Media reports and political rhetoric critical of BP's efforts to plug the Macondo oil well leak and its effects on the Gulf environment have failed to mention that the Macondo well leak will not likely be the largest spill to impact the Gulf of Mexico.
To answer the question of how the Macondo tragedy might ultimately play out, one can look to history for a long-forgotten example. On June 3, 1979, the PEMEX operated Ixtoc-1 well blew out after workers on board the semisubmersible Sedco 135-F removed pipe from the well to change the drillbit. During this process, oil and gas under tremendous geologic pressure overcame the weight of the drilling mud and the well blew out; the blowout preventer activated, but wasn't strong enough to shear through the thick pipe being pulled out of well.
As a result, hydrocarbons gushing from the well ignited at the surface, and the 63 rig workers, some injured and burned, were rescued before the rig sank. Meanwhile, gas from the well continued to burn on the surface long after the rig went down.
It took PEMEX nearly 10 months of efforts to plug the well, including pumping drilling mud, scrap rubber and other debris into the well under high pressure – the infamous top-kill procedure attempted by BP. PEMEX also installed a containment cap over Ixtoc in an effort to collect some of the hydrocarbons flowing from the field. PEMEX was finally able to plug the well after completing two relief wells that intersected the blown-out well; the company was then able to pump mud and cement into the well to plug it permanently.
Before it was plugged, the Ixtoc well spilled an estimated 3.3 million barrels of oil over a 290-day period. Tar balls from the spill washed up on Texas beaches, and beaches in Mexico were covered in oil, with the location bird population suffering and commercial fishing industry closed for a time after the spill. The level of animal life in the region of the spill fell by more than 50 percent for some species in the immediate aftermath.
Parallels between Ixtoc and the Macondo spill are clear, from the failure of the blowout preventer to the operator's hurried, ad hoc attempts to slow or plug the well before the relief wells could be completed, according to Elliot H. Gue, personal finance editor for the website Investing Daily. Gue analyzes the complexities of the global energy markets and related industries, from traditional fuels such as coal and crude oil to alternative energy, in his semimonthly newsletter, The Energy Strategist.
However, the long-term outlook for the U.S. Gulf marine environment may be less negative that forecasts reported in the U.S. media. Most marine biologists who studied the after-effects of the spill were surprised at how quickly the Gulf recovered, Gue noted. Local fisheries also had recovered to more or less normal levels of activity two to three years after the spill.
Oil spilled in the warm waters of the Gulf will degrade at a far faster pace than in colder conditions, with oil degrading twice as quickly for every 10 degrees Celsius. Though Macondo has been compared to the Exxon Valdez disaster in 1989, oil from the Exxon Valdez spill broke down at a slower pace due to the colder waters offshore Alaska.
Furthermore, oil and gas leaks have occurred naturally worldwide, and have taken place in the Gulf of Mexico for thousands of years. The exact amount of seepage is unknown, but estimates suggest that between 1 million to 1.5 million barrels of oil leak into the Gulf each year.
Amid the political rhetoric being thrown by the Obama administration at the energy industry and BP and the "sensationalist" media coverage of the disaster, the Ixtoc spill has barely been mentioned. Gue noted that Macondo is likely to be a smaller spill than Ixtoc, though Ixtoc was technically a much easier spill to manage because the water depth at the Ixtoc site was 160 feet and the well could be accessed by divers and from the surface. However, improvements in oil field technology since the 1970s will likely help BP to remedy a solution more quickly than the timeline of efforts to contain the Ixtoc spill, with BP's efforts to funnel oil to the surface appearing to work, Gue said.
While the Macondo leak's proximity to sensitive coastal wetlands and the fact that microorganisms that break down oil are likely more active in shallow waters might increase the Macondo spill's impact, the U.S. reaction to the spill, which has resulted in a six-month deepwater drilling moratorium, will clearly have larger economic impacts than the spill itself. Oil prices will likely head higher towards the $100 mark as a result.
While Macondo is an environmental disaster, "investors must separate pre-election political rhetoric and sensationalist media coverage from reality and history. Odds are that Macondo will turn out to be far less of a disaster than BP's most vocal critics suggest," said Gue.
When will it end?
When Macondo will be plugged and how much oil will have leaked by then are anybody's guess. As mentioned above, Ixtoc leaked an estimated 3.3 million barrels over a 290-day period, or an estimated 11,379 b/d.
According to recent estimates by the U.S. Geological Survey, the Macondo well is leaking between 20,000 b/d to 40,000 b/d. From the time period of April 22 through June 4, or 44 days, Macondo leaked between 880,000 and 1.8 million barrels of oil.
The LMRP [lower marine riser package] containment cap started capturing oil on June 4, and caught 89,000 barrels over a six and half day period, or about 14,000 b/d. The LMRP was capturing over 15,000 b/d as of June 11, and upcoming additions to the LMRP may enable more to be collected.
Looking forward to the capping of the leaking Macondo well, drilling of the first relief well started on May 2 and had reached 14,000 feet as of June 10, with an estimated 4,000 feet more to go. At that pace, drilling would likely be completed by early July. With further time for actually completing the well, BP's estimate of 3 months to complete the first relief well looks to be met. With the expectation that the relief well will be able to halt the flow of oil, the spill could be ended by the start of August.
For the 57-day period from June 4 through Aug. 1, Macondo could be expected to leak an additional 1.4 million barrels, assuming a flow rate of 40,000 b/d and that the LMRP continues to capture 15,000 b/d during that time.
Based on the highest current estimates of 40,000 barrels of oil being spilled per day, approximately 3.2 million barrels are likely to have been spilled from the Macondo well by the time the first relief well is ready. That size of a spill puts the current Gulf oil spill very much in line with the Ixtoc spill in terms of total volume.
With the significant efforts underway to control the extent of the spill and with the usage of dispersants, both at the surface and being injected directly into the oil plume, the actual environmental impact of Macondo may be significantly less than Ixtoc. If that is truly the case, the long-term environmental fallout from the Gulf oil spill will likely be much less significant than the enduring catastrophe that many are envisioning.
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