly/1XYBx - including a pic of a two ton tarball!


MOBILE – The crew of one of the thousands of Vessels of Opportunity (VOO) working in response to the Deepwater Horizon oil spill recently recovered approximately two tons of tarball material in the Gulf of Mexico.

The recovery was the result of the kind of creative thought and innovation at work among the more than 27,000 people working around the clock in the Gulf of Mexico in the largest oil spill response in U.S. history.

Designed by Gerry Matherne, a BP contractor and nearshore task force leader, the idea is simple. A shrimp boat with outriggers on each side drags mesh oil-collection bags made of perforated webbing near the ocean surface. As the boat trawls to collect oil patches, the bags, attached to an aluminum frame, collect oil. When filled, the bags are disconnected from the frame by crew on support vessels, and then towed to a lift barge for hoisting into a collection barge.

Redneck ingenuity at it's best.

Lemmie see . . . if the tar has about the same density as that of water, and if water weighs 8 lbs a gallon and if there is 42 gallons in a barrel, and if the tar is worth 70 bucks a barrel, a two ton tarball would be worth . . .

$416.67 - probably about equal to the fuel bill.

Maybe Bee Pee should be required to pay $1000.00 bbl/oil or tar to anybody and everybody . . . then you would have all these rednecks out there fighting each other to skim the stuff.

I have mixed feelings about whether to let the crude oil coalesce and thus be more skimmable, or to disperse it and thus be more biodegradable. I think skimming is to be preferred, where possible, but fear that not every coastal community with boats and personnel of all kinds would be as enterprising and creative as this crew is. Bravo for their accomplishment!

And this seems to be working. Maybe not at the scale needed, but maybe a prototype for scaling up.

But don't let Obama know. He'll make 'em stop. Or maybe tax them. Or, maybe, take credit for it. Like when Al Gore invented the internet.

They say necessity is the mother of invention. Sounds like these guys are doing the best they can given the circumstances.

Best hopes for all the folks down there, and for the relief wells getting control of that blow out asap.

PS. Thanks to all of you for posting such up to date and easily comprehendable information throughout this ordeal. I find myself glued to this site throughout the day. From a greatful long time reader and infrequent poster.

Your second paragraph is way out of line. What compels you to stick that kind of thing into an otherwise interesting response?

Reality compells people to point out the truth.

And the truth is prezidentin is hard work. Some people will attack the president no matter what he does. He does too much. He doesn't do enough. Irrational attacks and venom are par for the course. It's like junior high school all over.

Look at the week he has lined up and tell me he isn't doing a lot and doing his best:

Mon: Visit Gulf Region, discuss 48 hr deadline with BP demanding better oil collection resources(CG)
Tues: Prine time address to the nation from oval office about the gulf.
wed: Meet with BP COB and get committments for relief fund
Thurs: BP CEO to testify before congressional committee about spill

The president has also asked BP to pony up $20 billion in a relief fund, and if they refuse he is threatening to take the money from them through legal means.

Spoken like a lawyer ha!

Hey, i was a roughneck. chain hand, with a mean whip. Still have all my fingers, too.

Any analysis of the day-by-day response leading up to this point reveals a painful, startlingly slow reaction to this crisis (timeline available at http://bit.ly/b3qwUw)

I, like many, sincerely hope he has figured figured it out at this point and will begin leading proactively rather than reactively (as described in yesterday's NYT editorial http://nyti.ms/9mZHtM or the Rolling Stone article to be published 6/24 http://bit.ly/d1aemQ)

On a separate note, the weekly schedule above omits 4 hours of golf on Sunday. And Thursday's upcoming testimony is Congressional, has nothing to do with the President. Just to be accurate.

I'm afraid he still hasn't figured it out. I heard a bit on the radio earlier from a pep-talk he gave today somewhere on the Gulf ... he said something to the effect that "the Gulf will be better than it ever was." I thought for a moment there I was listening to Tony the Twit.

I don't think Obama "gets" marshes or endangered species at all - he's focused on jobs, the economy and oil. Not that they aren't important too, but they are not the first things I thought of when I heard that clip.

"Reality compells people to point out the truth."

My observations of the world do not support that conclusion.

Do you have a hypothesis that explains what compels them to spout mean-spirited nonsense?



kalliergo: Psychologists have a description. It's the "Look, Mommy! I'm running around with my pants off" neurosis in adults. Treatment: Ignore 'em.

You're being facetious about Gore?

He was a key figure in getting U.S. high-speed data networks developed -

see http://en.wikipedia.org/wiki/High_Performance_Computing_and_Communication_Act_of_1991

Brilliant idea.

It would work

Currently Ocean Intervention ROV 2 has a live shot of some gauge that looks like it has been attached/inserted? into the BOP.

I can't read the numbers on it, but it's needle has not varied from the same 3:30ish position for quite a while. A lot of escaping g/o obscures it occasionally.

I would appreciate some feedback from the Pros..

Sorry, I don't know how to take a screen shot.

Earlier this morning (8:45 AM or so) the ROV was having trouble getting as close as it is now. From a wider angle it appeared to be connected to a closed port on top of the "top Hat". (Sorry, I'm still having trouble with images too.)

Having the audio from the ROV operator would shed some light, no?

Probably not. It'd just be even more information to be misinterpreted and woven into increasingly complex conspiracy theories.

Humans have wonderfully inventive brains. We make things up in an attempt to explain things we don't understand. Early humans invented gods to explain why it got dark at night ("Dark! God angry! Quick, somebody kill a goat or something!!"), and why the sun reappeared every morning ("Hooray! See, I TOLD you killing a goat would work!!"). Without the crucial information about planets being, you know, round, and how celestial bodies move, and what gravity is, a god is a pretty logical conclusion to draw. It's called 'God of the Gaps'. You're witnessing it right here, as it happens (and you might be participating in it without realizing what you're doing), when people just KNOW they saw a leaking rock and ain't no amount of logic and reason gonna change their minds. It's sad and infuriating and hilarious, all at the same time.

Disclosure of ROV missions would be wrong. Far better to laugh.

So no additional information should be released because it might be misinterpreted by some people? Huh?

Under that reasoning, BP shouldn't be streaming the video either. Or holding press conferences. Or saying anything. Because, you know, it might get misinterpreted. Best to just let them not get distracted with pesky things like informing the public, including the millions of people directly affected by their massive screwup.

If there is audio, let them stream it and let the old hats here and elsewhere make sense of it. There will always be people who spin information this way or that, but that is no argument for witholding the information. Perhaps we should also stop streaming NASA missions (no telling what people would make of what astronauts are seeing and saying during spacewalks!) and police dispatchers should stop broadcasting and airlines should stop providing audio pickups of air traffic controllers to their passengers.

People can make all kinds of arguments against interpretations of information, but arguling against the very release of that information makes no sense.

Only disclosure I care about is Comfy's employer/client.

Only a witch would claim there's no such thing as witches. That's one of the main aspects of a conspiracy theory; the more valid a piece of information seems, the more likely it is to be fabricated by those who are perpetrating the conspiracy. It's a self-perpetuating spiral down into blithering idiocy, because facts are automatically rejected.

Shocking video evidence: Oceanic Wookie loses chess game with ROV, rips off ROV manipulator arm in fit of rage. When the world sees this, BP's house of cards will fall.


Seems to me there's two pieces of raw information BP can release on exactly what they are doing today at the sea floor:

1) Video
2) Audio

They've released (1) and withheld (2). Please tell me again what is the problem with releasing both and letting everyone understand what is going on in real time? Do you have a problem with factchecking BP as events happen, or are you comfortable with actions such as their shutting down the top kill operation and not informing anyone for 16 hours?

Seriously, I don't understand why BP deserves any defending right now. What exactly have they done that engenders trust?

Nice disclosure, Comfy. Today's WSJ print edition reports that all ROVs are piloted from BP Houston office. Where are you posting from?

Stories about ROV control in Houston:

KVUE-TV Austin, June 12, 2010

CNN, June 8, 2010

News 8 Austin, June 8, 2010 (same as CNN report above, in case CNN video doesn't load)

and the Wall Street Journal article

Certainly appears BP has gone on a low level PR offensive to show off how much they're doing by opening their Houston bunker to the press last week. Other than WSJ and CNN, it doesn't look like many folks bit.

Disclosure? You are out of your freaking mind, Sir. Have fun in your psychosis.

The WSJ article is not quite accurate in what it says about the piloting of the ROVs.

If you watch the News 8 Austin clip posted by natural34, you'll see that the ROVs are not being "piloted" from Houston - the pilots are onboard the surface vessels - instead it is more appropriate to say that the ROV operations are being directed or managed from Houston.

The controller in Houston gives instructions to the lead on the boat, s/he communicates them to the pilot and manipulator, all of three of whom have the advantage of working with the aid of the multiple high-definition screens.

This caught my eye because during all the discussion about the late release of the high-definition versions of the ROV videos, somebody - iirc it was Adm Allen during one of his regular press briefings - explained that the HD archived versions were only available on discs recorded at sea and that the delay was due to waiting for the hard drives to be physically delivered to land.

If the ROV pilots had actually been in Houston, and, as we've been told, were viewing the HD version as they manipulated their charges, there would have been no reason why the HD versions couldn't have been recorded as transmitted to Houston.

(It still strikes me as odd it took weeks to bring the discs to shore...)

It's some kind of two-gauge setup plugged into one of the ports in the top hat, don't know if it's part of the hot water/methanol equipment, or part of the pressure/flow monitoring BP started talking about over the weekend.

injector nozzle removed from port:

new gauge package installed in same port:

re: your question from previous thread about UTM discrepancies (subthread for those who missed it: http://www.theoildrum.com/node/6599/649805)

Viking Poseidon ROV 2 (VP 2), for whatever reason, drops the first digit from its UTM readings (it's always a '1'). VP 2 is the same ROV that filmed alexhiggins' snap that I linked in my post. Again, I don't know why two ROVs run from the same boat would use different setups, but VP 1 always uses the full UTM number, with the '1' in place. So the readings in the snaps of:
N: 0433312
E: 203671
...would in fact be:
N: 10433312
E: 1203671
This puts it very close to the wellsite, which is why I speculated this was wreckage that fell before the rig sank, when it was still over the wellsite. The main wreckage is much farther away (but less than a mile, just going by memory of early reports).

The youtube video of the 'leaking rock' was shot by Viking Poseidon ROV 1 which uses the full UTM coords.

The internal pressure reading instrumentation is reportedly intended to go in via the same path as the methanol. They're also supposed to be taking external measurements.

The robots were expected to insert the pressure sensors through a line used to inject methanol — an antifreeze meant to prevent the buildup of icelike slush — into a containment cap seated over the ruptured pipe, BP spokesman David Nicholas said.

BP was installing the sensors at the request of a federal team of scientists tasked with estimating the flow. The necessary equipment was first identified last week, and the installation procedures were approved over the weekend, said Coast Guard Lt. Cmdr. Tony Russell, a spokesman for Adm. Thad Allen, the top federal official in charge of the spill response. The work should be completed by Tuesday.

Read more: http://www.sfgate.com/cgi-bin/article.cgi?f=/n/a/2010/06/11/national/a00...

And thanks, c, for starting my morning off with a laugh with all those screen captures of pipe-shaped and painted rocks.

Comfychair - Thanks for your very helpful explanation!

I'm just beginning to get a feel for these coordinates. The UTM refers to a topographical grid map, a Universal Transverse Mercator grid system, yes? What level of error in location are the actual readings from the ROV? That was a pretty wide range in the last three whole digits for a unit that was stationary at the BOP. How do the ROVs establish their position? Are they referencing coordinates off their mother ship? Taking sonar readings?

I think that someone mentioned that you were/are a ROV operator, is that true?? Hell of a complicated piloting. Do ROVs have any sense of tactile feel?? (Some long range medical surgery equipment actually do give a surgeon the sense of feel/pressure as he manipulates his surgical tools from afar.)

IIRC: Short Baseline Acoustic Positioning System


Oh, no, hell no! I don't know anything about this other than what I've picked up since this started. I do have a mechanical/diagnostic background, but nothing approaching the level of many of the folks here.

As to UTM, I only know what I know from watching lots of ROV footage, many feeds at once, and taking screen captures when something looks interesting. Most of what's in the feeds is totally incomprehensible, it gets easier to figure out as the number of cameras pointing at the same thing increases. Stuff seen from 4 points of view (which is rare) makes it easier to put it in context. NOT jumping to conclusions is something I have lots of practice at.

What do you NOT think of color bars?

Yes, I'd also noticed that 1st digit drop when I was watching POS ROV2 on one of it's 33 mile jaunts to inspect something on the sea floor ...

Hey all, any informed commentator care to comment on this new plan? (Originally posted on the previous open thread by JamesRWhite )

BP is already capturing around 15,000 barrels a day of oil from the leaking well
through a pipe connected to the Discoverer Enterprise. A second vessel, the
Q4000, will connect to the well Monday and could increase that rate to 20,000 to
28,000 barrels a day, BP said. "The Q4000 should be ramping up to full rate on
Tuesday," BP said.

A third vessel, either the Helix Producer or the Toisa Pisces, will connect to
the kill line on the blowout preventer atop the well head, raising the capacity
of the system to between 40,000 barrels a day and 53,000 barrels a day by the end
of June. A fourth vessel is planned to connect to the well head by mid-July,
building additional redundancy into the system, BP said.


The large number of vessels operating on the water above the leaking well raises
the danger of an accident, BP said. "Several hundred people are working in
confined space with live hydrocarbons on up to four vessels. This is
significantly beyond both BP and industry practice," it said.

Sounds pretty hairy to me, apparently to BP too, and ISTR seeing informed comment on earlier open threads to the effect that connecting additional vessels to the flow would be potentially very difficult. From what I remember the major issues mentioned were:

1. multiple vessels trying to keep station in a fairly small area
2. multiple vessels flaring gas and producing oil in the same small area (and Q4000, at least, using pretty ad-hoc kit built on deck)
3. off-centre forces acting on the LMRP cap and/or BOP with risk of damage / loss there
4. ...wasn't there something else?

(Only managed to find one sub-thread on this: http://www.theoildrum.com/node/6587/648373 though I'm sure such issues were discussed earlier, can't find where, though.)

Both Allen in his regular press sessions and Kent Wells in his latest technical update 6/12 have referred to safety concerns about the increasing number of vessels in the area.

Allen said that the Q4000 will be flaring oil as well as gas because it doesn't have the capacity to store oil and would have needed two additional tankers for oil capture - one for temporary storage and one for shuttling the oil to shore. As it is, they have put down considerable extra hose to allow the Q4000 to move farther from the DE than it was during the failed top kill exercise.

Wells' briefing described the plan for the now overridden intricate dance of swapping in and out vessels, while having some on standby for redundancy. Sounds as if it is going to be a tricky trade-off between safety and reducing the amount of escaping oil.

Of all the people we've heard from - BP or Coast Guard or other gov't official - Wells appears to be the most visibly anguished over the situation. He begins every technical briefing with an acknowledgment of the lives lost and, with the 6/12 briefing, added an expression of sorrow over the damage to the environment.

Agree with your take on Wells. He is by far the most believable BP spokesman. In the limited time he has to make his presentations, they are a very informative overview especially for a neophyte like myself. He some how manages to talk about the technical aspects of the operation and express his anguish and sorrow over the loss of life and damage to the environment, a hard balance to strike and still sound real.

The new connections are going to be made to two ports on the side of the wellhead (the "choke" and "kill" ports), not to the top cap connected to the Enterprise. The lines will go to a manifold assembly lying on the seabed some way off to one side of the wellhead and from there up to the surface. The first line will go to the Q4000 rig which will process the oil/gas mix, flare off the gas and store the oil before shipping it away in a barge or tanker (probably the Loch Rannoch coming from Scotland). I think the plan is that the second ship will be connected to the second line and it will flare off the oil and gas mixture as it will not have any separating gear on board.

The latest technical video briefing by Kent Wells on the BP site has some good graphic illustrations of what the proposed scheme is.

BP's latest response letter from Doug Suttles, with details of the revised plan and some of the risks involved, has now been posted at BP response to Watson 6/13 (pdf).

Some of the risks listed include:

Connecting of Q4000 to the BOP choke line
- Junk from the top kill operation is introduced to the subsea system from the choke line and creates a flow restriction/blockage.
- Erosion of the choke line (not designed for continuous flow)
- Flow control of both systems (DE & Q4000) simultaneously
- Collapse of the subsea coflexip jumpers.

There are numerous caveats about safety in the letter, including

"The Q4000 will not be operated concurrent with these 4 vessels (ed. Toisa Pisces, Helix Producer, and their two support tankers) for safety reasons. Work is ongoing to confirm that this combination of 4 production vessels in indeed possible within appropriate safety parameters."

and the general comment:
"It is important to note that as we move into a multi-vessel containment operation the health and safety of our people remains our absolute number one priority. The risks of operating multiple facilities in close proximity must be carefully managed. Several hundred people are working in a confined space with live hydrocarbons on up to four vessels. This is significantly beyond both BP and industry practice. We will continue to agressively drive schedule to minimize pollution, but we must not allow this drive to compromise our number one priority, that being the health and safety of our people. The continued support and direction of the US Coast Guard and the MMS is essential to a successful and safe operation."

Numerous caution flags are being raised.

To emphasize the safety considerations a repeat of my one experience with a processing ship. Off the coast of Africa the ship processed about 100,000 bopd and flared 25 million cf of NG. Never spent time on it..just dropped/picked up hands in my chopper. But watched it 24/7 from my office on the platform. A truly hostile environment. Always hot, always noisy, always dangerous. Hands wore fire proof clothing even when they slept. Carried emergency breathing devices on their hips...even keep them close when showering. And this was in well established routine that had been ongoing for years. Not exactly what's happening in the GOM today.

Hi all. My first comment here, though I've been reading & learning a great deal here for several weeks. This is a terrific, topnotch site. Former roughneck here who worked with a small independent domestic O&G producer in the 80s when it was possible to make a living that way. :)

About the cost of the president's moratorium on exploratory deepwater wells: I can't help sympathizing with the White House/Dept. of Interior's position here. The moratorium could wind up costing local economies billions, but by the same token, the Deepwater spill is going to cost tens of billions when all is said and done. They have to take any risk of a new spill very seriously (for political as much as practical reasons).

And here's the real problem: while MMS inspections may reveal few problems with the idled rigs, the federal government is in crisis mode with the inspection regime itself. That is, everything right now needs to be reevaluated, from testing standards to equipment standards to inspectors themselves. Basically, the government right now can't trust its own agency charged with monitoring safety, *and* at the same time it seems clear that existing safety protocols were inadequate.

So, they need time to set their bureaucratic house in order, and another disastrous spill would spell political disaster as well.

Welcome to the Oil Drum!

Quick technical question:

I have looked at loads of diagrams of the well system.

Most show the sea bed and the well-head being at the top of the silt layer i.e. at the BOP.

However I saw one diagram which showed the well-head way below the BOP. Sadly I can't find where I saw that!

Soooo .... is the well-head at the BOP at the top of the silt ... or is there an additional chunk of machinery at the rock/silt interface way below the BOP?

The wellhead is just below the BOP. There is nothing equipment-wise at the rock/silt interface, just the 36" conductor pipe with the concentric casings within it (and cement in the annuli between the conductor, 28" casing and 22" casing).

Tx snowball.

It did seem odd that only one diagram had the alternate layout.

Reasons to Reluctantly Support the Drilling Moratorium

1) We have *NO* spare oil spill capacity now. Dealing with even a small spill would mean taking resources off the front line. In most cases, I would not do that. Just let 675 barrels spread out. In six months, there will still be clean-up but not an all out effort (I hope).

2) BOPs have a problem. They do not work (sometimes). At a minimum the failure modes need to be understood and addressed (two BOPs/well till new designs come out or ???)

3) Other issues need to be thoroughly understood and corrective measures taken. Why and how did bad cement job pass muster ? And how do we prevent it ? are the most crucial IMHO.

4) MMS reform.

The above are a tall order in just 6 months, but doable (I hope).


Is it possible to do a sub sea proof of performance test for the BOPs on each of the 33 exploratory wells currently in DW GOM?

X -- Yep...just hang drill pipe through the BOP and activate it. It works or it doesn't. Costs: just a rough guess but about 6 days rig time or around $3.5 million per well.

hey thanks Rock. Any other downside? Damage the BOP loose pipe chunk down the well? OTW why not make that a condition and let them prepare?

No real downside x. First, the BOP has to be replaced. That's one problem with an activation test. You just can't reset them like a thrown circuit breaker. They need to be rebuilt/inspected/shop tested from what I understand. But not problem with the DP: you just set a packer down the hole a little and then you can easily fish the DP out.

Ah, I was afraid of that. Still that may be the part of the price of doing business. Thanks again.

My understanding is that Brazil requires this demonstration on every well drilled before actual oil is hit as proof that the BOP can work in those particular depths. I've heard this called the "Brazil Rule". Are you aware of this or anything like it and can you shed light on it, including corrections if I have any details wrong?

westexas seems to have a handle on it. I'll wait for him to jump in.

I was just quoting "Toolpush."

As I said since the early stages of this unending nightmare, the MMS could implement the apparent "Brazil (Show Me) Rule" tomorrow morning, and I suggested that The Oil Drum take an official editorial position in favor of said rule.

If the "two" pipes in the sheared riser are really 9-7/8" liner or casing that were flattened and split, would the BOP shear that as easily as drill pipe?

It looks to be 9-7/8" 62.8# Q-125, H523 pipe from the diagram.

Well above my paygrade Merrill but I would guess no. just thinking that the csg is too easy compressed to cut clean while the stiffness of the DP would make a smoother cut.

RM Have you seen this document from TO DWH MC 252#1 2/10 showing the Blind and Casing Shear Rams 'Do not function as per exemption'


You have mentioned the ease of MMS regs. I'm pretty sure when we hear reports of statements such as 'I guess that's what the pincers are for' and then we see this document it creates extreme dissonance.

In your view, is performance testing the 33 BOPs now and changing the exemption (part of) the best way forward in this predicament?

RM Have you seen this document from TO DWH MC 252#1 2/10 showing the Blind and Casing Shear Rams 'Do not function as per exemption'

You realise that just means "Do not perform this test (ie function the shear rams) per exemption" and not that they don't function?

I thought I did (like Do not tough that button!) but the wording of it is a bit disconcerting. The fact that they didn't seem to fire from the POD they way it was wired made me wonder. Anyway my basic question still is. Aren't these all going to have to be tested before the moratorium is lifted?

It is a bit confusing but the meaning was queried at one of the Hearings and the reply was that was just how they worded the instruction not to test.

x -- such statements as "That's why we have pincers" or "BOP's" or "shear rams" is not an uncommon statement to hear on a rig. And to be brutally blunt the implication of such a statement is almost always the same: "F*ck you". It would be shared between equals. Use it with someone well above your pay grade and you could get run off...or worse. Basically you're accusing that person of risking everyone's lives. And it is often said in front of witnesses as a CYA move should things go badly. Years ago I had an engineer try to come across a table to grab me for saying it. The other engineers held him back. And yes, the well did take a kick. Didn't blow out but had an uncontrolled 120' NG flare roaring out over the mud pit. Needless to say he and I weren't drinking buddies anymore.

Long story short I'm less worried about DW GOM drilling safety now then I've ever been. I promise you there have been many tens of thousands of hours of lectures for all the hands operating in the GOM regarding the apparent mistakes seen on the BP well. IMHO no one is going to displace a riser without continuously monitoring mud returns. No one going to allow a BOP be tested in casual manner. No one wants to take the spot light off of BP. Not today...not 5 years from now.

Thanks RM. Great background. We carry fire shelters on wild land. If I told a div/sup 'I guess that's why we wear these shake-n-bakes' be 'bout the same. (unless I had a big grin and looked eager) And yeah we don't always see eye to eye on tactics/safety/production either. Been nose to nose a couple times.

It seems testing BOPs may be one item 'on the table' at least. The blogosphere says the Brazil Rule is that all DW BOPs are done at 5000' min (do they have like a favorite spot where they take them?) but no specifics on this anywhere to be found yet.

I think BO and Thad A. have to be seen to be doing something, change the regs, get the BOPs tested, keep the drill rigs involved and give them a chance to work their way back in while the RW's progress. That added layer plus your 'spotlight' issues would be understandable to most IMHO.

The report "Evaluation of Sheer Ram Capabilities" done for MMS by West Engineering Services, Inc. in 2005 also says that more ductile pipe requires higher shear force. Unfortunately, the report does not have data for shearing casing, but it looks like there would be about twice as much material to shear for 9-7/8" casing versus 6-5/8" drill pipe.

In section 3.5 of the report it says:

WEST researched known failures to shear and seal and located only the Ixtox 1 blowout and spill off of the Yucatan peninsula. Undoubtedly, there are more failures that were either not reported well or had minimal exposure. Not included are the known failures to seal during pressure testing since these were repaired prior to the rams being used on the well.
As in other disasters, multiple issues occurred and wrong directions were taken, but the shear rams were activated at one point and did fail to shear. Reportedly, they were pulling the drill string too quickly without proper fluid replacement and the well started coming in. They had no choice but to close the shear rams; unfortunately, drill collars were in the stack and shearing failed. The situation deteriorated from this point. This incident started the development of shear rams that could shear casing and/or drill collars.

Perhaps we have a repeat performance.

An earlier report Review of Shear Ram Capabilities showed that about half the shear rams failed testing for the drill pipe and conditions under which they were to be used.

Purpose of the project is to obtain data that describes shear rams capabilities for shearing drill pipe that is used while drilling a well. This study was designed to answer the question “Can a given rig’s BOP equipment shear the pipe to be used in a given drilling program at the most demanding condition to be expected?” Briefly, this can only be demonstrated conclusively by testing. Seven of the fourteen cases in this mini-study opted not to test to confirm capabilities; another had insufficient data to draw a definitive conclusion. Of the seven tested, five successfully sheared and sealed (71%) based on shop-testing only. If operational considerations of the initial drilling program were accounted for, shearing success dropped to three of six (50%). Based on the results obtained, two of the rigs modified their equipment to enable shearing and sealing on the drill pipe for their program.

I agree a moratorium in these conditions makes sense. But I don't believe it should be open-ended. There has been enough time to figure out the general areas of concern and how to address them. Implementation may take a few more months, but should not take years.

If I were President, I would announce the conditions under which the moratorium will be lifted, what is being done in that regard, and that the schedule for completion (which I would use resources to push any dawdlers) is X months out.

And I'd be shooting for X=5 or less. That would give workers and others in that economy a sense of confidence as to how long all this will last, and BP an idea of the upper limit of claims they may have to deal with (although probably not pay).

As for the $20B fund, if BP can trust the $36B estimate, then getting a loan to fund this wouldn't seem to be that difficult a proposition- if the White House would agree to stop badmouthing them and start supporting them as a business.

I hope I never have a fire that burns down a neighboring business- first, because I'd hate the government to attack me as they have BP. More importantly, because I'd hate to have a fire that burns down a neighboring business.

Although I don't expect it from our political process a little consistency would be nice. After Three Mile Island we essentially shut down the nuclear industry for a generation. That for an incident where the safety systems did work!! But for an oil spill with real damage we are arguing about a 6 month moratorium. I am old enough to remember the the DC 10 fleet being grounded after an engine came off in Chicago.

I don't know the answer but how would Chernobyl compare in terms of environmental damage with this spill if it continues to leak at its current level for another six months?

The safety systems did not work at Three Mile Island. Lots of people were exposed to radiation (as was the landscape, their neighborhoods) and there have been increased incidences of cancer and lots of complaints of premature death related to the exposure. The plant was shut down before a total reactor melt-down, but the systems failed to contain radioactive fallout that resulted from the accident.

The safety systems did not work at Three Mile Island.

I was involved in much of the concurrent TMI events and later oversaw some of its long term cleanup and industry review to prevent future recurrence. The mechanical safety systems, the reactor SCRAM, did work as designed. Plant operations management did not believe the sensors and manually overrode the system as the SCRAM was initiating thereby causing all the subsequent problems. If you meant that the safety process did not work, you are correct: the existence of a manual override for a safety shutdown system was a single point of failure at TMI and may have been a point of failure at Deepwater Horizon.

Thanks for the correction.

I still think it is correct to say that the safety systems failed (although that terminology was used by the person i was responding to). They failed to contain (or necessitated) releases of radioactive steam and gas during the biggest commercial nuclear reactor event in the US. It may have been human error that was the deciding factor, but human interplay is part of the system. Just some nit picking, sorry.

My brother was a few miles away when it happened.

" After Three Mile Island we essentially shut down the nuclear industry for a generation."

Not really, regs were tightened, but most of those nukes are still operating. And new construction had already stalled several years before TMI.

There is room for debate on whether the post-TMI regulatory costs and political climate inhibited new construction, but these things were already hugely expensive compared to other generating plants.

@ROCKMAN on June 14, 2010 - 1:58pm
Some interesting issues regarding validation/testing of BOP.
If BOP in-situ testing is one-shot and destructive, then testing of this nature is useless as means to predict next attempt reliability. To do this, the reliability must be proven by iterative design-test process.

As a back of envelope, this would imply development of BOPs qualified to properly operate, one more time beyond the nth undersea test, to a reliability of say 1/1000 or better i.e. 3.5-4 sigma, without service of any kind, whatsoever.

Could be useful. Development effort/cost estimate: 4 yrs/ $350MM on land + 6 yrs/$650MM underwater. About the same effort as developing a new prescription drug. Cost of production article compared to existing: 4x cost of existing. (Still might not cut through hard-banded drillpipe upset - just kidding...)

Alan, it is worth noting that oil in the ground will be more valuable in ten or twenty or fifty years from now than it is now. Too bad about the economy of Louisiana, but I'd be delighted with a ten year moratorium on all Gulf drilling. Saudi Arabia has plenty of excess capacity now, and we can always print more dollars to pay for it. What's the big rush with drilling now? (except to support the local economy and ease our balance of payments deficit. As an economist I don't give a flying fig newton for the balance of payments deficit; it's the least of our worries.)

Saudi Arabia has plenty of excess capacity now?

You really believe that?

Haven't you been around here long enough to know better?

I do agree that there is a good argument for leaving oil in the ground. The big question is whether the technology to access this kind of oil will still exist in twenty years. If it exists today.

The consensus estimate on TOD is that Saudi Arabia has at least 3 mbpd excess capacity. Saudi claims to have more than that, and you're right not to believe anything Saudi says about production capacity or reserves. Nevertheless, KSA has made substantial voluntary cutbacks in production to keep the price of oil close to $75 per barrel, which is exactly where they want it.

The consensus estimate on TOD is that Saudi Arabia has at least 3 mbpd excess capacity.

I doubt that's a consensus view on TOD. Myself I doubt if they have even 1 mbpd spare capacity at the moment and might well have effectively none at all. Did you know that KSA exports to the OECD of Light peaked in 2002 (2.84 mb/d) and all grades in 2003 (4.65 mb/d) based on IEA tracked import data (IEA OMR Table 6) from member countries?

Yes, I did know that. What you may not know is that during the past year and more there have been extended articles and several drumbeat threads on the question of whether current production is being constrained by limited demand or limited supply. Many estimates of Saudi's excess capacity have been given, ranging roughly from one to five mb/d. The consensus estimate is about 3 mb/d.

You would benefit from reading past articles on this topic. For all of the four years plus that I've been a TOD member, the topic of what exactly is the production capacity of KSA has been raised perhaps a hundred times on different days, maybe two hundred times. We do not know for sure, but it seems that Saudi has increased production capacity over the past couple of years. Meanwhile their output drops to cut back the supply so as to raise the price of oil.

The consensus estimate is about 3 mb/d.

It might be the consensus of TOD staff for all I know but I'll stick to my belief that most TOD core members would think it less. However I concede that's just an opinion. Memmel in particular argues Ghawar production has crashed and the Saudis (and the rest of us) are in far deeper doodoo than TPTB dare to admit. Matt Simmons has also argued that some OPEC nation(s) is hiding involuntary declines but he seems to be not the best person to quote right now.

Btw, I first posted the KSA IEA import data on TOD over a year ago so maybe that's where you read it :-)

Probably I did read your comment here!

I think Memmel and I agree about most things, but not on this topic. Most of the engineers seem to think Saudi has considerable excess capacity at this time, and if memory serves most of the geologists on this site argue that while Saudi reserves are greatly exaggerated it does seem to most of the best authorities on this website that all or most of the decline in Saudi output over the past few years has been voluntary--with the motive of getting to the current KSA target price of $75 per barrel. Of course I have no way of knowing what the actual excess capacity is, but I'd be surprised if it is only 1 mb/d.

Saudi Cumulative Net Oil Exports Versus US Oil Prices
2002-2005 & 2005-2008 (EIA, Total Liquids)

One of the primary contributors to the 2002-2005 increase in global crude production, followed by the 2006-2008 decline was Saudi Arabia, but let’s look at Saudi net oil exports, which are defined in terms of total liquids, inclusive of natural gas liquids and refined products.

Here are the average Saudi net oil export numbers per day by year, versus average annual US spot crude oil prices:

2002: 7.1 mbpd & $26
2003: 8.3 mbpd & $31
2004: 8.6 mbpd & $42
2005: 9.1 mbpd & $57
2006: 8.4 mbpd & $66
2007: 8.0 mbpd & $72
2008: 8.4 mbpd & $100

Relative to the 2002 net export rate of 7.1 mbpd, in the following three period, 2003-2005 inclusive, the cumulative three year increase in net exports was 1,716 mb, versus a three year increase in oil prices of $31.

But then we have the 2006-2008 data.

Relative to the 2005 net export rate of 9.1 mbpd, in the following three year period, 2006-2008 inclusive, the cumulative three year decline in net oil exports was 841 mb, versus a three increase in oil prices of $43.

Note that in early 2004, the Saudis reiterated their support for the stated OPEC policy of maintaining an oil price band of $22 to $28, and they made good on their promises to support lower prices as they significantly increased net oil exports in the 2003-2005 time frame, but then in early 2006, they started complaining about problems finding buyers for all of their oil, “Even their light/sweet oil,” even as oil prices continued to increase. Apparently no one thought to ask them in early 2006, as oil prices traded over $60 per barrel, why they didn’t offer to sell another two mbpd of oil for $28 per barrel.

Saudi Arabia has plenty of excess capacity now?

You really believe that?

Don't know about Saudi only, but the numbers we reference around here currently run at 6.11 million barrels /day.

Posted May 2010


Based on the articles and comments I've read on TOD, I'd be surprised if actual excess capacity is as high as six million barrels per day. It could be that high, but because of secrecy nobody outside the oil companies in those surplus countries knows the true figures.

Heck! I guess everyone is gonna have to drag up and go duck hunting. . . HELL! they wont even get to do that!

Obama's recent 9/11 comments are interesting : is he seizing the chance presented by this GOM blowout to trigger the transition away from fosill fuels?

I sure as heck hope so.

Does this mean we get to torture people again with no fear of future prosecution?

Only those is upper management !



My gut tells me that this is just going to be an excuse to push the cap-n-trade thing. Cap-n-trade is another drain on an already taxed system of commerce. If you are the middle man (read: finance industry) or are a large corporation/country, then you can lobby like mad and game the system. The little guys and the consumers are going to get screwed.

I look at cap-n-trade like a property tax on life. After all, don't I pass methane after meals? If I just have some land and some cattle, do I have to have credits? That's where it will end up going in the long run with costs passed onto consumers.

If we really cared about energy independance we would put our weight, as a nation, behind scalable solutions that build jobs and infrastructure.

Specifically, and I kind of say the same thing from time to time, we should start with MSRs.

PPT for those the prefer reading:

YouTube for those that prefer watching:



CrazyCooter wrote:

If you are the middle man (read: finance industry) or are a large corporation/country, then you can lobby like mad and game the system. The little guys and the consumers are going to get screwed.

That is exactly how it works.

And that is why, right now, the American taxpayer is subsidizing everything from ethanol production to farm subsidies for millionaire farmers to bailouts for GM and AIG to weapons purchases by Israel to billions in aid for foreign populations that hate us (like Egypt's and Gaza's just to name a couple) -- etc, etc, ad nauseum.

"Cap and trade" is just the next excuse for looting the American taxpayer.

Would it freak you out to know someone who considers themselves to the left of Chomsky (me) would agree with just about all of that, except to note you failed to mention military spending (and the resulting negative unintended consequences)?

Cap'n Trade will do even less for climate and sustainability than that steaming heap of crap health insurance giveaway will do for health care.

It's called a Ponzi scheme. Learn the term, you will be hearing more about it, as time goes on.

Playing that way on BBC News Online, at any rate. This is the lead story on the version of the site I get in the UK at the time of writing. (IDK if they do as CNN do, and serve different front pages to different regions.)

The memo of cost impact of the moratorium by the Louisiana Association at the top of this thread makes pretty sobering reading. But it ignores the likelihood that most of these deepwater rigs and support spreads will be taken up by operators in other parts of the world, and won't lie idle for 6 months. Worldwide deepwater rig utilisation has not got back to the heady levels of pre-2008, but my latest copy of Offshore Engineer has a rig market index which states that, for example, in Australia at least, rig utilisation is "expected to return to near 100% within the next several months". There are lots of deepwater prospects to be drilled there and no doubt elsewhere if the price is right.

Those operators will be getting these rigs at a more attractive dayrate than they were commanding in the GoM due to a suddenly softer market - but at least it will provide work for the crews and subcontractors. And better than nothing for the rig contractors.

[ ... ] in Australia at least, rig utilisation is "expected to return to near 100% within the next several months". There are lots of deepwater prospects to be drilled there and no doubt elsewhere if the price is right.

JordanNYC's comment upthread makes me wonder:

Is there any reason to expect (with our current imperfect & incomplete understanding of the sequence of events) that we couldn't have (*drumroll*) another DWH tomorrow, somewhere else in the world?

I really hope that's a silly question, for some reason that I just haven't thought of.

Has this been posted here? I have no idea on the value of the ideas but they seem well thought out.



This is what makes the internet amazing. Thank you Oil Drum. I hope Maurice saves the gulf of Mexico.

BBC news just reported that BP will treble their capacity to capture oil. Latest reports form BP say they are catching 15,000 bpd:

Subsea operational update:

• For the last 12 hours on June 13th (noon to midnight), approximately 7,480 barrels of oil were collected and 16.5 million cubic feet of natural gas were flared.

• On June 13th, a total of approximately 15,200 barrels of oil were collected and 33.4 million cubic feet of natural gas were flared.

• Total oil collected since the LMRP Cap containment system was implemented is approximately 134,500 barrels.

• Operations were stable.

• The next update will be provided at 6:00pm CDT on June 14, 2010.

Updated June 14 at 9:00am CDT / 3:00pm BST

This just gets bigger and bigger - worse and worse. And Congress has asked for a $10 billion fund - sending BP shares down 9%.

I'm just curious, does anyone have any idea whether it's the UK, or the US, who will have to add all the CO2 from the flaring to their greenhouse gas emission totals?

Obama wants a 20 billion dollar escrow fund. The importance of this fund is that it would be run by a trust that could pay out claims without getting an OK from BP's lawyers. If claimants had to get through a regiment of BP lawyers claims could take twenty years to be paid. See BLEAK HOUSE by Charles Dickens for a description of how these delays work to profit lawyers on both sides.

Get real. The Executive branch may suggest such a thing as political theater, but if you think BP will let an arm of the Executive have the control and authority, to give its money away - won't happen and shouldn't happen. This is why we have a third branch called the Judiciary; to hear "cases and controversies". Now if Congress wished to create an expedited process for the victims they could, but it will be prospective, and therefore constitutional, by crating a victims fund, dispersing it, and then recovering from BP by suing them for the expenditure. The point is, and it's implicit in the term 'escrow', there will be a process to hold money for a disbursement later, as determined by an arbitrator. The arbitrator certainly should not be BP or the Executive branch. So the settlement will shorten the process from 20yrs. to 18.5 yrs. In the meantime we rely on BP's discretion. Keep the pressure on them, and when, inevitably they balk, sue the beJesus out of them. It's the American way.

Is the American propensity to ignore the structure of its government, just easier after the events of 9/11 and the conditioning that comes with submission to TSA strip searches?

We'll just have to wait and see what happens. I think the Senate and the House and Obama all want the $20 billion to be put into escrow to ensure that an independent trust with an arbitrator can make expeditious and full restitution to victims of BP. If it goes to the courts then the litigation drags out for fifteen or twenty years, the way the Exxon Valdez spill did, and ultimately goes to the U.S. Supreme Court.

Chances are that more than one aspect will go to SCOTUS. It's what we've got. It's how it is supposed to work. If it's not good, maybe we should change it:

I think the level of anger is so high in the Gulf that people simply will not tolerate the delays that always happen with complex litigation. I still see the escrow fund as an end run around the regiment of BP lawyers--who very likely would be instructed by BP to delay most payments of claims as long as possible. U.S. legislators and Obama simply won't stand for that.

It seems really disingenuous to talk about delays and lawyer tricks when BP has been paying claims as they come in.

At some point they're going to get a claim that deserves to be denied. I hope they deny it. And I hope the media does a good job of exposing false claims, because this disaster is no excuse for fraud.

If I were in charge of BP, I'd establish a fund as part of good PR and while interest rates are low, but I'd certainly retain control of it- look what our government has done with the Social Security "Trust" Fund...

U.S. legislators are adamant on the point that BP will not have control of the escrow fund. That's the whole point of putting $20 billion into escrow. Final legitimate claims against BP may total double that amount.

You're both wrong. The idea behind the fund is to eliminate and minimize litigation, and cut down on the need for attorneys as much as possible.

And the escrow account would not be created by executive fiat, but through a voluntary arrangement worked out with BP.

In essence, the govt. is saying to BP, admit you are liable and put up enough money in an account to fund foreseeable claims. Don't force everyone to fight in court to prove that you are liable and wait years to get paid (with the taxpayer providing relief in the mean time).

However, people would still have to prove their damages. It's not a candy jar. There are companies and experts who routinely handle such claims administration processes and have lots of experience doing it. It can and does work well if done right. It's WAY faster and cheaper than individual trials for thousands and thousands of claims.

The benefit to BP is reduced transaction costs (attorney fees and litigation expenses), quicker resolution of the mess (helps stock price) and better PR (the public stops hating BP and Obama does not have to beat them up in public any more, stock price goes up).

The downside, they can't lower their exposure by fighting tooth and nail and dragging this out for 15 years. They may have calculated that they can shave billions off by fighting. And they will have to take a huge hit, accept it. They don't have a realistic menas of escaping unscathed, though.

So, it is not an evil plot. It's a good idea that should save everyone a lot of money and wasted time.

A voluntary contract between BP and the U.S. government? Surely you jest. The U.S. has a gun pointed at BP's head--not only the threat of criminal penalties for BP executives but also the explicit threat of putting BP into receivership and seizing their assets. BP is in a weak negotiating position, because they have to worry about their share price, and the last thing they want is a fight with the U.S. government, which is going to dictate the terms of the "contract." (A valid contract cannot be signed under coercion, so of course they will pretend to do things by mutual consent.)

$100 bet BP says no deal. Go ahead, seize it, if you dare.

I'll bet 2 cents. I never bet more than two cents on anything, and have thereby saved myself money over the decades. Actually, I've probably lost some money by not betting more, but I'm risk averse (unlike BP).

Well of course. But it is voluntary in that this would be done by agreement, as a settlement more or less, not as the result of adjudication, litigation, whatever the appropriate forum might be.

Obama has implied that he could legally seize BP assets to fund the fund, and has stated he will do so if BP does not cooperate in setting up the fund.

States are asking BP to set up funds, too. The request is made is to always to streamline the process.

And I agree BP will baulk. They want a way to limit their overall exposure and will accept nothing open-ended that is not a bargain. But Obama wants a way to ensure on-going payment of claims till they are all paid years from now.

Both want to get this mess behind them as quickly as possible, or at least under better control. BP so it's stock price can recover, and Obama so his poll numbers recover, or so he avoids a katrina-like legacy. Who will blink first?

You are 100% right about Obama's concern with public opinion polls. He is under great pressure to do something dramatic. Seizing BP's American assets would be a dramatic action that would boost O'Bama in the polls maybe twenty points. Nevertheless, I think he will try first to force an agreement to put $20 billion into an escrow fund with payouts decided by an independent trustee. In other words, BP will have no say in how the escrow funds are used.

If Obama seizes BP assets, he will get about a 3 point bump in the short term, and then he will lose at least 20 points when BP sues and the government is forced to pay very significant damages and unemployment goes up as the business climate degrades further.

It's a nice pipe dream for liberals to pass the day with, but it will never happen.

The U.S. has sovereign immunity from foreign lawsuits.

"Obama has implied that he could legally seize BP assets" - How ironic, advocating for the President to be King. What???
I'd like to see exactly what law he "implies", gives him this right. It will have to overturn Youngstown Sheet & Tube Co. v. Sawyer. See:

The best that can be done is for a branch of the federal gov. to go to court and claim BP is insolvent with respect to claims of the US commons i.e federal damages. BP argues that we are not insolvent, look at our assets, and besides we have not been judged negligent, criminal, etc. Government further asks for "bond" while the litigation is pending. Not an easy thing to get a Circuit Judge, then a Federal Circuit panel, then possibly the Supreme Court, to do. But it can be done: For federal damages. The president cannot sue civilly for the lost wages of a Shrimper.

It's going to be a "long hard slog" to quote the supremely incompetent Donald Rumsfeld.

In theory the idea sounds good, but in practice it would require everyone who has a claim to waive their right to sue. This right cannot be legislated away. So, at a minimum this reparations fund would have to have extra economic incentives for victims to relinquish their rights. This does not make it cheaper or necessarily faster.

No one complains much about the law as legislated, or the machinations of the federal courts when it comes the great laws putting petty crack addicts in prison for decades at a time. Why take shortcuts now? Look around, the system works great. [said as facetiously as his meager written communications skills would allow.]

"In theory the idea sounds good, but in practice it would require everyone who has a claim to waive their right to sue. So, at a minimum this reparations fund would have to have extra economic incentives for victims to relinquish their rights. This does not make it cheaper or necessarily faster."

No, you just have an opt out option that allows individual claims to proceed. The fund will take still care of the vast majority of claims if handled properly.


Why indicate a full quote of my previous post, when really it's a partial quote with salient information omitted from the middle? Huh?

In your hack quote you left out, "This right cannot be legislated away."

With this back in, I can now hack your rebuttal:

Yes, you just have an opt out option that allows individual claims to proceed. The fund will take still care of the vast majority of claims if handled properly.

BP is looking for good American lawyers.

sorry it was a cut and paste error. Not intentional. But it does not change anything. Congress can pass laws that limit lawsuits, but that would not be necessary here. (Just look, they imposed a $75 million cap on damages already.)

It would not be necessary to do anything but set up the fund, define the terms and how it would work, and implement the claims process handling. Then people could simply submit their claims. Along the way somewhere, they would give up the right to sue BP. In exchange for going through the fund, they get quicker and cheaper claim resolution.

So, obama is sort of acting as an aggressive mediator between BP and those harmed by the spill. But he's representing them as prez. too.

As a matter of law, the President is toothless, as it should be.

"..Congress can pass laws that limit lawsuits.." - Yes, that pass constitutional muster by not violating due process or are contoured as a bill of attainder.
So if Congress wants to limit damages to $75MM, fine but:
"(c) Exceptions
(1) Acts of responsible party
Subsection (a) of this section does not apply if the incident was proximately caused by—
(A) gross negligence or willful misconduct of, or
(B) the violation of an applicable Federal safety, construction, or operating regulation by,.."
TITLE 33 > CHAPTER 40 > SUBCHAPTER I >§ 2704. Limits on liability

Without these exceptions, the law wouldn't stand.

The applicable law is what it was on April 20th, 2010. The politicians are grandstanding in a legal sense. The rhetoric might be an effective combination of bare knuckle politics and comity among sovereigns that keeps the extra legal money flowing for awhile. In the end it's the courts and affected citizen without wealth has little chance to be made whole.

So the settlement will shorten the process from 20yrs. to 18.5 yrs. In the meantime we rely on BP's discretion. Keep the pressure on them, and when, inevitably they balk, sue the bejesus out of them. It's the American way.

Getting the environmentalists onside might speed it up a bit. ("Help make sure fossil fuel companies don't escape paying for the environmental damage they cause!") Without getting too starry-eyed and internet-freakzoid about it, there have been some interesting outcomes of such campaigns. e.g., Google [ Heathrow third runway ] .

This just gets bigger and bigger - worse and worse

heh heh, you must have confused by the capture, leaking and capacity.. Having more capacity is a good thing, that meant they can handle more leak. Capture more oil/gas is also good, that mean less is leaking out.. More oil/gas leak out is bad.. All the news said is that BP will increase the capacity.. So it is good news. There is nothing said about the leak.. for a fix size leak, capturing more when the capacity increase is a good thing...

Having more capacity is a good thing, that meant they can handle more leak.

Well, yes. But more leak is bad. Hence Euan's statement that it "just gets bigger and bigger - worse and worse."

The unstated question is this: why are they increasing capacity to ~80,000 bpd unless the leak is that bad, or expected to get that bad (worse, actually, since they won't be able to capture all of it)?

I think it is fair to say that the growth in capacity implies that the leak is even bigger than has previously been admitted. Does anyone care to take an over/under on when BP announces it is collecting 80,000 bpd from its 1,000 bpd leak?

There a european company (Dutch IIRC) that also makes a much more proven version of this tech, that should also have been deployed here long ago.

This is one of the many things that makes me question the government's and BP's commitment to a real cleanup/containment effort.

Such as:

* the Dutch skimmers--why were only 6 ordered, and why did it take so long?

* booms without skimmers have been laid all over the place, since about day 2. That serves no purpose at all.

* the dispersant use, and the choice of Corexit particularly is a national disgrace. This stuff should never be used in deep water, it is 10x more toxic than oil, it is a known human carcinogen, it is illegal in BP's home country, it makes the skimmer operation less effective, and it kills the bacteria that can eat oil. And it travels up the food chain, to become concentrated in predators, such as humans. The dispersant is also likely to force oil down to coral reefs, sponge beds, and so on- destroying critical habitat. Yet there will be no consequences to BP, or to the government that allows this, since no one will be able to prove in court where their individual cancer came from. This is a gift that will keep on giving, most likely long after the world has forgotten the name 'BP'.

Now, that said all of these things - meaning oil separators / better skimmers are basically pissing into the wind, and we all know that, I think. But, this is a wind that we need to piss into if ever there was --a massive all out effort needs (needed) to happen, and Obama has only given lip service to this, and only recently has he even cared to figure out what the true size of the gusher is, as he has realized the implications for himself, and needed to distance from BP.

Somewhere in the world, this will happen again, even if all DW drilling in the gulf is cut off, and at the very least we need to develop slightly better mitigation responses, then putting a few of the unemployed on beaches with shovels, rakes--- and without respirators on threat of being fired.

...illegal in BP's home country...

Interesting, I didn't know that. Idle curiosity's a terrible thing:

Oil spill tre atment products approved for use in the United Kingdom (PDF):

All products approved after 1 April 1996 have been required to pass both the Sea/Beach and Rocky Shore Toxicity Tests. Any products coming up for renewal that have only passed the Sea/Beach toxicity test in the past are required, before they can be renewed, to pass the Rocky Shore Test also.

The following products have been removed from the list of approved products because they did not pass the Rocky Shore Test when submitted for renewal:

Chemkleen OSDA JAC (removed from list 21/01/1998)
Corexit 9527 (removed from list 30/07/1998)
Corexit 9500 (removed from list 30/07/1998).

Confounded thing doesn't say whether failing the Rocky Shore Test was the *only* reason for removing Corexit, or what that test involves, so we can't wildly speculate about it's relevance to marshes. Hrrmmm....

Confounded thing doesn't say whether failing the Rocky Shore Test was the *only* reason for removing Corexit, or what that test involves, so we can't wildly speculate about it's relevance to marshes.

The document goes on to say:

Existing stocks of these products may still be used away from rocky shorelines in appropriate conditions. Approval should be sought from the relevant licensing authority before any proposed use.

The spec for the rocky shore test can be found at this link:


Basically it's a question of whether limpets can adhere to a metal plate treated with the dispersant.

So what's the importance of aquatic gastropod mollusks along the Gulf coast?

I don't have a link, but I read that the Dutch machines were not qualified for use because, get this, they process the oil/water and return the water part back overboard, and this water would not pass clean water standards. So, I hope after two+ months, they got a waiver.

Right, I remember reading that. But then they found a way around that -- which was that if they pumped the 'water' in front of the vessel, then they could meet the regs. So, they may have actually deployed some of them by now, I have not heard.

* the dispersant use, and the choice of Corexit particularly is a national disgrace. This stuff should never be used in deep water, it is 10x more toxic than oil, it is a known human carcinogen, it is illegal in BP's home country, it makes the skimmer operation less effective, and it kills the bacteria that can eat oil. And it travels up the food chain, to become concentrated in predators, such as humans. The dispersant is also likely to force oil down to coral reefs, sponge beds, and so on- destroying critical habitat. Yet there will be no consequences to BP, or to the government that allows this, since no one will be able to prove in court where their individual cancer came from. This is a gift that will keep on giving, most likely long after the world has forgotten the name 'BP'.

Where to start...

1. It is less toxic than crude oil.
2. It contains no human carcinogens. In fact the bulk of the ingredients are FDA approved for food additive use.
3. There is no evidence it has any toxic effect on the bacteria that eat oil. In fact the increased surface area should increase the rate of metabolism by bacteria.
4. The purpose of the dispersant is to keep oil off the surface where it can contaminate marshes and similar critical ecologies.
5. It is approved for use in over 30 countries and has a track record of safe use going back 20 years.

The slick at the surface has increased a lot during the last two weeks. In the weeks before the slick was NOT increasing at that pace. Seems to me that something bad happend the last 1-2 weeks.

From NOAA:s website on 1 of june:


And now:


Why is that?

1 Due to winds and currents? (I don´t think so)

2 Due to lesser skimming? (I don´t think so)

3 Due to lesser amount of dispersants? (Maybe, because they are running out of the stuff)

4 Due to increased leak att the sea floor (I think so)

5 Due to underwater oil plumes reaching the surface (maybe)

6 Due to some change in the reporting from NOAA? (I don´t think so)

7 Due to other things? (I have no idea)

And thanks to TOD. I have learned a hell lot of things in a few months. Keep up the good work! Excuse my poor english but I hope this nightmare will come to an end soon.

Kind regards from Sweden.

Takk gamle Svenska:-)

I'd tend to go for 5 - time taken for sub- surface oil emulsion plumes to reach surface. If this is right then even when they switch this thing off oil will continue to rise to surface for days / weeks thereafter.

Leak rate did increase when they removed the subsea assembly but since then they are now catching 15,000 bpd.

mange hilsener - Euan

:-) I assume you have some sort of connection to Scandinavia.

If the leak flow rate increased 20% when they removed the riser and if the leak flow rate was 30000-40 000 bpd before the removal (I think so) then the net decrease is about 7500 bpd compared to the leak rate before the removal of the riser. I´m not impressed.

They talked about "fighting the well" during the top kill attempt. I think this was a bad approach. I think Moder Nature said something else. The broken riser at the seafloor wanted to be captured and with no pressure differential to deal with. And Moder Nature also said "Don´t touch the guy with the broken neck if you are not absolute sure what to do" (the BOP and the kinked riser above).

But instead they tried to fight the well with at top kill attempt that increased the erosion inside the BOP and downhole. And the junkshot perhaps worsened it.

Actually, the RIT worked perfectly well, but did only collect a small amount of the leak. But I think they could have improved and refined the RIT and scaled it and perhaps multiplied it. And by now I think they could have collected much more of the leaking oil (cumulative) compared to what they achieved thus far.

Of course the above are a little bit late to write about, but philosophically it is not to late in my opinion.

I lived in Norway form 83 to 91. I speak much better than I write.

Working against nature, hmm?

The problem with this approach is that the leak at the kink was getting steadily worse. The higher pressure there was steadily eroding the holes and there was no good way to capture the oil leaking there due to it's position at the top of the BOP stack coming from a bent pipe in several places. Removing the riser to get the leak all in one spot where they can theoretically capture it all should be considered a good thing.... provided they can actually do so.


The average density of the surface spill is decreasing over time. Thinner oil over more area.

Oil in smaller droplets is surfacing after X days underwater. Different currents at different depths take this rising oil to different places.

Not much hope,


PS: Instead of sacrificing a goat, what do you think the gods would think of an upper class Englishman ... ? Worth a try ?

Gracious heavens, I do hope you're not mistaking `Tony' Hayward for "upper class"?! My dear, he's a simply frightful oik. Heavens, he was a Grammar School boy.

(Translation: educated by the state, not at a public (fee-paying) school like Eton, Harrow, Westminster, Winchester, Charterhouse,.. ie., definitely NQOCD. )

Point taken, but you must understand: "middle-class twit" just won't work for Americans. You see, we are *all* middle class.

Don't believe me? Just ask any American where s/he stands on the socioeconomic ladder.

"Oik" is good. I been looking for an alternative to "git," preferably one with a "born in a barn" overtone. Oik'll do nicely for our Tony. Thanks.

He seems to want to play "Upper Class" on TV.

I suspect 4 also, but the currents have changed in the last couple weeks. The Loop Current eddy has moved south and west; it had been holding much of the spill close to Louisiana, now there is more flow east toward Florida.

The Keys and points beyond caught a break, though. A smaller eddy had been holding oil west of Tampa for a couple weeks with the potential to have it flow south and east. The Loop eddy is sucking up that part of the spill and sending it into the central Gulf, away from land for now.

There is a composite picture of this at the new NOAA spill map that Gail posted earlier:


To see US Navy current prediction charts go to:


Your grasp of the language is fine. You don't want to hear what I do to Swedish! :-)

Complete NEWB question here, but maybe one of the experienced folks can help me out. I've heard a bunch of job titles (roughneck, driller, tool pusher, captain, company man etc) here and I think I know some of them, but I'm not sure. Could someone make a simple org chart that shows how the reporting structure works on a rig?

Company Man and Offshore Installation Manager are approximately (in theory) equal in authority, and only answer to the Captain of the vessel, and only then when it's a question of the vessel safety, or in questions of maritime law.

Below the OIM are the various department heads and chiefs (Safety Officer, Engineer, Chief Driller, Electronics, Mechanic, Maintenance, and so on). Also below the OIM are the chiefs of the various consulting and contracting crews (Downhole Tools and Measurement, Mud Engineers, Cement Engineers, ROV, and so forth).

The Toolpusher(s) are essentially (at least in the offshore world) the senior drillers, responsible for what goes on in the Dog House and on the Drill Floor, responsible for ensuring proper supplies of equipment and materials, responsible for managing consumables, responsible for the ongoing, daily drilling operations (as long as nothing out of the ordinary is happening, at which point they would consult with and follow the directions of the OIM.)

Roughnecks are the grunts - they follow the orders of the senior driller or toolpusher on duty, move this, lift that, connect this, disconnect that, carry this, clean that, and so on.

There are many multiple chains of command...

But the one you were asking about goes:

Captain -- OIM -- Company Man have equal authority in general, and greater authority (in theory) in their specific venues of command (ship, drill floor, economic decision making, respectively).

Toolpusher and Chief Driller (sometimes interchangeable terms, if not, chief driller > toolpusher > driller)

Roughneck at the bottom of the totem pole.

Dan - you left out the bottom of the bottom: roustabouts and galley hands. But don't tell the cook I said that. LOL

RM, I was a roughneck back in the day when we still got to "throw chain". OSHA says no to that now I hear. My last drilling job I was in a blizzard in Montana where the driller says to me, "If I knew a $%@#%@^$& thing about computers, I sure in the %^#$^%$^%#$ wouldn't be out HERE!". Decided to give up the glory, women and fun of roughnecking for "desk jobs" and made my fortune that way instead. Oh by the way there is NO glory, women or fun (well maybe a little now and then) to roughnecking! ;-)

Know what you mean wide. Did one hitch in Wyoming in the winter of 2000. Got real good at peeing into a Coke bottle when the wind chill hit -51. All we had was an unheated porto-potty on location.

A porta-potty is luxury! When my dad was hauling me around the oilpatch we had to crap behind the mudpit.

HEH! HEH! Between you and comfychair I've spilled coffee and now about choked to death on this bottle of Bud RROTFL!!!

Don't know about the oil business but in the Army a good cook is (or at least was) a very valuable resource. Back in the old days the Army had its own cooks (not this contracted out crap that I read about these days). Some of the old Army cooks could prepare meals that'd match what you'd get in a good restaurant (not all though, unfortunately some of them produced stuff that'd gag a maggot).

From your comments, I assume that the good cooks are at a high premium on the oil rigs.

Napoleon said that an army travels on its stomach. To some extent it is correct to say that an oil rig crew drills on its stomach. Few things destroy morale as quickly as bad food.

Geez! I wish they had cooks for the bridge crew back in the day! Ever try eating a baloney sandwich in a cold pickup @-51 windchill and sand grit in your mouth? Somehow, we carried on!

Obama is here in Gulf Shores. I took a photo. We are all saved. He can stop all this singlehandedly. I am an Obama fan or at least I was. Now I am an oil spill victim with too much free time, so I make political satire.

Notice the nice abs. From my photobucket album - BP is the Devil. I photoshopped it myself. http://s892.photobucket.com/albums/ac126/tinfoilhatguy/BP%20is%20the%20d...

Obama comes into shore after battling the oil monster. Good work. Keep it up.

A few days ago there was much comment at this site about BP hogging GIS data. Was that just an Internet myth or was there something to it? Rumors come and go with frequency these days. I've been hearing a whooper lately that the well could blowout completely. Another Internet myth, no doubt.

I asked my GIS-guru friends to find out what was happening and received a copy of the message appended below. I have redacted the name of the person who inquired of Stephens about this matter, but I have not redacted Stephens' address. First, the original letter has already been posted here (and many other places); I am merely adding his comments to the material already in circulation. Second, it seems to me that, if one makes accusatory and potentially inflammatory statements about the conduct of others, and releases said statements to the world via the Internet, one ought to be available to answer questions that may arise.

The very fact that the "open letter" was taken down so quickly might lead to additional questions, as might Stephens' dismissive, "Never mind, let's move on" reply to inquiries. I'll leave that to others who might be interested to determine.

---------- Forwarded message ----------
From: Drew Stephens drew@thegisinstitute.org
Date: Sun, 13 Jun 2010 12:09:52 -0400
Subject: Re: BP, GIS and The Mysterious Vanishing Open Letter
To: SCGIS@listserv.uri.edu

My fellow SCGIS'ers -

I did write the Open Letter mentioned by [REDACTED]. It went directly to
people in government and incident command that needed to know about
it. I took the letter off The GIS Institute site personally, as I feel
the problem has been stated, and it's time to work on solutions.

I have been away from the ICP for two weeks, and many GIS access
issues have changed - BP is hosting this site with this viewer

I have heard they are soon to be making GIS data directly available. I
urge all concerned, to support creative solutions that best support
all responders.

Also - I urge all of you to remove my address if you need to forward
[REDACTED] letter without my comments attached. Our mailing address is PO
Box 1124 Boulder, CO 80306

Thanks for all of the support!
Drew Stephens, Director
The GIS Institute

Thanks kalliergo.

I see he used the "I've been away" excuse, always an easy out.

No wonder this has quieted down.

Here a copy of that GIS stuff open letter in PDF as a copy from the website from which it was posted (and is now gone).

An escrow fund ordinarily provides assurance that funds will be available to pay future obligations. It does not, by itself, change the rules governing who gets paid, what amounts, under what conditions. It need not be a "political slush fund." It will be governed by whatever terms and conditions the parties which create the fund agree to.

The parties could, of course, agree to establish a fund "to be disbursed at the sole discretion of the local sheriffs, mayors, and parish presidents," but I doubt they will do that. It ought to just guarantee the payment of claims established under current law.

This shouldn't be too difficult for the BP board, because the normal procedure in a case like this is for a company to set up a reserve fund to meet pending claims. Putting the reserve in escrow is not that far a stretch.

The good news is that there are signs that BP, particularly its board, and the US President are looking for ways to make some mutual accommodation or understanding. At the end of the day, we all need each other.

It is very understandable that people are angry and upset. Livelihoods, and lives, have been lost. Jobs, and pensions, not to mention plants and animals, are at risk. There are signs that key participants made foolish, perhaps even reckless decisions.

It is very regrettable that some wish to blame the British or American people, as a group. BP is an international firm. They are responsible, they chose their managers and workers and subcontractors, and it was the company's responsibility to supervise them. They can, of course, pursue the various parties for damages. BP will be both hunted and hunter in the pursuit of claims.

But if we are smart, we will see that it is as futile for me to be mad at an oil company, even one that has presided over a disaster, as it is to be mad at a hammer that has struck an errant blow upon my thumb. I say futile not because I have no reason to be angry, but because the smart solution is to put both the hammer and the oil company -- all oil companies -- under better governance.

Both the hammer and the oil company are human inventions, tools to do a job. The oil company always will have conflicts between safety and profits. The company managers always will have conflicts between their personal risk/reward ratios and those of the company and its shareholders, not to mention the larger society.

It's not fair to anyone to expect a company to be a government. A higher, sovereign authority has to set the rules of the road, the best practices, the required safety procedures. I'll have more to say on this in a later post, but let me note that this ought to be an international standard. We shouldn't allow, as we now do, a greater likelihood of damage and disasters in other parts of the globe.

The fact is, we need the oil. Oil is not a convenience or luxury. Look at where the food comes from. Look at where the fertilizer comes from. Without oil, people will die. We need to transition our technology and economy to other energy resources, but we will need the oil, and for a long time. There always will be risk, and regrettably, accidents, in oil production. But we can, and we will, do it more safely in the future. Safety improvements need not be unaffordable or mere bureaucratic exercises, ticking boxes on forms. Real progress is possible.

BP, and any persons who committed misconduct, must be held responsible. But at the end of the day, the right thing to do, for everyone involved, is not just to punish a company but to make the industry as safe as is reasonably possible.

Escrow to me means we let the industry lead the next response. I prefer the escrow be held in the form of mitigation experts, drawn from industry with additional trainees, in uniform when responding. I bet if the Louisiana/Texas, Alaska, California, and New York/New Jersey had Naval Militia's with the right people and equipment, we would be a month ahead on the problem. They could easily be federalized in an emergency, and governors could request them. I can also see industry joining a National Guard type outfit, whereas the Coast Guard Reserve would not be an option. Especially if the units were given a Congressional no foreign deployment guarantee and only were federalized in an extreme emergency by authorization of Congress.

I have to say you put that really well.

I live close to an oil jetty and have had a bad spill on the beach 100 yds from my home. The thought of that stinking toxic mess magnified so many times is enough to provoke anger. But it is a wasted emotion. The long term will be best served by finding a way for all the oil companies to raise their standards but stay in business. Oil may be costing us too great an environmental price, but green energy is not without environmental cost. The oil on the beach has long gone, but what was once open sea here, is now slowly filling up with wind turbines. Only those of us with small boats are bothered by this vanishing wilderness, and for sure windmills are better than oil slicks, but even wind turbines impact on the environment.

The best outcome has to be better legislation, lessons learned, and a constructive partnership between state and oil company. Oil is part of our future, and if BP fail, it is not guaranteed that their assets will go to better suited management.

email alleged to be sent to clients by Simmons and Company

Recent tragic events in the Gulf of Mexico have led to a period of collective introspection for the industry as well as a surplus of opinions. And sadly, the forensic evidence associated with this tragedy is far from complete and will likely take several months to assemble in order to formulate a more complete and informed narrative.

This is a highly-charged environment, as well as an exceedingly fluid one, as the prospects for abating the blowout and mitigating the spill are opaque. All of us are trying to better understand the cause and effect
of the tragic blowout in the GOM and the implications for the upstream industry, especially as they relate to energy policy and the regulatory framework in the GOM.

Accordingly, we wish to remind industry participants, as well as our clients and friends, that the views of Simmons & Company International are separate and distinct from many of those being currently expressed by our good friend, founder and former Chairman, Matthew R. Simmons.

Several of the recent statements on the part of Mr. Simmons relating to the Macondo blowout and the implications for the industry and the individual companies involved in this incident are discordant with the views of Simmons & Company International. This accident has tragic consequences for the families of the deceased and injured, and
potentially exceedingly serious ramifications for the principal companies involved in the MC252 well in addition to the natural habitat of the broader Gulf of Mexico and Gulf Coast areas. We view this tragedy as an unfortunate and isolated accident for an industry otherwise known for its steadfast devotion to safety. We believe constructive changes will be made in order to further enhance safety and that the future for offshore drilling will remain vital.

Separate and apart from the Macondo blowout, Mr. Simmons? views and opinions regarding the productivity of the North American unconventional natural gas and oil resource plays are in direct contradiction to the
conclusions Simmons & Company International has reached from the in-depth and lengthy research we have conducted on the subject. Our view is that were it not for unconventional gas, the North American natural gas
resource base, which is presently witnessing compelling productivity, may otherwise have entered into a period of sustained decline.

While our respective views, historically, have often been in harmony, over the past year they have significantly diverged on some important fronts.

Thank you for your consideration and support.

The From:, To:, Date: and Subject: headers, as previously circulated:

From: Herbert, Bill
To: Herbert, Bill
Sent: Wed May 12 15:37:30 2010
Subject: Simmons & Company Views and Clarification

Bill Herbert is Simmons & Co.'s "Managing Director, Co-Head of Research."

The signature block:


Michael E. Frazier
Chairman, President, and Chief Executive Officer
Simmons & Company International

Not alleged . . . fact. The letter is posted on their website at

Thanks .. this is what a number of us were looking for yesterday and were unable to track down in old threads.

I stand corrected.

Don't know if this has been posted already. Weeks ago, there were rumors of Schlumberger crew leaving the rig on the day of the explosion without doing a CBL, allegedly because of a disagreement with BP over the safety of the well. Previously, SLB's spokesperson appeared to indicate their crew had finished their last job on the rig 5 days prior, and had left on the morning of the explosion.

However, a document from SLB now posted on the House Energy Committee site gives the timeline of events. It states the following:


Schlumberger wireline cased hole crew orrives on Transocean Deepwater Horizon. Specifically, BP contracted with Schlumberger to be available to perform a cement bond log and set a bridge plug and/or cement retainer, should BP request those services.


At approximately 7:00 a.m., BP informs Schlumberger crew that no wireline cased hole services will be requested and BP sends SchlumberQer crew home.

At approximately 11 :15 a.m., Schlumberger crew departs Transocean Deepwater Horizon on regulorly scheduled BP helicopter flight.

It would appear that this wasn't a case of crew hanging around for days waiting to do a job and then leaving, but rather an SLB crew that was sent in specifically to do a CBL, arrived 1-2 days prior, and left without doing the job.

Forgive me if this has been discussed but are there any projections for future production in the gulf and correlated estimates for the delays to that delivery based on this moratorium. Any data on the potential of the 33 exploratory wells based on their basins? It seems that there are only 3 main options for replacing US production. ANWR, the Bakken play, and the GOM. What is the potential for increased production from the GOM and what does this moratorium do to that?

For all you GIS datagrubbers out there: Mapping the Response to the BP Oil Spill in Gulf of Mexico:



First, I grew up on the GoM coast and still live here.

I am sick of the whole political and mob situation. I don't care much for BP, but this turned into a perfect Katrina money storm, people greedily trying to get a chunk of the lucre while pretending virtue.

I hope the latest stupidity of the escrow idea combines with forcing a dividend suspension to drop the stock price to the low 20s. The Chinese can then swoop in and pick up the company (and all of its reserves) for a fraction of its value - BP is already trading under both book value and sum-of-parts. The beauty is that the company is still only on the hook for actual cleanup costs and $75mil of economic damage. Anything over that is voluntary. BP statement that they will "make things right" hasn't legally or irreversibly lifted the cap. The great thing is that the Chinese have shown that they are willing to give the world the big FU when it comes to resources. They will get 3mmbbl/d production for way under market and the lawyers, chiselers and politicians will get nothing. And let's see the Obama administration play the big bully act against one of our largest creditors!

"...the company is still only on the hook for actual cleanup costs..."

I rather suspect that those are going to add up to a rather big "only" when all is, eventually, said and done.

"...and $75mil of economic damage."

We shall see.

Don't forget those fines.

I'm curious about the philosophical underpinnings of your allusion to a "big bully act." What do you think government's role ought to be in a case like this? What, for that matter, do you believe governments are *for*?

25000 bpd x 60 days x $4300/bbl = $6.45B if a federal court finds gross negligence - but assume a rigged trial. double the flow if you will to $13.5B - what are these fines for if not to compensate for the generalized damage to the common (as opposed to identifiable and separable damages)

cleanup so far $1.6B - double it to $3.2, though costs will go down when the relief well is stopped.

the value of the entire GoM fishery - $10B (incl FL east coast)

$27B total - against about $30B operating cash flow and +100B book value. Way less than the typical figures north of $50B being batted around.

A $20B escrow would be reasonable if that was the limit of total liability.

The administration has not been making any positive contribution to the clean up or well control. Screaming "work faster" doesn't really add much value. The President could be signing executive orders to streamline issuing permitting and exceptions that are holding up efforts. Example would be the Dutch skimmers. Any regulation that is not specifically created by Act of Congress can be waived by Obama's pen. BP would gladly use any other dispersant if EPA would waive permitting and the govt would shield them from liability. The way the system is rigged right now, BP is liable for any action they are forced to do by the govt. It is no wonder they are resisting pressure from non-experts.

what are these fines for if not to compensate for the generalized damage to the common

Punitive damages. That is why proof of negligence is required. Fines just to punish, to hurt, not for any damage to the commons.

the value of the entire GoM fishery - $10B (incl FL east coast)

Too low for a decade plus worth of damage.


This is a letter from Congress to Tony Hayward outlining the subjects he will be asked about during his testimony on Thursday. It will be very interesting to see how he deals with them.


They are so busted. Orders from the beach killed 11 men.

That's some pretty damning stuff there.

Things that could have been done differently:

Of course we've beaten the bad cement job and drill mud problems to death, obviously this made them lose the well integrity, and made them rely (too heavily) on the BOP (blow out preventer) too much. The BOP likely failed because it wasn't designed to cut through the casing PLUS the strong drill pipe designed for those depths. Enough of the shears activated enough to create a baffle structure inside the BOP, which may or may not be helping the flow.

But not enough attention has been paid to the fire. If this link works properly, you'll see how NOT to fight an oil fire:

Water on oil fires is not only a waste of time, it is a dangerous activity because the burning oil now gets to "surf" on the water, going to new places to find more fuel, oxygen and heat. The ONLY way to put out an oil fire is with FOAM.

I witnessed an oil fire in a tank farm. The firefighters fought it for 10 hours with hoses and water, and only managed to make things worse, including causing several nearby buildings to become involved and ultimately burn down. Nope, what happened is a fire fighter at the local Airforce base was watching the fire on television and ran it up his chain of command to use the spiffy fire engine they had on base full of foam (AFFF) to put out KC-135 tanker fires. They showed up (once the civilians ALLOWED them to that is) and literally put the massive tank farm fire out in SIXTY SECONDS!!! Whoosh and that was all she wrote. At approximately 3 minutes into this video you'll see the yellow (Airforce) fire truck pump out the foam and put out the fire.

Now an intelligent person might ask, "Why wasn't foam used on the Deepwater Horizon"? An industry source, who does extensive work in the oil industry and doesn't want to be quoted because he doesn't want to lose business, personally told me that BP requested permission from the EPA to use foam on the Horizon and were DENIED! If the USA wants to sue BP and this comes out in court, consider the government's position.

ALL this mess could have been dealt with far better with the Deepwater Horizon on station. Red Adair's company or Boots and Coots could have done what they do, even though it would have been dangerous, because the fire would have been OUT! There would have been no bent riser, no leaks, no compromised BOP, a relatively small spill.

But just like firefighters killed in Washington state because the Forest Service was worried about taking water out of a river that might have endangered species in it, unaccountable bureaucrats played a power trip game and caused a disaster.

By the nature of your source the world will have to wait for the enquiry to see the evidence.

Just a dumb question: would foam have been readily available in sufficient amounts out there to make a difference? Presumably yes if BP wanted to try, but if someone could comment on the logistics I would appreciate it.

"An industry source, who does extensive work in the oil industry and doesn't want to be quoted because he doesn't want to lose business, personally told me that BP requested permission from the EPA to use foam on the Horizon and were DENIED!"

Ummm... Is there any rational reason for us to believe this rumor?

Edit: If the person you describe is a real person, and if he really has the knowledge you report, what do you think it says about his ethical integrity that he "doesn't want to be quoted" WRT a possible major and proximate cause of the sinking of the Deepwater Horizon, because he doesn't want to lose business?

So, you're saying that these guys are completely full of it?


"Water alone has extinguished some of the largest blowout fires experienced by our industry, once flow was directed vertically by firefighters. Water works to extinguish blowout fires by various means:

It cools fire below spontaneous ignition temperature by absorbing heat as it is flashed to steam
Water flashed to steam displaces oxygen and smothers fire
Powerful water streams displace fuel from fire."

They go on to describe uses of foam in fighting these fires. But no matter what you still have an unlimited amount of _____ available to you on an offshore rig, so this question of water being "useless" is a crucial one.

I'll answer all three questions. The AFFF foam is available from multiple sources, I'm certain Tyco would have happily obliged immediately and the same airplane tankers that put out forest fires could have been used.

Yes it is a rumor and I don't have the folks at BP nor EPA to corroborate. Not my problem really, it is a matter for the court proceedings if the government decides to play hardball.

Water CAN cool a fire down, and if the fire isn't petrochemical in origin, it can deprive the fire of oxygen, one of the 3 components of fire. Unfortunately, oil floats on TOP of the water, so it continues to burn and float away. Watch the video, that was a land based oil fire, but the fire depts provided plenty of water, which only served to spread the fire around. The chemical structure of AFFF accomplishes multiple simultaneous and useful things to defeat an oil fire.

Obviously all those ships with unlimited water accomplished NOTHING as far as putting out the DH fire. They sprayed water on it for how many days? The longer it took, the more hopeless it became. There's another rumor I don't put much credence to that the coast guard wanted to scuttle the DH to put out the fire.

I'm not a lawyer, nor do I play one on TV, but BP will pull out all the stops to ensure its corporate survival and will pursue every avenue. The government better have perfectly clean hands in this, any mud they throw just might stick to those hands...

"Yes it is a rumor and I don't have the folks at BP nor EPA to corroborate. Not my problem really, it is a matter for the court proceedings if the government decides to play hardball."

No disrespect, but, surely, spreading unconfirmed and unsourced rumors *is* your problem—at least, you are responsible if you do it.

Read the following:

Obviously protocol wasn't followed, the next question is why? Did it have anything to do with this:
Unfortunately, recent studies have shown that certain fluorosurfactants used in AFFFs are toxic to aquatic life and tend to accumulate in the blood of animals and humans. The manufacturer recently has phased out these surfactants. Current AFFF concentrates contain fluorosurfactants that are chemically different from those that have been phased out. However, the toxicity and persistency in the environment of these fluorosurfactants are unknown and are under investigation by the U.S. Environmental Protection Agency and the Fire Fighting Foam Coalition, a group that represents AFFFs and fluorosurfactant manufacturers.

Finally here's a link from 1999 (5 years after the incident protocol was established) with the EPA griping about the NAVY using AFFF foam (BTW, the Navy INVENTED IT!)

So, kalliergo do you work for the EPA or are you just a trial lawyer working for them or what?

How is this, in any way, responsive to the assertion that you are merely spreading unsupported rumor?

I'll answer for you: It is not responsive; it is merely an attempt to cloud the question.

You made an unsupported charge, based upon hearsay (if your source is real and did tell you what you say he did), and you were called on it. You may be able to successfully confuse and confound some of the readers here with your misdirection, but only some.

Re: EPA and non-toxic foam:


It seems that the EPA was offering grant money, in 2005, to develop an effective firefighting foam that was non-toxic to marine life.

It sure leads to more questions about the "lesser of evils" practices in these matters. For instance, there is also talk of how the Dutch skimmers were initially nixed by EPA due to the skimmers' practice of re-releasing some of the oil back into the water. Much less than was there before, but (allegedly) above the limit.

News reports at the time indicated that the boats were using foam as well as water, for example:


If the boats had been using AFFF foam, they would have put the fire out. Either they were stupid, or someone told them not to use it.

Widely, so now you are saying they used the wrong foam?

You sound like you really know what you are talking about but you haven't cited any credible references that back you up. And there are plenty of sources that say foam is not effective for an offshore rig blowout; the link above in Bumpy's comment is representative. If you want to keep hammering away at this foam thing, show us some sources specific to a burning offshore drilling platform, and that doesn't mean an online article that starts off speculating that the blowout was an act of terrorism.

Oh, that 30 Mile fire incident you blamed on "unaccountable bureaucrats" worried about streamwater for endangered species? That seems to have been made up by anti-environmental activists. Independent journalists, a Senate oversight hearing and the Forest Service report make it pretty clear that bad field supervision and poor training led to the deaths. What the four firefighters who died needed to do was get out earlier, and they didn't, unfortunately.

And that Spokane fire where the civilians supposedly held up the foam truck? The Air Force fire crew responded because of a pre-existing mutual aid agreement, not 'cause some airman spotted it on TV. The fire didn't burn for ten hours before the foam came, and if you watch your own video link, the foam didn't put the whole fire out. Reference here: http://www.spokanefire.org/media_release/default.aspx?media=325

The Oil Drum is full of posts from all across the political spectrum, that's one reason I love it. But the folks who get the most respect here back up their opinions with solid citations and insight gained from direct experience, and they respect the reasoned criticism that comes their way.

wow...this graphic really puts things into perspective....

How's that. Please explain.

Rellio - no i got nothing to add of value here....i was just saying what a pain this has to be for the USCG....soon as they get a number and can plan some sort of response the number goes up ...they mobilize additional resources to counter the increase in flow estimates and the flow estimates increase again.....the ops planning for USCG must be going crazy ....i'm sure plenty of people gotta approve these USCG response plans along the food chain every time the plan changes to accommodate increase estimates....i feel like the sand barriers for LA would have been approved a lot earlier if the anticipation was 20KBPD as opposed to the 5KBPD number USCG had to work with at that time frame.. i think had the numbers been the 20K or more the environmental impact study of building the barriers would have been less of a concern..you know the salt water / fresh water exchange and all that good stuff for the bayous would have been a less of an issue and the barriers would've been in place much earlier..

and no i have no knowledge basis for saying all this...

I think the use of the term "total" is confusing people.

Prior to May, 27, we were being given only single-number estimates of the flow; thereafter, we've received estimates of possible ranges of flow.

In this context, "total" makes people think of "all the oil that has gushed, so far," and is probably not the best way to describe those early bpd estimates.

This might be a more useful way to look at it.

Yup. Better.

I think they are now in the range that has been posted here for a month or more.

I thought it was clear from the initial fire that the burn rate was significantly more than 5000 BPD + gas.

Rockman: Thank you for posting on this site, I have one question. Is it possible that this well has a natual pressure greater then 20,000 psi?

Thank you,


DBL - Nope. But you can estimate the reservoir pressure based upon the mud weight they used to drill it. Or at least the high end estimate. I recall they used 14 #/gallon mud weight to drill the formation. This MW had to exert greater pressure then the reservoir otherwise it would have blown out when they drilled it. To calc the pressure exerted by any column of fluid: MW (ppg)*column height*0.052 = psi. So 14 ppg*18,300’*0.052 = 13,322 psi = max reservoir pressure. To drill a 20,000 psi formation you would need a MW over 21 ppg.

Thanks Rockman, is 13,000 psi what you would expect and is it "normally" controllable in a DW rig? Is this well currently "bleeding" at 13,000 psi?

I've read blowout pressures over 40,000 psi - based on your reply this in NOT possible, is that correct?

Thanks for your depth of knowledge and your willingness to share it.


Hey Rock...more data in the links I posted below...Esp. the Transocean and Halliburton ones.

Sorry to be off track, but you all have prob already seen the BP internal emails released today. ....

Not off track...I imagine not everyone's seen this.

WASHINGTON (AP) -- BP took measures to cut costs in the weeks before the catastrophic blowout in the Gulf of Mexico as it dealt with one problem after another, prompting a BP engineer to describe the doomed rig as a "nightmare well," according to internal documents released Monday.

The comment by BP engineer Brian Morel came in an e-mail April 14, six days before the Deepwater Horizon rig explosion that killed 11 people and has sent tens of millions of gallons of oil into the Gulf in the nation's worst environmental disaster.

The e-mail was among dozens of internal documents released by the House Energy and Commerce Committee, which is investigating the explosion and its aftermath.

In a letter to BP CEO Tony Hayward, Reps. Henry Waxman, D-Calif., and Bart Stupak, D-Mich., noted at least five questionable decisions BP made in the days leading up to the explosion.

"The common feature of these five decisions is that they posed a trade-off between cost and well safety," said Waxman and Stupak. Waxman chairs the energy panel while Stupak heads a subcommittee on oversight and investigations.

It's a 16 or so page letter. Very interesting and well done. Waxman has a great staff.

Of note, they did not list the decision to displace the mud as being one they wanted explained by Haywood.

The 5 decisions were:

1. Casing choice;

2. Using 6 instead of 21 centering clips. whatever they are called

3. No "bottoms up" mud circulation before final cementing

4. Mo cement log test

5. No lock ring in place

Sorry if i got them wrong. I don't have the link any more.

Here's a copy of the entire question list from the Energy and Commerce Committee (Chair, Waxman, D-CA 30):


I do not work in the industry but I have been following the crisis and have enjoyed this site. If sea water is 8.5ppg and heavy mud is 14.5ppg, would it be feasible to mix tungsten with the mud. Its specific gravity is 17 times that of water so it might be feasible to get mud over 100ppg. A tungsten, steel, lead mix could also be tried in order to get enough media. For that matter why not just start dropping 6" tungsten spheres down the hole.

I believe the pipe is broken and you can't pump mud fast enough to overcome the leaks.

Geezz. Why not depleted uranium? That's what the military uses when they want the most density.

The President's motorcade drove by my house. I want to post the videos, but alas my uploading is slow. Look out.

Will there be political satire involved? Waiting with bated breath!

Just my snide comments. It is real footage I took at around 5pm CDT today. Does anyone know why my video take so long to upload? Something about flash conversion? Can I convert on my own then upload? Using YouTube and photobucket on different Windows Vista machines.

Picked up at Zero Hedge...

Gasparino Says BP Has Hired Goldman And Blackstone, Does Either Have A Restructuring Advisory Mandate?
Submitted by Tyler Durden on 06/14/2010 13:28 -0500

Fox Business Goldman Sachs

Fox Business' Gasparino reports that BP has hired Goldman and Blackstone, among other financial adivsors. While the hiring of Goldman is perfectly logical as an advisor to prevent a hostile take over, Blackstone's advisory practice is really known for just one group - restructuring. Did BP just finally hire a restructuring banker? We are waiting for confirmation to find out if a bankruptcy-focused legal advisor has also been retained to validate this assumption. If that is the case Simmons will be right and the firm could pursue some form of (dis)orderly bankruptcy. Matt Simmons that is. Not Simmons'd firm Simmons & Co, which on Friday upgrade BP to a Buy with a $52 price target.

More from Fox Business:

"Three investment banks, from what I understand, they hired two of those. Blackstone - Tony James the number two at Blackstone is working directly with the bankers that are working with BP. Also, Goldman Sachs. Three banks are working with them. Everything is on the table from what I understand. This is not a situation where you don’t develop contingency plans, and the top contingency plan is clearly a potential hostile takeover. If the stock keeps falling, are they basically susceptible to a hostile takeover.”

“What is not off the table, according to my Wall Street sources, that they have to look at bankruptcy if this thing does not stop.”

June 14 (Bloomberg) -- BP Plc may lose control [operator] of its U.S. oil and natural gas wells and be barred from doing business with the federal government

BP is the #1 supplier to the US military.

And the US military is the #1 user of oil in the world.

And that's the little dance, dog and pony show, whatever going' on.

Blackstone and Goldman... YeeHah! Two very large piranhas. When asked outright at Congressional hearings, Goldman's executives refused several times to say whether they worked in their clients' interest or their own and potentially against their clients' interest. But, maybe, Goldman changed with SEC civil charges pending and a criminal investigation under way. "Hope springs eternal."

This illustrates why escrow is not a bad idea. It's fine to call the CEO before Congress and ask questions, but we need to look beyond the plans and intentions of the current management or even the current board. We need to consider the possible actions of an unknown future buyer who might have little regard for what Congress thinks.

If some hostile buyer were to gain control of the firm at a deep discount and start disposing of its assets, all over the world, all the while resisting the payment of obligations, it might leave very little that is left for the injured parties. History is full of examples of the questionable disposition of corporate assets.

I have several questions about the relief wells.
This site was updated yesterday and it is showing relief well #1 at about 14,000 feet, about 4,000 feet from the planned intersection. They show successively smaller casing sizes in the descent. I don’t comprehend how they actually do this.

-Do they initially drill with the size they want to hit the production well with and switch to larger sizes at certain depths?
-If that is how it is done, what allows the initial 16” hole to accommodate the 36” casing?
-How do they physically change sizes?
-Once the smaller casing is in the vicinity of the well they want to intersect, do they stop some distance from it and send drill stem through the casing to actually breach the well?
-What controls the situation when the intersection happens so they don’t have two of the same situation they have now?

Someone else posted this days ago, but it is a good primer:


Thanks widelyred. That answers several of my questions.

Tx - Try to visualize: they have a csg sting in the hole.Now you have to run more csg. It has to go down the inside of the existing csg so it has to have a smaller diameter. So you back calculate: if you want a csg of a certain diameter over your reservoir you have figure backwards up the hole at each point where a csg is required to be set. The csg sets you need the larger csg you need to start with.

In the RW when they get close they put a steel mill bit to cut thru the blow out well csg. And yes, they are essentially drilling into a potential blow out with the RW. Thus they’ll be very close attention.

From a story about BP's stranglehold on information in today's NYT:


The lack of transparency has turned James Carville, a Louisiana native and a frequent contributor to CNN, into something very similar to John Goodman’s character on HBO’s series “Treme,” a Jeremiah who is shouting into a wind of indifference.

Reached by phone on Friday in New Orleans, Mr. Carville said secrecy had a place in national affairs, just not this one.

“I believe this country is at war,” he said. “We are being invaded, but in this instance it’s not Al Qaeda or the Japanese, it’s just a hideous, greasy, stupid slick of oil that can’t adjust to our tactics, so why the secrets? It’s absurd that we have any secrecy around this, and absurd that the government is going along with it. There should be no limits on access, not for the scientists, not for the journalists, and not for the public that has every right to know what is going on down here and how much of the culture is being lost.”

Dear aeberman,

Thank you for the informative post. I think your title is a bit misleading. I don't believe President Obama proposed the BP escrow fund, it was, as the linked article notes, "54 Democratic senators," who, "called in a letter for the company to set aside $20 billion in an escrow fund for cleanup and damages, to be administered by an independent trustee."

In the short term on the economic front, imho, we must protect ourselves from state-owned and hostile Chinese oil companies, such as PetroChina and Sinopec. The only way I can think to do that is likewise nationalize, or co-nationalize BP (a joint ownership between US/UK). Then we Americans and our English cousins need to do some serious introspection and clean up our corrupted political systems while we do everything we humanly can to help heal our injured people and environment.

Down the road we could discuss re-privatizing BP, but it's my considered opinion, to ease this traumatic and multiple-generational shift from dirty to clean energy, oil giants like BP, and all large-scale extraction businesses for that matter, should be run by the state in the run-up to a not-so-found farewell by 2100. The last thing we need to do is to continue to provide any incentive to any industry that will, through a thousands cuts and if left unchecked, kill us and every other living thing on this planet. There's a new oil spill reported today, large loss of animal life, in Utah.

Of course to suggest nationalization of BP, or any other business, runs counter to the predatory capitalist nature. Although I sense most ordinary Americans and Brits are growing equally fed-up with "Too big to fail," the subsequent socialization of corporate losses, multi-billion dollar CEO pay packs, massive bonuses, insider-trading, fraud and too numerous other malfeasance and moral corruption to list here.

Still lacking is the political will to bite the hand that feeds. Will this disaster be the game-changer? It's too soon to tell, yet it is clear it's all up to us, the People, to show Obama what "kick some ass" really means. Because we all also know, when the people lead, then their leaders will follow (or be removed, disgraced and/or imprisoned). Although I probably won't be around for much more of it, I think it's going to be a very difficult century. Great sacrifice will be required to make things right. I am also sure great leaders will finally emerge from the chaos we see, and feel, today.

One of my favorite writers, Douglas Admas, remarkably summed up this whole situation over 25 years ago, in his epic Hitchhiker's Guide to the Galaxy, "So Long, and Thanks for All the Fish."

O freedled gruntbuggly...as pledled gabbleblotchits on a lurgid bee! Or I will rend thee in the gobberwarts...with my blurgle! See if I dont! Hey! come on!

Hey! Watch it, or I'll torture you with my poetry... :)

While I appreciate the gravity of the payroll loss to the idled rigs along with all the support systems I see a bit of irony in how this is viewed. BP as most have voiced cut corners on safety to save a few million does that mean we follow suit?

I'm guessing all the oil companies are working to get this resolved. If the MMS is broken now is the time to check what's been submitted and what was approved along with who was responsible for the approvals. Are the plans and permits valid and if they were rubber stamped who's stamp was it. The reports seem to be that the rig inspections came out pretty clean with no major write ups but then again who was doing the inspecting. Ah disregard the last ? because Rockman already commented on the scrutiny being placed on every crew in the gulf. I think most supervision is walking well clear of a fine line along with the crews. Is it complacency across the board or it primarily BP?

Does it really need to take six months before drilling is allowed to start up again?

my314tin : Does it really need to take six months before drilling is allowed to start up again?

Dear my314tin,
Don't play with matches. I think it's pretty clear by now, given the state of the art, deep water is not a viable option.

The GOM needs to undergo a complete re-examination with a critical eye on conservation and all resource extraction, transport and refinery activities.

I agree wholly that BP shouldn't go into the hands of the PRC. Seeing as how this thread will be terminated shortly and so I can't cause that much trouble, I'd like to propose a really old school idea that will be seen as radical now. I think that shareholders - who own pieces of companies - should be on the hook for costs that can't be obtained from the companies they've invested in.

What we've become is a society that allows profit to be private but allows costs to be socialized - as in "bailout" - and I don't think that's helpful in the long run. It would also have the side benefit of straightening out Wall Street in a hurry.

The Utah spill was 500 barrels and oiled over one hundred birds near the Great Salt Lake. Not a good thing but not as dire as you make it sound.

Dear ronmac,
Death by a thousands cuts... I did not call this new spill "dire," yet could have been more specific about the dead animals. Please forgive me.

Here's some raw video from Utah, caution it's not pretty.
Utah Oil Spill

(edit: added "new" to distinguish events)
(edit: added video)

For all you all who like data...Lots up here:


Including draft of Transocean's internal investigation (they picked up cement off the Damon Bankston after the blowout!), 3 model runs by Halliburton w/ 21, 10, and 6 centralizers...characterized as 'minor flow chance', 'moderate flow chance', and 'SEVERE flow chance'.

And some of what was going on with the pit volumes from the perspective of the guys on the rig (from the transocean doc page 12)

Flow Show at 20:58
Trip tank being discharged to pits through flow line (normal procedures ahead of change from oil to water mud in active system)
At same point pumps ramp down for stop at static sheen test
Increased flow out due to discharge of trip tank
Driller expected to see flow increase
Flow returned near pre-tank discharge level when trip tank pump stopped, THEN increased
Potentially masked the gain

Yeah, I just linked to the Heyward letter (top entry) up the page a bit. Very very interesting stuff all this...going to take all night to go through it.

how long has skandiII been in color-bar land? does this mean they are using less dispersant?

It means they don't want to show you what's happening or where.

(right click-->view image to see full size)

Here's an excerpt from Waxman's letter that weaves four of the five questioned decisions together. The fifth was the failure to circulate the mud fully before cementing. The suspect decisions are in bold.

Did Waxman's staff make any obvious errors in selecting these five decisions over all others?
Lockdown Sleeve. Because BP elected to use just a single string of casing, the Macondo well had just two barriers to gas flow up the annular space around the final string of casing: the cement at the bottom of the well and the seal at the wellhead on the sea floor. The decision to use insufficient centralizers created a significant risk that the cement job would channel and fail, while the decision not to run a cement bond log denied BP the opportunity to assess the status of the cement job. These decisions would appear to make it crucial to ensure the integrity of the seal assembly that was the remaining barrier against an influx of hydrocarbons. Yet, BP did not deploy the casing hanger lockdown sleeve that would have prevented the seal from being blown out from below.

And of course the decision not to deploy the lockdown sleeve also took out the BOP many suspect, although that did not appear in the letter.

(more context: link to the letter to Heyward from Waxman):


Their approach is interesting: The compounding of cost-cutting "errors.".

All five errors as presented in the letter work together and build on one another to create the circumstances that led to the blowout.

Add in having the bigwigs there creating a distraction, throw in apparent crew complacency in monitoring the well, and you have a recipe for disaster, set up by corner-cutting initially.

Perhaps the crew should have noticed what wasd going on sooner, but management decisions put them in that predicament, and apparently there was not much time to correct it. If all of this is accurate, that is. A bif "IF" no doubt.