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Oil Blowout: What Did BP and Halliburton Know, and What/When Did They Tell Us?

As of Friday noon, large quantities of oil are still gushing into the Gulf, and the first slicks are starting to reach the many beaches along the mouth of the Mississippi. Estimates of the size continue to grow — now up to five times again as large as estimated just yesterday (25 times original 1000 bbls/day). See these amazing photos from the Boston Globe.

We still don’t know what caused the blowout and explosion, but the Wall Street Journal is running a story suggesting the cause may have been related to the process Halliburton used for sealing the holes and gaps created during the drilling process.

Regulators have previously identified problems in the cementing process as a leading cause of well blowouts, in which oil and natural gas surge out of a well with explosive force. When cement develops cracks or doesn’t set properly, oil and gas can escape, ultimately flowing out of control. The gas is highly combustible and prone to ignite, as it appears to have done aboard the Deepwater Horizon, which was leased by BP PLC, the British oil giant.

Concerns about the cementing process—and about whether rigs have enough safeguards to prevent blowouts—raise questions about whether the industry can safely drill in deep water and whether regulators are up to the task of monitoring them.

The scrutiny on cementing will focus attention on Halliburton Co., the oilfield-services firm that was handling the cementing process on the rig, which burned and sank last week. The disaster, which killed 11, has left a gusher of oil streaming into the Gulf from a mile under the surface.

Federal officials declined to comment on their investigation, and Halliburton didn’t respond to questions from The Wall Street Journal.

According to Transocean Ltd., the operator of the drilling rig, Halliburton had finished cementing the 18,000-foot well shortly before the explosion. Houston-based Halliburton is the largest company in the global cementing business, which accounted for $1.7 billion, or about 11%, of the company’s revenue in 2009, according to consultant Spears & Associates.

In the meantime, I’ve been thinking about how this unfolded, what BP and the platform operators knew and what government responders, including the Coast Guard, should have been told or figured out. Here’s a back-of-the-envelope outline of the story as it has unfolded to the public and what it tell us:

1. A huge explosion occurred [April 20], creating a fireball on the platform that burned for days before sinking. The size of the fireball and the fact it wasn’t burning out suggested large quantities of fuel.

2. From the beginning, there were two possible sources for the fuel. a) On deck storage of diesel fuel used by the platform and b) oil/gas coming from the well through the connecting riser pipe.

3. From the beginning, BP and the Coast Guard told us there were no "spills."

4. After days with the platform engulfed by a huge fireball, the answer seemed to shift to the well as a continuing source of fuel for the fire. That suggested further that whatever mechanisms the platform had for sealing off the well, and the source of the fuel, were not functioning, and

5. Since the safety valves were not functioning, that meant the operators knew they were facing the risk of an extended period in which oil/gas would continue to gush up the well, through the pipe and out the platform. At that point, the risk of a massive, uncontrolled gush of oil into the Gulf should have been apparent.

6. Given this likely knowledge, the moment the platform collapsed and sank, they would have known that there existed a huge risk that the pipe would rupture from the platform, and that the oil would begin to gush, out of control, from breaks in the riser pipe.

All of this would have been known by BP and should have been guessed by the Coast Guard/and regulators, and yet the story at the time was that there were no spills; when the "leaks" were reported, they were cast as a surprise when the oil was first reported on the ocean surface.

7. Now we’re told that in the normal, no-accident, situation some oil and/or gas always escapes from the moment the drilling pierces into the oil/gas pool, and that there is always a gap between the pipe inserted into the drilled hole and the pipe. We learn the oil/gas will escape through that gap, into the ocean, until the gap is sealed by a process of pumping cement down the pipe, out the bottom to plug the gap. In other words normal off-shore drilling operations always involve unreported leaks of oil/gas into the water.

8. Enter Halliburton. It’s job, worldwide, is to plug the gap between drill hole and pipe to stop the leakage, and to partially close the hole to allow more control over the pressure from oil/gas trying to escape up the pipe. If it doesn’t do this well, the pressure can cause a dangerous surge, and because the gas is highly flammable, there is a danger of a blowout and explosion when the escaping gas/oil reaches the platform.

9. This happened recently in Australia, where a rig also being sealed by Halliburton blew up and was destroyed, while millions of gallons of oil gushed into the ocean. This may not be a rare occurrence; blowouts do occur; we just don’t hear about them except when the explosions are large and easily detected.

A 2007 study by three U.S. Minerals Management Service officials found that cementing was a factor in 18 of 39 well blowouts in the Gulf of Mexico over a 14-year period. That was the single largest factor, ahead of equipment failure and pipe failure.

10. We don’t know what caused this blowout and explosion. But it’s now clear that those who are responsible did not reveal what they knew and are probably still withholding critical information from the public. Information about the potential risks is vital to government responders and affected communities, but as is often the case, it only trickles out when it’s obvious, after we’ve lost critical time in getting ready. Whether the industry is still withholding vital information from the authorities trying to plan for what’s becoming one of the worst environmental disasters in US history, we do not know.

Updates: Locals now asking, what’s worst case scenario?
Henry Waxman’s Energy Committee to question Halliburton about cementing at Deepwater Horizon rig
Halliburton issues press release; little information:

As one of several service providers on the rig, Halliburton can confirm the following:

* Halliburton performed a variety of services on the rig, including cementing, and had four employees stationed on the rig at the time of the accident. Halliburton’s employees returned to shore safely, due, in part, to the brave rescue efforts by the U.S. Coast Guard and other organizations.
* Halliburton had completed the cementing of the final production casing string in accordance with the well design approximately 20 hours prior to the incident. The cement slurry design was consistent with that utilized in other similar applications.
* In accordance with accepted industry practice approved by our customers, tests demonstrating the integrity of the production casing string were completed.
* At the time of the incident, well operations had not yet reached the point requiring the placement of the final cement plug which would enable the planned temporary abandonment of the well, consistent with normal oilfield practice.
* We are assisting with planning and engineering support for a wide range of options designed to secure the well, including a potential relief well.

From AP: New drilling on hold as Gulf oil spill washes up
NYT: Oil from spill reported to have reached coast
At HuffPo — continuing coverage and great pictures/p>
Article on the Australia blowout last year

BBC, April 23: Coast Guard says no leaks yet


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John has been writing for Firedoglake since 2006 or so, on whatever interests him. He has a law degree, worked as legal counsel and energy policy adviser for a state energy agency for 20 years and then as a consultant on electricity systems and markets. He's now retired, living in Massachusetts.

You can follow John on twitter: @JohnChandley