OGPSS - Gulf of Mexico production, and hurricanes

The summer brings back Hurricane season, with the threat that such storms bring to the oil and gas well operations in the Gulf of Mexico. And the National Oceanic and Atmospheric Administration (NOAA) has noted that

The Atlantic basin is expected to see an above-normal hurricane season this year, according to the seasonal outlook issued by NOAA’s Climate Prediction Center . . . . 3 to 6 major hurricanes (Category 3, 4 or 5; winds of 111 mph or higher)

The lessons of this vulnerability were, perhaps, more than most years, evident in 2005. The first sign of problems came with the arrival of Hurricane Dennis in July. It was a storm which severely damaged the BP deep water Thunder Horse drilling platform.

Thunder Horse after Hurricane Dennis (Prof Goose)

As that season wore on, the vulnerability of the platforms in the Gulf, and the refineries that border it, were exposed in more intensity with the passage of Hurricanes Katrina and Rita. These threats and their analysis were one of the factors that helped, in that formative year, to bring an audience to the pages of The Oil Drum. The Gulf is now home to thousands of wells, which, as the evidence from the Deepwater Horizon disaster last year reminded us, has moved further and further away from shore. That vulnerability is perhaps illustrated by a map, showing the path of Hurricane Rita through the oil platforms off the Texas and Louisiana coasts.

Path of Hurricane Rita through off-shore Gulf production facilities (The Oil Drum) (Each dot is a production unit)

Back in the 1930’s and ‘40’s it was the very gradual deepening of the seabed in the Gulf, that allowed the first oil drillers to venture, through the swampy regions of the Mississippi Delta and then on out into the waters of the Gulf. There had been some drilling from piers out in California and similar constructions were also tried along the Louisiana shore, as the prospects for success tempted companies away from the coast. However, as they did so the rigs faced the challenge, as they do today, of surviving in regions where Hurricanes are not uncommon. The industry was helped in this development since there were no major hurricanes that moved through the regions of most intense drilling, from the first wells in 1945 until 1964 when Hurricane Hilda arrived. And even when that hurricane struck on October 3rd, it only damaged three locations, at Eugene Island and Ship Shoals 149 and 199, with a total of some 11,869 bbl of oil being spilled due to the storm.

Gulf of Mexico showing regional features (Geoexpro)

The first pier-based platform had been built out into the Gulf of Mexico at McFaddin Beach, south of Port Arthur, Texas after having been approved by the Secretary of War, on July 8, 1937. The pier was a mile long, with three rigs at the far end, but it only drilled dry holes and was destroyed in a hurricane in 1938. More widely recognized was the first well to be drilled out of sight of land. This was the Creole platform near Cameron, which was a mile out-to-sea, an hour-an-a-half trip by shrimp boat at the time. The water was only 18 ft deep and the well, initially drilled by Pure Oil and Superior Petroleum, (later Kerr McGee, and then Anadarko) sat some 15-ft above the water level. Initial production was 600 bd from a depth of 9,400 ft. It was damaged by a hurricane in 1940, but survived and produced more than four-million barrels since through directional drilling.

Kemnac Rig 16 drilling the first offshore well in the Gulf of Mexico (Kerr-McGee via Penn Energy)

As was the case with California there was initially some controversy over who owned the rights to minerals off-shore and in 1953 Congress passed the Submerged Lands Act, which gave the rights to the states for the first three miles offshore, (the range of a smooth bore cannon at one time) and then the Outer Continental Shelf Lands Act which gave the rights for the more offshore land to the Federal Government. This settling of the disputes encouraged further drilling and while there were already 70 rigs, drilling at depths up to 70 ft of water, the years after 1953 saw the development of a variety of different rigs for drilling in ever deeper water. Designs to cope with hurricanes also progressed, so that by the time of Hurricane Flossy in 1956 rigs were relatively safe. It was followed by Audrey in 1957, ranked as the sixth deadliest hurricane in US history, which came ashore at Cameron, and killed 416 people, but caused $16 million in damage offshore, with no fatalities.

Path of Hurricane Flossy in September 1956. (Note I have referenced the web pages showing the storm paths under the Hurricane name in that which follows).

Technology was, however, allowing rigs to work in ever deeper water, 100 ft of water in 1957, 225 feet by 1965, and 300 ft in 1969. With this increase in range came increased production, which had reached 2 mbd, but it also exposed more rigs to the threat from larger storms. Hilda, formed in 1964, caused $100 million in damage and effectively destroyed 18 platforms,; Betsy in September 1965 had the distinction of financially impacting a future President of the United States.

On September 9th, the day Hurricane Betsy struck, MAVERICK was located 20 miles off the Louisiana Coast in 220 ft of water. The following day an inspection showed Zapata’s three other rigs were undamaged, but the MAVERICK had vanished. This was the largest single loss that the domestic offshore drilling industry sustained in this or any other hurricane. . . . . .The MAVERICK loss was a substantial one for Zapata. This was our newest rig and one of our very best contracts. . .

(George H.W. Bush, “My Life in Letters and Other Writings.”) (The insurance check was for $5.7 million).

Camille in 1969 was the largest storm to hit the USA in the 20th century. It did about $100 million in offshore damage, including sinking three up-to-date rigs designed to survive those storms. (Camille was a Category 5). Onshore the damage exceeded $1 billion. This was the hurricane that taught the industry that they had to design rigs that could not only withstand waves more than 70-ft high, but has also to consider that the seabed itself might move under the force of the storm.

Fortunately such storms have proved to be relatively rare, and the “three strikes” of Dennis, Katrina and Rita in 2005 have not been repeated since. Yet the industry remains highly vulnerable to such storms. As the second figure shows, the Gulf has become increasingly filled with production platforms. In 2008 this region was hit by hurricanes Gustav at the start of September and Ike two weeks later. Even though these were weaker storms their impact was significant.

Effective August 2008, there were more than 3,800 production platforms in the Gulf, ranging in size from single well caissons in 10 feet of water up to a large, complex facility in 7,000 feet of water. The MMS estimates about 2,127 production platforms were exposed to hurricane conditions from Gustav and Ike, carrying winds greater than 74 miles per hour.

Final results of the agency’s assessment of destroyed and damaged facilities from these two storms indicate that 60 platforms were destroyed. These included some platforms that had been reported earlier to have extensive damage.

In comparison, 115 platforms were destroyed by the Rita-Katrina wallop in 2005.

The platforms designated as destroyed following Gustav and Ike produced 13,657 barrels of oil and 96,490,000 cubic feet of gas per day, or 1.05 percent of the oil and 1.3 percent of the gas produced daily.

Part of the reduction in damage came from lessons learned from Katrina/Rita.

Mobile Offshore Drilling Units (MODUs) that previously had to have eight mooring lines were now required to have 12 and, in some cases, 16 mooring lines,” Angelico said. “In ’08, 18 moored MODUs were in the path of hurricane force winds, and two went adrift, which represented 15 percent of the rigs out there. In Katrina and Rita, 63 percent of the rigs went adrift.’

There are additional impacts from these storms. The Gulf continues to produce about 27% of the nation’s oil, and 15% of the natural gas. Those fuels must be brought ashore and, in the case of oil, refined. Refineries lie inshore all along the Gulf Coast, and if flooded can take months to be brought back on line. Given the growing reliance that the country places on production from these regions makes us all vulnerable to the season.

Outer Continental Shelf (OCS) Crude and Condensate as an annual volume and percentage of national production. (BOEMRE)

Last October OCS crude and condensate production averaged 1.52 mbd, which comprised 28% of the estimated US production.

Offshore Natural gas production as an annual volume and percentage of national production (BOEMRE)

Last October natural gas production averaged 5.6 bcf/day which was 8.9% of estimated national production.

There is a significant production from smaller, older wells, while the new fields are found in deeper waters further into the Gulf, and so that is where I will venture next time.

Deepwater Oil Spill - nearing intersection, hurricanes, the TWIP and gold

Progress on the Deepwater Horizon well is going well enough that the Admiral considers it likely that the remaining work (other than plug and abandon) may be completed within the next four days.

just to summarize again, in the last 24-hour period we proceeded to go ahead and drill to the intercept. At the time we started drilling we estimated that we were 3.5 horizontal feet away and 50 feet away from the intercept. We drilled down (inaudible), we went through the drill string, we put in a ranging tool just to make sure that we wanted to calibrate what the ranging tool told us versus the equipment that now allows us to do some ranging measurements from inside the drill bit.

The drill string is now packed and it’s commenced drilling so the air at this moment as we’re speaking drilling that last 20/25 feet and they are almost touching the well at this time. That’s the report I got just before I came out here. When we do the intercept, which will be imminently I will say in the next 24 hours because they may elect to pull that drill bit back do another ranging run, which would add time. That’s the reason I’m not going to say it’s going to happen in the next hour.

Sometime in the next 24-hour period, we should do the well intercept. Once the well is intercepted, we’ll have to understand from the pressure differentials and the drilling fluids the nature of the annulus. Once that’s been determined decision, will be made on cement and then once it’s cemented the cement will have to adhere and be pressure tested.

That entire element from this morning I would estimate to be about 96 hours.

It is good that the remaining critical work will be done in this time. Right at the moment there are two Category Four hurricanes in the Atlantic (something that hasn’t happened since 1926). While both of those are likely to head North up the Atlantic, Tropical Storm Karl may turn into a Hurricane after it crosses the Yucatan, which may be some cause for concern because, when it re-enters the Gulf, it will be quite close to the offshore Mexican wells, where over 2 mbd is produced.

The possibility that global warming is causing an increase in hurricane intensity, if not overall numbers, is something that climate scientists continue to debate, but the possibility of another series of hurricanes of the likes of Katrina and Rita clobbering the oil supply/distribution network, regardless of cause, is something that the EIA has to consider, and that is the topic of the front page of the TWIP, this week. The EIA is introducing a Hurricane page, which will, on a hurricane specific basis, show the projected path of the hurricane, and the facilities that might be at risk.


As an example, they showed this illustration from the recent path of hurricane Earl ( a larger version is available here

And speaking of the state of the refineries, with the driving season over, inputs to the refineries have fallen, with most of the drop coming from imports, domestic production even had a slight uptick.


Gasoline production remains constant for the moment:


Although demand has begun its seasonal fall.


Fuel ethanol production continues to rise,


Some of that increased production is going into rebuilding stocks, which had been falling until recently.

Distillate demand is also rising seasonally, and is significantly ahead of where it was last year.


Speaking of things rising, I note the record price for gold on Tuesday, though it has since fallen a little. But it may show what happens when a product that is in demand, passes beyond the point of peak production.

And finally, speaking of mining metals, it appears that the trapped miners in Chile, will have a lot of job offers when they get out safely. We can only hope that this comes sooner rather than later.

Deepwater Oil Spill - a little more progress

Travelling today we discovered that all the hotels in Urbana are full, due to a softball tournament, so this will be short. One thing that a couple of relatively gentle Hurricane seasons lulls us into forgetting, is that when the nucleating storms start to crank up, they can come quite regularly for a significant period of time. Back in 2005, for example, the National Hurricane Center ran out of normal alphabetical names for the storms. I mention that because, while Alex, the first storm of the season, is now landing and crossing the Yucatan Peninsula, there is already another area of concern forming in the Atlantic.


Back in the Gulf,

For the first 12 hours on June 26 (midnight to noon), approximately 7,570 barrels of oil were collected and approximately 4,070 barrels of oil and 28.3 million cubic feet of natural gas were flared.

On June 25, total oil recovered was approx. 24,550 barrels:
approx. 16,340 barrels of oil were collected,
approx. 8,210 barrels of oil were flared,
and approx. 54.5 million cubic feet of natural gas were flared.

Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 391,000 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 413,000 barrels.

And your Federal Government want you to know that they are in charge:

BP has finished installing the first free standing riser, which has greater survivability than a fixed riser and will be connected to a third vessel arriving at the site of the wellbore next week, the Helix Producer—a redundancy measure also taken under the direction of the federal government.

The relief well has reached a point where the well needs to be cased and lined, and that is in hand. As the depths get closer to that of the original well (RW at 16,400 ft original well 18,000 ft) I suspect that there may be a little more care than usual taken to ensure that this cement job is good. And once that is complete, then as the drill begins to advance further the “ranging”operation will continue.

Given stated concerns over the use being made of foreign aid, the Coast Guard Joint Command also wants you to know that

To date, the administration has leveraged assets and skills from numerous foreign countries and international organizations as part of this historic, all-hands-on-deck response, including Canada, Germany, Mexico, Netherlands, Norway, the United Nations’ International Maritime Organization and the European Union's Monitoring and Information Centre.

And finally (in more senses than one) the Solar Car Race is over. The results for today were:

Results for the last stage of the Solar Car Race.

These numbers should be added to those after the second stage. They show that Michigan won the race. Minnesota was second and the German team from Bochum third.

And so, as the ROVs work to attach new risers to the well, and prepare for a cap change later in the week, we will move on.

Sorry that the temperature data is missing again this week, but now that the RAW data is available I would like to more closely look at it before putting another post up on the topic.

Deepwater Oil Spill - Weather looks worse, as the solar race goes on

The weather situation in the Gulf is getting a little worse, as the National Hurricane Center has now classified the wave I have been writing about recently as Tropical Depression 1, with a second area of low pressure forming further out into the Atlantic.


Once the storms are identified this way, then the NHC begins to provide tracking information, and this is the current prediction for the storm track. I have put a red square where the Deepwater Horizon well is roughly located.


The white zone around the path shows where winds will rise to over 50 knots. At the briefing today Admiral Allen noted that when the winds are predicted to reach 40 knots in the area, then 120 hours before that occurs the rigs will be disconnected and moved to a safe area.

Also in the briefing the Admiral explained the location of the initial well and the relief well (RW) (one relative to the other) in a little more detail. Now that the initial location of the well has been established, the RW is drilling back downwards. But every so often it will stop and:

This is where they withdraw the drill pipe and put down an electrical cable into the end of the wellbore, and they put out an electrical signal, and they actually could pick up the magnetic field around the wellbore. This tells them how close they are getting.

They have made contact with this electromagnetic field. What they will do is continue to drill down in short intervals, withdraw the pipe, put that sensing device down, and slowly close on the wellbore to the point where they're ready to do the intercept drilling.

This last part takes some time, because they only do several hundred feet at a time, withdraw the drill pipe, and then put the sensor down to figure out how close they're coming. After a series of these readings, they can have a very precise idea of how close they are to the wellbore and then how to actually turn the drill in and make the intercept. But then we'll get much slower, because they have to basically drill, withdraw the drill pipe and put the sensor down.
They also have a vessel standing by that's full of mud on the top, in the event they get really close, they could potentially knick the wellbore they could actually put mud down to control any hydrocarbons that might come out.

Regarding the longer-term containment, we should by next week have the additional vessel in place to start producing off of the kill line. That's the other line that's available to bring oil to the surface. That will bring us the three production vessels and the 53,000-barrel capacity we were looking for by the end of June.

In the change to a new cap that is planned for next week, there are three different designs that are being considered for installation. The ROVs are currently hooking up the hoses to the new distribution system that will ultimately feed four risers.

The recovery operation has returned to collecting about 24 kbd:

For the first 12 hours on June 25 (midnight to noon), approximately 7,870 barrels of oil were collected and approximately 4,230 barrels of oil and 27.5 million cubic feet of natural gas were flared.

On June 24, total oil recovered was approx. 23,725 barrels
• approx. 15,785 barrels of oil were collected,
• approx. 7,940 barrels of oil were flared,
• and approx. 54.7 million cubic feet of natural gas were flared.

In the solar car race, the final staging stop before the final tomorrow has been reached in Normal, OK with the official times for the first two stages being posted at the race website .

The current times are (unofficially from the Michigan web site

Michigan . . .25:15 (hours and minutes)
Minnesota . . . . ..27:27
Bochum . . . . . . 27:37
Stanford . . . . . . 28:52
Missouri S&T . . 29:40
Calgary . . . . . . .30:21
Kaohsiung . . . . 32:48
New Platz . . . . . 41:37
Kentucky . . . . . 42:00

And these are the only cars to complete the third stage.

Posting will be a little shorter over the next few days as we drive East, but I will try to at least include the daily oil production, the end of the solar car race and further developments if relevant in the weather (but hopefully not for the volcano).

P59. Pick Points

Some of the oil that is being held in tanks near the Mt Redoubt volcano is to be removed by a tanker this weekend The tanks are protected by an earthen dam, that is still holding, but the tanker will remove about 840,000 gallons of the 3.1 million gallons that is held in each of the two storage tanks.

The amount of oil that is held (as kerogen) in the oil shale of the Piceance Basin in Colorado may be more than 50% greater than at first thought, according to the latest U.S. G. S. figures. However it is still not that easy to extract, and while the Department of the Interior is encouraging research and development of concepts for extraction, they are not encouraging development of the leases, as yet. Shell, for example, is now testing the freeze wall concept for keeping water from the refractory zone during the heating of shale in place to convert and extract the oil. General Synfuels International have announced a breakthrough in extracting the energy through gasification they have also secured a parcel of land, and are acquiring the components to build a production prototype with testing next year.

Predictive production numbers from Mexico have been dropped an additional 30,000 bd, down to 2.72 mbd. This will, in turn force a cut in exports, which cut may reach 18% next year with overall production falling below 2.5 mbd, and exports falling below 1.125 mbd. This implies a drop of 245,000 bd and the question, since most of that comes to the United States, is where will the volume come from to make up the loss? Export levels for this year are already below prediction. In order to raise money for more investment in production Pemex has sold $712 million in new bonds. And while the company promises more investment, and new wells for Cantarell the overall prognosis does not look good, as the company continues to fail to meet targets.

In the continuing saga of the wind farm projected to be built where Senator Kennedy sails, the Interior Department is promising a ruling on Cape Wind. The project has seen numerous challenges as it has moved forward, which led to publication of a book, (which I reviewed over on TOD). The ruling is anticipated to come about in a couple of months, with the implication of the Secretary’s remarks being that the project may be allowed to move ahead. In the UK there are plans for a new wind farm off Norfolk, capable of generating 315 MW. Construction is slated to start early this summer, with production from the 88 turbines anticipated to start coming ashore in 2011. British plans do not, however, seem to be keeping up with earlier predictions in terms of the volume of renewable energy that will be available to meet targets. And there has been some heated debate in Dekalb county, outside Chicago about plans for a 133 turbine farm to be installed near the Windy City.

The predictions for Hurricane activity in the Gulf have been lowered to only 13 named storms this year. Only 3 – 4 of these should reach major strength.