The Prize is an incredible history and economics film on the oil as a commodity, industrial sector, industry and it's affects on geopolitics. This is actually an EP re-run, originally posted as a FMN in November 2008. But I thought due to the gulf oil spill, there would be renewed interest in actually watching it. If you have not seen this, it's a must watch as the definitive book and documentary on the history of oil.
With that, here is another documentary that is amazing but it doesn't have much economics information contained within, hence it's being put in a comment.
The Fires of Kuwait IMAX film. Below is the first segment, the rest can be found on youtube here.
These most commonly are set up to drill into the side of the out of control well casing or sit just under the bottom of the pipe in the reservoir and shoot the mud/cement into the pipe flooding the casing/pipe with the mud. They call this 'bottom kill' and apparently this will always work eventually.
I've seen conflicting info on how they did this at IXTOC but overall and for todays purposes what I described is how its done.
I believe what I at one point described and what is being described in the 'pool of oil' talk on EP would be a 'pressure relief well' which may indeed be what they end up needing anyway. Some call what they will be doing as a 'kill well'.
Bear in mind that blowing the well head is not a concern with this method and therefore the mud/cement can be pumped in at a much greater pressure with no harm apparently.
Some oil people describing 'relief wells'.
I've managed the drilling of 4 of them in my career, all successful as planned. I might add that none of them attempted to mill into casing but were targeted to be 50 ft from the bottom of the blowing well. When one gets that close or sooner sometimes, the bottom falls out of the relief well and its katy bar the door to pump mud to keep up with the lost returns into the blowing well. You have to be set up for that occurrence as we were and all went as planned with the kill happening on the first encounter. Keep in mind there will be a pressure sink in the formation around the blowing well which will aid in sucking the mud from the relief well. If you can flood the blowing well from the source of the BO, i.e. the formation that is producing or blowing, it won't make much difference whether the flow is up a cased well or around the casing(annular flow). It takes mucho planning to have the pumps on hand and the mud volumes required to
kill a blowout from a relief well.
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Locating the casing of the wild well is not a major issue (@ 90% or so success of getting minimum of 50% cross section to mill).
The original wild well took a month and half longer to drill than scheduled. Just a difficult well. That same delay (or longer) could happen to any one relief well.
And then there is the last foot. Miss center by 18 inches, back up and spend @ one week and do it again. Perhaps only 10% chance, but oil pollutes the Gulf every minute of delay.
The milling of that last foot may take one week, or three weeks. Odds of success <50% (five tries last year in Australia). One week or so delay if milling attempt fails before another try as drillhead is repositioned.
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Alan, I'm willing to bet you a beer there won't be any milling required. As they get close to the producing reservoir they will hit a pressure sink in that reservoir that will suck the mud out of the relief well like crazy so they better be prepared for it.
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(Maybe I should mention that it's not really a "relief well", it's a "kill well", and the purpose of the kill well is to get down below the bottom of the drill pipe and inject enough cement to plug the formation up but good.)
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(The relief well intersects the wild well a few hundred feet above the oil & gas reservoir. It spends 1 to 3 weeks (I have read various times) TRYING to mill through the steel (<50% chance each attempt) on the last foot. Once it succeeds it pumps in kill mud into the bottom of the well and kills flow. Then cemented in.
If relief well attempt to mill through fails, week plus to back up and start over a few feet up or down.
THEN wild well is reentered and a series of concrete plugs are poured in the original well bore.
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OK - was lurking for days and decided to jump in. See my bio for my industry background.
In this case, it's almost certain that the flow is coming up the outside of the production casing string, so you don't want to mill a window in it. Instead, the relief well has to get very close to the old wellbore and establish communication with it.
Once that's done, you can pump like craazy down the relief well and begin mixing heavy mud with the produced fluids at the source. Remember, that the velocities are much lower downhole because the gas is unlikely to be coming out of solution until the pressure is relieved up the wellbore. (I always thought the topkill would fail, because it's like pissing into the wind -- there are so many leaks above the stack that they can't establish enough backpressure to halt the well flow and start the mud going south. If they can get enough bridging with the junk shot, it might have a chance, IMHO)
Anyway, back to the relief well -- As the mud adds hydrostatic pressure, it slows the rate into the wellbore (as per Darcy's law), which means that the ratio of mud to oil increases, which further increases the mud/oil ratio, which further increases the hydrostatic head. This cycle continues until no more oil flows and it's only mud circulating up the old casing annulus.
Once the flow stops, then BP can remove the old LMRP, connect a 2nd BOP stack on to of the old one, open the old rams, and begin permanent P@A operations (assuming its not a casing collapse below the hangar, in which case I think the only option would be to bullhead cement from the top and pump enough of it that if plugs off the annulus between the production casing and intermediate string).
here. Describes some sort of major fight between the rig crew and a "BP company man" who was, it implies, telling them to cut corners.
i.e. "Company guy" barks orders that are wrong and because he's "company guy" things are done wrong type of deal, like something straight out of a 1940's bad script.
Wait till the Fannie/Freddie bailout costs come to light. They will dump all their bad CDO investments (as you say the crap that the banks sold them rated AAA by the corrupt ratings agencies filled with junk) on the taxpayers rather than default and the taxpayer will pay the banks yet again further perpetuating the system in place.
Cue the markets to fall. Cue Libor and TED back to 2008 levels. Cue the Fed to return to QE priming the pump. Cue hyper inflation hidden by fake stats as consumers here buy everything made by Chinese prison labor. Cue worse and worse unemployment. Cue the FHA plus a newly rejuvenated F&F to more sully support a housing market already on government life support to maintain high housing prices to further support the banks. I mean housing sales are way off so what we want is different mechanisms for people to borrow there way into bankruptcy not allow more affordable homes right? This will of course also inflate our way out of debt but with all the benefits going to the banks and the wealthy where as my solution most goes to regular people.
We won't have to wait long for all this to play out though. The FASB wants to reverse their change in bank asset valuations back to mark to market and F&F will bubble to the surface by the end of summer. Look for action to block the FASB move and to put off F&F till after midterm elections.
As the money supply contracts and the Fed keeps printing the Congress keeps borrowing to spend cue hyper inflation as the Fed will unleash the printing presses and Congress will spend us into the proverbial poor house weakening the dollar till its wallpaper. As long as a house remains essentially pegged where it is though since thats the status quo.
The scary thing is that we have to see US M3 stats coming from Europe because the Fed no longer publishes them.
When this started many people including Roubini, Taleb, Marc Faber and a few others including Bernankes MIT economics professor Stanley Fischer said that they are just doing the same thing that got us here in order to maintain the status quo.
Fischer put it best though at the Central Banking get together in Jackson Hole, WY last year:
"At this stage, we seem to be taking it for granted that we should go back to the structure of the financial system as it was on the eve of the crisis," Fischer said. "But we need to be thinking more broadly, including the possibility that some radical restructuring is needed.
We are solving a private debt crisis by exacerbating an already bad sovereign debt crisis and our children and grandchildren will be paying for all this.
The Gulf operating rig count is way down, so they have an inclination and ability to drill more wells. That is the slow way to relieve pressure on the offending well. But guess what? You get more wells drilled and more production.
Capacity of in place wells is measurable - somewhat. Actual oil production utilization is way tricky because it is so variable and proprietary. See MMS reports.
"The U.S. Gulf of Mexico was the only major rig market to experience a decline in utilization..." according to ODS-PetroData. If you look at BPs reports to MMS, much of the well-head capacity is not active.
From MMS reports and rig count, I infer there
is slack production capacity at many of the over 30,000 well heads in the Gulf. It's not a long shot.
Just open the circular valves a little and you improve
the Top Kill chances. But don't do this if you want to drill more wells.
sure, but the underlying reason for propping up Freddie Mac and Fannie Mae is to service and keep solvent (if anthing about them is really solvent) JP Morgan Chase, Goldman Sachs and Morgan Stanley.
Therefore, as others far more intelligent than I have pointed out, the US Dollar today is based upon mortgage loans.
Housing will fall for awhile while wages will rise naturally and our debt as a percentage of GDP will fall.
But I fundamentally agree with your idealistic assessment of what would happen in an honest economy -- assuming the US economy is anything other than a colossal criminal enterprise today.
Good grief! I'm watching the press conference and he literally said they are "winning" the clean up of the oil near shore. On what kind of fiction is that from the various images/maps and analysis of various plumes and what's washing up?
One thing that drives me nuts is this is a situation where engineers should be 100% in charge. A President doesn't know physics and oil engineering, either does a BP CEO for that matter. That sounds like great theater but doesn't sound right in terms of fixing the problem if I understand oil field pressures at all (which maybe I do not!)
or is this a removal of the current BOP and putting on another type of cap over the well.
I'll bet that NY times article is accurate, and "running out of mud" is something I sure did not consider but the pressures down there, none of this surprises me.
I think that Ratigan clip talks about trying to plug up a firehose while it's gushing as an analogy.
Beyond my pay grade but I do think the public is putting way too much hope on this "top kill", they should have never claimed a 70% chance and lowballed it.
Find any legitimate engineering criticism out there on what they should be doing to cap off the well?
IMO this is just perpetuating a failed system and keeping home prices from reaching affordable levels.
We have oodles of government support for housing prices from tax deductions of interest to credits to mortgage programs etc. All this does is create an artificially high priced market that pushes home ownership further and further away from the average earner and pads the pockets of the banks and the wealthy.
Reinstating mark to market for bank held assets is the first step in deleveraging the US housing market and hence the economy. Within a year of that we'll see whether the new reforms allow for another round of bank bailouts etc.although the Fed will bail them out anyway since we have no control there in all reality making financial reform a complete joke.
Remember China is still moving away from long term US investments and even stuck to the Euro investments rather than return to US as its main investment. What does that tell us?
Let the housing market fall and deleverage the dollar. Housing will fall for awhile while wages will rise naturally and our debt as a percentage of GDP will fall. Pizzas may end up costing $50 but we'll have the money to pay for them and making oil $300 a barrel is the best thing we could do for alternate energy.
and isn't shutting down the wells of the field increase the overall pressure?
Also, how updated is this? I'm watching the news and the misinformation is beyond belief. If BP was smart they would put an actual engineer from the team on the air so people would realize it's real information.
I do know that such a maneuver is so nasty, 5500 feet down, I don't know what the PSI is on that gusher but the oil volume tells me it's beyond a fire hose!
So, is it suspended or is it a recalibration of pressure? If they just force this without adapting for various pressures I imagine they would blow up the BOP easily.
Ya know honestly, I don't know how well this will work, I"m not hopeful and think they should be deploying a secondary technology to just try to "vacuum" from the source as much as they can in the nearby water.
When I wrote up this post, I had to swim through so much misinformation or skewed, inaccurate, it's tough to find out what's truly going on, esp. in real time.
You might also notice that share button. Since EP is a niche site, all econ 24/7, a lot of posts get read because someone reads something and shares it on another site or through those buttons. It's weird but that's what goes on, instead of writing a comment on this site, they write a comment on some other site which has picked up on the article, even though it is read on this one. The site feeds also go out and are aggregated by some other sites who like us as well as news sites, which is another way people read the articles posted here.
I'm working to get more people to join us in the comments, discussion section and I'm working on the software to make that happen more, but in terms of getting really good posts read, so far this seems to be how it's all happening.
Bottom line if you think an article/post is awesome, you might try those buttons in addition to comments.
saved for SMC. You get the "theme" of this weeks SMC, so if you find more of these, esp. youtubes which finding those gems is a tough hunt, you can email me too and help me cast the net wider to capture the great ones.
The Prize is an incredible history and economics film on the oil as a commodity, industrial sector, industry and it's affects on geopolitics. This is actually an EP re-run, originally posted as a FMN in November 2008. But I thought due to the gulf oil spill, there would be renewed interest in actually watching it. If you have not seen this, it's a must watch as the definitive book and documentary on the history of oil.
With that, here is another documentary that is amazing but it doesn't have much economics information contained within, hence it's being put in a comment.
The Fires of Kuwait IMAX film. Below is the first segment, the rest can be found on youtube here.
These most commonly are set up to drill into the side of the out of control well casing or sit just under the bottom of the pipe in the reservoir and shoot the mud/cement into the pipe flooding the casing/pipe with the mud. They call this 'bottom kill' and apparently this will always work eventually.
I've seen conflicting info on how they did this at IXTOC but overall and for todays purposes what I described is how its done.
Relief Well Images
I believe what I at one point described and what is being described in the 'pool of oil' talk on EP would be a 'pressure relief well' which may indeed be what they end up needing anyway. Some call what they will be doing as a 'kill well'.
Bear in mind that blowing the well head is not a concern with this method and therefore the mud/cement can be pumped in at a much greater pressure with no harm apparently.
Some oil people describing 'relief wells'.
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here. Describes some sort of major fight between the rig crew and a "BP company man" who was, it implies, telling them to cut corners.
i.e. "Company guy" barks orders that are wrong and because he's "company guy" things are done wrong type of deal, like something straight out of a 1940's bad script.
Wait till the Fannie/Freddie bailout costs come to light. They will dump all their bad CDO investments (as you say the crap that the banks sold them rated AAA by the corrupt ratings agencies filled with junk) on the taxpayers rather than default and the taxpayer will pay the banks yet again further perpetuating the system in place.
Cue the markets to fall. Cue Libor and TED back to 2008 levels. Cue the Fed to return to QE priming the pump. Cue hyper inflation hidden by fake stats as consumers here buy everything made by Chinese prison labor. Cue worse and worse unemployment. Cue the FHA plus a newly rejuvenated F&F to more sully support a housing market already on government life support to maintain high housing prices to further support the banks. I mean housing sales are way off so what we want is different mechanisms for people to borrow there way into bankruptcy not allow more affordable homes right? This will of course also inflate our way out of debt but with all the benefits going to the banks and the wealthy where as my solution most goes to regular people.
We won't have to wait long for all this to play out though. The FASB wants to reverse their change in bank asset valuations back to mark to market and F&F will bubble to the surface by the end of summer. Look for action to block the FASB move and to put off F&F till after midterm elections.
As the money supply contracts and the Fed keeps printing the Congress keeps borrowing to spend cue hyper inflation as the Fed will unleash the printing presses and Congress will spend us into the proverbial poor house weakening the dollar till its wallpaper. As long as a house remains essentially pegged where it is though since thats the status quo.
The scary thing is that we have to see US M3 stats coming from Europe because the Fed no longer publishes them.
When this started many people including Roubini, Taleb, Marc Faber and a few others including Bernankes MIT economics professor Stanley Fischer said that they are just doing the same thing that got us here in order to maintain the status quo.
Fischer put it best though at the Central Banking get together in Jackson Hole, WY last year:
We are solving a private debt crisis by exacerbating an already bad sovereign debt crisis and our children and grandchildren will be paying for all this.
It looks like the government is grossly underestimating the spill amount. They are claiming 39 million gallons.
The Gulf operating rig count is way down, so they have an inclination and ability to drill more wells. That is the slow way to relieve pressure on the offending well. But guess what? You get more wells drilled and more production.
Capacity of in place wells is measurable - somewhat. Actual oil production utilization is way tricky because it is so variable and proprietary. See MMS reports.
"The U.S. Gulf of Mexico was the only major rig market to experience a decline in utilization..." according to ODS-PetroData. If you look at BPs reports to MMS, much of the well-head capacity is not active.
From MMS reports and rig count, I infer there
is slack production capacity at many of the over 30,000 well heads in the Gulf. It's not a long shot.
Just open the circular valves a little and you improve
the Top Kill chances. But don't do this if you want to drill more wells.
http://www.gomr.mms.gov/homepg/pubinfo/repcat/pipeline/pdf/2010.pdf
http://www.oods-petrodata.com/odsp/weekly_rig_count.php
sure, but the underlying reason for propping up Freddie Mac and Fannie Mae is to service and keep solvent (if anthing about them is really solvent) JP Morgan Chase, Goldman Sachs and Morgan Stanley.
Therefore, as others far more intelligent than I have pointed out, the US Dollar today is based upon mortgage loans.
But I fundamentally agree with your idealistic assessment of what would happen in an honest economy -- assuming the US economy is anything other than a colossal criminal enterprise today.
Republicans will have a field day with this but none of those states are Blue.
Bottom line here is overall there is going to be a huge loss of income and real estate value and jobs for the south east before this is done.
WashPo Story
But on the other hand, does that make sense? How do they cap a well in the first place, no accident?
ON CNN some guy is claiming work is suspended on the 2nd relief well.
I believe the idea is to just try anything till the relief wells are in place knowing none of it will work but trying to appease the public.
Good grief! I'm watching the press conference and he literally said they are "winning" the clean up of the oil near shore. On what kind of fiction is that from the various images/maps and analysis of various plumes and what's washing up?
One thing that drives me nuts is this is a situation where engineers should be 100% in charge. A President doesn't know physics and oil engineering, either does a BP CEO for that matter. That sounds like great theater but doesn't sound right in terms of fixing the problem if I understand oil field pressures at all (which maybe I do not!)
or is this a removal of the current BOP and putting on another type of cap over the well.
I'll bet that NY times article is accurate, and "running out of mud" is something I sure did not consider but the pressures down there, none of this surprises me.
I think that Ratigan clip talks about trying to plug up a firehose while it's gushing as an analogy.
Beyond my pay grade but I do think the public is putting way too much hope on this "top kill", they should have never claimed a 70% chance and lowballed it.
Find any legitimate engineering criticism out there on what they should be doing to cap off the well?
I read that on the Oil Drum. Everything offshore under US control.
You are correct lots of misinformation much of it coming from BP and possibly from the Government.
They shut off the mud for 16 hours yesterday while they ran a loop of the video from the time before that.
My understanding is that they are removing the riser from the BOP now and they will be trying to cap it with another dome.
I don't know why they don't drill into the BOP and suck the oil out as if its a new well. With the right drill head they could do that I think.
Misinformation or Truth?
IMO this is just perpetuating a failed system and keeping home prices from reaching affordable levels.
We have oodles of government support for housing prices from tax deductions of interest to credits to mortgage programs etc. All this does is create an artificially high priced market that pushes home ownership further and further away from the average earner and pads the pockets of the banks and the wealthy.
Reinstating mark to market for bank held assets is the first step in deleveraging the US housing market and hence the economy. Within a year of that we'll see whether the new reforms allow for another round of bank bailouts etc.although the Fed will bail them out anyway since we have no control there in all reality making financial reform a complete joke.
Remember China is still moving away from long term US investments and even stuck to the Euro investments rather than return to US as its main investment. What does that tell us?
Let the housing market fall and deleverage the dollar. Housing will fall for awhile while wages will rise naturally and our debt as a percentage of GDP will fall. Pizzas may end up costing $50 but we'll have the money to pay for them and making oil $300 a barrel is the best thing we could do for alternate energy.
and isn't shutting down the wells of the field increase the overall pressure?
Also, how updated is this? I'm watching the news and the misinformation is beyond belief. If BP was smart they would put an actual engineer from the team on the air so people would realize it's real information.
I do know that such a maneuver is so nasty, 5500 feet down, I don't know what the PSI is on that gusher but the oil volume tells me it's beyond a fire hose!
So, is it suspended or is it a recalibration of pressure? If they just force this without adapting for various pressures I imagine they would blow up the BOP easily.
Ya know honestly, I don't know how well this will work, I"m not hopeful and think they should be deploying a secondary technology to just try to "vacuum" from the source as much as they can in the nearby water.
When I wrote up this post, I had to swim through so much misinformation or skewed, inaccurate, it's tough to find out what's truly going on, esp. in real time.
BP reported that less than 10% of the fluids being pumped in is staying in and they suspended the effort for the third time.
This isn't a supply disruption though because this was not even an active well.
The supply disruption is shutting down all the wells in the Gulf through a moratorium but thats necessary.
Putting on my EP admin hat on for a moment.
You might also notice that share button. Since EP is a niche site, all econ 24/7, a lot of posts get read because someone reads something and shares it on another site or through those buttons. It's weird but that's what goes on, instead of writing a comment on this site, they write a comment on some other site which has picked up on the article, even though it is read on this one. The site feeds also go out and are aggregated by some other sites who like us as well as news sites, which is another way people read the articles posted here.
I'm working to get more people to join us in the comments, discussion section and I'm working on the software to make that happen more, but in terms of getting really good posts read, so far this seems to be how it's all happening.
Bottom line if you think an article/post is awesome, you might try those buttons in addition to comments.
saved for SMC. You get the "theme" of this weeks SMC, so if you find more of these, esp. youtubes which finding those gems is a tough hunt, you can email me too and help me cast the net wider to capture the great ones.
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