Exxon’s Tillerson disputes comment by BP’s Dudley

Tension continues to surface regarding the Macondo well blowout and Gulf of Mexico oil spill nearly 1 year ago. ExxonMobil Corp. Chief Executive Rex Tillerson criticized comments made by BP PLC’s Chief Executive Bob Dudly at the IHS-CERA energy conference.

On Mar. 8 in Houston, Dudley said industry can learn from safety issues identified since the Apr. 20, 2010, Macondo well control incident in 5,000 ft of water off Louisiana. The blowout caused an explosion that killed 11 people aboard Transocean Ltd.’s Deepwater Horizon semisubmersible drilling rig.

During a separate Mar. 9 news conference, Tillerson said the accident and spill primarily stemmed from management oversights by BP. Tillerson met with reporters following Exxon’s analyst meeting in New York.

“I think those comments are a great disservice to this industry,” Tillerson said of Dudley’s remarks. “This conclusion that this is a bigger problem for the industry is just wrong.”

Top executives of major oil companies rarely express negative comments about one another, but Tillerson openly disputed Dudley’s comments.

“I think the industry manages this risk well. When you do things the proper way, these things don’t happen,” Tillerson said. He believes Exxon manages risk well, relying on a system it developed after the Exxon Valdez tanker spill in Alaska’s Prince William Sound.

Tillerson’s unhappiness with his BP counterpart's industry remarks is an unusual demonstration of tension between oil companies.

Scientists find new microbe in Macondo oil spill

US Department of Energy Lawrence Berkeley National Laboratory scientists found microbes degraded oil in deepwater much faster than anticipated, and this degradation appears to take place without a significant level of oxygen depletion.

That is among the most positive findings following the massive oil spill from BP PLC’s Macondo well off Louisiana in 5,000 ft of water. Berkeley Lab scientists found the presence of various hydrocarbon degraders, adding that the dominant microbe in the dispersed Macondo oil was a new, unclassified species.

The existence of oil at extreme water depths posed numerous questions. BP deployed chemical dispersants at the wellhead, creating tiny petroleum particles in efforts to prevent oil from reaching the gulf’s surface.

The environmental effects of dispersants have been studied in surface water applications for years, but their potential effect on the deepwater gulf marine ecosystem was unknown.

Terry Hazen, a Berkeley Lab microbial ecologist, said findings “suggest that a great potential for intrinsic bioremediation of oil plumes exists in the deep sea.” The research done by Hazen and his colleagues was reported in Science (Aug. 26 online) in a paper entitled “Deep-sea oil plume enriches indigenous oil-degrading bacteria.”

The influx of oil “profoundly altered the microbial community” by stimulating psychrophilic (cold temperature) gamma-proteobacteria closely related to known petroleum-degrading microbes.

Psychrophilic petroleum degraders contributed to the rapid decline of the Macondo oil, he said. Analysis of changes in the crude oil composition indicated faster-than-expected biodegradation rates with the half-life of the oil’s alkanes ranging from 1.2 to 6.1 days.

Crews to protect Macondo casing hanger during BOP swap

The casing hanger and annulus seal have taken center stage in BP PLC’s plan to replace the Transocean Ltd. Deepwater Horizon semisubmersible's blowout preventer with another blowout preventer.

Engineers and scientists calculated 80,000 pounds of force can be used to pull the Deepwater Horizon BOP off the blown-out Macondo well. National Incident Commander and US Coast Guard Adm. Thad Allen describes this as “a gentle tug.”

“What they’re concerned about is somehow potentially dislodging the casing hanger that is at the top of the well,” Allen said.

An earlier ambient pressure test indicated a static condition in the annulus, Allen said. This situation gives crews the confidence that they can change out the BOP without causing any harm before proceeding with completion of the relief well.

“What we’re trying not to do is create some change to the static situation in relation to the seals that are keeping the annulus at a static condition as we try and lift the blowout preventer up,” Allen said. “That’s the reason there’s a limit to how much pull we’re using.”

The casing hanger is part of a subsea wellhead system built by Dril-Quip of Houston.

BP, ConocoPhillips leave climate coalition

A lobby group focused on climate-change legislation is seeing its corporate membership numbers drop, which some analysts are calling another indication that Congress appears increasing unlikely to pass a climate change bill this year.

BP PLC and ConocoPhillips decided against renewing membership in the US Climate Action Partnership, a coalition of environmental groups and corporations targeted on building support for a national cap-and-trade program. BP and ConocoPhillips were among USCAP’s founding members in 2007.

Other large companies, including Royal Dutch Shell, remain in the coalition.

USCAP spokesman Tad Segar says there’s still momentum to get a climate change bill done. Some energy analysts are not so sure of that.

Raymond James & Associates Inc. said in a Feb. 17 industry brief that there is no realistic prospect of passing cap-and-trade in 2010, adding that attitudes in Washington are shifting “in the wake of the Climategate scandal and news that the UN climate panel made bogus claims about glacier melting, and perhaps also out of recognition that cap-and-trade is DOA in the US Senate.”

Former BP executive joining alternative energy company

Sapphire Energy recently attracted a former BP PLC executive to its ranks. Cynthia J. Warner plans to become president of Sapphire energy, effective Feb. 1, 2009.

She is leaving her job as BP’s group vice-president of global refining to join Sapphire, a San Diego, Calif., company working on using sunlight, carbon dioxide, and micro organisms, such as algae, to produce renewable fuel products.

“Pioneering a new energy frontier for the next industrial era is the best way I can image to make a positive impact as a leader,” Warner said in a recent Sapphire Energy news release.

It would be interesting to know how many industry veterans have left the ranks of oil companies to join alternative energy companies. I don't have any statistics but I know that Warner is not the first one.

She also is not alone in putting confidence in the future of alternative energy despite the ailing US stock market and worldwide oil price volatility.

“Simply put, when energy is out of favor, alternative energy is almost always even more out of favor,” said Raymond James & Associates Inc. analysts in the Houston office. “To acknowledge the obvious: 2008 was a dreadful period for alternative energy stocks, with the solar space especially hart hit.”

Assuming oil prices recover in 2009, RJA analysts believe alternative energy is well-positioned for a rebound “albeit without the sense of market exuberance that was visible 12-18 months ago.”