Oil Spill Prospects - Comparing to Past Well Blowouts

If the biggest problem in all of this is that the blowout preventers (BOPs) blew out, then we should probably look at similar instances. The well is a blowout or gusher, and the oil pours and pours until it is capped, the well is destroyed or all the oil comes out. This isn't a one off spill and it isn't going to solve itself. As a result we're looking at mostly very old cases, mostly before BOPs were first created (in 1924). First, lets look at the characteristics of the current situation at the Macondo well in the Gulf of Mexico.

The major estimates range between the low White House Department of Energy estimate at: 33k barrels (via Stephen Chu), the high DOE estimate at 57k barrels, and 100k barrels from Matthew Simmons (Oil and gas investment banker). It sounds as though there is a decent possibility it's greater than 100k, and this may be the maximum flow from the well. The well was also estimated to contain about 50m bbl. Extremely simplistically, the highest estimates can be extrapolated to 500 days of oil flow.

This all started on April 20th, now it's June 19th. So we're 60 days in. Worst case scenario, we're about 12% of the way through this. To further the point (and show how this isn't as ridiculous as it sounds), we can use a comparison.

This takes us back a century to the Lakeview Gusher. Three characteristics make it stand out: 1. it couldn't be stopped, 2. it was been estimated to have released about 90k barrels per day at its peak, 3. it was also from within a similar order of magnitude (it eventually spewed about 10m bbl and didn't continue to produce much more when the original bore was closed and the field redrilled), 4. this well spewed a river of oil for 540 days. In other words, this isn't completely insane.

BP claims it is collecting up to 25,290 barrels a day between the cap on the pipe and a new containment system. If this is the case (requiring us to trust BP), then between the lowest and highest acceptable estimates, they are recovering between 25 and 76% of the oil, and still leaves between 8k and 75k barrels being released into the GOM per day. To put this in perspective once again.

The Exxon Valdez checked in at 272k barrels of oil in total. If we allow for the currently claimed capture, this leaves us with an Exxon Valdez every 4-30 days. Today, we would be in the areas around Valdez 5, and Valdez 20. If the flow rate is the low Chu less the capture (8k per day * 45 days), or the very best case scenario, we have 360k bbl to go, or about 1.3 Valdezs to go if the relief wells are done by mid-August. If it is the Simmons (still allowing for BPs capture rate), we about have another dozen Valdezs to go.

If the relief wells don't work, we have only the option of nuking it, or letting it run out. If we let it run out, and we assume that as much oil that came out of Lakeview (10m bbl) can come out of this one (and this well is 5x larger), we still have another 27.5 Valdezs on our hands if the capture rate is what BP claims (and it doesn't change).

Tomorrow, hopefully some visualizations and publishing some numbers. Also, I'd like to look at the nuclear options. I just took a quick look through, and it sounds like there are most certainly risks. This is a trade, not a solution, on both sides.

My expectation as of right now: for political reasons, we wait to see if BP can drill in to make the relief well. If this doesn't happen by the end of August, we will nuke the well.