Best of the Week
Most Popular
1.Trump Delirium Triggers Stock Market Brexit Upwards Crash Towards Dow 20,000! - Nadeem_Walayat
2.The Future Price Of Gold Will Drop Below $1000 In 2017 -InvestingHaven
3.May Never Get Another Opportunity to Buy Gold at this Level Again - Chris_Vermeulen
4.Delirium - The Real Reason Why Donald Trump Won the US Presidential Election - Nadeem_Walayat
5.Why Nate Silver / Fivethirtyeight is one of the Most Reliable Election Forecasting Indicator? - Nadeem_Walayat
6.Gold Price Forecast: Nasty Naughty November Gold Price Trend - I_M_Vronsky
7.Gold Mining Stocks Screaming Buy! Q3’16 Fundamentals - Zeal_LLC
8.Delirium of Trump Mania Win's Mr BrExit US Presidential Election 2016 - Nadeem_Walayat
9.The War On Cash Goes Nuclear In India, Australia and Across The World - Jeff_Berwick
10.Hidden Signs for Gold and Silver - P_Radomski_CFA
Last 7 days
Trump Sets The Stage For A Huge Gold Rally In 2017 - 6th Dec 16
BrExit Tsunami Claims Emperor Renzi's Scalp, Counting Down to End of the EU, Next? - 6th Dec 16
Failed EU - Means an Expanded Dictatorship - 6th Dec 16
Crude Oil Prices: "Random"? Hardly - 5th Dec 16
The Coming Stock Market Crash and WWIII - 5th Dec 16
This Past Week in Gold Market - 5th Dec 16
Stock Market Short-Term Correction Underway - 5th Dec 16
If Trump Doesn’t Do This, We Will Have the Great Depression 2.0 - 5th Dec 16
India’s Demonetization Could Be the First Cash Domino to Fall - 5th Dec 16
Our Future Economy, Jobs, Banking, And Governance - 5th Dec 16
Gold and Silver Bullion Buying Opportunity for 2017? - 4th Dec 16
First UK BrExit then Trump, Next BrExit Tsunami Wave to Hit Italy HARD Sunday! - 3rd Dec 16
The 10YR Yield and SPX Stocks Bull Markets - 3rd Dec 16
Gold And Silver – Do Not Expect Much Difference With Trump Compared To Obama - 3rd Dec 16
Gold, Currencies and Markets Critical 61.8% Retracements - 2nd Dec 16
Gold Junior Stocks Q3’16 Fundamentals - 2nd Dec 16
Adventures in Castro’s Cuba - 2nd Dec 16
We Are Putting Off the Inevitable - 2nd Dec 16
Macroeconomic Cycles & Demographics - A Fuse, An Explosive and The Igniting Catalyst - 2nd Dec 16
How Moving Averages Can Identify a Trade - 1st Dec 16
Silver Prices and Interest Rates - 1st Dec 16
America, is it Finally time for us to say Goodbye? - 1st Dec 16
Blockchain Technology – What Is It and How Will It Change Your Life? - 1st Dec 16
Burn the Flags, Can Trump Salvage The Sinking US Economic Ship? - 1st Dec 16
Will US Housing Real Estate Market Tank in 2017? - 1st Dec 16
Referendum Puts Italy's Government to the Test - 30th Nov 16
Why We Haven’t Seen Gold Price Rally after Trump Victory - 30th Nov 16
Breakdown and Slide in Crude Oil Price - 30th Nov 16
A 'Wicked Rally' in Gold Price Predicted - 30th Nov 16
Silver Market Sentiment Looks Golden - 30th Nov 16
Indian Demonetization Denotes Severe Stress in the Global Gold Market - 30th Nov 16
Owning Gold and Silver in Troubling Times - 29th Nov 16
Trump's Presidency - Stock Market Crash or Start of New Mega-Trends - 29th Nov 16
Prime Minister Modi's War Against Corruption, Black Money and Fake Currency Notes in India - 29th Nov 16
Can President Trump Really Drain the Swamp? - 29th Nov 16
President Trump’s Economic Plan Isn’t Going to Work - 29th Nov 16
The US Bond Bear Market Has Begun! - 29th Nov 16
Simple Yet Powerful Technical Trading Tools - 28th Nov 16
Public Infrastructure – Welcome to the World of Waste, Fraud, and Abuse - 28th Nov 16
Fifty Years Later, Moore's Computing Law Holds - 28th Nov 16
An Elusive Stock Market Top - 28th Nov 16

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

$10000 Gold

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.


© 2005-2016 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

Catching a Falling Financial Knife