BP -- Better Plans -- Maybe Success This Time

The latest attempt to stop oil from flowing into the Gulf is showing some promising signs.

BP's cap funneling oil to the surface-Coast Guard

Fri Jun 4, 2010 10:08am EDT

* Cap on leak, funneling fraction of oil to drillship

* BP hopes cap will eventually capture 90 pct of oil

HOUSTON, June 4 (Reuters) - BP Plc.'s containment cap over its stricken Gulf of Mexico well is collecting about 1,000 barrels per day, the top U.S. official overseeing the cleanup effort said on Friday.

A top BP executive overseeing containment efforts told CNN earlier that as that collection rate increases, it could corral "90-plus percent" of the oil.

One thousand barrels is a small fraction of the 19,000 barrels per day that the U.S. government has estimated could be gushing from the well, but the amount should increase as BP closes vents at the bottom of the cap to trap more oil, Coast Guard Admiral Thad Allen told reporters in a conference call.

"Sometime later today we'll probably be able to get ... an approximation of how much oil we are capturing," he said.

The containment cap is BP's latest attempt to trap oil, after its' "top kill" plan to plug the well failed on Saturday. BP's strategy is now to trap the oil at the well and funnel it to a tanker on the surface until it can drill a relief well to staunch the flow, which could take until mid-August.

Doug Suttles, BP's chief operating officer of exploration and production, told CNN earlier on Friday that the containment cap "should work."

"I'd like to see us capture 90-plus percent of this flow," Suttles said. "I think that's possible with this design."

Both Allen and Suttles said BP would continue working to seal the cap on jagged remnants of a pipe on equipment at the wellhead.

"Of course what we have to do is work through the next 24 or 48 hours to optimize that. But that would be the goal ... We want to stop this oil from spilling to the sea," Suttles said.

Suttles was the first BP official to publicly discuss the cap -- its latest attempt after a series of failures to try to contain a gushing oil and gas leak in the Gulf of Mexico.

BP spent Thursday lowering the cap onto the jagged remnants of a pipe that had been sheared from the top of equipment at the wellhead.

A rubber seal on the bottom of the cap is intended to capture most of the oil, but some is still expected to escape.

Meanwhile, drilling continues on two relief wells expected to intercept and plug the leaking well far beneath the seabed. Drilling began May 2 on the first relief well and May 16 on a second. Both are expected to be finished in August.

Oil and Water

It should be obvious that less offshore drilling is unlikely to prevent or reduce oil spills. Prior to the current leak in the Gulf of Mexico, the biggest leak came from the Exxon Valdez, a ship. Not a producing well. If we drill less, then we will import more, and more of the imported oil will arrive by ship. More ships means more potential for leaks.

Drilling in Deep Water
A ban on offshore production won't mean fewer oil spills

It could be months before we know what caused the explosion and oil spill below the drilling rig Deepwater Horizon. But as we add up the economic costs and environmental damage (and mourn the 11 oil workers who died), we should also put the disaster in some perspective.

Washington is, as usual, showing no such restraint. As the oil in the Gulf of Mexico moves toward the Louisiana and Florida coasts, the left is already demanding that President Obama reverse his baby steps toward more offshore drilling. The Administration has partly obliged, declaring a moratorium pending an investigation. The President has raised the political temperature himself, declaring yesterday that the spill is a "massive and potentially unprecedented environmental disaster."

The harm will be considerable, which is why it is fortunate that such spills are so rare. The most recent spill of this magnitude was the Exxon Valdez tanker accident in 1989. The largest before that was the Santa Barbara offshore oil well leak in 1969.

Workers load oil booms onto a crew boat to assist in the containment of oil from a leaking pipeline in the Gulf of Mexico.

.The infrequency of big spills is extraordinary considering the size of the offshore oil industry that provides Americans with affordable energy. According to the Interior Department's most recent data, in 2002 the Outer Continental Shelf had 4,000 oil and gas facilities, 80,000 workers in offshore and support activities, and 33,000 miles of pipeline. Between 1985 and 2001, these offshore facilities produced seven billion barrels of oil. The spill rate was a minuscule 0.001%.

According to the National Academy of Sciences—which in 2002 completed the third version of its "Oil in the Sea" report—only 1% of oil discharges in North Americas are related to petroleum extraction. Some 62% of oil in U.S. waters is due to natural seepage from the ocean floor, putting 47 million gallons of crude oil into North American water every year. The Gulf leak is estimated to have leaked between two million and three million gallons in two weeks.

Such an accident is still unacceptable, which is why the drilling industry has invested heavily to prevent them. The BP well had a blowout preventer, which contains several mechanisms designed to seal pipes in the event of a problem. These protections have worked in the past, and the reason for the failure this time is unknown. This was no routine safety failure but a surprising first.

One reason the industry has a good track record is precisely because of the financial consequences of accidents. The Exxon Valdez dumped 260,000 barrels of oil, and Exxon spent $3.14 billion on cleanup. Do the math, and Exxon spent nearly 600 times more on cleanup and litigation than what the oil was worth at that time.

As for the environmental damage in the Gulf, much will depend on the weather that has made it more difficult to plug the leak and contain the spill before it reaches shore. The winds could push oil over the emergency containment barriers, or they could keep the oil swirling offshore, where it may sink and thus do less damage.

It is worth noting that this could have been worse. The Exxon Valdez caused so much damage in part because the state of Alaska dithered over an emergency spill response. Congress then passed the 1990 Oil Pollution Act that mandated more safety measures, and it gave the Coast Guard new powers during spill emergencies. We have seen the benefits in the last two weeks as the Coast Guard has deployed several containment techniques—from burning and chemical dispersants to physical barriers. America sometimes learns from its mistakes.

On the other hand, Washington's aversion to drilling closer to shore has pushed the industry into deeper, more difficult, waters farther out to sea. BP's well is 5,000 feet down, at a depth and pressure that test the most advanced engineering and technology. The depth complicates containment efforts when there is a disaster.

As for a drilling moratorium, it is no guarantee against oil spills. It may even lead to more of them. Political fantasies about ending our oil addiction notwithstanding, the U.S. economy will need oil and other fossil fuels for decades to come. If we don't drill for it at home, the oil will have to arrive by tanker and barges. Tankers are responsible for more spills than offshore wells, and those spills tend to be bigger and closer to shore—which usually means more environmental harm.

The larger reality is that energy production is never going to be accident free. No difficult human endeavor is, whether space travel or using giant cranes to build skyscrapers. The rest of the world is working to exploit its offshore oil and gas reserves despite the risk of spills. We need to be mindful of such risks, and to include prevention and clean up in the cost of doing business, but a modern economy can't run without oil.