In light of the recent oil response training that took place with the relevant stakeholders involved, the author thus found it necessary to take that into consideration in the discussion and analyses on this topical issue – as was observed in last week’s edition especially. As such, this, among other factors, has necessitated an extension of this series or this particular important topical discussion, after having done further research into the causation of the most recent oil spill ; that is, the one that occurred in the Gulf of Mexico. It is the findings that emerged therein that led to the conceptualization of some critical and interesting questions, of which the answers are important to not only the people of Guyana, but also the Government of Guyana (GoG) and the political Opposition.
It has also contributed to this columnist’s conclusion that Guyana is in fact exposed to a higher risk of an oil spill – a notion that is contrary to what the relevant stakeholders, chiefly ExxonMobil, is claiming: that an oil spill is unlikely. In this respect, this analyst is of the strongly held view that these are some factors that merit serious consideration at the level of the nation’s policymakers. It is these new dimensions of the broad oil spill discussions that today’s article seek to address.
What caused the Gulf of Mexico BP Oil Spill?
The earliest oil wells in the Gulf of Mexico were in shallow waters near the coast. As these wells became depleted, it was thus necessary to drill in deeper waters. Drilling in deeper waters, however, imposes greater challenges, such that the pressures are greater, the temperature of the oil is higher, and the stresses on the metals involved are greater. In spite of the fact that the oil industry is creating ever more technologically advanced equipment to deal with these issues, the fact remains that it is virtually impossible to solve every new problem that may arise through computer simulations. Should the equipment be tweaked to make it even stronger to deal with the higher pressures, and greater temperature differential between the hot oil and the cold water, it can cause unforeseen problems with another system that interacts with it (cited from Gail the Actuary at The Oil Drum, featured in the Business Insider, 2010). The deep-water horizon was a nine-year-old drilling rig that could operate in waters of up to 10,000 feet deep. While drilling a 35,050 foot-depth exploratory well in 5,100 feet of water, methane gas expanded into the drilling rig and ignited, causing a massive fireball and destroying the oil pipeline to the rig. The explosion and resulting oil leak caused an estimated 4.9 million barrels of oil to be spilt over the course of several months (from April 2010, and was finally capped in July, 2010).
Of the 126 crew members that were on board, 11 were never found, and were believed to have died despite a three-day Coast Guard search (Cholan et al, 2013).
According to John Griggs, who had written on the BP oil spill in the Gulf of Mexico (published in the Energy Law Journal, Vol.32:57:P66), he noted that the primary problem with BP’s contingency plan was that it did not address what specific technology would be needed or available to respond to a deep-water blowout. Instead, it repeatedly emphasized that such a spill was unlikely, and that if it were to occur, environmental damage would be minimal because the well was forty miles offshore (sounds familiar?).
Ironically, the BP oil spill turned out to be one of the largest accidental marine oil spills in the petroleum industry’s 150-year history, and it caused widespread environmental damage, rendering thousands of miles of coastland uninhabitable for hundreds of native species. In short, it cost in excess of US$4 billion dollars in penalties and damages. This was the sad outcome despite similar assurances by BP at the time that an oil spill was unlikely, and should it occur, the damage would be minimal. This did not happen, unfortunately.
Here, in Guyana, the multinational oil giant ExxonMobil is toeing the same line, and is not too forthcoming to sufficiently explain the measures it has in place and the technologies etc., other than simply overemphasizing that it has strong measures in place. What are these strong measures? That’s what the people of Guyana and the GoG need to be schooled on, hence this analyst’s previous contention of an independent evaluator in this regard, and not the oil companies themselves.
In essence, what all this preamble means is that Guyana is in fact exposed to a higher risk of an oil spill due to the very fact that Guyana’s oil drilling is a deep-water venture, which naturally imposes greater risks for technical failures. Moreover, Guyana’s drilling is even deeper than the Gulf of Mexico (Guyana is 5,900 feet, Gulf of Mexico was 5,100 feet in deep waters).
The Author is the holder of a MSc. Degree in Business Management, with concentration in Global Finance, Financial Markets, Institutions & Banking from a UK university of international standing.