Tuesday, June 29, 2010

The Gulf

Juli asked me to blog about the oil spill in the Gulf of Mexico. As most of you probably know I am a drilling engineer. For the last 13 years I have drilled and completed oil and gas wells. I have followed the BP disaster very closely and from everything I have read (presentations to Congress by BP, the Waxman letter, updates from the BP website, etc) BP made some poor decisions that led to this disaster. The only thing that comforts me is that relief wells work 100% of the time. That is the only way that the well will be brought under control and the flow of hydrocarbons stopped. All other options have been exhausted. I included a link to a very good presentation ~10 minutes long on the relief well here (Kent Wells technical update from June 27).

I am extremely confident in the relief wells. One is enough. Having a second is prudent given the damage that is occurring. They will work. It is proven technology. "Killing" a well is easily done from the bottom of the well but very difficult from the top. From BP's update they are 55' away from the well and are honing in on it. They are 10 days ahead of schedule.

Oil and gas drilling can be done very safely. To drill safely two barriers must be maintained at all times to prevent oil and gas from coming to surface. In the case of the BP incident a late change in the well design, the decision to not lock down the wellhead seal, a poor cement job, performing multiple operations at once when displacing the well to seawater (which contributed to missing indications that something was wrong), and then the failure of the blow out preventers resulted in this tragedy.

We were sad to hear about oil reaching the marshes of Louisiana and the beaches of Florida. We frequented the swamps south of New Orleans and loved the sea food and culture present in South Louisiana. We still have many friends there and loved our time and now visits there. I participated in work parties with our church after Katrina and Rita to clean up hurricane damage in Louisiana. We feel close to the people there. While we lived in New Orleans for 3 years one of our favorite places was Fort Pickens. We have such great memories camping there. We loved hearing the frogs, playing in the ocean and bay, walking on the beaches at night and seeing the phosphorescence as the waves crashed and where we stepped in the wet sand.

So here are my thoughts: I think we are actually lucky that BP is the responsible party. They seem to have acknowledged their responsibility and in my opinion are doing everything possible to remedy the situation. The industry I work in will clearly have to change because this should never have happened and we should have been better prepared.

What I am saddened by most is the president's decision to stop offshore drilling. That is like saying that if there is a coal mining accident in one mine that all mines should be closed. That is unbelievable. For the people of the Gulf Coast to lose a major industry like fishing is horrible but then for the president to shut down another main source of income (oil and gas drilling) is worse. There needs to be a measured response. Unfortunately the American public does not understand the industry that provides them energy so there are many misunderstandings and false perceptions. My heart goes out to the people of the Gulf Coast.

Maybe this is a chance for us to look more longterm. We as a nation have never been able to do this though. Until something else replaces hydrocarbons we need them to maintain our standard of living. As Americans we use 25% of the WORLD's energy with only 5% of the world's population. We import 60% of the oil that we use. Most of that comes from countries near us (Canada, Mexico, Venezuela). We are energy pigs. I think we should be thankful for the country we live in, the freedoms we have and the lifestyle we enjoy but we MUST conserve and become better stewards of what we have. We have some tough choices as a nation ahead. If we move to solar (doesn't work when the sun is down), wind (huge footprint relative to what hydrocarbon production takes and not efficient), nuclear, coal, or hydro they all have pretty major disadvantages. To me it makes sense to do some of all of them. Solar in NM and Queensland makes sense but not in Seattle.

I commit to do my part. What are you going to do to be better? Set your thermostat one degree hotter or cooler, use Solar in your home, put in a zero scape yard? We can all do something......

Happy to talk to anyone about this.


AJ and Jennifer Curtis said...

Shon, thanks for the good information and analysis. I'm curious for your perspective on the 'moral hazard' balancing. What I've read was that in the wake of the Exxon Valdez disaster the US Government assumed greater control over the industry and had approval over drilling sites. As part of the same deal, the companies were given a $75M liability cap.

In the reports I've read, companies were denied permission to drill in 'shallow' areas and allowed permission to drill in deep water like this area. In your opinion, are these statements and reports accurate? If so, what level of impact (if any) did a $75M liability cap play in the decision making process with respect to this well? Thanks. I guess I can talk to you more about it when you come home.

Juli said...

AJ I don't have all the facts on how the decision to drill the well took place but I seriously doubt anyone thought about the $75M cap when making decisions. I have drilled many offshore wells and I actually was never even aware of the cap.

The Exxon Valdez and the BP disaster are very different. One was a drunk captain (simple human error root cause). The root causes of the BP incident are much more complex. There were mechanical failures, design changes, operational changes, missed indicators etc. All of the causes of the BP incident are preventable.

The reality is that much of the oil and gas in the shallow areas of the Gulf is developed. We have to continue to drill in deeper water to find more. I am not aware of legislation stating that companies can not drill in shallow areas but should drill in deeper areas.

It was great to see you yesterday.

Spencer P. said...

Sweet post Shon. I think it is awesome that you drill. You are such a dirty capitalist. All you care about is oil and money. Right?

The funny thing is that you are one of the only people I know who really makes an effort to conserve. Tons of people talk about it, but most (myself included) lack the self control to do anything. Although, my watch does have a solar cell to keep it running : ). Seriously, you are just a really good person, kind, smart, generous . . . etc. Living in mega-liberalville I laugh when I hear folks talking about those terrible oil companies and their affiliates and then think of you. Its such a stark contrast between what the descriptions indicate and what I have seen from your example. I think you should change careers and go into PR to become the new face of oil.

Anyways, we are sad we missed you. I guess we'll just have to go Down Under.