[A-List] Deepwater Horizon: The Worst-Case Scenario

Thu Jun 24 18:16:13 MDT 2010

by Richard Heinberg

postcarbon.org (June 20 2010)

countercurrents.org (June 22 2010)

Reports from the Gulf of Mexico just keep getting worse. Estimates of
the rate of oil spillage from the Deepwater Horizon wellhead just keep
gushing (the latest official number: up to 60,000 barrels per day).
Forecasts for how long it will take before the leak is finally plugged
continue pluming toward August - maybe even December. In addition to
the oil itself, BP has (in this case deliberately) spilled a million
gallons of toxic Corexit dispersant. Biologists' accounts of the
devastation being wreaked on fish, birds, amphibians, turtles, coral
reefs, and marshes grow more apocalyptic by the day - especially in
view of the fact that the vast majority of animal victims die alone and
uncounted. Warnings are now being raised {1} that the natural gas being
vented along with the oil will significantly extend the giant dead
zones in the Gulf. And guesses as to the ultimate economic toll of this
still-unfolding tragedy - on everything from the tourism and fishing
industries of at least five coastal states to the pensioners in Britain
whose futures are at risk if BP files for bankruptcy or is taken over
by a Chinese oil company - surge every time an analyst steps back to
consider the situation from another angle.

We all want the least-bad outcome here. But what if events continue on
the current trajectory - that is, what if the situation keeps
deteriorating? Just how awful could this get?

For weeks various petroleum engineers and geologists working on the
sidelines have speculated that the problems with the Deepwater Horizon
may go deep - that the steel well casing, and the cement that seals and
supports that casing against the surrounding rock, may have been
seriously breached far beneath the seabed. If that is true, then
escaping oil mixed with sand could be eroding what's left of the well
casing and cement, pushing out through the cracks and destabilizing the
ground around the casing. According to Lisa Margonelli in The Atlantic
{2}:

	There is the possibility that as the ground and the casing
shift, the whole thing collapses inward, the giant Blow Out Preventer
falls over, the drill pipe shoots out of the remains of the well, or
any number of other scenarios, that could making it virtually
impossible ever to cap the well or even to plug it at depth via relief
wells.

Read, for example, this comment {3} at TheOilDrum.com, a site frequented
by oil industry technical insiders who often post anonymously. The
author of the comment, "dougr", argues fairly persuasively that
disintegration of the sub-surface casing and cement is the best
explanation for the recent failure of "top kill" efforts to stop the
oil flow by forcibly injecting mud into the wellhead.

Concerns about the integrity of the sub-seabed well casing appear also
to be motivating some seriously doomerish recent public statements from
Matt Simmons, the energy investment banker who decided to go rogue a
couple of years ago following the publication of his controversial Peak
Oil book Twilight in the Desert (2005). Simmons says {4}, for example,
that "it could be 24 years before the deepwater gusher ends", a
forecast that makes little sense if one accepts the conventional view
of what's wrong with the Deepwater Horizon well and how long it will
take to plug it with relief wells.

Are these concerns credible? From a technical standpoint, it is clear
that improperly cemented wells can and do rupture and cause blowouts
{5}. It's fairly clear that this is part of what happened with
Deepwater Horizon. But is the well casing further disintegrating, and
is oil escaping the well bore horizontally as well as vertically? We
just don't know. And that is largely due to the fact that BP is as
opaque on this score as it has been with regard to nearly every
sensitive technical issue (including the rate of leakage) since its
drilling rig exploded two months ago.

So far, up to 3.6 million barrels of oil have spilled into the Gulf. The
size of the Macondo oilfield has been estimated as being anywhere from
25 to 100 million barrels. It is unclear how much of that oil-in-place
would escape upward into Gulf waters if its flow remained completely
unchecked, but it is safe to assume that at least half, and probably a
much greater proportion, would eventually drain upward. That means many
times as much oil would enter the Gulf waters as has done so until now.

Already Deepwater Horizon is the not only the worst oil spill, but the
worst environmental disaster in US history. Multiplying the scale of
this existing catastrophe multiple times sends us into truly uncharted
territory.

Already, coastal ecosystems are being shredded; for a sense of how bad
it is for wildlife in the Gulf now, just read "Biologists fear Gulf
wildlife will suffer for generations" {6}. In a truly worst case, oil
-  and perhaps dissolved methane as well  -  would hitch a ride on
ocean currents out to the deep Atlantic, spreading ecological
destruction far and wide.

For the economies of coastal states, a worst-case leakage scenario would
be utterly devastating. Not only the fishing industry, but the oil
industry as well would be fatally crippled, due to the disruption of
operations at refineries. Shipping via the Mississippi River, which
handles sixty percent of all US grain exports, could be imperiled, since
the Port of South Louisiana, the largest bulk cargo port in the world,
might have to be closed if ships are unable to operate in oil-drenched
waters. Unemployment in the region would soar and economic refugees
would scatter in all directions.

The consequences for BP would almost certainly be fatal: it is
questionable whether the corporation can survive even in the best case
(that is, if "bottom kill" efforts succeed in August); if the spill goes
on past the end of the year, then claims against the company and
investor flight will probably push it into bankruptcy. Americans may
shed few tears over this prospect, but BP happens to be Great Britain's
largest corporation, so the impact to the British economy could be
substantial.

The consequences for the oil industry as a whole would also be dire.
More regulations, soaring insurance rates, and drilling moratoria would
lead to oil price spikes and shortages. Foreign national oil companies
could of course continue to operate much as before, but the big
independent companies, even if they shifted operations elsewhere, would
be hit hard.

For President Obama, an environmental disaster of the scale we are
discussing could have political consequences at least equivalent to
those of the Iranian hostage crisis during the Carter presidency.
Obama's only chance at survival would be an FDR-like show of leadership
backed by bold energy and economic plans and ruthless disregard for
partisan bickering and monied interests.

For the US economy, already weakened by a still-unfolding financial
crisis, a worst-case scenario in the Gulf could be the last straw. The
cumulative impacts - falling grain exports, soaring unemployment in
southeastern coastal states, higher oil prices - would almost certainly
spell the end to any hope of recovery and might push the nation into the
worst Depression in its history.

We would all prefer not even to contemplate such a scenario, much less
live with it. It is irresponsible to inflict needless worry on readers
on the basis of entirely speculative and extremely unlikely events. But
the more I learn about the technical issues, and the worse news gets,
the more likely this scenario seems. We all hope that a relief well
will succeed in stopping the oil flow sometime around August, and that
until then BP will be able to siphon off most of the oil escaping
through the riser and damaged blowout preventer. But one has to wonder:
is anyone at the White House seriously considering the worst-case
scenario? And what should citizens be doing to prepare, just in case?

Links:

{1}
http://www.google.com/hostednews/ap/article/ALeqM5gIXWYBTpLtSayJtg41LKXpxSxVPAD9GDJBO84

{2}
http://www.theatlantic.com/science/archive/2010/06/question-for-bp-how-close-are-we-to-the-unthinkable/58361/

{3} http://www.theoildrum.com/node/6593#comment-648967

{4}
http://www.businessinsider.com/matthew-simmons-dylan-ratigan-deepwater-2010-5

{5}
http://www.aggregateresearch.com/articles/19275/Cement-quality-blamed-for-oil-rig-disaster.aspx

{6}
http://www.desdemonadespair.net/2010/06/biologists-fear-gulf-wildlife-will.html

http://www.postcarbon.org/blog-post/109323-deepwater-horizon-the-worst-case-scenario

http://www.countercurrents.org/heinberg220610.htm

http://www.billtotten.blogspot.com
http://www.ashisuto.co.jp