Patterico's Pontifications

6/21/2010

Well Problems and Oversight on BP’s Well

Filed under: Government — DRJ @ 8:54 pm



[Guest post by DRJ]

A Bloomberg report raises questions about BP’s decision-making and red flags about oversight by the Obama Administration’s MMS.

My layman’s impression is that the oil companies decide what risks they are and are not willing to take. However, the MMS is supposed to exercise oversight of its oil and gas properties, including wells on federal lands and offshore wells. (FWIW, I suspect the top people at the White House and BP had no knowledge of these problems until the well blew, which is why oil company decision-making and MMS oversight at the lower management levels is important.)

Congress investigated MMS’ role after the BP oil spill and determined oversight was lacking. Secretary Ken Salazar responded with an MMS restructuring plan, and Congress plans to conduct hearings this summer.

H/T ian cormac.

— DRJ

13 Responses to “Well Problems and Oversight on BP’s Well”

  1. Is it any surprise that the energy company most on board with the hoax known as “Climate Change” would have exceptionally shoddy engineering practices? They abandoned science with global warming; why not abandon it with across the board?

    ParisParamus (ca6a0d)

  2. And now MMS is the BoOEMRE. Bag of overflowing exc …

    htom (412a17)

  3. The technology of deep water drilling is still pretty new. I was surprised to learn of the tremendous pressure of oil and gas. BP may be reckless in some procedures but there is no one in the administration who knows anything about this. Probably the best informed government official is Joe Barton who has two engineering degrees and worked in the industry for years before becoming a Congressman, taking Phil Gramm’s seat.

    Mike K (82f374)

  4. i’m not surprised at the pressures: all this is is a gusher underwater…..

    redc1c4 (fb8750)

  5. Mike K,

    The pressures are like this in onshore drilling. Even though it’s underwater, once you get to the formations it’s basically the same and oil companies have been drilling deep wells like that for decades.

    DRJ (d43dcd)

  6. Just remember those incredible early films of gushers coming in…geysers of crude, sometimes twice (or more) the height of the derrick.

    AD - RtR/OS! (a2aeeb)

  7. My layman’s impression is that the oil companies decide what risks they are and are not willing to take.

    In most industry, government has no real expertise in inspecting and reviewing high-tech equipment or safety-related process. Instead, government usually just makes sure that the facility has adequate insurance to cover the liabilities that it could, in a worst-case way, face.

    It’s the insurers who then take up that burden, seeking to protect their bottom line by gathering the needed expertise, meaningfully inspecting and reviewing its insured’s facilities, and insisting that problems be remedied. That’s the way it’s worked forever, and that’s how it should have worked for the drilling industry.

    And it did, until Congress decided to get involved and screw up the natural marketplace for the benefit of the people who give them money. In this case, we see that Congress has capped BP’s liability at $75 million – a drop in the bucket compared to the damage they could easily do with a blowout.

    So, BP’s insurers have likely structured a mere $75 million in coverage. The attention that an insurer pays to an insured is proportional to the amount of the insurer’s money the insured could possibly end up owing in damages for its covered claims. If Congress caps that figure downward by several orders of magnitude, the insurers covering BP are less interested in inspecting BP and correcting BP by those same several orders of magnitude.

    If Congress wants to screw with the market, it had better start doing its homework.

    bobby b (4baf73)

  8. Some government oversight includes technical proficiency, such as the FAA which not only oversees air travel but also investigates accidents. And I think the MMS is active in overseeing onshore drilling on federal lands, so why wouldn’t it have a similar mandate regarding offshore wells?

    DRJ (d43dcd)

  9. It’s the NTSB that investigates air travel accidents, and rail accidents, etc.
    The FAA is, in fact, a classic case of a gov’t bureaucracy married to the past, just one step removed from the old CAB/CAA.

    No more MMS.

    AD - RtR/OS! (a2aeeb)

  10. bobby b knows things.

    daleyrocks (1d0d98)

  11. got this gem from some moonbat associates.

    we’re all gonna die.

    redc1c4 (fb8750)

  12. The (former) MMS’rs are paper-pushers.

    MikeHu (6451eb)

  13. redc1c4 — true, we’re all going to die; hopefully not today. The moonbats start from real problems and possibility and reason to disaster. It could go that way (although supersonic tsunami are a bit much) and there isn’t much we could do if it does. Some think that BP has already told Obama about this and the real probability thereof, and that’s why he’s so detached.

    htom (412a17)


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