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The long weekend has come and gone. But the problems in the Gulf are still on our minds…
But the ever darkening story of the oil and gas “spill” in the Gulf of Mexico still forces us to pose some questions. BP or who we like to refer to as BURP oil said at the outset the spill was limited to 1,000 bpd, then 5,000 bpd; both seemed at the time to be suspiciously rounded guesstimates. Looking at real time video of this spill (which BURP had not until recently released to the U.S. government), it seems to us that we should rename this to a “gusher” of untold force, and it’s certain the true volume would be at least 10 times the announced leakage rate.
The attempts to stop the leak can, at best, be termed medieval. From attempting to burn it to placing a glorified garbage can lid over it. Another thing that BURP has been rather secretive about is the type of crude that is in this gusher. If it is a sweet light crude then disbursal by chemicals, evaporation or burning may succeed. If, however, the crude is asphaltic then the problem will become a nightmare.
As the U.S government, envirionmental agencies, and BURP oil continue to search for answers to stopping the leak and cleaning up the mess, (and, they are searching for sure)… but what it all comes down to is what will it mean for crude oil pricing?
By: Roger McKnight, Senior Petroleum Advisor
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