There was a really interesting set of comments/observations by a retired oil lawyer, retiredL, on theOilDrum.com in the comment threads of today’s main topic, Deepwater Oil Spill – the BP CEO and Congress – and Open Thread:.

This is one of those things that would just get lost in the shuffle if I don’t post it here, so I want you guys to see this. I think he’s giving a more or less clear view of the realities of how the legal parts of this situation will proceed, as well as of what is going on internally, more or less, inside of BP now.

Although retiredL made a few technical errors in terms of spill rate and volume, his overall understanding of how oil companies work internally is well worth a very close look, as well as his conclusions about how things will turn out.

Because this is a very long posting, here’s the summary, found at the bottom of the full posting:

BP’s only concerns are protecting its property and limiting liability. Those concerns will be defined by laws and actuarial tables, not by common sense; so, they will pay attention to technical solutions only as far as those solutions accomplish those goals. Our society is far too dependent on Big Oil to risk damaging or driving an oil corporation out of existence. As with the Exxon Valdez, any punishment for BP’s behavior will gradually be reduced over to time to a point where BP still feels welcome in American waters.

I’m skipping most of the comments in this discussion because what is interesting is what retiredL says, not what people comment on via their opinions about law or lawyers. I’ve highlighted a few of the more relevant passages.

retiredL on June 18, 2010 – 10:20am Permalink | Subthread | Comments top

First time poster; I’ve been reading Oil Drum for years. Some of this I posted to the other thread right before it closed, so please excuse the repeat.

I hate to tell you, but the people calling the shots on this are lawyers and accountants. BP took off its “engineering hat” and put on its “managing hat” a long time ago; that’s why the spill happened in the first place.

Anything proposed by technicians, engineers, etc. is going to be vetted by lawyers and accountants first… including the scripted “Oops!” moment of the BP spokesperson talking about “the little people” (a classic provocative statement by a flakcatcher.) They will use a twofold criteria: Does this increase liability? Does this protect the company’s assets?

I am a retired lawyer from La., whose family has been involved with oil cases since Standard Oil was actually called Standard Oil. It seems to me that a great deal of both the effort to seal the well and to protect the coastline has been dictated by laws, not by physics or chemistry.

For instance, every petrochemical state has a long line of cases about ownership of oil and gas which is “spilled” or “lost” by the driller. At least some of BP’s cleanup behavior seems to be an effort to maintain a claim of ownership on the spilled crude. After all, there’s billions of dollars of it floating around, available to the first person on the site with good cleanup equipment.

Similarly, it’s my impression that a great deal of the undersea efforts have been directed, not at capping the well, but at proving that BP is not abandoning the well.

To me, the tragedy of BP’s continued oversight of the whole thing lies in their basic aims; retain ownership of the well, retain ownership of the spilled oil, limit legal liability. They honestly could care less about anything else at this point.
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This one popped out today in theOildrum.com Deepwater Oil Spill – the BP CEO and Congress – and Open Thread:, interesting stuff in light of the ongoing congressional investigations of the BP blowout.

I like how these oil company insiders hear this stuff, as they’ve noted, the drilling community is very small, and relatively closely connected, so if you’re in it, in the Gulf of Mexico (GOM), it’s likely things will start leaking out, pardon the pun.

ROCKMAN on June 18, 2010 – 1:13pm Permalink | Subthread | Parent | Parent subthread | Comments top

Merril — I agree Tony would have a tech team evaluate the incident. Opinions will vary but I would bet my last container of Blue Bell ice cream he had a rather thorough analysis within 2 or 3 weeks of the explosion. The BOP failure would, of course, be a different matter. The bulk of those details still lay in 5,000′ of water. But IMHO the details leading up to the blow out have been documented and those depositions are sitting in the BP lawyer’s safe right now. And will stay there until the trial.
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[-] TerrytheTurtle on June 18, 2010 – 3:15pm Permalink | Subthread | Parent | Parent subthread | Comments top

Rockman,

The BP investigation took place at a hotel near the Houston HQ from May 7th to 21st and averaged 18 hours/day of work by a team from all over the world. That investigation did inlcude the depositions of the rig crew.

The draft report was ready on May 27th to be presented to BP executives, the final version was ready on Wednesday night, before the Congressional meeting.

Tony’s answers were probably ‘legal quality answers’, meaning any he said which was implied otherwise in the report which will surely be made available to Congress and/or OSHA mmight be unwise yesterday.

He could have taken the 5th I suppose, but that wouldn’t look good on Wall Street.
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This is fast approaching the worst case scenarios outlined by the industry insiders who I consider competent and rational, and who have been sharing their insights on various online forums, especially theOilDrum.com.

Washington – Based on updated information and scientific assessments, Secretary of Energy Steven Chu, Secretary of the Interior Ken Salazar, and Chair of the National Incident Command’s Flow Rate Technical Group (FRTG) Dr. Marcia McNutt (Director of the U.S. Geological Survey) today announced an improved estimate of how much oil is flowing from the leaking BP well.

Secretary Chu, Secretary Salazar, and Dr. McNutt convened a group of federal and independent scientists on Monday to discuss new analyses and data points obtained over the weekend to produce updated flow rate estimates. Working together, U.S. government and independent scientists estimate that the most likely flow rate of oil today is between 35,000 and 60,000 barrels per day. The improved estimate is based on more and better data that is now available and that helps increase the scientific confidence in the accuracy of the estimate.

At the direction of the federal government, BP is implementing multiple strategies to significantly expand the leak containment capabilities at the sea floor even beyond the upper level of today’s improved estimate. The Lower Marine Riser Package (LMRP) cap that is currently in place can capture up to 18,000 barrels of oil per day. At the direction of the federal government, BP is deploying today a second containment option, called the Q4000, which could expand total leak containment capacity to 20,000-28,000 barrels per day. Overall, the leak containment strategy that BP was required to develop projects containment capacity expanding to 40,000-53,000 barrels per day by the end of June and 60,000-80,000 barrels per day by mid-July.
U.S. Scientific Team Draws on New Data, Multiple Scientific Methodologies to Reach Updated Estimate of Oil Flows from BP’s Well

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A surprisingly good speech from Obama, covering some areas which really needed to be discussed. The corruption of the MMS was covered, along with pointing out that the insane policy of deregulation where industry regulates itself, more or less, leads to disaster (one has to ask, however, why this same point and speech was not made about the grotesque abuses of the financial services sector.

Obama also points out that we consume 20% of the global oil production but have only about 2% of the oil reserves means we need to start dropping oil consumption. Discussion of clean energy and the mythical ‘energy independence’ we like to fantasize about.

You can get the speech transcript here. There’s also a useful page of links to more speeches available.

We’ll see how this goes. Obama brings up history, World War II, landing men on the moon, and so on. I guess it helps to try, even though unfortunately, dealing with resource constraints isn’t in the same category as burning/using massive amounts of resources to achieve some goal, like building tanks in WWII, making rockets to fly to the moon, and so on.

And this of course is where the speech making falls flat, trying to sell the model of consumption/resource plenitude as a method of dealing with resource constraints/scarcity. That’s just not going to work, and I’m not sure how long that type of rhetoric is really going to fly. Maybe we’ll just keep doing it, I don’t know.

As we wind down, each step of the way we’ll just grow into believing this is the new normal, which is the same as the old normal (a nice column by Dmitri Orlov which has an amusing story about our tendency to think in this way no matter what reality actually shows us)….