Letter To Congress: Stop The Off-Shore Drilling Moratorium

There is something noble about dedicating one's life to building a family-owned business. It is a huge investment of time, money, energy, and human emotion. However, one family's dream of helping power America has been shattered by President Obama's six-month moratorium on off-shore drilling. In the letter below, citizens Cliffe Laborde and Peter Laborde ask Senator Mary Landrieu (D-LA) and Senator David Vitter (R-LA) to intervene on behalf of their state and their country. They ask that their Senators do whatever it takes to lift the moratorium for the sake of protecting the livelihoods of thousands of American citizens.

The simple fact is that an overwhelming majority of the people working in America's oil and gas industry are honest, hard working Americans that love their country. They're sick and tired of being demonized by this Administration because one company, British Petroleum, made irresponsible decisions that led to a massive oil spill off the Gulf Coast. This letter captures the zeitgeist of how oil and gas workers feel about what's going on in America. It's a compelling story and we invite you to read on.

Letter From Laborde Marine To Senator Mary Landrieu (D-LA) And Senator David Vitter (R-LA)
June 4, 2010


The Honorable Mary Landrieu
United States Senator
724 Hart Senate Office Building
Washington, D.C. 20510

The Honorable David Vitter
United States Senator
516 Hart Senate Office Building
Washington, D.C. 20510

RE: Moratorium on Deep Water Drilling


Dear Senators Landrieu and Vitter,

The B.P. blowout and its aftermath constitute a continuing tragedy of gigantic proportions, both for the nation as a whole, and for Louisiana in particular. However, the Administration’s moratorium on deep water drilling is ill-advised and compounding the tragedy.

Over 50,000 wells have been drilled in the Gulf of Mexico with no environmental incidents of any consequence. Of that number, 4,000 were deepwater wells (drilled at a depth greater than 1,000 feet), and over 700 were ultra-deepwater wells (over 5,000 feet in depth); none of these had any problems. These impressive statistics establish that the offshore drilling industry has an excellent safety record. This record was achieved by advances in drilling technology, coupled with an industry culture of exceptional and safe performance. No one in the industry wants to see our water polluted with oil, and no one wants anyone injured or killed in the production of energy for our nation. The fact that the MMS conducted a safety assessment of each of the deepwater rigs in the days following the blowout and found no significant problems is testament to the industry’s commitment to safe operations.

While the investigation into the BP blowout is still underway, it is apparent that the cause of this tragedy was a series of human errors in judgment, with catastrophic results. The technology and processes were in place to prevent this accident, but they were circumvented to expedite completion of the project. To shut down the entire industry is overkill and analogous to shutting down all commercial air traffic after one plane crash due to pilot error. It is a decision that makes no sense and should be reversed.

Laborde Marine is a family-owned business headquartered in New Orleans which employs over 200 people. Over the last three years, we have built in US shipyards or acquired new US built and flagged vessels primarily designed to service the deepwater drilling market. We own and/or operate 21 vessels, all built in US shipyards. We have invested over $150 million to build or acquire our fleet of vessels. Our annual payroll is over $14 million. Now the US government is telling us to simply “park” our vessels for at least six months. Never in the history of the United States has the government decided to shut down an entire industry for six months. That decision seems to be a knee-jerk reaction based on an emotional response to the spill, and made without a full appreciation of the consequences which will adversely impact tens of thousands of hard working people who are engaged in the industry. It is a decision that advances the Administration’s agenda for transferring to a clean/alternative energy- economy, but at an enormous cost to the thousands of us engaged in offshore exploration and development.

If the moratorium on deep water drilling is not lifted, the 33 semi-submersible rigs and/or drillships affected will simply go to other countries where they will be well received, such as Brazil, the countries off West Africa, and Southeast Asia. They will not return to the US Gulf of Mexico for years, if ever. The damage to our industry will be irreversible. And the companies most adversely affected by this plan are the US based service companies — particularly the marine/boat companies which built their vessels in US shipyards, as required by US law to work in US waters. For us to move internationally, we will have to compete with vessels built in foreign yards at a much lower cost and often subsidized by foreign governments. It will not be a level playing field. The moratorium may well be the death-knell for US businesses engaged in the energy service sector. The major and independent operators — the “oil companies” — are not nearly as adversely affected by the moratorium as service firms, inasmuch as the operators will still own the oil in the ground, and can come back later, after the moratorium is lifted and oil prices have increased, and then produce the oil. The local service companies may not be around to come back.

We are proud to be a part of the offshore industry, doing our small part to assist in the production of energy for our nation. We believe that we are enhancing the national security of the United States by lessening its reliance and dependency on foreign sources of oil. While alternative energy is a laudable goal, it will be decades before alternative fuels make a dent in our country’s needs. The transition to alternative fuels must be done over time — not by a six month moratorium that may well put us out of business. This is the United States of America, where reason and sound judgment have always been the foundation of our system of government — not poorly thought out and capricious reactions that destroy the livelihoods of thousands of its citizens in order to promote a partisan political agenda. Please do whatever it takes to lift the moratorium on deep water drilling immediately, before irreparable harm to our nation’s and state’s economy occurs.


Sincerely,

Cliffe F. Laborde
J. Peter Laborde, Jr.


Cc: Governor Bobby Jindal
Louisiana Congressional Delegation

The Gulf Disaster: Is Failure an Option?

Have you ever heard the phrase “rocket scientist” in reference to someone really smart, someone who can solve problems? Well, we are pleased to have a “rocket scientist”—or at least an astronaut and a scientist—on board to help shed light on some of the current issues facing America—especially energy. We welcome Harrison Schmitt, former New Mexico State Senator and Apollo Astronaut.

As is pointed out here, no matter how many rocket scientists one has working on a project, accidents can still happen. Here, Harrison Schmitt draws comparisons between how NASA handled a crisis and how the federal government is handling the BP/Gulf disaster. He offers and interesting perspective and shows that it is possible to do it right—even for government agencies.

No Analogy Between The Gulf Oil Spill Crisis And Apollo 13
President Obama’s Administration and its supportive media repeatedly use our 1970 Apollo 13 experience as analogous to the effort to contain and cap the Deepwater Horizon oil spill in the Gulf of Mexico. Not hardly! The rescue of Astronauts Jim Lovell, Fred Haise, and Jack Swigert after an oxygen tank explosion on their spacecraft illustrates how complex technical accidents should be handled in contrast to the Gulf fiasco. Nothing in the government’s response to the blowout explosion on the Deepwater Horizon and its aftermath bears any resemblance to the response to the Apollo 13 situation by the NASA of Apollo and its Mission Control team at the Manned Spacecraft Center in Houston.

“Failure was not an option” for Gene Kranz and his Apollo 13 flight controllers and engineers. In contrast, failure clearly has been an option for President Obama and those claiming to have been on top of this situation "from day one" in his White House and in the Departments of Interior, Homeland Security, and Energy. With no single, competent, courageous, and knowledgeable leader in charge of a comparably competent, courageous, and knowledgeable team as we had with Apollo 13, the Administration has been doomed to failure from the start. The President, without any experience in real-world management of anything, much less a crisis, has no idea how to deal with a situation as technically complex as the Gulf oil spill.

Whatever may be the culpability of British Petroleum and its federal regulators in the accident, it has been left to BP engineers and managers and to Gulf State officials to respond as best they can in a regulatory environment that is politically charged, incompetent, fearful, and hesitant.

Absolutely no reason exists to assume that any part of the Federal Government has engineering expertise comparable to the petroleum industry that can be applied to this or any future energy-related crisis. Certainly, White House Chief of Staff Rahm Emanuel, Interior Secretary Ken Salazar, Homeland Security Secretary Janet Napolitano, and Energy Secretary Steven Chu have no more experience in these matters than does the President.

Salazar’s empty threat to “push BP out of the way” has no basis as a realistic option and best illustrates the floundering of the Obama Administration. Indeed, from "day one," the expertise of the entire U.S. and British drilling and production industry, with a single experienced engineering manager in charge, should have been mobilized to combat this spill. It still is not too late to start doing it right.

A more appropriate analogy from the Apollo era would be the recovery from the tragic fire during a pre-launch test on January 27, 1967, that took the lives of astronauts Gus Grissom, Ed White, and Roger Chaffee. The Apollo 204 fire occurred in the clearly recognized crisis atmosphere of the Cold War in which America raced to demonstrate to the world the superiority of freedom over the communist oppression of the Soviet Union. The Deepwater Horizon explosion took place in the equally apparent crisis of America’s dependence on sources of oil from foreign nations governed or intimidated by our enemies or economic competitors. There, however, the validity of the 204 fire analogy ceases.

The NASA's response to the 204 fire was to rapidly implement its previously well-formulated, objective investigation of its causes, both technical and managerial. Managerial responsibilities were identified and George Low and his engineering team made appropriate changes without a prolong exercise in finger pointing or the delays of another Presidential, buck-passing "commission." NASA of that day moved forward and even accelerated the Apollo effort to its successful conclusion. Apollo 8’s Frank Borman, Jim Lovell, and Bill Anders orbited the Moon less than two years after the 204 fire. Seven months after that, on July 20, 1969, Apollo 11’s Neil Armstrong and Edwin Aldrin, with Mike Collins in orbit overhead, landed on the Moon.

The lessons from the 204 fire were applied and we moved on. In contrast, President Obama’s and his Administration’s otherwise rambling response to the Deepwater Horizon explosion has been to stop off shore oil exploration by the United States. How misguided and, indeed, how either ignorant or devious can our President be!

President Obama has shown repeatedly that the best interests of the American people are a lower priority than his ideological goals to change America from what it has been, to some mystical, socialist utopia with an energy-based standard of living equivalent to that of the late 1800s. As if the Administration could not make its ineffective, disjointed response to the Deepwater Horizon accident any worse, it did not even use preciously established sea surface burn-off and dispersant procedures to minimize the effects of the spill. Then, it has inexcusably delayed approving and assisting in Louisiana Governor Bobby Jindal’s request to protect the State’s shores and wildlife habitats with offshore sand barriers, as unnecessary as having to make that request should have been. And this is the government that Congress and the President want to run healthcare, immigration, banking, carbon emissions, auto manufacturing, and everything else in American life?

The geologists, engineers, and on-site managers responsible for the Deepwater Horizon drilling effort understood that drilling to an oil reservoir through 13,000 of rock in 5000 feet of seawater would be very difficult. They knew that their geophysically defined target, typical of Gulf petroleum reservoirs, would be a complex mix of crude oil, natural gas, and brine contained in porous and permeable rock. Because of the rock and water depth, the reservoir also would be under very high pressure. In this situation, a reliable blowout preventer, a crimping device installed on the pipe near the floor of the sea, would be essential to reduce the risk of both a spill and potential explosion on the Deepwater Horizon.

Current information indicates that BP installed a defective blowout preventer and does not have a deep water, robotically emplaced, crimping technique as a backup to the blowout preventer. Essential to the prevention of future accidents will be an objective, complete technical and managerial investigation of why a geological and engineering situation of known risks spun out of control. The primary question is, will such an investigation be possible in the politically charged, adversarial “boot on the neck” atmosphere created by President Obama and his team? Imagine if such an atmosphere had surrounded the 204 fire investigation and recovery.

Responsibility for the Deepwater Horizon accident ultimately lies with the chaotic regulatory environment for petroleum exploration created over recent decades by Congress and the Department of Interior. Will we learn anything about regulatory overkill from this tragic loss of eleven lives and disruption of business and employment in the Gulf? Elimination of access to most on-shore and near-shore oil production has driven American exploration away from more easily discoverable and produced resources and into the much more dangerous and technically challenging deep waters of the seas and oceans. Even then, drilling and production accidents are exceedingly rare in spite of the geological, engineering, and weather-related difficulties explorers and producers face as a consequence of misguided restrictions.

Long-term, history reminds us that naturally and accidentally released oil in the oceans disappears due to bacterial action. Remember that the fuel oil blackening of beaches of the world from World War II ship destruction disappeared after only a few years and ocean life survived. The Gulf oil spill will not be this Nation's most serious environmental crisis: World War II tops it by orders of magnitude in more than just this respect.

If America and freedom are to survive indefinitely, the next Congress must begin to restore sanity and intelligence to national energy policy. Until economically competitive alternatives become fully feasible, fossil fuels will remain the mainstay of our economy. Our dependence on unstable foreign sources of oil has become one of our greatest national security vulnerabilities that only domestic production can solve in the next 50 years. The 2010 elections become a critical starting point to bring rational, constitutional, America-first thinking back into the Federal Government.



Harrison H. Schmitt is a former United States Senator from New Mexico as well as a geologist and former Apollo Astronaut. He currently is an aerospace and private enterprise consultant and a member of the new Committee of Correspondence.

Green-Think: It Is Less About The Environment And More About Using Environmental Accidents To Advance Social And Political Agendas

With the daily news continuing to focus on the oil spill in the Gulf, there is ongoing discussion as to what it all means. One suggestion is that the environmentalists are grieved. Surely there is truth to that as everyone—oil producers included—is. But there is much more going on in the background.

We were pleased to receive the following insights from Steven Milloy, author of Green Hell: How Environmentalists Plan to Control Your Life and What You Can Do to Stop Them , widely known for his popular website: junkscience.com. This piece is bound to stir up some controversy while offering substantial food-for-thought.

If you are not familiar with Steven Milloy, we invite you to listen to CARE’s Conference Call recording when he was our featured guest, March 2009.

Greens Love Oil Spills
If you think that environmentalists are lamenting the Gulf oil spill, think again.
President Obama discomfited the greens in March when he announced that he would expand opportunities for offshore drilling. Although not a sincere policy proposal, the President’s announcement nonetheless worried the greens as they thought that they might have to make a concession on offshore drilling to get oil industry support for a climate bill.

Although the President reiterated his support for more drilling after the spill, Congressional Democrats, environmental groups and the Center for American Progress have all publicly breathed a sigh of relief. Their view is that the spill not only strengthens their hand against more drilling, but increases the likelihood of getting a climate bill through the Senate.

“Environmentalists hope the BP spill turns into a game changer that will help propel the climate legislation’s passage much like the Exxon Valdez oil spill led to the 1990 Clean Air Act amendments,” reported Climatewire (May 4).

This is not likely to be the case since the public of 2010 is much more hip to the green agenda than it was in 1990, but the Climatewire report provides clear insight into green-think. They don’t care about the planet’s environment so much as they do about how they can use environmental accidents to advance their social and political agenda.

Not convinced?

Consider the puzzlingly slow response of the Obama administration to the spill.
Although Homeland Security chief Janet Napolitano claims the government has been involved since “day one,” in fact, that “day one” response was limited to search and rescue efforts. Days after the spill, White House Press Secretary Robert Gibbs dismissed the severity of the accident, stating, “I don’t honestly think it opens up a whole new series of questions, because, you know, in all honesty I doubt this is the first accident that has happened and I doubt it will be the last.”
As the spill got worse, threatening coastal areas and the administration, the administration remained content to allow the inept BP—responsible for the largest oil spill on Alaska’s North Slope in 2006—to putter around with unsuccessful efforts to repair the leak and contain to the spill.

For an administration that claims to be so sensitive to the environment, its reaction was curious. Why didn’t the administration rush to action? If your house is catches fire, does the 911 operator respond to your call for help with, “Let’s wait and see if you can put it out before we send a fire truck.”

Interestingly, a Clinton administration-era plan calls for the immediate use of fire booms in case of a major Gulf oil spill, according to a Mobile Press-Register report. A single boom (costing only a few hundred thousand dollars) towed by two boats can burn 1,800 barrels of oil an hour, “raising the possibility that the spill could have been contained at the accident scene 100 miles from shore.”

But there were no booms onsite or anywhere close. It took federal officials more than a week to even conduct a test burn. Booms won’t be onsite until Wednesday or Thursday of this week.

It’s hard to know for sure whether this all simple lameness on the part of government, or whether the Obama administration is in no rush to prevent a disaster because it perceives an oil-drenched Gulf Coast as a way to advance cap-and-trade and anti-oil agendas. But why would it let a good crisis go to waste?


Steve Milloy publishes JunkScience.com and is the author of Green Hell: How Environmentalists Plan to Control Your Life and What You Can Do to Stop Them (Regnery 2009).

Transocean Rig Disaster: The Well From Hell

It has been a tough month for energy on the disaster front. The news media seems infatuated with the off-shore oil spill and rig blow out. For all the focus, they do not really offer a comprehensive overview of what happened—though truly it will be weeks, if not months before the truth is really known. We cast the net to our experts and found the following technical, thoughtful and understandable review from one of our favorite energy experts: Byron King.

As you know by now, the drilling vessel Deepwater Horizon exploded, burned and sank last week, with the loss of 11 workers and injuries to many more. What happened? What's happening now? What's going to happen? He’s been working to piece things together.

What do you think? Does this help you understand? Does it change you thoughts on off-shore drilling?

An Ill-fated Discovery
According to news accounts, at about 10 p.m. CDT last Tuesday, Deepwater Horizon was stable, holding an exact position in calm, dark seas about 45 miles south of the Louisiana coastline. Water depth in the area is 5,000 feet. The vessel manifest listed 126 souls on board.

Deepwater Horizon was finishing work on an exploration well named Macondo, in an area called Mississippi Canyon Block 252. After weeks of drilling, the rig had pushed a bit down over 18,000 feet, into an oil-bearing zone. The Transocean and BP personnel were installing casing in the well. BP was going to seal things up, and then go off and figure out how to produce the oil -- another step entirely in the oil biz.

The Macondo Block 252 reservoir may hold as much as 100 million barrels. That's not as large as other recent oil strikes in the Gulf, but BP management was still pleased. Success is success -- certainly in the risky, deep-water oil environment. The front office of BP Exploration was preparing a press release to announce a "commercial" oil discovery.

This kind of exploration success was par for the course for Deepwater Horizon. A year ago, the vessel set a record at another site in the Gulf, drilling a well just over 35,000 feet and discovering the 3 billion barrel Tiber deposit for BP. So Deepwater Horizon was a great rig, with a great crew and a superb record. You might even say that is was lucky.

But perhaps some things tempt the gods. Some actions may invite ill fate. Because suddenly, the wild and wasteful ocean struck with a bolt from the deep.

The Lights Went out; and Then...
Witnesses state that the lights flickered on the Deepwater Horizon. Then a massive thud shook the vessel, followed by another strong vibration.

Transocean employee Jim Ingram, a seasoned offshore worker, told the U.K. Times that he was preparing for bed after working a 12-hour shift. "On the second [thud]," said Mr. Ingram, "we knew something was wrong."
Indeed, something was very wrong. Within a moment, a gigantic blast of gas, oil and drilling mud roared up through three miles of down-hole pipe and subsea risers. The fluids burst through the rig floor and ripped up into the gigantic draw-works. Something sparked. The hydrocarbons ignited.

In a fraction of a second, the drilling deck of the Deepwater Horizon exploded into a fireball. The scene was an utter conflagration.

Evacuate and Abandon Ship
There was almost no time to react. Emergency beacons blared. Battery-powered lighting switched on throughout the vessel. Crew members ran to evacuation stations. The order came to abandon ship.

Then from the worst of circumstances came the finest, noblest elements of human behavior. Everyone on the vessel has been through extensive safety training. They knew what to do. Most crew members climbed into covered lifeboats. Other crew members quickly winched the boats, with their shipmates, down to the water. Then those who stayed behind rapidly evacuated in other designated emergency craft.

Some of the crew, however, were trapped in odd parts of the massive vessel, which measures 396 feet by 256 feet -- a bit less than the size of two football fields laid side by side. They couldn't get to the boats. So they did what they had to do, which for some meant jumping -- and those jumpers did not fare so well. Several men broke bones due to the impact of their 80-foot drop to the sea. Still, it beat burning.

With searchlights providing illumination, as well as the eerie light from the flames of the raging fire, boat handlers pulled colleagues out of the water beneath the burning rig. In some instances, the plastic fittings on the lifeboats melted from the heat.

The flames intensified. Soon it was impossible for the lifeboats to function near the massive vessel. The small boats moved away from the raging fountain of fire fed by ancient oil and gas from far below.

The lifeboat skippers saved as many as they could find -- 115 -- but couldn't account for 11 workers who were, apparently, on or around the drill deck at the time of the first explosion. Nine of the missing are Transocean employees. Two others work for subcontractors.

Damon Bankston to the Rescue
Fate was not entirely cruel that night. Indeed, a supply boat was already en route to the Deepwater Horizon. It was the Tidewater Damon Bankston, a 260-foot long flat-deck supply vessel.

Damon Bankston heard the distress signal. Her captain did what great captains do. He aimed the bow toward the position of Deepwater Horizon. Then he tore through the water, moved along by four mighty Caterpillar engines rated at 10,200 horsepower. Soon, the Damon Bankston arrived on scene, sailed straight into the flames and joined the rescue.

Meanwhile, Coast Guard helicopters lifted off from pads in southern Louisiana, and Coast Guard rescue vessels left their moorings. "You have to go out," is the old Coast Guard saying. "You don't have to come back."

The helicopters flew in the black of night toward a vista of utter disaster. Arriving on scene, the pilots watched in awe as columns of flame shot as high as a 50-story building. The helicopters were buffeted by blasts of super-heated wind coming from the flames, while chunks of soot the size of your hand blew by.

The pilots hovered in the glow of the blazing rig, while Coast Guard medics fast-roped down to the deck of Damon Bankston . The medics quickly assessed the casualties, strapped critically injured crewmen to backboards and hoisted them up to the helicopters. Then the pilots turned north and sped ashore to hospitals.

Uninjured survivors returned to land on the Damon Bankston. And others came out to fight the blistering flames.

But the Deepwater Horizon wasn't going to make it. The situation deteriorated, to the point of complete catastrophe. The ship was lost.

At about 10 a.m. CDT on Thursday morning, 36 hours after the first explosion, the Deepwater Horizon capsized and sank in 5,000 feet of water. According to BP, the hulk is located on the seafloor, upside-down, about 1,500 feet away from the Macondo well it drilled.

Still Spilling Oil
We were told that the oil well drilled by the Deepwater Horizon was sealed in. The "official" word was that the well wasn't gushing oil into the sea. My sources were no less than U.S. Coast Guard Rear Adm. Mary Landry, of the New Orleans district, as quoted in The New York Times.

But over the weekend, Rear Adm. Landry and The New York Times reported that the well IS leaking oil, at a rate of about 1,000 barrels per day.

The on-scene information comes from remotely operated underwater robots that BP and Transocean are using to monitor the well and survey all the other wreckage of the Deepwater Horizon. There's now a large amount of equipment and pipe and a myriad of marine debris on the seafloor near the well. It's a mess.

Apparently, the blowout preventer is not controlling the flow of oil. According to Transocean, the blowout preventer on Deepwater Horizon was manufactured by Cameron Intl. (CAM: NYSE).

What happened? We don't know that just yet. Earlier reports that underwater robots sealed the blowout preventer were wrong. It's possible that the blowout preventer is only partially closed. We'll find out, eventually. Meanwhile, BP and Transocean have announced that they will make another effort to activate the blowout preventer. They need to stop that oil.

BP is also preparing to drill one or more relief wells to secure the site permanently. BP has mobilized the drilling rig Development Driller III, which is moving into position to drill a second well to intercept the leaking well. With the new well, the drillers will inject a specialized heavy fluid into the original well. This fluid will secure and block the flow of oil or gas and allow BP to permanently seal the first well.

Riser Problems?
According to the Coast Guard and BP, oil is leaking from two spots along what is left of the riser system. Here's a schematic view:



Originally, the risers (represented by the blue line in the graphic above) were affixed to the blowout preventer on the seafloor, and extended 5,000 feet straight up to the "moon pool" of the Deepwater Horizon. When the drilling vessel sank, it took the riser piping and bent it around like a pretzel.

The remnants of the riser system now follow a circuitous underwater route. According to BP, the risers extend from the wellhead up through the water column to about 1,500 feet above the seabed. Then the riser system buckles back down toward the seafloor. (Frankly, I'm astonished that it all held together as well as it has. It's a credit to the manufacturer, which I'll discuss below.)

According to the Transocean website, the riser devices on the Deepwater Horizon were manufactured by VetcoGray, a division of General Electric Oil & Gas. The specific designation is a "HMF-Class H, 21-inch outside diameter riser; 90 foot long joints with Choke & Kill, and booster and hydraulic supply lines."

Here's a photo of something similar. These are Vetco risers sections that I saw on another vessel, the Transocean Discoverer Inspiration, when I visited that ship last month:

The different color stripes on the risers indicate differing amounts of buoyancy. The idea is to put heavy riser pipe down at the bottom, connected to more buoyant risers above. The buoyancy keeps the entire riser system in more or less neutral buoyancy, so that the drill ship doesn't have to somehow hoist up the huge weight of all that pipe.

As you can see, there's a large-diameter pipe in the middle of each riser. That pipe is then encased in a buoyant foam substance. The risers are bolted together at the flange sections. The bolts are about as big as the arm of a very strong man. The nuts, which tighten things down, are the size of paint cans.

After the risers are assembled and hanging down from the drilling vessel, the drilling personnel lower and raise drilling pipe through the large-diameter center riser pipe. All the drilling mud stays inside the drill pipe on the way down hole, and inside the riser pipe on the return.

On the side of the riser sections, you can see smaller-diameter pipes. These are choke & kill, booster and hydraulic pipe components. The pipes run parallel to the large-diameter inner pipe. These pipe systems run down to the blowout preventer on the seafloor.

The idea is to keep the drilling process an enclosed system. All the "drilling stuff" -- the drill-pipe, drilling-mud and drill-cutting returns -- stays inside the large-diameter pipe. The smaller pipes hold fluid to transmit hydraulic power and help control drilling. In particular, the pipes on the side aid in communicating with and controlling the blowout preventer.

Technical Specs
Ideally, when the risers are working as intended, nothing leaks out into the sea. Then again, you're not supposed to twist and bend the riser sections like a pretzel. So how strong is a riser system? Extremely strong, actually.

According to technical literature from GE Oil & Gas, the riser equipment is "designed for use in high-pressure, critical service and deep-water drilling and production applications." The pressure-containing components are rated for working pressures of 15,000 psi. That's the same as the Cameron blowout preventer on the Deepwater Horizon. The materials used in risers have exceptional tensile and bending load characteristics.

According to Vetco paperwork that I've seen, the Class H riser sections have a 3.5 million pound load-carrying capacity. That's the equivalent weight of about four fully fueled Boeing 747s. These risers are super strong.

Still, it's not just any one single piece of riser section that does it all. These sections all get bolted together, for 5,000 feet in this case. The riser sections all have to work together as a system. The whole string is only as strong as the weakest spot. And yes, even the strongest steel will break if you apply enough stress.

It all has to work together. You've got the riser sections, along with things called HMF flanged riser connectors. Then there are HMF riser joints; flex joints; telescopic joints; and, near the top, things called "fluid-bearing, nonintegral tensioner rings." Together, these all comprise the marine riser system.

In general, the riser components compensate for heave, surge, sway, offset and torque of the drilling vessel as the ship bounces around on the sea surface. The bottom line is to maintain a tight seal -- what's called "integrity" -- between the subsea blowout preventer stack and the surface during drilling operations.

Down at the bottom, at the seafloor, the risers are connected to the blowout preventer by a connector device. The GE-Vetco spec is for a device that accommodates 7 million foot-pounds of bending load capacity. That's about eight fully fueled Boeing 747s.

What's the idea? You want a secure connection between the high-pressure wellhead system and the subsea blowout preventer stack. That's where mankind's best steel meets Mother Nature's high pressures.

High pressures? You had better believe it. And in this case, Mother Nature won. So looking forward, there's going to be a lot of forensic engineering on the well design and how things got monitored during drilling. Transocean drilled the well, but BP designed it. So the key question is how did the down-hole pressures get away like they did?

What Happens Now?
It's a good thing that the Deepwater Horizon didn't settle right on top of the well. At least there's room for the remotely operated vehicles to maneuver. Also, there's still a lot of riser still floating in the water column. So there's some element of integrity going down to the blowout preventer.

It's absolutely imperative to shut off that oil flow. We just have to hope and pray that the BP and Transocean people can get the blowout preventer shut off. Or that there's enough integrity to the risers somehow to get in there and control the leaks, perhaps with some sort of plug. One other idea is to lower a large "hood" over the leak and capture the oil so it can be pumped up to a storage tanker ship.

Meanwhile, the relief well has to go down -- carefully and safely. This Macondo well is history. Seal it. Mark it. Give it back to the sea. Move on. Don't tempt fate on this one.

And wow... for a relatively modest-sized deep-water discovery, this thing sure has turned into the well from hell.

Welcome to the World of Deep-water Risk
As I've said before, this accident is Mother Nature's wake-up call to everyone. Deep-water drilling is a high-stakes game. It's not exactly a "casino," in that there's a heck of a lot of settled science, engineering and technology involved.

But we're sure finding out the hard way what all the risks are. And it's becoming more and more clear how the totality of risk is a moving target. There's geologic risk, technical risk, engineering risk, environmental risk, capital risk and market risk.

With each deep well, these risks all come together over one very tiny spot at the bottom of the ocean. So for all the oil that's out there under deep water -- and it's a lot -- the long-term calculus of risk and return is difficult to quantify.


Byron King earned his Juris Doctor from the University of Pittsburgh School of Law, graduated cum laude from Harvard University, served on the staff of the Chief of Naval Operations, and is a regulator contributor to the Whiskey and Gunpowder investment newsletter.

Power: Commentary: How Myths Distort Energy Policy

Have you ever read something and had a gut feeling that what you were reading was somehow distorted or flat out untrue? Well part of CARE's mission is to provide the public with an accurate picture of the important role that abundant and affordable energy plays in our lives. To help our readers understand how myths distort energy policy in the United States, CARE has enlisted the aid of Thomas Tanton, an Environmental Fellow with the Pacific Research Institute. In the blog posting below, Mr. Tanton dispels numerous myths including: The perception that foreign oil provides most of our energy, renewables will replace conventional energy sources, the United States is a disproportionately large polluter compared to other nations, and energy efficiency reduces energy use. Mr. tanton also establishes a fact that is seldom mentioned in America's energy debate - inreased oil production can yield environmentally friendly results!

Energy is a complex issue but thanks to contributors such as Thomas Tanton, everyday people have the chance to get an accurate picture of the energy debate. We here over at CARE encourage you to read on and to let fact rather than fiction guide your views on energy policy.

Power: Commentary: How Myths Distort Energy Policy
Congress and various states are considering a fundamental restructuring and regulation of our energy policy. Any such effort should be based on facts, but legislators, unfortunately, incline to myths, such as the notion that most of our energy comes from oil.

Myth: Foreign Oil Provides Most of Our Energy
According to the U.S. Department of Energy and the Energy Information Administration, oil represents less than 40% of our energy use. A full two-thirds of that oil comes from North America, primarily Canada, not the Middle East. According to another prevailing myth, alternative energy sources will reduce the use of petroleum. Such sources may first reduce domestic production, but they will not affect production in unstable regions. Renewable technologies are subject to import and price security concerns as well.

Myth: Renewables Will Replace Conventional Energy Sources
A correlated and persistent myth is that increasing wind- and solar-generated electricity will reduce our dependence on foreign oil and thus boost our energy security. Less than 1% of our electricity is generated using petroleum, so any renewable generation will have no appreciable effect on petroleum demand. Activists and regulators believe that energy companies will not invest in clean reliable energy, so we need government programs to do so. This ignores the reality that energy companies are investing huge sums of money to develop cleaner and more reliable sources of energy.

The U.S. faces a 19% increase in energy demand over the next two decades. To meet that demand, U.S.-based oil and gas companies from 2000 to 2007 invested an estimated $121.3 billion on emerging energy technologies in the North American market. This expenditure represents 68% of the estimated total of $180 billion spent by U.S.-based companies. Renewable energy sources, however, will not soon replace most conventional energy sources. Despite considerable publicity on their behalf, renewables will remain a small fraction of our energy mix for the foreseeable future.

Myth: The U.S. Is a Disproportionately Large Polluter
From all sources, the U.S. consumes large amounts of energy. But does the U.S., as mythology has it, emit a disproportionate amount of the world’s greenhouse gases? It should be kept in mind that the U.S. produces a large portion of the world’s goods and services. Energy-related emissions of man-made greenhouse gases represent more than 80% of all anthropogenic emissions. Emissions and energy use are linked.

In 2008, goods and services produced in the U.S. accounted for 30% of all of the world’s production as measured by gross domestic product. In the same year, the U.S. share of global greenhouse gas emissions was only 19.3%. Richer countries are actually cleaner and healthier countries. It is the affluent society that does not want to be the effluent society, as various environmental analysts have noted.

Myth: Energy Efficiency Cuts Energy Use
Prevailing mythology also favors federal mandates for higher-mileage cars in the belief that this means less energy consumption. This ignores the reality that increased energy efficiency leads to increased energy use. In the case of vehicles, the fuel efficiency, as measured by Corporate Average Fuel Economy (CAFE), has led to increased driving, and — along with changing land-use patterns and increases in population — to increased consumption. Some hold that forcing drivers to use alternative fuels will help solve global warming. Such fuels, unfortunately, do not necessarily result in lower greenhouse gas emissions.

Fact: Increased Oil Production Can Have Green Results
Meanwhile, it is not a myth that expanding domestic oil production would reduce imports and even help improve the environment. Less than 1% of all oil found in the North American marine environment comes from offshore oil and gas development. According to the National Academy of Sciences, 60% of oil in the marine environment is the result of natural oil seepage through the ocean floor. In many places, it is even higher.

For example, all of the tar on the beaches of Santa Barbara is from natural oil seeps. Reducing oil reservoir pressure through extraction of petroleum will decrease oil pollution from natural seepage. New drilling technology, developed by private energy companies, has greatly reduced the risk of oil spills.

Seeking an Energy Policy Based on Reality

"It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so." That adage, attributed to Mark Twain, applies in particular to energy. Energy myths have consequences their advocates prefer to ignore. Policy based on myths could easily curtail our energy supply, drive up prices, and even increase pollution, all without an increase in energy security.

On the other hand, a common-sense energy policy based on facts stands the best chance of increasing our supply, lowering prices, trimming emissions, and boosting our overall energy security. If that is indeed their goal, policy makers, the media, and the public should reject energy myths and stick to the path of reality. That way alone leads to energy abundance and security for America.

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Thomas Tanton is an Environmental Fellow with the Pacific Research Institute.

Debunking Myths To Lower Prices, Trim Emissions And Sustain Access To Energy

A new extensive report has just been released by one of our Blog Contributors: Tom Tanton. This report titled Top Ten Energy Myths offers insight into and facts on the myths that are permeated upon the public by the mainstream media. As an energy supporter, this report will give you valuable information to back up conversations you may have.

Why should you know about, understand and debunk the myths? Because, as these comments for the report's conclusion state, "Myths have consequences. Energy policy based on myths could easily curtail our energy supply, drive up prices, and even increase pollution, all without any increase in energy security. On the other hand, energy policy based on facts stands the best chance of increasing our supply, lowering prices, trimming emissions, and boosting our overall energy security. If that is their goal, policy makers, the media, and the public should reject energy myths and stick to the path of facts and reality. That way alone leads to energy abundance and security for America."

This posting is different from most of our Blog contributions in that what you see below is the press release copy that provides an overview of the study. Typically our Blog postings are shorter commentaries from noted energy experts—such as Tom Tanton. However, this report is 19 pages—a bit lengthily for this forum. We believe that once you read the overview, you’ll want to connect to the full report. The colorful document is full of charts, graphs and maps for quick reference. Print it out and pass it around!

Top Ten Energy Myths
The Pacific Research Institute, a free market think tank based in San Francisco, released a new report debunking the common myths about energy in America. Top Ten Energy Myths, by Thomas Tanton, senior fellow in Energy Studies, confronts ten popular myths about America’s energy sources, uses, and risks.

The report challenges conventional discourse about energy propagated by politicians, celebrities, and the media. Using data from the U.S. Department of Energy and the Energy Information Administration, Top Ten Energy Myths clearly outlines the types of fuel most used in the U.S.—where they come from, the risks involved, and the potential for alternative technologies.

"Contrary to common belief, new technology has greatly reduced the environmental risk of oil extraction, and renewable energies such as solar and wind will not increase our energy security," said Mr. Tanton. "There is a plethora of unexplored options for securing energy in America through domestic sources, but misled confidence in renewable technologies and increased efficiency are hampering common-sense energy policy."

The list of top ten myths in the report are:
1. Myth: Most of our energy comes from oil.
Reality: Oil represents less than 40 percent of our energy use.

2. Myth: Most of our oil comes from the Middle East.
Reality: Two-thirds of our oil comes from North America.

3. Myth: We have no choice but to import vast quantities of oil and natural gas.
Reality: The U.S. could significantly reduce imports by expanding domestic production.

4. Myth: Offshore oil production poses environmental risks.
Reality: New technology has greatly reduced the risk of oil spills. Reducing oil reservoir pressure through extraction of petroleum will decrease the amount of oil pollution from natural seepage.

5. Myth: Reducing our petroleum use through alternative energies will increase U.S. energy security.
Reality: Reducing petroleum use will first reduce domestic production, not production in unstable regions. Renewable technologies are subject to import and price security concerns as well.

6. Myth: Energy companies will not invest in clean reliable energy so we need government programs to do so.
Reality: Energy companies are investing huge sums of money to develop cleaner and more reliable sources of energy.

7. Myth: Renewable energies will soon replace most conventional energy sources.
Reality: While growing fast in percentage terms, renewable energies are a very small fraction of our energy mix and will remain so for the foreseeable future.

8. Myth: The U.S. consumes large amounts of energy and thus emits a disproportionate amount of the world’s greenhouse gases.
Reality: The U.S. uses energy and emits a large portion of the world’s emissions because it produces a large portion of the world’s goods and services.

9. Myth: Federal mandates for higher-mileage cars means less energy consumption.
Reality: Increased energy efficiency leads to increased energy use.

10. Myth: Forcing drivers to use alternative fuels will help solve global warming.
Reality: Alternative fuels do not necessarily result in lower greenhouse gas emissions.

"Energy policy must be based on facts, not myths," said Mr. Tanton. "If based on myths, energy policy could easily curtail our energy supply, drive up prices, and even increase pollution, all without an increase in energy security."

"If our goal is to lower prices, trim emissions and sustain access to energy, then policy makers, the media, and the public should reject energy myths and stick to the path of facts and reality," concluded Mr. Tanton.

Tom Tanton is a Senior Fellow with the Pacific Research Institute as well as the Principal of T2 & Associates, a firm providing consulting services to the energy and technology industries. Mr. Tanton has over 35 years experience in the energy, economy, and environmental fields.

California says “No” to Offshore Drilling

While energy news has been on a roller coaster, it is currently on a bit of a high. The American public is ready to blast their Senators and Representatives over healthcare and cap and trade. Video of irate crowds drowning out the elected officials at town-hall meetings is beginning to surface on the news.

In the midst of this encouraging environment, comes the news that California has opted to deny an offshore drilling lease that would have provided much needed income to the state and high-paying jobs. And, as they say, as California goes, so goes the nation. Let’s hope their foolhardy decision is not a harbinger of things to come.

Said as only a Californian can say it…

California Says No Thanks to $100 Million; Never Mind to $4 Billion
Governor Schwarzenegger has just vetoed almost $500 million in budget line-item, in order to finalize the state budget. However certain environmental activists convinced the Assembly to deny an offshore oil drilling lease. While the drilling lease narrowly passed in the Senate the proposal eventually stalled in the Assembly. The lease would have provided an injection of $100 million dollars in 2009-2010, and about $4 billion over the next decade; not a bad deal for a state that is quite literally living on borrowed money.

Even after all the spending cuts and state worker furlough days, the state continues to be short on cash. The Assembly’s vote against the offshore drilling lease is troubling because it seems to lack any acknowledgment of California’s dire position both today and in the long term.

Offshore drilling in California would not only provide desperately needed funds to the state coffers but would also create high paying jobs. While the drama of the California budget has played out let us not forget that the state’s unemployment rate is at a historic level, over 11.5 percent. If the economy continues to struggle unemployment rates could move even higher especially in low income and minority communities. California’s foreclosure rates are soaring as people struggle to find jobs, pay mortgages and raise their families. But regrettably it seems the California legislature is content with shipping in energy from around the world as opposed to producing it ourselves. Why would the politicians want to create jobs, cut the budget, grow the economy and be energy independent anyway?

The legislature has also missed an opportunity to clean up the ocean and beaches from oily tarry residue. Less than 1 percent of all oil found in the North American marine environment comes from offshore oil and gas development. According to the National Academy of Sciences, the majority—60 percent—is the result of natural seeps through the ocean floor. In many places, it is even higher. For example, all of the tar on the beaches of Santa Barbara is from natural seeps. Moreover, these seeps are reduced when the oil is produced and transported to shore, where it can be put to use as energy for America.


Tom Tanton is a Senior Fellow with the Pacific Research Institute as well as the Principal of T2 & Associates, a firm providing consulting services to the energy and technology industries. Mr. Tanton has over 35 years experience in the energy, economy, and environmental fields.