Professor Elam

Monday May 3 2010

This is a good background article on British Petroleum. The CEO has been trying to turn things around but seems to keep facing problems, safety and otherwise. 

Transocean RIG had suspended bonuses this past year over safety violations.

Yesterday on one of the news shows, Bill Kristol made the point that politicians had forced offshore drilling into deeper waters.  The deeper the water, the greater the risk of not being able to control an accident.  We are not drilling on land in ANWAR, and other states do not want close in drilling in safer shallow waters. So the risk has been increased by the very people who claim to be adverse to risky drilling. I found the comments from most of the talking heads to be worthless. No one took Kristol's observation seriously. Rather when Chris Wallace asked Janet N. what she would have BP do, she has said they are not doing enough, of course she had no answer. Others suggested that we do not proceed with any more drilling until something vague like 'all safety precautions are in place.'  This is malarky, drilling in a mile of salt water will never be a safe proposition. As this disaster shows, there is no such thing as fail safe equipment in such a dangerous environment. 

My Father was a drilling supervisor for Gulf Oil I visited my first operating oil rig when I was about thirteen years old. My point being that unless you have physically stood there and seen and listened to the noise, and weight of the sheer amount of machinery necessary to do all this, you are not grasping the enormity of the task of make this 'safe.' The vast majority of land based wells in the US do not flow naturally, there is not enough pressure, all those wells were drilled years ago. The search for new oil has taken us to new, and literally untested waters. 

Even the Interior Secretary noted that 30,000 wells have been safely drilled in the Gulf. Statistically this is an outlier, the results of course are not. The shoreline in Alaska is mostly rock which at least is subject to scrubbing and washing. That is not the case for thousands of miles of low lying marsh land along the Gulf Coast. 

For whatever reason, we are now in a period of significant upheaval. Hurricane Katrina, a volcano in Iceland, a mine disaster in Eastern US, a rig explosion in the Gulf, two financial collapses since year 2000, and now a Euro meltdown. Interesting times.