Saturday, June 5, 2010

BP Collected 6,077 Barrels Friday at Well

[0605oilA] Associated Press

A man walks past oil residue on the beach in Gulf Shores, Ala. Oil from the Deepwater Horizon oil spill has started washing ashore on the Alabama and Florida coast beaches.

BP PLC collected 6,077 barrels of oil on Friday, the first full day after a new containment cap was placed over the deepwater well in the Gulf of Mexico that has been leaking for more than six weeks, the company said early Saturday on its website, noting that the rate should increase in the coming days.

The first daily estimate of oil collected indicates that possibly between half and one-third of the oil that is spewing from the BP-owned Macondo well is being captured. Last week, scientists led by the U.S. Geological Survey estimated that between 12,000 and 19,000 barrels a day were gushing into the Gulf, though some scientists have said the rate is likely considerably higher and the government team continues to evaluate the flow.

With a cap lowered over a runaway well, BP is beginning to capture some of the oil spewing into the Gulf of Mexico, but residents are worried about oil hitting beaches. Video courtesy of Fox News.

"Optimization continues and improvement in oil collection is expected over the next several days," BP said in the update, noting that it had also collected 15.7 million standard cubic feet of natural gas that was the surface.

On Saturday, at the spill site, a flotilla of at least 10 vessels clustered around the Discoverer Enterprise, the 835 foot-long drillship that is collecting oil siphoned from the well through a newly insinslled riser. Next to the drillship, a giant flame could be seen from a U.S. Coast Guard airplane—millions of cubic feet of natural gas being flared. Swaths of brown oil surrounded the fleet.

U.S. Coast Guard Admiral Thad Allen, who is overseeing the federal response to the oil spill, said at a news conference in Theodore, Ala., that technicians are working to increase the production rate but are doing so in a manner that won't allow for the introduction of hydrates into the containment cap. Hydrates, which are ice-like crystals that form when frigid seawater combines with natural-gas molecules, derailed a separate containment effort that BP attempted last month.

The containment device that is now in place has four vents to help prevent hydrate buildup, though these also allow oil and natural gas to escape. Technicians had hoped to close the vents on Friday to boost the capture rate, but Adm. Allen said they remained open as of Saturday morning.

"They're going to remain open until they can stabilize the pressure and the rate of production," Adm. Allen said at Saturday's briefing. "They're making adjustments to the system and making sure they don't increase the production rate until it's safe to do so."

He said the goal is to take as much pressure coming from the well as possible and put it into production, but that it's essential to stabilize the pressure.

Chocolate-brown tar balls were washing ashore Pensacola Beach in Florida. Video courtesy of Fox News.

"Once you've optimized that pressure, there's a ... smaller chance that whatever oil that cannot be accommodated up to that pipe for production will go down and out those rubber seals [on the cap]," he said. "That will be the final, what I would call residual, leakage we're going to have to manage over the long term."

Adm. Allen said that any oil that continues to leak at the source would be treated with subsea chemical dispersants. He added that officials are doing all they can to limit the use of dispersants at the surface, as much more has been used than could have been originally envisioned. Scientists have raised serious concerns about the potential long-term effects that dispersants could have on marine life.

BP placed the containment cap over the leaking well late Thursday after severing the pipe that lies a mile beneath the water's surface. The company wasn't able to get as smooth of a cut as it had originally hoped for, which means that it hasn't been able to get as tight a seal as needed to keep oil from leaking.

The Macondo well has been spewing hundreds of thousands of gallons a day of oil since the explosion on April 20 and sinking two days later of the Deepwater Horizon drilling rig owned by Transocean Ltd. The disaster is threatening to cause devastating ecolological and economic harm to a wide area of the U.S. Gulf Coast.

BP and the U.S. government have come under withering criticism as repeated attempts to stop or contain the oil spill, which is now among the biggest in history, have failed. BP, which has seen its share price fall nearly 40% since the rig exploded, has already spent more than $1 billion on its response efforts and faces a raft of litigation, as well as a federal criminal probe into the incident. The Obama administration has said it will hold BP and other responsible parties accountable and has also taken steps to restrict offshore drilling.

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Associated Press

This computer image released shows that oil leaking from a damaged well in the Gulf of Mexico could wind up on the East Coast and even get carried on currents across the Atlantic Ocean.

BP has stumbled frequently in its efforts to contain the spill. Last weekend it suspended a much-vaunted procedure known as "top kill," which was designed to plug the well. As the company proceeds with its containment efforts, it is also drilling two relief wells that are seen as the ultimate solution to stopping the leak but won't be ready until August.

"The long-term threat of this well will not go away until the relief well has been drilled, pressure has been taken off and the well has been plugged," Adm. Allen said Saturday. "In the meantime, we have to optimize our containment efforts."

He said the worst-case scenario now is that the oil discharge related to what can't be contained continues until the relief wells are drilled in early August.

Questions remain about how much oil is flowing from the well, especially since government officials over the past week said that the latest containment effort could increase the rate by about 20%, at least temporarily.

Adm. Allen said that the government's flow-rate technical group continues to study the matter, and that production numbers from the Macondo well in coming days will help add clarity.

"Hopefully we'll start moving those ranges into a more acceptable representation of what's actually flowing, and the best way to do that is to get a good flow rate of production because once you know what you are producing every day, that's a known quantity you can take off the table," he said.

Meantime, he noted that winds continued pushing the northern edge of the spill closer to Mississippi, Alabama and Florida and oil is increasingly washing up on shores.

Tar balls have started washing up on the Florida Panhandle in recent days, threatening the area's reputation for clean beaches and emerald-tinted waters. Even as a sign welcomed tourists to Pensacola Beach with the boast "World's Whitest Beaches," cleanup teams have been deployed to scour 18 miles of shoreline in Escambia County.

Tar Reaches the Florida Coast

Escambia County officials in Florida said Saturday that the primary oil plume is two miles from Pensacola Beach, and that a light sheen, three miles wide, is slightly more than a half mile from the same beach.

In his weekly radio address Saturday, President Barack Obama, who on Friday made his third visit to the Gulf Coast since the crisis began, asked Americans to support the Gulf Coast by visiting the area's beaches, many of which remain unaffected.

"We will continue to leverage every resource at our disposal to protect coastlines, to clean up the oil, to hold BP and other companies accountable for damages, to begin to restore the bounty and beauty of this region—and to aid the hardworking people of the Gulf as they rebuild their businesses and communities," he said.

Monday, May 17, 2010

Disaster Plans Lacking at Deep Rigs


The Deepwater Horizon oil rig burns in the Gulf of Mexico on April 21.

A huge jolt convulsed an oil rig in the Gulf of Mexico. The pipe down to the well on the ocean floor, more than a mile below, snapped in two. Workers battled a toxic spill.

That was 2003—seven years before last month's Deepwater Horizon disaster, which killed 11 people and sent crude spewing into the sea. And in 2004, managers of BP PLC, the oil giant involved in both incidents, warned in a trade journal that the company wasn't prepared for the long-term, round-the-clock task of dealing with a deep-sea spill.

It still isn't, as Deepwater Horizon demonstrates and as BP's chief executive, Tony Hayward said recently. It's "probably true" that BP didn't do enough planning in advance of the disaster, Mr. Hayward said. There are some capabilities, he said, "that we could have available to deploy instantly, rather than creating as we go."

It's a problem that spans the industry, whose major players include Chevron Corp, Royal Dutch Shell and PetrĂ³leo Brasileiro SA. Without adequately planning for trouble, the oil business has focused on developing experimental equipment and techniques to drill in ever deeper waters, according to a Wall Street Journal examination of previous deepwater accidents. As drillers pushed the boundaries, regulators didn't always mandate preparation for disaster recovery or perform independent monitoring.
More on the Spill

See graphics covering how the spill happened, what's being done to stop it, and the impact on the region.

The brief, roughly two-decade history of deepwater drilling has seen serious problems: fires, equipment failures, wells that collapsed, platforms that nearly sank. Since last July, one brand-new deepwater rig—among the 40 or so operating in at least 1,000 feet of water in the Gulf—was swept by fire. Another lost power and started to drift, threatening to detach from the wellhead. Poor maintenance at a third deepwater well led to a serious gas leak, according to regulatory records.

By some measures, offshore drilling has become safer in recent years. Industry backers argue that major accidents are rare. The rate of serious injuries in U.S. waters fell 71% between 1998 and 2008, and the number of serious oil spills has also been falling once hurricanes are taken into account. Moreover, deepwater drilling is by some measures safer than drilling in shallower waters, where rigs are often older and operated by smaller companies.

Still, drilling for oil at depths no human could survive presents special risks when something does go wrong. The water pressure is crushing, the seabed temperature is almost freezing, the underground conditions explosive. The rapid push into deeper water means that some projects rely on technology that hasn't been used before.

"It's like outer space, in terms of the complexity of the operating environment," said Robin West, who helped oversee offshore-drilling policy under President Ronald Reagan and is now chairman of PFC Energy, a consulting firm.

In 2008, Chevron was plagued with accidents while using the Discoverer Deep Seas rig in more than 7,000 feet of water in the Gulf. There was a fire, then a leak deep under the sea. Finally the cement and steel casing inside the well collapsed, allowing drilling fluid to flow out of control. Workers stopped the flow only by permanently plugging the well.

Chevron says the well was "safely and permanently" abandoned after the problems. "One of Chevron's core values is the safety of our employees, contractors and neighbors," Chevron spokesman Kurt Glaubitz said. "It is fundamental to how we operate."

BP has led the charge into the deepest, most challenging environments. Last week Mr. Hayward, the CEO, said, "It's clear that we will find things we can do differently."

As companies have moved farther offshore, drilling has gotten increasingly expensive. BP was paying nearly $500,000 a day to lease the Deepwater Horizon from Transocean Ltd. and paid roughly that much again for other equipment and services.

BP's oil platform Thunder Horse listed off the Louisiana coast in 2005 after a faulty control system allowed water to flood the platform.

One of the most serious safety hazards on rigs are "blowouts," the uncontrolled flows of oil and natural gas like the one that brought down the Deepwater Horizon. They remain relatively rare, but no more so than in the 1960s, when equipment was much more primitive.

That's in part because, even as the gear used to fight blowouts has improved, the industry has steadily pushed into deeper waters.

"While drilling as a whole may be advancing to keep up with these environments, some parts lag behind," Texas A&M professors Samuel Noynaert and Jerome Schubert wrote in a 2005 paper published in an industry journal. "An area that has seen this stagnation and resulting call for change has been blowout control in deep and ultra-deep waters."

The professors declined to comment for this article.

Serious accidents like the Deepwater Horizon have been rare, but not unheard of. In 2001, an oil-and-gas-production platform off Brazil's coast exploded and ultimately sank, killing 11 people.

Offshore drilling is almost as old as the oil industry itself. In the 1890s, companies began prospecting for oil from piers extending off the beach near Santa Barbara, Calif. In 1947, Kerr McGee Corp. (which was later acquired by Anandarko Petroleum Corp.) drilled the first well out of sight of land, in the Gulf of Mexico.

In the past decade or so, what had been a steady march into deeper water turned into a sprint, as easier-to-find oil fields dwindled. In 1996, Royal Dutch Shell broke new ground with its Mars platform, which floated in 3,000 feet of water. A decade later, wells in 5,000 feet of water—almost a mile deep—were so common as to be considered relatively routine. Several rigs working today can drill in water as much as 12,000 feet deep, more than two miles above the ocean floor.

Shell says it has operated in the Gulf for five decades without "a significant offshore well incident or platform spill in the deep water Gulf of Mexico."

Drilling in deeper water doesn't change the fundamental process, but it makes virtually everything harder. Rigs must be bigger so they can hold more drilling pipe to stretch vast distances. The pipes themselves must be stronger to withstand ocean currents. Equipment on the sea floor must be sturdier to face extreme pressures at depth.

Drill bits must be tougher so they don't melt in the 400-degree temperatures they encounter deep in the earth. And it is harder for drillers to exert just the right amount of pressure down the well bore, enough to keep oil and gas from spurting upwards—a blowout—but not so much that they crack open the rocks beneath the surface, which could also lead to a blowout.

The use of untested techniques has raised alarm bells among some engineers. In a paper published in a trade journal last year, three industry engineers in Denmark noted that many deepwater projects are "dependent on prototype and novel technologies." They said, "there is significant uncertainty related to the performance of these systems," because they haven't been tested in real-world settings.

They couldn't be reached for comment.

BP discovered that in 1999 at its Thunder Horse offshore oil field in the Gulf of Mexico, where managers say hundreds of pieces of equipment had to be created from scratch.

Not all the brand-new systems worked. Thunder Horse had a near disaster in 2005, when a faulty control system opened valves and allowed water to flood into the hull of a drilling platform there. The multibillion-dollar platform almost sank. BP spent months fixing equipment damaged in the flood.

And in 2006, as Thunder Horse was getting close to completion, workers discovered a leak in one of the huge sets of valves on the seafloor that control the flow of oil and gas from the wells. An investigation found minute cracks in a protective coating on some of the pipes, allowing corrosion that could, ultimately, have led to breakage of the pipes. BP had to pull the equipment back to the surface for repairs, delaying the project for months and raising the costs.

Equipment failure was also to blame in the case of the Discoverer Enterprise, the rig that ran into trouble in 2003 when the "riser," the pipe down to the seafloor, snapped in two. That left the Enterprise floating free, with no immediate way to control the well sitting on the sea floor more than a mile below. That well, investigators later concluded, had the potential to spew more oil in one week than was spilled in 1989 by the Exxon Valdez, which ranks as one of the worst U.S. oil spills to date.

In a 2004 article in a trade journal, two BP managers evaluated the company's response to the Discoverer Enterprise incident. Their conclusion: Although the company's initial reaction was strong, it had "less focus" on the longer term and wasn't prepared for the nearly two weeks of round-the-clock response even the fairly small spill required.

A BP spokesman said it follows a "tried-and-tested approach to incident management."

Catastrophe was averted in the Discoverer Enterprise case because, unlike at the Deepwater Horizon, the well's "dead-man switch" was triggered when the riser broke. A powerful contraption known as a blowout preventer sheared off the pipe and sealed off the well. Some 2,450 barrels of drilling fluid inside the riser spilled into the Gulf, but the well itself was secure.

Today, the Discoverer Enterprise is located at the site where the Deepwater Horizon sank, sucking up oil from the still-leaking well through a special tube.

Drilling companies have pushed the limits of technology in blowout preventers, also known as BOPs. Multiple technical papers have called into question whether the shears are powerful enough to cut through the tough steel used in modern drilling pipe at the deepest wells. A 2004 study commissioned by federal regulators found that only three of 14 newly built rigs had shears powerful enough to cut through pipe at the equipment's maximum water depth.

"This grim snapshot illustrates the lack of preparedness in the industry to shear and seal a well with the last line of defense against a blowout," the study said.

Andy Radford, a policy adviser for the American Petroleum Institute, said the group recommends that all blowout preventers be equipped with shears powerful enough to cut through the pipe being used.

Some subsequent studies, including a 2007 paper co-authored by a BP engineer, have echoed those concerns. "The use of higher strength, higher toughness drill pipe ... has in some cases exceeded the capacity of some BOP shear rams to successfully and or reliably shear drill pipe," the 2007 paper said.

When things go wrong in deep water, the problems are harder to solve. "If we can touch the wellhead, we have a really super high chance of making the flow stop," said Daniel Eby, vice president of Cudd Well Control, a contractor that helps oil companies stop out-of-control wells. "The problem comes when you can't touch it. And when you put that wellhead in 5,000 feet of water, we can't touch it."

The current crisis is widely expected to send insurance costs higher for deepwater drilling. Lloyd & Partners Ltd., a London broker, recently said it would cut back the amount of pollution insurance it offers to oil companies by a third. In general, rates have risen for all drilling rigs in recent years due to hurricane damage and other issues, but haven't been consistently higher for deepwater rigs than for those in shallower water.

Government regulators have long known that the deepwater presents special challenges. After the 2003 accident on the Discoverer Enterprise, researchers from the National Oceanic and Atmospheric Administration conducted a study looking at how to tell where oil from an undersea spill would reach the surface, and how to better coordinate with workers responding to a spill.

The Minerals Management Service, the government agency that oversees offshore drilling, in recent years moved away from requiring specific safety measures in offshore drilling and instead set broad performance goals that it was up to the industry to meet.

MMS declined to make an official available for an interview for this article. In a statement, the agency said it's reviewing its oversight in light of the disaster.

In joint MMS-Coast Guard hearings into the Deepwater Horizon accident, Michael Saucier, an MMS official, testified that the agency "highly encouraged," but didn't require, companies to have back-up systems to trigger blowout preventers in case of an emergency.

"Highly encourage? How does that translate to enforcement?" Coast Guard Capt. Hung Nguyen, who is co-chairing the investigation, asked at the hearings.

"There is no enforcement," Mr. Saucier replied.

Coast Guard Lt. Cmdr. Michael Odom, who oversees Coast Guard inspections (the Coast Guard inspects oil-company vessels above the water, while the MMS oversees drilling) testified that current regulations for offshore drilling may be out-of-date. He said many regulations were written years ago, and focused on near-shore drilling operations.

"The pace of technology has definitely outrun the regulations," Mr. Odom said at the hearing.