Noting that "[t]he immense undersea gusher of oil and gas, seen on live video feed, looks as big as it did last week, or bigger, before the company sliced through the pipe known as a riser to install its new collection device," Justin Gillis and Henry Fountain of the New York Times said late Monday that "many Americans are struggling to make sense of the numbers."[1]  --  Dr. Ira Leifer, a member of the government team charged with estimating the flow rate, "said in an interview on Monday that judging from the video, cutting the pipe might have led to a several-fold increase in the flow rate from the well."  --  “The well pipe clearly is fluxing way more than it did before,” said the University of California, Santa Barbara, researcher.  “By way more, I don’t mean 20 percent, I mean multiple factors.”  --  “It’s apparent that BP is playing games with us, presumably under the advice of their legal team,” Dr. Leifer said.  “It’s six weeks that it’s been dumping into the gulf, and still no measurements.”  --  BP had to halt efforts to close all vents on its capping device because the amount of oil being captured, approaching 15,000 barrels a day, was exceeding the processing capacity of the collection ship at the surface, yet vast amounts of oil continue to flow into the Gulf of Mexico.  --  On Tuesday morning, Adm. Allen said that "about 14,842 barrels of oil had been pulled into a processing vessel above the well in the last 24 hours -- up from about 11,000 reported a day earlier," the Los Angeles Times said.[2]  --  "But an unknown amount of oil is still escaping, and BP intends to swap out the current cap with a bigger one next month that can capture more oil."  --  “We’re groping in the dark trying to figure out what our recovery capacity should be,” said Ian MacDonald, an oceanographer at Florida State University in Tallahassee, Bloomberg Businessweek said Tuesday morning.[3]  --  “They keep painting themselves into a corner and having to abandon the positions that they held before because they were not truthful about this, and didn’t try to get real numbers,” MacDonald said.  --  MacDonald's estimate of the rate is 26,500-30,000 barrels a day, six times more than the figure used by BP and the government from April 28 to May 27, Jim Polson and Jessica Resnnick-Ault said.  --  Pro Publica's Marian Wang pointed out that despite its denials, BP has an incentive to low-ball estimates:  "Flow rates affect how much BP could be fined. . . . [T]he U.S. could seek civil fines 'for every drop of oil that’s spilled into the nation’s navigable waters' . . . That would be a fine of $1,100 per barrel, unless a judge finds that the spill was caused by gross negligence -- in which case the fine could be up to $4,300 a barrel. . . . A lower spill rate, for that reason, could save the company millions in fines."[4]  --  Flow rates could also "affect how much BP owes the government in royalties," because "BP owes the government royalties on all the oil and gas that’s 'lost or wasted' if the leak is found to be a result of company negligence, according to Bloomberg."  --  And finally, of course, "[f]low rates affect the company’s public image." ...


1.

U.S.

RATE OF OIL LEAK, STILL NOT CLEAR, PUT DOUBTS ON BP

By Justin Gillis and Henry Fountain

New York Times

June 8, 2010 (posted Jun. 7)
Page A1

http://www.nytimes.com/2010/06/08/us/08flow.html


Staring day after day at images of oil  billowing from an undersea well in the Gulf of Mexico, many Americans are struggling to make sense of the numbers.

On Monday, BP said a cap was capturing 11,000 barrels of oil a day from the well.  The official government estimate of the flow rate is 12,000 to 19,000 barrels a day, which means the new device should be capturing the bulk of the oil.

But is it?  With no consensus among experts on how much oil is pouring from the wellhead, it is difficult -- if not impossible -- to assess the containment cap’s effectiveness.  BP has stopped trying to calculate a flow rate on its own, referring all questions on that subject to the government.  The company’s liability will ultimately be determined in part by how many barrels of oil are spilled.

The immense undersea gusher of oil and gas, seen on live video feed, looks as big as it did last week, or bigger, before the company sliced through the pipe known as a riser to install its new collection device.

At least one expert, Ira Leifer, who is part of a government team charged with estimating the flow rate, is convinced that the operation has made the leak worse, perhaps far worse than the 20 percent increase that government officials warned might occur when the riser was cut.

Dr. Leifer said in an interview on Monday that judging from the video, cutting the pipe might have led to a several-fold increase in the flow rate from the well.

“The well pipe clearly is fluxing way more than it did before,” said Dr. Leifer, a researcher at the University of California, Santa Barbara. “By way more, I don’t mean 20 percent, I mean multiple factors.”

Asked about the flow rate at a news conference at the White House on Monday, Adm. Thad W. Allen, the Coast Guard commander in charge of the federal response to the spill, said that as BP captured more of the oil, the government should be able to offer better estimates of the flow from the wellhead by tracking how much reaches the surface.

“That is the big unknown that we’re trying to hone in and get the exact numbers on,” Admiral Allen said.  “And we’ll make those numbers known as we get them.  We’re not trying to low-ball it or high-ball it.  It is what it is.”

Speaking at a briefing in Houston on Monday, Kent Wells, a BP executive involved in the containment effort, declined to estimate the total flow and how much it might have increased.  He said that video images from the wellhead showed a “curtain of oil” leaking from under the cap.

“How much that is, we’d all love to know,” Mr. Wells said.  “It’s really difficult to tell.”

He said that more than 27,000 barrels of oil had been collected, and that engineers were working to optimize the collection rate.

On Sunday, engineers halted their efforts to close all four vents on the capping device, because even with one vent closed, the amount of oil being captured was approaching 15,000 barrels a day, the processing capacity of the collection ship at the surface.

Mr. Wells reiterated that a second collection system, involving hoses at the wellhead, would be implemented “by the middle of June.”  That oil would be collected by another rig with the ability to handle at least 5,000 barrels a day, he said.

The success of the containment device has cast new doubts on the official estimates of the flow rate, developed by a government-appointed team called the Flow Rate Technical Group.  Before the riser pipe was cut, the group made estimates by several methods, including an analysis of video footage, and the overlap of those estimates produced the range of 12,000 to 19,000 barrels a day that the team reported on May 27.  That was two to four times as high as the government’s previous estimate of 5,000 barrels a day, a number that had been widely ridiculed by scientists and advocacy groups.

Yet the scientists who produced that new range emphasized its uncertainty when they presented it.  In fact, a subgroup that analyzed the plume emerging at the wellhead could offer no upper bound for its flow estimate, and could come up with only a rough idea of the lower bound, which it pegged at 12,000 to 25,000 barrels a day.

The Flow Rate Technical Group is scheduled to release a new estimate this week or early next, though it is not clear whether that report will take into account the changed circumstances of recent days.

Some scientists involved in the Flow Rate Technical Group say that they would like to produce a better estimate, but that they are frustrated by what they view as stonewalling on BP’s part, including tardiness in producing high-resolution video that could be subjected to computer analysis, as well as the company’s reluctance to permit a direct measurement of the flow rate.  They said the installation of the new device and the rising flow of oil to the surface had only reinforced their conviction that they did not have enough information.

“It’s apparent that BP is playing games with us, presumably under the advice of their legal team,” Dr. Leifer said. “It’s six weeks that it’s been dumping into the gulf, and still no measurements.”

President Obama has repeatedly criticized BP’s handling of response efforts.  He has been criticized for his seeming lack of outrage over the spill, but he took an angrier tone Monday in an interview to be broadcast Tuesday morning on NBC’s “Today” show.

“I don’t sit around just talking to experts because this is a college seminar,” Mr. Obama told the show’s host, Matt Lauer, in an interview in Kalamazoo, Mich.  “We talk to these folks because they potentially have the best answer so I know whose ass to kick.”

On Monday, Mr. Wells, the BP executive, said that engineers had always felt that the oil traveling through the damaged riser created some back pressure that reduced the flow rate.  “We always expected to see some increase in flow” when the riser was cut, he said.  “It’s difficult to do any calculations on that.”

The company, which for several weeks had publicly rejected the idea of using subsea equipment to measure the flow rate, now says it is up to the flow-rate group itself to decide whether to undertake such a step.

“We are fully cooperating with the Flow Rate Technical Group,” said Anne Kolton, a spokeswoman for BP.  “We are working very closely with their experts.”

The difficulty adds one more item to the government’s long to-do list as it begins planning its response to future oil spills:  creating some kind of technology that can produce accurate numbers in a deep-sea blowout.

The lack of a reliable measurement system “opens the door to all this speculation and uncertainty,” said Elgie Holstein, oil spill coordinator for the Environmental Defense Fund, an advocacy group, “and we’re all reduced to staring at grainy video footage from the ocean floor.”

The success of the cap has prompted commentators on cable networks and the Internet to ask what BP intends to do with the oil, whether the company should be allowed to profit from it or even whether the federal government should confiscate it.

BP officials have said previously that they intend to refine the oil and sell it, although the oil may require special handling.  They have also pointed out that any money to be made -- at current prices the oil collected by the cap so far would be worth about $1.9 million -- would pale in comparison with the costs of the spill, currently $1 billion and counting.

2.

GULF OIL SPILL: OIL COLLECTION JUMPS, BUT BAD WEATHER LOOMS


Los Angeles Times

June 8, 2010 -- 1106 PDT

http://latimesblogs.latimes.com/greenspace/2010/06/gulf-oil-spill-oil-collection-continues-to-increase-but-bad-weather-ahead.html


A containment cap continues to capture increasing amounts of oil from BP's leaking well in the Gulf of Mexico, but bad weather in the coming days may hamper collection efforts, Coast Guard Adm. Thad Allen says.

Allen said Tuesday about 14,842 barrels of oil had been pulled into a processing vessel above the well in the last 24 hours -- up from about 11,000 reported a day earlier. But an unknown amount of oil is still escaping, and BP intends to swap out the current cap with a bigger one next month that can capture more oil.

"I have never said this is going well," said Allen, who's monitoring the response effort for the government. "We're throwing everything at it that we've got. I've said time and time again that nothing good happens when oil is on the water."

A government panel had estimated the total flow at 12,000 to 19,000 barrels per day, but BP said that cutting a kinked riser pipe before placing the cap could have increased the flow by as much as 20%. Estimates of the leak rate, however, continue to be met with skepticism.

While BP works to ramp up the collection rate, it is undertaking an effort to use hoses to extract oil and send it to a platform vessel. Wells said the hoses and cap operation would be able to capture 20,000 barrels, or 840,000 gallons, of oil per day. BP also plans to place a tighter "sealing valve" over the damaged well.

As the collection effort increases, the disastrous oil slick has expanded to about 120 miles of gulf coastline and has broken into hundreds or thousands of patches of oil and is taking a worsening toll on birds and wildlife.

Complicating that cleanup and containment effort is the possibility of bad weather in the coming days. "The weather may become a little bit of a factor," Allen said. "We continue to watch that very, very closely."

As the hurricane season approaches, larger vessels -- including one located in the North Sea -- also have been mobilized to provide what Allen calls a "more permanent" and "durable solution in heavy weather," including the use of flexible hoses that would allow the rigs to operate in turbulent conditions.

Allen said he had requested multiple systems be in place, "so that if we lose one part of it, we can still produce at the same rate."

Allen also said he was "not comfortable" with the claims system that had been administered by BP to assist individuals and businesses dealing with the financial effects of the spill. "Working claims is not something that's part of BP's organizational competency or capacity," Allen said, noting that he would meet with the company later this week to oversee the process.

-- Kim Geiger, reporting from Washington.


3.

BP OIL-CAPTURE RATE RISES AS SPILL PACE STAYS MYSTERY

By Jim Polson and Jessica Resnick-Ault

Bloomberg Businessweek
June 8, 2010 -- 0822 EDT

http://www.businessweek.com/news/2010-06-08/bp-oil-capture-rate-rises-as-spill-pace-stays-mystery-update1-.html


BP Plc said more oil is being recovered from its leaking Gulf of Mexico well with a cap device, as the commander of the U.S.’s spill-response team said it’s unknown how much crude continues to leak.

A drillship above the leak recovered 7,541 barrels of oil in the 12 hours to midday yesterday, BP said on its website last night.  Sustained over 24 hours, that would be 36 percent more than the 11,100 barrels the London-based company gathered June 6.  BP said it will give its next update on the recovery rate at 9 a.m. U.S. central daylight time.

A governmental scientific team will reassess its estimates of the spill amount, which ranged from 12,000 barrels to 25,000 barrels a day, after BP stabilizes the recovery rate, U.S. Coast Guard Admiral Thad Allen, the national incident commander, said yesterday at a press conference at the White House.

“We’re groping in the dark trying to figure out what our recovery capacity should be,” said Ian MacDonald, an oceanographer at Florida State University in Tallahassee.  “They keep painting themselves into a corner and having to abandon the positions that they held before because they were not truthful about this, and didn’t try to get real numbers.”

BP recovered 10,500 barrels on June 5 and 6,077 in the previous 24-hour period ending at midnight June 4.  The oil is piped to a vessel at the surface with capacity to handle 15,000 barrels a day.  BP said it burned off 15 million cubic feet of gas in the 12 hours to noon yesterday.

SPILL ESTIMATES


MacDonald estimates the well is leaking 26,500 barrels to 30,000 barrels a day, six times more than the figure used by BP and the government from April 28 to May 27.

The spill, which is the largest in U.S. history based on the government estimates, has polluted 140 miles (225 kilometers) of shoreline, reduced offshore drilling in the nation by half, menaced tourist beaches in four states, and cost BP more than $1.2 billion.

The spill resulted from the blast of the Deepwater Horizon rig on April 20 and won’t be stopped until the well is plugged by so-called relief wells no earlier than August.  BP is preparing to process another 5,000 barrels a day at the site by hooking up a drilling rig this month, Allen said.

BP intends to reverse the flow through lines used for the failed top kill attempt so that oil and gas can flow to the Q4000, the floating rig it also used to try and plug the well, Allen said.  BP has said that system will be in place by mid- June.

SCIENTIFIC PANEL

The government scientific panel can’t reassess its estimates until BP stabilizes the flow to the drillship through a cap installed June 3, Allen said.  The panel also can’t check its estimate that cutting away a section of kinked pipe, necessary to fit the cap, raised the spill rate by as much as 20 percent, he said.

“We’d love to know” how much oil is skirting the cap, Kent Wells, a BP senior vice president, said yesterday in a briefing with reporters.  The test of the system is whether it reduces the amount of oil on the surface, he said.

Winds that had held the bulk of the oil east of Louisiana shifted, breaking up the slick into sections that are soiling Louisiana and threatening beaches in Florida, hundreds of miles away, Allen said yesterday.  The Coast Guard is canvassing national inventories of oil-skimming equipment to see what can be spared for the Gulf, he said.

'CHANGING ENEMY'


“We’re adapting to an enemy that changes,” Allen said.  Allen has said that the spill response hasn’t been hampered by the lack of an accurate estimate of the leak, and that the estimate is mainly needed to assess damages against BP.

BP had said it was prepared for a spill of 250,000 barrels a day in a Gulf deep-water response plan filed in 2008.  The company has brought to bear all of the resources called for by that plan, Allen said yesterday.

The government scientific panel, led by Marcia McNutt, director of the U.S. Geological Survey, said May 27 its best estimate of the spill rate was 12,000 to 19,000 barrels a day, based on separate analyses of the plume of oil from the well as shown on video and the extent of the slick on the surface of the Gulf.  Scientists examining the plume estimated the leak might be 25,000 barrels a day, the panel said.

Failure to plug the well with mud and cement on May 29 means BP can only capture oil to send to surface ships until relief wells stanch the flow, Allen said.

By the end of June, BP intends to re-plumb the drillship containment system with a quick-release hose for tankers so that ships may detach and reconnect swiftly if a hurricane raises seas to unsafe heights, Wells said yesterday.

BP said today in a statement it will pay the first-quarter dividend of 14 cents a share on June 21.  It was promised to shareholders on April 27, one week after the Deepwater Horizon explosion.

--With assistance from Brian Swint in London. Editors: Charles Siler, Kim Jordan.

--To contact the reporter on this story: Jim Polson in New York at This email address is being protected from spambots. You need JavaScript enabled to view it.; Jessica Resnick-Ault in New York at This email address is being protected from spambots. You need JavaScript enabled to view it..

--To contact the editor responsible for this story: Susan Warren at This email address is being protected from spambots. You need JavaScript enabled to view it..


4.

FOUR REASONS WHY MEASURING FLOW IN BP's SPILL MATTERS

By Marian Wang

Pro Publica
June 7, 2010

http://www.propublica.org/ion/blog/item/Four-reasons-why-measuring-oil-flow-BP-spill-matters (see original for links)

Estimating oil flow from BP’s ruptured well in the Gulf of Mexico has consistently been a subject of contention among the oil company, the government and the skeptics who believe that official estimates significantly low-ball the scale of the disaster.

Both BP and the government knew early on that the disaster could be far worse than what official statements reflected.  Early last month, behind closed doors, BP officials told some lawmakers that the spill rate could be as much as 60,000 barrels a day [2].  Last week the Center for Public Integrity reported that even before a leak was announced, the Coast Guard’s estimate of flow rate in case of a blowout was changed from 8,000 barrels a day to between 64,000 and 110,000 barrels a day [3].

BP’s executives have said that the oil flow is “impossible to measure [4],” and that the company’s top priority is plugging the well rather than measuring it.

But having a lower estimate for the amount of oil that has flowed into the Gulf matters for several reasons:

Flow rates affect how much BP could be fined.

Under the Clean Water Act, for instance, the U.S. could seek civil fines “for every drop of oil that’s spilled into the nation’s navigable waters [5],” according to McClatchy.  That would be a fine of $1,100 per barrel, unless a judge finds that the spill was caused by gross negligence -- in which case the fine could be up to $4,300 a barrel.  (Reuters points this out in an earlier piece [6].)

A lower spill rate, for that reason, could save the company millions in fines.

Flow rates could affect how much BP owes the government in royalties.

Under its drilling lease, BP owes the government royalties on all the oil and gas that’s “lost or wasted [7]” if the leak is found to be a result of company negligence, according to Bloomberg.

When the official flow rate was still at 5,000 barrels a day, Bloomberg reported that those royalty payments could be as much as $1.1 million a day, but it based those calculations on higher estimates of flow rates from scientists.  BP’s royalty debt would be far less if calculated with the official estimates.

Flow rates affect response.

As we noted last week, BP’s own Oil Spill Response Plan, drafted prior to the Gulf disaster, stated that measuring the size and volume of an oil spill was “critical to initiating and sustaining an effective response [8].”

BP spokesmen have since said that calculating the flow of oil is “not relevant,” “might even detract” and “would not affect” the company’s response to the disaster.

Flow rates affect the company’s public image.

Rep. Ed Markey, D-Mass., said weeks ago on CBS’ “Face the Nation” that BP has misled the public about the magnitude of the spill and warned people to avoid buying into its PR game.

“I do not think people should really believe anything BP is saying in terms of the likelihood of anything that they are doing is going to turn out as predicted,” Rep. Markey said.

The company has already spent millions on ad campaigns and public relations to address the Gulf disaster, though the precise amounts remain unclear [9].

I called BP to ask if the company has both a financial and public relations incentive to keep estimates on the low side.  BP spokesman Mark Proegler told me “that’s not the case,” and that the Unified Command -- which includes BP -- continues to refine flow rate estimates.

“We’ve been transparent with everything we’ve done,” BP spokesman Mark Proegler told me.  “I am proud to work for BP and I’m very proud of the way we’re doing the response.  Every piece of information is out there transparently and I would take issue with anyone who suggests otherwise.”

Correction: This post has been corrected to state that Bloomberg’s previous calculation of BP’s royalty debt was not based on the official, 5,000-barrels-a-day flow rate estimate at the time of its publication.  Instead, the calculation was based on higher estimates of flow rate calculated by independent scientists.