Deep trouble in deep water
The long-term implications of the Gulf of Mexico's disastrous oil spill for the offshore industry could be as far-reaching as the spill itself, writes Anne Feltus
EXPLOITATION of the billions of barrels of oil buried deep beneath the Gulf of Mexico's (GOM) ultra-deep waters is as perilous as it is promising. That became evident in April as oil companies, government agencies and an assortment of other responders began battling to bring a large oil slick under control and to minimise damage as the hydrocarbons approached the shore.
The disaster began with an explosion on 20 April on the semi-submersible Deepwater Horizon drilling rig, which was operating at the Macondo prospect, in about 5,000 feet of water, about 50 miles off the Louisiana coast. Owned by Transocean, the world's biggest offshore drilling contractor, the rig was under contract to BP, the GOM's largest producer.
The $350m, 5th-generation rig had worked on several other high-profile BP developments, including Atlantis, Thunder Horse and Kaskida fields. In September, it had drilled a discovery well on the multi-billion-barrel Tiber prospect; reaching down to a vertical depth of 35,050 feet in more than 4,100 feet of water – the deepest oil well in history.
Following the explosion, the rig caught fire. US Coast Guard helicopters evacuated 115 people from the structure, including 17 who were injured. Eleven others were missing and, after an exhaustive search, they were assumed dead.
Almost two days after the explosion, the rig sank. Oil began flowing from three leaks in the riser and drill pipe that lay on the ocean floor. Although an estimate of 5,000 barrels a day has been bandied about, industry sources admit the difficulty of determining how much petroleum was and is escaping from the well. An oil slick forming on the surface began spreading north and west across the Gulf.
Although there has been plenty of finger-pointing, it is likely that the cause of the explosion will not be determined for many months. What is known is that the blowout preventer, the huge stack of valves on top of the well that should have shut off the oil flow in case of a blowout, did not work. What has not been determined is why it failed or how hydrocarbons entered the wellbore, causing the blowout.
The oil spill triggered an unprecedented response, involving not only BP, Transocean and other industry resources, but also the US defence, energy, homeland security and interior departments, the Occupational Safety and Health Administration and various other federal agencies, as well as governments of affected states and local communities. At a media briefing, Coast Guard commandant admiral Thad Allen, appointed by Department of Homeland Security secretary Janet Napolitano to act as national incident commander for the event, cited four operational priorities: to stop the leak at its source; remove the leaked oil from the sea; protect resources onshore; and recover and mitigate areas affected.
Addressing those goals presented some formidable technological challenges. Remotely operated vehicles sent to the subsurface were able to cap the smallest of the three leaks, but were unsuccessful at closing the valves on the blowout preventer. Work also began to drill two relief wells that would intercept the pipe and pump heavy mud into the borehole to stop the oil flow. Although this method would probably work, experts estimate it could take three months to drill the wells.
Meanwhile, in an industry first at this water depth, responders piped dispersants to the source of the leaks to break up the oil before it could rise to the surface; although the measure met with some success, it did not stop the flow of oil. Then, in early May, BP began lowering a four-story-tall, 100 tonne, steel and concrete dome, called a cofferdam, over the leak site in the hope of collecting and containing the oil so it could be funnelled to a vessel on the surface.
The technique had worked effectively at shallower depths, but had never been attempted in 5,000 feet of water, where temperatures are as low as 42°F and pressures exert at 2,300 pounds per square inch. The efforts were suspended as ice-like methane crystals began building up inside the dome, clogging the opening where the pipe was to be connected and making the cofferdam buoyant.
As an alternative, BP began constructing a two-tonne version, called a top hat, based on the theory that crystals would be less likely to form in the smaller chamber because it would allow less seawater inside. The company also received approval from the Environmental Protection Agency to pump methanol into the larger container to act as an antifreeze and announced plans to flush warm seawater around the pipe that would connect the cofferdam to the surface.
At press time, oil continued to flow from the well, and other alternatives were under evaluation. In a measure called a top kill or junk shot, BP planned to pump debris, such as golf balls and shredded tyres, into the blowout preventer to block the oil flow – a method that was used to halt well fires in Iraq and Kuwait during the Gulf Wars, but which had never been employed in a deep-water environment.
Officials are also considering cutting away equipment above the existing blowout preventer and lowering a new one onto it, a risky manoeuvre that could rupture the well and accelerate the flow of oil. In addition, BP executives were assessing whether to insert a tube into the break of the leaking pipe to intercept some of the oil; rubber flaps on the tip of the tube would prevent seawater from entering the pipe and causing methane-hydrate crystals to form.
Other mitigation efforts were launched on the surface to contain and remove the oil as it approached the wetlands along the Louisiana coast. About 275 vessels were mobilised and almost a million feet of booms had been floated on the sea surface by 11 May to corral the oil slick. More than a million feet of additional boom also were made available if needed.
In addition, work began to skim oil off the sea surface, and biodegradable dispersants were applied from planes and boats to break up the spill. The Coast Guard initiated a controlled burn of the oil sheen to minimise environmental risks. Meanwhile, responders launched a massive shoreline protection effort that involved 14 staging areas along the coast and thousands of volunteers.
As the operator of the Macondo prospect, BP has responsibility under the Oil Pollution Act for mitigating the environmental and economic impact of the event. Company representatives said the offshore-mitigation efforts alone are costing about $6m a day. Onshore clean-up costs and litigation could boost that figure substantially.
Tighter regulation almost certain
In addition, BP and the rest of the offshore energy industry could pay dearly if the incident results in a more restrictive regulatory environment. In a move to gain broader support for a proposed climate bill pending before the Senate that would cut greenhouse-gas emissions, President Barack Obama had announced plans to include provisions in the bill that would open additional offshore areas for development, including the energy-rich Eastern Gulf of Mexico, where drilling is banned (PE 5/10 p26). The industry welcomed the news.
However, following the Deepwater Horizon incident, the bill's sponsors rewrote the section on offshore drilling. Although it still calls for opening more offshore areas for energy activity and gives states 37.5% of the royalties from offshore-drilling developments, it also allows states to restrict any drilling off their coastline that could cause environmental or economic harm. Previous versions of the bill have already been stalled in the Senate for about a year and it is expected that the latest rendition will also trigger intense debate.
Other legislative restrictions have been proposed in the aftermath of the oil spill. For example, bills have been introduced in both the House of Representatives and Senate that would prohibit new offshore leasing.
Meanwhile, Obama has requested legislation that would toughen and update the Oil Pollution Act, passed after the 1989 Exxon Valdez oil spill, which sets a $75m cap on how much companies would have to pay to private parties for economic damages they cause while drilling for, or transporting oil. In addition, bills could be introduced as a result of investigations launched by at least three Congressional committees to assess the economic and environmental impact of the spill. The committees' hearings have been especially contentious, as angry Congressional representatives have grilled executives of BP, blowout preventer manufacturer Cameron and Halliburton, which cemented the well, and as the executives blame each other for the explosion.
A tighter regulatory environment is almost certain. Within days of the explosion, Napolitano and Interior Department secretary Ken Salazar directed the Coast Guard and Minerals Management Service (MMS) jointly to conduct an investigation into the cause of the event. The Interior Department also established the Outer Continental Shelf (OCS) Safety Oversight Board to provide recommendations regarding interim measures for enhancing OCS safety, and improving and strengthening the department's management, regulation and oversight of OCS operations.
Salazar said no new offshore-drilling permits would be issued until the safety-review process had been completed. He also proposed splitting the MMS into two agencies – one that would oversee the oil industry and another that would provide drilling leases and collect royalties – to eliminate any possible conflict of interest between the two functions.
Events continue to unfold and the full impact of this incident will not be understood for months or perhaps years. At the very least, it will serve as a sombre reminder that the oil and gas that fuel the world's factories, heat its homes and power its cars are combustible products that must be pried with caution from some of the riskiest, most remote regions on the planet.