Deepwater Horizon

Plugging Macondo, the story of how the runaway Deepwater Horizon oil well was finally brought under control

Last May I wrote about the oil drilling disaster in the Gulf of Mexico. This year I can report on the final killing of the runaway well. The story appears in the Spring issue of Mines Magazine, the magazine of the Colorado School of Mines Alumni association. The story appeared there because the two engineers in charge of the operation, Donal Fitterer and Bill McEduff, are graduates of “Mines.” You can read their story here.

BP-pic

The well was plugged at the top, but top plugs are often temporary solutions. What was really needed was a relief well to intersect the hole just above the oil reservoir, the so-called “bottom kill.” All they had to do was hit a basketball-sized target buried under 5,000 feet of water and 13,000 feet of rock while drilling from a randomly moving floating platform. Sounds like a high-pressure assignment, but Fitterer said, “The number one thing I learned at Mines was the ability to focus on exactly what needs to happen to get the job done. They are very big on giving you too much to do, so you have to make a decision as to what is most important.”

The technique they used was to drill the relief well, using standard directional drilling, to get close to the well at a depth. Once there, they used a ranging vector magnetometer to close in on the target which involves drilling a little, putting the instrument down the hole, then adjusting and drilling some more. The goal was to get the relief well parallel to and near the original well, then intersect the runaway well at a depth near 18,000 feet, which is just above the oil reservoir.

Positioning is achieved using a 300-foot-long assembly, which includes a 30-foot-long cylindrical beryllium copper tool equipped with a transmitter and receiver on opposite ends. Invented by Vector Magnetics, the device emits a current that sets up an electromagnetic field when conducted by the well casing. By interpreting data on the electromagnetic field picked up by the receiver, Fitterer can calculate the precise distance and direction to the blown-out well.

It only takes him two or three hours to collect these measurements, but they must be taken every 30 to 60 feet, and getting the equipment into place at the extreme depths at which they were operating was a very time-consuming process: 24 hours to withdraw the drill bit; 12 hours to lower the ranging tools, take measurements, and retrieve the equipment; and another 24 hours to lower the drill bit back into place. As a result, in the final approach, progress moved at a rate of 30 feet every 2 ½ days.

Once the original well is intersected, they could pump in heavy mud to permanently seal the well. You can watch an explanatory video of the technique here.

Gasoline Prices and the Obama Energy Policy

When President Obama took office, the national average gasoline price was $1.83 per gallon according to the Energy Information Administration. As of this writing, the national average gasoline price is $3.39 per gallon. There are many factors that determine the price of gasoline, not the least of which is turmoil in the Middle East. The price depends on supply and demand and upon the expectations of supply and demand.

I don’t know if the Obama administration is simply clueless on energy, or if there is a determined ideological effort to cripple fossil fuel supplies in order to promote renewable energy, but the effect of administration policy is to discourage and hinder domestic production of fossil fuels.

In September, 2008, soon to be Energy Secretary Steven Chu told the Wall Street Journal, “Somehow we have to figure out how to boost the price of gasoline to the levels in Europe.” Gas prices in Europe averaged about $8 a gallon at the time.

Contrary to administration rhetoric that the U.S. should become more energy independent, administration policy seems to be directed to do all it can to stifle domestic production.

Following the Deepwater Horizon accident in the Gulf of Mexico, the administration imposed a drilling moratorium. That moratorium was lifted last October, but in fact still remains in force. The Interior Department has approved just one drilling application although more than 100 are pending. A federal judge ordered that the de facto moratorium be lifted but the administration has ignored that order. In fact, in early February, the federal judge held the Interior Department in contemp of court for dismissively ignoring his ruling to cease the drilling moratorium which the judge had previously struck down as “arbitrary and capricious.” Ironically, the de facto moratorium of Gulf drilling will deprive the federal government of $1.35 billion in royalties this year.

According to the Heritage Foundation, “Obama also reversed an earlier decision by his administration to open access to coastal waters for exploration, instead placing a seven-year ban on drilling in the Atlantic and Pacific Coasts and Eastern Gulf of Mexico as part of the government’s 2012-2017 Outer Continental Shelf Program.”

 The U.S. has abundant resources of oil and natural gas in shale deposits. According to the U.S. Geological Survey the U.S. holds more than half of the world’s oil shale resources. The largest known deposits of oil shale are located in a 16,000-square mile area in the Green River formation in Colorado, Utah and Wyoming. The USGS’s most recent estimates (April, 2009) show the region may hold more than 1.5 trillion barrels of oil – six times Saudi Arabia’s proven resources, and enough to provide the United States with energy for the next 200 years. But Obama’s Interior Department is reversing Bush-era policy by delaying leases saying they need to take a “fresh look” at the situation.

American-oil-shale

 

The EPA has added costly new regulations to refineries over concern with global warming. The EPA is also denying approval of the Keystone pipeline which would increase the amount of oil the U.S. receives from Canada by over a million barrels per day.

If all this were not enough, the Interior Department has instituted a new “wild lands” policy that will bypass Congress in establishment of wilderness areas which will further delay and restrict access to our mineral resources.

The next time you fill your car with gasoline, don’t blame the oil companies for the high prices, the fault lies squarely with Obama’s energy policy.

Bureaucracy Bungling Gulf Oil Spill Cleanup

As crude oil washes over Gulf beaches, the federal bureaucracy is denying use of effective tools to mitigate damage. Sitting in Norfolk, Virginia, a converted oil tanker is awaiting permission to go to the gulf to help clean up the oil spill from the Deepwater Horizon break.

The ship, called the S.S. A-Whale, a giant oil tanker, was built in South Korea, modified in Portugal, is owned by Taiwanese, and flagged in Liberia. Hence its use is stopped by the Jones Act which has yet to be waived to allow foreign ships to help. This ship has the capacity to gather up 500,000 barrels of oil a day from surface waters. To put that in perspective, the current government authorized fleet has taken 70 days to collect 600,000 barrels of oil.

The ship works as a skimmer gathering oil, separating oil from water, storing the oil, and discharging the residue. Trouble is, the residue contains a little more than the 15 parts per million oil that the EPA permits to be discharged. But rules are rules.

See more on the Gulf and the bureaucracy.

Hurricanes and Oil Slicks

In true Mencken style (“The whole aim of practical politics is to keep the populace alarmed by menacing it with an endless series of hobgoblins, all of them imaginary.” ) an AP story on the front page of the Arizona Daily Star speculates on dire consequences that may occur if a hurricane meets the oil slick in the Gulf of Mexico.

Here is what the National Oceanic and Atmospheric Administration (NOAA) says about such a possibility:

Most hurricanes span an enormous area of the ocean (200-300 miles) — far wider than the current size of the spill. If the slick remains small in comparison to a typical hurricane’s general environment and size, the anticipated impact on the hurricane would be minimal. The oil is not expected to appreciably affect either the intensity or the track of a fully developed tropical storm or hurricane. The oil slick would have little effect on the storm surge or near-shore wave heights.

The high winds and seas will mix and “weather” the oil which can help accelerate the biodegradation process. The high winds may distribute oil over a wider area, but it is difficult to model exactly where the oil may be transported. Movement of oil would depend greatly on the track of the hurricane. Storms’ surges may carry oil into the coastline and inland as far as the surge reaches. Debris resulting from the hurricane may be contaminated by oil from the Deepwater Horizon incident, but also from other oil releases that may occur during the storm. A hurricane’s winds rotate counter-clockwise. Thus, in very general terms: A hurricane passing to the west of the oil slick could drive oil to the coast. A hurricane passing to the east of the slick could drive the oil away from the coast. However, the details of the evolution of the storm, the track, the wind speed, the size, the forward motion and the intensity are all unknowns at this point and may alter this general statement.

Evaporation from the sea surface fuels tropical storms and hurricanes. Over relatively calm water (such as for a developing tropical depression or disturbance), in theory, an oil slick could suppress evaporation if the layer is thick enough, by not allowing contact of the water to the air. With less evaporation one might assume there would be less moisture available to fuel the hurricane and thus reduce its strength. However, except for immediately near the source, the slick is very patchy. At moderate wind speeds, such as those found in approaching tropical storms and hurricanes, a thin layer of oil such as is the case with the current slick (except in very limited areas near the well) would likely break into pools on the surface or mix as drops in the upper layers of the ocean. (The heaviest surface slicks, however, could re-coalesce at the surface after the storm passes.) This would allow much of the water to remain in touch with the overlying air and greatly reduce any effect the oil may have on evaporation. Therefore, the oil slick is not likely to have a significant impact on the hurricane.

All of the sampling to date shows that except near the leaking well, the subsurface dispersed oil is in parts per million levels or less. The hurricane will mix the waters of the Gulf and disperse the oil even further.

The experience from hurricanes Katrina and Rita (2005) was that oil released during the storms became very widely dispersed.

Besides NOAA, other sources say that storms disperse and/or bury oil already on the beach. Tar balls are common on Galveston Island beaches but less so after a storm. The Marshes should fare the same way. If anything, hurricanes have a tendency to leave beaches cleaner than they found them.

Gulf Oil Disaster – Beneath the Waves

The sinking of the Deepwater Horizon oil rig in the Gulf of Mexico is an economic disaster and may prove to be an ecological disaster. The graphic below shows the situation in cross-section.

Gulf-cross-section-oil-spill

The primary cause of the disaster is yet to be determined. There is speculation that an unexpected pressure surge destroyed, or overcame, the 450-ton blowout preventer. Natural gas separated from the oil and caused an explosion and fire on the rig. There have been suggestions of improper cementing in of the well head, of metallurgical failure of the drill pipes, and of human error, even some speculation of sabotage.

The Deepwater Horizon rig, located 45 miles south of the Louisiana coastline, was attempting to exploit an oil field discovered in 2006, by a consortium of oil companies. The first well in this field, called the Jack well, was drilled in 7,000 feet of water, to a depth of more than 20,000 feet below the sea floor. It found a major field in a geological area called the lower tertiary trend. It is estimated that the formation may hold up to 15 billion barrels of oil, which could boost America’s reserves by 50 percent. The three companies took major geologic risk by targeting the lower tertiary, but they were proved right. The Jack well cost more than $100 million.

When the surface rig sank, the riser pipe kinked and restricted the leakage to about 5,000 barrels (210,000 gallons) per day. However, if there is another pressure surge, that pipe or the well-head could break and result in unrestricted flow of oil into the Gulf. A good well in that region could produce up to 30,000 barrels per day.

A relief well is being drilled, but according to BP, the owner, that effort could take two to three months to stem the flow. When that well intercepts the original well, special heavy fluids can be injected to stem the flow, then the original well can be sealed.

Blowouts such as this one are uncommon in U.S. waters. The last one was in Santa Barbara in 1969. That one was close to shore. There are many natural oil seeps, especially off the California coast. In fact National Geographic has an article about an asphalt volcano developed 10 miles off-shore from Santa Barbara.

The following is taken from “Seis Matters” a blog by an oil industry professional. It discusses what probably happened. The article refers to Transocean the owner of the drilling rig, which was hired by British Petroleum, the company holding the lease on that portion of the oil field and paying for the well.

According to the Transocean veteran, BP had discovered significant quantities of oil and gas at Macondo, the name of the field that the Deepwater Horizon rig was drilling. BP had reached total depth and penetrated the reservoir horizon at 18,000 feet. Halliburton had cemented the last casing string in the well and inserted several cement plugs within it which BP intended to drill out at some future point when they returned to Macondo to begin full-field development.

With the cement plugs in place, Transocean had begun the process of removing the drill string in the well (used during the cementing operation) and had begun to replace the heavier mud in the wellbore with less dense sea water. This is apparently a common practice, as the plugs are designed to contain the reservoir fluids downhole. Effectively, the Deepwater Horizon was hours away from moving off the Macondo location.

At this point, some speculation begins. The leading hypothesis is that the cement plugs failed. The drilling crew wouldn’t be expecting a failure and perhaps weren’t monitoring the systems that detect an influx of fluids into the well, drill string, and drill pipe riser. Unbeknownst to those on the rig, a mixture of gas and water was coming up the drill string and riser to the surface and the deck of the Deepwater Horizon. The volatile mixture of high-pressure hydrocarbons likely ignited quickly and unexpectedly, killing the 11 individuals who were on the drilling floor itself.

Normally, one of these drillers would have hit the “panic button” that closed the blowout preventers (BOP) on the seabed, but likely didn’t have the time to do it. The toolpusher a bit farther away also has access to a panic button, but himself may have been incapacitated in the explosion or, if the electrical switches to the BOP were cut when the riser exploded, may have been unsuccessful in his attempt.

The next line of defense is called a “dead man’s switch” and is supposed to activate the BOP on the sea floor if electrical and hydraulic communications with the rig are lost. If this switch had activated properly, five hydraulic “rams” under thousands of pounds of pressure, including one “shear ram” that acts like a pair of scissors, should have cut the drill string and closed in the well. The shear ram is designed to cut up to 13-3/8 casing, which is far larger than what was in the well at the time.

For reasons not understood, the BOP’s either didn’t activate at all or didn’t do their job as intended. ROV pictures from the seabed show drill pipe extending out of the BOP (which should have been sheared off) and the oil is leaking at this point, as well as at several points above it where a part of the drilling riser remains.

As for liability, it primarily rests with BP according to this panel of experts. Maritime law has a precedent called “the anchored tanker” that says that the owner of the anchored tanker is liable for any damage resulting from it, even if that tanker is hit by another ship that was behaving in a reckless or negligent manner. BP is the owner of the anchored tanker in this case.

Moreover, the typical 100+ page drilling contract specifies that the rig owner (Transocean) is liable only for spills that happen in the course of the drilling operation (such as a tank of diesel rupturing and spilling overboard). In the case of a blowout, all drilling contracts specify that those are the responsibility of the oil company that has contracted the rig (BP in this case) and that most of them even specify that the oil company will “protect and indemnify” the rig owner even if they are shown to be reckless, negligent, or had behaved with gross misconduct.

It would appear that this will be hard for BP to prove, especially since the Deepwater Horizon was the “top performing rig” for BP worldwide, with an unmatched safety and operational performance record and a crew that had been on board more or less continuously since 2001. Net-net, it sounds like BP is going to shoulder the lion’s share of the liability for this accident and clean-up.

As for fall-out, there are three expected ramifications. The first is the “natural resource damage” that will be incurred (presumably by BP) as marine habitat, fisheries, etc. are shut-in and temporarily or permanently damaged. These costs, primarily resulting from jury awards or settlements in commercial litigation, are expected to far outweigh the clean-up costs (which themselves are estimated to be approaching $1 billion).

The second impact will likely be increased government intervention. The participants on the call don’t believe that there will be a blanket ban on offshore drilling (despite some White House commentary suggesting this earlier today) but they do see Congress spending significant time on the holistic topic of offshore drilling in the years ahead. In their opinions, this could actually be a good thing as it might provide a more consistent and stable regulatory regime for E&P operators.

Lastly, they expect higher costs to conduct offshore E&P operations. Similar to Congress mandating double-hulled tankers after the Exxon Valdez spill, they expect a host of regulations to be put in place to add “double and triple redundancy” in offshore operations to prevent incidents like the Deepwater Horizon explosion and the Macondo blowout and spill from repeating in the future.

A truly unfortunate incident in every sense.