The fake “recovery” was nice while it lasted, says famous apocalyptic forecaster Gerald Celente, founder of the Trends Research Institute. But now the fun’s over, and we’re headed for what Celente describes as the “Greatest Depression.” Specifically, the always startling Celente says the country is headed for rising unemployment, poverty, and violent class warfare as the government efforts to keep the economy going begin to fail.

The crux of the problem, Celente argues, is that the middle class has been wiped out. America used to be a land of opportunity for all, where hard-working people could build their own small businesses in their own communities and live prosperous and fulfilling lives.

But now a collusion of state and corporate interests that Celente describes as “fascism” have conspired to help only the biggest companies and the richest Americans. This has put a shocking amount of the country’s wealth in the hands of a privileged few and left the rest of the country to subsist on chicken-feed wages and low job satisfaction as Wal-Mart “associates” — or worse.

I’ve seen some people reject this technically correct definition of fascism, Greer comes to mind especially, but that’s based on a misunderstanding of what corporatism actually is.

And here’s another interview, America Won the Cold War But Now Is Turning Into the USSR, Gerald Celente Says

There’s a lot of talk these days about America being an empire in decline. Gerald Celente, director of the Trends Research Institute, goes a step further, arguing America is following a similar path as the former Soviet Union. “While the many glaring differences between the two political systems have been exhaustively publicized – especially in the U.S. – the glaring similarities [go] unnoticed,” Celente writes in The Trends Journal, which he publishes.

And here’s another, ‘Too Big to Fail’ Is Killing the Middle Class, Celente Says

Deregulation and bailouts favor the country’s largest corporations, at the expense of small business, Celente believes. “They’re squeezing out everybody else.” Policies like these have created the widest wealth gap in the industrialized world, he says; “10% of the nation controls 93% of the assets.” Former IMF Chief economist Simon Johnson makes a similar point in his book, 13 Bankers. In it, Johnson claims, six banks (Goldman Sachs, Morgan Stanley, JPMorgan Chase, Citigroup, Bank of America, and Wells Fargo) control 60% of America’s gross national product.

The only way to turn the tide, says Celente, is to “put back what was in place that worked,” like the Glass-Steagall Act and the Sherman Antitrust Act, which exists in name only. “That’s what stopped the robber barons from raping the country.”

Celente is confident more regulation on the largest companies will help entrepreneurs, which in turn strengthening a fading middle class – the backbone of our society. “America becomes strong again when the middle builds big again,” he says. Unfortunately, Celente sees the trend going in the opposite direction. “The merger of state and corporate powers, let’s calls a spade a spade. It’s fascism.”

The Obama Administration says the recently signed Dodd-Frank Law, the biggest bank overhaul in decades, will ensure against another financial crisis.  William Black Associate Professor of Economics and Law at the University of Missouri-Kansas City couldn’t disagree more.

“They haven’t dealt with any of the fundamental perverse incentive structures that cause these recurrent, intensifying crises,” he tells Tech Ticker. In other words, the incentive to take excessive short-term risk in exchange for a multi-million dollar bonus is still very much intact. “Your pay should be based on long term performance instead of short term results which are easy to gimmick through accounting,” he says. 

Excessive pay on Wall Street, which Black says is the biggest culprit of the financial crisis, is just one reason we’re likely to witness another crisis in the not so distant future. Financial regulation reform also fails to deal with the “professional compensation” structure, says Black, a former federal regulator during the Savings & Loan Scandal. By that, he means the continued reliance on lawyers, appraisers, rating agencies and auditors ensures these professionals will remain the “most valuable allies to the frauds.”

We’re also no safer with the Dodd-Frank law than without it simply because, as a whole, the financial system doesn’t believe in regulation, Black observes. “It’s the ideology [which says] ‘you can never regulate effectively’, so why bother to try.” Finally, Black says, the law fails to end ‘Too Big to Fail’. As long as this policy exists we’re guaranteed to face more bailouts. “Why would we allow these systemically dangerous institutions to continue?,” he wonders.
Wall Street’s “Perverse Incentive Structures” Guarantee Another Crisis, Says Bill Black
by Peter Gorenstein – Yahoo

See:

• URANIUM RESOURCES AND NUCLEAR ENERGY – Energy Watch Group 2006
• theoildrum.com Uranium Depletion and Nuclear Power: Are We at Peak Uranium? March 21, 2007

So without further ado, here’s part of an interview with Bill Powers (please note that this appears to be an automatically generated transcription, ie, it’s not very accurate):

Interviewer: A whole lot of newsletters cover oil and gas, but you picked uranium, which hardly anyone was covering until recently?

Bill Powers: I feel the uranium market right now could be the world’s most unbalanced commodity market. Inside a sense, the planet, by means of the nuclear power industry, consumes approximately 172 million pounds of uranium per year, as well as the planet only produces about 92 million pounds of uranium per year. The supply deficit is produced up through above-ground inventories, which are becoming worked down pretty quickly. Individuals numbers were supplied by Uranium Info Center. A great deal of my information arrives through the U.S. Department of Energy (DOE) or the Nuclear Regulatory Commission. For example, I discovered from them that the U.S. made, through the 1980s, about 43.seven million pounds of uranium. And by 2002, the U.S. only created about 2.34 million pounds of uranium.

Interviewer: Exactly where is uranium being created in the United States?

Bill Powers: Wyoming. There’s also a uranium facility in Nebraska. I think there are two in-situ leach plants in Wyoming and an additional 1 in Nebraska. There are a couple of phosphate farmers in Florida who generate uranium. I believe there can be a facility in Texas that also produces uranium. For that most part, the uranium business in New Mexico has just about been wiped out. The extremely low rates that we’ve seen, for about twenty years, have pretty a lot wiped out the entire U.S. uranium market. To go from over 43 million pounds to less than 2.five million pounds, it has truly only allowed the most productive, highest margin and most efficient mines in the nation to continue operating in that environment.

Interviewer: So that makes the U.S. a net importer of uranium?

Bill Powers: Absolutely. According to the DOE, US imports have gone from 3.6 million pounds per year in 1980 to 52.7 million pounds per year in 2002. A lot of it comes from Canada, but a significant amount is coming through the Russians, through a program referred to as HEU (highly enriched uranium): the megatons to megawatts program. It is where the United States Enrichment Corporation, as nicely as its partner in Russia, took highly enriched uranium and broke it down into reduced grade uranium that could be marketed to nuclear power businesses throughout North America and around the planet. This has been a single of the reasons we’ve had reduced prices. All of this uranium has cluttered the marketplace the past handful of many years. As well as the US Enrichment Corporation has a lot to do with why we’ve seen low uranium costs here in the States. I had a conversation with them about the fact that because 1998, when they became a public business (right after becoming a company that was owned through the U.S. government), their long-term inventories of uranium had declined. When they became a private corporation, the U.S. government gave them seven,000 tons of enriched uranium and 50 tons of highly enriched uranium. They have been promoting about 6 million pounds of uranium into the marketplace each and every year because 1998. According to my conversation with them, they have about three to four much more many years of promoting. It is simply because the US Enrichment Corporation wants to get out of the uranium storage business, and they want being within the processing company.

For some reason, a certain type of person becomes increasingly delusional when it comes to energy production and nuclear power. Almost like fairy tales except using mystical sources of energy instead of dragons and emperors, or future scenarios that currently do not yet exist in production, ie, in the real world.

Note that these consumption levels include France, Sweden, and the USA, but do NOT include new plants coming online. In other words, the future isn’t looking so great re uranium supplies.

As for the mystical thorium, take a quick read of the Norwegian study on the viability of thorium as a nuclear fuel (PDF 2008 report). Read the executive summary chapter to get a good overview.

Here’s their final recommendations:

1. No technology should be idolized or demonized. All carbon-dioxide (CO2) emission-free energy production technologies should be considered. The potential contribution of nuclear energy to a sustainable energy future should be recognized.
2. An investigation into the resources in the Fen Complex and other sites in Norway should be performed. It is essential to assess whether thorium in Norwegian rocks can be defined as an economical asset for the benefit of future generations. Furthermore, the application of new technologies for the extraction of thorium from the available mineral sources should be studied.
3. Testing of thorium fuel in the Halden Reactor should be encouraged, taking benefit of the well recognized nuclear fuel competence in Halden.
4. Norway should strengthen its participation in international collaborations by joining the Euratom fission program and the GIF program on Generation IV reactors suitable for the use of thorium.
5. The development of an Accelerator Driven System (ADS) using thorium is not within the capability of Norway working alone. Joining the European effort in this field should be considered. Norwegian research groups should be encouraged to participate in relevant international projects, although these are currently focused on waste management.
6. Norway should bring its competence in waste management up to an international standard and collaboration with Sweden and Finland could be beneficial.
7. Norway should bring its competence with respect to dose assessment related to the thorium cycle up to an international standard.
8. Since the proliferation resistance of uranium-233 depends on the reactor and reprocessing technologies, this aspect will be of key concern should any thorium reactor be built in Norway.
9. Any new nuclear activities in Norway, e.g. thorium fuel cycles, would need strong international pooling of human resources, and in the case of thorium, a strong long-term commitment in university education and basic science. All these should be included in the country level strategy aiming to develop new sustainable energy sources. However, to meet the challenge related to the new nuclear era in Europe, Norway should secure its competence within nuclear sciences and nuclear engineering fields. This includes additional permanent staff at the universities and research institutes and appropriate funding for new research and development as well as a high quality research-based Master and PhD education.

nuclear engineering fields. This includes additional permanent staff at the universities and research institutes and appropriate funding for new research and development as well as a high quality research-based Master and PhD education.

And here’s a shorter summary.

A 2008 Norwegian study summarised the advantages and disadvantages of an ADS fuelled by thorium, relative to a conventional nuclear power reactor, as follows, and said that such a system was not likely to operate in the next 30 years:

Advantages	Disadvantages
Much smaller production of long-lived actinides Minimal probability of runaway reaction Efficient burning of minor actinides Low pressure system	More complex (with accelerator) Less reliable power production due to accelerator downtime Large production of volatile radioactive isotopes in the spallation target The beam tube may break containment barriers

No panacea, no magic pill, but a possible future mode of nuclear energy, using, again, another finite raw material, to burn up until it too is gone. But I’d guess it will be used, since mankind simply will not accept that less can be more, and quality could possibly just be more important than quantity.

Allegedly the near cornucopia of free energy, the new methods, asides from using extremely toxic liquid materials to fracture the rock formations to let the gas slip out to the well bore, for extraction, have been promoted by people like T. Boone Pickens as the source for future US energy needs in the transport sector. The latter by switching the truck/heavy equipment fleet to natural gas power.

This is supposed to be a good idea because it’s supposedly a 100 year’s supply. As usual, sadly, with such rosy predictions, the real numbers, when re-examined in the light of non-delusional, somewhat sane, thinking, simply do not hold up.

A current theoildrum.com posting highlights this issue.

Arthur Berman talks about Shale Gas

If you investigate the origin of this supposed 100-year supply of natural gas…where does this come from? If you go back to the Potential Gas Committee’s [PGC] report, which is where I believe it comes from, and if you look at the magnitude of the technically recoverable resource they describe and you divide it by annual US consumption, you come up with 90 years, not 100. Some would say that’s splitting hairs, yet 10% is 10%. But if you go on and you actually read the report, they say that the probable number-I think they call it the P-2 number-is closer to 450 Tcf as opposed to roughly 1800 Tcf. What they’re saying is that if you pin this thing down where there have actually been some wells drilled that have actually produced some gas, the technically recoverable resource is closer to 450. And if you divide that by three, which is the component that is shale gas, you get about 150 Tcf and that’s about 7 year’s worth of US supply from shale. I happen to think that that’s a pretty darn realistic estimate. And remember that that’s a resource number, not a reserve number; it has nothing to do with commercial extractability. So the gross resource from shale is probably about 7 years worth of supply.

As with pretty much every other finite energy source, when you apply modern consumption levels plus the realities of extraction, the totals come out much lower than the energy optimists would have you believe.

Coal, and probably uranium, supplies reflect a very similar gulf between predictions from cornucopians and the actual numbers, including predicted consumption growth rates over time.

The group (Energy Watch Group uranium study – PDF)contends that worldwide rankings mean little, then, when one considers that only Canada has a significant amount of ore above 1 percent–up to about 20 percent of the country’s total reserves. In Australia, on the other hand, some 90 percent of uranium has a grade of less than 0.06 percent. Much of Kazakhstan’s ore is less than 0.1 percent.

The world uses 67,000 tons of mined uranium a year. At current usage, this is equal to about seventy years of supply.
Council on Foreign Relations – Global Uranium Supply and Demand – January 14, 2010

Pay very especial attention to the phrase ‘At current usage’. That is the essence of almost all cornucopian predictions. As oil / gas supplies begin their imminent decline globally, the world will reach to existing sources of energy, mainly coal and uranium, for its electrical production. Actually, forget the future tense, that’s happening now, all over. China, India, along with most of the rest of the world.

So make that 70 years drop down to less than 20 or 30. Really people should start to pay attention to the arithmetic of growth (transcript of the Professor Al Bartlett video talk on the problems of all growth based population/resource consumption patterns), it’s not very hard to understand.

And this doesn’t even begin to touch on the question of exactly how clean will an ongoing decline in global energy resources actually be, in terms of production and economic realities. Dmitri Orlov. has been pushing this point consistently, see for example his recent posting, Thinking in Straight Lines.

One particularly significant example of this thinking is the belief in Peak Oil, generally expressed as the idea that global oil production already has or will soon reach an all-time peak, and will then gradually decrease over a time span of several decades. Oil depletion is being modeled as a linear function of oil production: a few percent a year, holding more or less steady from one year to the next.

But that article isn’t good for little quote snippets, read the whole thing is my advice, what he’s saying is fairly serious, and isn’t being discussed nearly as much as it should be.

This is about the most concise, accurate, rebuttal of the deregulation position I’ve ever seen.

syncro on July 13, 2010 – 8:53pm
Obeying regs is not going to provide a defense. But I am more interested in your point that

“BP’s response plan was filed and APPROVED by MMS as good enough. It wasn’t but that’s not BP’s fault…”

What catches my interest is that a lot of the conservative politicians argue that we should have less regulation. Some even say no regulation. Throw in the problem of the undue influence of corporate lobbyists and political cash. You wind up with a weak regulatory body that is instructed by the president to basically act as a force for promoting drilling. The new head cuts back funding for enforcement. Regs. are loosely enforced if at all. In other words, it is an ideal regulatory body from the point of view of the politicians who preach against regulation. And then when the corporate citizen causes a disaster through reckless conduct, you blame the hollowed-out regulatory body and let the corp. off the hook entirely.

It’s a bit hypocritical, no?

While the comment ends there, it’s worth looking at the question a bit more. The essence, as far as I can tell of all libertarian thinking is NOT, repeat, not, a true desire to achieve freedom for all. No, it’s rather the desire to achieve freedom to achieve wealth/power using whatever means necessary.

There’s a reason almost all libertarian types love the third rate fiction author Ayn Rand, who writes what are essentially teenage fantasy novels about rising above all the other riff-raff. The fantasy presented is appealing to those who strive to either be master or to serve the master. In other words, it’s about as far away from actual freedom as you can get.

Libertarians want a return to basic feudalism, where power lies in the hands of kings, who allocate it dukes, earls, and so on. Serfs, aka feudal employees, and consumers, are the foundation of the wealth, not land. That’s the only real difference. Government regulations form the only real block to corporate type power, and so of course are blindly opposed, no matter how irrational that position appears to be from an outside perspective.

Alleged ‘intellectuals’, like Alan Greenspan, are simply small men (literally small in his case) who strive to become great by promoting the interests and agenda of such corporate structures. Kings of yore used the same tools to consolidate their power, only the names were different.

So in essence, my only real objection to the entire libertarian project is the intense intellectual dishonesty they engage in, pretending to be promoting personal freedom when what they really are promoting is the freedom to achieve maximum political power and wealth. But if this honesty appeared, then none of their power base, or almost none of it, would vote for them, so they can’t be honest. Plus I think they aren’t actually capable of thinking their position through in the first place.

Oil in the Gulf, two months later – June 21 2010 – Oil spill photo gallery, disturbing shots, check it out. A picture is really worth a thousand words, and since they have a lot of them, I’ll save the words.

Gulf oil spill: BP accused of lying to Congress – June 20, 2010

BP has been accused by a senior US politician of lying to Congress to reduce its liabilities, after an internal company document showed that the oil giant’s own worst-case assessment of the size of the oil leak in the Gulf of Mexico was 20 times its public estimate.

In the document, BP attempts to put a figure on the rate of oil spewing into the ocean. It notes that if the condition of the well bore deteriorates to the extent that crucial parts fall off, the rate could reach 100,000 barrels a day.

Deepwater Horizon worker claims oil rig leaking weeks before explosion – June 21 2010

An oil worker who survived the BP Deepwater Horizon explosion has claimed that the oil rig’s safety equipment was leaking several weeks before it exploded, triggering the huge spill in the Gulf of Mexico.

Tyrone Benton says that he spotted a leak on the rig’s Blowout Preventer (BOP), the device that is meant to shut the well down if there is an accident. He told the BBC’s Panorama programme that both BP and Transocean, who owned the rig, were informed of the leak, and the faulty part – a control pod – was switched off rather than being repaired.

Regulators Failed to Address Risks in Oil Rig Fail-Safe Device – June 21 2010

But the questions raised by the failure of the blind shear ram extend well beyond the Deepwater Horizon.

An examination by The New York Times highlights the chasm between the oil industry’s assertions about the reliability of its blowout preventers and a more complex reality. It reveals that the federal agency charged with regulating offshore drilling, the Minerals Management Service, repeatedly declined to act on advice from its own experts on how it could minimize the risk of a blind shear ram failure.

It also shows that the Obama administration failed to grapple with either the well-known weaknesses of blowout preventers or the sufficiency of the nation’s drilling regulations even as it made plans this spring to expand offshore oil exploration.

Whistleblower: BP Risks More Massive Catastrophes in Gulf – 30 April 2010

A former contractor who worked for BP claims the oil conglomerate broke federal laws and violated its own internal procedures by failing to maintain crucial safety and engineering documents related to one of the firms other deepwater production projects in the Gulf of Mexico, according to internal emails and other documents obtained by Truthout.

The whistleblower, whose name has been withheld at the person’s request because the whistleblower still works in the oil industry and fears retaliation, first raised concerns about safety issues related to BP Atlantis, one of the largest and deepest semi-submersible oil and natural gas platforms in the world, located about 200 miles south of New Orleans, in November 2008. Atlantis, which began production in October 2007, has the capacity to produce about 8.4 million gallons of oil and 180 million cubic feet of natural gas per day.

BP’s Gulf Spill Fuels Australian Opponents to Deepwater Drilling for Oil – June 17 2010

BP Plc’s Gulf of Mexico disaster is generating opposition to deepwater drilling off Australia, where the government is opening new exploration areas less than a year after the country’s third-worst oil spill.

Popular Mechanics – Fighting the Worlds Worst Oil Spill
Google online version of the article about the Ixtoc oil spill (1979) in the Mexican waters of the Gulf of Mexico. Up til now, the world’s worst oil spill. Took about 10 month to stop, using prett much the same ideas BP used on today’s. Somewhat disturbing reading.

Click on the link at the end of each section to get to the next part.

BP engineer’s testimony contradicted by e-mail released by congressional investigators – June 15, 2010

But now, e-mail messages released by congressional investigators paint a different picture of Hafle’s confidence in the troubled well.

They show Hafle expressed concerns in the week before the April 20 disaster on the Deepwater Horizon oil rig, calling the Macondo well 5,000 feet below that rig “a crazy well.”

And contrary to Hafle’s testimony that his team worked with the cementing contractor, Halliburton, to analyze models and design a plan “to give us the best chance to have a successful cement job,” the internal e-mail messages now show that BP actually rejected a safer plan that required installing more components because, as well team leader John Guide wrote on April 16, “it will take 10 hours to install them.”

Transocean under fire over US oil spill May 3, 2010

The Swiss-based drilling contractor, Transocean, is starting to feel the heat – along with BP – over the oil spill disaster in the Gulf of Mexico.

It is still unclear what caused the explosion on the rig operated by BP and owned by Transocean, but many are beginning to point their finger at the Zug-based company’s blowout preventer (BOP) for failing to work properly.

Bad cement jobs plague offshore oil rigs – May 24, 2010

Yet federal regulators give drillers a free hand in this crucial safety step — another example of lax regulation regarding events leading up to the April 20 explosion on the Deepwater Horizon oil rig.

Federal regulators don’t regulate what type of cement is used, leaving it up to oil and gas companies. The drillers are urged to simply follow guidelines of the American Petroleum Institute, an industry trade group.

Far more stringent federal and state standards and controls exist on cement work for roads, bridges and buildings.

While the chain of failures on Deepwater Horizon is under investigation, rig owner Transocean has singled out cement work as one likely fundamental cause of the blowout.

BP Engineer Called Deepwater Horizon ‘Nightmare Well’ Days Before Blast, Oil Spill – June 14 2010

WASHINGTON (AP) — BP took measures to cut costs in the weeks before the catastrophic blowout in the Gulf of Mexico as it dealt with one problem after another, prompting a BP engineer to describe the doomed rig as a “nightmare well,” according to internal documents released Monday.

The comment by BP engineer Brian Morel came in an e-mail April 14, six days before the Deepwater Horizon rig explosion that killed 11 people and has sent tens of millions of gallons of oil into the Gulf in the nation’s worst environmental disaste

And that’s it for some of the news worth a second look over the past few weeks.

Ok, by now you’ve probably read something about parts of oil well drilling in the media because of the BP Deepwater Horizon Oil Blowout/Spill, but you are probably having trouble visualizing how the actual drilling of complex directional wells proceeds. Directional means the well bore angles in, like the current BP Gulf spill relief wells, ie, they go down vertically then angle and are redirected towards a target.

In the video below, the target is a narrow band of oil in a geological layer. It’s an animation that shows fairly clearly the steps involved in drilling a curved well. In the relief wells, the target is a roughly 16″ steel casing, 18,000 feet below sea level, and about 13,000 feet below the ocean floor.

Cool, no? In this video you see how the basic directional drill works, how casing is inserted after the horizontal drill is removed, how cement is pumped up around the casing to create a solid bond (what the CBL, cement bond log that BP decided not to do checks, ie, that the cement is fully filling the space between the drill hole and the casing pipe.

At the end you see how a drill pipe is placed horizontally in the oil deposit, with multiple holes for accessing the reservoir’s oil along a great distance. Short in the video, but can be a mile or more.

Engineering fine points and explanations of the technology on directional drilling below the fold.

Technical Explanations of Directioinal Drilling Technologies

This is from today’s theOilDrum.com daily discussion thread, BP’s Deepwater Oil Spill – Improving the Clean-up – and Open Thread:.

Thread starter in
sub-thread only

Choice technical explanations:

ROCKMAN on June 21, 2010 – 6:39am Permalink | Subthread | Parent | Parent subthread | Comments top

ski — I think that was 200′ horizontally. Maybe another 2,500′ or so of hole to drill. And maybe one more csg set. And I think the latest plan is to drill past the blowout hole, measure exactly where it is using magnetometer, plug back and re-drill to the intersept. But plans do change.
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Petey Wheatstraw on June 21, 2010 – 6:43am Permalink | Subthread | Parent | Parent subthread | Comments top

Hey, Rockman,

How do they steer the drill bit?
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ROCKMAN on June 21, 2010 – 7:20am Permalink | Subthread | Parent | Parent subthread | Comments top

Petey — I find a good hard slap on the side of the head works well. No…wait…that’s with geologists…not drill pipe. Actually one basic technique is really simple: imagine you pushing a stick along a layer of sand the ground. The stick is straight to it goes straight. Now use a stick with a bend on the end of it. Push it and it turns in the direction of the bend. Want the stick to go in the opposite direction? Just flip it over and push.

The bottom hole drilling assembly (BHA) has such a “bent sub” on the bottom. There are electronic instruments in the BHA that indicate the orientation of the sub so it can be pointed in the direction you want it to go. The drill pipe doesn’t rotate in this situation. The bit turns via a “mud motor”: the drilling mud flowing thru the drill pipe turns only the drill bit. We call this “sliding”. But what if you want to go straight? Simple: rotate the drill pipe as you go forward. This way the bend is constantly going thru a 360 degree cycle so there is no prejudice to direction. We call this “rotating”. When the RW gets close we may see a lot of reference to “sliding” and “rotating”. There are other steering system designs but in the end they work pretty much the same: point the bit in the right direction and the rest will follow.

But remember Mother Nature is always in charge. You can angle the drill pipe to go right and it might go left. There’s is always a directional plan. And then there’s what Mother will allow.
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Frontier_Energy on June 21, 2010 – 7:59am Permalink | Subthread | Parent | Parent subthread | Comments top

Rockman:

To expand somewhat on your explanation and maybe a little clarification. The system Rockman described is a conventional downhole mud motor. The historic “bent sub” is actual an integral part of the motor.

The type of directional drilling system being used on the two relief wells, as also was used on the original wellbore is a “rotary steerable” system. No “sliding” is required as the BHA is rotated continously. There is an inclinometer behind the bit that allows real time sensing so that the well bore can be monitored real time relative to the desired well path. There is two way communication between the rotary steerable and the surface through mud pulses. “Deflection” is added on the fly, meaning that if the build is not aggressive enough you can add it as necessary and the rotary steerable will make the necessary bend angle internally needed without a requirement for stopping. This allows the directional driller to “paint the line” in regard to well path. It is the rotary steerable technology that has allowed them to make as fast a progress that they have over the past few weeks. Conventional mud motors and “sliding” directional technology would have taken much longer.
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aliilaali on June 21, 2010 – 9:10am Permalink | Subthread | Parent | Parent subthread | Comments top

put my 2 cents in the basket here as well…

there are many advantages for a rotary steerable as opposed to a mud motor….since there is no sliding there are many advantages interns of

1- better hydraulic performance interms of leading to better lift for cuttings to surface and such
2- better weight transfer leading to higer penetration rates
3- reduced well bore tortuosity — resulting in a cleaner wellbore with better LWD/MWD data
4- better downhole positioning
5- lesser BHA trips for correction runs
6- issues like ledging are minimized which are really the bane far as bent-sbus are concerned with high dogs in current applications

AutoTrack (BHI), PowerDrive (SLB) and Geo_pilot (Sperry) are three big ones ….

although certain hybrid systems are available too ….something like BHI VertiTrack is a true vertical drilling system that runs a mud motor but uses three expendable pads (aligned at 120 degrees all around) in the BHA just behind the stator to realign the wellbore to true vertical by using hydraulics to push out one or a combination of pads to realign slowly….but then this is strictly a vertical bore application…

there are also closed loop steerable systems available where top drive torque is not sufficient …..
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ROCKMAN on June 21, 2010 – 9:21am Permalink | Subthread | Parent | Parent subthread | Comments top

Yeah, yeah, yeah…rotary steerables are great but where’s the excitement in letting the computer do all the work. Sure the computer usaually does a better job. I’m just old school and like the extar pressure of making the steering calls myself. Just one more justification for drowning my anxieties with a big bowl of Blue Bell. [ed: Blue Bell is ROCKMAN's favorite ice cream]
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Frontier_Energy on June 21, 2010 – 7:12pm Permalink | Subthread | Parent | Parent subthread | Comments top

For most application on land the conventional motor does just fine. A lot of offshore applications as well. But to get the fast P-Rate needed to get to the target on this bitch -we need rotary steerables. They may be using a conventional motor once they get near the target, maybe someday we will hear the “rest of the story”.

Calling a set is not that big a deal- standing on the rig floor making the set is the challenge with a conventional motor. Using weight and differential – rocking the table to get the string moving, etc. Nothing like having a bit take a bite and make about 3 wraps downhole. You sit there and wait until everything unwinds. Then after waiting – it doesn’t unwind – so you have to pick up- work the pipe and try to get a toolface.

In the present situation we need rotary steerables at high rate of penetration zeroing in on the target. The computer does not steer the motor- the deflection is made on the fly using the inclination at the bit for reference. This is compared to a conventional motor where you get your deflection based on what you anticipate the motor yield in deg/100′. You get your survey 50 feet behind what you have already drilled and have to calculate what you think you will get on the next set. Thats all fine and good until you get a change in formation as you mention “Mother Nature”

One issue with rotary steerable is cost – not relevent in the present situation.

There’s also a very well done technical discussion of directional drilling, with images and graphics at Pirate4x4.Com forums.

Pros/Cons of Directional, High Technology Drilling Methods

The basic thing this very complex drilling technology lets us do is drain existing and new reservoirs more quickly, leaving less for the future, and bringing the future oil depletion scenario just that much closer. They can, and do, for example, target a narrow band of oil, maybe only 10 feet tall, and snake the drill along it for a mile. Obviously, the well will supply a lot because it’s a straw with a lot of holes, as you can see clearly in the last part of the above video, but if you suck at very high pressure from a long tube you simply drain the target pool that much more quickly.

An obvious pro is that such methods make intercepting a 15″ or so pipe 18k feet below sea level possible, and within reason, practical, in order to kill an out of control well spewing oil into the Gulf of Mexico, or anywhere else.

Saudi Arabia, for example, national oil company Aramco is considered a global leader in such methods, despite persistent statements that if we could just get western oil companies into the 2nd and 3rd world NOCs our oil supply issues would simply vanish. This is a false though intellectually attractive belief that seems to appeal most to those least willing to conserve or change.

Oil Drilling Factoids I’ve Picked Up

1. Vertical wells are not actually vertical, but form a very gentle corkscrew shape.

2. The straight steel casing has no trouble bending around the curves of a directional well, or the corkscrew of a standard well, because it’s steel and flexible, and the curves are very gentle.

3. Failure to center the casing in the hole, using centering tools, can cause the cement to form a channel on the side with less pressure, related to fluid dynamics. This is why the recent BP discussion re Halliburton/Congressional investigation focused on BP’s decision to not use enough centering devices on their casing.

4. Pressure in rock is simply the weight of the rock column above the point you need to know the pressure of. Water is a bit less dense than rock, which is why the ocean bottom pressure at 5000 feet is about 2250 psi. At 18,000 feet it’s about 12k PSI in the reservoir, so that’s about 0.8 pounds per foot of rock vs about 0.4 pounds per foot of water, per square inch.

5. The column of drilling mud/fluid, which can have greater or lesser densities (mud weight, more from ROCKMAN) depending on the pressure it needs to hold back, has to total more than the pressure of the oil/gas in the reservoir, or you get a blowout. Weights vary between about 14 and 20 pounds per gallon, ppg. Anything more risks physically fracturing the rock at the end of the well bore, which is a very bad thing since then the drilling mud flows into the fractures and of course, the rock isn’t forming a solid seal any more.

Pressure (psi) = 0.052 X mud column height (feet) X mud weight (#/gallon) (src).

So to kill the BP blowout, for example, you’d take:
11,900 = 0.052 x 13,000 x mud weight, which gives: 17.6 lb mud weight to kill the well, give or take.

6. BP removed the drilling mud without checking adequately for the cement job’s integrity, and also failed to properly track the rate of mud returns, which is the main warning sign of an approaching well kick, or natural gas shooting up the well bore, and which is supposed to be dealt with by pushing more mud back down to kill the kick, and sometimes even the well itself. This is exactly what BP failed to do, and it’s why most other drillers are furious at BP. Rather than spend one more day, and about 1 million dollars drill platform rent, BP decided to take a short cut and replace the mud column with sea water, which doesn’t have the proper weight to hold back the oil/gas pressure.

And that’s it for today’s tech talk. All of the above points may be slightly wrong due to my misunderstanding various subtle points, but the overall idea should be more or less right.

There’s also a Naomi Klein article, Gulf oil spill: A hole in the world that’s probably worth a quick read as well.

This Gulf coast crisis is about many things – corruption, deregulation, the addiction to fossil fuels. But underneath it all, it’s about this: our culture’s excruciatingly dangerous claim to have such complete understanding and command over nature that we can radically manipulate and re-engineer it with minimal risk to the natural systems that sustain us. But as the BP disaster has revealed, nature is always more unpredictable than the most sophisticated mathematical and geological models imagine.

You’ve read the stories, but take a look at this to get a real sense of what’s going on down there right now. The ABC video does a good job showing the intensity of activity in the area. Check out especially around 1:40 and 2:13 into the video for a shot of all the ships and flames.

So you understand what you’re seeing, there’s a few pools of oil being burned on the surface after being collected in containment booms. Then the long ship shooting out a relatively thin flame is the Deepwater Enterprise Drill ship, which is processing oil and flaming off the natural gas. Finally you see the squarish platform burning off a big round flame, that’s the Q-4000, which is just burning off oil/gas because it can’t do the separation/processing. Total being burned off, about 21,000 barrels per day. Leaving maybe 10,15 up to 40k barrels per day flowing into the gulf.

They are spraying water on the burning tubes to keep them from overheating, not because they are on fire

Freaky stuff.

Already hitting the media now Bloomberg, Anadarko Says BP Should Pay After Being Reckless :

June 19 (Bloomberg) — Anadarko Petroleum Corp., the Texas oil company that owns 25 percent of the damaged well pouring crude into the Gulf of Mexico, said BP Plc, the project’s operator, should pay the costs from the spill because it acted recklessly and unsafely at the drilling site.

BP didn’t monitor or react to warning signs as the Macondo well was drilled, Chief Executive Officer Jim Hackett said yesterday in a statement. BP is responsible for damages under such conditions, Anadarko said.

“BP’s behavior and actions likely represent gross negligence or willful misconduct and thus affect the obligations of the parties under the operating agreement,” Hackett said in the statement.

This discussion re Anadarko just occurred on theOilDrum.com’s daily discussion thread, and it’s well worth reading if you want to get further understanding of the legal games that are about to get started in earnest. The comments also explain the significance of Anaradko’s public statement if you’re not clear on what’s actually going on. (Read only subthread).

ROCKMAN on June 19, 2010 – 1:15pm Permalink | Subthread | Comments top

FOR ALL

Given the recent headlines re: Anadarko a quick primer on offshore drilling partnerships. Anadarko owns 25% of the well with a Japanese company owning 10%. BP owns the balance. BP’s partners may have been in the deal from the original lease sale or bought in later. Between the lease bonus and seismic/overhead costs the partnership could have been $50 -$100 million in the red before the first well was spudded.

THE JOA
Such drilling partnerships are governed by a very sophisticated and court tested contract: the joint operating agreement. These can be well over 100 pages long with enough detailed legalize to choke a football stadium full of attorneys. Covers virtually all possible scenarios of what might happen while drilling a well. Obligations, authorities, mandates, restrictions, etc. More later on one of THE critical aspects as to who pays for the accident.

THE AFE
When the operator (in this case BP) proposes to drill a well they prepare a rather detailed cost estimate for the project. This Authorization For Expenditure is another legal document like the JOA. The partners can sign the AFE or not. Don’t sign it and the JOA covers very specific penalties for not doing so. The AFE process follows hundreds of hours of joint meetings between the partners to work out the details. And there are always tech disagreement. And with very few exceptions the operator wins these debates. At most all the partners can do is not participate and be penalized as per the JOA.

ANADARKO: BP’S WORSE NIGHTMARE
Since I don’t have access to the history I can only speculate on the details. But to some degree these generalities are correct. BP has been criticized for making various tech decisions on the well design. Anadarko may have a long and well documented paper trail showing they had disagreed with every choice BP has made. Or to some lesser number of choices. But to whatever degree the documentation wasn’t casual. It’s done by every partners in every joint venture as a negotiation tool. By signing the AFE the partners agree to pay their share of the ultimate actual cost. But it often doesn’t go just like that. The operator (Company A)plans to do the X Procedure. Partner B strongly disagrees and says doing X is risky and could waste money/lose the well/cause a blow out. But the operator almost always wins these debates and drills the well and does X. And surprise…it was a mistake to do X and it runs the well costs up $16 million. When the well is finished the operator mails out the bill to the partners. Company’s B share (25%) is $4 million. But B sends a note back to A and says we need to chat. They get together and B hands them the documentation of how they strong disagreed with doing X so let’s just deduct our $4 million (or some lesser amount)share of that “mistake” from the final bill. This is a very common situation in all joint ventures. That’s why I’m certain Anadarko had a well documented list of potential “ammo” long before the blow out occurred. They might have had their own personnel onboard for short periods of time to document such potential screw ups. As a consultant I’ve been sent out tasked with that exact job. It is exactly as it sounds: a very serious “gotcha” game.

THE COCKED TRIGGER
Anadarko’s press release:”…BP operated unsafely and failed to monitor…” and “BP’s behavior and actions likely represent gross negligence or willful misconduct”. These wordings are not casual. They are based upon very specific language in the JOA. They are the basis for a legal action that would not only assign the full cost of the blow out on BP but also require BP to cover the cost of the original well and perhaps all pre-spudding costs. It would also be cause to remove BP as operator of any future development of the field. There is very specific language in the JOA that specifically gives Anadarko a “get out of jail card” if they can prove the assertion. And it might not even take a lawsuit to prove it. Many JOA require binding independent arbitration to settle such disputes. Someone said the Anadarko statement was a “shot across the bow” of BP. I would disagree: it was a bayonet to the liver. Anadarko is now on the hook for about $10 billion of these disaster costs. They are big but not as big as BP. If they can’t shed this liability they probably cease to exist. I can promise that within days of the blow out they had a world class legal/tech team put together to mount the strongest possible attack on BP. Wouldn’t be surprised if Anadarko hasn’t put $50+ million on the budget just for the legal fees. Any gov’t investigation will pale compared to the story Anadarko is putting together. But will it be heard? Might wake up in a couple of months and Anadarko has gone silent. BP could make a side deal to take Anadarko out of the mess. But that won’t make Anadarko that much less of a danger to BP. Anadarko isn’t going to destroy their records. Nor would they shade their statements if they are forced to testify IMHO. But it would keep them from making anymore damning press releases. It could also save BP from a lawsuit costing them 3X or more of Anadarko’s liability.

How close is BP coming to the gallows? Keep an eye on Anadarko. They may represent the best “leading indicator” of BP’s future.
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E L on June 19, 2010 – 3:51pm Permalink | Subthread | Parent | Parent subthread | Comments top

ROCKMAN:

Great post. Thanks. Anadarko has made itself the chief government prosecution witness in any criminal action (also a handy informant for Search Warrants) against BP and other individuals by these statements. Anadarko now is, I’m sure, under “a keep and preserve all records” order. And at a criminal, or even civil trial, of US v. BP confidentiality agreements don’t hold up when the judge says “Bailiff, take this witness to jail until he testifies.” So most of this will out. May take a while.

In addition, I posted above some of the “discretionary debarment” considerations including the catchall that could come BP’s way. I’m beginning to think BP’s executive were so giddy after the meeting with Obama because he told them “discretionary debarment” would not come their way if they paid $20 billion and kept throwing everything they had at the blow out.

Just your typical “shakedown.” Must have learned that from Capone in Chicago.
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aliilaali on June 19, 2010 – 4:13pm Permalink | Subthread | Parent | Parent subthread | Comments top

RM –

wow …i kinda expected Anadarko to break silence at some point …but i thought it would be after the BP incident report came to light publicly….and then hammer BP

Anadarko’s come out quiet early and seems ready to take the bull by the horns…i suppose Rex Tillerman’s statement backed up by the powers that be in Chevron and Shell at their testimony about the particular mechanical setup of this well setup a good foundation for this statement form Anadarko….

i’m sure Anadarko has a paper trail of disagreements as long as the Mississippi river itself …kinda expected considering the cash flows of Anadarko cannot survive their share of the liability …matter of survival from BP ..maybe not but this stinker will surely sink Anadarko …..

appreciate to hear your 2 cents (or any person with knowledge in these affairs …cuz it be way over my pay scale) on the following if/when you get a few minutes…i reckon it be likely that Anadarko and BP settle this out of court and if they do is there a mechanism in place to keep Anadarko from releasing their dis-agreements with BP to the justice dept or is this not an option ….cuz i reckon the justice dept just found their best friend in Anadarko otherwise…

what wouldn’t i give to be a lawyer in Houston for the next 2 yrs or so ….
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subsea on June 19, 2010 – 4:28pm Permalink | Subthread | Parent | Parent subthread | Comments top

Fantastic post Rockman. As I consider the whole of your arguments, It’s not much of a reach to imagine a case where the minority holders expected something like this would happen – not this level of severity – but a case where they knew that BP would violate the JOA by way of `gross negligence or willful misconduct’ thereby ceding drilling rights to this field which is arguably a nice find. Remains to be seen whether the minority partners can surf the rest of this wave, but Anadarko as informant and witness stands to come out smelling like a rose, and possibly with minority partners gaining control of the field if they covered their butt, and from their stance here early on, it looks like they did. Abundance of Hubris and extreme high stakes.

You can already see the jostling going on, now representative Markey says that BP Partners Anadarko, Mitsui Should Share Oil Woes