Oil companies review their safety policies following Macondo spill

Oil and gas industry executives surveyed by Delotte LLP were about evenly split regarding whether changing US offshore regulations actually will improve drilling safety.

Of 201 executives polled earlier this month, 41% said yes while 42% said no. The rest said they don't know.

Regarding future corporate health and safety policy, 57% said their companies are more likely to review and update HSE policy as a result of BP PLC's Macondo well blowout and the resulting explosion and fire on Transocean Ltd.'s Deepwater Horizon semisubmersible. The accident triggered a massive oil spill in the Gulf of Mexico.

Nearly 60% of those polled said any improvements in drilling safety will come from the industry itself rather than from government regulations or third-party insurance and financing requirements.

Blowout preventers and their cutting power being reviewed

The failed Deepwater Horizon blowout preventer is being examined at a NASA laboratory in New Orleans, National Incident Commander and retired US Coast Guard Adm. Thad Allen said. Basically, the BOP is a large valve at the top of the well designed to close in an emergency.

A number of government agencies are investigating why the Deepwater Horizon BOP failed, contributing to a fatal accident and a massive oil spill in the Gulf of Mexico. BP PLC, which operates Macondo, issued recommendations on BOP design and assurance measures in BP's own investigation report.

The Macondo well was drilled by Transocean Ltd.’s Deepwater Horizon semisubmersible on which 11 crew members died.

Separately, National Oilwell Varco has developed a new blade design for shear rams within the BOP stack. National Oilwell Varco says its new shear ram system is intended to cut through the thickest joints of drill pipe.

BP’s BOP recommendations primarily involve BP establishing minimum levels of redundancy and reliability for its BOP systems. BP also would require drilling contractors to implement an auditable risk management process to ensure BOP systems are operated above minimum levels. The oil company likely will strengthen its minimum requirements for contractors’ BOP testing and emergency systems.

Safety regulators worldwide are reviewing deepwater drilling policies, including BOP regulations.

Gulf of Mexico becomes science laboratory for dispersants

President Barack Obama requested $2 million in supplemental federal funds for dispersant research associated with the oil spill in the Gulf of Mexico. Record volumes of dispersants have been used on the gulf's surface and in the subsea at 5,000 ft of water. Most previous research on dispersants involved laboratory testing, but the spill resulted in scientists monitoring the effects of chemical dispersant on a much grander scale.

Lisa P. Jackson, administrator of the US Environmental Protection Agency, testified on July 15 before a subcommittee of the Senate Committee on Appropriations about the request for funding dispersant research.

Dispersants played a big role in the Macondo oil spill response efforts. Scientists and others are studying the effects that dispersants might have on marine life. Federal officials and Louisiana state officials granted BP authorization to use approved dispersants to break down the oil into smaller drops.

In May, EPA and the US Coast Guard issued a directive requiring BP to implement a monitoring and assessment plan for subsurface and surface applications of dispersants. Federal authorities on May 26 asked BP to significantly decrease the overall volume of dispersants being used.

“Since that directive, we have seen the total volume of dispersants used fall by almost 70% from their peak levels,” Jackson said. EPA set up an extensive network to monitor the air, water, and sediments for the presence of dispersants and crude oil components.

The next phase of EPA’s testing will assess the acute toxicity of multiple concentrations of Louisiana sweet crude oil alone and combinations of Louisiana sweet crude oil with dispersants.

ROVs shine in work on runaway Macondo well

Crews working on the runaway deepwater Macondo well use remotely operated vehicles to perform a wide-ranging multitude of tasks. About 12 ROVs are at the wellhead in 5,000 ft of water where no human diver can venture.

Although the overall oil spill response effort has been marred by disappointments, the ROVs and their operators score fairly high on successful operating performance and on safety since the Apr. 20 Deepwater Horizon drill rig accident.

Each ROV is controlled via a tether going up to a vessel on the Gulf of Mexico. Macondo is operated by BP PLC, whose executives say choreography ensures ROV tethers do not tangle with other equipment in the congested area.

In their most-publicized chore, ROVs provide the lights and cameras that enable the public to watch a live video feed of oil and gas spilling from the failed blowout preventer on Mississippi Canyon Block 252. Some ROVs ran the saws to cut off a portion of the riser while other ROVs kept up the live video feed for a public audience.

Most of the time, the ROVs work smoothly without attracting attention, although the undersea robots are believed responsible for one, possibly two, mishaps. During May, an ROV temporarily dislodged a riser insertion tube that collected leaking oil and gas. In June, an ROV might have bumped a containment cap, forcing BP to temporarily suspend some collection operations.

"There are an unbelievable amount of ROVs operating down there," National Incident Commander and retired US Coast Guard Admiral Thad Allen told reporters during a June 23 conference call. "I think the fact that we've had two bumps that have had some kind of a consequence associated with them in the 60-plus-days response is a pretty good record."

Surveys show “sea of discontent” with subsea equipment

EnergyPoint Research Inc. reports its oil field service surveys suggest oil companies are significantly less satisfied with equipment available for subsea and deepwater projects than with equipment for surface-based applications.

“As the industry searches for ways to avoid a repeat of the catastrophe in the Gulf of Mexico, it may prove helpful to develop a more thorough appreciation of what drives the lower scores for subsea equipment,” EnergyPoint Research said on June 10.

“Data indicate customers see subsea blowout preventers, wellheads and trees, and riser and flexjoints as particularly lacking,” said EnergyPoint Research, suggesting this dissatisfaction stems in part from rapid growth within the subsea business. “Notably, ratings for subsea BOPs trail those of surface BOPs by material margins.”

Meanwhile, remotely operated vehicles received the highest long-term ratings of any subsea product category EnergyPoint tracked in its survey. The findings stem from more than 5,600 customer evaluations of oil field product suppliers since 2005.

Indeed, ROVs have proved to be the workhorses in dealing with the failed BOP and resulting oil spill in the gulf since the Apr. 20 deepwater Macondo well blowout and resulting explosion and fire to Transocean Ltd.’s Deepwater Horizon semisubmersible. BP PLC operates Macondo on Mississippi Canyon Block 252.

BP flooded with thousands of ideas on how to stop oil spill

Drilling and well-control experts aren’t the only ones with ideas about how to resolve the oil spill in the Gulf of Mexico. BP PLC, operator of the runaway Macondo well, reports it received some 40,000 ideas on the evolving situation since the Apr. 20 deepwater blowout.

“A lot of people have had some really good ideas,” Kent Wells, BP senior vice-president of exploration and production, said during a June 7 technical briefing in Houston. Some ideas “were bang on” he said, adding they suggested similar strategies as the ones already being developed by industry experts and federal scientists.

Some ideas were good but would not work in 5,000 ft of water, he said, adding other ideas were very creative and held potential, but they would have taken too long. Although none of the ideas from the public yet have proven to be game changers providing instant answers, BP found them to be useful.

“They have helped us rethink things, Wells said. “They’ve helped us tweak things.”

Some ideas, such as using explosives, were impractical, Wells said. BP received ideas on how to stop the flow as well as suggestions for collection systems and how to prevent the formation of gas hydrates.

NOAA vessel joins the hunt for possible underwater oil plumes

The National Oceanic and Atmospheric Administration is sending its own research ship, the Gordon Gunter, to study reports of oil plumes suspended in the Gulf of Mexico.

NOAA’s Gunter was in the gulf already sampling plankton to establish baseline conditions for the deepwater oil spill off Louisiana. On May 28, NOAA expanded the Gunter’s mission to use its sonar equipment to define any underwater plumes.

Researchers from various universities have reported underwater oil plumes, and their findings need to be put into context. Some oceanographers suggest increased microbes are growing in response to the spill, which could tip the marine system out of balance. They warn that too many microbes robs oxygen from the seawater, creating an uninhabitable hypoxic area, or "dead zone" threatening marine life.

Still, documentation of these reported plumes has yet to be provided by the broad scientific community. BP PLC Group Executive Tony Hayward says there is “no evidence” of masses of oil suspended in seawater.

Meanwhile, NOAA scientist Charlie Henry told reporters weeks ago that a sample of water from these so-called plumes would look just like normal seawater. Hydrocarbons are present, but the oil is in tiny droplets.

“Layers of oil are totally untrue,” Henry said of some media reports regarding initial reports from university research vessels about underwater plumes of oil (OGJ Online, May 17, 2010).

If potential plumes are identified, the Gunter will deploy an underwater vehicle, Gulper, provided by the Monterey Bay Aquarium Research Institute “to take discrete water samples at various depths to allow precise characterization of any oil, dispersants, or other substances,” NOAA said.

Record volumes of chemical dispersants have been used on the spill, and any potential long-term dispersant effect on marine life remains unknown.

Threats to fisheries or marine life must be taken seriously, but first these reported underwater oil plumes have yet to be substantiated.

Process management proving key in oil spill response

BP PLC executives painstakingly examined each part of each step in the “top kill” operation they started May 26 in efforts to halt the flow of oil and gas from a deepwater runaway well. Meanwhile, the public grows increasingly impatient for an end to the oil spill.

The longer it takes to stem the leaking Macondo well in 5,000 ft of water off Louisiana, the more detailed information BP is releasing about the process management behind each option being considered.

On its web site, BP posted illustrations showing a fleet of specialized vessels on the surface standing ready to do the top kill work. Progress at the seabed was monitored via video from numerous remotely operated vehicles. An illustration of subsea activity for the top kill emphasizes the complexity and the safety issues involved in deepwater efforts.

Doug Suttles, chief operating officer for BP Exploration & Production, told reporters that nothing is simple in 5,000 ft of water, and that any individual step can take longer than expected.

“I wish this thing would come to an end and come to an end very quickly,” Suttles said during a May 24 news conference from Robert, La. “I think everyone is very, very frustrated.”

What the public is learning is that nothing in the deepwater oil spill response effort happens instantly. Every decision is being made with much deliberation between BP, scientists, industry experts, and government officials.

So far, testimony from regulatory investigations primarily has involved talk about equipment. But I suspect process management issues also will come into play as regulators and companies figure out exactly what happened so that such an accident can be avoided in the future.

Fate of oil spilled from Macondo well unclear; reminiscent of Ixtoc

Scientists expect to monitor and measure the Gulf of Mexico oil spill and its possible consequences on the environment and marine life for some time regardless of how soon BP PLC seals the deepwater Macondo well.

Predictably, the American Petroleum Institute and others have studied oil spills for decades. “Fate of spilled oil in marine waters: Where does it go? What does it do? How do dispersants affect it?” is the title of a March 1999 report from API.

The booklet, the first of three in a series, was developed for oil spill response decision-makers. The booklet’s introduction sets out a scenario involving an oil spill from a tanker accident.

Time will tell what kind of information API develops after the Macondo well spill. The closest that the US has come to experiencing a spill from an offshore well was in 1979 when Pemex had a blowout at its 1 Ixtoc discovery well in Campeche Sound (OGJ, June 11, 1979, p. 33).

The Ixtoc well was in 164 ft of water while the deepwater Macondo well is in 5,000 ft of water. Time will tell what consequences, both operational and regulatory, might stem from the deepwater spill for both the oil industry and the environment.

BP sets up numerous hotlines to deal with oil spill

I have received several emails from people with suggestions on how to stop the flow of oil leaking from BP’s deepwater Macondo well on Mississippi Canyon Block 252. Other readers are emailing me with questions about how they can volunteer or telling me that they have boats available to use in the Gulf of Mexico oil spill response.

BP has set up a number of hotlines for people to call with various offers or with damage claims:
--To report oiled shoreline or request volunteer information, call 866-448-5816.
--To submit alternate response technology, services, or products, call 281-366-5511.
--To submit your vessel to help with skimming, call 281-366-5511.
--To submit a claim for damages, call 800-440-0858.
--To report oiled wildlife, call 866-557-1401.

Some readers are asking why I am not reporting about oiled birds. The short answer is that there were few oiled birds as of early May. BP is working with various wildlife response organizations to ensure quality care for any oiled wildlife.

The first oiled bird to be recovered was a northern gannet, a seabird. It was caught on Apr. 30 and treated by Tristate Bird Rescue and Research, a company of bird experts hired by BP to rehabilitate wildlife.

Expertise and training is required to properly feed, hydrate, and clean oiled birds. The Joint Information Center is advising the public against attempting to rescue oiled or injured birds. People instead are urged to call the Oiled Wildlife hotline at 866-557-1401.

Spilled oil being burned on open water, EPA monitoring

Oil spill response officials are using controlled burns to eliminate some of the crude oil spilled off Louisiana. They say burning crude oil offshore has been effective elsewhere in the past.

Meanwhile, federal officials are monitoring air quality and testing water samples. Officials say it will take some time to measure the effectiveness of the controlled burns in the Gulf of Mexico.

US Coast Guard Rear Adm. Mary Landry said a controlled burn off the coast of Newfoundland in 1993 proved very effective at eliminating oil trapped in special containment booms and set on fire.

The majority of the spill on the gulf’s surface is an oil-water mixture called a rainbow sheen with some areas of emulsified oil. The spill is moving closer to the shore and to Louisiana’s wetlands.

The controlled burn eliminates the emulsified oil, leaving a waxy substance that can be picked up by skimming vessels.

“If we don’t secure this well, this could be one of the most significant oil spills in US history,” Landry said during an Apr. 27 news conference. An estimated 5,000 b/d is leaking from a BP PLC well drilled by Transocean Ltd’s Deepwater Horizon.

An Apr. 20 explosion and fire on the semisubmersible left 11 crew members missing and presumed dead. The semi sank on Mississippi Canyon Block 252 on Apr. 22. Efforts continue to stop the leaking oil.

The controlled burn practice does involve tradeoffs in that it creates air pollution, said Charlie Henry, a scientific support coordinator with the National Oceanic and Atmospheric Administration.

Meanwhile, other scientists say warm water temperatures, strong sunshine, and microbial action will help the oil degrade and evaporate. The spill involves light, sweet crude so it will degrade faster than did the heavy oil spilled from the Exxon Valdez tanker. An API spokewoman says a controlled burn was used on the Valdez spill and was effective.

API reaffirms oil and gas industry commitment to safety

While the US Coast Guard searched for workers missing after an explosion and fire on a semisubmersible rig off Louisiana, American Petroleum Institute Pres. Jack N. Gerard told reporters in Houston that safety is the oil and gas industry’s top priority.

“Every time an incident happens, we ask ourselves what we can do better,” Gerard said. “We’re working for a zero-injury, zero-fatality effort.” Industry considers workers to be its “most sacred” asset, he added.

April has been marred by accidents, both upstream and downstream. An Apr. 2 explosion in a naphtha hydrotreater within Tesoro Corp.’s 120,000-b/d refinery at Anacortes, Wash., killed six employees. The hydrotreater was undergoing maintenance at the time (OGJ Online, Apr. 5, 2010).

On Apr. 12, the United Steelworkers issued a news release saying the refinery industry fails to learn from past disasters. The union called on refiners to develop and implement policies requiring full safety reviews before all process start-ups and scheduled shutdowns.

Gerard said API devotes much of its staff’s attention to safety, adding that API’s activities involve research, standards development and reviews as well as training efforts and information transfers.

On Apr. 20-21, Gerard was in Houston to speak to the local API chapter and to brief reporters. He told reporters that his thoughts were with the families of 11 missing workers.

An explosion and fire rocked the Transocean Ltd. Deepwater Horizon rig at about 10 p.m. CDT Apr. 20. The semi was drilling for BP Exploration & Production Inc. on Mississippi Canyon Block 252 about 41 miles off Louisiana.

Gas flaring reduction efforts progressing

The World Bank-led Global Gas Flaring Reduction partnership (GGFR) reports the global estimate for gas flaring has declined for a third consecutive year.

GGFR helps countries and companies to both implement gas-flaring reduction projects and seize opportunities to increase the utilization of associated gas.

“Our work in different countries, from Russia to Azerbaijan and from Nigeria to Mexico, illustrate this common effort of preparing for potential opportunities to improve energy efficiency, expand access to energy, and contribute to climate change mitigation hence promoting sustainable development,” GGFR said in a newsletter posted on its web site.

In December 2008, the GGFR held a Global Forum on Flaring and Venting Reduction in Amsterdam. Some 175 delegates from over 100 different organizations and 38 countries attended the Amsterdam event.

Numerous oil companies helped sponsor or sent delegates and speakers to the conference; They included Royal Dutch Shell PLC, Total SA, Chevron, ExxonMobil Corp., BP PLC, StatoilHydro ASA, and Petrobras.

It's hard to replace energy infrastructure

Energy infrastructure is not easily replaced or retired from service, notes a Baker Institute report entitled “Sustainable US Policy Options to Address Climate Change: Highlights of the Debate.” The Baker Institute released the report in June outlining conclusions from climate change conferences that it organized on its campus within Rice University in Houston.

The 15-page report contains a lot of detailed information, yet it’s the infrastructure sentence that caught my attention. Despite extensive discussions nationwide about emerging climate policy, I am waiting to hear more about how the logistics of energy infrastructure will fit within any new policy.

Can the fuels of the future be distributed and marketed using existing refineries, pipelines, and service stations? This is where science and technology development will prove to be key, and it’s where the involvement of oil companies will prove to be key.

Steve Koonin, chief scientist at BP PLC, participated in a Baker Institute conference on climate policy last year. He said the need for adoption of climate policy is urgent because energy infrastructure is not easily replaced or retired.

“Apart from universality, greenhouse gas policies must also be timely—one of the defining characteristics of the energy infrastructure is its longevity,” Koonin said. “Power plants last 50 years, automobiles last 20 years, and buildings in which half the world’s energy is used last about 100 years.”

He noted future GHG emissions are being locked in for decades by infrastructure built today. Hence, the largest international corporations must be involved in GHG reductions and in figuring out the logistics for the fuels of the future.

“Materiality means that large corporations must be actively involved in GHG reductions, since it is through them that societies get things done, at least in the developed world,” Koonin said.

Conference examines state of the ethanol industry

Bob Dinneen, president of the Renewable Fuels Association, expects the US ethanol industry will survive the world's financial crunch, coming out as a stronger, more competitive, and more sustainable industry.

Speaking to the National Ethanol Conference in San Antonio, Tex., on Feb. 24, he reported the US has 171 ethanol plants in operation and 21 more under construction.

“While I also see the 23 [ethanol plants] that are currently idled and know that more may well follow, I firmly believe that is a temporary misfortune that will be corrected when the economy turns around and the market rebounds,” Dinneen said.

Several companies are racing to be the first to produce commercial volumes of cellulosic ethanol in the US. Currently, nearly all the ethanol produced in the US comes from corn.

Dinneen noted a few pilot plants in the US produce cellulosic ethanol along with at least one demonstration plant in Canada. The ones of most interest to Oil & Gas Journal are companies having joint ventures with oil companies.

Verenium Corp. is producing ethanol from bagasse and sugar waste at a demonstration plant in Jennings, La., that can produce 1.4 million gal/year. Verenium and BP PLC formed a joint venture to commercialize cellulosic ethanol from nonfood stocks.

Iogen Corp. is producing ethanol from wheat straw at an Ottawa plant and has plans to build commercial scale facilities in the US and Canada. Iogen and Royal Dutch Shell PLC have a cellulosic ethanol alliance.

Meanwhile on the international front, three of the world’s largest ethanol trade associations have formed a global biofuels organization called the Global Renewable Fuels Alliance (GRFA). Its 29 member countries represent 60% of the world’s renewable fuels production.

Dinneen’s RFA, the Canadian Renewable Fuels Association, and the European Bioethanol Fuel Association cooperatively formed the GRFA. Brazil is not yet a member but Dinneen said GRFA is in talks with Brazil’s sugar cane ethanol industry.

Can nanosensors boost oil production?

Oil companies and service companies are helping finance a research consortium promoting nanotechnology. The consortium hopes that subsurface nanosensors can coax more oil and gas out of conventional reservoirs.

The Advanced Energy Consortium says it “seeks to build a vital and economical hydrocarbon bridge while renewable energy resources are being developed.” AEC seeks to use nanosensors to characterize reservoir rock formations.

The medical industry already uses nanotechnology—engineering on the level of atoms and molecules. Paul Ching, AEC executive director, said most major oil companies are researching nanotechnology.

AEC members include BP America Inc., Baker Hughes Inc., ConocoPhillips, Halliburton Energy Services Inc., Marathon Oil Corp., Occidental Oil & Gas Corp., Schlumberger Ltd., Royal Dutch Shell PLC, and Total SA. The Bureau of Economic Geology at the University of Texas manages AEC. Rice University is a collaborating technical partner.

Separate from AEC, ConocoPhillips announced a 3-year nanotechnology program with the University of Kansas to research and test new technologies for enhanced oil recovery.

Stephen Brand, ConocoPhillips senior vice-president of technology, said the inclusion of nanoparticles might yield more efficient, environmentally sensitive EOR technologies.