The joint venture formed by the four biggest U.S. oil companies after the Horizon disaster announced on Thursday the blowout containment system was ready for business. The lack of a system has been the "official" reason the administration has not issued any deepwater drilling permits.
The Marine Well Containment Company (MWCC) announced on Thursday the immediate availability of an interim well containment response system for use in the Gulf of Mexico. They reported the system had passed all the requirements by the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). The administration posted the government's requirements several months back and they have been denying permits because no system existed to mitigate a deepwater blowout like the Horizon.
Exxon, Chevron, ConocoPhillips and Shell formed the joint venture and committed $1 billion to the research, design and construction of a deepwater containment system in the months following the Horizon disaster. The projected system will not be available until 2012 with the capability to capture 100,000 bpd and work in depths up to 10,000 feet. The interim system announced today can capture up to 60,000 bpd and work in depths up to 8,000 feet.
The system consists of a 100 ton "capping stack" designed to be lowered onto the well where it will close off the flow when possible but in a worst case situation it will allow the flows to be piped to the surface and captured on tankers for delivery to a refiner.
BP was allowed to join the consortium after they concluded the Horizon disaster. The group has opened a membership window until March 11th for anyone else interested in joining. Membership after that date carries a 20% dues penalty. Non-members can have access to the systems through a service agreement and a fee.
100 Ton Well Containment Capping Stack
The BOEMRE now has a problem. They have been using the lack of an available containment system as a reason for denying all permits. Many analysts believe this was just an excuse to keep any further drilling from occurring until after the next election cycle. The president received a serious black eye from his handling of the Macondo blowout and oil spill. It is thought the administration was hoping to avoid the potential for another disaster but now they will either have to issue permits or find another reason to use as an excuse.
There are between seven and ten deepwater applications currently pending and Michael Bromwich said last week that one could be approved in the "next several weeks." Who knows what that means when prior permits were approved in days and these have been on hold for months.
This is not rocket science. You establish the parameters and post the rules. Companies submit their applications according to the rules. The BOEMRE staff goes through the check off list and either approves, rejects as incomplete or denies the permit. The applicable document required to be submitted with an application to drill is NTL No. 2010-N10. It specifies the requirements for well containment and it is TWO pages long. LINK It is written in legalese but these oil companies have been complying with prior statutes for decades so it is not insurmountable.
Since the BOEMRE has already witnessed a complete function test of the containment system I am going to track the number of days from today until the first permit is issued. It should be interesting to see how long it takes.
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