Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
Focus on Graphite Companies with Green Energy and Technology Strategies - 22nd Oct 14
Crude Oil Price Hitting Bottom - 22nd Oct 14
Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - 22nd Oct 14
Gold Or Crushing Paper Debt Stocks Crash? - 22nd Oct 14
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High - 22nd Oct 14
Bitcoin Stock Exchange Could Be "More Valuable than Alibaba" - 22nd Oct 14
Currency War - How to Profit from a Stronger U.S. Dollar - 22nd Oct 14
Banks Hold Treasuries and Make Loans- 22nd Oct 14
Gold and Silver Timing is Everything - 22nd Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VII) - 22nd Oct 14
Follow the Baby Boom to Biotech Stock Profits - 22nd Oct 14
Copper, Nickel and Zinc Won't Be Cheap for Long - 22nd Oct 14
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14
Sheffield Roma Crisis School Place Application's Fraud Perfect Storm - 17th Oct 14
Stock Markets, Commodities and Indicators - 17th Oct 14
“Save Our Swiss Gold ” - Game Changer For Gold? - 17th Oct 14
How to Trade the Ebola Stock Market Sell-Off - 17th Oct 14
When... Not if... Crude Oil Price Drops Below $70 - 17th Oct 14
Either You're The Butcher or You're The Cattle - 17th Oct 14
Gold Benefits from Market Uncertainty - 17th Oct 14
Stock Market Pullback Underway, Euro downside, Commodities - 17th Oct 14
Stock Market Seven Year Cycle and A Correction Ahead? - 17th Oct 14
Three Ways to Play Uranium: Top Stock Picks - 17th Oct 14
America Flirts With Deflation - 17th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Plausible Gulf Oil Spill Scenario: Underground Blowout and Mudflow

Politics / Environmental Issues Jul 27, 2010 - 03:49 AM GMT

By: Dian_L_Chu

Politics

Best Financial Markets Analysis ArticleAmid rising fears over a circulating story about a leak and seepage, the federal government's oil spill chief said that seepage detected two miles from BP's oil cap is coming from another well. Meanwhile, BP is on track to use static top kill procedure in Macondo.


The static kill option is basically the cousin of the previously failed top kill. According to Platts, “the static kill would pump drilling mud and cement into the well, using the same entry points as the previous top kill procedure. The materials would be forced into the choke and kill lines of the well's blowout preventer (BOP).”

Scenario Apocalypse?

Although BP's new containment cap has stopped the flow of oil, circulating stories about a leak and seepage had caused mounting concern that the cap was displacing pressure and causing leaks deep underground.

One oil industry veteran engineer describes to me an underwater blowout (UGBO) as quite plausible, with the well being capped plus the static kill adding pressure from the top.

That is, capping the well might not be such good news.

The more they try to restrict the oil gush, the more pressure could be built up within the wellbore (like a soda can.) The increasing pressure could eventually push the leak below leading to a UGBO. (See graph)


(Note: The graph is a general illustration and does not represent the BP Macondo well.
Source: http://www.silentpcreview.com/)

What Is A UGBO?

According to Schlumberger Oilfield Glossary and Wikipedia:

“An underground blowout is a special situation where the uncontrolled fluid flows from one reservoir into the wellbore, along the wellbore, and into another reservoir. Usually this is from deeper higher pressure zones to shallower lower pressure formations.”

“Underground blowouts can be very difficult to bring under control, and are historically the most expensive problem in the drilling arena. If left unchecked the fluids may find their way to the surface or ocean floor nearby.”

While there are sporadic discussions around a possible UGBO at Macondo well, it is still hard to visualize what kind of damage it could actually bring. A look at the ongoing mudflow environmental disaster in Indonesia could shed some light.

Indonesia Mudflow

The Sidoarjo mudflow in east Java, Indonesia has been ongoing since May 2006. The mud volcano was created by the blowout of an exploration well drilled by PT Lapindo Brantas, which triggered the eruption of hot mud.

The hot mud has continued to spew out at a rate of 100,000 cubic meters a day--equivalent to the contents of forty Olympic-size swimming pools--despite government efforts to plug the leak.

News reports described the mud lake is so huge — seven square kilometers in area and 20 meters deep — that it is now visible from space. Experts have warned that the mud may continue to flow for several decades.

Since 2006, the mudflow ha s inundated hundreds of hectares while new mudflows are still opening up. Some 50,000 Indonesians reportedly have been displaced after the drilling accident in May 2006.

Mudflow in the Gulf?

In the case of the Macondo well, a UGBO could cause a seismic shift of the seafloor, and a potential astronomical increase of oil shooting to the sea surface of the Gulf, and flowing towards coastline. The seabed breach could also bring about a mud volcano and mudflow, similar to what happened in Indonesia, in the Gulf of Mexico deepwater, possibly for decades.

In fact, this is the very same doomsday scenario many scientists and geologists have feared, as there are some early signs of a typical UGBO such as the reported seepage and leak. That is why BP and the U.S. government have been feverishly analyzing underwater data and monitoring the pressure.

This one oil industry expert I talked to believes that with the failure of the first top kill, and the risk of UGBO, the more prudent course is to just drill the two relief wells as planned (see graph), instead of further risking the well integrity by the trying experimental well cap and another static kill.

Inaction Is Good …., Occasionally?

While this apocalyptic scenario seems beyond the imaginable, and there does not seem to be a previously documented case of a deepwater UGBO, but again, everything regarding this gulf disaster has been unprecedented.

I imagine all the experts in BP’s camp are quite aware that the risk of an UGBO is quite high, but with mounting public criticism towards BP and the Administration, any cautionary (i.e., non-action) note most likely will not be taken into serious consideration by the people in charge.

Crucial - Implementing Lessons learned

There are plenty of lessons learned and yet to be acted upon for the spill response and remedial side of the oilfield technology to catch up with the technology on the drilling and production side. The new rapid response system for the Gulf deepwater announced by the four oil majors--Chevron, ConocoPhillips, ExxonMobil and Shell-- seems to be a good start towards that direction.

Meanwhile, let’s hope a deepwater UGBO remains as a scenario-based discussion only.

(Many thanks to the silent co-contributor of this article.)

Dian L. Chu, M.B.A., C.P.M. and Chartered Economist, is a market analyst and financial writer regularly contributing to Seeking Alpha, Zero Hedge, and other major investment websites. Ms. Chu has been syndicated to Reuters, USA Today, NPR, and BusinessWeek. She blogs at Economic Forecasts & Opinions.

© 2010 Copyright Dian L. Chu - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2014 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014