Matthew Simmons, founder of the Ocean Energy Institute and former energy advisor to President George W Bush, spoke with Bloomberg TV yesterday. Mr Simmons said that while the leak has been stopped from coming out of the riser, danger awaits five to ten miles away, where there is a more important leak caused by the explosion of the blow-out preventer. Here are some of the highlights from the interview.
On whether the well pressure should be a concern:
“No, it’s a total diversion – that’s the gas condensation that was trapped in the drilling riser which blew off the wellhead at 10:01 PM CT on April 20th, it’s a mile-long compressed natural gas.”
“What we don’t know anything about is the open hole which is caused by the drill bit when it tossed the blow-out preventer way out of the hole…and 120,000 minimum of toxic poison has now covered the floor of the Gulf of Mexico. So what they’re talking about is the biggest environmental cover-up ever. And they knew that that well, that riser, would finally deplete. And then they could say it’s over. And unfortunately, we now have killed the Gulf of Mexico.”
”Some 5-10 miles away is what the NOIA research vessels have now proved is a deep oil lake that is growing by the day and it’s very toxic oil and its gases are very lethal. Basically if we have a hurricane now, we would have to evacuate the Gulf Coast.”
On the financial implications for BP:
“When people find out the magnitude of the story, I don’t know if we can technically clean up the Gulf but it would cost at least a trillion dollars.”
Mr Simmons on his reaction to the rig explosion:
“First of all when I woke up, when my wife turned on the television at 7:00 AM on the 21st and I saw this shocking news, that one of the greatest deepwater rigs ever built by one of the great companies in the industry, Transocean, was in the middle of this terrible fire, and then they said this was a rig fire, this is fuel on the rig, I know that there was 700 gallons of diesel on the rig, I said ‘This is a lie, the Gulf of Mexico is on fire. Why are they saying this?’ For two days they kept saying it’s a rig fire. When the rig sank they could no longer call it a rig fire. It’s a riser leak…Because if they said the truth they would all go to jail.”
On whether the blame lies squarely with BP:
“I think Transocean [staff] need Congressional Medals of Hero for this…I am really disgusted. Other than John Hofmeister, the retired president of Shell America, he’s the only other person in the industry who I’ve seen to speak out.”
Mr Simmons on why he is shorting BP stock:
“You bet I did. Because I thought BP was going to go under. I’ve been saying that for months and months and when I read that 20 of the 24 Wall Street analysts had a ‘buys,’ I said ‘ That’s ridiculous, I’m going to short them.’ I’ve never shorted a stock in my life before.
”They promised to clean up the Gulf, is that right? Do you know how much it will cost if they can technically do it? Well over a trillion dollars.”
On whether there is hope for a permanent solution now that the oil has stopped leaking:
“No, because that’s not the gusher. That was a little bit of condensation that would have ended anyways. There’s no way to fix the gusher because there’s no casing left in the hole other than doing a small diameter nuclear bomb…It’s the only way. With no casing left in the hole, the odds of the relief well working are zero. What the relief wells do– if they can find the casing, they then cut a 4 inch hole–and then they have something to capture the mud with. With no casing there, it’s like pouring oatmeal down a fire hydrant…The casing is not there. It’s scattered over the ocean floor. The government now has gamma ray images of the actual blow-out preventer, which is five stories high, weighs 325 tons and it has two sections of casing that pierced through five stories of metal.”