Earlier I had reported that the events in the Gulf were unprecedented, a
black swan. Since then, folks in the oil patch are still incredulous, but
are increasingly upset with BP breaking the rules of the game.
Gautam posted on Facebook the following article published in the WSJ:
http://online.wsj.com/article/SB10001424052748703303904575293270746496824.ht
ml?KEYWORDS=Samson#articleTabs_comments
http://tinyurl.com/22nzd37
It is written by the president of an independent oil company. I've seen in
the AP report of the relevant meeting and heard second hand that the
contractors strongly argued for the right actions to be taken, and were told
by the company man that he was in charge, he did his own tests (which were
never transmitted to shore and went down with the rig if they existed) and
found everything was OK). Even if this were true, the multiple red flags
indicate that the well needed a second cement plug.
Let's assume, for arguments sake, that no one in the discussions really
cared about the environment, corporate responsibility, loss of life, etc.
All they cared about was the bottom line. Halliburton's and the rig hands
actions were reasonable in that light. They saw red flags for a pressure
problem with a bad seal. The indications were that the formation pressures
were going past the bad cement job, and it had to be redone. Even if BP
successfully got Halliburton to do it for free, even if the rig owner gave
BP the rig time for free, they'd be a lot better off than risking this.
BP's rep. bet the house that the tests were wrong and that the blowout
preventer would work in case the well blew. But, that's like someone doing
a DWI, assuming that air bags and seat belts would assure that no one would
be killed. The author's point is rightyou should never get to the last
line of defense. Given what they knew, they knew what to do, and
Halliburton argued for it, as did the assistant driller who died.
The question is why did BP argue for taking the risk. The company man knew,
or should have...BP did, about the problems with the blowout
preventersand blowout preventers are not made to withstand being hit by
hundreds of feet of casing blowing through them. Allowing a blow-out, and
relying on safety mechanisms was not a smart financial move.
I have a friend responsible for a number of deep water rigs. They take
safety seriously for two reasons. First, they actually believe in
responsibility. But, just as important, it makes financial sense.
BP, if they are lucky, will lose 10 billion. There is talk of liabilities
well beyond that, especially if what everyone in the business knows what
happened actually happened. This isn't someone asleep at the wheel. This
is someone being told the risks in plain English, and deciding to take
them...even though anyone with a calculator could tell that it was a bad
move for BP _financially_. In other words, if all you cared about was BP's
profits, you'd do the right thing...you'd spend the money to plug the well
properly, and then talk with the contractors concerning whether you are due
a rebate.
So, the question for me is how BP's culture encouraged the company man to
ruin the company.
The second, unrelated, question that I have concerns the idea that we could
have cost efficient alternative, non-nuclear, non-fossil fuel technology now
if we only were serious about it. Eliminating our dependence on Mid-East oil
has been a stated goal of every president since Nixon, tens of billions have
gone into it, without much effect. Japanese companies make little off oil;
it is just a negative on their balance of trade, but could make hundreds of
billions, if not trillions off solar power built by Japanese companies.
Yet, they haven't done it.
There's been all sorts of conspiracy theories to explain why. But, let me
offer a parallel to explain it. In the early '80s, Reagan announced a
missile defense program that would stop the missiles from the USSR,
protecting the US. Tens, if not hundreds of billions were pored into it.
30 years later, and our successful tests involve steering the target into
the way of the interceptor. We aren't even close to demonstrate the ability
to stop 5 rockets.
Why? What lack of dedication stopped us?
Might I suggest that it was a task that we didn't have the proper tools to
accomplish. Even with dedicated contractors and generals, it wouldn't work,
the task was beyond the technology of the time.
Up until now, a replacement for fossil fuels hasn't existed. And, if the US
and Europe decided to not use oil or coal, then they'd just be blown away by
China and India, who's economy would expand while ours would shrink as costs
skyrocketed in the West and stayed the same elsewhere.
The only solution is a positive black swan. It is increasingly likely (I've
changed my odds from 5% to 20%) that synthetic biology will allow the
creation of fuels from sunlight, carbon dioxide and sea water. This is the
best bet I've
