You’ll recall that all during the summer I talked about BP’s number one goal
with its blowout well: getting it shut in without measuring the flow. They accomplished just that on July 13 when, as the Washington Post reported
in August, Energy Secretary Steve Chu ordered the “well integrity test” and the well was shut in, before the elaborate containment system, that could have measured the flow, was completed. BP successfully shut in the well without measuring the total flow, and they did it on a government order. You’ll also recall that I was critical of the operation not only because the flow had never been measured, but also because their stated procedure risked further damage.
Why was this important? There are several reasons. First and foremost, to hide the flow rate, BP exceeded the safe working pressure of the wellhead, risking mechanical damage that could have caused uncontrolled, and uncontrollable flow from the well. Second, there was serious risk of an underground blowout from suspected damaged casing possibly caused by the earlier failed top kil attempted on the Memorial Day weekend. Third, by hiding the flow rate, BP could argue later argue for a lower flow rate than what the government estimated. That’s exactly
what has now happened. In a draft report
issued by the President’s spill commission, BP lawyers argued that the flow rate from the well was 20 to 50 percent lower than the official government flow rate, that the government estimate was inaccurate and overblown.
SInce the blowout on April 20th, BP has never publicly disclosed it’s estimate of the flow rate. In fact, in the early days of the disaster, BP representatives actually stood mute on the same platform with Coast Guard Admiral Mary Landry, as she unknowingly lied to the American public that the well was not flowing, then flowing 1,000 barrels per day, then 5,000. BP knew those assertions were completely false, since we now know that they had ROVs at the wellhead desperately trying to get the BOP shut in even as Landry was reporting that the well was not flowing. Since the EPA fines are determined by the number of barrels released into the water, BP’s problem could be increased or shrunk by billions of dollars, depending on the final flow rate determination. Since BP was successful in hiding the rate, it will now be up to the courts to make the judgment. That will take years, if not decades to accomplish, as well as millions of dollars in legal expenses. In the meantime, untold damage to the Gulf’s ecosystems remain, even as public interest has faded after a massive government effort to assure the public that all is well even though it’s not.
At the risk of saying I told you so…I told you so.
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Bob Cavnar is a 30-year veteran of the oil and gas industry with deep experience in operations, start-ups, turn-arounds, and management of both public and private companies. He was most recently President and Chief Executive Officer of Milagro Exploration, a large, privately held oil and gas exploration firm based in Houston, Texas with operations along the Texas, Louisiana, Mississippi Gulf Coasts, and offshore in the Gulf of Mexico. Cavnar holds a Master of Business Administration degree from Southern Methodist University and completed the Program for Management Development at the Harvard Business School.
He blogs at dailyhurricane.com.