Gulf oil spill

The Money Game quotes Florida investment advisor David Kotok on what the relief well BP is drilling needs to do. I once worked on little land drilling rigs in West Texas, and thus have a vague idea of the daunting task that lies ahead for the drillers.

Oil spews for months, until a new well can successfully be drilled to a depth of 13000 feet below the 5000-foot-deep ocean floor, and then concrete and mud are injected into the existing ruptured well until it is successfully closed and sealed. Work on this approach is already commencing. Timeframe for success is at least three months. Note the new well will have to come within about 20 feet of the existing point where the original well enters the reservoir at a distance of 3.5 miles from the surface drilling rig.

And if it doesn’t work? Then oil will continue to gush until the field is emptied.

Kotok also says the damage is now in the tens of billions of dollars, and growing, with BP offering commercial fishermen a mere one month’s pay as settlement.

Another plan is to clog the leak with mud (drilling solution) or junk like ground up tires and hope it works. If it doesn’t, it could damage the blowout preventer and make things much worse.

Sounds like Desperation City to me. The unpalatable truth is, no one really knows what to do, as this has never happened before.

BP, Halliburton, and Transocean are starting to blame each other. The lawsuits from this will go on for decades.

The Gulf wait, wondering how bad the damage will be. This was a failure of corporations and a failure of the government. The Bush Administration let the Oil companies do whatever they wanted, regulators were asleep and compromised, and the Obama Administration specifically allowed BP to drill Deepwater Horizon without a detailed environmental report.

If there’s any silver lining to the disaster in the gulf, it is that it may serve as a wake-up call, a reminder that we need politicians who believe in good government, because there are some jobs only the government can do.

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