Oil Spill

[DoingHomework]

BP said this morning they were now capturing 10,000 barrels (420,000 gallons) of oil per day.

That's wonderful. Especially considering they said there were only 5000 barrels leaking.

 

[clifp]

That's wonderful. Especially considering they said there were only 5000 barrels leaking.

The Cap is actually a modern miracle it cleans up 5,000 barrels of oil that are on the beaches and marches.

 

[Purron]

We need Blast Hardcheese to solve this thing...

YouTube - MST3K - We Put Our Faith In Blast Hardcheese

 

[audreyh1]

I'm not disputing the fact that there have been man-caused oil residue come ashore in Texas. But Texas beaches, like most other seashores, have always had natural occurring oil seepage washing up. Ancient indians along the coast used oil and tar they found on the shores to make paints for ceremonial decorations. Early Anglo settlers in places like Port Aransas used to collect tar balls along the beaches to waterproof their roofs, grease wagon wheels, etc.

I've read several reports in the last couple of weeks of tar balls washing ashore in places like Florida, that were not from the BP platform. But the only way that was determined was by a scientific analysis of the oil. Those tar balls you see could have come from a spill, a flushed bilge, a leak from a ship, or from Mother Nature herself.

Edit to add: In 1793, during the travels of English explorer James Cook, his navigator, George Vancouver, recorded in his journal that they had anchored off of Goleta, California. Vancouver reported that the sea was

Doesn't wash for me Leonidas. The fact is that the MX spill completely changed the beach experience in TX across the entire coast and persisted for years.

Audrey

 

[Leonidas]

Doesn't wash for me Leonidas. The fact is that the MX spill completely changed the beach experience in TX across the entire coast and persisted for years.

I don't disagree with that at all. However, I do disagree with this statement

Even now on the "white" beaches the sand still has dark mixed in, and you still get a dark stain on your feet.

if you are saying that the oil staining your feet today is from Ixtoc.

From Edward Flattau, "The nation's longest running syndicated environmental newspaper columnist":

Along the Texas coast today, whatever oil residue that remains from the Ixtoc blowout is under water or underground. But the Gulf of Mexico surf tumbling across South Padre Island beaches is not oil-free. Natural seeps and the profusion of tankers and offshore rigs give the Gulf a high concentration of oil pollution.

The Dirty Aftermath of Ixtoc 1 Oil in the Gulf – Edward Flattau

The good news is the Ixtoc experience suggests the Gulf of Mexico has natural properties that help it cope with massive oil spills, scientists say. Warm waters and sunlight helped break down the oil faster than many expected. Weathering reduced much of the oil into tar balls by the time it reached Texas.

Two decades after the Ixtoc disaster, marine biologist Wes Tunnell sank his diving knife into an area where he had spotted a tar patch just after the spill. The blade came out black and tarry but the hardened surface of the patch was under sand, shells and algae that had completely covered it.

"No one else would know that it was anything other than a rock ledge," said [Dr. Wes] Tunnell of the Harte [Research] institute [Texas A&M's GOM research arm].

I'm not saying Ixtoc didn't screw up Texas beaches - I stepped in the tar patties myself, and I remember the kerosene stations they set up so you could clean up enough to get into your car to drive home.

All I am saying is that whatever you are stepping in today is not from Ixtoc.

While that was severe, Tunnell noted that natural oil that seeps from the seabed releases the equivalent of one to two supertankers of crude in the Gulf of Mexico each year.

“It’s what I call a chronic spill,” Tunnell said. “The good side of having all that seepage out there is that we’ve got a huge population of microbes, bacteria that feed on petroleum products in the water and on shore. So that helps the recovery time.”

Emphasis added

As I said in my earlier post, tar balls have been on Texas shores forever. Long before we started drilling for oil.

Oil seeps occur throughout the Gulf of Mexico. In a 1972 paper titled Natural Hydrocarbon Seepage in the Gulf of Mexico. Researchers from Texas A&M University said this about the history of this seepage:

"Archaeological reports indicate that the Karankawa Indians were using tar in their pottery making in pre-Columbian times. pottery making in pre-Columbian times. Survivors of DeSoto's group used tar found along the Texas-Louisiana coast to caulk their boats.

From 1902 to 1909 heavy oil slicks were noted in an area about 100 miles south of the Louisiana coast. Oil spouting into the air was reported in the same area in 1909. Oil ponds off the Sabine area are reported in a USGS publication in 1903.

Read more: Is Deepwater Horizon different from Ixtoc 1? - Oil Spill - SunHerald.com and 1979 Ixtoc oil spill suggests there will be no quick fixes for Deepwater Horizon - 6/4/2010 10:55:15 AM | Newser and http://www.associatedcontent.com/article/2967632/500000_barrels_of_oil_leak_into_gulf.html
Dr Wes Tunnell
About – Edward Flattau
Seeps and Oil Exploration
Natural Marine Oil Seepage -- Wilson et al. 184 (4139): 857 -- Science
Scientists Find That Tons Of Oil Seep Into The Gulf Of Mexico Each Year
​

 

[RonBoyd]

 

[Trek]

Sign at a BP gas station.

 

[REWahoo]

This is depressing.

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]

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.

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]

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]

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]

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.

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]

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.

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).

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]

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]

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]

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]

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]

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]

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]

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.