Unless you have been hiding under a rock these last two weeks, you are no doubt aware of the terrible accident on the oil drilling rig Deepwater Horizon. The rig was owned by Transocean, and under contract to BP (British Petroleum) drilling a well, about 50 miles off the coast of Louisiana. On April 20th, 2010, there was an explosion around 10pm, and the rig burned violently for two days before sinking. The riser was found damaged and leaking crude at numerous places; the blow out preventer is non functioning and therefore oil continues to flow from the well, 5000 feet below the surface at an estimate rate of about 4,000 cubic meters a day.
Obviously there is little insight I can offer from my distant home, but I would like to comment on how I see this will do some serious damage to the reputation of the offshore biz, in particular the darlings of the fleet, the ultra deep, modern drilling rigs and ships.
Transocean was no small player, BP not a small player, the Gulf of Mexico not a remote outpost, but a central hop and skip away from the offshore meca that is the Gulf Coast. So what went wrong, I haven’t got a clue, and no one seems to be sharing that piece of news in the daily and lengthy media broadcasts. One thing is for sure, the blow out preventer, the heart of every well since the beginning of drilling, failed in a major way.
With it, went the apparently untouchable image that technology was solving all the variables of offshore drilling. The well crafted, fancy, flashy picture of rugged men wearing all sort of PPE, while handling all sort of deepwater challenges without effort or mishaps due to the state of modern, well maintained equipment, has been forever tarnished, that is for sure.
It is apparent that the well, currently gushing sweet crude, will not be getting under control anytime soon. I think this will become a major incident, definitely a turning point in the industry. The realization of the impacts will becomes so much more palpable by a greater populace because of accessibility, and because of information technology.
The fact that a much wider swath of population will be affected, vis a vis the last great American oil tragedy, the Exxon Valdez which occurred in a remote Alaskan sound, will ensure a greater impact on the offshore oil industry. The full commercial effects of the Exxon Valdez are just now coming in to full force. People on the Gulf Coast, often the leaders of the “drill, baby drill” chants, will become grossly affected and the state of the industry will be sent into a significant introspect. It has to.
Ultimately, 11 people died; 115 evacuated safely. The oil that is gushing form the well, is ultimately very old vegetation, dinosaur bones, etc. It is sweet light crude, rather than heavy bitumen, or sour crude. The gulf coast does have ample assets at the disposal. BP is well capitalize, still a “super major”. The environmentalist will have a field day; lots of dead turtles and sea life damage for the evening news.
I am very anxious to get past the hype, and get to what actually happen. Many have said that the rush to drill, the lackluster approach to maintenance, and even perhaps cavalier attitude towards safety is to blame. I believe these will have some impact on the report, but ultimately this is an accident the industry could of done without.
BP and Transocean both have dedicated significant space of their respective websites to inform the public of what is happening, and there is also a response website, from the unified response command. Transocean has also a web site for the men killed. You will find the stats on the Transocean Deepwater Horizon here, and here is the Wikipedia page. The Wall Street Journal has an interesting article that puts the accident in context, in particular, what appears to be a systemic failure in their safety and maintenance systems. There is of course a plethora of news articles surrounding the accident.