News Is Offshore Oil Drilling Truly Safe?

[Proton Soup]

Why on Earth does CNN have T. Boone Pickens spinning doom and gloom with that living mummy Larry King?!

http://en.wikipedia.org/wiki/T._Boone_Pickens#The_Pickens_Plan

 

[stewartcs]

I am soooooooo happy, esp right now, that we have Chu [nobel-prize-winning physicist] as Energy Sec. It is such a relief to have competent people manning the ship of State.

The Nobel Prize in Physics 1997 was awarded jointly to Steven Chu, Claude Cohen-Tannoudji and William D. Phillips "for development of methods to cool and trap atoms with laser light".

Yeah...I'm sure those methods to cool and trap atoms with laser light will come in handy with this oil spill.

CS

 

[stewartcs]

Offshore oil drilling seems relatively safe when regulations are enforced, just like everything else in life, and when they are not enforced, it becomes unsafe. Not exactly the shock of a lifetime.

It is safe when done properly and regulated properly.

CS

 

[turbo]

The point is that even they are now planning for a leak this size - 80,000 barrels per day. I'm not sure what you mean by referencing 5000 barrels per day. They have been capturing 15k barrels per day for almost a week now, with little to no noticable effect on remaining leak. It's still a gusher even minus the 15K bpd.

Maybe I should have used a smiley to indicate irony. BP and its handmaidens (including the CG) have been low-balling this spill since it started.

 

[Pattonias]

Everyone has been "high-balling" the spill as well. My determination, no one has any idea how much oil is spilling. Its way too much regardless. They will keep cleaning until its all gone anyway. Not like they are going to collect all the oil in one place and see if they collected as much as they "estimate" came out during the spill. It is a useless number that has really no impact on anything. We know the leak is still there and we will all be happier when no more oil is coming out.

 

[Ivan Seeking]

Earlier in the thread I quoted a CNN panelist who stated that in a worst-case scenario, much like what we are seeing, the total losses from this event could reach into the hundreds of billions of dollars. I was accused of being unreasonable. At first I intended to start digging for examples of how losses can multiply, but I thought it far easier to just wait for the examples in this case to manifest. We have our first example of a hundred-billion dollar loss.

While a bit ironic in the context of this thread, it is the first directly measurable casualty, and it is BP. BP stock, 38% of which is U.S. owned, has lost half of its value - about 80 billion dollars. Today, with the commitment of 20 billion to the relief fund, they have lost over 100 billion dollars.
http://www.tallahassee.com/article/20100615/BREAKINGNEWS/100615007/BP-stock-has-lost-80-billion-since-oil-spill

Again, while it is a somewhat inverted example of what was intended, it is still an example of the sorts of losses that can spinoff from events like this. One cannot consider only the fishing and tourism industries losses that can be measured directly; the value of which are in the tens of billions of dollars annually for each State, IIRC. We also have to consider the duration of the losses, which may continue for decades in some cases, and secondary and other losses, such as loss of real estate value. How many companies dependent on fishing or tourism will fold? How many companies will suffer losses in stock values? How will this affect trade in the region? While it is impossible to fully anticipate all of the consequences of an event this magnitude, we can be sure that the ramifications from this will be profound, and of long duration. One cannot, in a worst case, dismantle the economy over an entire region of the country, esp a highly productive region like the Gulf coast, and expect anything less.

My best read on this is that we are now at the mercy of the weather. If the weather holds out and we have a relatively calm summer, and if they can get the well under control, maybe the absolute worst case can be avoided. On the other hand, it we have a number of severe storms or hurricanes, which is expected, the biological and financial future of the gulf, and the future of BP, may depend entirely on which way the wind blows. If the oil is driven into the marshes and wetlands by storm surge, or even if we have wind-carried oil coating an entire coastal section of the gulf, it is difficult to even imagine the long-term ramifications. What would be the effect on the economy, for example, if the South suffers a crash in the value of real estate? How would the effects spread throughout the economy; esp during a critical time in our recovery; esp when we are subject to stresses resulting from the European financial crisis? The possibility that the total losses related to this event could be hundreds of billions of dollars, is a no-brainer. And we see that already in the value of BP. Generally, even a relatively small effect on the national economy can results in financial losses that rise to that level.

 

[RonL]

Earlier in the thread I quoted a CNN panelist who stated that in a worst-case scenario, much like what we are seeing, the total losses from this event could reach into the hundreds of billions of dollars. I was accused of being unreasonable. At first I intended to start digging for examples of how losses can multiply, but I thought it far easier to just wait for the examples in this case to manifest. We have our first example of a hundred-billion dollar loss.

While a bit ironic in the context of this thread, it is the first directly measurable casualty, and it is BP. BP stock, 38% of which is U.S. owned, has lost half of its value - about 80 billion dollars. Today, with the commitment of 20 billion to the relief fund, they have lost over 100 billion dollars.
http://www.tallahassee.com/article/20100615/BREAKINGNEWS/100615007/BP-stock-has-lost-80-billion-since-oil-spill

Again, while it is a somewhat inverted example of what was intended, it is still an example of the sorts of losses that can spinoff from events like this. One cannot consider only the fishing and tourism industries losses that can be measured directly; the value of which are in the tens of billions of dollars annually for each State, IIRC. We also have to consider the duration of the losses, which may continue for decades in some cases, and secondary and other losses, such as loss of real estate value. How many companies dependent on fishing or tourism will fold? How many companies will suffer losses in stock values? How will this affect trade in the region? While it is impossible to fully anticipate all of the consequences of an event this magnitude, we can be sure that the ramifications from this will be profound, and of long duration. One cannot, in a worst case, dismantle the economy over an entire region of the country, esp a highly productive region like the Gulf coast, and expect anything less.

My best read on this is that we are now at the mercy of the weather. If the weather holds out and we have a relatively calm summer, and if they can get the well under control, maybe the absolute worst case can be avoided. On the other hand, it we have a number of severe storms or hurricanes, which is expected, the biological and financial future of the gulf, and the future of BP, may depend entirely on which way the wind blows. If the oil is driven into the marshes and wetlands by storm surge, or even if we have wind-carried oil coating an entire coastal section of the gulf, it is difficult to even imagine the long-term ramifications. What would be the effect on the economy, for example, if the South suffers a crash in the value of real estate? How would the effects spread throughout the economy; esp during a critical time in our recovery; esp when we are subject to stresses resulting from the European financial crisis? The possibility that the total losses related to this event could be hundreds of billions of dollars, is a no-brainer. And we see that already in the value of BP. Generally, even a relatively small effect on the national economy can results in financial losses that rise to that level.

How about "the perfect storm II" ?
If all operations are abandoned because of an approaching hurricane, might there be enough oil floating and gas erupting, to produce any amount of combustionable mixture, ignited by a lightning strike? A wild thought, but what would the added heat do for the energy of a hurricane.

 

[apeiron]

Everyone has been "high-balling" the spill as well.

Well the high-balling greenies certainly beat out the industry apologists on this forum .

The interesting thing is what comes next. Given the coming global production crunch over the next four years, economies may need BP more than it needs them. So expect real politiks to win over harsh words, harsh penalties. Confidently predict that the goal is still that 40% of US domestic petroleum comes from deep sea drilling by 2020. As nothing less gives even close to business as usual.

And when it comes to environmental damage, are a few giga-spills in the gulf going to be any more of a cost than the slow but sure destruction of Canada's open pit oil sand mining? Or China's exponential increase in coal burning?

Hey, is that the edge of a cliff I can see looming? Quick, jam the foot down harder. And you clever techo-boffins in the back see if you can rustle up some wings for this here dang old car .

 

[nismaratwork]

It is safe when done properly and regulated properly.

CS

That's what I mean, but clearly regulations were not being enforced, and even broken outright by the enforcers. Really a shame, for the gulf and for those 11 men and their families. I wonder if the coke-heads at Minerals Management will ever see a court of law for negligent homicide? They should... they won't.

 

[nismaratwork]

Well the high-balling greenies certainly beat out the industry apologists on this forum .

The interesting thing is what comes next. Given the coming global production crunch over the next four years, economies may need BP more than it needs them. So expect real politiks to win over harsh words, harsh penalties. Confidently predict that the goal is still that 40% of US domestic petroleum comes from deep sea drilling by 2020. As nothing less gives even close to business as usual.

And when it comes to environmental damage, are a few giga-spills in the gulf going to be any more of a cost than the slow but sure destruction of Canada's open pit oil sand mining? Or China's exponential increase in coal burning?

Hey, is that the edge of a cliff I can see looming? Quick, jam the foot down harder. And you clever techo-boffins in the back see if you can rustle up some wings for this here dang old car .

That's well said, and probably the most accurate statement in the 15 or so pages I've read.

 

[xxChrisxx]

Hey, is that the edge of a cliff I can see looming? Quick, jam the foot down harder. And you clever techo-boffins in the back see if you can rustle up some wings for this here dang old car .

That's acutally quite nice metaphorical imagary. I assume the subtext is that we should slow down and not speed up.

Well to further the analogy, slowing down isn't an option as you've got a huge traffic jam that can't see the cliff that is constantly accelerating behind you. If you brake you get shoved over the cliff whether you want to go or not.

 

[signerror]

If all operations are abandoned because of an approaching hurricane, might there be enough oil floating and gas erupting, to produce any amount of combustionable mixture, ignited by a lightning strike? A wild thought, but what would the added heat do for the energy of a hurricane.

Well, let's see. According to http://en.wikipedia.org/wiki/Deepwater_Horizon_oil_spill" . I think much of the oil is either already onshore, or underwater (in micelles created by BP's detergent) where it can't combust, so this 10^-4 meter figure is a conservative estimate of how thick the sea-surface oil is.

Crude oil has an energy density of http://www.engineeringtoolbox.com/fuels-higher-calorific-values-d_169.html" .

For comparison, the thermal energy of seawater that is accessible to hurricanes, as estimated by http://www.aoml.noaa.gov/phod/cyclone/data/method.html" , is on the order of 10⁵ J/cm², or 10⁹ J/m². About 300 times higher.

(Or flipping it: the most hurricane-favorable seas have the heat potential of a 25 mm (1 inch) layer of crude oil.)

 

[mheslep]

A look back at US consumption during the 1973 oil embargo and subsequently:
http://www.eia.doe.gov/aer/eh/images/figure11.jpg
In '73 the US was essentially forced to cut its oil consumption ~ 1.5 Mbbl/day (~9%) in response to the OPEC embargo and price hikes of 100%, then 300%. The US later cut consumption ~5 Mbbl/day over 3-5 years on its own via efficiency improvements and largely doing away with oil based electricity generation. The '73-'75 period in particular was difficult, but it didn't create a police state or radical reorganization of the society in the US, nor anywhere else that I recall. I do not see how the current oil forecasts portend anything worse.

 

[apeiron]

The '73-'75 period in particular was difficult, but it didn't create a police state or radical reorganization of the society in the US, nor anywhere else that I recall. I do not see how the current oil forecasts portend anything worse.

The shocks did cause social disruption elsewhere (the US was only just hitting its domestic production peak then). But yes the shock was fleeting as a swift clip to the ear for OPEC led to the 20 years of back-to-cheap-oil that paid for the yuppie years.

There was another oil shock was at the turn of the 1980s when the Iranian revolution was followed by war between Iran and Iraq. The cost of a barrel of oil soared to $140 for five years. But as the West tapped new oil fields in Alaska, Russia and Mexico, the price plummeted to about $40 a barrel and stayed there for another go-go decade.

It was only with the oil shock of 2007 that we even got back to those early 1980 levels. And that was a blip of a few months.

The credit crunch has cut demand and cut prices since. So we have only suffered oil blips in fact.

Anyway, further current discussion about the efficiency trade-off story.

http://www.theoildrum.com/node/6503#more

So of couse, oil stress will lead to oil efficiencies. The hard question is how much resilience there actually is in the world system. Hopefully plenty. And real shocks will change behaviours rapidly with less disruption than some anticipate. This would be the optimistic view taken by us pessimists.

 

[apeiron]

BTW, EIA forecasts a http://www.eia.doe.gov/oiaf/ieo/excel/figure_2data.xls" , i.e. by 2020, (all types including ethanol). I don't follow how that creates a shock leading to a police state.

Well you can extrapolate the demand trends or analyse the production capacity plans. Do that an discover the disconnect.

Anyway, this is the trend of EIA production forecasts.

http://www.theoildrum.com/node/6556

You can either focus on the way the prediction is revised downwards every year, or instead admire the way it still keeps soaring away unconstrained after the current predicted production shock.

But what is not in question now is the fact of an imminent world production bottleneck (which will either cause a global economy shock, or only be avoided by one (a recession continuing to kill demand) - so pain either way).

 

[mheslep]

There was another oil shock was at the turn of the 1980s when the Iranian revolution was followed by war between Iran and Iraq. The cost of a barrel of oil soared to $140 for five years. But as the West tapped new oil fields in Alaska, Russia and Mexico, the price plummeted to about $40 a barrel and stayed there for another go-go decade.

$140/bbl in the 80s? The price of oil per barrel, in nominal terms, never exceeded $40 until roughly 2004. Inflation correction would correct the price higher especially because of the inflationary 70s, but still would not hit "$140 for five years"

http://www.wtrg.com/oil_graphs/oilprice1947.gif

 

[Evo]

Temporary shutdown in order to bring this thread under control.

 

[Ivan Seeking]

Just to mark the date: For the first time, the flow from the main pipe has been stopped. After about 90 days - starting date April 20th - they may finally have this under control.

perhaps 180 million gallons spilled [plus or minus 20%, or so]. This does not allow for the oil collected, or burned.