Conference Call on Deepwater Horizon Response
By Jane Van Ryan Friday 7 May 2010
Yesterday API hosted a conference call with 14 bloggers to discuss the Deepwater Horizon incident, and spill response and cleanup efforts. Several API representatives who have been closely monitoring the issue were on the call to take questions.
Experts on the call included:
Richard Ranger, Upstream/Industry Operations, API
Holly Hopkins, Upstream/Industry Operations, API
Robin Rorick, Group Director, Marine & Security, API
Allison Nyholm, Oil Spill Response Veteran, API
John Felmy, Chief Economist, API
John Wagner, Upstream Consultant, API
Bloggers who participated in the call included:
Bear, The Absurd Report
Bob McCarty, Bob McCarty Writes
Brian Westenhaus, New Energy and Fuel
Bruce McQuain, The QandO Blog
Gail Tverberg, The Oil Drum
Geoff Styles, Energy Outlook
Jazz Shaw, The Moderate Voice
James Shott, Observations
Joy McCann, Little Miss Attila
Nick Chambers, Gas 2.0
Rich Trzupek, FrontPageMag.com
Steve Kijak, Rightside VA
Steve Maley, RedState
Tim Hurst, Ecopolitology
For more information, I encourage you to listen to the audio recording of the call using the player and follow along with the transcript below.
API
BLOGGER CONFERENCE CALL
MODERATOR:
Jane Van Ryan, API
SPEAKERS:
Richard Ranger, Upstream/Industry Operations, API
Holly Hopkins, Upstream/Industry Operations, API
Robin Rorick, Group Director, Marine & Security, API
Allison Nyholm, Oil Spill Response Veteran, API
John Felmy, Chief Economist, API
John Wagner, Upstream Consultant, API
Thursday, May 6, 2010
Transcript by
Federal News Service
Washington, D.C.
Bloggers on the call included Bear from The Absurd Report, Bob McCarty from Bob McCarty Writes, Brian Westenhaus from New Energy and Fuel, Bruce McQuain from Questions and Observations, Gail Tverberg from The Oil Drum, Geoff Styles from Energy Outlook, James Shott from Observations, Jazz Shaw from The Moderate Voice, Joy McCann from Little Miss Attila, Nick Chambers from Gas 2.0, Rich Trzupek from Big Journalism, Steve Kijak from Rightside VA, Steve Maley from Redstate and Tim Hurst from Ecopolitology
00:15 JANE VAN RYAN: Hello, this is Jane Van Ryan from API. It sounds like we have a few people on the phone today. Welcome.
(Cross talk.)
00:24 MS. VAN RYAN: Hi there. Why don't we start by finding out who‟s on the call? First of all, we're in a conference room here at API. I have several experts in the room with us, some of whose names I sent out to you by e-mail last time. However, there has been a bit of a change in the lineup. Erik Milito is not with us today, but I do have Robin Rorick, John Felmy, Holly Hopkins, who's going to be on the telephone with us, Allison Nyholm, Richard Ranger, who's also with our upstream department and is extremely knowledgeable about offshore operations, and so on.
So I think we'll be able to respond to whatever questions you have today. One thing I want to mention to you is, if you are not asking a question, please hit *6 to mute your phone, then hit #6 to un-mute. In the past, as you know, we've had some audio difficulties with people who have not muted the phone. Again, please mute your phones by hitting *6. All right? Okay. Let's find out who we have on the call with us today. Who'd like to go first?
01:35 GAIL TVERBERG: This is Gail Tverberg from The Oil Drum.
01:36 MS. VAN RYAN: Great. Thank you, Gail. Who else?
01:40 NICK CHAMBERS: This is Nick Chambers with Gas 2.0.
01:41 MS. VAN RYAN: Thank you, Nick. Anyone else?
01:45 JAMES SHOTT: Yes, James Shott, Observations.
01:47 MS. VAN RYAN: Wonderful, good to talk to you. Let's see here, I‟m checking you all off the list to make sure that I have everybody. Next?
01:54 STEVE MALEY: This is Steve Maley at Badger Oil, blog at RedState and joined by Dale Clark, who‟s our drilling engineer.
02:03 MS. VAN RYAN: Very good. All right, who else do we have?
02:07 BRIAN WESTENHAUS: Brian Westenhaus.
02:09 MS. VAN RYAN: Great, thanks, Brian.
02:12 MR. WESTENHAUS: You're welcome. Hi, Gail.
02:14 MS. TVERBERG: Hi, Brian.
02:16 MS. VAN RYAN: Who else do we have?
(Cross talk.)
02:19 JAZZ SHAW: Jazz Shaw– with the George Phillips campaign.
02:20 MS. VAN RYAN: Okay, Jezz, I heard you. And then I've missed someone else?
02:24 BOB MCCARTY: Bob McCarty at bobmccarty.com.
02:27 MS. VAN RYAN: Gotcha, okay.
02:30 STEVE KIJAK: Steve Kijak, Rightside VA.
02:33 MS. VAN RYAN: Great.
02:36 GEOFF STYLES: Geoff Styles, Energy Outlook.
02:37 MS. VAN RYAN: Gotcha, Geoff.
02:41 TIM HURST: Tim Hurst from Ecopolitology.
02:44 MS. VAN RYAN: Great. Thank you.
02:48 BRUCE MCQUAIN: Bruce McQuain.
02:50 MS. VAN RYAN: Oh, good. Thanks, gotcha on here. Who else? Maybe a few others are there, maybe some that will join us in progress today. Why don't we go ahead and get started? We're going to go about an hour. We'll be happy to take any questions that you have.
If you saw the note that I sent out last night, then you're aware of the fact that we're hoping to limit questions to one apiece until everybody has a chance to at least ask something before we open it up really more broadly than that. Holly, are you on the phone – Holly Hopkins? Okay, she'll be joining us, then, in progress. Holly is an API person who‟s going to be joining us –
03:37 HOLLY HOPKINS: Yeah, I am. I was trying to un-mute. (Chuckles.) I‟m here.
03:42 MS. VAN RYAN: Holly, why don't we start with you, because you'll be able to provide a quick – and please keep it brief – update as to what‟s happening – the information that‟s been released by the joint unified command.
03:54 MS. HOPKINS: Okay. As of this morning at 8:30 a.m. Central Time, there were 270 vessels involved in the operations, including skimming and – I‟m sorry – including skimmers and barges, and 788,171 feet of boom have been deployed, with another approximately 1.5 million feet available.
Presently, 1.2 million gallons of oily water mix have been recovered, to date. 190,285 gallons of dispersant have been used; 55,611 gallons remain available. There are currently 10 ROVs operating. Over 6,700 personnel and an additional 2,500 volunteers have been trained, to date. There are 10 staging areas they‟re operating out of. As you probably all know, one of the three points of oil that were leaking have been closed. There only are currently two areas that are leaking. The deployment and assembly of the subsea containment system has begun, and they hope to have that operational by Monday. They are also still working with the ROVs – the remotely operated vehicles – to shut in the blowout preventers. That‟s ongoing.
The drilling of the first relief well began Sunday afternoon and has been ongoing for the last several days. Yesterday, they had controlled burns that happened, and skimming continues. That‟s probably the latest update on operations so far.
05:37 MS. VAN RYAN: Okay, very good. Thank you. When you ask a question, please state your name so we'll be able to have that information for the transcript. As you know, this entire conversation will be recorded and we'll be providing an audio file and a transcript online at energytomorrow.org, on the blog.
We'll hopefully have it up Friday afternoon so you'll have an opportunity to then use that whichever way you want to use it – link to it or pull quotes or whatever. So who would like to ask the first question?
06:09 MS. TVERBERG: This is Gail. I was wondering, have there been any recent studies done on the safety of the dispersants? I know there was an ABC news report yesterday claiming that BP wasn't going to use any more until there were some more environmental tests done, but that doesn't seem to be consistent with some other stories I've seen. But anyhow, just generally, the safety issue.
06:34 ALLISON NYHOLM: Right, this is Allison Nyholm. And I don't have any information relative to the reports that ABC put out. I can tell you that there is varying information relative to toxicity. And I do know that they're consistently looking at making dispersant available. It is my understanding they're using dispersants to affect the oil.
We know they've done it sub-surface, as well as on the surface. Getting back to the toxicity question, there is no real data associated with direct toxicity that we know of. That's extrapolated information. And I believe what‟s being used is information directly on the containers of Corexit or anything else that's being used. And that really is sort of a red herring, in terms of toxic levels.
This dispersant is being used not at those concentration levels, obviously. And so we're just very careful to not use that information – we don't want to have that information be put out there incorrectly.
08:18 MS. HOPKINS: This is Holly Hopkins. If I may add a few comments, I think what the news was reporting is related to the subsea diserseants that were being done. And as you probably already know, BP had a pre-approved authority to use – or there was a pre-approved plan in place to use dispersants on the surface. And so that was done and is still being done, and those approvals are in place.
What has stopped is the subsea introduction of dispersants, because this had not been pre-approved and had not been done. They did put together a proposal that was approved, and what it consisted of was, is that they would do two test dispersements, you know, and those two tests have been completed. And then the agreement was to let all of the relevant agencies review those tests and review the information that occurred during those, make a further decision on whether to continue using the subsea dispersant. So I think that might be what they were reporting.
09:24 MS. TVERBERG: Oh, okay. That sounds good.
09:27 MS. VAN RYAN: Okay, who has a question?
09:30 MR. MALEY: This is Steve Maley from RedState.
09:33 MS. VAN RYAN: Yes, Steve?
09:34 MR. MALEY: Could you give us a little more insight into how the one source that's been controlled has been controlled? I assume that was with an ROV. And was it the jointed drill pipe that we‟ve seen pictures of?
09:50 MS. VAN RYAN: Steve, this is Jane. I‟m not sure that anybody here in this room, unfortunately, would be able to give you an eyewitness account, basically, on what happened. I know that BP has commented on that. Based on the news release that they put out and some published reports, apparently, they used ROVs to saw off, if you will, the end of the drill pipe. And they were able to put a very heavy-duty valve on the end of the pipe. Now, that does not preclude the two other leaks coming from this crumpled and bent pipe from continuing to spill oil into the Gulf. That is continuing to happen, unfortunately.
But that‟s precisely what apparently has occurred. They used an ROV – at least one, perhaps more – to shear off the end of the drill pipe and were able to place a valve on the end of it, therefore closing that portion off. So I hope that answers your question, but again –
10:47 MR. MALEY: Thank you.
10:48 MS. VAN RYAN: – that‟s coming directly from BP and not really from API, sorry.
10:53 MR. MCQUAIN: This is Bruce McQuain with Questions and Observations. My question has more to do with the future, I guess. My background is military plans and operations, and when we wrote plans and operations, we always had a “go to hell” plan, you know, in which the worst-case scenario was imagined and planned for.
I get the impression that what's going on out there is definitely the worst-case scenario for the petroleum industry. And my question is, why wasn't there a “go to hell” plan, or if there was, did it envision this? And in the future, will the industry address this type of a scenario and have teams and equipment available to address it more quickly?
11:40 RICHARD RANGER: Bruce, this is Richard Ranger responding to your question. And I think really, the array of vessels, the number of personnel, the amount of equipment being deployed indicates that it is execution of what I think you could call the “go to hell” level of an oil spill contingency plan.
The plans that are developed – BP, other companies in the industry that have them are, you know, routinely re-examined and adjusted based on lessons learned, most usually from drills and exercises.
And the drills and exercise – because, you know, our record, certainly, up until this horrible incident has been a record where there have been very few spills of scale against which to test a plan. So the drills and exercises themselves are carried out at different scales.
They're carried out not simply by the companies, but in collaboration with government officials, be it – usually involving, for the OCS, the Coast Guard and Minerals Management Service. There's a tremendous transfer of knowledge throughout industry and between industry and government.
Now, so the question, in terms of scale here, was there access to equipment for an immediate response? Yes, there was. Was there access to additional, out-of-region equipment to cascade into the Gulf of Mexico to augment the initial response?
Yes, there was. Has there been a scaling up of the government or public side of the response across Coast Guard districts and involving additional personnel from both federal and state agencies? Yes, there has been.
This event has been moving at a very fast pace, but I think it would be mistaken to suggest that there hasn't been, really, a very complete commitment, certainly, of the resources that BP has available, the resources that the key government agencies have available, and most importantly, the resources, the expertise and the personnel that the response organizations, like MSRC, have available. So I would argue it‟s been demonstrating scalability of the response plan.
14:03 MR. MCQUAIN: Can I ask a follow-up, or –
14:05 MS. VAN RYAN: Sure, go ahead.
14:07 MR. MCQUAIN: Yeah, I guess what I'm getting at, Richard, is the fact that there's been – it's been almost a month fabricating this dome that‟s going to be placed over the wellhead. And while I appreciate the fact that people have responded and are out there doing the best they can, and that we don't know whether this dome is going to work or not, that kind of gets to my point. If this dome had been available at the time of the accident, and if it, in some way, had been tested or we knew more about it, wouldn‟t that type of a response have been much more, I guess, impressive than what we're seeing now?
14:50 MR. RANGER: Well, I guess, Bruce, in response to that, with your military background, I forget how the words go, but you're probably familiar with the adage that you have a plan and once the gunfire starts, you throw the plan away. And I think what there has not been before is this type of catastrophic event effecting a failure of the drilling rig.
The sinking of the rig, the consequent bending of the riser and the creation of a situation where you've got this, you know, significant leak of oil from below the sea floor and you have to put something over that leak – so this is kind of a serial number one effort that, I think with all of the anticipation and all of the forward planning, this particular scenario, perhaps, hadn't been envisioned before.
So your question's a good one. There are things that are going to be learned about the performance and effectiveness of this particular piece of equipment, but I think it's a significant achievement that, in the span of a very few days, this idea was conceived, this piece of equipment‟s been fabricated and being brought to the location.
So yes, I would agree you‟re partly right, but I think the response that BP and others have put together shows the adaptability of people and expertise when confronted with the kind of situation we have here.
16:17 MR. MCQUAIN: Thank you.
16:19 MS. VAN RYAN: Another question, please.
16:20 MR. CHAMBERS: Yeah, this is Nick Chambers with Gas 2.0. You know, there was some controversy recently about – I think it was on Huffington Post where they claimed that the oil industry had resisted the Minerals Management Service from promulgating new offshore safety rules last year. And I think Jane, you responded with a blog post that said that wasn't true.
And I read through that letter that the oil industry wrote to the MMS, and it seems like what they're saying is that it's just – the rules are far too confusing and that's what you were resisting, but that the key issue is that worker behavior is to blame in most of these incidents, and that, that wasn‟t addressed in this MMS rule-making.
Would you say that – and maybe you don't know yet – would you say that worker behavior was what caused this incident, or was it something else?
17:12 MR. RANGER: This is Richard again. You know, we're a long way away from understanding the cause of this incident, and I think it‟s not helpful for us to presume any causes or factors.
There's a tremendous amount of effort going on now to try to find out what did happen and why. I would say this with respect to the kind of front end of your question:
Our industry, like any other closely regulated industry, is engaged in ongoing dialogue with the agencies that regulate us.
We have – we promulgate, through API, you know, a considerable number of standards and recommended practices that are developed by the subject-matter experts from both within our industry, as well as government and third parties.
And that process is one that we have direct involvement in from Minerals Management Service. From time to time, inevitably, the questions come up, do you set a rule here and prescribe something, or do you allow alternatives to be considered by an operator based upon best professional judgment?
And I think one of the things that some in the media are running with, is that there are points – and these occur over time in connection with offshore exploration and production – where we have expert-to-expert dialogue and conversation with the agencies over the appropriateness, in certain circumstances, of having prescriptive solutions, versus alternatives that operators can use, and then, that the government agency – in this case, MMS – can evaluate and oversee.
So I think that's the kind of dialogue that was going on in this instance, and again, since we're a long way away from finding the cause, it's really, I think, impossible to say what happened, what failed, what took place in this instance.
19:14 MS. VAN RYAN: Let me interject a question because it‟s been sent to me on my BlackBerry from one of the bloggers on the call today.
I'll read it and then I'm going to provide a partial answer. Then, perhaps, others in the room can add onto that. The question is, “AP says that BP was granted an exemption from filing a site-specific blowout plan and implied that the Minerals Management Service failed to do its job because of its, quote, "cozy relationship," unquote, with the oil industry.
And they wanted to know if somebody could comment on that. But the first thing I want to say about that is that, interestingly enough, Commandant Adm. Thad Allen was interviewed by the Houston Chronicle yesterday, and I noticed in today's Houston Chronicle article that he refers specifically to a plan that was filed by BP with the Minerals Management Service. But does anybody else here in the room have any other comment on that – know anything about it?
20:13 MR. RANGER: I'm about a day behind that Houston Chronicle article. (Laughter.)
20:17 MS. VAN RYAN: Not a problem.
20:18 MR. RANGER: I would add this small – is that the – what companies do when they submit an exploration plan is, they do describe their plan of operations for drilling. And sometimes, that directly speaks to, sometimes it incorporates by reference, other actions that the companies take.
And with respect to well control generally, you know, there are various measures that companies take as a standard practice to control well pressures to prevent blowouts. They do so in shallow water; they do so in deep water; and of course, they do so onshore.
It's really presumptive, at this point, to say what failed, because we simply don't have that information. And there's going to – so here again, people are, I think, trying to run with a narrative pointing at some particular act or failure when, in fact, we simply don't have a causal chain established.
21:21 MS. VAN RYAN: All right. There is another follow-up question, and it's to –
21:25 MS. HOPKINS: Jane, if I may add – this is Holly, I'm sorry.
If I may add a comment to Richard's, while I completely agree that it's premature to blame a cause, part of the article, I think, was referring to MMS's requirements for a backup system. But MMS does not prescribe what type of backup system for the blowout preventer is required, and they leave that decision up to the individual companies as a business decision.
And so MMS – I'm sorry, BP did – I'm sorry, the blowout preventer did have backup systems. They just weren't – they're not specifically prescribed by MMS.
22:00 MS. VAN RYAN: Thank you, that's a good point, Holly.
22:02 MR. RANGER: Thanks, Holly.
22:03 MS. VAN RYAN: All right. I do have a follow-up question, so if you don't mind, I'll go ahead and give this one.
This is coming from a blogger on the call.
“There are allegations out there that the Department of the Interior waived some safety checks for BP. Has API had an opportunity to look into that, with everything else that's going on?”
The answer to that question, from the head-shaking around the table, is no. Sorry, that's one we're not going to be able to respond to today. We just don‟t have the information. All right, who else has a question?
22:32 MR. SHOTT: This is James Shott with Observations. I'm curious as to what factor, or what influence there might be by the fact that the moratorium has pushed drilling further and further offshore and into deeper and deeper water, and wondering, you know, how – if this project had – if this problem had occurred in shallower water, how would that – you know, would that have had any effect on the cleanup and the stopping the leak and so forth?
23:02 MR. RANGER: James, this is Richard, and I'll take a whack at your question and anyone else can follow up. I wouldn't establish a cause between deepwater exploration and the discoveries of new resources we‟ve found in the past 10 or 15 years in Gulf deepwater directly with the moratorium.
Certainly, we've not had the opportunity because of the moratorium to search for new resources in a lot of other areas of the Outer Continental Shelf. But I think what the Gulf deepwater experience has represented has been sort of a systematic gain in knowledge, testing of new ideas, lessons learned from wells drilled in shallower-depth resources; encountered in shallower-depths, some projections of where there might be new exploration targets.
And it's very much, I think, a science-driven and experienced-driven quest for new resources in the deepwater Gulf that has been of tremendous benefit to our energy security and our ability to provide new energy supplies. And obviously, that benefit has a big asterisk next to it because of this event, this incident, involving the Deepwater Horizon.
But really, I think that the deepwater experience has been driven by a quest for new resources and an application of lessons learned at shallower depths and theories tested to discover new resources that have been of benefit to the nation and the economy.
24:48 MS. NYHOLM: This is Allison Nyholm, and just as a follow up and an additional comment on the response, I would say that with Deepwater Horizon we're realizing that distance is a factor and that needs to be factored into a response – response timing. That said, I think that the industry has really rallied on all resources to bear, as well.
25:17 MS. VAN RYAN: Thank you, Allison. We have another question.
25:20 MR. WESTENHAUS: Brian Westenhaus, New Energy and Fuel.
25:24 MS. VAN RYAN: Go right ahead, Brian.
25:29 MR. WESTENHAUS: It seems that the – well, what I gather from the news is the oil is getting away because the blowout preventer failed. Is there some information as why yet, and is there an ongoing effort to get the thing to work?
25:43 MR. RANGER: This is Richard, again. Brian, no, again, this gets back to this question of what mix of actions, procedures or failure to follow procedures or equipment failures cumulatively led to this horrible incident.
And we don't have that information. So I guess it would be, again, very premature for us to comment lacking that information as to why the blowout prevents did not seal as well.
26:22 MS. VAN RYAN: There have been reports, Brian, of course, that it's partially sealed. So it's really not known what has happened down there. I think it'll be some time. There are investigations – at least two that apparently are underway and we‟ll hope to have answers to your questions here eventually.
26:39 MS. HOPKINS: And I might add – I'm sorry, this is Holly – as I might add, yes, efforts are continuously ongoing to close the preventer – to close the blowout preventer (BOP) by the ROV. That work continues to go on until the oil is stopped. So they are currently down there with ROV working on the blowout preventer trying to get it to stop.
27:03 MR. WESTENHAUS: Is the reservoir slowing down or reducing pressure?
27:09 MS. HOPKINS: No, they have not – the flow has not changed. As Jane indicated, apparently, they were able to activate part of the BOP and part of it did shut in. But the sealing elements apparently are not working or something – there's another problem because, as we know, the oil is still flowing.
27:40 MS. VAN RYAN: Next question?
27:46 MR. HURST: Yeah, this is Tim Hurst from Ecopolitology. There are a few reports or I guess pundit comments in the days after the accident that this could have been some kind of inside job or sabotage of some sort committed by environmentalists. I was hoping – I understand that we're still a long way from figuring out a cause here.
I was hoping someone from API could comment on how easy or difficult it would be for someone to get on a offshore oil rig and sabotage it somehow.
28:21 MR. RANGER: We have no information on that, Tim, but the – it‟s real hard to get on rigs. You don't just drive a boat up to them and get off on the ladder. So the people who are on the rig are people who are on a manifest who have a job to do.
28:44 ROBIN RORICK: And I would add – this is Robin RORICK – I would agree with Richard. We're talking probably well in excess of 80 feet from the barge to the lowest point on the platform that you would have to scale. These platforms are in the middle of the water so it's not like you can really sneak up on them.
And then it is – there are crews that work closely with one another on these rigs, so if there was someone who should not have been there, that also would have been fairly obvious.
And then lastly, I would say that this equipment is extremely complicated. And it would take someone with a lot of knowledge and a lot of time to really conduct any sort of sabotage. Now, that being said, I have no idea what the cause of this incident is and I can't really speak to whether or not this was or was not the result of any sort of sabotage.
29:42 MS. VAN RYAN: Do we have another question or a follow-up to that? (Pause.) All right. I'm going to ask a question and it came from a blogger; it came in this morning. Holly, this one might be one that you can respond to:
“It has been reported that our government did not have required fire booms on hand to deal with the initial incident before the slick became so large. And they perhaps could have started oil-burning techniques earlier if they'd had more fire boom. Have you seen anything, heard anything in the updates that would indicate that that‟s correct?”
30:22 MS. HOPKINS: To be honest, no, I can't really comment on that. I believe that there was fire boom available. I‟m sorry, I just don‟t have the answers to that. I know that there has been quite a bit of discussion about it in the media but I just don't have those facts.
30:37 MS. VAN RYAN: And Allison, do you have a comment?
30:39 MS. NYHOLM: Yeah, I think I can respond to it a bit. It did take them time to get the permit. I was told that it took a couple days to get the permit. Once the permit was in place, then they had to mobilize. They did have the necessary boom available according to the folks that I spoke with. And then once that was all in place, then they got – they made sure that the conditions were proper for conducting the in-situ burn. So really, it happened in a pretty rapid manner. I think everyone in the industry felt pretty good about the timeliness of it.
31:20 MS. VAN RYAN: And then there were weather issues, too.
31:23 MS. NYHOLM: Well, right, once the conditions were proper. And by that, I meant weather conditions. And so Robin Rorick just mentioned that it might be worthwhile discussing what the fire boom is. And basically, it's that boom that‟s used to contain a portion of the oil so that then an in-situ burn can take place.
31:44 MR. RANGER: It's got a surface material that resists heat for a longer period of time. Regular boom is essentially – it has flotation and its surface is a plastic skin. And so it's flammable and meltable whereas fire boom uses a mix of materials that resist flammability.
The one other thing about boom and equipment generally, however, that's important is the main resource for fire boom skimmers, regular boom, shoreline boom and so forth is industry. Industry maintains these stockpiles and it's through either the Marine Spill Response Corporation and in some other cases the more regional, port-based cooperatives.
The government has – the Coast Guard maintains some assets, it's true. I think some other agencies do. But the vast majority of the equipment that has been brought to bear on this incident comes from ventures that are supported by funding that the oil-and-gas industry provides through sort of membership bases both in the U.S. and internationally. There is some international equipment that's come in as well.
33:09 MS. NYHOLM: But again, that fire boom was available.
33:12 MR. RORICK: This is Robin RORICK. One thing that I would add is that oftentimes, these issues with the availability of equipment or material are portrayed as, this would be a panacea, or, this would cause rapid reductions. And you really have to be careful with comments like that because the reality of it is, is that in any response activity, there are multiple tools in the toolbox, if you will, of which booms, three or four different types of skimmers, fire boom, dispersants, in-situ burning. There are multiple tools in the toolbox and the most effective response is the one where the spill is going to be analyzed and you use any combination of all of that equipment effectively.
So my point, I think, is just to say that you really have to look at the entire suite of options that are available and utilize them to their full potential and don't fall into this trap of thinking that simply because you may have been a day or an hour late, then you would have yielded all of these great results.
It‟s a matter of keeping it in perspective, I think.
34:24 MR. RANGER: Yeah, I think that's very good, Robin, and this is Richard, and getting back to Bruce‟s point. I really think the combat analogy is very, very valid. You've got a lot of equipment, you've got lines of supply that are converging on points that are 50, 60 miles offshore; you've got all of these vessels which – by the way, like the slick itself are moving in three dimensions. And so some of your actions are only partially successful at first or compromised by time or something like that.
But I think the standpoint of access and availability of equipment, this incident has demonstrated the capabilities of the oil-spill response community to bring massive amounts of resources to bear on a very, very difficult and large-scale incident.
35:12 MS. VAN RYAN: Do we have another question?
35:13 MR. STYLES: Hi, Jane, this is Geoff Styles. Jane, you can imagine I've got a number of questions here, but in the interest of restraint, I've been holding myself back. And several of them really boil down to the issue of risk and the quantification of risk.
And, you know, we're hearing a lot about what people‟s perception now of the risk of offshore drilling is. And it's clear that after the fact the risk of this accident is 100 percent; it happened. But it's also not clear what this accident tells us about the ex ante assessment of risk of this kind of accident, particularly in conjunction with a similar accident in the Timor Sea last year.
So I'd be interested in hearing what you can say about the larger issue of assessing risk here and specifically looking at how many wells, how many deepwater wells have been drilled globally and how many have been drilled in the Gulf of Mexico to help try to establish what's the universe here out of which this is one example?
Is this a one in 100 shot? A one in a thousand shot? A one in 10,000 – or so on. And then, against that, you know, have you looked at anything on the relative risk of if we stopped offshore drilling in the U.S., what does that translate into in terms of increased tanker deliveries? My guess is about 270 additional VLCCs a year. And what does that translate into in terms of the risk of an oil spill from a tanker, which is clearly much higher than the risk from an oil platform. That‟s a bunch of stuff but those are sort of half of my questions all in one.
37:01 MS. VAN RYAN: I think John Felmy is going to take a shot at this.
37:04 JOHN FELMY: Well, I think I can only contribute a little bit on that, Geoff. Of course, risk is very much a function of a lot of things. And one of the things about going forward on risk is, you know, we may be able to have a better assessment once the whole review is done, as has been said before. In terms of the numbers, if memory serves me, MMS listed about 500 discoveries in the Gulf greater than 1,000 feet.
So in terms of their terminology for deep water, that's their cataloguing of it up to I think the deepest discovery is just a little less than 10,000 feet of water. In terms of worldwide, of course, you've got tremendous amounts of activity going in various parts of the world, such as offshore Brazil, offshore West Africa and so on. But I don‟t have those numbers at my fingertips to give you an assessment.
In terms of – you know, this is the first incident of its kind. This is the first it‟s happened in 40 years of this magnitude. So clearly we have been following that we thought everything has its place. And so gauging risk going forward, you know, it‟s too soon to tell in terms of what we can learn from the actual analysis of it.
But clearly, the one thing that we‟ve got to keep in mind is that this is a tragic accident, that we need to learn from it and we need to stop it and we need to clean it up and we need to move forward because the fundamentals of our energy situation haven't changed. We get 30 percent of our offshore oil from the Gulf – or 30 percent of our production from the Gulf. And all forecasts indicate that we‟re going to continue to need oil for the foreseeable future and so we need to put it in that context in terms of what we need to do to move forward in a positive way.
38:56 MR. RORICK: And Geoff, this is Robin. You know, what I would probably add is that while I am not a risk expert, I do think it's helpful to sort of put this incident in perspective and if you look at production over the last 60 years, I mean, MMS reports that we've produced about 15.5 billion barrels of crude oil. And if you looked at the amount of oil that was released to the environment from – and this is the Gulf of Mexico – and if you look at the last 40 years as the oil that was releasing into the environment relative to production, that‟s about .001 percent.
So I mean, if you – I think you really have to – while this is – I would agree with John that you really have to – our first – our attention right now has to be directed towards the response. We need to stop this, clean it up and figure out what happened and then make sure that if there are any gaps that we address those. But I also think it's important to keep this incident in perspective relative to how much crude has been produced and to the overall performance of the industry.
39:54 MR. STYLES: Yeah, and I guess just as a follow-up – and I agree with everything you said there and at the same time, it's very clear that the policy debate about what to do about offshore drilling has already started. You know, unfortunately we‟re not going to have the luxury of waiting until the results are in.
Just as a follow-up though, can anybody talk about any similarities and differences between this accident and the accident that occurred in the Timor Sea last year?
40:24 MR. RANGER: Geoff, this is Richard. No, not yet because I think they landed on the failure in the cementing program in the Timor Sea that there's, I believe, pretty good confidence is the source of that particular loss of well control. We don‟t have that information in connection with this incident.
40:49 MR. STYLES: Thank you.
40:51 MR. RANGER: Cementing program – everybody understands what I mean by cementing program?
40:55 MS. VAN RYAN: It might be helpful to explain it, Richard.
40:57 MR. RANGER: Yeah. Fundamentally, the major lines of defense, if you will – the major lines of controlling and addressing the risk of drilling are the casing program – the setting of steel pipe that is cemented to the surrounding rock through which the fluid that would be produced from the well or that would try to escape from the well are controlled. And they are controlled – so you have the steel pipe cemented to rock and if you think that through, there are sort of two basic categories of concern or interest: the integrity of the pipe and the integrity of the cementing job that locks that pipe to the surrounding rock.
And what can happen if you have a poor cementing job is that you create a new weak area through which a high-pressure fluid and/or gases can migrate and can either further crack the cement, perhaps cause a change in pressure that would go beyond the tolerance of the pipe to the environment from – and this is the Gulf of Mexico – and if you look at the last 40 years as the oil that was releasing into the environment relative to production, that's about .001 percent.
So I mean, if you – I think you really have to – while this is – I would agree with John that you really have to – our first – our attention right now has to be directed towards the response. We need to stop this, clean it up and figure out what happened and then make sure that if there are any gaps that we address those. But I also think it's important to keep this incident in perspective relative to how much crude has been produced and to the overall performance of the industry.
39:54 MR. STYLES: Yeah, and I guess just as a follow-up – and I agree with everything you said there and at the same time, it's very clear that the policy debate about what to do about offshore drilling has already started. You know, unfortunately we're not going to have the luxury of waiting until the results are in. Just as a follow-up though, can anybody talk about any similarities and differences between this accident and the accident that occurred in the Timor Sea last year?
40:24 MR. RANGER: Geoff, this is Richard. No, not yet because I think they landed on the failure in the cementing program in the Timor Sea that there's, I believe, pretty good confidence is the source of that particular loss of well control. We don‟t have that information in connection with this incident.
40: 49 MR. STYLES: Thank you.
40: 50 MR. RANGER: Cementing program – everybody understands what I mean by cementing program?
40:55 MS. VAN RYAN: It might be helpful to explain it, Richard.
40:57 MR. RANGER: Yeah. Fundamentally, the major lines of defense, if you will – the major lines of controlling and addressing the risk of drilling are the casing program – the setting of steel pipe that is cemented to the surrounding rock through which the fluid that would be produced from the well or that would try to escape from the well are controlled. And they are controlled – so you have the steel pipe cemented to rock and if you think that through, there are sort of two basic categories of concern or interest: the integrity of the pipe and the integrity of the cementing job that locks that pipe to the surrounding rock.
And what can happen if you have a poor cementing job is that you create a new weak area through which a high-pressure fluid and/or gases can migrate and can either further crack the cement, perhaps cause a change in pressure that would go beyond the tolerance of the pipe and so that cementing job is one of the keys – that and the pipe itself are two of the keys to assuring the integrity of the well.
And the other one that doesn't get talked about a lot because we've been having all this conversation on blowout preventers – is the drilling mud program, the fact that at all times when the bit is moving, it's moving through a fluid column. And that fluid column has hydrostatic weight. And the mud weight – the weight of that column is maintained by the use of additives to that fluid so that you can offset the pressures that may be coming back up from the bottom of the well. And that itself is also confined, controlled, protected by that casing program – that steel piping that‟s cemented to the surrounding rock.
42: 57 MS. VAN RYAN: Another question? If not, I've got an announcement I can give you. We've just been notified – and this is coming through a publication called Greenwire, which is affiliated with The New York Times. Greenwire is now reporting that the Interior Department has just indefinitely suspended plans for an oil-and-gas lease sale off Virginia's coastline.
As you might recall, it's Lease Sale 220 and it was planned originally for next year. It would have involved the development of oil and gas believed to exist about 50 miles off Virginia's coastline. So I just thought I'd pass that along. Any questions?
43:42 STEVE MALEY: This is Steve Maley. I don't have any questions about that in particular, but I'm hoping somebody could comment – a lot has been taken from this incident as relating to all of the offshore. I've been telling people, to make an everyday analogy, that when Dale Earnhardt died in NASCAR, we didn't shut down building the highways and take cars off the road. We‟re a shelf operator in the Gulf of Mexico, where for 40 years, the safety record has been impressive and improving and relatively pristine. Would anybody at the API care to comment about that?
44:28 MR. RANGER: I'll start – Steve, I‟ll make one venture. You know, one of the things that, to me, has been the dog that hasn't barked in this discussion: There's obviously been a lot of coverage in recent days and weeks for good reason regarding the potential impact of this spill to the fisheries industry, to the oystermen, the shrimpers and other – and then the recreational fishing component that exists and thrives in the Gulf.
And I guess, you know, one thing I'd like to point is that for those who have made the argument or sought to make the argument that our industry's presence in new parts of America's coast – new parts of the Outer Continental Shelf (OCS) – would displace these industries. Here you have in the Gulf of Mexico after, you know, 50 or 60 years of significant production from the offshore oil and gas industry, you have had a thriving commercial fishing industry, you have had a thriving, in fact, growing tourism industry, particularly along the Alabama and Mississippi coasts.
And I'm not in any way trying to diminish the concerns that many of those people have for their livelihoods and so forth. A lot of those people are now volunteering. A lot of those people are working on the response. You know, certainly out of self-interest. But the point is, is that the Gulf of Mexico has been – and we think can continue to be – the demonstration of a successful multiple-use ocean environment where important energy resources can be produced and other activities of value – economic and non-economic – can be carried on in the same marine environment.
46:15 MS. VAN RYAN: Thank you, Richard. Another question? If not, I've got a couple here. Anybody have anything they want to talk about first?
46:24 MR. STYLES: Jane, I've just got one more quick question. This is Geoff Styles. You know, obviously we‟ve heard a lot about BP‟s resources devoted to solving this problem, industry resources, Coast Guard and so on.
Can you tell us anything about any other company resources that have been thrown at this – any other oil and gas companies? I had heard one report that Exxon was offering drilling rigs and experts. Are any of the other companies actually pitching in? Because this is clearly an industry problem; it‟s not just a BP problem.
46:56 MS. NYHOLM: This is Allison Nyholm. Yeah, I think I hinted at that a little bit earlier. But yeah, the industry has been bringing all the resources to bear that they can, pitching in where necessary. There are many examples of that – Shell offered up a command center right away. Boats of various sorts and types have been made available.
I think some of the early ones were used to move boom and dispersant. I think one of the most effective tools that are being used across the industry are really the people, the personnel, the expertise that are being drawn on across the oil-spill response industry. Sorry, I thought I heard somebody trying to interject. Anyway, huge amounts of resources are being brought to bear. Without fully identifying people or putting them on the spot, I would say categorically the industry has come together to address the incident.
48:05 MR. STYLES: Thank you.
48:06 MR. RANGER : I would agree with that. And I happen to know there are people from as far away as Alaska and England and throughout the U.S., maybe other countries. But I just know of a couple of direct experiences where folks from industry are down on the team in the command centers helping out with this effort.
48:23 MS. NYHOLM: You know, I guess I would add one more point that really was one that was – it took some – a leap of faith on the part of the industry. And that was to share technology – technologies that are still being underway. This is proprietary information that folks said, you know what? We need to get beyond any legal obstacles we may see and really share this technology, help out and bring it to bear.
48:54 MS. VAN RYAN: Very good. I‟ve got a couple of questions that have been sent to me. And I'll pose these together. Perhaps the people here in the room will be able to provide some insight on this. One of the questions is, “Will the oil slick hinder any of the other oil or natural gas-producing platforms in operation in the Gulf?” And the other one is very similar in that it asks “whether it could disrupt deep-sea shipping here in New Orleans?”
49:26 JOHN WAGNER: I guess we won't have a comment on how it might hinder or effect production. We simply don‟t know.
49:32 MS. VAN RYAN: Okay, that was John Wagner of API. At this point, apparently, it's premature. And I did not have the answer to that and John does. We simply don't know. So I apologize.
49:43 MS. HOPKINS: Holly, if I – this is Holly, if I may. Currently, there are two production platforms that are shut in, in the Gulf. I do not have the amount. But they were shut in by the operator, by a decision on the part of the operator out of an abundance of caution. But from what I can – from what's been reported so far, it's not a large amount.
50:10 MS. VAN RYAN: Thank you, Holly.
50:11 MR. SHAW: Do we have time for one more?
50:13 MS. VAN RYAN: Yes.
50:14 MR. SHAW: Yeah, this is Jazz again. And I guess it's hard to ask people to speculate and look towards the future. But a lot of the reports that have been coming in and questions that we're getting – we're doing a press conference on this next week as a matter of fact – seem to be that the technologies we currently are deploying after a spill has happened do not always seem to be sufficient to the task out on ocean waters, deploying lines of buoys, setting oil on fire.
CNN did a report saying that there were new technologies for controlling oil, such as pelletizing the oil to get it to sink and make it more controllable so you don't get widespread slicks. But none of that is happening right now. Do you have any sense or data or idea as to how soon we might see a breakthrough that was ready to be deployed that would be more effective at arresting a wide-scale spill like this after it‟s already occurred.
51:20 MR. RORICK: I can't obviously speak for the responsible party. But what I can say is that I am fairly certain that if there is a technology that they could utilize to respond to this spill effectively – and that was – they would take advantage of that. So I can't speak to any – to the efficacy of any specific technology.
I know oftentimes you will have someone who will claim that they've got the next greatest thing. And in an instance like this, maybe they do and maybe they don't. But those issues are all being addressed by the unified command on the spill and I‟m sure every viable method of responding to this spill will be utilized.
52:09 MS. VAN RYAN: Thank you, Robin. Another question has been e-mailed in. “Is there a pre-established timeframe within which an investigation must be completed after the fact?”
No? I'm seeing people shaking their heads, apparently not. A follow-up to that:
“Who on the industry or non-government side of matters will be involved in investigating?” Are there people within the industry that would be involved in investigating events of this nature?
52:43 MR. WAGNER: Well, I mean this is John Wagner again. I mean, sort of the incident-specific investigation would involve, you know, the parties who were involved and then the appropriate regulating industry, I mean, government agencies. But you know, there wouldn‟t be sort of a separate industry investigation. Government investigation now and I have every confidence that the parties involved will fully cooperate with that investigation.
53:10 MS. VAN RYAN: Very good. Thank you, John. One other thing that we ought to mention is that the industry has set up task forces – is that what you were just – we have people looking at each other in here. And I guess that‟s what they'd like to explain to you. Who'd like to go talk about this issue?
53:26 MR. RORICK : Well, there's not – we‟re still very much in the beginning stages. The industry is in the process of setting up a couple of taskforces that will work closely with the federal government to look at both equipment and operational issues. And you'll just have to see what they come up with. And at this point, like I said, those taskforces are still very much in their infancy in scope, and so we'll have to stay tuned.
53:55 MR. RANGER: But I would say this. This is Richard. The interest in getting answers on improvements and things like that – there's the investigation and then there‟s kind of the look forward. And the interest in that is visceral. I've spent some time in industry and spent some time actually the last couple of days looking at drillers‟ blogs. I don't know if you – some of you may know this but there are blogs of drilling professionals. And there is really sort of a one-to-two, three separation in the industry, particularly in the offshore sector, of the people who work in that sector know – there before the grace of God go I element to this. There are some – there are people, I've seen comments from people who know people who are missing as a result of this incident. So the interest in finding answers is deep throughout the industry. The people who are engaged in this work, which is hard work, are professionals.
You know, they may not always wear tuxedos and go to some of the fine parties in Washington, D.C. But they're every bit as professional as any other profession. And they're certainly committed to finding answers for the safety – for their safety and security and for their jobs and livelihood going forward.
55:11 MS. VAN RYAN: We're almost out of time. I'm sorry, Robin.
55:12 MR. RORICK: Well, I just want to make a disclaimer. I don't want to give the impression that these task forces will have any role in this investigation. So in the task forces – that's not to say that the results may not play into what these task forces look at. But the task forces in no way are going to be part of the investigative team on this. That may have been obvious. But I like to state the obvious.
55:37 MS. VAN RYAN: We probably have time for one more question?
55:40 MS. HOPKINS: Jane, this is Holly. If I could make one comment, it's probably known. You guys probably all know this. But just to be clear, the government investigation, there's a joint investigation that was agreed to by the Department of Homeland Security and the Department of Interior with U.S. Coast Guard and MMS, they have filed an MOU to work together to do a joint investigation on the government side.
56:04 MS. VAN RYAN: Okay, thank you.
56:06 MR. CHAMBERS: Hey, Jane. Is there time for one more question? Actually, there's a clarification. Holly, before you had said the backups – this is Nick from Gas 2.0. The backup systems are not specifically prescribed by MMS but they can be determined by the individual companies. Does that mean that they are – are they approved by MMS or do the companies just come up with their solutions on their own?
56:29 MS. HOPKINS: They're required to have a backup system. But it's not prescribed on what kind it is. So they decide what they‟re going to have. As long as they have one, that's all that they need.
56:40 MR. CHAMBERS: But is that – I mean, so the federal government in no way looks at that to make sure it's some kind of – you know it will work. It‟s left up to the company entirely?
56:52 MS. HOPKINS: I'm sorry. I can't answer that. I'm not positive. I believe that they give them a list of options and they choose. (Cross talk.)
57:05 MR. CHAMBERS: And then that was the clarification. My last question though is that there has been a narrative developing recently that the deepwater drilling that we‟re seeing, which has caused this incident – and why it's so difficult to control – is a result of this shallow water moratorium. Is that the case or is it simply that really the deepwater is where the new oil discoveries are being found because we've ran out of everything else?
57: 32 MR. RANGER: This is Richard. I thought I spoke to that earlier. Really, it's been – it's closer to the latter than to the former. It‟s really the result of the application of lessons learned from drilling over the history of drilling in the Gulf. When I was a young landman in the late ‟70s working in Lafayette, Louisiana, I can remember a geologist showing me a seismic plot on the wall that showed – you couldn‟t – it showed salt dome and you couldn't see what was below the salt domes. And he said, geologists believe that below these salt domes, though which we can‟t see with our current seismic tools – this being 77 – there would be additional strata that would contain oil or gas. But we can‟t get there. We don't have the technology to drill out there.
You know, he was probably partly prophetic. And from the standpoint that over the intervening years, a combination of technology, research and exploration effort sort of progressively moved the frontier. And that really, I think, is the story of the Gulf deepwater more than it's because of moratoria or it's because of this or that.
58:39 MR. FELMY: If I could also add – this is John Felmy – I think part of the outcome of the deepwater opportunities that we've had is due to probably one of the most successful pieces of energy legislation that's ever been passed. And that was the Deepwater Royalty Relief Act of 1995, which really jumpstarted a nascent industry in a time of very low crude oil prices and an inability to take these projects forward. And so that 5-year program really was a success in terms of helping the industry move forward, develop the technology and actually develop these resources that are going to be so vitally needed for the U.S.
59:19 MR. RANGER: And to develop, I think, engineering and technological leadership that has involved really exports because a lot of the expertise developed in these deepwater areas is American. It's developed through these projects in the Gulf of Mexico. It's been applied elsewhere in the world. But the source expertise, a lot of the companies engaged in the lines of business – not all of them certainly – but many of them are American. So this has been not only providing jobs associated with the production to the Gulf of Mexico and to the U.S. but jobs and expertise, high-value jobs associated with the technology.
59: 57 MS. VAN RYAN: All right, we just passed an hour. I think we're going to shut down now. I want to thank you all for your good questions and for your participation today. If you have any additional questions that you would like someone here to address, please send them to me by e-mail. I'll do my best to get questions answered for you. Continue to read the blog. We're trying to put information up there as frequently as possible. And keep an eye on the blog tomorrow afternoon because we'll have an audio file and a transcript up there for your use.
Thanks everybody. Good hearing your voices.
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