Oil Spill

[RonBoyd]

Lost.JPG

[Trek]

Sign at a BP gas station.

[REWahoo]

This is depressing.

Quote:

BP decided Sunday to keep some of the four vents open on the cap over its leaking well a mile below the surface of the Gulf because it didn't have enough processing capacity to handle the mix of sea water and oil coming from the gusher, according to a New York Times report.

BP eyes containment shortfall on Gulf well: report - MarketWatch

[ronocnikral]

Quote:

Originally Posted by travelover Same thing in Ecuador. It seems that Chevron really trashed some pristine areas. Chevron in Ecuador

I would caution people in believing everything they read. It's easy to dig up anything on the internet these days. I have a friend who works with me from ecuador, and he doesn't believe any of this. in addition, he hasn't seen his parents for the last 10 years b/c the country of ecuador won't let his parents out of the country. seems like a very non-corrupt place.

Quote:

Originally Posted by winger Remember this is one of the same companies that prices their fuel at price + .9 cents. Gallons are a more impressive number if they are recovering it, barrels are better when you are spilling.

Show me any company's financial report where they report oil recovery or reserves in gallons.

In fact oil is sold in bbls, reported in bbls, discoveries are reported in bbls. it's only when there is a spill everyone changes it to gallons. you have it backwards. gasoline is not oil production.

[TromboneAl]

Quote:

because it didn't have enough processing capacity

What does that mean? Do they literally not have any place to put the oil/water? Do they pump this over to tankers and they don't have enough tankers?

[travelover]

Quote:

Originally Posted by ronocnikral I would caution people in believing everything they read. It's easy to dig up anything on the internet these days. I have a friend who works with me from ecuador, and he doesn't believe any of this. in addition, he hasn't seen his parents for the last 10 years b/c the country of ecuador won't let his parents out of the country. seems like a very non-corrupt place.

Well I believed it when I saw it when I was in Ecuador last year. If you question my assertion, I'd like to see something more than broad skepticism.

[MasterBlaster]

The governor of Mississippi Haley barbour said this weekend that no oil had hit the beaches there and that the national media were causing tourists to stay away for no reason.

Haley Barbour: Oil? What Oil? Press Should Stop Scaring Tourists - Yahoo! News

[ronocnikral]

Quote:

Originally Posted by TromboneAl What does that mean? Do they literally not have any place to put the oil/water? Do they pump this over to tankers and they don't have enough tankers?

one option is to just stuff the oil into a tanker and let all the gas in solution float into the air or where ever it pleases. then roll the dice with natural gas floating around with the internal combustion engines and other potential sources of ignition. the other solution is to run it through processing facilities to seperate out the gas from the oil and then flare the gas. luckily, the enterprise has processing facilities to be used for well testing, unluckily their facilities' capacity is being reached. i think it is rated more for high pressure than it is for volume.

Quote:

Originally Posted by travelover Well I believed it when I saw it when I was in Ecuador last year. If you question my assertion, I'd like to see something more than broad skepticism.

were you there in the early 90's and did you see texaco workers? or did you just see what anyone could have done, including the national oil company of ecuador? it's easy to pin it on the big guy...not the corrupt gov't that already released texaco from all further liability.

[Leonidas]

Quote:

Originally Posted by TromboneAl What does that mean? Do they literally not have any place to put the oil/water? Do they pump this over to tankers and they don't have enough tankers?

Interesting question, I think I found the answer (or answers). BP apparently says they are worried about ice build up blocking the flow of oil.

Quote:

Oil and gas continued to gush out from under the cap because vents are open as BP pumps nitrogen and methanol into the cap through a pipe attached to a drillship a mile (1.6 km) above at the ocean's surface. * The chemicals are intended to stabilize pressures and combat cold temperatures as the pumping action helps expel seawater from the cap. * The aim is to prevent seawater from mixing with the gas, which can form ice-like hydrates and block the eventual flow of oil and gas to the drillship.

If they can lower the pressure then the seal they placed on the broken pipe coming off the BOP should work effectively. The May cap attempt failed because of hydrate build up.FACTBOX-How BP's containment cap works, next steps | Reuters

Of course that's a bit of a different story from the article Wahoo linked to. According to that article, it's the drillship's processing limitations (15,000 bbls/day).

Quote:

The cap was already capturing about 10,000 to 15,000 barrels a day without all its vents closed, while the Discoverer Enterprise drill ship at the site is equipped to handle up to 15,000 barrels a day. "There is no chance to close the vents when you are at maximum production," the technician said, meaning oil continues to flow in.

Maybe it's both, but I'm not sure.

[brewer12345]

And the longer all of this goes on and the more extensive the drilling moratorium and the more expensive the incremental permit/regulatory requirements, the more upward pressure there will be on oil and gas prices.

[DoingHomework]

Quote:

Originally Posted by TromboneAl What does that mean? Do they literally not have any place to put the oil/water? Do they pump this over to tankers and they don't have enough tankers?

Fundamentally I think it means BP is unwilling to move resources (tankers, pumps) from productive site to the Gulf to mitigate the damage.

I'm one who thinks the original accident was just that - an accident. And I did not feel any animosity toward BP.

But deciding not to bring all the global corporate resources to bear in cleaning up the mess is, IMO a criminal act and should land many executives in prison. You can't tell me that BP does not have the ships to process the oil. They are just using them elsewhere to make money while they pollute the Gulf.

Am I the only one that was suspicious when they announced they were setting up a separate company to clean up the spill. I think that is all about isolating the rest of BP's resources from being commandeered by the CG or ordered into service by US courts.

[travelover]

Quote:

Originally Posted by ronocnikral were you there in the early 90's and did you see texaco workers? or did you just see what anyone could have done, including the national oil company of ecuador? it's easy to pin it on the big guy...not the corrupt gov't that already released texaco from all further liability.

You are going to have to come back with a few more facts than this to have any credibility. For anyone else that is interested, Google "Texaco Lago Agrio "

Let me google that for you

[FUEGO]

Quote:

Originally Posted by DoingHomework Fundamentally I think it means BP is unwilling to move resources (tankers, pumps) from productive site to the Gulf to mitigate the damage. I'm one who thinks the original accident was just that - an accident. And I did not feel any animosity toward BP. But deciding not to bring all the global corporate resources to bear in cleaning up the mess is, IMO a criminal act and should land many executives in prison. You can't tell me that BP does not have the ships to process the oil. They are just using them elsewhere to make money while they pollute the Gulf. Am I the only one that was suspicious when they announced they were setting up a separate company to clean up the spill. I think that is all about isolating the rest of BP's resources from being commandeered by the CG or ordered into service by US courts.

It sounds like they are potentially incurring hundreds of millions of dollars in liabilities every day this thing spews oil. I'm talking mostly cleanup costs and damages claims over the coming months and years. I imagine moving a couple ships to prevent further damage would be a cost effective solution if it were possible at this point. Who knows, maybe it is in the works and just takes a couple days to rearrange these resources.

[Brat]

BP doesn't own any Jones Act ships but is tight with ATC (Alaska Tanker Corporation) whose ships are probably working the Pacific and under contract. BP would need to lease double-hulled ships then find a place for the crude-seawater mess to be processed or stored safely on land. There just aren't many places capable of handling this mess. No excuse, but perhaps something that may explain what is going on.

Frankly I don't think this incident will impact oil prices but may effect refineries. US refining capacity was pretty much fully utilized before this incident.. St. Croix (Hess) and Huston (various) are the only major sites I can think of at the moment.

Brewer.. have you seen any movement in the tanker day rates?

[SarahW]

Here's the latest attempt at a fix.

[brewer12345]

Quote:

Originally Posted by Brat BP doesn't own any Jones Act ships but is tight with ATC (Alaska Tanker Corporation) whose ships are probably working the Pacific and under contract. BP would need to lease double-hulled ships then find a place for the crude-seawater mess to be processed or stored safely on land. There just aren't many places capable of handling this mess. No excuse, but perhaps something that may explain what is going on. Frankly I don't think this incident will impact oil prices but may effect refineries. US refining capacity was pretty much fully utilized before this incident.. St. Croix (Hess) and Huston (various) are the only major sites I can think of at the moment. Brewer.. have you seen any movement in the tanker day rates?

Crude day rates have rebounded thus far this year. Clean has been stagnant.

This will affect oil prices over time as production is constrained in the GOM and costs rise due to incremental regulations. You can already see nat gas being affected.

[Brat]

This gunk will go to a crude carrier. Clean (processed product) volume would be basically stagnant because of the fixed capacity of the refiners.

Brewer, what would be the better stock buy.. a nat gas producer or pipeline operator? While gasoline pipelines are the best way to ship product on land I think a lot of those pipes get eroded on the inside and when weak cause unexpected havoc. My gut is that nat gas lines are usually better maintained because of the sensors.

[ronocnikral]

Quote:

Originally Posted by travelover You are going to have to come back with a few more facts than this to have any credibility. For anyone else that is interested, Google "Texaco Lago Agrio " Let me google that for you

i figure since you can use all the opposing view sites to stand on, i might as well be able to use chevron's position.

1998 was when the gov't of ecuador signed and released texaco from any further obligation, after a site by site inspection.

also interesting reading...

of course, you'll probably say something like...you can't trust them or they are just blowing hot air. but, the same can be said for any other website showing an opposing view.

[ronocnikral]

Quote:

Originally Posted by DoingHomework Fundamentally I think it means BP is unwilling to move resources (tankers, pumps) from productive site to the Gulf to mitigate the damage. I'm one who thinks the original accident was just that - an accident. And I did not feel any animosity toward BP. But deciding not to bring all the global corporate resources to bear in cleaning up the mess is, IMO a criminal act and should land many executives in prison. You can't tell me that BP does not have the ships to process the oil. They are just using them elsewhere to make money while they pollute the Gulf. Am I the only one that was suspicious when they announced they were setting up a separate company to clean up the spill. I think that is all about isolating the rest of BP's resources from being commandeered by the CG or ordered into service by US courts.

i don't know of a single FPSO in the GOM. there may be one, but I have never heard of one...

to have the enterprise is a real treat. the rig was really a breakthrough in drilling technology. well testing processing facilities aren't your standard equipment on a rig.

what resources are you suggesting they move or procure? to my knowledge, all oil and nat gas is piped to shore in the GOM. could be wrong about that as well...

[brewer12345]

Quote:

Originally Posted by Brat This gunk will go to a crude carrier. Clean (processed product) volume would be basically stagnant because of the fixed capacity of the refiners. Brewer, what would be the better stock buy.. a nat gas producer or pipeline operator? While gasoline pipelines are the best way to ship product on land I think a lot of those pipes get eroded on the inside and when weak cause unexpected havoc. My gut is that nat gas lines are usually better maintained because of the sensors.

Personally, I have been buying CHK equity and options. I am of the opinion that onshore gas will be a more valuable asset very shortly as production in the gulf becomes constrained and then more expensive and painful, regulatory-wise. While nat gas from shale is not without risks (see EOG's fun last week), its a long way from the potential destruction with offshore deepwater drilling. CHK at current prices is equal to about $2/MCF of proven reserves with everything else thrown in for nothing. I believe that most of the other onshore guys (EOG, BBG, RRC, UPL, GDP, etc.) are similarly priced, so you could probably get some diversification if you like.

Pipelines are fine but not at the same discount. I think Ha would be your man to opine on that one. If it ever gets cheap enough to interest me enough to mess with another K1, I like NS/NSH.