Oil drillers and regulators are trying to determine why massive bolts used in underwater oil pipes keep corroding, snapping, and failing, causing insiders to worry a blowout leak is on the horizon.
Safety regulators at the Department of the Interior began investigating the mysterious blowouts in 2013, after which regulators and industry officials concluded the problem goes beyond General Electric Co.’s bolts and its blowout preventers, which are used to stop oil and gas flow during well emergencies.
The company’s bolts come from subcontractors, none of which have been publicly identified.
GE is not the only company finding flaws in its bolts and preventers — the company’s primary competitors, National Oilwell Varco Inc. and Schlumberger Ltd., have also seen their share of flaws, according to the Department of the Interior.
“This is what we view as a very critical safety issue,” said Allyson Anderson Book, associate director of the Bureau of Safety and Environmental Enforcement at the Interior Department (BSEE). “If your smallest component fails, you can’t expect a sophisticated many-million-dollar piece of equipment” to hold fast and prevent a leak.
While a spokeswoman with GE assured customers that it is working with the government to solve the problem and is replacing faulty bolts, National Oilwell Varco and Schlumberger refused to comment on the story.
“This is a systematic industry problem that requires immediate attention,” BSEE’s chief wrote in a January letter to the head of the American Petroleum Institute (API), an energy industry trade group.
The bolt failures and blowouts could affect nearly 2,500 oil rigs in the Gulf of Mexico, 23 off the coast of California, and one rig near Alaska, a BSEE spokesman said.
Part of the problem is that companies are not obligated to report failures until after July 28. After that date, new rules will go into place since the 2010 Deepwater Horizon spill go into affect. The new rules and regulations will require companies such GE and National Oilwell Varco to report more regularly faulty equipment.
The repairs will be costly.
Marc Edwards, the chief executive of Diamond Offshore Drilling Co., which has a 30 oil rigs, told reporters his customers stand to lose between $600,000 and $800,000 a day during the repairs. The interruption could cripple the industry, Edwards explained.
The pricey fix could hamper the industry, if recent research by the Energy Information Administration (EIA) showing costs per well have dropped since 2012 is any indication.
“Costs per well generally increased from 2006 to 2012, demonstrating the effect of rapid growth in drilling activity,” an EIA report stated in March. “Since 2012, costs per well have decreased because of reduced overall drilling activity and improved drilling efficiency and tools.”
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