Here’s an early draft of the new deep water drilling regulations. If you scan them, you can basically see all the points where BP’s cost cutting efforts created the scenario where a blowout could occur. There’s also a NY Times article, In Gulf, It Was Unclear Who Was in Charge of Rig, that helps show where the lapses occurred that these new regulations will hopefully help prevent in the future.

You can bet there’s a lot of drillers out there now who are cursing BP loudly…. but sometimes this is what it takes to unroll decades of loose industry/government coziness, a process that got even worse under the GW Bush group, where the MMS/Oil industry links and connections became almost a farce in terms of ensuring strict regulations would be carried out and enforced.

New deepwater exploratory drilling will be on hold for six months pending the findings and recommendations of a presidential commission investigating the causes of the explosion that sank Transocean’s Deepwater Horizon rig leased by BP Plc.

Such a lengthy moratorium could impact future U.S. oil and natural gas output. U.S. Gulf offshore oil operations produced 1.6 million barrels of oil per day in 2009, accounting for 8 percent of U.S. liquid fuel consumption, according to the U.S. Energy Information Administration.

In addition to the deepwater drilling moratorium, the Interior Department has also outlined a series of potentially costly new safety rules and standards that oil companies will have to contend with.

Here some details about the drilling ban and safety measures:

DEEPWATER DRILLING MORATORIUM

* The six-month moratorium will apply to all new exploratory drilling at depths more than 500 feet.

* Thirty-three exploratory rigs in the Gulf of Mexico will have to stop drilling operations as soon as safely possible and remain out of action for six months.

* Companies that have an approved permit to conduct exploratory drilling in deepwater, but have not started their project, will not be allowed to start drilling during the moratorium.

* Shallow water drilling and wells already in production will be able to continue work under the moratorium.

* As part of the ban, Royal Dutch Shell’s proposal to drill exploration wells in the Arctic this summer has been postponed until 2011.

* Upcoming lease sales in the Gulf of Mexico and off Virginia have been canceled.

SAFETY STANDARDS

* Blow-out preventers (BOPs) on floating drilling operations need to certified by an independent third party. The department will also develop formal equipment certification standards for BOPs.

* Within a year, BOPs on all operations will be required to have two sets of blind shear rams spaced at least four feet apart.
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It’s a shame this type of information gets buried in endless comment threads over at theOilDrum.com, so for a while I’m going to salvage the best stuff and put it up here. (Fixed and added a few links).

avonaltendorf on June 6, 2010 – 3:49pm Permalink | Subthread | Parent | Parent subthread | Comments top

Preponderance of evidence that BP Houston gave orders to company men Vidrine and Kaluza, neither of whom appeared at Coast Guard hearings in Kenner. Vidrine claimed illness, Kaluza pleaded 5th Amendment. BP executives repeatedly denied knowing what happened at Macondo and blamed Transocean for the blowout. Coast Guard hearings established that BP company men were in control of drilling program, ignored mud returns, ordered displacement to seawater.

“Mark Hafle, the BP drilling engineer who wrote plans for well casings and cement seals on the Deepwater Horizon’s well, testified that the well had lost thousands of barrels of mud at the bottom. But he said models run onshore showed alterations to the cement program would resolve the issues, and when asked if a cement failure allowed the well to flow gas and oil, he wouldn’t capitulate. Hafle said he made several changes to casing designs in the last few days before the well blew, including the addition of the two casing liners that weren’t part of the original well design because of problems where the earthen sides of the well were ballooning. He also worked with Halliburton engineers to design a plan for sealing the well casings with cement.” [NOLA.com – Hearings: Only deepest well casing used new kind of cement]

I monitored the hearings, listened to every word of testimony and watched him smirk. Halfe prevaricated, refused to identify the authenticity of the Macondo Final Drilling Plan with his signature on it, which was produced by Transocean. Hafle’s attorney objected to introduction of BP proprietary information.

“BP’s claims of limited involvement in the actual drilling of the Macondo Prospect well are so disingenuous and incongruent with the facts that they would be laughable if they were not so cynically absurd. All aspects of Macondo well design and drilling program execution came under BP’s direct control, supervision, approval and authority, and for BP to suggest that they simply were not significantly involved in the conduct of well operations on 20 April is to turn the world upside down and expect no one to notice.” [Michael Williams, Wall Street Journal (note: for the full text of this comment, see below]
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ROCKMAN puts up another classic posting, this time on the problems you would expect in drilling a relief well.

The relief wells, you might or might not remember, will be what actually stops the oil flow. The top hat thing they are using now is only a temporary measure, and at best will capture only about 90% (and that’s really at best) of the flow. Given that the flow is estimated between 12-20k barrels per day, that leaves a lot of oil spewing out in the Gulf.

So the real solution is, and always was, the relief wells that are being drilled down now Those will intercept the blown out well bore about 50 feet from the top of the actual reservoir, that is, about 18k feet below sea level, and 13k feet below the ocean floor. Once they intersect, which is a very complex process because you are drilling down with maybe a 20 inch hole trying to intersect maybe a 15 inch hole, down at 18,000 feet. Tricky stuff. You can also watch the official BP videos on relief wells.

This entire discussion is well worth reading, because it sheds some light on some parts of this process and industry you are most likely not aware of.

So without further ado, here’ how Rockman and a few other drilling engineers and professionals see the coming problems (theoildrum.com Deepwater Oil Spill – Pressure Tutorial – and Open Thread):

ROCKMAN on June 6, 2010 – 9:35am Permalink | Subthread | Parent | Parent subthread | Comments top
…. [ edited out beginning: not relevant to the thread topic]
I’ll take advantage of Euan’s post and expand on it with regards to recent question regarding the drilling risks associated with the relief wells. This is a matter I have experience with first hand in recent years. Prior to drilling a DW well there’s needs to be an estimate of the pressure gradients Euan has described. If there is not a well close to the new location the pressure gradient model (PGM) has to be estimated from the seismic data. Compared to a PGM generated from a nearby well, a seismic derived PGM is rather crude but it’s all we have to work with sometimes. This is why the PGM is modified while drilling. This was one of my tasks in a former life: well site pore pressure analyst (PPA). As the well is drilling a variety of rock property data as acquired by electronic sensors just behind the drill bit: logging while drilling (LWD). This data is transmitted continuously back to the surface. As simple as it may sound the data is essentially transmitted like a telegraph signal. Pulses are generated in the LWD tool and transmitted to the surface via the mud column. On the rig the LWD data is decoded and ready to use. Though I can’t predict the PGM ahead of the bit I can determine how close it’s matching the pre-drill model. Even when there isn’t a dramatic change in rock pressure there are limits to the range of mud weights used to drill a hole. That’s why we see so many csg sets in the RW’s. Too light a MW and the well flows. Too high a MW and you fracture the rocks and can easily lose the hole.
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Didn’t want to let this one slip by. In case you missed it, a fresh spill, this time along the BP run Alaskan pipeline.

With the Gulf Coast dying of oil poisoning, there’s no space in the press for British Petroleum’s latest spill, just this week: over 100,000 gallons, at its Alaska pipeline operation. A hundred thousand used to be a lot. Still is.

On Tuesday, Pump Station 9, at Delta Junction on the 800-mile pipeline, busted. Thousands of barrels began spewing an explosive cocktail of hydrocarbons after “procedures weren’t properly implemented” by BP operators, say state inspectors. “Procedures weren’t properly implemented” is, it seems, BP’s company motto.
…
In one case, BP’s CEO of Alaskan operations hired a former CIA expert to break into the home of a whistleblower, Chuck Hamel, who had complained of conditions at the pipe’s tanker facility. BP tapped his phone calls with a US congressman and ran a surveillance and smear campaign against him. When caught, a US federal judge said BP’s acts were “reminiscent of Nazi Germany.”
…
The company is deeply involved in our democracy. Bob Malone, until last year the Chairman of BP America, was also Alaska State Co-Chairman of the Bush re-election campaign. Mr. Bush, in turn, was so impressed with BP’s care of Alaska’s environment that he pushed again to open the state’s arctic wildlife refuge (ANWR) to drilling by the BP consortium.
BP’s OTHER Spill this Week, May 28, 2010

You know, there’s a familiar ring to that “procedures weren’t properly implemented” wouldn’t you agree? According to ROCKMAN over at theOildrum.com, procedures weren’t properly implemented on the BP Deepwater Horizon blowout, especially not on the days / events leading up to the actual blowout.
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Here’s one I bet you haven’t heard much about. And of course, the problem of increased costs, for insurance, for dealing with expanded and improved and revised drilling regulations that will be required to minimize the risks of another blowout can’t be ignored.

See the update comment under the fold about partner liabilities, also quite informative.

Anadarko owns a 25 percent stake in London-based BP’s Macondo well, where the April 20 rig disaster killed 11 people and set off leaks spewing an estimated 5,000 barrels of oil a day into the sea. Anadarko, based near Houston, had no say in how the well was drilled.

“They were basically the passenger and somebody else was doing the driving, so the car crashed,” said Fadel Gheit, an analyst at Oppenheimer & Co. in New York. “What we see here is that Anadarko got hurt more than the driver.”

Pound for pound, Anadarko may have to pay more than BP. ING Bank NV estimated that costs of the spill may reach $7.8 billion. Anadarko may have to pay as much as 25 percent of those expenses, which would be almost $2 billion, if ING’s forecast proves accurate. BP, which owns 65 percent of Macondo and is project operator, is 29 times the size of Anadarko by revenue and almost eight times as big based on reserves available for future production.
source: Spill May Hit Anadarko Hardest as BP’s Silent Partner, Bloomberg Businessweek

So here’s another area that deepwater drilling is going to see major ripple affects down the road: the willingness of businesses to invest in drilling ventures. And of course, also the ongoing problem of insurance re-adjustments for deep water drilling. All in all, Deepwater Horizon is looking to be a major game changer in global oil production.

The price to insure offshore rigs will almost certainly rise as the accident’s cost to the insurance industry becomes clearer. Premiums may remain permanently higher if the investigation of the disaster reveals previously unknown dangers, or if the inevitable legal wrangling breaks new ground in assigning blame more broadly than insurers expected.
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