Deepwater Horizon -- BP's Response to Inflated Government Flow Estimates

As the BP oil spill trial approaches the second phase, source control and flow estimates will come to the fore. Phase One of the trial dealt with how we got into this mess, Phase Two will deal with who did what to solve the problem and how big did it finally turn out to be. Given that those who caused the problem were sidelined by the legal ramifications, there is a new cast of characters, even at BP. The key point at issue from the government perspective is how much money in fines it will collect. The politicians of both parties have already outlined how they will spend the money. They and their acolytes in the media have been throwing around an estimate of 4.9 million barrels of oil at either $1,100 or $4,300 per barrel. Rounding up they expect to be able to spend $20 billion.

Fuelfix has a nice story on the BP response from its expert witness. Martin J. Blunt. Here are the key points taken from page 9 of Exhibit One, Part 1 of 2.

There are three other overarching problems in the Government expert reports.

1. Government experts assumed an unchanging outflow path, predetermining a total flow estimate of 5 MMstb (5 million standard tank barrels per day -Ed). The experts who did not use the material balance method -- Dr. Hsieh, Dr. Griffiths and Dr. Pooladi‐Darvish -- took an estimate of the final flow rate before shut‐in,approximately 50,000 stb per day, and assumed that the flow rate during the preceding 86 days was even higher. Of course, simple mathematics dictates that the outcome of a cumulative‐flow calculation based on this assumption will exceed 4.5 MMstb. They justified this approach by assuming that there were no impediments to oil flow in the well‐bore, blow‐out preventer or tubing that might have caused flow to be lower in those preceding days. They did not prove this assumption; indeed, they hardly discussed it. By contrast, the material balance method usedhere is not tied to an assumption about historical flow rates (see Section 3.5).

2. Government experts assumed the reservoir oil was completely connected to the Macondo well, omitting to analyze geological features that the Government's non‐litigation expert consultant said would limit connectivity. None of the Government experts analyzed the evidence from the Macondo geology and seismic analysis that indicates that the oil reservoir was not completely connected to the well. This is a change from prior expert analysis commissioned by the Government. Dr. Hsieh was told by the Government's consultant Prof.Fleming from the University of Texas that the "geological evidence" pointed to "a significant probability of poor connectivity" in the Macondo reservoir.4 The Government estimates therefore have an implicit upward bias from ignoring evidence that some of the oil was likely compartmentalized and hence cut off from flowing to the well (see Section 4.1).

3. Government experts overestimated flow by overstating the pressure depletion in the reservoir. They used an improper conversion from the pressure measurements at the capping stack to the pressure inferred in the reservoir. They did not account for pressure increases as the oil trapped in the well‐bore cooled. The estimates of oil flow by Drs. Kelkar and Raghavan, Hsieh and Pooladi‐Darvish overstated the reservoir pressure depletion that drove the flow. All of these experts used the pressure measurements taken from the capping stack mounted above the blow‐out preventer, as do I. These were used to deduce the bottom‐hole or reservoir pressure. But between the capping stack and the reservoir was a column of trapped oil thousands of feet tall. So the reservoir pressure was higher than at the capping stack -- it had a column of oil sitting above it. This "head" is a function of the density of the trapped oil. The density rose following the shut in. The oil was hot as it flowed from the reservoir to the ocean.

When flow stopped, the oil cooled down, gradually becoming heavier. The Government experts based their calculation on measurements of capping stack pressure increasing slowly over time, but the reservoir pressure was rising faster than they suggest: there was an extra factor -- the weight of oil -- that was also increasing. As we will see below, none of the Government experts presented an analysis accounting for this changing oil density. By assuming the oil was hotter and lighter than it actually was, indeed unfeasibly hot, they end up overestimating pressure depletion, and hence the oil flow (see Section 4.3).

The net result of his work indicates a conservative estimate of 3.26 million stock tank barrels (stb) released less 800,000 barrels collected at the surface. That puts the size of the oil spilled into the Gulf of Mexico at 2.46 million barrels and nicely explains the reason the government could not find one million barrels of "missing oil" in its The Amount and Fate of the Oil report. It never flowed out of the well in the first place. So if BP is not found to be criminally negligent, the fine could be only $1,100 per barrel times 2.46 million barrels, or $2.706 billion. That is quite a large sum, but just a mere fraction of the projected spending by the politicians.

Meanwhile in the 5th Court of Appeals BP has chosen to fight back against what it alleges are claims for non-existent damages being paid out by the settlement administrator, Patrick Juneau. One of Mr. Juneau's deputies, Lionel Sutton III, has already resigned under pressure. And the court has appointed former FBI Director, Louis Freeh, to investigate allegations of misconduct in Juneau's office.

Previously here at AT, I have told you this would be getting good. I was not kidding. Once this was declared a Spill of National Significance (SONS), the government took charge. Now the performance of the government in its duties will become a matter of record in a court of law. Advocates of Big Government must quake in fear of what will be revealed, that the private sector "plugged the damn hole", not Obama and his government lawyers and scientists. There will be real proof that Big Government is NOT the solution to our problems.

Bruce Thompson wrote the first publicly available Management of Change document for the "static kill" procedure that killed the Macondo 252 well on August 4, 2010, more than a month before the government's relief well was completed.

 

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