RFF suggests putting deepwater risks in context

Resources for the Future, an independent economic research group, suggests that neither government or the oil and gas industry yet has adjusted to the high-risk context of deepwater operations. RAF recommends setting liability caps for individual wells at a level reflecting damages from worst-case spill scenarios.

Lynn Scarlett, RFF visiting scholar and former deputy secretary of the interior, made this comment during a Feb. 15 luncheon symposium hosted by ConocoPhillips at its Houston headquarters.

“One might argue it is rocket science,” Scarlett said of regulating drilling and production activities in the deepwater Gulf of Mexico. “No project is business as usual.”

RFF recommends that third-party insurance should be researched as a possible way to strengthen external monitoring of deepwater oil and gas operations. If insurance pools are used to assist smaller firms, fees should be related to risk, Scarlett said.

She said both government and the private sector lacked capacity and practices for performing adequate risk assessments.

‘You just don’t know what you don’t know,” Scarlett said, adding that risk assessment capacity and practices will be a key issue for both industry and regulators going forward after the April 2010 Macondo well blowout and resulting massive oil spill in the gulf.

Crews cleaning oil residue from Louisiana wetlands

Crews using special vacuum devices are sucking pools of spilled Macondo crude oil residue out of Louisiana marshes, said US Coast Guard Rear Adm. Paul D. Zukunft, federal onscene coordinator for the Deepwater Horizon response.

“At some point, we will let Mother Nature do the work,” Zukunft said, adding the USCG and other federal officials are working with state officials to mutually determine when “there is no net environmental benefit” to continuing to clean marsh areas.

During a Sept. 29 teleconference, Zukunft said 588 miles of shoreline remained oiled and are being cleaned. This includes both marshes and beaches.

In Louisiana, one particular marsh cleanup crew involves 600 people, he said. Nine marsh areas continue to be cleaned, and they are all in Louisiana. Zukunft described a heavy, black “sticky residue in marsh grass.”

An Apr. 20 blowout of the deepwater Macondo well resulted in a fire and explosion on Transocean Ltd.’s Deepwater Horizon semisubmersible, killing 11 workers and resulting in a massive oil spill in the Gulf of Mexico. No oil has spilled since the installation of a capping stack on July 15. BP operated the well.

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.

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.

Macondo to undergo standard abandonment process

Nothing has been typical with BP PLC’s deepwater Macondo well in the Gulf of Mexico since an Apr. 20 blowout caused an explosion and fire on Transocean Ltd.’s Deepwater Horizon semisubmersible, killing 11 people. The rig sank on Apr. 22, and the well was responsible for a massive oil spill.

Yet eventually, the well will be abandoned according to typical industry practice. BP and its partners will plug and abandon Macondo on Mississippi Canyon Block 252 with nothing left to see, marking a drastic change from months of live video feeds provided publicly via remotely operated vehicles.

The well has been shut in since July 15, and BP engineers plan to swap the Deepwater Horizon blowout preventer with another BOP before completing a relief well, now expected scheduled for after Labor Day. Industry routinely puts on and takes off BOPs.

Kent Wells, BP senior vice-president of exploration and drilling, said industry has very clearly defined regulations and procedures on how to abandon a well.

“There’s a very sophisticated procedure we’ll go through before the well is ultimately abandoned,” Wells said. “But, of course, it will have been killed and cemented…well in advance of that. But, those will be the final steps we’ll take. That will be very much routine, like we do any well when we plug and abandon it.”

The exception being that the Deepwater Horizon BOP, once removed, will be the subject of investigation.

NOAA tracking spilled Macondo oil and its consequences

National Oceanic and Atmospheric Administration scientists are working throughout the Gulf of Mexico to assess where spilled Macondo oil has gone, where it might go, and to figure out the extent of any potential damages to the gulf ecosystem.

During a news conference on July 27, NOAA Administrator Jane Lubchenco said preliminary findings indicate the light crude has been biodegraded quickly by naturally occurring bacteria that is abundant in the warm-water gulf.

“We do know that over 600 miles of the gulf coast shoreline have already been oiled, and some [oil] remains on the surface although the amount on the surface is less and less,” Lubchenco said. “Recent satellite imagery indicates surface oil is continuing to break up into smaller scattered patches,” that are predominantly light sheens containing little recoverable oil.

NOAA scientists are studying short-term and long-term impacts. Four NOAA vessels, two aircraft, and five sea turtle rescue boats currently are busy with missions ranging from seafood safety to detecting submerged oil.

The NOAA ship Nancy Foster is using a remotely operated vehicle to monitor deep water bottom and coral habitats exposed to the oil dispersant mixture. The NOAA ship Oregon II is collecting samples of fish and shrimp off Louisiana that will be tested for contaminants.

A Twin Otter aircraft is using a multispectral scanner to measure surface oil density and thickness, and a second Twin Otter is providing aerial observations and surveys of dolphins, whales, and sea turtles in the area of the spill.

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.

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.