Gulf of Mexico Well Blowout

This is a human safety and environmental tragedy.  It is not possible to put an economic value on it, it is conceptually infinite.  The risk of it happening, however, is finite and small.

I believe that in a qualitative sense, offshore oil production is safe.  That exploratory drilling is also safe, but definitely more risky.  Production drilling is generally safe, since the reservoir formation and pressure gradient is better understood during the development phase when drilling out the asset.

Companies have different practices in the areas of Health, Safety, and Environment procedures and processes.  Sometimes they are simply lip service, in other companies they are taken and acted upon very seriously.  It really depends on the corporate culture.  BP has a bit of a history here, not that any company is perfect by any means.  It is a risky business for sure.

This is a very unfortunate event that will have devastating consequences.

• 11 men killed
• $500 MM floating drilling rig on the seafloor 
• 5000 bbls blowing-out of the well everyday, with 2-3 months required to drill the relief well 
• Tremendous clean up activities both offshore and onshore 
• Damage to the wet lands and shoreline 
• Prime migratory bird roosting time 
• Fisherman's livelihood to be seriously affected

The only saving grace, in the long run, is the self-healing capacity of mother earth.

I feel very, very sad.