Friday, September 17, 2010

Day 149 BP Oil Spill: Relief Well Intercept; Bottom Kill Underway

Sep 17: At about 10 PM, last evening (September 16)National Incident Commander for the BP Gulf of Mexico oil spill disaster, Admiral Thad Allen issued a brief statement on the relief well intercept operation designed to initiative the "bottom kill" of the well. Allen said, "I have received extensive briefings over the last 24 hours regarding the final effort to intercept the Macondo well. Through a combination of sensors embedded in the drilling equipment and sophisticated instrumentation that is capable of sensing distance to the well casing, BP engineers and the federal science team have concluded that the Development Driller III relief well has intersected the Macondo well. 
    "This determination was made based on a loss of drilling fluids that indicated communication had been established beyond the relief well, the pressure exerted against the drill bit as it came in contact with the well casing and, finally, an increase in pressure in the choke line of the Macondo well blow out preventer. While each of these indicators taken separately would not necessarily be conclusive, the aggregate data available supports the conclusion that the two wells are joined. It is also important to note that none of the measurements supported a scenario where the annulus of the well is in communication with the reservoir. Accordingly, we intend to proceed with preparation to cement the annulus and complete the bottom kill of the well. Further information will be provided as cementing procedures are completed." Estimates are that the well will be completely sealed this weekend.
    Since the BP oil spill response began, the administration reports that it has worked to hold the responsible parties accountable for repairing the damage, and repaying Americans who have suffered a financial loss -- first by directing BP to improve its claims process and then by establishing the Gulf Coast Claims Facility (GCCF), the independent agency administered by Kenneth Feinberg which was formed in June as part of an agreement between the Obama Administration and BP. To date, 62,983 claims have been opened through the GCCF, from which more than $156.9 million have been disbursed -- in addition to the more than 150,000 claims filed and $395 million disbursed through the BP claims process.
    Also, on September 16, the Administration released a 25-page report entitled, Estimating the Economic Effects of the Deepwater Drilling Moratorium on the Gulf Coast Economy Inter-Agency Economic Report. The report indicates that in response to the BP oil spill, the Secretary of the Interior exercised his authority to suspend certain deepwater drilling activities. Given uncertainty about the adequacy of existing safety regulations, the moratorium provided time to determine whether and how deepwater drilling could continue in a safe and environmentally-sound manner. The current moratorium is in effect until November 30, 2010. The report estimates the economic consequences of this moratorium in the five Gulf Coast states.
    The report indicates that, "Based on conversations with a number of rig operators along with other publicly-available information, we estimate that during the six-month period of the moratorium average employment of rig workers in the Gulf of Mexico fell by about 2,000. Total spending by drilling operators is estimated to decline $1.8 billion over the six-month period. . . We estimate that the six-month moratorium may temporarily result in up to 8,000 to 12,000 fewer jobs in the Gulf Coast. These jobs would not be permanently lost as a result of the moratorium; most would return following the resumption of deepwater drilling in the Gulf of
Mexico. . .
    "The other primary economic consequence of the moratorium is delayed oil production. Consistent with other studies, we estimate that the moratorium will reduce Gulf of Mexico oil production by about 31,000 barrels per day in the fourth quarter of 2010 and by roughly 82,000 barrels per day in 2011. These are small reductions compared to world production, and are occurring at a time when both crude oil and product inventories and global spare oil production capacity are at high levels, hence they are not expected to have a discernable effect on the price of oil."
    In the meantime, the organization, Public Employees for Environmental Responsibility (PEER), has filed a lawsuit accusing the Obama administration of "hiding the memos and e-mails behind official scientific assessments of the size of the massive BP oil spill." PEER said, "Estimates of the leak rate inexplicably rose five-fold amid reports that political appointees sought to low ball the size of the spill." Over the course of the BP incident, "official" oil leak estimates ranged from 1,000 barrels per day (bbl/day) to 55-000-62,000 bbl/day.
    On July 6, 2010, PEER requested the release of all of the Technical Group papers, including directives from Marcia McNutt, Director of the Interior Department's U.S. Geological Survey and other Interior political appointees but they say virtually none of the materials has been released. PEER filed a lawsuit in Federal district court in Washington, DC claiming that hundreds of pages of reports and communications are being withheld in violation of FOIA.
    PEER Executive Director Jeff Ruch said, "This lawsuit will produce Exhibit A for the case that science is still being manipulated under the current administration. Our concern is that the administration took, and is still taking, steps to falsely minimize public perception about the extent and severity of the BP spill -- a concern that the administration could start to dispel by releasing these documents."

    Access the statement from Allen (click here). Access the 25-page moratorium economic report (click here). Access a release from PEER and link to the lawsuit and related information (click here). Access more information on BP activities from the BP response website (click here). Access the Restore the Gulf website for more information (click here). Access the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling for additional information (click here).