Jay Schempf - Contributing Editor
An “overabundance of caution” was the phrase most often repeated by federal government and BP Plc spokesmen to describe phase testing of their newest subsea hardware innovation aimed to stem the flow of oil and gas from the wild Macondo well in the deepwater Gulf of Mexico.
AsOffshore went to press, a so-called “capping stack” – a specially constructed three-ram BOP designed to attach via spool piece to the well’s inoperative drilling BOP at a water depth of some 5,000 ft (1,524 m) – had been installed successfully and the production flow slowly shut in as three flow valves on the body of the stack were closed gradually. This procedure was conducted in six-hour intervals with extreme care as engineers and scientists with the joint BP/federal team allowed pressure from the Macondo reservoir to build behind the capping stack in order to monitor for well integrity problems.
In addition to reviewing real-time well monitoring data from transducers on the capping stack, the team also used six ROVs deployed around the wellhead to conduct a continuous 360º scan of the ocean bottom via both video and sonar equipment, each searching for potential anomalies that might indicate oil or gas seeping up to the seafloor.
At the surface, multiple seismic and acoustic passes by private seismic vessels and by NOAA’s research vesselPisces also were being made daily over a larger area above the well site to look for changes in sub-bottom geology or for indications of possible bubbling from potential fissures caused by hydrocarbons leaking from compromised casing.
Capping stack always in the works
According to BP, the concept of using the capping stack – a “BOP atop another BOP” setup – had been in the works since shortly after theDeepwater Horizon rig exploded on April 20 and sunk the next day. The stack was designed, manufactured, and tested in parallel with more quickly deployed solutions attempted during the early life of the blowout. These included cofferdam containment equipment, a failed junk shot “top kill” procedure, and collection of oil and gas from the partially open drilling BOP through seafloor manifolding to floating risers connected to storage and flaring ships. This captured some, but not all, of the production. Addition of a third independent riser destined to route even more flow to a third vessel was accomplished in early July, with the vessel expected on scene by month’s end.
While many off-the-shelf components apparently were incorporated into its design, the capping stack took considerable time to produce, BP officials said. Still more time was spent in surface-testing installation procedures on simulated Macondo wellhead equipment, the company noted.
But when the capping stack was installed, all containment and pumping equipment to the surface, as well as the storage and flaring by the surface vessels, were shut down since the well flow was totally closed off (at least temporarily). In turn, these vessels and equipment made way for the capping stack installation by the drillshipDiscoverer Inspiration. The vessels remain in the general area, however, and can be connected to the existing seafloor capture system in several days’ time, should the decision to do so be made.
In daily press briefings, both retired US Coast Guard Rear Admiral Thad Allen, the federal government’s national incident commander, and Kent Wells, a BP senior vice president in charge of the subsea work, both tenaciously insisted on calling the top capping measure a “test,” even after three days of flow shut-in and a gradual positive increase in well pressure, which seemed to signify well integrity.
However, they also refused to state whether the well would remain shut in until the first of the two relief wells being drilled nearby establishes communication with the Macondo wellbore – perhaps by early August – followed by killing it with mud and cement plugging.
But they acknowledged the possibility that in any case, the surface collection array could be reactivated and, with addition of the third storage/flaring, probably could capture 100% of the flow routed through the capping stack. This would necessitate allowing the oil and gas to escape uncontrolled into the water column once again for perhaps as long as three or four days, a universally unwelcome circumstance.
Drilling ban raises everyone’s choler
It was almost inevitable that both the puzzling causes of the Macondo disaster, along with political expedience in the wake of both legislative and public protest over it, would persuade President Barack Obama to order a temporary moratorium on deepwater drilling in US federal waters. The moratorium would remain in force until it was deemed whether the incident was a “freak” occurrence in particular or something systemic to offshore drilling and production. It came as no surprise, then, that the president ordered such a drilling ban only days after the incident.
What’s more, nearly a month later, as BP’s attempts to stop the oil from leaking produced few positive results, nobody seemed shocked when the president ordered Secretary of the Interior Ken Salazar to extend the moratorium for at least six months (until Nov. 30). In essence, the extended interdiction stopped the approval process for new deepwater drilling permits and temporarily halted drilling at 33 deepwater and ultra-deepwater exploratory locations. The industry currently defines “deepwater” locations as those in water depths of about 1,500 ft (600 m) or more; generally, “ultra deepwater” locations are at 5,000 ft (1,525 m) or more.
But when it became plain that the ban would cover all new or existing drilling permits in water depths of 500 ft (150 m) or more, the offshore industry, along with federal, state and local officials in affected states from Texas to Alabama, joined in cried “foul,” even though MMS statistics track the Gulf deepwater out from about 650 ft (200 m) of water depth, a definition set by the Deepwater Royalty Relief Act.
Nevertheless, the industry/government group predicted appalling losses in income for businesses engaged in offshore drilling and production activities of all kinds. They further anticipate that the subsequent interruption and outright loss of associated jobs would further devastate an already feeble recovery in the Gulf Coast region, which on one hand is tied to the ongoing US economic malaise and on the other to the physical and financial damage by major hurricanes during the last five years.
In addition to operating companies, particularly threatened by the drilling ban are offshore service and supply companies – from drilling and completion hardware transporters to tubular goods installers, and other well site providers, all of whose equipment and commercial activity would be interrupted significantly as government oversight is expanded in far greater scope – and at the usual snail-slow pace.
Judges overturn moratoria…for now
It took a group of Louisiana-based companies, led by Hornbeck Offshore Services of Covington, Louisiana, to challenge the extended moratorium in federal district court in New Orleans. There, in late June, a federal judge granted a preliminary injunction against the ban, finding it “overly broad” and insufficiently justified by existing law.
The initial finding was challenged by the US Justice Dept. in early June, but a three-judge federal appeals panel refused to reinstate the administration’s six-month moratorium while litigation continued. However, the court order said the administration could reapply for an emergency stoppage of drilling if deepwater activity were about to begin.
Meanwhile, on June 12, Interior filed a decision to again pause deepwater drilling – another moratorium, but with a different basis for suspension, i.e. covering drilling operations that use subsea BOPs or for floating rigs or platforms using surface BOPs.
After reviewing the new drilling ban criteria, the anti-moratorium joint venture considered it even more restricting, and at press time was considering still another court challenge.
MMS unraveled by misconduct charges
Compounding the blowout and spill-related curtailment in Gulf Coast business activity are the results of an investigation by the US Interior Department’s inspector-general into the activities of the US Minerals Management Service (MMS), the department’s agency charged, for more than 30 years, with regulating offshore oil and gas leasing, drilling and production in federally controlled waters.
Though ordered several months before, the report coincidentally appeared just days after the Macondo incident. It apparently reveals indiscretions involving Louisiana MMS inspectors since 2005, which include receiving gifts and favors resulting from what the administration described as a “cozy” relationship among operating companies and the MMS.
This report added fuel to a growing legislative fire in Washington, DC, where several House and Senate committees conducted public hearings right after the spill that raked BP and other operating and service company managers across the coals with regard to alleged sidestepping of official code regulations and purported lax attention to written industry standards for deepwater drilling/production equipment, among other charges. Various representatives and senators vowed to scrutinize such allegations and promised to prepare new legislation to both penalize and more deeply regulate offshore petroleum operations across the board.
At the behest of President Obama, Interior’s Salazar quickly reacted to the report with a May 19 executive order dividing the MMS into three separate agencies. Concurrently, several top MMS officials either resigned outright or announced their retirement effective at year’s end.
On July 15, Interior submitted its official MMS restructuring plan, which split the agency into three entities, focused on resource management, safety and environmental oversight, and revenue collection and enforcement.
The moratorium notwithstanding, the first of these agencies to be up and running would be the revenue collection and enforcement arm – the Office of Natural Resources Revenue (ONR) – which could be operating in full by Oct. 1. The others would phase in beginning in January 2011 and continue over the next year.
Oil Spill Commission to hold sway
While the “abundance of caution” phrase characterized much of the language involving the testing of the Macondo well capping stack, there exists “a superfluity of scrutiny” in measures to actually be taken or considered in investigating the state of deepwater drilling and production in US federal marine acreage – and perhaps of those activities in state-regulated waters, as well.
Using similar panels created to identify those responsible for earlier national emergencies as a precedent, President Obama in mid-May created a so-called independent commission to mount a detailed investigation of theDeepwater Horizon explosion and fire and the out-of-control oil spill that followed. Though densely populated with former federal officials, the “independent” depiction of the panel apparently excludes only current federal officials. Judging from their backgrounds, a more accurate portrayal of its seven members would add “environmentalist” to its composition.
Even so, the National Commission on the BP Deepwater Horizon Spill and Offshore Drilling kicked off its six-month inquiry on July 12 with a two-day hearing in New Orleans. At the hearing, commission members listened to testimony, much of it emotionally charged, ranging from the pros and cons of the use of dispersants to thin oil both on the surface and in the water column to the expected effects on the commercial fishing/shrimping industry, among other topics.
And though they had not expected testimony with regard to the deepwater drilling moratorium, commission members got an earful from both sides of the question.
From the anti-moratorium side, they heard impassioned pleas from various interests for the commission to exert whatever influence they might have with the administration to help the industry return to pre-spill deepwater activity in the Gulf.
In addition to invited witnesses, Sen. Mary Landrieu (D-LA) made a surprise appearance. She, too, called for expedient settlement of offshore drilling equipment compliance. She stressed that it should take only a few days to examine 33 deepwater wells and drilling rigs for compliance so that the industry can regain its robustness without wholesale bankruptcy in the service industry, and an irreversible exodus of the few deepwater drilling units to other areas of the world.
Michael Bromwich, director of the interim federal agency created out of the MMS to regulate the moratorium until replaced by the new three-agency bureaucracy, said while a shorter moratorium is not out of the question, there remains the need for a more thorough review of existing wells and the drilling equipment necessary to drill and complete deepwater wells without the risk of creating another Macondo-like blowout and spill.
Looks sometimes lie
Commissioners later admitted that they had not been fully aware of the potential damages inherent in protracted activity in the offshore petroleum sector, and several of them were concerned at the official six-month life of the moratorium.
Commission co-chairman William Reilly, a former chief of the Environmental Protection Agency (EPA), in an interview with the New Orleans Times-Picayune newspaper, said after the second day’s testimony that he came away with a much greater sense of the economic dislocation felt in the area.
“How hard can it be to put inspectors on each one and draw conclusions that will allow a resumption of activity?” he said of the 33 deepwater drilling operations in question.
Oil Spill Commission members share environmental ties
The seven-member BP Deepwater Horizon Oil Spill and Offshore Drilling Commission named by President Barack Obama in May is made up of a number of pro-environment and somewhat anti-offshore drilling officials, some former federal employees.
Sen. Bob Graham (D-FL), left, joins former EPA chief William Reilly as co-chairs of the seven-member commission investigating the BP explosion and blowout.
The co-chairs are former senator and governor of Florida, Bob Graham (D-FL), and William K. Reilly, former Environmental Protection Agency administrator under President George H.W. Bush (including during the 1989Exxon Valdez oil spill in Alaska.)
The other members are:
- Frances Beinecke, president of the Natural Resources Defense Council
- Donald Boesch, president of the University of Maryland’s Center for Environmental Science
- Terry Garcia, a National Geographic Society executive and former chief lawyer at the National Oceanic and Atmospheric Administration (NOAA) under President Bill Clinton
- Cherry Murray, dean of Harvard’s engineering school and former president of the American Physical Society
- Frances Ulmer, chancellor of the University of Alaska, Anchorage, and former Democratic lieutenant governor of Alaska.
Only one of these members, Murray, has an engineering background, but it is in optics and physics. A second member, Boesch, has experience in coastal areas and the after-effects of oil spills.
The other five members share experience in policy and management.
New bureaus divide MMS functions
Restructuring of the now-defunct Minerals Management Service (MMS) has resulted in creation by Interior Sec. Ken Salazar of three separate bodies at the executive order of President Barack Obama, each responsible for specific facets of the federal government’s regulation and oversight of the U.S. offshore mineral resources, and petroleum industry offshore leasing, drilling, and production.
All three bureaus will be led by a director yet to be named and all will report to either the assistant secretary of Energy for Land and Minerals Management or the assistant secretary for Policy, Management, and Budget.
The three entities are:
- The Bureau of Ocean Energy Management (BOEM) – This bureau will be responsible for the sustainable development of OCS conventional and renewable resources (oil and gas) functions of the former MMS, including activities involving resource evaluation, planning, and leasing
- The Bureau of Safety and Environmental Enforcement (BSEE) – This bureau will be responsible for the safety and environmental enforcement functions of the former MMS, including the authority to inspect, investigate, summon witnesses, and produce evidence; to levy penalties; to cancel or suspend activities; and to oversee safety, response, and removal preparedness
- The Bureau of Natural Resources Revenues (BNRR) – This bureau will assume the royalty and revenue functions including collection, distribution, auditing and compliance, and investigation and enforcement. Additionally, the bureau will oversee asset management for both onshore and offshore resource activities.
Offshore Articles Archives
View Oil and Gas Articles on PennEnergy.com
