BP Deepwater Horizon Well MagnitudeJohn Kostura |
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On April 20th 2010 at 9:45 p.m. the British Petroleum Macondo well suffered a tragic blowout in the Gulf of Mexico. The Deepwater Horizon oil rig exploded and burned until it sank. Eleven men lost their lives and their bodies have not been recovered.
The well is reported to be flowing 2.5 million gallons of oil per day into the Gulf of Mexico. We look at that number but do we really understand what this means? Just how big is this flow rate? What is the magnitude of this well? First lets convert the gallons to barrels. The standard unit for oil production is barrels of oil per day. Spills are typically reported in gallons per day. 2,500,000 gallons per day / 42 gallons per barrel = 59,524 barrels of oil per day (BOPD) How does 60,000 BOPD compare in the oil industry? This is how I see the BP well from my perspective. Back in the 1980's, I explored for shallow oil in Eastern Oklahoma as an exploration geologist. A good well would have pumped a total of 120,000 barrels of oil over a ten year period. The BP Macondo well in two days produces the total oil one of my wells would have produced in ten years. Comparing a deep water offshore well to an Eastern Oklahoma shallow oil well is an unfair comparison. So lets look at the total oil production for the State of Oklahoma. The last reporting number is for 2008. The total oil production for Oklahoma for that year is 65,165,925 barrels of oil. So how much is that per day? 65,165,925 / 365.25 days = 178,415 BOPDTherefore the BP Macondo well is flowing one third (1/3) of the total daily oil production for the entire State of Oklahoma for the year 2008. Again this may seem an unfair comparison since oil production has greatly declined in Oklahoma. The highest oil production for Oklahoma was in 1929 with a total of 277,775,000 barrels of oil. The daily production is: 277,775,000 / 365.25 days = 760,507 BOPD The BP well in 13 days would exceed the daily oil production for Oklahoma in 1929. Here is a similar comparison for other States for September 2007.
No matter how we look at the flow from the BP well, it is massive. What is good for one spill is bad for the next. The company responsible for the spill does everything it can to keep the spill estimates low. Spill totals become political and public relation numbers rather than numbers based on engineering or science. This makes it difficult to use previous spill numbers to project the potential damage of a new spill. The Exxon Valdez Spill is an excellent example of this problem. The official estimate of the total oil released from this spill is 10.9 million gallons or approximately 250,000 barrels of oil. The Exxon Valdez Spill "eventually covered 1,300 miles (2,100 km) of coastline and 11,000 square miles (28,000 km2) of ocean." At present the BP Oil Spill is ten times greater than the Exxon Valdez spill. Should we expect to see ten times the damage? The Exxon Valdez spill resulted from a tanker running aground. The volume and the total oil carried by the Valdez is a known quantity. Yet there is a wide discrepancy in estimating the total Exxon Valdez Spill and the actual spill volume is still being disputed. The Exxon Valdez spill may actually be closer to 750,000 barrels of oil. The BP Macondo Blowout should be compared to the Pemex Ixtoc 1 Blowout rather than the Exxon Valdez Oil Spill. The Pemex Ixtoc 1 Blowout occurred in 1979 while drilling off shore in the Gulf of Mexico.
Looking at the above chart it should be clear that the BP Macondo well is similar to the Ixtoc 1. The main difference is BP Macondo well flowed at a higher rate and the Top Kill effort failed. Fortunately the Helix Producer containment was successfully installed on the Macondo well and stopped the flow of oil on July 15th. The static kill of the well was completed on August 4th by pumping heavy mud into the well. The relief well completely sealed the well on September 19, 152 days from the date of the blowout. Unfortunately the BP Macondo blowout resulted in one of the largest oil spill recorded in the US. As the oil continued to flow, all numbers increasingly became political rather than scientific. This is unavoidable and seems to be an historic tradition of each oil spill. In economics there are two ways of describing cost; direct cost and indirect cost. For example a steel mill may be required to install scrubbers on its smoke stacks to reduce pollution. This would be a direct cost and would be passed on to the consumers of the steel. Or the steel mill could pollute the air resulting in reduced property values, sickness, cancer and premature deaths in the local community. An indirect cost can never fully be calculated but it is always orders of magnitude greater than the actual direct cost. Corporations tend to want to internalize profits while externalizing costs as much as possible. When you hear the political spill numbers remember the true indirect cost of this oil spill. The total damage done to the people living and working on the Gulf Coast cannot be estimated nor will it be understood by the majority of us. Because of the scope and magnitude of the BP Oil Spill this damage will be generational and change the Gulf Coast area forever. How do you calculate this kind of damage?
 For Information E-Mail John Kostura at jk@2near.com
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