Experts: BP Lowballing Size of Leaking Oil Reservoir

Washington’s Blog
June 22, 2010

On May 1st, I warned that the amount of oil spilling into the Gulf was much higher than either the government or BP were admitting:

As a story in the Christian Science Monitor shows, the Gulf oil spill is much worse than we’ve been told:

It’s now likely that the actual amount of the oil spill dwarfs the Coast Guard’s figure of 5,000 barrels, or 210,000 gallons, a day.

Independent scientists estimate that the renegade wellhead at the bottom of the Gulf could be spewing up to 25,000 barrels a day. If chokeholds on the riser pipe break down further, up to 50,000 barrels a day could be released, according to a National Oceanic and Atmospheric Administration memo obtained by the Mobile, Ala., Press-Register.

As estimates of the spill increase, questions about the government’s honesty in assessing the spill are emerging.


“The following is not public,” reads National Oceanic and Atmospheric Administration’s Emergency Response document dated April 28, according to the Press-Register [see this]. “Two additional release points were found today. If the riser pipe deteriorates further, the flow could become unchecked resulting in a release volume an order of magnitude higher than previously thought.”
An order of magnitude is a factor of 10.

The Wall Street Journal reported Friday that John Amos, an oil industry consultant, said that NOAA revised its original estimate of 1,000 barrels after he published calculations based on satellite data that showed a larger flow.

The 5,000 barrels a day is the “extremely low end” of estimates, Mr. Amos told the Journal.

CNN quotes the lead government official responding to the spill – the commandant of the Coast Guard, Admiral Thad Allen – as stating:

If we lost a total well head, it could be 100,000 barrels or more a day.

Indeed, an environmental document filed by BP estimates the maximum as 162,000 barrels a day:

In an exploration plan and environmental impact analysis filed with the federal government in February 2009, BP said it had the capability to handle a “worst-case scenario” at the Deepwater Horizon site, which the document described as a leak of 162,000 barrels per day from an uncontrolled blowout — 6.8 million gallons each day.


Now, I am warning that the amount of oil still in the reservoir might be much bigger than BP is admitting.

Specifically, BP claims that there are 50 million barrels worth of oil in the reservoir underneath the leaking spill site.

But the Guardian noted Friday:

But the 50m figure cited by Hayward took some industry insiders by surprise. There have been reports the reservoir held up to 500m barrels – the figure quoted by Hayward’s questioner, Joe Barton, a Republican from Texas.

“I would assume that 500m barrels would be a more likely estimate,” said Tadeusz Patzek, the chairman of the department of petroleum and geosystems engineering at the University of Texas at Austin. “I don’t think you would be going after a 50mbarrel reservoir so quickly. This is just simply not enough oil to go after.”

Indeed, Wolf Blitzer said:

One — one expert said to me — and I don’t know if this is overblown or not — that they’re still really concerned about the structural base of this whole operation, if the rocks get moved, this thing could really explode and they’re sitting, what, on — on a billion potential barrels of oil at the bottom of the Gulf of Mexico.

Bloomberg notes:

The ruptured well may hold as much as 1 billion barrels, the Times reported, citing Rick Mueller, an analyst at Energy Security Analysis in Massachusetts.

Oil industry expert Matthew Simmons also puts the number above one billion barrels (see thisBloomberg interview, for example, where he says that – unless stopped – 120,000 barrels a day will leak for 25-30 years; that adds up to 1,095,000,000 to 1,314,000,000 barrels).

And Rob Kall claims that a source inside BP tells him:

Size of reservoir – estimated by BP and its partner, Andarko to be between 2.5B and 10B bbl. (that’s 100,000,000,000 gallons and 400,000,000,000 gallons).

Yes – all of those numbers are BILLIONS.

Given that BP’s nearby Tiber and Kaskida wells each contain at least 3 billion barrels of oil (seethis, this, this and this), estimates of more than a billion barrels for the leaking Macondo reservoir are not unreasonable.

Why the Size of the Reservoir Matters

The size of the reservoir is important for several reasons. Specifically, the more oil in the Macondo reservoir, the longer the oil leak will flow if the efforts to cap it fail.

Moreover, higher volumes of oil and gas might change the pressure of materials gushing out of the leaking well. As CBS notes:

The oil emanating from the seafloor contains about 40 percent methane, compared with about 5 percent found in typical oil deposits, said John Kessler, a Texas A&M University oceanographer who is studying the impact of methane from the spill.

I will leave it to the scientists to calculate what a larger volume of oil (with 40% methane) would mean for pressure. Higher pressure may make it harder to cap the leak, and may wear out the casing quicker by speeding up the rate at which sand and other small particles in the oil abrade the metal. Lower pressure would ease both problems.

Finally, the more oil and gas in the reservoir, the higher a priority the government may consider it to produce the well at all costs. See this and this.


A race against the clock as oil continues to gush

Some experts estimate the Gulf spill has tripled in size

May 1, 2010, 11:49PM



Melissa Phillip Chronicle

Louisiana Gov. Bobby Jindal, left, with President Barack Obama at the airport in New Orleans on Sunday.


Technical experts crowd a conference room at BP offices in Houston on Sunday. The company has established a crisis center at its west Houston campus where company officials say experts in oil drilling are working to figure out how to stop the Gulf oil spill.

One of history’s biggest oil spills showed no signs of abating Saturday as a mile-deep well kept pouring tens of thousands of gallons into the Gulf of Mexico and coastal communities braced for crushing environmental and economic damage.

Some experts estimated the spill had tripled in size in just a day or so, suggesting that the oil is gushing out faster than officials initially estimated.

An apparent blowout April 20 caused the Deepwater Horizon drilling rig to burn and later sink. Eleven workers are missing and presumed dead.

Although some reports have said an oily sheen already has reached shore, Adm. Thad Allen, the Coast Guard commandant who is overseeing the Obama administration’s response to the spill, said the spreading oil’s leading edge would reach the fragile Louisiana coastline in the next few days.

The National Oceanic and Atmospheric Administration estimates 210,000 gallons, or 5,000 barrels, of oil are gushing from the wreckage of the Deepwater Horizon rig each day. That rate — even if it’s conservative — means nearly 2 million gallons of crude have spilled into the Gulf.

But at a news conference on the eve of President Barack Obama’s planned tour of the imperiled region, Allen said any estimate of what’s flowing from the well is “probably impossible at this time due to the depth of the water.”

Just how big?

The growing mess could eclipse that from the ruptured tanker Exxon Valdez, which dumped 11 million gallons of oil into Alaskan waters in 1989. With a tanker, the amount spilled is finite.

There is no such limit on the current spill in the Gulf, Allen said, adding that the top priority is to stanch the leak, which is 40 miles offshore and 5,000 feet underwater.

The oil giant BP, which leased the rig and is responsible for the cleanup, began putting equipment into place Saturday to drill a relief well to halt the flow — a process company officials say could take up to three months.

BP also attempted for the first time to use chemicals at the wellhead to prevent the oil from reaching the surface.

Allen said the experiment appeared to work, but more tests were needed to ensure that the chemicals didn’t harm the ecosystem.

The size of the spill was about 1,150 square miles Thursday, but it had tripled to about 3,850 square miles a day later, said Hans Graber, a professor of applied marine physics at the University of Miami, who analyzed satellite images of the slick.

“The spill and the spreading is getting so much faster and expanding much quicker than they estimated,” Graber told The Associated Press.

Another expert, Duke University biologist Larry Crowder, cautioned that if the spill continues growing unchecked, oil could threaten coral reefs in the Florida Keys and even move up the Eastern Seaboard.

And while the spill doesn’t pose an immediate threat to Texas, the oil eventually could reach the state’s coastline, said Ayal Anis, an oceanographer at Texas A&M University-Galveston.

“It’s becoming a big puddle that goes in all directions,” Anis said. “If it continues for a long time, we might see it.”

Even with a continuous flow of oil from the leak, the oil is more likely to come ashore as globs rather than a “black tide,” said Ed Overton, an oil spill expert at Louisiana State University.

He also said the spill could worsen if the pipe that connected the well to the rig above collapses. BP has said that the flow is from three leaks in that pipe, called a riser.

“Everyone would like predictions, but we’ve never had something like this before, so you just don’t know,” Overton said.

Doug Suttles, BP’s chief operating officer for exploration and production, said that while it was impossible to know just how much oil was gushing from the well, the company and federal officials were preparing for the worst-case scenario.

Coastal fisheries

In an exploration plan and environmental impact analysis filed with the federal government in February 2009, BP said it had the capability to handle a “worst-case scenario” at the Deepwater Horizon site, which the document described as a leak of 162,000 barrels per day from an uncontrolled blowout — 6.8 million gallons each day.

Oil industry experts and officials are reluctant to describe what, exactly, a worst-case scenario would look like. But if the oil gets into the Gulf Stream — the warm-water current that flows from the Gulf of Mexico to the North Atlantic — and is carried to the beaches of Florida, it could become an environmental and economic disaster of epic proportions.

The focus, so far, has been to keep the oil in the Gulf and away from one of the most productive coastal fisheries for shrimp, oysters and crabs, among other species.

In St. Bernard Parish, near New Orleans, more than 200 fishermen attended a training session to become certified to assist in efforts to contain the spill.

Weather, however, kept in port oil-cleaning skimmers and other boats needed to deploy the floating boom lines that might keep the advancing slick out of marshes. Winds were blowing as high as 40 mph, creating waves 8- to 10-feet high.

Forecasts call for scattered thunderstorms and strong winds today.

With some areas already closed to fishing, anglers were desperate to fight for their livelihood.

“I wish they would let us have a try,” said Glenn Sanchez, owner of a marina in Hopedale, La., who went through the training. “This is the most productive estuary in the world. It’s unbelievable what comes out of here.”

Government’s role

The White House said Obama would arrive in the morning for a firsthand look at the scene.

During a speech Saturday at the University of Michigan, Obama noted the importance of government regulation in dealing with recent disasters.

“Government,” Obama said, “is what ensures that mines adhere to safety standards and that oil spills are cleaned up by the companies that caused them.”

The Associated Press contributed to this report.

Oil Is Considered A National Security Issue

Why are oil companies like BP being allowed to drill so deeply in hazardous conditions under the Gulf? In other words, why has the government been so supportive of deepwater drilling in the Gulf?

The answer – as Roger Anderson and Albert Boulanger of Columbia University’s Lamont-Doherty Earth Observatory note – is that there is a tremendous amount of more oil deep under the Gulf, and that the United States government considers oil drilling in the deep waters of the Gulf as a national security priority:

The oil and gas industry and the United States government both face tremendous challenges to explore discover, appraise, develop, and exploit vast new hydrocarbon reserves in waters deeper than 6000 feet in the ultra-deepwater of the Gulf of Mexico. Yet these new reserves of hydrocarbons are needed to offset the economically detrimental, long-term decline in production from within the borders of the United States
If successfully developed, the new play concept would fill an essential gap in the overall strategic defenses of the United States by decreasing the gap that results in the nation’s dependence on foreign oil and gas reserves in this volatile and hostile, post 9/11 world. However, the successful production of oil and gas from this new carbonate play concept requires much more cost-efficient evaluation and appraisal technologies than exist today to economically conduct exploration, appraisal, and development activities. These new technologies must be developed before production can be practical in the ultra-deepwater operating environment…. The Ultra-Deepwater and Unconventional Gas Trust Fund of the DOE has as its mission to cut costs and time-to-market not incrementally, but radically, so that the United States can optimally utilize these strategic hydrocarbon reserves. The DOE, with extensive industry,academic and non-governmental assistance, developed an Offshore Technology Roadmap …,
The U. S. Energy Bill of 2002 has allocated significant resources to fund innovative industry, academic, and national laboratory research initiatives to develop the new technologies necessary to explore and produce these new ultra-deepwater reserves economically. The purpose is not only to impact the national defense, but also to regain our international technological leadership in the deepwater, recently lost to the Brazilians, Norwegians, and Europeans.
Congress, never a big friend to energy interests, has acted to create the Ultra-deepwater Trust Fund that would add an astounding $200 billion by 2017, if successful at developing the new production technologies required.

So the Department of Energy and Congress have committed to development of the deepwater Gulf oil reserves in the name of national security. This also helps explain why Obama has been pro-drilling in the Gulf.

Indeed, BP supplies most of the oil and gas to the U.S. military. That might help to explain why Obama is talking tough but going easy on BP.

But let’s take a step back and ask why the government considers oil a national security priority in the first place.

Well, as professor of national security affairs at the Naval War College Mackubin T. Owens writes:

The concern of these lawmakers [regarding the BP oil spill] is understandable, but lest they overreact, they need to place their valid concerns within the broader context of the nation’s economic health and energy security.


Americans currently consume about 22 million barrels of oil daily, of which about two-thirds is imported. The Department of Energy’s Energy Information Administration (EIA) expects imports to reach 70% by 2025. This means we send billions of dollars abroad in payment for foreign oil. This makes little sense when, according to the U.S. Minerals Management Service (MMS), there are vast reserves of oil and gas beneath Federal lands and coastal waters. And it is likely that even these estimates are low. For instance, in 1987, MMS estimated that there were 9 billion barrels of oil in the Gulf of Mexico. By 2007, once drilling had begun in deeper waters, MMS had revised its estimate upward to 45 billion.

In addition, the U.S. military is the largest consumer of oil in the world. And the government is eager to ensure that the military maintains access to oil.

As NPR reported in 2007:

All the U.S. tanks, planes and ships guzzle 340,000 barrels of oil a day, making the American military the single-largest purchaser and consumer of oil in the world.

If the Defense Department were a country, it would rank about 38th in the world for oil consumption, right behind the Philippines.

As Reuters pointed out in 2008:

U.S. military fuel consumption dwarfs energy demand in many countries around the world, adding up to nearly double the fuel use in Ireland and 20 times more than that of Iceland, according to the U.S. Department of Energy.

And as I summarized last year:

Sara Flounders writes:

By every measure, the Pentagon is the largest institutional user of petroleum products and energy in general. Yet the Pentagon has a blanket exemption in all international climate agreements.


The Feb. 17, 2007, Energy Bulletin detailed the oil consumption just for the Pentagon’s aircraft, ships, ground vehicles and facilities that made it the single-largest oil consumer in the world.


Even according to rankings in the 2006 CIA World Factbook, only 35 countries (out of 210 in the world) consume more oil per day than the Pentagon.


As I pointed out out last week:

Professor Michael Klare noted in 2007:

Sixteen gallons of oil. That’s how much the average American soldier in Iraq and Afghanistan consumes on a daily basis — either directly, through the use of Humvees, tanks, trucks, and helicopters, or indirectly, by calling in air strikes. Multiply this figure by 162,000 soldiers in Iraq, 24,000 in Afghanistan, and 30,000 in the surrounding region (including sailors aboard U.S. warships in the Persian Gulf) and you arrive at approximately 3.5 million gallons of oil: the dailypetroleum tab for U.S. combat operations in the Middle East war zone.

And in 2008, Oil Change International released a report showing that [b]etween March 2003 and October 2007 the US military in Iraq purchased more than 4 billion gallons of fuel from the Defense Energy Support Center, the agency responsible for procuring and supplying petroleum products to the Department of Defense.

Indeed, Alan Greenspan, John McCain, George W. Bush, Sarah Palin, a high-level National Security Council officer and others all say that the Iraq war was really about oil.

Nobel prize winning economist Joseph Stiglitz says that the Iraq war alone will cost$3-5 trillion dollars.

And economist Anita Dancs writes:

Each year, our military devotes substantial resources to securing access to and safeguarding the transportation of oil and other energy sources. I estimate that we will pay $90 billion this year to secure oil. If spending on the Iraq War is included, the total rises to $166 billion.

Are you starting to get the picture?
In addition, experts say that the Iraq war has increased the threat of terrorism. See this, this, this, this, this, this and this.

Personally, I strongly believe that it is vital for our national security – and our economy – to switch from dependence on oil to a basket of alternative energies. As I pointed out Friday:

It’s not just the one BP oil rig. For example, since the Deepwater Horizon oil drilling rig exploded on April 20th, the Obama administration has granted oil and gas companies at least 27 exemptions from doing in-depth environmental studies of oil exploration and production in the Gulf of Mexico. Then there are the 12 new oil and gas drilling rigs launched in the U.S.this week.
And a whistleblower who survived the Gulf oil explosion claims in a lawsuit that BP’s operations at another oil platform risk another catastrophic accident that could "dwarf" the Gulf oil spill, partly because BP never even reviewed critical engineering designs for the operation. And see this.

And the Department of Defense also apparently has some issues with extensive off-shore drilling for security reasons.

Many still believe that alternative energy is an expensive, unrealistic pipe dream.

But that is no longer necessarily true, especially when the externalities of environmental and military costs are taken into account.

But existing national policy is to do whatever is necessary – drilling deep under the Gulf and launching our military abroad – to secure oil. Until we change our national security and energy policies, future mishaps – environmental, military and economic – may frequently occur.

MONDAY, JUNE 7, 2010

Environmentalists Didn’t Cause The Gulf Oil Spill … Peak Oil Did

Sarah Palin and many others claim that the BP Gulf oil disaster happened because environmentalists have prevented drilling in shallower waters and safer locations.

In other words, they claim that oil producers were forced into deeper, more dangerous conditions because of environmentalists.

Are they right?

BP was clearly criminally negligent, and government regulators were wholly captured by the oil industry.

But we have to take a step back to see the bigger picture.

As McClatchy pointed out last month:

Conventional U.S. oil production has been in decline since the 1970s, and near-shore production along the Gulf Coast peaked in 1997.

Globally, one in every 10 barrels of oil produced in 2030 will come from ultra-deepwater operations, [Leta Smith, director of oil supply research for Cambridge Energy Research Associates, a leading oil analyst] said, adding that roughly 70 percent of the deep water in the Gulf of Mexico remains unexplored.

In 1990, the deep waters of the Gulf of Mexico yielded about 20,000 barrels per day of crude oil. By 2009, that number had grown to 1 million, according to CERA.

Nine projects that are coming onstream will add at least 200,000 barrels per day this year, said CERA researchers, who expect deepwater production to account for 17 percent of U.S. liquids production this year, which includes oil and natural gas.

Today there are at least 42 active deepwater projects for exploration or production in the U.S. Gulf of Mexico or international gulf waters, and at least another five projects in the works. Seventeen of those are ultra-deepwater.


Outside the Gulf Coast region, Brazil is the world’s most promising ultra-deepwater producer, with new discoveries in the past five years in the so-called Santos basin that experts think will make the South American giant a powerhouse in the oil business. Deep waters off the African nations of Nigeria and Angola also hold promise.

Nigeria has next to no environmental controls. So the fact that deepwater drilling is being explored off the coast of Nigeria speaks volumes.
As the Post Carbon Institute notes:

With Federal regulators approving a new Gulf of Mexico oil well and the Canadian government continuing to support deepwater drilling off its own coasts, it looks like business as usual for the oil industry ….

Anyone wanting to understand the issue should turn to an 87-page Minerals Management Service document, Deepwater Gulf of Mexico 2009: Interim Report of 2008 Highlights [which] states:

In February 1997, there were 17 producing deepwater projects, up from only 6 at the end of 1992. Since then, industry has been rapidly advancing into deep water, and many of the anticipated fields have begun production. At the end of 2008, there were 141 producing projects in the deepwater Gulf of Mexico.

If 141 producing deepwater projects in that area seems larger than expected, note that there are many more leases on oilfields in the area – 7,310 active leases in 2008 – and that the trend is towards ever deeper water. The document continues:

Over the last 15 or so years, leasing, drilling, and production moved steadily into deeper waters. There are approximately 7,310 active leases in the U.S. GOM, 58 percent of which are in deep water. (Note that lease statuses may change daily, so the current number of active leases is an approximation.) Contrast this to approximately 5,600 active GOM leases in 1992, only 27 percent of which were in deep water. There was a maximum of 31 rigs drilling in deep water in 2008, compared with only 3 rigs in 1992. Likewise, deepwater oil production rose about 786 percent and deepwater gas production increased about 1,067 percent from 1992 to 2007. Production from seven deepwater fields began in 2008, including Thunder Horse, the largest daily producer in the GOM.

So why is drilling happening in such deep waters off the coasts of the U.S., Canada,Brazil, Angola, Nigeria and other countries?
In two words: peak oil.
As the head geologist of one of the world’s largest oil companies – the guy whose job it is to find new oil – told me a year ago:

Yes, it is true [that we have peak oil]. We are no longer on the ascending part of the curve.

In other words, the rate of petroleum production (and also the rate of energy return for a given amount of investment) is no longer on the rising, left-hand side of the bell-shaped curve:

And the world’s leading oil experts say that peak oil is real. See this and this.
Peak oil doesn’t mean that the oil flow will suddenly stop. What it does mean is that more and more extreme methods will be used to find and extract oil, such as deepwater drilling or crushing literally tons of sand to squeeze out some petroleum.
Energy and oil expert Byron King explains in a new interview:

[Interviewer] We know about peak oil already. But… is it really THAT bad that we’re having to search for oil buried beneath 12,000 feet of water? And after the water, another 10,000 feet of dense rock? That’s a lot of risk to take. Seems to be proof for the end of cheap oil theory, right?

[Byron King] Exactly. The days of drilling a hole beneath the soil in Texas, inserting a pipe and watching oil gush out are gone. We’re never going back to those days.

It gets into what we’re dealing with here in the search for deep sea oil… The energy industry has to go deeper and deeper to make things work. Risking more and more capital – and unfortunately, lives – along the way.

Look at what we’ve seen in the last 20 years or so, since 1990, when the oil industry really started to go deep. There was something like an “arms race” to develop better and better deepwater technology, to go for the next levels down. We’ve seen this race to deeper and deeper water. And it’s all because the so called “cheap oil” is gone.

It used to be that drilling at 1,000 feet water depth was the edge of technology! You know, back then in the early 1990s it was 1,500 feet, then it was 2,500 feet, then it was 5,000 feet…7,500, 10,000. Now they’re drilling at 12,000 feet of water.


Offshore development is the future of oil. The oil industry wouldn’t be taking these risks if cheap oil was still with us. We’re just starting to scratch the surface of this deep-sea stuff. The cheap stuff’s gone. Gotta go offshore…

The cheap stuff – and the less dangerous to get stuff – is gone.
Because oil companies will go to more extreme measures and operate in more dangerous conditions to extract oil, there will be more accidents. As the Guardian reports:

One industry insider, who asked not to be named, said: "Major spills are likely to increase in the coming years as the industry strives to extract oil from increasingly remote and difficult terrains. Future supplies will be offshore, deeper and harder to work. When things go wrong, it will be harder to respond."

And because it will be so expensive to produce, companies will try to cut corners – just as BP did with the Deepwater Horizon drilling operation.
Therefore, there will be more catastrophic accidents, which are much harder to clean up than a little oil gusher in the nostalgic oil fields of Texas.
Unless we switch to smarter forms of energy, the Gulf oil spill will end up simply being one of many catastrophes.
Note: While there are many promising prospects for alternative energy, it is important to be honest. Many types of alternative energy currently either use more energy than they produce, require substantial amounts of fossil fuels or toxic chemicals to produce, or only appear economical because of massive, hidden subsidies (I’m all for subsidies, as long as they are out in the open). Of course, oil is massively subsidized as well.