Bud's Offshore Energy (BOE)

Like all swinging voters, Dirty Harry – a saltwater crocodile admired for his prediction prowess – took his time sniffing out the candidates in his enclosure at Crocosaurus Cove in Darwin today. Refusing to make a snap decision, Harry – reluctantly it seemed – chose the chicken carcass that was attached to a caricature of Prime Minister Julia Gillard.

Link

Should the croc be correct, BOE friend Martin Ferguson will presumably retain his cabinet position and release the Montara report as promised.  Why is the release of this report so important?

1. While the transcripts of the Inquiry hearings do a pretty good job of identifying the well planning, cementing, barrier, and management issues that were contributing factors, the Commission’s confirmation of the specific root causes of the blowout is essential.
2. Only a few BOE geeks and a handful of others have actually read all of the testimony and submissions.  The Macondo planners and Deepwater Horizon crew either were totally unaware of what happened at Montara or ignored what they had learned.  I suspect that the former was the case.
3. Important emergency response issues, which received minimal attention during the Montara hearings, will likely be discussed in the report.  Montara demonstrated that capping and containment operations can be more difficult for a surface well than they are for a subsurface well.   For safety reasons, a surface capping operation was prohibited at Montara.  Even if the operation was allowed, it probably wouldn’t have been successful because of the way the well was suspended.  Should well suspension practices take into account the possibility of a surface capping operation?
4. The decision to move a rig from Singapore to drill the Montara relief well, rather than use rigs that were operating off Australia, has broad industry and regulatory implications.  Will this decision be assessed in the report?
5. Finally, the Montara Commission makes recommendations for Australia’s offshore regulatory regime. These recommendations will be of great importance to the US and other nations that are reorganizing or initiating their regulatory programs.  We expect the Commission to recommend that a single agency regulate operational safety offshore Australia.  This is consistent with the recommendation in my testimony before the Senate Committee on Energy and Natural Resources and the approach taken by Norway and other leading offshore regulators.  A regulatory regime that includes multiple agencies with overlapping or segmented jurisdiction guarantees conflict, confusion, gaps, and inefficiency.  Wells, platforms, and pipelines are integrated drilling and production systems, and must be regulated as such. Similarly, permitting, auditing, and inspection are integrated regulatory functions that cannot be effectively divided among multiple agencies.  One regulator must be responsible and accountable.

Read Full Post »