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Home Publications Blogs Beat the Press How Could BP Be So Far Off?

How Could BP Be So Far Off?

Friday, 11 June 2010 04:28

For more than a month BP was telling the world that the rate of leakage from its well was just 5,000 barrels a day. It now appears that the size of the leak is actually an order of magnitude greater. How could BP be so far off the mark? Did they really not have a clue? (What do people get paid for at this company?) Or, where they deliberately not telling the truth?

And the question that we ask here at BP, why aren't the media asking this obvious question?

Comments (8)Add Comment
written by izzatzo, June 11, 2010 6:54
Despite claims to the contrary, an area has been discovered in the Gulf that is free of oil since the spill, about 100,000 square feet in surface area with no tar balls on top or plumes underneath.

Deepwater pile driving heavy machinery has been deployed to dam and seal this area off to maintain its pristine condition, so glass bottom boats can conduct "Before and After" tours with contrasting views easily in sight.

Given the expected extreme relative scarcity of such views, tour prices and revenues are predicted to rise accordingly and be sufficient to fund the entire clean up, eventually putting the tour itself out of business.

Thank you in advance for understanding and supporting how free markets work to impose the cost of risks on those who bear them.

P.S., Commandant Thad Allen of the Coast Guard is not a liberal fascist.
written by zinc, June 11, 2010 7:09
Success breeds complacency and ,ultimately, incompetence. Especially in the new "globalized Walmart" world where costs are driven lower by taking short cuts, outsourcing, laying off the most experienced and expensive employees, down sizing, and other corporate "belt" tightening.

The great fallacy of the economists' view of "open" markets and "fwee twade" is not that short run costs don't fall, they do. The fallacy is that long run costs increase along with a decline in consumer choice and product quality. From where I sit, BP is a poster child for the Reagan/Bush view of free wheeling corporate enterprise, unbridled by societal constraints.

The drive to technological incompetency in the name of short run profits is akin to over-leverage. Provides a short term pop when times are good but sinks the boat when the storm comes up.

Contemporary economists, who drive corporate and government policy, are incapable of distinguishing between short term stimulus and long term stability and risk.
written by Brett, June 11, 2010 8:35
Actually, for the longest time I thought that BP has to be lying about not knowing the flow rate, but I work for an oil and gas company in the oil services industry, and specifically one of the projects I work for is a flow meter that measures the rate of oil and gas going through a pipe.

The other day I finally got to spoke with some of the pH'Ds who did the math and the programming to figure out how to calculate the flow going through the pipe on our device, and they said that BP really has no idea how much is spilling into the ocean each day. The problem is that the liquid is a mixture of different elements. To calculate flow you have to know precisely what percentage of each substance if flowing through the pipe and the density of that substance (in the case of the only known data being the diameter of the pipe and the pressure coming out of the well).

If it was only light crude oil that was coming out of that pipe, then based on the pressure they found when they were first drilling (something like 13000 PSI) and the fact that they know the diameter of the pipe they could have figured out a flow rate.

But in truth the pipe is spewing out a light crude, heavy crude, water, natural gas, and methane mixture. All those different elements have different densities and there is no way for them to tell what the ratios of each element is coming out. One pH'D I talked to said they wouldn't even be able to tell if the pipe was completely connected and nothing had gone wrong. The operation on the rig would be just to produce oil at the maximum capacity the rig could handle in a given day which would have likely been less than the oil well could have delivered at max flow.

So it's all a guess. You see a pipe down there that is obviously spewing a lot of oil, but who really knows how much. Though to me it seems that it is quite obviously spewing more than 1000 barrels/day (their 1st estimate), or 5000 barrels/day (their 2nd estimate). Likely they lowballed the figure to keep media and government pressure off their backs for a while as they scrambled to come up with a solution.
i did not spill oil in that ocean
written by frankenduf, June 11, 2010 9:25
the reason is that everyone already knows the answer- it's like when congress lined up the tobacco ceos and asked them 1-by-1 if smoking causes cancer, and they all answered 'no'- ie what's the point?
written by skeptonomist, June 11, 2010 9:29
I think the media have actually been doing a fairly decent job of covering the size of the leak; at least there have been stories on the controversy from early on. They could not afford to ignore things like the video of the spewing pipe - they don't like to get scooped by youtube.
It is governments, both federal and state, who have been assisting the coverup, suppressing reports from their own investigators. It seems that a major purpose of the dispersant was to cut down on the amount of oil visibly reaching the surface; use of this could have been interdicted by the federal government.
written by diesel, June 11, 2010 10:24
And why weren't they "so far off" in the other direction? For some reason, I don't think too many of us weren't surprised not to hear the CEO of BP come on the air and say the following: "Folks, it was all a mistake. While originally we had announced that the rate of flow was 100,000 barrels a day, that turns out (fortunately for all parties) to have been a gross overestimate. In reality, the spill is much milder than we had projected and you may rest assured that we will take responsibility for any and all damage that may result. We are as relieved as you are that our original estimate erred on the side of prudence--we do so as company policy to make it clear from the start that we will not prevaricate and fully intend to fulfill our civic responsibilities."
written by Oggie, June 11, 2010 1:02
Don't be so hard on BP. The only reason they lied was because they didn't want to upset us proles.
written by John Emerson, June 11, 2010 2:32
BP has been allowed to exclude reporters and outside scientists from the site, with the active cooperation of all levels of government as far as I know.

Reports sometimes are gallons and sometimes barrels (=41 gallons), which confuses people, and there's no attempt at comparing this "spill" to earlier spills. Based on the wiki "oil spills" article, this spill ranks somewhere between 11th and 4th all time anywhere. Since it won't be under control for a couple of months, it seems likely to become the all time biggest. (Though at the same time, so much information has been withheld that all estimates are guesswork.)

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About Beat the Press

Dean Baker is co-director of the Center for Economic and Policy Research in Washington, D.C. He is the author of several books, his latest being The End of Loser Liberalism: Making Markets Progressive. Read more about Dean.