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Guest Post: Obama Administration Knew About Deepwater Horizon 35,000 Feet Well Bore, Green-Lighted And Fast-Tracked Project

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Submitted by Wayne Madsen of

Obama Administration Knew About Deepwater Horizon 35,000 Feet Well Bore
President Obama and Secretary of Interior Ken Salazar, Secretary of Energy Steven Chu, and Defense Secretary Robert Gates were informed that BP would drill an unprecedented 35,000 feet well bore at the Macondo site off the coast of Louisiana. In September 2009, the Deepwater Horizon successfully sunk a well bore at a depth of 35,055 below sea level at the Tiber Prospect in the Keathley Canyon block 102 in the Gulf of Mexico, southeast of Houston.
During the September drilling operations, the Deepwater Horizon drill penetrated a massive undersea oil deposit but BP's priorities changed when the Macondo site in the Mississippi Canyon off the coast of Louisiana was found to contain some 3-4 billion barrels of oil in an underground cavern estimated to be about the size of Mount Everest. It was as a result of another 35,000 feet well bore sank by the Deepwater Horizon at the Macondo site that the catastrophic explosion occurred on April 20.
According to the Wayne Madsen Report (WMR) sources within the U.S. Army Corps of Engineers and the Federal Emergency Management Agency (FEMA), the Pentagon and Interior and Energy Departments told the Obama Administration that the newly-discovered estimated 3-4 billion barrels of oil in the Gulf of Mexico would cover America's oil needs for up to eight months if there was a military attack on Iran that resulted in the bottling up of the Strait of Hormuz to oil tanker traffic, resulting in a cut-off of oil to the United States from the Persian Gulf.
Obama, Salazar, Chu, and Gates green-lighted the risky Macondo drilling operation from the outset, according to WMR's government sources.
WMR learned that BP was able to have several safety checks waved because of the high-level interest by the White House and Pentagon in tapping the Gulf of Mexico bonanza find in order to plan a military attack on Iran without having to be concerned about an oil and natural gas shortage from the Persian Gulf after an outbreak of hostilities with Iran.
BP still has an ongoing operation to drill down to 40,000 feet below sea level at the Liberty field off the north coast of Alaska.


By. Wayne Madsen for who offer detailed analysis on Oil, alternative Energy, Commodities, Finance and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors. Visit:


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Tue, 06/22/2010 - 17:08 | 427725 bigdog
bigdog's picture

Clinton was trying to kiss and make up with Chavez after the spill.Sorry no cigar(the other one)he was singing"but i don't love you".Nice voice too had the crowd in red cracking up..gotta love a dictator that does stand up...Hugo...Polo

Tue, 06/22/2010 - 17:16 | 427743 DosZap
DosZap's picture

Why did BP, shortcut the BO Preventers on a well this deep?.

I think checks of their OTHER deep water rigs, is paramount at this stage.

Tue, 06/22/2010 - 18:08 | 427864 hangemhigh
hangemhigh's picture


this sounds like something you might like to know...................

BP CEO Tony Hayward will travel to Russia to reassure President Medvedev on BP's solvability


BP chief executive Tony Hayward is planning a trip to Russia to reassure President Dmitry Medvedev the oil giant is not on the verge of collapse, the Financial Times reported Monday. Hayward will meet with Medvedev and tell him that BP can meet the cost of the liabilities from the Gulf of Mexico oil spill, said the paper, without citing a source. The timing of the trip has not been finalised, it added. The company last week announced a 20-billion-dollar compensation fund to deal with claims arising from the spill. BP is present in Russia through TNK-BP, the third largest oil producer in the country, accounting for roughly a quarter of BP's global production.

Hayward's decision to visit Russia came after Medvedev expressed concern last week over the future of the company, in a newspaper interview. "What I know is that BP will have to pay a lot of money this year," the president was quoted Thursday as telling the Wall Street Journal. "Whether the company can digest those expenditures, whether they will lead to the annihilation of the company or its breakup into pieces is a matter of expediency." As well as being saddled with the huge clean up and compensation costs, the oil firm's credit worthiness has been slashed and its shares have slumped on the stock market in the wake of the spill. The environmental disaster began on April 20, when a explosion ripped through the Deepwater Horizon rig, killing 11 workers.

Hayward's recent efforts to pacify American anger have proved disastrous, and the oil chief was under fire again Sunday when US politicians blasted him for attending a yacht race. Media reports that he went to the race off the Isle of Wight, the day after he was removed from management of the oil leak disaster, drew fierce criticism from the US administration.  

Tue, 06/22/2010 - 17:17 | 427747 CustomersMan
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So, let's see. Who are the people that have been pushing for war with Iran? And as a result the closing of the Persian Gulf?

Tue, 06/22/2010 - 17:17 | 427748 michael63636
michael63636's picture


at sea bottom = 5000_ft*_m^2*1028_kg/_m^3*9.83_m/s^2

 = 15,400,385_N/_m^2 = 15,400,385_Pa/_psi

 = 2,233_psi

differential from sea floor to

well bottom = 35,000_ft*_m^2*2,800_kg/_m^3*9.83_m/s^2

 = 293,626,032_N/_m^2 = 293,626,032_Pa/_psi

 = 42,586_psi


Pressure at bottom of well = 42,586_psi + 2,233_psi

 = 44,819_psi

Tue, 06/22/2010 - 17:21 | 427758 Augustus
Augustus's picture

You are calculating pressures for a well that WAS NOT DRILLED.

The well that WAS DRILLED had a bottom hole pressure of about 12,500 psi.

Tue, 06/22/2010 - 17:33 | 427792 gasmiinder
gasmiinder's picture

1) Depth of deepwater wells is subsea - to get the differential you need to subtract the 2381 psi pressure at seafloor from total.

2) The Macondo reservoir is at 18,000' not 35,000'.  Don't know what possible connection their is between the Wilcox turbidite discovery in the Perdido foldbet and Macondo - actually there is none.

3) Not sure what your using for your fluid density but the Macondo well reached total depth using 14.3 ppg oil-based drilling mud.  Assuming this number was surface to TD the pressure in the reservoir is 13,360 psi.  This results in a pressure drawdown from reservoir to seafloor of about 11,000 psi.  (But the oil column is not weightless - let's keep it simple though)  Contrary to what you've heard it can't possible be 60,000 psi - if the pressure was that high the rock would naturally frac and the oil would have been in the ocean eons ago.


Tue, 06/22/2010 - 17:18 | 427751 gasmiinder
gasmiinder's picture

Anytime someone tells you "an underground oil cavern estimated to be the size of Mt Everest" you can rest assured they don't know WTF they are talking about.

Tue, 06/22/2010 - 17:23 | 427763 Augustus
Augustus's picture

WMR has sources who have visited the cavern full of oil and observed the multiheaded monsters swimming there.  Unnamed sources, of course.

Tue, 06/22/2010 - 17:34 | 427796 bigdog
bigdog's picture

did it have seven heads and 10 crowns

Tue, 06/22/2010 - 17:44 | 427824 snakehead
snakehead's picture

by snakehead

According to snakehead, this guy is obviously a BP shill, misunderestimating the REAL size of the reservoir.  



Tue, 06/22/2010 - 20:02 | 428121 Thomas Paine
Thomas Paine's picture

Yesss gasman! Finally somebody leads off with a little more practical knowledge & common sense than the off-hand blather and pigshit of tiny town...more please.


Tue, 06/22/2010 - 17:33 | 427793 Thunder Dome
Thunder Dome's picture

Abiotic oil people.  I used to be a big believer in Peak Oil but now I am not so sure.  Many old wells have begun to replenish.  How does that happen?  Abiotic oil people.

Tue, 06/22/2010 - 17:52 | 427836 Augustus
Augustus's picture

There has not yet been a discovery of any oil that was not of organic origin.  For a good discussion, with some reasonable balance, read this article:

The “Abiotic Oil” Controversy by Richard Heinberg

Tue, 06/22/2010 - 22:10 | 428334 russki standart
russki standart's picture


Sorry Bro, but abiotic oil does exist. The russians proved its existence by drillin over 40 thousan feet and striking huge pools of oil, at a depth that precludes sourcing from dead dinosaurs. Google Abiotic Oil, Russia and explore some of the widely available material. Besides, hydrocarbons are found throughout the solar system, such as on Uranus and Neptune.  It should be noted abiotic oil does not eliminate the possibility of oil also originating from biological sources. The theories of the genesis of biotic and abiotic oil are not mutually exclusive.

Tue, 06/22/2010 - 23:34 | 428476 Anarchist
Anarchist's picture

Russian Chemists also proved there is no biological decomposition process that can produce oil as the end result. Oil is the result of minerals, water, radioactive decay, pressure, heat and time. I trust a Chemist over a Geologist any day of the week on this subject.

On a another subject is the source of our magnetic field and molten "core". The Russians believe that radioactive decay is the source of heat that has kept the core molten. Most in the west believe we have a molten iron core yet cannot prove how the core has stayed molten for billions of years with no source of heat.   

Wed, 06/23/2010 - 05:36 | 428625 Gordon_Gekko
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Tue, 06/22/2010 - 17:52 | 427837 tmosley
tmosley's picture

Old wells are replenishing?  Source?

Tue, 06/22/2010 - 20:23 | 428164 Augustus
Augustus's picture

Read the article I linked above.  There are a couple of instances where it has happened.  It is pretty well confirmed that the "new" oil coming from a connection to another reservoir.  The oil is still of organic origin and can be identified as being different from the original oil in the reservoir.

Tue, 06/22/2010 - 17:39 | 427808 Guy F.
Guy F.'s picture

Meet the new boss, same as the old boss...

Tue, 06/22/2010 - 17:45 | 427828 Augustus
Augustus's picture

I just read the end of the original post:

By. Wayne Madsen for who offer detailed analysis on Oil, alternative Energy, Commodities, Finance and Geopolitics. They also provide free Geopolitical intelligence to help investors gain a greater understanding of world events and the impact they have on certain regions and sectors.

It must be provided free.  If they tried to charge for the fiction it would be grounds for fraud indictments.

Tue, 06/22/2010 - 17:56 | 427840 Heroic Couplet
Heroic Couplet's picture

Most middle class Americans know the connection between the Republican party and Big Oil. No, the world did not begin with Obama. Bush ok'd the lease on the drill area. I've read that IMMS is stacked with Bush/Cheney appointees, don't know how well documented that is.

Pray tell, let's have the lobbyists logs for the time before the rig broke. How many were tramping in and out of Capitol Hill?

Tue, 06/22/2010 - 18:07 | 427873 baserunr
baserunr's picture

To be fair, having more credibility than the AP or .gov is a low hurdle to clear.  And yet people pay for the AP. (Why?) We get fine original thinking/research and commentary here at ZH for free! The AP is dinosaur media.  And like dinosaurs, they will eventually leak out of the ground and make a mess all over the place.

Tue, 06/22/2010 - 18:16 | 427901 jkruffin
jkruffin's picture

And yet another nice piece of corrupt government news:


WASHINGTON (Reuters) – The United States is indirectly paying tens of millions of dollars in protection money to Afghan warlords, and potentially to the Taliban, to secure convoys carrying supplies to U.S. troops in Afghanistan, congressional investigators said in a report.

Tue, 06/22/2010 - 18:20 | 427910 Johnny Dangereaux
Johnny Dangereaux's picture

Ummmm  they (Ehud's Stooges I call them) are going to attack Iran no matter how much friggin oil anybody's got....after a week or two the Straights of Ho will be threat free anyway....and they can also ramp up Iraqi production...since we got control of that stuff now.........time to invest in bicycle manufacturing it seems to me.....

Tue, 06/22/2010 - 18:21 | 427912 HEHEHE
HEHEHE's picture

Where are the facts?  I don't doubt any of the mentioned gubmint officials would be above any of this but from reading the piece there's no facts to support any of the allegations.

Tue, 06/22/2010 - 18:25 | 427920 ex VRWC
ex VRWC's picture



The BP crisis in the Gulf of Mexico has rightfully been analysed from the ecological perspective. People’s lives and livelihoods are in grave danger. But that focus has equally masked something very serious from a financial perspective, in my opinion, that could lead to an acceleration of the crisis brought about by the Lehman implosion.


People are seriously underestimating how much liquidity in the global financial world is dependent on a solvent BP. BP extends credit – through trading and finance. They extend the amounts, quality and duration of credit a bank could only dream of. The Gold community should think about the financial muscle behind a company with 100+ years of proven oil and gas reserves. Think about that in comparison with what a bank, with few tangible assets, (truly, not allegedly) possesses (no wonder they all started trading for a living!). Then think about what happens if BP goes under. This is no bank. With proven reserves and wells in the ground, equity in fields all over the planet, in terms of credit quality and credit provision – nothing can match an oil major. God only knows how many assets around the planet are dependent on credit and finance extended from BP. It is likely to dwarf any banking entity in multiples.


And at the heart of it all are those dreadful OTC derivatives again! Banks try and lean on major oil companies because they have exactly the kind of credit-worthiness that they themselves lack. In fact, major oil companies, conversely, spend large amounts of time both denying Banks credit and trying to get Bank risk off of their books in their trading operations. Oil companies have always mistrusted bank creditworthiness and have largely considered the banking industry a bad financial joke. Banks plead with oil companies to let them trade beyond one year in duration. Banks even used to do losing trades with oil companies simply to get them on their trading register… a foot in the door so that they could subsequently beg for an extension in credit size and duration. For the banks, all trading was based on what the early derivatives giant, Bankers Trust, named their trading system: RAROC – or, Risk Adjusted Return on Credit. Trading is a function of credit bequeathed, mixed with the risk of the (trading) position. As trading and credit are intertwined, we might do well to remember what might happen to global liquidity and markets if BP suffers what many believe to be its deserved fate of bankruptcy. The Intercontinental Exchange (ICE) has already been and will be further undermined by BP’s distress. They are one of the only “hard asset” entities backing up this so-called exchange.


If BP does go bust (regardless of whether it is deserved), and even if it is just badly wounded and the US entity is allowed to fail, the long-term OTC derivatives in the oil, refined products and natural gas markets that get nullified could be catastrophic. These will kick-back into the banking system. BP is the primary player on the long-end of the energy curve. How exposed are Goldman sub J. Aron, Morgan Stanley and JPM? Probably hugely. Now credit has been cut to BP. Counter-parties will not accept their name beyond one year in duration. This is unheard of. A giant is on the ropes. If he falls, the very earth may shake as he hits the ground.


As we are beginning to see, the Western pension structure, financial trading and global credit are all inter-twined. BP is central to this, as a massive supplier of what many believe(d) to be AAA credit. So while we see banks roll over and die, and sovereign entities begin to falter… we now have a major oil company on the verge of going under. Another leg of the global economic “chair” is being viciously kicked out from under us. Ecological damage is not just an eco-event on its isolated own. It has been added to the list of man-made disasters jeopardizing the world economy. The price tag and resultant knock-on effects of a BP failure could easily be equal to that of a Lehman, if not more. It is surely, at the very least, Enron x10.


All the counter-party risk associated with the current BP situation means the term curve of the global oil trade has likely shut down. Here we have yet another credit-based event causing a lock-up in markets that will now impede trade and commerce. It looks like an exact replication of the 2008 credit market seizure could ensue all over again – and it could probably be a lot worse. The world is in a far more delicate state now.


Although never really discussed, the world is highly reliant on BPs provision of long-term credit to many core industries. Who makes good on all the outstanding paper that so many smaller oil, gas and electricity companies, airlines, shipping companies, local bus, railway and transportation networks that rely on BPs creditworthiness and performance for? It doesn’t take a genius to figure out how this could all unwind. If BP has to be bailed-out, like a bank, the system will have to print even more unimaginable amounts of money.

The market, intellectually lazy and slow to realization, as it often is, probably has not woken up to it yet – but the BP crisis could unleash damage similar to the banking crisis. A BP failure through bankruptcy could make Lehman look small in comparison, and shake the financial house of cards we live in even more severely. If the implicit danger of the possibilities imbedded in such an event doesn’t make an individual now turn towards Gold at full speed, it is likely that nothing will.


Respectfully yours, 
CIGA Pedro

Sounds plausible but I am not well versed - I am merely an engineer.  Does this poster sound right to you Fins out there?

Tue, 06/22/2010 - 18:45 | 427966 papaswamp
papaswamp's picture

Holy diaper rash batman! I would think this puts BP in a whole different class of liability. "..but your honor, the US Govt told us it was a matter of national security."

Tue, 06/22/2010 - 19:09 | 428002 palmereldritch
palmereldritch's picture

Peek Oil

Tue, 06/22/2010 - 19:20 | 428018 bugs_
bugs_'s picture

Joint liability BP and US Govt.

$20B is BP's share.

Wed, 06/23/2010 - 08:30 | 428691 MsCreant
MsCreant's picture

Holy Shit! If Obama said to do this, that means we pick up the tab? Oh well. Guess we always pick up the tab. Bag holder of last resort.

Tue, 06/22/2010 - 19:32 | 428044 linrom
linrom's picture

Tyler Durden and Wayne Madsen are of the same mind. Tyler wants to turn ZH into Aljezeera's mouthpiece; Madsen wants to turn US into Zioniosts Free Zone.

Now seriously and without any sarcasm: if you complain about MSM lack of journalistic integity, you don't have to look further to see the same at ZH. Shame!


Tue, 06/22/2010 - 20:09 | 428138 desgust
desgust's picture

And who pays you, moron?

Tue, 06/22/2010 - 19:44 | 428074 michael63636
michael63636's picture

bankruptcy for BP — an outcome increasingly inevitable

Copied from the London Times:


Lynn Lophucki, one of America’s leading experts on bankruptcy law, said that the Bill being drafted in the House of Representatives would compel BP to use American courts if it wanted to file for bankruptcy for any of its subsidiary companies — an outcome that he regarded as increasingly inevitable. “There is really no top limit on what this is going to cost,” Professor Lophucki, of the UCLA Law School in Los Angeles, said. He dismissed Goldman Sachs’ estimates that the disaster was likely to cost BP no more than $70 billion — a huge sum but one it could probably swallow. “There are definitely scenarios that end in the complete destruction of BP.”



Tue, 06/22/2010 - 20:18 | 428119 Augustus
Augustus's picture

Heroic Couplet ,

You are as poorly informed by the DumpoCrap propaganda as most who write here.  Pelosi is even trying to continue the blame game.  It won't work when people can check up on you.


Pelosi’s lame blame game: No ‘burrowed-in’ Bush appointees oversaw Deepwater Horizon The Washington Examiner has obtained biographic information on the MMS officials responsible for overseeing BP’s Deepwater Horizon rig at the time it exploded, from the Gulf Region Director to the last inspector to set foot on the rig. Most of these federal employees started with the agency decades ago. Not one was a presidential appointment of George W. Bush, although one longtime MMS employee in question was promoted to his current position during the Bush Administration.

Tue, 06/22/2010 - 20:59 | 428235 Missing_Link
Missing_Link's picture

I am HIGHLY skeptical of this report.  Are we to seriously believe that a single oil well could provide for the entire USA's oil need for eight months?

Tue, 06/22/2010 - 22:57 | 428420 thesapein
thesapein's picture

I'm more skeptical because of the blatant link to war with Iran which is something Wayne Madison would be looking to expose. So I really want his sources.

How much oil does a large well usually provide and how does that compare to our consumption?

Tue, 06/22/2010 - 22:11 | 428338 tyler
tyler's picture

I don't expect the media to mention this.  All the media sleep in the same bed and that includes fixed news. 

Wed, 06/23/2010 - 00:58 | 428522 barkingbill
barkingbill's picture

While some enthusiastic zerohedgers are busy arguing about whether we need a democracy or republic, (don't worry you will get neither on our present course), or whether one enourmous deep sea well will make a difference for our oil consumption during a war(no one is saying that we will just pump our gas from that one well for the duration of the war please), or whether Wayne Madsen can be trusted (I say it's a dirty job but someone's got to do it), we are hurtling towards great financial, environmental and military destruction, but don't mind me, go get those a-rabs and test some more bombs, cuz like Iran is just soooo dangerous. Just like Iraq was with all those dangerous WMDs and after that harrowing close call in Times Square with the guy with the wrong firecrackers, and then again the underwear bomber almost succeded in lighting up his gonads, so it's a dangerous place out there for good people like Americans and Israelis. I say lets tear the place up. Let the bombing begin. We have to make the world safe for the thoughtless. 

Maybe if the evil guys in turbans don't attack us first, we will have to stage an attack's a dirty job but it's all in the name of world domination, so that makes it ok, after all we are America, the nation god blessed. now pass the burger and slurpee, i want to watch some college football.....

Wed, 06/23/2010 - 05:33 | 428624 Gordon_Gekko
Gordon_Gekko's picture

In that case, and considering the fact that the American populace has been nothing but MUTE, DEAF AND DUMB spectators to all the ILLEGAL and IMMORAL wars, this GoM disaster is simply WELL DESERVED punishment. Serves us right.

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