The growth of the deepwater sector worldwide was extraordinary—from 1.5 million barrels a day in 2000 to 5 million by 2009. By that point, some 14,000 exploratory and production wells had been drilled in the deep waters around the world. It became customary to describe deepwater production as the great new frontier for the world oil industry. Among the most prospective areas were at the corners of what was called the Golden Triangle—the waters off Brazil and West Africa and the Gulf of Mexico. By 2009 the shallow and deep waters of the Gulf of Mexico together were supplying 30 percent of U.S. domestic oil production. That year, for the first time since 1991, U.S. oil production increased, instead of declining, and the deepwater was the largest single source of growth. In fact, in 2009 the Gulf of Mexico was the fastest-growing oil province in the world.5
DEEPWATER HORIZON
On the morning of April 20, 2010, a helicopter took off from the Louisiana coast and headed out over waters so smooth as to be almost glassy. Its destination was the Deepwater Horizon, a drilling platform operating 48 miles off the Louisiana coast. A fifth-generation semisubmersible drilling rig, the Deepwater Horizon was a marvel of scale and sophisticated engineering. The passengers that morning included executives from Transocean, which owned the drilling rig, and BP, which had been the contractor of the rig since it had been launched nine years earlier. They were flying out to honor the Deepwater Horizon and its team for its outstanding safety record.
The location was Mississippi Canyon Block 252, on a prospect known as Macondo. The Deepwater Horizon had been on site for eighty days. The well had descended through almost five thousand feet of water and then had pushed on through more than another 13,000 feet of dense rock under the seabed, where it had made another major Gulf of Mexico discovery and it was now almost at the end of the job. All that was left to do was plug the well with cement, and then the rig would move on to another site. At some later date, when a permanent production platform was in place, the Macondo well would be unplugged and would begin producing. The crew had encountered some frustrating problems along the way, notably what were called gas kicks from pockets of natural gas. At times Macondo had been called the “well from hell.” But now that all seemed behind them.
A decade earlier, Macondo would have been at the very edge of the frontier, but by 2010 the frontier in the Gulf of Mexico had moved beyond Macondo to discoveries as deep as 35,000 feet—twice that of Macondo.
Now, on board the Deepwater Horizon, it was a matter of wrapping up over the next few days—highly exacting and technically complex work, but also familiar in terms of what needed to be done. The night before, April 19, it was decided to dispense with a cement bond log, which would have provided critical data to determine if the well was sealed is a secure way. It was deemed unnecessary. Overall, things seemed to be proceeding normally.
At 7:55 p.m. the evening of April 20, final tests were concluded on the pressure in the well. After some discussion, the results were judged satisfactory. That was a misinterpretation. For deep down in the earth, many thousands of feet below the seabed, something insidious, undetected, was beginning to happen. Oil and, even more dangerous, gas were seeping through the cement that was meant to keep the well sealed.
At 9:41 p.m., the captain of a neighboring ship, the Damon Bankston, saw mud shooting up above the drilling rig with extraordinary force. He hurriedly called the Deepwater Horizon. The officer on the brig told him there was “trouble” with the well and to pull away as fast as possible. Then the line went dead.
“WE HAVE A SITUATION”
On the rig itself, one of the drillers called a superior in a panic. “We have a situation. The well has blown out.” People began to scramble, but the response in those critical minutes was hampered by confusion, poor communication, unclear information, and lack of training for that kind of extreme situation.
Yet there was still one last wall of defense—the 450-ton, 5-story-tall blowout preventer, sitting on the bottom of the ocean floor. Equipped with powerful pincerlike devices called shear rams, it was meant to slice into the pipe and seal the well, containing any potential blowout of surging oil and gas. It was the fail-safe device if all else failed, the final impregnable line of protection. The blowout preventer was activated. The unimaginable happened. The pincers failed to fully cut into the pipe—by 1.4 inches.
At about 9:47 p.m. there was a terrifying hissing sound. It was the worst sound that the crew could possibly hear. It meant that gas was escaping up from the well. The gas encountered a spark. At 9:49 a thundering explosion rocked the rig, and then a second blast, and a series more. The rig lost all its power. It heaved and shook violently. Whole parts of the structure were blown to pieces; stairways crumbled and disappeared altogether. Workers were tossed this way and that. The entire rig was engulfed in fierce flames.
Some crew members dove directly into the sea. Many piled into the two lifeboats, some dreadfully injured and in awful pain, and eventually made it to the Damon Bankston. Others were pulled from the sea. The Coast Guard arrived just before midnight and began a search-and-rescue mission. On April 22, two days after the accident, the Deepwater Horizon, gutted and deformed, sank. The next day the search for additional survivors was called off. Eleven of the 126 crew members had perished.6
THE RACE TO CONTAIN
At the time of the accident, no established methods existed for staunching the flow of a deepwater accident, other than the proper operation of the blowout preventer. If it failed, the only option was to drill a relief well that would intercept the damaged well so that it could be sealed. But that would take three months or more. Both industry and government seem, in retrospect, to have assumed that a catastrophe of such dimensions was impossible. It was an accident, said BP’s then chief executive Tony Hayward, that “all our corporate deliberations told us simply could not happen.”7
Over recent decades, a handful of serious accidents and major blowouts had occurred. The worst in terms of loss of life was a fire on the Piper Alpha platform in 1988, off the coast of Scotland, that took 167 lives. That disaster had led to major reforms in North Sea regulation and safety practices. The last big blowout in the Gulf of Mexico was a Mexican well in the Gulf of Campeche, off the Yucatán, in 1979. In August 2009, a well in the Timor Sea between Australia and Indonesia spilled up to 2,000 barrels a day for ten weeks. But no noteworthy blowouts had occurred in U.S. waters since Santa Barbara in 1969. Between 1971 and 2009, according to the U.S. Department of the Interior, the total number of barrels of oil that had spilled in federal waters as the result of blowouts was a miniscule 1,800 barrels—an average of 45 barrels a year.8
But now the unthinkable had happened, and the flow had to be stopped. The result was an overdrive process of high-tech engineering improvisation by BP, its contractors, other companies, outside specialists, government experts, and government scientists who knew little about oil to begin with but quickly became experts.
A whole host of approaches for stemming the flow were tried. They all failed. Finally, in mid-July, eighty-eight days after the accident, a newly designed capping stack was put in place. That ended the spill. No more oil was leaking out of the Macondo well. Two months later, on September 19, after the relief well connected with the original well, the government pronounced Macondo “effectively dead.”9
“FIGHTING THE SPILL”
In the Gulf itself, the fishing industry, whose boats could not go out, was hardest hit economically, along with tourism at beach resorts. The marshy coastal waters of Louisiana were among the areas worst affected.
As with the blowout itself, both government and industry were unprepared to deal with the environmental consequences. The Oil Pollution Act and the Oil Spill Liability Trust Fund had been established two decades earlier, in the aftermath of the Exxon Valdez accident in Alaska, to respond to an accident involving a tanker. But the loss of oil from a tanker, however serious, was a finite affair. A tanker only held so much oil.
The response to a blowout on this
scale had to be invented. A vast navy of ships of all sorts, 6,700 in all, were deployed to intercept and capture the oil; onshore, a small army was similarly raised to clean up the beaches. Altogether, the clean-up campaign enlisted 45,000 people.
Some said that it would take decades for the Gulf to recover and that some parts of it might never recover. But in August 2010, the National Academies of Sciences estimated that three quarters of the spilled oil had already evaporated, been captured, or had dissolved. It was becoming clear that the consequences of Macondo would not be as severe as had first been feared.10
The sea itself provided a major solution. The natural seepage of oil from fissures in the bottom of the Gulf—estimated to be as much as a million barrels of oil a year—combined with the warm waters, had nurtured microbes known as hydrocarbonolostic, whose specialty is feasting on oil. For them, Macondo oil was an unexpected bonanza, and they went to work on it. As a result, the oil biodegraded and disappeared much faster than had been expected. On September 20, 2010, the day after the official announcement that the well had been killed, the New York Times reported that the environmental consequences were proving far less long lasting than feared. “As the weeks pass, evidence is increasing,” said the Times, that “the gulf region appears to have escaped the direst predictions of the spring.”11 Over the next several months, further research confirmed that the microbes had eliminated much of the oil and gas that had leaked from the well. As one scientist put it, “The bacteria kicked on more effectively than we expected.”12
Many uncertainties about the longer-term consequences remain—as to whether a damaging carpet of Macondo oil has settled over the Gulf’s floor around the well, the impact on the delicate marshes and wetlands along the coast, and the long-term effect on aquatic life and wildlife. Only time will tell.
THE GOVERNMENT AND THE COMPANY
For many years, 85 percent of the U.S. outer-continental shelf had been closed to drilling. On March 31, 2010, three weeks prior to the accident, President Barack Obama had begun the process of opening areas off the coast of Virginia and in the eastern Gulf for future exploration. The opposition from his own political base was intense. After the accident, these areas were quickly withdrawn and once again put off-limits.13
The Obama administration placed a moratorium on all drilling in the Gulf of Mexico. In due course, the moratorium was officially lifted. But it seemed clear that a de facto slow pace was going to prevail for some time, as a result of more thorough reviews and re-reviews, more complex and time-consuming regulation, a slowing-down of decision making, and a possible immobilization of decision making altogether. The Obama administration reorganized the regulatory apparatus for the offshore to avoid any hint of “coziness” between regulators and industry. Safety officials now had to carry their own lunches when they flew a couple of hundred miles out to inspect platforms, and they were prohibited from accepting anything once there, even a bottle of cold water on a hot day.
The accident and its consequences demonstrated that the abilities to explore and produce in the deep water had run ahead of the capacity to deal with a failure of all the safety systems. Under extreme duress, the learning about what to do had been compressed from years into months. Several companies came together in the aftermath to establish, with an initial billion dollars, a nonprofit Marine Well Containment Corporation that would have the skills and tools, in the event of a major accident, to close a well quickly and clean up the spill. Two dozen other companies formed the Helix Well Containment Group, a deepwater containment consortium that can rapidly provide expertise and equipment in the event of an accident. Helix is the company whose equipment was used to actually shut the Macando well.
As to the cause of the accident, the conclusion (as is so often the case in a postmortem on a major accident) is that the cause was not one thing but rather a series of errors, omissions, and coincidences—human judgment, engineering design, mechanical, and operational—all interacting to build to a crescendo of disaster. Were one single incident not to have occurred, there might not have been a disaster.14
That was certainly the conclusion of the national commission appointed by President Obama. “The well blew out because a number of separate risk factors, oversights, and outright mistakes combined to overwhelm the safeguards meant to prevent just such an event from happening,” it said. The commission continued, “But most of the mistakes and oversights at Macondo can be traced back to a single overarching failure—a failure of management.” It added, “A blowout in deep water was not a statistical inevitability.” The diagnoses and debate about what had gone wrong—and what could be learned from the experience—will go on for years.15
The resource-rich deep waters of the Gulf of Mexico will likely remain one of the main pillars of domestic U.S. energy supply. The offshore oil industry has considerable economic as well as energy significance. In 2010 about 400,000 jobs depended upon the offshore industry just in the four Gulf states of Texas, Louisiana, Mississippi, and Alabama. Moreover, the offshore oil and gas industry could generate as much as a third of a trillion dollars of government revenues in taxes and royalties over a ten-year period.16
But the Gulf of Mexico was clearly going to be more quiet and less active, at least for a few years ahead. In response, some of the drilling rigs, the workhorses of exploration, began to leave the Gulf and migrate to other parts of the world that still saw the deep water as one of the great frontiers of world energy.
THE PRESALT: THE NEXT FRONTIER
The most obvious destinations were the other points in the Golden Triangle—West Africa and, more than anything else, Brazil. By this time, Brazil had already leapfrogged ahead of the United States to become the world’s largest deepwater producer. “We had to find oil,” said José Sergio Gabrielli, the president of Petrobras. “We didn’t find any onshore and so we had to go offshore.” Today Brazil is on track to become one of the world’s major oil producers, exceeding Venezuela, which for almost a century has been the dominant producer in Latin America. The reason is a major advance in capabilities that has opened up a massive new horizon.
The offshore Santos Basin stretches 500 miles, paralleling the southern coast of Brazil. Beneath the seabed is a layer of salt, averaging more than a mile thick. Oil had been produced beneath salt in other areas, including the Gulf of Mexico, but never through so large a section. It was thought that there might be oil below the salt layer in the Santos Basin, but it seemed impossible to do the seismic work—mapping the underground structures—because the salt dispersed the seismic signals so much that they could not be interpreted. “The breakthrough was pure mathematics,” said Gabrielli. “We developed the algorithms that enabled us to take out the disturbances and look right through the salt layer.”
The first discovery was the Parati field. Petrobras was also drilling with its partners BG and Galp in the Tupi field, the most difficult well the company had ever undertaken. It cost $250 million and went through 6,000 feet of water and then another 15,000 feet under the seabed. It required significant new technologies to cope with the peculiarities of the salt layer, which, like sludge, keeps shifting.
When Guilherme Estrella, Petrobras’s head of exploration, reported to the board on the outcome of the well, he began with a long discussion about what had happened 160 million years ago when the continents of Africa and Latin America had pulled apart, depositing the salt above the oil reservoirs, which were already in place and thus became known as the presalt.
“As we listened to him,” said Gabrielli, “we thought that Estrella is a great geologist, but that he was dreaming. But then he told us the numbers, and we were thrilled.”
That well had discovered a supergiant field—at least 5 billion to 8 billion barrels of recoverable reserves—the biggest discovery since Kashagan in Kazakhstan in 2000. As other wells have been drilled, it has become clear that the presalt in the Santos Basin could be a huge new source of oil. Brazil’s then president, Luiz Inácio Lula da Silva, describe
d it as “a second independence for Brazil.”17
If development proceeds more or less as planned and there are no major disappointments, Brazil could, within a decade and a half, be producing close to six million barrels per day, which would be twice the current output of Venezuela. The investment would be huge—half a trillion dollars or more—but it would catapult Brazil to the top rank among the world’s oil producers, making it one of the foundations of world supply in the decades ahead.
FROM FRINGE TO MAINSTREAM: CANADIAN OIL SANDS
In April 2003, a few weeks after the start of the Iraq War, a U.S. Senate hearing convened to examine international energy security issues. The chairman of the foreign relations subcommittee was startled by what he heard. “Something very dramatic has happened that people have not much focused on,” said one witness. It was “the first major increase in world oil reserves since the mid-1980s.” But it was not in the Middle East. It was often said that Iraq had the second-largest oil reserves in the world. But that was no longer true. Canada had just made an extraordinary upward adjustment in its proven oil reserves—from 5 billion barrels to 180 billion, putting it in the number two position, right after Saudi Arabia.18
At first, surprise, even skepticism, greeted the Canadian announcement. But it has come to be generally accepted in the years since. This particular unconventional petroleum resource—Canadian oil sands—also happens to be strategically placed on the doorsteps of the United States.
The Quest: Energy, Security, and the Remaking of the Modern World Page 29
