WTI Crude

Loading...

Brent Crude

Loading...

Natural Gas

Loading...

Gasoline

Loading...

Heating Oil

Loading...

Rotate device for more commodity prices

Gulf of Mexico Oil Spill: Who to Believe?

As we enter a week without further news as to whether BP's efforts to place a containment vessel over the oil leak in the subsurface, two news articles were published...

http://apnews.myway.com/article/20100514/D9FMI8SG1.html

Discusses that more than 35% of the spill has evaporated and 10% has been sopped up.  This because the crude is light, meaning it is dominated by short chain hydrocarbons, and thus much lighter than water with a strong propensity to float.  However, scientists disagree. Although I am sure there is a consensus somewhere that we will hear about shortly, especially if tied to massive research spending by the government or BP.

In any case, the New York Times reports massive 300' subsurface plumes of oil wrecking the biodiversity and flow rates an order of magnitude higher than reported. 

http://www.nytimes.com/2010/05/16/us/16oil.html?hp

No word yet on the exact mechanism on how light end hydrocarbons maintain subsurface thicknesses like this in much denser water for any amount of time.  Thermoclines can't explain it, since the density differences hotter/colder water are an order of magnitude different than water/oil. One interestting note, the NYT makes it appear, without really saying so, that BP is actively obfuscating the rates of flow, which it quotes its own experts, from something ill-defined in the article as the "Pelican Mission" and the researchers, all with doctorates, are not identified as to their expertise.  However, Google identifies one unnamed group as the University of Mississippi's Water and Wetland Research Institute, and it's head, Ray Highsmith, as someone whose specialty is "Community Ecology".  Dr. Samantha Joye has more impressive credentials as specializing in:

"Biogeochemical cycling of nutrients, metals, and organic materials in coastal environments; biogeochemistry of methane hydrate and chemosynthetic habitats; ecosystem and geochemical modeling; microbial ecology, metabolism and physiology; molecular biology; global nitrogen cycle, global methane cycle".

In any case, University Scientists, whose best interest is in finding catastrophe and the funding it will generate seem to be on the job, while those working for BP, whose best interest is in finding smaller impact, are also on the job, and the rest of us fed news written by folks with apparent agendas. 

Previously, I wrote that 5,000 BOPD was a reasonable rate.  It seems to me to be much more believable than the 100,000 BOPD rates quoted elsewhere.  As one reader stated, at 100,000 BOPD, you should be buying BP stock, not shorting it.  In any case, the containment dome, if successful, would give us real rates, not speculation. 

As an oilman, albeit it one that has only drilled dry holes offshore, and thus not likely to stroll back into that harsh environment, I know first hand that the manufacturing and industrial processes we have today are first rate and our H&SE track record amazing relative to our economic output.  I get queasy about further regulation because it is rarely thought out, is often punitive, and overseen by people that are not objective and neutral, but actually dogmatic and hostile to our industry from a values perspective, which seems absolutely ridiculous... like putting pedophiles in charge of an orphanage.

Perhaps counter-intuitively, the more we regulate and strangulate offshore drilling increases the value of my assets, which are onshore.  It also helps OPEC and other international producers who regularly laugh at our wrong-headed societal antipathy to our home industries, because, in the great American Way, we will still consume, whether we consume US oil or Iraqi oil. Big Oil is not affected much, because they can operate anywhere, but US laws on production are ACTUALLY targeted on independents, who drill 90+% of US wells and produce 80% of US oil and gas.

By. Allen Gilmer




Back to homepage


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News