Wednesday, May 12, 2010

Been too busy to keep up

Has anyone done the obvious "Thanks Houston" post?

Let's see, we've got:
BP and contractors Transocean and Halliburton were expected to give conflicting accounts of responsibility for causing the blast, testimony prepared for the Senate Energy and Natural Resources Committee and the Senate Environment Committee show.

That's Transocean:
Transocean might not have a great record when it comes to safety engineering, but it has shown real expertise in the area of financial engineering.

Transocean has opposed new Interior Department safety regulations that would have applied to its rig by mandating safety audits once every three years, instead of whenever the oil companies felt like it, the Huffington Post reported. But it has treated its shareholders extremely well, pumping out billions of dollars in dividends and making use of aggressive techniques to finance a big merger.

Here are some highlights:

* The company, spun off from Sonat in 1994, was based in Houston but maintained its official headquarters in the Cayman Islands, where the tax rate is zero. It moved its headquarters to Zug, Switerland, in 2008.

And Halliburton, let's not forget Houston's Cameron International:
Even with the problems with cement seals and the weakening of the mud barrier, the blowout preventer, or BOP, a contraption built by Cameron International, still could have blocked the oil gusher. Unfortunately, those devices, too, have had documented troubles.

The above might be a tad unfair, but they do seem to like the "market good/ government regulation bad" Tea Party bumper sticker in Texas.

His point wasn't quite the same as mine, but, yeah, he did. I really wanted to point out that Houston-based Transocean is a big federal tax dead beat even though it couldn't exist without the Coast Guard.

I assume that everybody reads Naked Capitalism by now (O.K. Yves Smith has been lax on her blogging for a couple of weeks now), have I missed anybody linking to these guest posts?

When it became evident that gas was entering the wellbore from the “oil” reservoir, the appropriate course of action would have been to raise the density of the drilling mud, thus preventing entry of gas into the wellbore. Drilling in an underbalanced situation is a bit risky, but for various reasons (for instance, you can make hole faster) it is sometimes done. To attempt to run casing under these circumstances, however, is suicidal.

Why the decision was made to attempt to run casing under these circumstances is not known. I can say that the time required to circulate and condition the drilling mud—-that is to raise its density or “mud weight”—-on a well of this depth could run into days. Perhaps there were incentives to cut corners.

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