According to Ben Lieberman*, in 1982 Congress restricted extended oil exploration areas through annual Department of the Interior (DOI) appropriations by denying DOI the funding necessary to conduct leasing of new offshore areas to oil companies. DOI has authority over the Outer Continental Shelf (OCS), which includes most areas more than three miles offshore. It is important to note that Congress could have, at any time, passed a law permanently putting these areas out of reach, but it chose not to do so. These restrictions must be renewed annually. In August 2008, 85 percent of America’s territorial waters were off-limits to energy exploration and production.
* In 2008, Ben Lieberman was Senior Policy Analyst in Energy and the Environment in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.
In 1990, President George H.W. Bush issued a presidential directive withdrawing new areas from offshore exploration and drilling. These White House restrictions overlapped the congressional ones. In 1998, President Clinton extended these restrictions through 2012. For his first seven years in office, President George W. Bush had not seen fit to lift them. Skyrocketing gasoline prices changed that, and in July of 2008 President Bush eliminated the executive branch restrictions and urged Congress to do the same, which the Democrat-controlled Congress failed to do.
In 2009, the American Clean Energy Leadership Act was passed, allowing oil drilling within 45 miles of the Florida coastline and closer in areas near the panhandle. In March 2010, President Obama unveiled plans for a limited expansion of U.S. offshore oil and gas drilling.
On April 20, 2010, an explosion on the Deepwater Horizon offshore oil drilling rig in the Gulf of Mexico, around 40 miles south east of Louisiana, kills 11 workers and injures 17 others.
Cement is used at two stages of the deep-water drilling process. It is used to fill gaps between the well pipe and the hole drilled into the seabed, to prevent any seepage of oil and gas. it is also used to temporarily plug an exploration hole before production begins. Halliburton was responsible for cementing the drill into place below the water. The company has acknowledged that it had completed the final cementing of the oil well and pipe just 20 hours before the blowout. According to a Halliburton statement, “At the time of the accident, well operations had not yet reached the point requiring the placement of the final cement plug which would enable the planned temporary abandonment of the well.”
Experts say cementing is a basic part of drilling, exploration and production of oil on the sea floor. Drill ships or rigs plant large pipes called “conductors” on the sea floor, and casings, or nested pipes, are placed inside of them. The pipes are fixed in place by cement, some hanging inside other pipes, and a drill string is run down a casing, and extended to the sea floor to bore holes.
During the drilling process, mud works its way back up the pipes and the “riser,” a pipe that connects the drill site to the ship or rig above. Cement fixes the operations in place. Cement may also be used to plug a well, pumped down the string until it comes up on the sides, and stops the hole.
According to experts cited in the Wall St. Journal, the timing of the cement job in relation to the explosion — only 20 hours beforehand, and the history of cement problems in other blowouts “point to it as a possible culprit.” Robert MacKenzie, managing director of energy and natural resources at FBR Capital Markets and a former cementing engineer, told the Journal, “The initial likely [emphasis added] cause of gas coming to the surface had something to do with the cement.”
OK… now we know a bit of history. We have 3 companies involved: British Petroleum, Halliburton and Transocean. Here is a brief timeline of events:
The fire rages. Mid-morning Thursday a second explosion occurs causing the rig to sink. 700,000 gallons of diesel are enclosed tanks inside the pontoons at the time of the initial explosion. Unclear if diesel remains contained.
Coast Guard states no oil appears to be escaping from the well head on the ocean floor. The U.S. Coast Guard suspends its search for the 11 missing crew members at approximately 5 p.m. ending a three day search that included 28 air and ocean craft and covered ~5,375 square miles.
With remotely operated vehicles (ROVs), officials discover the oil is escaping from two leaks in a drilling pipe about 5,000 feet below the surface. Leaks appear to be releasing 1,000 barrels a day. There are 40 gallons in a barrel of oil.
The oil slick covering 600 square miles and spreading north, is about 70 miles south of the Mississippi and Alabama coastline.
The oil slick stretches 80 miles across the Gulf and is 36 miles southeast of Louisiana. Cleanup crews set up booms to block as much oil as possible from coming ashore. ROVs are a full day into operations to seal the oil well on ocean floor. Reuters- “The leaking well, 5,000 feet under the ocean surface off Louisiana’s coast, has created an oil sheen and emulsified crude slick with a circumference of about 600 miles, covering about 28,600 square miles (74,070 sq. km), the Coast Guard said on Tuesday. That’s slightly bigger than the U.S. state of West Virginia. The spill, however, is not yet comparable with the infamous Exxon Valdez disaster, which spilled about 11 million gallons (50 million liters) of oil into the Prince William Sound in Alaska when it ran aground in 1989. BP’s well is spewing about 42,000 gallons (190,900 liters) of oil a day into the ocean, the Coast Guard estimates.”
BP officials consider setting fire to the slick, which has grown to 100 miles across. The spill is about 20 miles off the Louisiana coast. A controlled burn of the surface oil is now considered. Homeland Security Secretary Janet Napolitano and Interior Secretary Ken Salazar say they are expanding the government’s investigation of the explosion that caused the disaster. Obama administration officials meet with top executives of BP. Governor Bobby Jindal requests Coast Guard set up protective booms around several wildlife refuges.
BP reports that its first-quarter profits more than double to £3.65 billion following a rise in oil prices.
The slick nears to 20 miles east of the mouth of the Mississippi River. British Petroleum states a controlled test to burn the leaking oil was successful late Wednesday afternoon. NOAA-”Workers finish a containment chamber portion of a collection doom that will collect oil escaping from the well at the seafloor. The first rig to drill a relief well arrives on site and will commence drilling on Friday but will not be ready for several months. Good weather allows for both skimming operations and aggressive aerial application of dispersants – over 50,000 gallons of dispersant have been applied to the surface oil in the last two days.” The U.S. Coast Guard moves ahead with a plan to burn off some of the crude from the slick. Mineral Management Service calls off luncheon “to present its annual award for exemplary safety and environmental management.” BP among list of finalists.
Louisiana Gov. Jindal declares a state of emergency and the federal government sends in skimmers and booms to prevent environmental damage. At morning, the spill is roughly 16 miles off the Louisiana coast and stretches across a 600-mile area. Updated models indicate the the slick may reach parts of the coast by later today or early Friday. President Obama designates the spill of national significance allowing personnel and equipment from other regions to be more easily mobilized and transfered to the scene. BBC – President Barack Obama said BP was “ultimately responsible for funding… clean-up operations”. US homeland security secretary, Janet Napolitano, is to visit the Gulf of Mexico tomorrow.
BP stocks plummit by 7% when admission that oil is leaking faster than original speculations. At current rate of oil leakage in 58 days it will surpass the Exxon Valdez disaster as the largest oil spill in U.S. history. BP official on the Today Show welcomes help from all parties including U.S. military. Concerns grow on impact to Louisiana seafood and tourism industry. As of 8:42pm, “Faint fingers of oily sheen have reached the mouth of Mississippi River… By sunset Thursday, the oil had crept into South Pass of the river and was lapping at the shoreline in long, thin lines.” Jean-Michel Cousteau releases statement of dismay and asks all ot expect more of their governments, “Write your Congressional and State representatives demanding their support for alternative energy technologies and policies at all levels of government, including subsidies.” Senator Bill Nelson FL-D drafts legislation to suspend the Obama administration’s plan of offshore exploration and drilling until a full investigation of diaster and the development of new protocols are developed.
An Obama aide says no drilling will be allowed in new areas, as the president had recently proposed, until the cause of the Deepwater Horizon accident is known.
Analysts including Morgan Stanley predict that the disaster could cost BP between £1 billion and £3 billion as shrimpers in the state of Louisiana file the first class-action lawsuits against BP and the platform’s owners.
BP Chairman Tony Hayward says the company takes full responsibility for the spill and would pay all legitimate claims and the cost of the cleanup. The Interior Department orders safety inspections of all 30 deepwater drilling rigs and 47 deepwater production platforms.
Coast Guard says leak will affect the Gulf shore.
Obama visits the Gulf Coast to see cleanup efforts first hand. U.S. officials close areas affected by the spill to fishing for an initial period of 10 days.
Work begins on a drilling a relief well to isolate the leak as Tony Hayward, BP’s chief executive, indicates that the firm will seek compensation from Transocean. The slump in BP share prices reaches 15 per cent as some experts predict the total compensation and clean-up bill could be around £10.6 billion. One of the biggest oil containment operations ever attempted begins, with a flotilla of nearly 200 boats sent to tackle the spill.
A barge begins towing a 98-ton containment chamber to the site of the leak. BP says one of the three leaks has been shut off by capping a valve, but that would not cut the amount of oil gushing out. Officials plan a controlled burn to remove oil from the open water, the first since April 28.
Oil washes ashore on the Chandeleur Islands off the Louisiana coast, uninhabited barrier islands that are part of the Breton National Wildlife Refuge and important nesting and breeding areas for many bird species.
BP engineers use undersea robots to move the containment chamber over the larger of the two remaining leaks on the seabed. The firm abandons efforts to close valves on a failed blowout preventer with underwater robots. A fishing ban for federal waters off the Gulf is modified, expanded and extended to May 17.
BP’s containment dome hits a problem when a buildup of crystallized gas forces engineers to postpone efforts to place the chamber over the oil leak and siphon oil to the surface. “Tar balls” suspected to come from the leak wash up along a half-mile stretch of Dauphin Island, Alabama.
BP admits it has dramatically underestimated the cost of the leak and that it has already reached around £240 million.
James Dupree, BP’s senior vice president for the Gulf, admits during congressional hearings in the US that a safety valve protecting the oil well failed a key pressure test just hours before the explosion.
Shares rise as BP says it is capturing about a fifth of the estimated oil gushing from the ruptured well by using a pipe to divert it from the sea bed onto a ship.
Mr Hayward claims the environmental impact of the spill will be “very, very modest”. His reassurances coincide with the discovery of the first tar balls from the spill off Florida.
Experts begin to fear that currents could be directing a slick the size of Luxembourg towards US coastal areas.
The US government announces it is nearly tripling the size of an area in the Gulf of Mexico that is closed to fishing.
BP attempts a “top kill” operation to plug the spill. The company admits that the procedure has never before been attempted at such depths and its “ultimate success” is uncertain.
The total cost to the firm reaches around £638 million as Barack Obama states that BP would “pay every dime” for the damage caused and criticised the “cosy and sometimes corrupt” relationship between regulators and the oil industry.
BP shares tumble a further 15 per cent after it admits its “top kill” operation was unsuccessful. It emerges that the company has lost a quarter – £30 billion – of its market value since the explosion. Meanwhile, documents emerge showing that the firm was given permission to drill in the Gulf of Mexico after promising it was equipped to deal with a spill 10 times larger than the current leak. Eric Holder, the US Attorney General, announces he will visit the site of the spill for the first time on Tuesday, increasing speculation that a criminal investigation will be launched.
BP says a second containment system to stem the leak should be ready by “mid-June”, as costs of the clean-up rise to £860 million and the total share-price slump reaches 30 per cent.
Norway bans new deepwater oil drilling in the North Sea in a sign that panic over BP’s Gulf of Mexico spill is spreading. Meanwhile the US President attacks Mr Hayward, saying he should have been sacked for tactless comments made after the spill.
BP buys the top Google and Yahoo! search result for terms like “oil spill” in a bid to recover its public image. Obama is accused of holding “his boot on the throat” of British pensioners after his attacks on BP are blamed for wiping billions off the company’s value. The firm’s share price falls a further 17.35p to 391.55p – representing a 40 per cent drop on the 655p price of a share two months ago.
The US government signals it will take legal action to force BP to stop paying a dividend to shareholders. The company’s shares tumble. David Cameron refuses to defend the company in the wake of Barack Obama’s attack, saying he “completely understands” the American government’s frustration.
New estimates from the US suggest the slick is more than twice as large as previously thought, with data suggesting upwards of 40,000 barrels a day could have been leaking into the sea before a cap was fitted. Following a briefing with BP’s chief of staff, an analyst reports that the cost of the clean-up could reach as high as $6 billion. BP declines to comment.
David Cameron and Barack Obama hold their first conversation about the spillage, and the President assures the Prime Minister during a 30-minute telephone discussion that his public criticism of the company has “nothing to do with national identity”.
Barack Obama demands more money from BP to meet the cost of handling the crisis, ahead of a meeting of the BP board where a decision will be taken over whether to freeze dividend payouts.
Our fearless leader makes his first speech from the Oval Office. I won’t bore you with all the details, but full transcript of the speech can be found here. I do have a couple of comments on the speech: Nothing he said will stop the oil leak. Nothing he said will prevent another tragedy such as this one. What Obama said last night will, in effect, hold the Gulf Coast hostage to a national energy tax. Of course, this is nothing new for this man. Who else would discuss climate change legislation in the same breath as the Gulf oil crisis?
Nobody can turn back time and reverse the events of the last 57 days. ALL parties involved in the disaster (i.e., BP, Transocean and Halliburton) need to share in the expense. An investigation does need to be made into the root cause of the explosion and subsequent spill, and the oil industry needs to learn from it. In addition, the Obama Administration didn’t cause the explosion or oil leak, but they also need to learn the lessons put forth here.
This administration needs to pull their heads out of their collective asses and act like executives, managers and administrators. You all have jobs to do, and none of you are doing them. Riddle me this, Batman:
What possible excuse can they have for not checking out first hand an explosion that killed 11 oil workers?
Just as important, why are oil companies being forced to drill in mile deep water, when it is readily apparent we have abundant oil reserves in much shallower water and on dry land? Had the explosion occurred in shallow water or on dry land, this problem would have been resolved weeks ago.
We need to wise up, People, and stop electing folks to public office who are so incredibly incompetent and inept.
The Gulf oil spill isn’t all BP’s fault… it’s ours, too.
Of course, this is just One Man’s View. As always, your comments are most welcome.]]>