Oil production hit for decades after BP spill

A deep sea drilling moratorium will leave global supplies depleted just as demand gets greater

Even as the first oil from BP's stricken Macondo well in the US Gulf of Mexico washed ashore this weekend, and as the clamour mounts, experts claim the slick will be nothing like as catastrophic as forecast – for either the environment or the oil industry. However, some analysts warn the accident could still seriously hurt global oil supply later this decade.

The fate of the Louisiana coastline is in the hands of BP engineers working to place a cofferdam, or 100 tonne steel and concrete funnel, over the worst leaks, using remote-controlled submarines a mile down on the seabed. If the operation succeeds early next week, as BP hopes, it should capture around 85 per cent of the leaking oil, sharply reducing the potential impact. "Once they have the cofferdam in place they're almost home and dry", says Dr Simon Boxall, an oil spill expert from the University of Southampton, "if they succeed, this won't even make it into the top 100 oil spills by volume".

Around 100,000 barrels, or 4.2 million gallons, have leaked from pipes damaged when the Deepwater Horizon rig exploded and sank last month, less than half the amount spilled in the Exxon Valdez disaster in 1989. But if the cofferdam fails, the impact would be much worse. BP, led by chief executive Tony Haywood (pictured) is already drilling a second well to intercept and plug the first just above the oil field itself, 13,000ft below the seabed, though that might take three months. If so the spill could reach 450,000 barrels, just under twice the Exxon Valdez. But even that would only rank in the top 50 spills. "It could clearly do a lot of damage," says Dr Boxall, "but when people claim this is the oil industry's Chernobyl, it's really nothing like it".

The rising backlash against deepwater drilling – anything over 500 meters, far too deep for divers to work should anything go wrong – is unlikely to damage the industry as much as the noise on Capitol Hill would suggest, because it is too vital to the oil supply. According to analysts Douglas Westwood, deepwater oil production has soared from under two million barrels per day in 2000 to eight mb/d in 2010, almost 10 per cent of global consumption, and must rise further as onshore and shallow offshore production declines. "They can't ban deepwater because the industry has nowhere else to go", says chairman John Westwood. Last year, 500 deepwater wells were drilled, costing up to $100m each, and Douglas Westwood predicts $167bn will be spent on deepwater development to 2014.

Deepwater drilling has provided substantial discoveries recently, such as BP's Tiber field off Brazil, thought to contain some three billion barrels of oil. But such is the industry's desperation it will also chase tiny fields at depths unheard of a decade ago. The Macondo field probably contains less than 50 million barrels – an oilfield minnow. A BP spokesman admitted "the easy stuff is done first. We're now on to the stuff that is technically, politically or economically difficult."

If a ban is unlikely, deepwater drilling will be far more tightly regulated, as happened after the Piper Alpha disaster in 1988. Then British North Sea production slumped for several years as safety equipment and procedures were upgraded, before recovering. The difference is that many forecasters now predict a global oil supply crunch by the middle of this decade, so any pause in US deepwater drilling could have magnified consequences.

The analysts Newedge USA say if the moratorium on new drilling, announced by President Barack Obama after the accident drags on, oil supply could suffer a shortfall of up to one mb/d by 2016 to 2018. Another analyst said: "They wouldn't be able to offset depletion with new drilling". With forecasters predicting peak oil in 2015, this could only make matters worse.

If BP's cofferdam succeeds, it will still be neck deep in litigation for decades to come, and industry costs will rise, but hostility to deepwater drilling will soon be overshadowed.

David Strahan is the author of The Last Oil Shock: A Survival Guide to the Imminent Extinction of Petroleum Man, published by John Murray. www.lastoilshock.com

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Trainee Consultant - Surrey/ South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Ashdown Group: Trainee Consultant - Surrey / South West London

£22000 per annum + pension,bonus,career progression: Ashdown Group: An establi...

Recruitment Genius: Claims Administrator

£16000 - £18500 per annum: Recruitment Genius: This is an excellent opportunit...

Recruitment Genius: Senior SEO Executive

£24000 - £28000 per annum: Recruitment Genius: A Senior SEO Executive is requi...

Day In a Page

Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected
Who is bombing whom in the Middle East? It's amazing they don't all hit each other

Who is bombing whom in the Middle East?

Robert Fisk untangles the countries and factions
China's influence on fashion: At the top of the game both creatively and commercially

China's influence on fashion

At the top of the game both creatively and commercially
Lord O’Donnell: Former cabinet secretary on the election and life away from the levers of power

The man known as GOD has a reputation for getting the job done

Lord O'Donnell's three principles of rule
Rainbow shades: It's all bright on the night

Rainbow shades

It's all bright on the night
'It was first time I had ever tasted chocolate. I kept a piece, and when Amsterdam was liberated, I gave it to the first Allied soldier I saw'

Bread from heaven

Dutch survivors thank RAF for World War II drop that saved millions
Britain will be 'run for the wealthy and powerful' if Tories retain power - Labour

How 'the Axe' helped Labour

UK will be 'run for the wealthy and powerful' if Tories retain power
Rare and exclusive video shows the horrific price paid by activists for challenging the rule of jihadist extremists in Syria

The price to be paid for challenging the rule of extremists

A revolution now 'consuming its own children'
Welcome to the world of Megagames

Welcome to the world of Megagames

300 players take part in Watch the Skies! board game in London
'Nymphomaniac' actress reveals what it was really like to star in one of the most explicit films ever

Charlotte Gainsbourg on 'Nymphomaniac'

Starring in one of the most explicit films ever
Robert Fisk in Abu Dhabi: The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers

Robert Fisk in Abu Dhabi

The Emirates' out-of-sight migrant workers helping to build the dream projects of its rulers
Vince Cable interview: Charging fees for employment tribunals was 'a very bad move'

Vince Cable exclusive interview

Charging fees for employment tribunals was 'a very bad move'
Iwan Rheon interview: Game of Thrones star returns to his Welsh roots to record debut album

Iwan Rheon is returning to his Welsh roots

Rheon is best known for his role as the Bastard of Bolton. It's gruelling playing a sadistic torturer, he tells Craig McLean, but it hasn't stopped him recording an album of Welsh psychedelia
Morne Hardenberg interview: Cameraman for BBC's upcoming show Shark on filming the ocean's most dangerous predator

It's time for my close-up

Meet the man who films great whites for a living
Increasing numbers of homeless people in America keep their mobile phones on the streets

Homeless people keep mobile phones

A homeless person with a smartphone is a common sight in the US. And that's creating a network where the 'hobo' community can share information - and fight stigma - like never before