ADMIRAL ALLEN: Good morning folks. A lot of activity yesterday regarding the meeting with British Petroleum. A lot has been said about claims, the capabilities being stood up and the escrow amounts. I’m going to address more operational issues because I think that’s been thoroughly discussed and vetted in the last 24 hours.
While this has been going on, we’ve continued to produce oil out of the well head through the containment cap. As of yesterday though, we have the added capacity now what we call the Q4000 mobile drilling units on scene. It is actually drawing oil up through the kill pipe. That’s where we actually sent the mud down during the top kill operation. We’re actually using that as a way to evacuate more oil out in addition to what’s being produced by the Discover Enterprise.
We now, once we get these both operating, have the potential to bring our production capacity up to about 28,000 barrels a day. Probably by sometime early next week. They’ll bring the rates up slowly to make sure they can control it.
The Q4000, what we are doing is we’re bringing up both natural gas and oil and they’re both being flared off. There’s an EverGreen burning device on the Q4000 that looks much like the flaring device for natural gas but it’s capable of flaring the oil itself with natural gas in it, a fairly clean burn. Not nearly what the amount of smoke that you see for an in situ burning.
We’ll look at, further down the line, the ability to actually transfer that oil ashore and actually offload it. But for now, it’s giving us several thousand more barrels a day capacity and that’s several thousand barrels a day that’s not going into the environment.
We’re also working very closely with British Petroleum. We have given them direction to increase their redundancy and capacity of their containment operations. There were two parts of the meeting with BP at the White House yesterday. One was on the claims as I mentioned earlier. The second was on the containment efforts so far.
BP laid out and we’ve approved where they are headed right now to bring in needed capacity. And under the current containment cap that sits on the well head by bringing additional vessels in and being able to draw oil off the choke and the kill lines and produce that on the surface, we expect to get to a capacity of around 53,000 barrels a day by the end of June.
At that point, sometime during the month of July, we want to convert over and put a new cap on the well bore that will allow us to have multiple hoses come up to a much larger processing vessel. And the goal is by the end of July if we, if it is required by the amount of oil that’s coming out to increase our capacity between 60 and 80,000 barrels a day. So we continue to make progress there.
It’s the same point Development Driller II, which is the, drilling the relief well is proceeding at pace and they are 9,000 feet below the sea floor right now and starting to close in on the well bore itself. We anticipate over the next three to four weeks they will close in and be able to tap into the well itself. At that point, they will pump mud down it and attempt to the, what we call, the bottom kill and actually cap the well. Development Driller III is the platform that is drilling the second well or the backup well, the risk mitigator well a mere currently 4,500 feet below the sea floor and continuing to drill ahead.
The areas we’re trying to concentrate on right now generally across the coast or to take advantage of the extraordinary response we’ve had to vessels of opportunity, these are local watermen from small boats up to shrimp boats that have signed up to do work in response to the spill. The good news is we have over 2,000 vessels of opportunity that have registered. The challenge we have is organizing all of them so they can be effectively employed.
This is in fact more vessels than there are in the actual Coast Guard itself so we are doing a number of things including putting tracking devices on some of these boats so we can have a better idea of where they’re at, connecting them with tactical radio communications and in many cases providing on scene Coast Guard units to actually coordinate them in small squadrons, if you will. Then to link them overhead with aerial surveillance. And the goal there is to take this increasing threat we have, which is anywhere from the shoreline out to about 15 to 20 miles now that the spill has proliferated from south central Louisiana over towards Fort Walton Beach, Florida. And be able to have increased capacity for skimming in shore.
We will continue to skim in and around the well head. But as I’ve said in previous operational briefs, we’re dealing with a pretty expansive area of patches of oil right now. It’s not a monolithic spill. It’s literally a collection of hundreds of thousands of patches of oil. Some are miles long or some are several hundred yards long.
The good news is when they tend to come ashore, while no oil ashore is good, they’re in small concentrations and they can be dealt with so we don’t have large monolithic spill. The bad news associated with that is that they are widely dispersed and requires us to really move our assets around and try and, and try and attack the closest oil to shore.
To that end, we are doing a national inventory of skimming equipment. And right now in addition to the boom, which has always been a critical resource for us, the availability of skimmers is critical. We are in touch with the Department of Defense using skimming capability they have at naval installations. And we also put out a call for the various states and the on call response equipment they have to the extent we can bring that to the Gulf, we will as well. With that I’d be glad to go into any questions you may have for me this morning.
MODERATOR: Operator, we are ready for questions.
OPERATOR: At this time, I would like to remind everyone in order to ask a question, press star then the number one on your telephone key pad. We’ll pause for just a moment to compile the Q&A roster. And your first question comes from the line of Brian Hartman.
Q: Yes, hi. Thanks, Admiral. Do you believe the well pipes themselves are broken or leaking at all? And do you have any concerns about the integrity of the blow out preventer, the well borer, the sea floor that’s holding up the blow out preventer? Thanks.
ADMIRAL ALLEN: That’s a terrific question. Let me kind of take it in sequence. We have some idea of the condition of the blow out preventer and lower marine riser package. In combination, they call that the stack that sits above the well head itself. We know from some sonic testing that was done based on radiography equipment from the Department of Energy we have a partial closer of some of those rams but not a complete closer. And that was a problem for the top kill operation because we could not get enough pressure on top of the blow out preventer to force all of the mud down into the well bore to allow us to top kill it, if you will.
So we know that the, that there is, there is, and we also know that there is product rising up through the blow out preventer through the, where we cut the lower marine riser pipe. We’re not going to know the exact condition of that blow out preventer until we’ve capped the well, can remove the blow out preventer and bring it to the surface.
I’ve said on several occasions, I consider that blow out preventer almost the equivalent of this incident of the black box we would be seeking to find after an aviation accident because it can reveal a lot of information related to what happened at the time of the event. And the blow out preventer was key to that.
As you move below that and you go down into the well bore, I think that one thing that nobody knows is the condition of the well bore from below the blow out preventer down to the actual oil field itself. And we don’t know, we don’t know if the well bore has been compromised or not. One of the reasons we did not continue with top kill at higher pressures, there was a concern that if we increased the pressure too hard it might do damage to the casings and the well bore. What we didn’t want was open communication of any oil from the reservoir outside the well bore that might get into the formation and work its way to the sub sea floor and then result in uncontrolled discharge at that point. That has not happened and that’s the reason they’re taking such precautions and did not proceed any further with the top kill.
What we are doing is going down the very bottom of the well bore for this intercept and hopefully at that point they will start pumping mud in. And mud will first go up all the way and fill the well bore and then it will be forced down over the oil into the reservoir and then put enough weight of the mud to hold the oil in the reservoir. And then allow them to put a cement plug in after that.
So what I would tell you is we don’t know exactly the condition of the well bore. And that’s one of the unknowns that we’re managing around in terms of risks. And that’s the reason we didn’t go, didn’t go to excessive pressures on the top kill and decided that we’d deal with containment and then go for the final relief well.
OPERATOR: And your next question comes from the line of David Fahrenthold.
Q: Admiral, Dave Fahrenthold from the Washington Post. I’m trying to step back and get a big picture perspective here. The President, the other night, talked about this as a war. Looking at the clean up operation that you guys are doing to sort of capture the oil after it comes out of the well, do you think you’re winning? Are you making more progress every day than you’re losing ground in that clean up operation?
ADMIRAL ALLEN: I think there have been days where we have actually recovered more oil through containment and recovery than what came out. I think there are probably days that we didn’t. Since we don’t know the exact flow rate right now, I don’t think I could come up with a combination of win or loss days. But obviously, there’s a lot of oil that was discharged before we were even able to start the containment we have right now. So over all it is a net loss of control of the well. We’re trying our best to contain it.
There’s a lot of analogies you can use for this. It is, what we have is a, we have a, if you want to use the war analogy, we have a battle line that extends from south central Louisiana almost to Port St. Joe, Florida. The breadth of this spill gets bigger every day, although it is not concentrated.
As I said before, it’s hundreds of thousands of patches of oil. And that’s what makes it difficult. Because depending on weather conditions and current, it can come ashore one place, back off and several weeks later can re-oil the beach again. You can’t give up your defensive position and your way to protect the beaches or you’re skimming off shore because it could reverse the next several days and come back at you. And that entire threat that presents itself moving in and out now extends almost the entire Gulf Coast from central Louisiana to Port St. Joe, as I said.
That makes this one of the most demanding on water responses in the history of the country, in the history of the Coast Guard. And is requiring us, to what I would call, mass our forces. And that’s exactly what we’re doing not only with Coast Guard but other assets out there and plus these 2,000 vessels of opportunity.
It’s going to require us to, until the oil is stopped at the source, to every day attack this oil at hundreds of different locations across a several hundred mile front. And it is challenging. It is complex. But it’s one of these things where we just have to keep at it and keep bringing more resources to the area. Because to do anything other than that would be catastrophic and that’s our task.
OPERATOR: And your next question comes from the line of Christian Hayes.
Q: Good morning, Admiral. Nice to have you back.
ADMIRAL ALLEN: Thank you.
Q: You said earlier that the BP’s increase of capacity would be up to 50 to 80,000 barrels a day by the end of July. I thought BP’s plan said they planned to have that by mid July. Is there a delay that we don’t know about?
ADMIRAL ALLEN: No, quite frankly I didn’t have the chart in front of me but it is July and it’s mid July. I probably misspoke there. I …
HAYES: OK.
ADMIRAL ALLEN: One of the problems they’ve got is and one of the concerns I have is when we set hard dates and we don’t meet them. You know, there’s lots of expectation and everybody immediately thinks there’s a credibility issue with what we’re doing. The big challenge in this new production, the three elements of this new production system that are very, very challenging.
First of all we’re going to have to put an absolute cap over the lower marine riser package. And right now all we have is a containment cap. That’s going to mean we’re probably going to have to unbolt the flange that’s connected to that riser pipe and replace it with a very tight fitting that will allow no oil to escape. Because at that point, we’ll have enough production capability on the surface to be able to take it all not creating too much pressure back down the well bore. But to do that, we’re going to have to change the delivery system and also make it more hurricane proof.
Right now the Discover Enterprise is physically connected to a riser pipe to the lower marine riser package. It’s physically connected to the well, if you will. But they are going to do, as they move from the 53,000 barrel a day capacity up to that 60 to 80,000 barrel capacity is shift to floating production platforms that are used elsewhere in the world. Not in the Gulf but in the North Sea and other places where a floating production platform takes the oil, separates the gas and oil and then ships it to shuttle tankers that are moored alongside and then they take the oil ashore.
The way things are conducted in the Gulf right now, all that oil is transferred via pipeline along the bottom of the ocean and back. But to make this operation work, we’re going to have to put up a flexible moorings and riser pipes that have flexible hoses coming from the well to the riser pipes and then from the top of the riser pipes to the production platforms. To bring those kinds of vessels in because they don’t operate in this area, they’re coming from as far away as the North Sea and Brazil.
So we talk about mid July but I would just caution everybody to understand that we’re bringing in operating platforms and shuttle tankers that are not traditionally used in the Gulf. And we’re bringing this all together in a combination of the production capacity that hasn’t been tried before in the Gulf. It has been tried elsewhere. They think this is low risk. It just takes a long time to get the equipment there and get it put in place.
HAYES: OK, Admiral. Thank you.
OPERATOR:Your next question comes from the line of (Richard Harris).
Q: Hi. I have a couple of quick questions here. You’d said earlier that the, that you expected the well to, the relief well to intersect in three or four weeks? That would be mid July. Is that, was that, is that a new target date because we’d been hearing mid August.
ADMIRAL ALLEN: Well, mid August was the target date. They’re actually ahead of schedule right now. But I’m not going to guarantee it will be as early as I said earlier. We should be very wary about deadlines and hard deadlines. Right now they are ahead of schedule.
HARRIS: OK.
ADMIRAL ALLEN: And they are starting to close in on the, on the well. What they actually do, just for your information, they actually come very close to the well itself. Probably within 10 feet of it. And as they pass by it, they use telemetry and sensor to actually locate to a virtual certainty where the well, where the pipe is at.
Then they actually, this is directional drilling, they actually bend the drill bit down and they go down about another thousand feet and they come right back into the pipe. And the reason they do that is to get an absolute location and then follow the pipe down to the exact intercept point.
They’re going to be very close to that point of passing with 10 feet in the next couple of weeks. But that last thousand feet where they have to align it right because they’re basically trying to hit a seven inch diameter pipe after they go through the casing. And the last thousand feet and the telemetry required to do that and the sensors required to do that are very, it’s a slower process. It has to be very, very exact.
So while they’re ahead of schedule now, I’m not prepared to say that they’ll be able to do this in anything short of the August date. But the current timeline has them ahead of schedule.
HARRIS: OK. And in terms of hitting the pipe, the, my understanding is the leak is not within that seven inch internal pipe but it’s between that and the external pipe. So what is their target the internal pipe that’s actually presumably not leaking? Or is it that small gap between the internal pipe and the casing?
ADMIRAL ALLEN: Well, what you want to do is you want to have an opening into the casing and if you need to into the pipe itself so you can pump mud in to kill the well. But the first thing they will do is they’ll actually drill through the casing and at that point they’ll make a decision whether or not they want to pump mud down and try and kill the well that way. Or whether or not, and the other thing is they need to actually find out whether the pipe, the drill pipe is still there. Because the drill pipe is another way for either mud or oil to go up or down. And then they may, at that point, make a second decision to drill into the pipe.
But you’re right. It will be a two stage process. They will go through the casing and then there’ll be a decision made on what the condition of the well bore is and whether or not that the pipe there, whether or not they’ll have to drill through the pipe itself. Is that responsive?
HARRIS: Yes. And just one last little question. You said that Development Driller II was, I think Development Driller III is the primary one right? And you said Development Driller II was the one that’s going to get there first? But it’s number three.
ADMIRAL ALLEN: Oh no, what happened, the first one on scene was Development Driller II. That’s the one that is the deepest. Developmental Driller III arrived on scene later so there was a reverse on the numbers from actually who got there first.
HARRIS:Because you said it the other way last time. That Development Driller III was the one that was working first and Development Driller II was the backup. So, I’m …
ADMIRAL ALLEN: I get them mixed. I’m sorry. They both had the same name as Roman numerals.
HARRIS: Right. OK. Thank you.
ADMIRAL ALLEN: Yes.
OPERATOR: Your next question comes from the line of Osha Davidson.
Q: Hi, yes, this is Osha Davidson with the Phoenix Sun. Good morning, Admiral.
ADMIRAL ALLEN: Good morning.
DAVIDSON: I understand the need to burn surface oil to protect the marine and shore life. But about the 5.2 million gallons of oil burned so far and then the more oil and gas that are going to be flared, can you translate that number into the amount of CO2 released and other pollutants like particulates added to the air? And is the government monitoring the potential health effects of the air pollution caused by this disaster?
ADMIRAL ALLEN: We are doing air monitoring. That’s the purpose of EPA and Lisa Jackson has been doing extensive air monitoring around that. I don’t know the exact answer to your question right now but we’ll get that and make sure we answer it in the future if that’s OK. But we actually had air monitoring going anyway for the in situ burns taking place and there’s been a lot of monitoring being done even closer to shore regarding any potential impact of dispersants. So there is a significant air and water monitoring going on. Was that responsive? At least, we’ll get the data to you.
DAVIDSON: Yes. And how can we get that data on CO2?
ADMIRAL ALLEN: Tony Russell, my press assistant, is here and we’ll get you follow up information and we’ll get the information to you if that’s all right.
DAVIDSON: Thank you, yes.
ADMIRAL ALLEN: Let me go back for everybody. I keep jumping on the numbers and I apologize. If I don’t have the thing right in front of me I get confused. For once and for all, the gentleman was correct. Development Driller Roman numeral III is, and I got the paper in front of me now, is at total depth below the floor of 9,967 feet. Development Driller II, which got on scene second, is now below the sea floor at 4,560 feet. And I apologize. I deal with these terms all day long and sometimes I invert the Roman numerals. But just for clarity I’ll say it one more time.
The first driller on scene was Development Driller III. Now is at a depth of 9,967 feet. Development Driller II, the second driller on scene, is now at a depth of 4,560 feet below the sub surface. And I apologize for confusing you and me. Next question.
OPERATOR: And your next question comes from the line of Jim Poleson.
Q: Admiral, thank you for the clarity on the bottom kill effort. Has BP indicated to you how much time it may take to actually stop the well once they intercept it? I’ve heard estimates of a week or two.
ADMIRAL ALLEN: I’m not sure I had that exact conversation with them. It, what it will take is the amount of time to fill the entire well bore with mud. And that will include how far up the mud may have to go to create a back pressure so the rest of it goes down. That will depend upon a couple of things. If they’re successful in putting the new containment device on the well head itself, that will allow them when the mud goes in and goes up, almost up to the production level, and then that creates more weight that goes back down the well bore. And the more mud they put in then, but what you have is a longer column of mud that suppresses the pressure of the oil down in the reservoir. And that’s what the intent is to do.
What I will do is I will try and get a range of options based on the condition of the well and how high the column is at that time. And we’ll be able to report that back to you tomorrow.
Poleson: OK. Just to clarify. You’re saying that they’re close to intercepting the well this month but you’re sort of sticking with the first half of August for an actual plugging?
ADMIRAL ALLEN: What they are doing, I wanted to go through how they do this. They’re going to come very close to the well very shortly. And what they do is they actually come, they actually pass by the well and then turn down and go down about a thousand feet and then go back into it. That allows them to very accurately locate the well, the well casing and where they actually want to enter.
And the way they do that is by, it’s almost like a, coming in almost horizontally crossing very close to the well and then turning straight down going down about another thousand feet. Then curving back into the well.
So they’re going to be very close to the well in the next couple of weeks. The last thousand feet and then drilling through the casing are what becomes very, very tricky and has to be done very, very carefully and precisely.
POLESON: So they’re close to the well, close to the well is this month. Actually intercepting it is still August.
ADMIRAL ALLEN: Correct. And it could be sooner than that because they are ahead of schedule but I don’t think we should (inaudible) till we know that they’ve actually got down there and been able to intercept the well.
POLESON: Thank you, sir.
OPERATOR: Your next question comes from the line of (Carol Rosenburg).
ROSENBURG: Thanks, Admiral. This tropical depression west of the Gulf in the Pacific. Is it a concern or trouble in going to push some of this stuff east to us on the west coast of Florida? And also have you named your Deputy in Florida? Thanks.
ADMIRAL ALLEN: We have. I’m not sure I’ve got his name right in front of me right now. We’ll get back to you and give you that. But we’re watching all the weather out there wherever it’s at whether it’s out in the, off of the west coast of Africa or down in the lower Gulf of Mexico.
One of the things we’re trying to do right now, the reason we want to transition to this new containment system, it will allow us to have a floating riser below the surface being connected by a flexible hose to the production vessel. That does two things for us. It allows us more flexibility in production but it also allows us to bring bigger ships in that are not connected directly to the riser pipe that can withstand heavier weather. These new shuttle tankers they’re bringing in are 1,000 feet long and used to working in the North Sea off of Scotland and Norway.
But in addition to that, we have been doing hurricane planning and preparedness. The issue is that if a hurricane comes that direction, it’s going to take us several days to disconnect and several days to come back out and reestablish the drilling operation. So we’re going to be hyper sensitive to any fronts that are moving around because it’s going to take us some amount of time to disconnect and then redeploy after that’s over. We’re very, very sensitive to that and working very closely with NOAA.
In fact, in the next week or so, I’ll be meeting with the head of the National Hurricane Center and I would like to, at some point, maybe in the next seven to ten days, actually have a press event where we both sit side by side and talk about the weather and the response at the same time. And we’ll make that a commitment to you. Last question.
OPERATOR: And your next question comes from the line of Mike Ahlers.
Q: Good morning, Admiral. Thanks for taking these calls. I have two questions. One is the Q4000 is, you said, is now drawing oil through the kill pipe. Do you have any figures on how much it’s drawn the first day of operation? And secondly, there’s some upset in Louisiana, as you may know, because they say the Coast Guard shut down operations on six vacuum barges that evidently didn’t have certificates of operation. I don’t know if you have any knowledge of that or anything you want to say about that?
ADMIRAL ALLEN: Sure. Let me hit the Q4000 first. First of all I apologize for confusing kill and choke lines. They’re both lines that go down the side of the blow out preventer. And I might have said kill line before but the Q4000 is actually using the, bleed off the oil from the choke line. In the first 12 hours of production yesterday, they got about 1,200 barrels. So we’re looking at probably around between 2,000 and 3,000 barrels a day added on to the about 14,000 barrels we got out of the, out of the other production from the Discover Enterprise. We’ve already increased production significantly.
And in regards to the second question. In one of the overriding issues in any response like this is safety of personnel. What you don’t want to do is compound the problem you have out there by somebody getting hurt, injured or killed. It’s catastrophic enough that we lost 11 people when the mobile drilling unit sunk.
When you’re moving barges and tanks on barges and equipment on barges and sometimes you’re trying innovative technologies where you’re taking equipment that works on land and putting it on barges because that allows you to get opportunity in the marsh areas to evacuate oil and things like that, I think nobody has a problem with the concept.
We’re all trying to work together out there and we’re trying to do what is as affective as we can for the operations. But there are some basic safety and stability issues. You would not want to get out there and operate in the marshes and all of a sudden have a load shift or a capsizing and have all of a sudden another environmental problem, a physical problem for the marshes but more importantly, a safety problem for the personnel that are working out there.
So I think our people are taking appropriate action and making sure the safety standards are adhered to. There are times when you have to make trade offs between the effectiveness of the response and the safety of individuals. But I don’t think there’s anybody in this country that would want to sacrifice the safety of one of our responders if we could some how avoid it. So I think the appropriate action is being taken down there, (Mike).
AHLERS: Thank you, sir.
ADMIRAL ALLEN: Yes. Thank you folks.
MODERATOR: Thank you, everybody.
OPERATOR: This concludes today’s conference call. You may now disconnect.
For information about the response effort, visit www.deepwaterhorizonresponse.com.
