Good2Have a View

Supping with The Devil

The shores of the UK are warmed by the Gulf Stream that flows from the Gulf of Mexico. How ironic that this same Gulf is now causing an increasing flow of warm air due to an oil spill.

The oil spill from Mississippi Canyon block 252, otherwise known as the location of the Deepwater Horizon, is a manifestation of the global big picture. It has resonances with both the global banking/economic crisis and the global political map.

In order to satisfy the global economy’s need for oil, and not least in that the demands of the world’s biggest economy – the USA, it is desirable to find oil reserves in politically acceptable areas. And so BP found itself searching for oil in the Gulf of Mexico at depths that stretch engineering knowledge and techniques.

In a similar vein, up until the doubts that arose over US sub-prime mortgages, the banking system, primarily based in New York and London, used the limits of its knowledge and techniques in order to fuel an element even more important to the global economy than oil – money, or rather debt.

Fundamentally, the global economic system is flawed. Countries such as China, Germany and those in S.E Asia  produce a great deal and consume little (i.e. they save). Those in the West, predominately the USA and UK, produced little and consumed a lot (i.e. spent). The savings of one were funnelled to the pockets and cash registers of the other by the banking system. This process resulted in debts being incurred by the spenders. The risk of that debt seemingly being managed by financial engineering. That financial engineering being as problematic as the oil engineering that is now ‘pushing the envelope’ in the Gulf of Mexico.

When you have processes that are at the limit of human understanding mistakes happen and problems arise. It happened with financial engineering and it has happened with oil engineering. In both cases the electorate are impacted and that requires a political response. The more so since both endeavours, banks and oil companies, earn huge revenues and incur huge profits that their employees enjoy.

This is a toxic mix.

Indeed it happened with aero engineering. The world’s first jet airliner, the Comet, suffered three catastrophic crashes in the 1950s that were the result of the shape of windows. Had jet airliners been banned due to the loss of life (35 people) travel would be very different nowadays. Lessons were learnt and it wasn’t. But that was a different time.

So, as with the banks, the ‘greedy’ oil company must be brought to book. But the electorate is fickle. If you bring all parties to book that impacts American firms and American jobs. Not a good idea with mid-term elections due in November, a President under siege due to his cobbled together health reforms (one of his main domestic policies) , a jobless economic recovery and a war in Afghanistan that is going nowhere and has many of the attributes of another lost war in Vietnam. Then along comes his ‘Katrina’ Moment, ironically enough in the same part of the USA.

He has to show himself to be no George W. Bush. In fact this seems to be his most potent ‘brand’ – I’m not Dubyah. So hyperactivity replaces no activity, or rather hyper-rhetoric replaces no activity . But Bush could have helped the residents of New Orleans. The Army Corp of Engineers could have built better levees. The US governemnt cannot help stop the flow of  oil. But all politiains respond to the electoral clamour that ’something must be done’.   

Furthermore, the matter is complex. Not only are we dealing with real engineering and its complexities at the limit of human understanding, but also judgements and the fact that not one but several companies are involved. Lehmans may have taken bets on many financial products developed by many companies but only Lehmans made those decisions.

In this case, the oil spill from Deepwater Horizon, the issue revolves around that of completing the well.

What seems to be known is that a production casing (a tube to seal off the formation) was run prior to the rig leaving location, This casing has to be cemented in place. The cementation job is not performed by BP but by an American firm, Halliburton, and supervised by BP. The formation being sealed off was problematic when being drilled in so far as drilling fluid (mud) used to balance pressures and prevent blow-outs (amongst other things) had been lost into a formation that was obviously very porous. This required that the cement used for the casing should be specialist in nature so as not to be lost also and the bond between casing and formation weakened. In addition, a cement plug was placed within the casing to add to the prevention of a blow-out.

The casing was run but then it seems that a casing bond log, performed by the oil-field services company Schlumberger was not run. Schlumberger had run a number of logs and had been asked to stay on board the Deepwater Horizon for 5 days following their last test. They departed, according to a statement issued by them, on the day of the blow out without performing further tests.

From this it can be assumed that the tests they had run were in ‘open’ hole, i.e. without any casing. It should take only two or three days to run such casing and cement it so if no more logs were run it would seem to support the assertion that a casing bond log was not run.

The casing bond log tests the all-round (360 degree) quality of the cementation of the casing using sonic techniques. It produces a chart that needs to be interpreted and despite being described as a ‘gold-plated’ test still requires analysis since it is rarely shows a job so bad that it is an obvious failure.

However, in addition to the casing, Halliburton also installed a cement plug*. Whether this was done at the same time as the casing cementation is not known (if so a casing bonding log would have not been possible as no casing of interest would have been exposed to the Schlumberger tool).

 Furthermore, in order to obtain a decent casing log the casing would have had to run through the whole pay zone (reservoir). Since Deepwater Horizon was drilling an exploration well that may not have been the case, although unlikely as it is important in delineating the oil reservoir to gain some idea as to how thick the producing formation is at this point.

After installing the plug two tests were run however. One was an over-pressure test whereby pressure above the plug is increased. If the pressure then falls the plug is leaking.

In addition, a negative pressure test was performed. This reduces pressure above the plug so that if pressure rises the plug is leaking.

These are pass/fail tests that require no assessment. Pressures are either as  expected (pass) or not (fail). There is no indication that these tests were anything but successful.

So, having (apparently) completed the well steps were taken to leave the location. This meant pumping out mud from the riser ( a tube that connects the blow out preventor to the rig floor) and replacing it with sea water. This replaces the hydrostatic pressure of the mud with the normal (lower) pressure of sea water.

At this point the blow out occurred and the blow out preventor failed. Hence the destruction of the rig and the subsequent leak. The kill lines from the BOP {used to operate it)  have been retrieved but not been made to work. This is a feat in itself. Also an initial report from a Congressional committe has it that the BOP was operated a number of times befoe the incident to control pressure and bleed off the fluid.

The initial test report of the BOP, which would have been conducted when the well was started, can be seen here (http://energycommerce.house.gov/documents/20100512/Transocean-Deepwater%20Horizon%20BOP%20Test.pdf ) and was signed off by all parties. 

So, questions surround the work of Halliburton (an American company) and BP’s supervision of that but even more profound questions surround the failure of the blow out preventor made by the American firm Cameron Ironworks. Yet it is BP, or rather British Petroleum, that has bore all the brunt of US political outrage.

If you had a car accident and the safety belts or air-bag failed, wouldn’t you want to ask the manufacturer why? Why isn’t Obama so interested?

The fact that the US political establishment has felt able to do this says a great deal about the calculation it has made between its own electorate and its relationship (special or otherwise) with its closest ally, the British.

But it should come as no surprise. The UK dispossessed the inhabitants of Diego Garcia and, despite court rulings in favour of the dispossessed, continue to do so in order that the US may have an air base.

The UK suckered itself into an invasion of Iraq that was ill-prepared and ill-conceived. It continues to delude itself that, by buying the US Navy three submarines and incur the running costs in order that the US Navy may install its Trident missiles, it (the UK) has an independent nuclear deterrent. Faced with such a sucker would you not think they were easy meat to cop the blame?

The bigger, global question, concerns the way in which the US treats perceived foreign business leaders compared to its own.

The Bhopal disaster claimed the lives of an estimated 10,000-20,000 people. The CEO of Union Carbide was arrested after the disaster but allowed on bail and subsequently fled to the US where he has enjoyed the protection of the courts that refuse to extradite him. This is despite the fact that the Bhopal facility was totally under the control of Union Carbide and with no involvement of contractors.

Indeed, the US is currently lobbying the Indian government to limit the liability of the nuclear industry in India. Not dissimilar to the way in which Dick Cheney organised a limit to the liability of oil companies for oil spills – a limitation BP is willing to forego. If the Indians agree to that they are insane, although it is highly likely any US company falling foul of that would have the US government pressure the Indian government for a dispensation.

Whereas the CEO of BP readily accepted responsibility for the clean up yet has been torn apart by President Obama’s rhetoric, despite the involvement of other (American) firms.

The lesson is clear – when dealing with hostile, unfriendly and pernicious environments have a long spoon.

*Addendum: A statement by Halliburton has it that this second plug was not set

http://www.halliburton.com/public/news/pubsdata/press_release/2010/ProbertTestimony2.pdf

the well is obviously flowing due to a lack of casing/cementation integrity so the lack of a second plug is significant. Despite successful pressure tests the abscence of a casing bonding log and this second plug do combine to make the judgement to empty the riser somewhat optimistic.  The nature of the formation (porous and prone to fluid loss – hence the specialist cement), the use of less centralisers than recommended by Halliburton (not necessarily a problem as Halliburton may have been over cautious), the lack of a CBL do combine with the lack of a second plug to make a more problematic mix than each on its own.

This entry was posted on Sunday, June 13th, 2010 at 3:56 pm and is filed under Community. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.