Low Incidence, High Consequence

To date, NASA has launched 132 space shuttle missions. Two – Challenger in 1986 and Columbia in 2003 – were catastrophic failures, killing all the astronauts onboard each shuttle. Low incidence, high consequence; it doesn’t happen very often, but when it does, it’s bad.

So it is with deepwater and/or high pressure oil drilling. Most of the time, it goes well, or well enough to prevent catastrophe, but when things go wrong, as they did on April 20, then 11 men lose their lives and an ecosystem and an economy it supports will never be the same.

“We’ve learned our lesson. We’re going to redouble our efforts to make sure this never happens again.” I could attribute that quote to either BP (or any of its sister oil companies) or the federal government (regardless of whether Democrats or Republicans are holding down the White House and Congress). It’s a choral number.

A few weeks ago, as I was floating around the Gulf of Mexico with marine conservationist Rick Steiner, he told me this story: “The newspaper stories about the Macondo well say the guys drilling it were calling it ‘The Well from Hell’ because of all the gas kicks. You can tell when you’re drilling if the well is going to give you trouble. There’s another well in the gulf, called Blackbeard that ExxonMobil was drilling a few years ago. Even though their tests indicated that there’s a huge amount of oil in the field, the drilling was going so badly that the engineers told Exxon, ‘This is just too dangerous. We can’t control this.’”

“To their credit, Exxon did the smart and responsible thing: they cancelled the drilling and pulled the rig out. Then they did something that was smart – in a way – but extremely irresponsible: they sold the rights to a smaller operator who is drilling the well, but doesn’t have anywhere near Exxon’s resources if everything starts to go wrong.”

I got home from the gulf and checked out the story and sure enough, Blackbeard West (South Timbalier Block 168) is a very deep, very high pressure, potentially lucrative field in the gulf Exxon was drilling in 2006, but then sold to McMoRan Exploration, which resumed drilling on the well in 2008. By 2009, the well was nearly 33,000 feet deep; the deepest drilled to date. Tests indicate that pressure in the field is around 28,000 pounds per square inch (psi). In June, BP’s Macondo blowout was reported to be at 9,000 psi. The only saving grace for this well is that, although it’s six miles down to the oil, the wellhead is in 70, rather than 5,000 feet of water.

What I haven’t seen is any indication on the web that the well has completed its tests and begun production. The two factors which might be keeping the well off line are 1) the BP oil disaster (of course) and 2) the (relatively) low price of oil ($82 per barrel this morning).

It’s that second factor you’ll want to watch, because it’s what drove Exxon and then McMoRan into ultradeep drilling in the first place. If the money’s right, Blackbeard West and other fields – some high-pressure, some deepwater – will be drilled. There will be more incidents – perhaps less; perhaps more devastating than BP’s Macondo. In the end, the factors it will all come down to are oil and money. As long as we keep burning oil at unsustainable rates, the price will rise and exploration companies will go further, drill deeper – and more dangerously – to get it.

© Mark Floegel, 2010

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