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Location: essex ma
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i'm kinda waiting to see how the walk-away happens.
and i can't imagine that concentration is a desirable thing for a capitalist-type cheerleader who thinks markets are rational and all that. think hayek for example, his problems with monopoly.
anyway, there's plenty squabbling amongst bp and anadarko about well design and between bp and shell and exxon et al over whether bp's decisions can or cannot be seen as conforming to "industry norms"---of course all the non-bps have every interest in separating these norms from what bp had been doing because they are opposed to things like the drilling monatoria which would obviously interrupt the sacred functions of capital accumulation. but the case seems a bit shaky given that, for example, all the companies involved with off-shore drilling use basically the same disaster plan....
Quote:
Stakes high for warring oil spill partners
By Carola Hoyos in London
Published: June 29 2010 22:33 | Last updated: June 29 2010 22:33
One of the bitterest battles resulting from the oil spill in the Gulf of Mexico is the dispute between BP, operator of the Macondo well, and Anadarko, its biggest junior partner.
On June 18, after Anadarko’s credit rating had been downgraded to junk, Jim Hackett, chief executive, launched an attack on BP. He said the accident could have been avoided and that BP would likely be found to have acted with “gross negligence or wilful misconduct”.
He said he was “shocked” at what he had learnt from documents that became publicly available after the accident.
What he did not mention was that Anadarko knew and even approved some of the most controversial decisions BP made, ones that US lawmakers have given as examples of BP cutting corners to cut costs.
Lawmakers, in the course of congressional hearings into what caused the disater, have raised concerns about Macondo’s basic well design, the technology used and about BP’s execution of the development of the well.
Executives from Royal Dutch Shell, ExxonMobil, Chevron and ConocoPhillips, all peers of BP and Anadarko, have testified that they would have done things differently than the partners at Macondo.
BP and Anadarko ThumbnailRoyal Dutch Shell, for example, said it would not have used the well design approved by Anadarko, BP and Mitsui, the third partner, for use at this type of deepwater exploration well.
Marvin Odum, president of Shell, told a Congressional hearing in mid-June: “It’s not a well that we would have drilled in that mechanical set-up.”
In contrast, Anadarko says that the accident was caused purely because of BP’s faulty execution, not the design or the technology.
“What we knew was that the design, the long string and the use of centralisers all met industry standards if executed correctly. The problems were caused by BP’s execution of each of these,” Anadarko said.
A long string is a cheaper way of lining a well but one that gives less protection against gas leaks than using multiple layers, including liners and casings, while centralisers stabilise a well before it is cemented.
Industry executives on and outside the Macondo project agree that BP, not Anadarko, called the shots on the Deepwater Horizon and had more information on what went into day-to-day decisions than its partners, which did not have a representative on the rig on a regular basis.
However, Anadarko was kept abreast of what was going on each morning when BP sent it a report of what happened at the rig in the previous 24 hours, both companies said. The report included information such as well test results, the technical procedures that had been undertaken and any unexpected challenges, such as a surge in gas.
“BP gave or made available to the co-owners Authorisation for Expenditure (AFE) documents, supplemental AFE documents, daily operations reports, and other documents that showed the well design, changes to the well design, and identified big well control events encountered during drilling operations,” BP said in an e-mail in response to Financial Times’ questions. “Further, personnel from the co-owners engaged in periodic communications with BP personnel about well design and other issues related to the well.”
Anadarko says that, still, it did not have enough data, to throw up red flags.
For example, Anadarko says it knew of BP’s decision on April 16 to use only six centralisers despite the challenging nature of the well. However, Anadarko says it was only told of the decision after the centralisers had been put in place and was not aware that BP’s decision contradicted advice from Halliburton, the contractor on the rig.
Anadarko also did not know of at least two of the most controversial decisions BP made, executives from both sides acknowledge. That is because those calls were made within the final 24 hours of the life of the well, executives said.
Thus, the fate of Anadarko will depend on whether investigators and courts decide that the Macondo well was flawed from the onset, or whether the decisions BP made – especially in the critical final 24 hours – were what caused the accident.
The stakes are high for both parties.
If BP alone is indeed found guilty of gross negligence or wilful misconduct, Anadarko and Mitsui will not have to pay their share of the cost of the clean up and the liabilities that have arisen from the accident.
For Anadarko, in particular, that decision could be the difference between life and death given its size and the fact that no one knows how much those liabilities would be, analysts say.
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FT.com / Companies / Oil & Gas - Stakes high for warring oil spill partners
meanwhile those heroic captains of industry set up an organization to help deal with oil spills that now finds itself wholly outstripped by reality:
Quote:
Oil industry cleanup organization swamped by BP spill
By Joe Stephens and Mary Pat Flaherty
Washington Post Staff Writers
Tuesday, June 29, 2010; 9:57 PM
For the past two decades, companies that produce and transport oil have channeled tens of millions of dollars a year into an organization they set up to provide cleanup equipment and personnel if a catastrophic offshore spill were ever to hit the United States.
But when that spill occurred two months ago, it soon swamped the Marine Spill Response Corp.
MSRC "has never had to deal with anything even remotely this large and chaotic," said Kieran Suckling, executive director of the Center for Biological Diversity, which is suing BP for damages under the Clean Water Act.
MSRC officials say they expect to be in the spotlight as Congress investigates whether the industry and the nation should have been better prepared for a disaster on the scale of the one playing out in the Gulf of Mexico. Congress also is likely to look into whether the tax-exempt company's equipment -- much of it two decades old -- is up to the current challenge, as wells move farther out to sea and deeper below the ocean.
"Should the industry's capacity have been greater than it is? That's a fair question," said Steve Benz, MSRC president and a former BP executive. He stressed that the U.S. Coast Guard set benchmarks for how much equipment and manpower large oil-recovery companies should have. Also, he said, any standing operation would have difficulty immediately capturing the volume of oil gushing from the Gulf well.
"If this happened again, should we already have in place 20,000 people and 1,000 boats?" Benz asked. "You can't build a firehouse that big and have it make any reasonable economic sense. You need to prevent the fire in the first place."
Congress has been here before. Twenty years ago, after the Exxon Valdez dumped millions of gallons of oil into Prince William Sound, lawmakers angrily reacted -- much as they have today -- by vowing to ensure that such devastation would never happen again. Congress passed the Oil Pollution Act of 1990, requiring companies transporting oil over water to have ready access to clean-up equipment adequate for the worst possible spill. Big oil companies banded together to form MSRC.
Far from the coast, the nonprofit is run out of nondescript offices in Herndon, Va., sharing a building with a credit union and a title company. The company, which calls itself the nation's largest oil spill recovery organization, remained low-profile while growing to more than $100 million in assets. Its resources include 400 employees and 15 large oil-recovery ships dubbed "Big Blues" and positioned in the lower 48 states and Hawaii. It and its contractors have responded to 700 spills, none approaching the magnitude of the Deepwater Horizon blowout.
State and regional officials familiar with MSRC's past work say it does a good job handling more contained environmental challenges. But now MSRC finds itself leading the charge in a much different battle.
"There is no asset MSRC has that is designed to collect oil 5,000 feet under the seas," said Brett G. Drewry, chief executive of the industry-backed organization that funds MSRC.
That fact did not stop BP and other companies from citing MSRC, alone or alongside for-profit cleanup companies, as their first responder for massive spills. Oil companies, Congress and regulators point to MSRC as evidence of lessons learned from Valdez. Suckling said safeguarding the coasts should not be left to private industry.
"It seems to me there is a real significant conflict of interest here," he said. "When you are dealing with an issue that has such enormous stakes for public health and safety, it should be in the government's hands."
In most spills, recovery efforts capture only between 10 and 15 percent of the leaked oil, according to several state and industry experts.
Rep. Lynn Woolsey (D- Calif.), wants to increase funding for federal research into spills. "The fact that we didn't have the technologies in place to prevent and respond to these kinds of disasters before we allowed drilling 5,000 feet underwater is totally unacceptable," Woolsey said.
MSRC sprang from a cost calculation by big oil. The companies decided that, rather than each buying its own armada of skimmers, it would be cheaper and more efficient to work together.
In 1990, they formed the non-profit Marine Preservation Association and based it in Scottsdale, Ariz. MPA, in turn, funded the creation and operations of MSRC.
The structure was designed to shield oil companies from liability, in case MSRC was later found responsible for damages related to a skimming operation, according to officials at both organizations.
By joining MPA, oil companies gain the right to enter service agreements with MSRC, said Judith Roos, an MSRC spokeswoman. If a spill occurs, companies then pay MSRC for individual cleanup services.
At its inception, MSRC commissioned 15 specialty ships, each 210 feet long with temporary storage for 4,000 barrels of recovered oil. Today, the corporation's annual operating budget is about $80 million.
For most spills it has handled, MSRC has been the primary or only responder, cleaning up the mess on its own or through its contractors. But the BP blowout has required much greater resources.
Within hours of the explosion, MSRC dispatched four skimmers; they arrived while the fire was still burning. MSRC is providing the largest number of skimming vessels in the off-shore fleet, Benz said. Specific figures are unclear, but Benz said that "well over half" of the oily water recovered offshore has been collected by MSRC and its contractors.
Onsite today in the gulf are 10 Big Blues. Two more, now in California, should arrive soon. (MSRC's remaining three vessels will remain elsewhere in case of unrelated spills.)
The Big Blues skim oil from the surface through an umbilical hose that vacuums oily water and empties it into the ship's storage tanks or a barge alongside.
The company has three ocean-going barges onsite, each capable of holding about 40,000 barrels, and 25 shallow-water barges. It also has deployed an assortment of smaller, fast-response boats and has its C-130 cargo plane in Louisiana to spread dispersant. At the disaster's peak, MSRC said it had 7,000 people working in the gulf. The number dropped as volunteers and other organizations arrived.
When MSRC was formed, the oil companies envisioned it as uniquely poised to clean up catastrophic spills. But over time, a competing approach arose.
Seacor Holdings, based in Fort Lauderdale, saw a business opportunity in the post-Valdez cleanup standards. It formed the for-profit National Response Corp., and set out to provide many of the same services as MSRC at lower prices. While MSRC had a dedicated fleet, NRC retrofitted a handful of ships and contracted with commercial shippers for access to their fleets in an emergency.
Before long, some MSRC customers were moving to NRC. MSRC cut costs, including research into better ways to recover spilled oil.
"That was much to the detriment of the organization," said David McLain, a former MSRC consultant.
Today, NRC has eight ships it owns recovering oil for BP, and has secured more than 100 other vessels for the operation. It remains to be seen, however, whether the for-profit company is better prepared to deal with a deepwater spill.
"All of us who do oil spills will be looking for the lessons learned here," said Stephen Edinger, who works on oil recovery issues for the state of California. That reexamination likely will include MSRC itself, according to oil industry consultant Robert Peterson.
"The industry will rethink the MSRC's ability to respond," he said, "and I expect increased investment and increased response capability."
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Oil industry cleanup organization swamped by BP spill
meanwhile this article:
Quote:
Second pipe may have crippled BP well's defense mechanism
The discovery joins a list of clues that is helping scientists understand the complexities of the Deepwater Horizon accident, and from that, craft changes in how deep-water drilling is conducted.
Jim Tankersley, Tribune Washington Bureau
4:17 PM PDT, June 29, 2010
The gushing BP oil well is a mystery still unfolding, and late last month, a team of scientists from the Energy Department discovered a new twist: Their sophisticated imaging equipment detected not one but two drill pipes, side by side, inside the wreckage of the well's blowout preventer on the bottom of the Gulf of Mexico.
BP officials said it was impossible. The Deepwater Horizon rig, which drilled the well, used a single pipe, connected in segments, to bore 13,000 feet below the ocean floor. But when workers cut into the wreckage to install a containment cap this month, sure enough, they found two pipes.
The discovery suggested that the force of the erupting petroleum from BP's well on April 20 was so violent that it sent pipe segments hurtling into the blowout preventer, like derailing freight cars.
It also offered a tantalizing theory for the failure of the well's last line of defense, the powerful pinchers called shear rams inside the blowout preventer that should have cut the pipe and stopped the rising oil and gas from reaching the Deepwater Horizon 5,000 feet above. Drilling experts say those rams, believed to be partially deployed, could have been thwarted by the presence of a second pipe.
The doubled-up drill pipe joins a list of clues that is helping scientists understand the complexities of the Deepwater Horizon accident, and from that, craft changes in how deep-water drilling is conducted.
"We still don't really know what's in" the well wreckage, said Energy Secretary Steven Chu, whose team discovered the second pipe using gamma-ray imaging. He added: "If there were two drill pipes down there when the shear rams closed, or two drill pipes below, is it possible that in the initial accident … there was an explosive release of force?…Did it buckle and snap?…The more we know about this, the better we can know what to do next."
The challenge will be making enough changes to soothe policymakers' and the public's fears of a repeat accident, while keeping deep-water drilling economically feasible in an area that provides a third of the nation's domestic oil.
Whether this requires halting deep-water drilling in the Gulf of Mexico is hotly debated. Last week, a federal judge overturned the Obama administration's May decision to ban work on 33 deep-water rigs until January, when a presidential commission is expected to release its reform suggestions. The administration is appealing.
Officials are trying to plug the leak while looking for at least interim answers to fundamental questions about the oil spill. Chief among them: What part of the confluence of events that caused the disaster is unique to BP's methods and practices, and what is common to the industry at large? What amount of government oversight can increase the safety of deep-water drilling, and at what cost?
Drilling experts and advocates, environmentalists and government officials agree so far on one point: No amount of regulation can absolutely preclude another drilling accident.
But some changes could not wait: Interior Secretary Ken Salazar has dismantled and begun to reassemble the agency charged with drilling oversight after finding it had too cozy a relationship with the oil industry and had ceded too much safety responsibility to the drillers.
Many drilling experts say there's already ample evidence of errors designing and drilling the well beneath the Deepwater Horizon — and of officials on the rig "cutting corners" to finish a job that was expensively behind schedule. Those could be addressed, and could be penalized with civil and criminal charges, without shutting down part of the industry.
The accident "absolutely was preventable," said Eric N. Smith, associate director of the Tulane Energy Institute. The rig, he added, lacked "a regulatory presence onboard that said, 'I don't care how late it is, you do it right or you go home.' "
The experts suggest that the most glaring mistake was a faulty cementing job in the well that was unable to handle the high-pressure oil and gas flow.
The government could prevent similar errors by hiring experienced engineers, stationing them on drilling rigs and empowering them to shut down any operation that failed to meet established safety standards, Smith said.
Administration officials acknowledge that the federal government has not provided nearly enough money or inspectors for that level of oversight.
Salazar called past and present funding levels for inspectors "woefully inadequate" and said that "you need to have the horsepower to be able to have the inspection" of deep-water drilling rigs.
He has also insisted that the drilling moratorium would give investigators crucial time to solve the mystery of why so many of the Deepwater Horizon's "fail-safe" backups failed. That includes learning why the shear rams are partially deployed but resisting efforts to fully close.
"There clearly needs to be identified what, if anything, went wrong with the fail-safe system," said Gene Beck, an assistant professor of petroleum engineering at Texas A&M University. "We need to understand, did something happen with the [blowout preventers] that we didn't understand? Did they fail to function, in any way, shape or form, within their design parameters?"
Regulators could recommend additional backup systems, such as a second blowout preventer or a relief well drilled in conjunction with the initial well.
The other key to minimizing the risks of a similar blowout is economic. For example, Beck said requiring a concurrent relief well with every project could drain any profit from drilling. Smith, along with a chorus of public officials on the Gulf Coast, warns that Salazar's six-month moratorium could drive the exploration industry out of the gulf permanently.
Environmentalists are pushing the administration to value ecological protection more highly as it updates its risk calculations.
"Safety costs a bit more," said Chris Mann, a senior officer with the Pew Environment Group. "Our argument is that should be the cost of doing business."
Chu said scientists won't solve the mystery of the Deepwater Horizon — and absorb its lessons — until they exhume the blowout preventer from the seafloor and break it down.
Still, economists are beginning to tally the costs of possible reforms. A Washington-based think tank, Resources for the Future, released an analysis suggesting that if the United States brought deep-water safety regulations up to the stricter standards of nations such as Norway, the cost of a typical drilling project would rise about 10% to 20%.
That shakes out to less than half a cent per gallon at the pump.
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Second pipe may have crippled BP well's defense mechanism - latimes.com
has triggered an interesting exchange at the oil drum:
The Oil Drum | BP's Deepwater Oil Spill - Making the Connection- also Hurricane Effects - and Open Thread
which is still the best source for information about the struggle to control the leak itself.
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a gramophone its corrugated trumpet silver handle
spinning dog. such faithfulness it hear
it make you sick.
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