Deepwater Horizon: No Clue How to Stop It and No Clue About the Size of the Problem

CNBC.com has probably as good a summary as anyone about the current state of affairs with the gulf oil well disaster. Unfortunately, the article only serves to underscore the fact that nobody either within BP (BP) or the government has any good handle on the situation.

Consider the fact that there is really no accurate estimate of the amount of oil and gas escaping:

The failure of the most recent effort — known as a top kill, which BP officials expressed great optimism about before trying it — has underlined the gaps in knowledge and science about the spill and its potential remedies. Ever since the explosion and the resulting leak, estimates of how much oil is escaping have differed by thousands of barrels a day. Both government and BP officials said on Sunday that they had no accurate idea of how much oil was spilling into the gulf.

“We honestly do not know,” Mr. Dudley said on “Meet the Press.” “We’ve always found this a difficult oil to measure because of the huge amounts of gas in the oil.”

“The one thing about this method that we’re about to go into — it will and should measure the majority of the flow,” he said.

Mr. Dudley said that the original estimates by the government and BP officials of 5,000 barrels a day were based on satellite pictures and that the current estimate of 12,000 to 19,000 barrels was “issued without an actual flow measurement.” If the leak is not contained or slowed and continues at the higher estimated flow rate of 19,000 barrels a day until Aug. 20 — four months after the accident — it could amount to close to 2.3 million barrels spilled into the gulf.

The article points out that the latest plan to fit a containment device over the well and capture as much of the escaping contaminants as possible and pump them into a vessel on the surface carries no guarantee of success. Actually, it seems to be a variant on the first containment plan which failed miserably, but I guess you have to give them credit for trying.

No mention of the nuclear option in the article. What does seem to be the underlying tone is that this isn’t going to be completely solved or maybe solved at all until relief wells can be completed and used to block the leaks from the existing well. August is still the time frame for that one.

August that is unless some Category 4 or 5 hurricane decides to blow through.

About Tom Lindmark 401 Articles

I’m not sure that credentials mean much when it comes to writing about things but people seem to want to see them, so briefly here are mine. I have an undergraduate degree in economics from an undistinguished Midwestern university and masters in international business from an equally undistinguished Southwestern University. I spent a number of years working for large banks lending to lots of different industries. For the past few years, I’ve been engaged in real estate finance – primarily for commercial projects. Like a lot of other finance guys, I’m looking for a job at this point in time.

Given all of that, I suggest that you take what I write with the appropriate grain of salt. I try and figure out what’s behind the news but suspect that I’m often delusional. Nevertheless, I keep throwing things out there and occasionally it sticks. I do read the comments that readers leave and to the extent I can reply to them. I also reply to all emails so feel free to contact me if you want to discuss something at more length. Oh, I also have a very thick skin, so if you disagree feel free to say so.

Enjoy what I write and let me know when I’m off base – I probably won’t agree with you but don’t be shy.

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