Guest Post: Experts Say BP Lowballing Size of Leaking Oil Reservoir

Washington’s Blog

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 this Bloomberg 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 (see this, 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.

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About George Washington

George Washington is the head writer at Washington’s Blog. A busy professional and former adjunct professor, George’s insatiable curiousity causes him to write on a wide variety of topics, including economics, finance, the environment and politics. For further details, ask Keith Alexander… http://www.washingtonsblog.com

19 comments

  1. Doc Holiday

    Part of the BP game is to add confusion to chaos and keep changing mis-information around and keep everyone as confused as possible — which is why BP should be removed from the gulf ASAP. BP is the equivalent of a drunk nuclear engineer at a Chernobyl-like reactor, and hence, we are getting all our mis-information from the source of the chaos — which seems fairly retarded! Once again, Mr. Einstein has the right phrase: “We can’t solve problems by using the same kind of thinking we used when we created them.”

    BP GO HOME!

    May 28, 2010: La. scientist locates another vast oil plume in the gulf
    http://www.washingtonpost.com/wp-dyn/content/article/2010/05/28/AR2010052802346.html

    A day after scientists reported finding a huge “plume” of oil extending miles east of the leaking BP well, on Friday a Louisiana scientist said his crew had located another vast plume of oily globs, miles in the opposite direction.

    James H. Cowan Jr., a professor at Louisiana State University, said his crew on Wednesday found a plume of oil in a section of the gulf 75 miles northwest of the source of the leak.

    Cowan said that the submarine traveled about 400 feet down, close to the sea floor, and found oil all the way down. Trying to find the edges of the plume, he said the submarine traveled miles from side to side.

    “We really never found either end of it,” he said. He said he did not know how wide the plume actually was, or how far it stretched away to the west. He said the plume was found in an area that had already been closed to fishing by the federal government.

    MAY 31, 2010: ‘NO UNDERWATER OIL PLUMES’: BP CEO TONY HAYWARD DENIES SCIENTISTS’ RESEARCH
    http://www.google.com/url?q=http://www.energyboom.com/policy/no-underwater-oil-plumes-bp-ceo-tony-hayward-denies-scientists-research&sa=X&ei=DFcgTKWHJernnQfGpKVn&ved=0CCcQqQIoAjAA&usg=AFQjCNFwbDZ13QvHSpJ9iCwsSLEgPBsAiw

    > Last week scientists from the University of South Florida reported an oil plume 22 miles long, six miles wide and more than 1,000 feet deep.

    Despite congruent evidence from multiple sources, Tony Hayward insists “There aren’t any plumes. The oil is on the surface.”

    June 8, 2010: Scientist Awed by Size, Density of Undersea Oil Plume in Gulf
    http://www.nytimes.com/gwire/2010/06/08/08greenwire-scientist-awed-by-size-density-of-undersea-oil-98517.html

    > Researchers aboard the F.G. Walton Smith vessel briefed reporters on a two-week cruise in which they traced an underwater oil plum 15 miles wide, 3 miles long and about 600 feet thick. The plume’s core is 1,100 to 1,300 meters below the surface, they said.

    13 June, 2010: Florida Panhandle Fights 2 Huge Oil Plumes
    http://www.timesnewsline.com/news/Florida-Panhandle-Fights-2-Huge-Oil-Plumes-1276460567/

    Study foretold a consequence of oil leak
    http://www.boston.com/news/science/articles/2010/06/21/study_foretold_a_consequence_of_oil_leak/

    Little is known about the plumes, which are largely separated from the surface slick. It is not clear how much oil they hold, how many and where there are, how quickly the oil will break down, and whether the plumes are harming marine life.

    NOAA officials have confirmed the existence of plumes as far down as 3,300 feet below the surface and as far as 142 miles from the wellhead. Other scientists have found evidence of plumes more than 10 miles long.

    1. Doug Terpstra

      Indeed, what could possibly go wrong with that? We’ll use a failsafe backup blowout preventer just in case.

  2. Expat

    BP management are not fools, just typical businessmen. Given their track record in the industry, they are all keenly aware of the penalties they risk for pollution and negligence. Consequently, and after long consultation with inhouse and outside legal counsel, they provided obsecenely low estimates of the size of the leak.

    As BP has maintained, it is difficult to estimate the flow of a leaking well one mile underwater. They also argued that they were more concerned with capping than with wasting time measuring the flow.

    Both arguments are false. The very essence of an oil well is the flow rate. No oil company drills a well without having a good idea of how much oil will come out. While the damage to the well-head might have changed the flow, BP knew from early on how much oil was flowing; they needed to know this in order to cap the flow! If they deny this, then they are admitting they are grossly incompetent and legally excluded from drilling in the US.

    No, BP and its lawyers lowballed the figure because they all have little calculators. They can all multiply 100,000 barrels times $4000 per barrel times 100 days. They know that civil spill penalties alone could exceed $40 billion dollars.

    By lowballing the flow for the first two months and claiming it was no more, on average, than 20,000 barrels per day, BP has already saved itself $30 billion dollars.

    If the well structure and sub-surface rock structures are severely damaged (as many suggest), this well will pump over 100,000 barrels a day into the Gulf for anywhere from 100 to 10000 days.

    This is possibly an LE.

      1. Graveltongue

        If this is indeed an extinction level event then the irony is not lost on me.
        Is this not the impact sight of the meteor that some think may have wiped out the dinosaurs. Reads a little like War of the Worlds doesn’t it: Something buries itself deep below the surface of the earth for millions of years only to be released to wreak its havoc on mankind one last time, only I don’t think the aliens were in it for the money.

        1. Graveltongue

          I think the role called for any American with African roots as President. I believe Whoopy Goldberg was approached but she had already committed to playing God at the Donmar.

      2. Sufferin' Succotash

        ELE?
        I thought Morgan Freeman had to be President before you could have one of those.

    1. NOTaREALmerican

      ELE? Perhaps, but what’s the schedule.

      The Chinese and Indians have already proven that humans can exist in toxic filth – and AND maintain enough optimism to reproduce.

      If this ELE event is beyond 100 years then any pessimistic human can choose not to have kids and mitigate any guilt they have over the future.

      There’s nothing that can be done about the dumbass optimists but – being optimists – they know things are always going to be GREAT!

      Dude, these life-time hazmat suits are great, dude. Are we the most advanced society, or what? Dude, how can life get any better, dude? Like totally, dude.

  3. John L

    The relief wells, scheduled to reach the blowout well in August, will seal this well as long as nothing catastrophic happens to it in the meantime.

    By catastrophic, I mean the collapse of the casing and BOP into the well from erosion or miscalculation. Right now the BOP is limiting somewhat the flow of oil out of the well. There’s a pressure drop across the BOP that has been steadily decreasing since the blowout; that indicates an erosion of whatever’s blocking the flow, probably from sand in the oil at high pressure.

    No one knows how long that flow restriction is going to last. The other concern is the weakened casing underground; after BP pumped tens of thousands of gallons of mud into the well to kill it, the mud just disappeared once it reached about 1000′ below the surface. That is why they stopped the ‘top kill’; there is some kind of damage in the casing and higher pressures risk having it break open completely.

    Right now there’s about 1000′ of rock and seafloor supporting the casing and BOP. If the casing ruptures and allows oil/gas to escape to the outside of the liner, erosion could so weaken the support that the whole thing collapses. If it collapses, then we’ve got unrestricted oil flow that the relief wells may not be able to stop.

    It’s a race against time right now. Hopefully the relief wells reach the well before any of that happens.

    1. Yves Smith

      You and the media generally are optimistic here. Relief wells are being DRILLED in August. That does not mean they succeed. It took ten months in the case of Ixtoc (in only 200 feet of water) to drill successful relief wells. Our Glenn Stehle has likened it to hitting a target the size of a dinner plate….at 18,000 feet below sea level.

  4. Sungam

    The size of the oil reserves under development has a material impact on the valuation of BP. There should be some kind of figure of the the amount of oil they were hoping to tap in the Gulf in their annual report? In that document they have no incentive in low-balling that estimate.

    Pre-disaster press releases might also have some figures about the amount of oil they were hoping to extract.

    There should be better numbers available than the ones of various pundits trying to get their quotes in the media since their incentives are to sound dramatic (and the media self selects for drama in any case).

    I had a quick Google search and the 2009 estimate for the entire Tiber Oil Field when they announced the find was 450 Million extractable with possibly 4 to 6 billion barrels in the ground.

    http://www.statesman.com/business/content/business/stories/other/2009/09/03/0903gulfoil.html

  5. Viator

    1) On Feb. 13, BP told the minerals service it was trying to seal cracks in the well about 40 miles (64 kilometers) off the Louisiana coast, drilling documents obtained by Bloomberg show. Investigators are still trying to determine whether the fissures played a role in the disaster.

    The company attempted a “cement squeeze,” which involves pumping cement to seal the fissures, according to a well activity report. Over the following week the company made repeated attempts to plug cracks that were draining expensive drilling fluid, known as “mud,” into the surrounding rocks.

    2) In early March, BP told the minerals agency the company was having trouble maintaining control of surging natural gas, according to e-mails released May 30 by the House Energy and Commerce Committee, which is investigating the spill.

    3) On March 10, BP executive Scherie Douglas e-mailed Frank Patton, the mineral service’s drilling engineer for the New Orleans district, telling him: “We’re in the midst of a well control situation.”

    http://www.bloomberg.com/news/2010-06-17/bp-struggled-with-cracks-in-gulf-well-as-early-as-february-documents-show.html

  6. Valissa

    Study foretold a consequence of oil leak http://www.boston.com/news/science/articles/2010/06/21/study_foretold_a_consequence_of_oil_leak/?page=full
    But an unusual experiment conducted in 2000 off the coast of Norway, a trial run of a deep-water oil and gas spill that BP helped pay for, showed that oil could remain underwater for some time. The North Atlantic exercise was designed to understand how a spill would behave as the drilling industry plumbed new depths to extract oil and gas. The federal Minerals Management Service and 22 companies took part in the test, at about half the depth of the gulf disaster. … A BP spokesman last week acknowledged the company participated in the Deep Spill experiment but refused to answer why officials flatly denied the possibility there could be significant amounts of oil trapped underwater — even the day after the federal government confirmed the existence of plumes on June 8.

  7. Jib

    I dont know if I believe the high end numbers being thrown around for both oil, methane and pressure at the well head. If true, this would be the largest oil well in history. All time, world champion. If true, given the pressures involved, we probably do not have the technology to drill and control this well. If true, we may not be able to control the relief wells. If true.

    I know BP is not to be trusted at all but Occam’s razor would dictate that there is a better chance that the current high end estimates are wrong than this is the greatest oil well in the history of the world. I’m just saying….

  8. Rikkert

    I do not like to spoil the “Bash BP” party, but the rising estimates could all be correct. An increasing flowrate is to be expected, given likely erosion of the leak.

  9. Doug Terpstra

    For further intrigue, OilPrice.com has another article by Wayne Madsen Report (WMR) who first broke the story about a coverup of massive underwater oil plumes including WH/BP collusion, which turned out to be true:

    “Obama Administration Knew About Deepwater Horizon 35,000 Feet Well Bore”

    http://oilprice.com/Energy/Energy-General/Obama-Administration-Knew-About-Deepwater-Horizon-35000-Feet-Well-Bore.html

    “President Obama and Secretary of Interior Ken Salazar, Secretary of Energy Steven Chu, and Defense Secretary Robert Gates were informed that BP would drill an unprecedented 35,000 feet well bore at the Macondo site off the coast of Louisiana…”

    “…sources within the U.S. Army Corps of Engineers and the Federal Emergency Management Agency (FEMA), the Pentagon and Interior and Energy Departments told the Obama Administration that the newly-discovered estimated 3-4 billion barrels of oil in the Gulf of Mexico would cover America’s oil needs for up to eight months if there was a military attack on Iran that resulted in the bottling up of the Strait of Hormuz to oil tanker traffic, resulting in a cut-off of oil to the United States from the Persian Gulf. Obama, Salazar, Chu, and Gates green-lighted the risky Macondo drilling operation from the outset, according to WMR’s government sources.

    WMR learned that BP was able to have several safety checks waved because of the high-level interest by the White House and Pentagon in tapping the Gulf of Mexico bonanza find in order to plan a military attack on Iran without having to be concerned about an oil and natural gas shortage from the Persian Gulf after an outbreak of hostilities with Iran.

    BP still has an ongoing operation to drill down to 40,000 feet below sea level at the Liberty field off the north coast of Alaska.”

    And thus the ‘strategic’ connection to Israel inflicts itself upon us once again.

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