In some circles, a "cold comfort letter" confirms certain accounting information and provides limited negative assurances concerning changes in the issuer’s financial condition since the last audit. To most of us, "cold comfort" means very slight consolation. (Graphic credit: Mike Mitchell)
Today, both BP and high-ranking Obama Administration officials acknowledged what many of us have suspected and feared for some time: chances of stanching the flow of oil from the bottom of the Gulf of Mexico before August are slim at best.
Some truth is finally being told after misstatements. It's cold comfort in light of cold facts: Do not pin all hope on the relief wells working in August.
Cold fact no. 1: The LRMP is not likely to work and may make matters worse.
This morning, BP's Managing Director Bo Dudley told ABC's This Week that the LRMP (Lower Marine Riser Package, a containment effort) would only minimize the pollution going into the Gulf.
Shortly after, White House Energy Adviser Carol Browner and Dudley both appeared on Meet the Press. Dudley acknowledged what many of us suspected -- the topkill was a matter of luck. Browner, less worried about stock prices and more worried about the effectiveness of the LRMP:
MS. BROWNER: Well, the top kill would have shut it down. There wouldn't have been any oil coming up. We're now going to move into a situation where they're going to attempt to control the oil that's coming out, move it to a vessel, take it onshore. Obviously that's not the preferred scenario....
MR. GREGORY: Right. But the bottom line is, you're not--I should say, the bottom line is, the chances are very high that nothing is going to work until a relief well is in place. All these attempts are still basically low-percentage plays. We're looking at an oil flow that goes on until August.
MS. BROWNER: We are prepared for the worst.
The New York Times adds that the containment cap (LRMP) "could actually increase the flow of oil by as much as 20 percent because a key pipe — a riser — needed to be cut to allow for the cap to have a spot over which it could fit cleanly." The 20 percent estimate is a government estimate.
In short: BP's former strategy was based on luck, its new strategy is no better and may make things worse, and the WH is now (finally?) prepared for Oilpocalypse to spew poison until August.
But at least the relief wells will do the trick in August, right?
Cold Fact No. 2: Relief wells are not failsafe.
NPR asks if BP's last best hope is a sure thing, and finds that the answer depends on who is asked. One of the "world's leading experts in marine engineering" has a lot of ifs in describing the process: "If all goes according to plan, that water should make its way into the lower end of the leaking well, displacing oil. If that succeeds, the next step is to pump in a mineral mud, which follows the sea water up the broken well. Once that mud hits the well, concrete can be pumped into the relief well.
'If you get a tall tower of mud, and if you're lucky, you'll stop it,' said Milgram."
Here's the two relief wells' progress as of May 26, via BP and the federal Joint Unified Command:
Last year, an oil well 250 feet undersea in the East Timor region of Australia blew out. A relief well stopped the blowout. On the fifth try. The blowout began on August 21. The first relief well, drilled on October 6, missed. So did the second, third, and fourth wells. The fifth one made it on November 1. The relief well drill job was tricky because of a small ten-inch casing; Deepwater Horizon's well has an even smaller seven-inch casing.
Rep. Markey believes that two relief wells double the chance of success. Browner and Obama have both reiterated the government's demand that BP drill a second well.
I've discussed relief well matters with an editor and knowledgeable commentator at The Oil Drum. One gives a less than 50 percent chance of one well succeeding; the other is more sanguine.
In short: relief wells seem to be like baby-making: not guaranteed to work the first time, but enough tries will get the job done.
Cold Fact No. 3: BP has suspended work on the second relief well so that its blowout preventer can be on standby, presumably with the knowledge and consent of the federal government.
In turn, that cold fact raises interesting questions:
WHO THE F*CK IS DOING RISK MANAGEMENT? If the LRMP has such a slim chance of success, why are efforts being diverted from the second relief well to the LRMP?
Is the Obama administration truly prepared for the fact that the first and second relief wells might not work?
If so, why hasn't a third relief well been ordered?
As August heat and hurricanes approach, take cold comfort indeed in cold facts.