Bloomberg reported today that BP Plc paid more than $5 billion to 204,434 claimants in the past year from the fund created to compensate victims from the 2010 Gulf of Mexico oil spill. The claims facility draws on more than $20 billion set aside by BP after the oil spill. In total BP has received more than 947,000 claims of which nearly 97% have been reviewed.
Victims have until August 2013 to apply to the claims facility.
Read the full article here.
A Norwegian firm reports the blowout preventer failed because of faulty design and a bent piece of pipe, shifting some blame away from the oil giant.
The 551 page repot cast blame on the blowout preventer’s blind shear rams, which are supposed to pinch a well shut in an emergency by shearing through the well’s drill pipe. Above the Macondo well, the BOP shear rams couldn’t do their job because the drill pipe had buckled, bowed and become stuck, according to the report. The report suggests that BOPs be redesigned or modified in such a way that shear rams will completely cut through drill pipe regardless of the pipe’s position. The blowout preventer was made by Cameron International and maintained by Transocean Ltd.
Unfortunately, this may not be the end of the BOP issue as its design flaw may have gone unnoticed by the entire industry.
The federal government on Monday told Noble Energy it can resume a deep-water drilling project. This is the first work of its kind approved since the Obama administration lifted a moratorium prompted by last year’s Gulf of Mexico oil spill.
Full story from Chron Energy here.
Oil from the BP spill remains stuck on the bottom of the Gulf of Mexico, according to a top scientist’s video and slides that she says demonstrate the oil isn’t degrading as hoped and has decimated life on parts of the sea floor. At a science conference in Washington Saturday, marine scientist Samantha Joye of the University of Georgia aired early results of her December submarine dives around the BP spill site. She went to places she had visited in the summer and expected the oil and residue from oil-munching microbes would be gone by then. It wasn’t.
Full story from the AP here.
Dispersants injected deep in the Gulf of Mexico to counter an oil gusher last spring seemed to keep some oil from fouling the water’s surface, but the chemicals lingered underwater, raising concerns about long-term problems, a new study found.
Scientists at the Woods Hole Oceanographic Institution in Massachusetts found circumstantial evidence that the chemicals guided some oil into underwater currents, stopping it from bubbling up to the surface, where it would do more damage to marshes and beach.
The U.S. Justice Department is expected to join civil lawsuits stemming from the Gulf of Mexico oil spill. By joining the private litigation, Justice Department officials will play a major role in the coming trial. Attorneys for private party plaintiffs are expected to consolidate their cases by filing a combined civil suit in federal court in New Orleans. Attorney generals from many of the states whose coastlines were affected by the spill already agreed to pool their resources and share documents.
Testing began today on the failed BOP in a NASA facility in New Orleans.
The BOP can snuff a blowout by squeezing rubber seals tightly around the pipes with up to 1 million pounds of force. If the seals fail, the blowout preventer deploys a last line of defense: a set of rams that can slice right through the pipes and cap the blowout.
Investigators will test the device that was used with BP’s Macondo well will try to determine why it faileddidn’t stop the flow of oil to the sea.
BP said in a statement that the relief well intercepted the stricken well’s annulus — the space between the well’s metal casing and the surrounding rock — nearly 13,000 feet below the seabed at 4:30 p.m. Central time on Thursday.
BP said that tests showed there was no cement or oil and gas in the annulus at the interception point, so there was no need to pump heavy drilling mud into the annulus through the relief well, a procedure known as a bottom kill. Instead, crews will pump only cement into the annulus, forming a final seal.
“It is expected that the MC252 well will be completely sealed on Saturday,” the statement said, referring to the damaged oil well. Once it is sealed, the statement said, crews would begin standard procedures to abandon the well.
Retired Coast Guard Adm. Thad Allen, the government official overseeing the crisis in the Gulf, said the relief well BP has been drilling all summer long should intersect the ruptured well within 24 hours. He said mud and cement will then be pumped in, sealing the hole once and for all by Sunday.
“We are within a 96-hour window of killing the well,” Allen said nearly five months after the disaster unfolded with an explosion aboard an offshore drilling rig April 20 that killed 11 workers.
UPDATE: On Thursday Allen added, “Sometime in the next 24-hour period, we should do the well intercept. Once the well is intercepted, we’ll have to understand from the pressure differentials and the drilling fluids the nature of the annulus. Once that’s been determined decision, will be made on cement and then once it’s cemented the cement will have to adhere and be pressure tested.”
No oil has spewed into the Gulf since a temporary cap was put on the busted BP well in mid-July. Mud and cement were later pushed down through the top of the well, allowing the cap to be removed. The relief well is being drilled 2 1/2 miles through dirt and rock beneath the sea floor so that the ruptured well can also be sealed from the bottom, ensuring it never causes a problem again.
As of Wednesday morning, crews had only 20 feet left to drill.
The Obama administration moved to head off another catastrophic leak like the BP disaster Wednesday, ordering oil and gas companies in the Gulf of Mexico to plug or dismantle thousands of wells and platforms no longer in use.
In Washington, Interior Secretary Ken Salazar issued an order requiring oil and gas companies to plug nearly 3,500 nonproducing wells and dismantle about 650 production platforms that are longer being used.
The threat posed by the wells was detailed earlier this summer in an Associated Press investigation. The Gulf has more than 27,000 abandoned oil and gas wells and more than 1,200 idle rigs and platforms, and AP found that many of the wells have been ignored for decades, with no one checking for leaks.
“As infrastructure continues to age, the risk of damage increases. That risk increases substantially during storm season,” said Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement.
Under the order, operators must plug wells that been inactive for the past five years. Platforms and pipelines that are not being used for production or exploration must be decommissioned, even if the leases are still active.
Here is a great chart published in the Wall Street Journal’s Power Investing: Investing in Energy special report published on September 13, 2010.
This chart shows the “levelized” cost of electricity–reflecting all costs (capital, fuel, operating costs, etc.) without subsidies–in dollars per megawatt-hour. While I think this chart is great, in my opinion it needs to also include the environmental costs–made palpably apparent by the Gulf Oil Spill–which would make the renewable sources even that much more efficient. We need to be focusing on and supporting geothermal, wind, solar, and nuclear energy.
While BP claims their internal investigation was free from any senior management input, it was subject to many reviews from BP internal legal team. Hopefully the incident will provide the necessary wake-up call to the true cost of oil and its increasingly risky techniques to capture oil.
BP’s internal report on the Deepwater Horizon incident made certain that there was plenty of blame to go around.
It is evident that a series of complex events, rather than a single mistake or failure, led to the tragedy. Multiple parties, including BP, Halliburton and Transocean, were involved.
Out-going CEO Tony Hayward did not put any of the burden of the accident’s causes on himself or his senior management:
“To put it simply, there was a bad cement job and a failure of the shoe track barrier at the bottom of the well, which let hydrocarbons from the reservoir into the production casing. The negative pressure test was accepted when it should not have been, there were failures in well control procedures and in the blow-out preventer; and the rig’s fire and gas system did not prevent ignition.”
The longer litany of causes:
Report from: Douglas A. McIntyre. Full report here.
Read more: BP Report: Blame Transocean And Halliburton – 24/7 Wall St. http://247wallst.com/2010/09/08/bp-report-blame-transocean-and-halliburton/#ixzz0ziGyCXbn
Last night, the failed BOP that had allowed BP’s Macondo well to flow uncontrolled into the Gulf of Mexico for 87 days earlier this year was recovered after a risky US government-ordered replacement procedure was completed.
The massive structure was slowly recovered throughout the day and into the night, stopping about 500 feet below the surface to flush it with methanol to melt methane hydrates on the inside. About 9 pm central time, it was lifted to the deck, where agents from the Department of Justice took control. It will be moved to a NASA facility to detailed analysis.
Here’s a video of the site sped up 8x so it is a little jerky. Appreciate how big the equipment and rigs are that drill oil and gas wells, especially in the offshore. The BOP is basically the size of a 5 story building and weighs almost half a million pounds.:
Original Article by Bob Cavnar. This article originally appeared on The Daily Hurricane.
Here’s a great diagram of what went wrong with the Deepwater Horizon drilling.
Click on the image for a larger version
Graphic provided by Emmett Mayer III and Dan Shea / The Times-Picayune
Source: Staff Research
Referencing many posts from The Oil Drum, a blog often frequented by petroleum engineers and other oil-industry specialists, David Phillips lays out a worst case scenario for the Deepwater Horizon Oil Well. Hopefully this has been proven false by the successful static kill procedure completed in mid August.
Phillips contends the well’s casings beneath the ocean floor have been irreversibly damaged, possibly to such an extent that it may be impossible to cap the well.
He adds:
We know little about the underlying geology of the spill site since BP has held that information close, claiming that it’s “proprietary” data. Scientists are clamoring for BP to publicly release geological survey data on the underlying “Lower Teriary” formations (rock layer formed 65 million to 250 million years ago). Remotely operated vehicles (ROVs) are streaming video feeds of high pressure columns of oil and gas bubbling up from fissures in the sea floor — flowing from likely stress fractures in the underground piping.
Evidence cited by Phillips include the tilting BOP at 12-15% from vertical after the riser was removed, the fact that particulates have sand blasted the wells and well-liners for over 70 days while the well spewed oil into the gulf, and other anecdotes from The Oil Drum blog.
Larry Flak, an engineer recognized the world over for his acumen in containing deepwater well blowouts, presciently warned back in 1997 (before drilling at depths of 30,000+ feet was feasible) of the dangers ultra-deepwater blowouts might pose:
Underground blowout risk is substantial in ultra deepwater wells…. Blowout control options in ultra-deepwater are very limited. Blowout prevention is of paramount importance.
The Wall Street Journal compiled a great article on the doomed rig’s last day and the divisive change of plans to use less drilling mud. Definitely worth the read. Read the full article here
According to the investigation by the Journal many of the senior rig managers of BP and Transocean were focused on a tour of VIP executives. This distraction and the confusing pressure readings from the well led to the situation rapidly deteriorating out of control.
Again, the BP’s decision to remove the heavy drilling mud is brought into question:
Normally, workers on the rig remove about 300 feet of mud below the blowout preventer and replace it with seawater. Mud holds down any gas that leaks into the well. So companies usually test a well fully to make sure it is sealed against any influx of gas before removing too much of the mud.
But BP engineers in Houston, including Mr. Morel and his colleague Mark Hafle, had decided to set the cement plug much deeper than usual and remove 10 times as much mud as is normal before running the test. It was unusual, but BP says it changed the procedure in order to avoid damage to a key seal.
Ronald Sepulvado, the top BP manager who was on shore that day with his phone switched off, was asked under oath by the Interior Department-Coast Guard panel in July if he had ever run a negative test where so much mud had been removed.
“No, ma’am,” replied Mr. Sepulvado. Had he ever heard of BP doing so anywhere? “No, ma’am.”
BP had asked federal regulators for permission to use a deeper plug on April 16, and received approval after only 20 minutes. But Transocean workers and contractors aboard the rig later said that they weren’t informed of the change until the morning of April 20.
Graphic from WSJ
The raising of the BOP from the Macondo Well is not just a safety precaution. The BOP is also evidence that may reveal how the Gulf oil spill happened.
Video still released by BP, oil can be seen pouring out of several spots of the BOP on June 3.
The 450 ton BOP resting a mile below the surface of the Gulf of Mexico is set to become Exhibit A in a Justice Department investigation into what caused the explosion aboard the Deepwater Horizon rig, killing 11 men, sinking the platform, and resulting in the biggest oil spill in U.S. history. Why the “shear ram” valve failed to slice through the drill pipe shutting off the well after the explosion on April 20th may finally be known.
Thad Allen, gave BP and Transocean, the drill rig operator, permission to replace the Deepwater Horizon’s BOP with another and to bring the failed unit to the surface. The BOP will hopefully provide clues at to whether the blowout was a result of human error, mechanical failure, bad maintenance, faulty procedures — or a combination of those.
On example that’s been raised is: “the question of whether the BOP was opened and closed multiple times in the confusion of the blowout after high-pressure gas started shooting across the deck of the Deepwater Horizon rig. That might explain why, in video images, two pieces of pipe appeared to be sticking out of the top of the BOP. If the unit makes it to the surface with the pipe still inside it, part of the mystery could be solved.”
“The BOP could have closed, once shut off at the sea floor,” he explains. “But with all the expanding oil and gas still flowing to the surface a mile above, there could have been confusion aboard the rig over whether it actually closed or not – and the operators might have tried it again.”
Dan Albers, a petroleum engineer and member of the Deepwater Horizon Study Group at UC Berkeley, says the BOP could help answer questions about a major theory concerning the device’s malfunction.
If oil and gas shot up the gap, or “annulus,” between the rock and the drill casing (a steel pipe just over nine inches wide), it could have lifted that large-diameter pipe and jammed it up into the vicinity of the BOP shear rams. BP never installed the casing hanger lockdown device, Mr. Albers says. If that happened, it would have made it impossible for the blind rams to close.
Under the plan to replace the BOP, BP has been directed to flush out the current blowout preventer and capping stack, clean it, and fill it with sea water. After that would come pressure tests. If those tests show the cement cap is holding, then the BOP could be removed and replaced by another BOP now being used by the second relief well from the Development Driller II rig.
The main reason for doing this, Allen said, is to put the best possible BOP on the well in advance of pumping heavy mud into the bottom of BP’s Macondo well through the adjacent primary relief well. It’s a safeguard just in case any weaknesses remain in the concrete cap already put in place from the top last month.
The U.S. government said the final plugging of BP’s blown-out Gulf well will begin sometime after Labor Day. Before then, engineers are planning a risky maneuver to replace the blowout prevent. The failed blowout preventer, a prime source of interest for investigators, will be preserved intact so it can be analyzed by the government according to BP senior vice president, Kent Wells.
There’s a new Bloomberg article out there that reports that a team of federal scientists and BP engineers is looking at either attaching a pressure-control system to the top of the well or installing a new blowout preventer, an emergency device designed to stop the flow of oil and gas, National Incident Commander Thad Allen said today during a press conference.
The equipment is needed to control pressure that may be created when mud and cement are pumped from the bottom of the well for the final plug, Allen said. U.S. Energy Secretary Steven Chu is meeting today with the team to make a recommendation on how to proceed. Allen said he expects a decision “in the next day or two.”
