Prominent Oil Industry Insider: "There's Another Leak, Much Bigger, 5 to 6 Miles Away"

George Washington's picture


Matt Simmons was an energy adviser to George W. Bush, is an adviser
to the Oil Depletion Analysis Centre, and is a member of the National
Petroleum Council and the Council on Foreign Relations. Simmon is
chairman and CEO of Simmons & Company International, an investment
bank catering to oil companies.

Simmons told Dylan Ratigan that "there's another leak, much bigger, 5 to 6 miles away"
from the leaking riser and blowout preventer shown on the underwater

have no idea whether or not Simmons is right. The government should
immediately either debunk or admit his claim.

If accurate, the
bigger leak could have been caused by the destruction of the well casing
when the oil rig exploded. That is Simmons' theory.

Or it could
be caused by a natural oil seep, although the odds of a seep of that
size occurring right around the time of the Deep Horizon disaster is
nearly zero.

There is another possibility.

It is well-known that there were previous accidents at the Deepwater
Horizon rig. For example, as AP notes:

2000 to 2010, the Coast Guard issued six enforcement warnings and
handed down one civil penalty and a notice of violation to Deepwater
Horizon, agency records show.

On 18 different occasions during that
period the Coast Guard cited the vessel for an "acknowledged pollution

And as 60 Minutes reports:

[Mike Williams, the chief electronics technician
on the Deepwater
Horizon, and one of the last workers to leave the doomed rig]  said
they were told it would take 21 days; according to him,
it actually took six weeks.


With the schedule slipping, Williams says a BP manager ordered a
faster pace.


"And he requested to the driller, 'Hey, let's bump it up. Let's bump
it up.' And what he was talking about there is he's bumping up the rate
of penetration. How fast the drill bit is going down," Williams said.


Williams says going faster caused
the bottom of the well to split
open, swallowing tools and that drilling fluid called "mud."


"We actually got stuck. And we got stuck
so bad we had to send tools
down into the drill pipe and sever the pipe," Williams explained.


That well was abandoned and
Deepwater Horizon had to drill a new
route to the oil.
It cost BP more than two weeks and millions of


"We were informed of this during one of the safety meetings, that
somewhere in the neighborhood of $25 million was lost in bottom hole
assembly and 'mud.' And you always kind of knew that in the back of your
mind when they start throwing these big numbers around that there was
gonna be a push coming, you know? A push to pick up production and pick
up the pace," Williams said.


Asked if there was pressure on the crew after this happened, Williams
told Pelley, "There's always pressure, but yes, the pressure was


But the trouble was just beginning: when drilling resumed, Williams
says there was an accident on the rig that has not been reported before.
He says, four weeks before the explosion, the rig's most vital piece of
safety equipment was damaged.

It is therefore possible that there has been another ongoing leak
which BP has tried to cover up.

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shawnlee's picture

We have no idea yet how much oil is going to come out of that geiser so to state that the Gulf will repair itself seems Panglossian at best. But I sure as shit hope you're right my friend.

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Miles Kendig's picture

Fail to set a place at the table for Murphy and see what happens.  Every Ranger knows this, but the folks in big oil & big government seem to have either forgotten it or just plain don't give a fuck since it isn't their mess and they have a TBTF stay out of jail free card.  Horrific results always follow the abrogation of responsibility.  Time to get busy doing what is really important to the people of this great nation! Start trucking in the white sand to West Palm Beach.  Appearances must be maintained or it will be Drill Baby in 2012. Gotta put those disaster funds to real productive use.

knightmare's picture

When we learn that BP have been giving us feed of the small leak we will all wake up to the half truths and innuendos.I been monitoring the sideshow.What a circus!!I feel betrayed!!Boycott and bankrupt BP please.

Miles Kendig's picture

I am sure the fed has some BP bonds somewhere on their balance sheet and will soon have more.  As the fed will use their dollar swap facilities and trade BP general obligation debt for treasuries, or even look at levering the future government payments to help offset the costs associated with the loss of production and clean up.  Perhaps additional assistance may be provided since this is a serious situation .. through another program to facilitate the LIBOR & CP markets in Europe perhaps.  Bankrupt BP?  They're another TBTF.  Besides, if they were held to account no one would ever work the oil industry again and this would lead to major social disruption, soldiers in the streets, the total collapse of global finance & energy not to mention a tough reelection campaign for the congress critters.  Just ask one of the presidents most trusted advisors, Cas Sunstein about the importance of the idea that public service (at least senior public service which includes the TBTF corporations) cannot be criminalized.  This is just one of many areas of near total agreement between Cas and David Addington.

Prosecuting government officials risks a “cycle” of criminalizing public service, [Sunstein] argued, and Democrats should avoid replicating retributive efforts like the impeachment of President Clinton — or even the “slight appearance” of it.

Hephasteus's picture

It's about 3 am. This thing just went from bad to worse to a NIGHTMARE.

This has collapsed an is currently spewing out oil like a volcano. The gulf is dead.

knightmare's picture

I had not seen a situation the government did not want to commandeer. BP are still lying to us.We are not getting the whole truth.

Buck Johnson's picture

There is a possibility that the one hole that was damaged and left alone wasn't capped well enough and/or they just pulled up and ran.

Printfaster's picture

By the way on the leak estimates, they can be off by more than 4x or so.  When crude mixes with seawater it forms something called "chocolate mousse" which consists of about 4 parts water and one part crude.

Chocolate mousse can turn a 10,000 bpd leak into what looks like a 50,000 bpd.

Printfaster's picture

How about renting a narco sub instead to look at the leak:


tahoebumsmith's picture

I think we need to talk to Schlumberger, they are the people that haven't been mentioned and the original story has been changed. The story now reads, A spokesman for the testing firm, Schlumberger, said BP had a Schlumberger team and equipment for sending acoustic testing lines down the well "on standby" from April 18 to April 20. But BP never asked the Schlumberger crew to perform the acoustic test and sent its members back to Louisiana on a regularly scheduled helicopter flight at 11 a.m., Schlumberger spokesman Stephen T. Harris said.

The original story read,

SLB (Schlumberger)gets out to the Deepwater Horizon to run the CBL, and they find the well still kicking heavily, which it should not be that late in the operation. SLB orders the “company man” (BP’s man on the scene that runs the operation) to dump kill fluid down the well and shut-in the well. The company man refuses. SLB in the very next sentence asks for a helo to take all SLB personel back to shore. The company man says there are no more helo’s scheduled for the rest of the week (translation: you’re here to do a job, now do it). SLB gets on the horn to shore, calls SLB’s corporate HQ, and gets a helo flown out there at SLB’s expense and takes all SLB personel to shore

6 hours later, the platform explodes.


DoChenRollingBearing's picture

If the BP company man is still alive, his ass will be roasting so hot that they will smell the barbecue all the way to London.

And their sleazy internal culture of speed, low cost, etc. is really something.  When I was in the oifields (at Bravo's age) in 1980, SAFETY was taken very seriously.

Maybe we just take back Amoco from BP.

Jim in MN's picture

Also noticed that one way the Gulf Stream was first noticed and mapped was from detrius washing up in the British Isles.  So, no shit, BP really could get some of 'their' product back home.

Never underestimate the ocean.

Jim in MN's picture

We did some calculatin' here a few weeks ago and it turns out that 100 million gallons can contaminate one third of the Gulf to 1 ppm, which when it starts to smell and the EPA starts to get fidgety.  If it's perfectly mixed.

But that just seems too horrific, so it can't possibly happen. 


laosuwan's picture

No smoking near the sea.

could start a fire

Sudden Debt's picture

I'd love to see warning signs near the beaches like that :)

or: Inhalation of the seabreeze can cause longcancer

Al Gorerhythm's picture

Please turn off all cell phones anywhere near the gulf.

onlooker's picture

Could it be that they were on a fracture line and the explosion super pressurized the drill stem through the drill bit or blew out the pipe and “fracked” the formation. If so there could be multiple formation breaks letting the trapped fluids and gas escape. If the field is as large as I suspect, then you could look at a doomsday situation of no way to stop it and so much that it will flow for a long time. I hope this is not the reality.

GivesNoSht's picture

we will all get what's coming to us

CEOoftheSOFA's picture

Nothing in this article makes any sense. 


tip e. canoe's picture

mad props to Dylan for having the wisdom to keep quiet and let these guys ramble on a bit at the end.   much was learned by many in that little exchange.  that's good television.

Rogerwilco's picture

Some perspective please. This is a mess, but it is no way the end of world for the Gulf of Mexico. The Gulf is around 300,000 square miles of open water. Let's say the oil pollutes 1/10 of that or 30,000 square miles. BP has lost about 20 million gallons of oil since the leak began. That is less than 700 gallons per square mile, or about 1/10 of a drop (milliliter) per square foot. If I squirt a drop of oil in a bathtub, does it turn into a dead zone for a generation? The media are overplaying this thing big time.

QQQBall's picture

You must be the guy I saw leaving the game in the third inning. Why not wait to see if they can plug the thing or if it just has to keep gushing until they drill ancillary wells. There is no way to conclude anything yet on this disaster.

almost_have_a_name's picture

This one will end up on the shore, where all the phytoplankton head up the food chain.

Shrimp gumbo, shrimp cocktail, broiled shrip, Oiled shrimp, Obama shrimp, shrimp BP, ...


ZackAttack's picture

Estimate maybe about twice that:

Right now, the surface area of the spill is about 39,000 square miles:

The rest of us will just huddle in the no-pissing section of the bathtub, then.

When BP's CEO tried to downplay the spill with the same argument, I wrote him to ask if that indicated he wouldn't mind a drop of man-chowder in that great big mug of tea. I didn't get an answer back.


tip e. canoe's picture

perhaps, though if so, i prefer to think that Mother is teaching her children another lesson (but that's me).  regardless, what it's revealing about the current state of humanity is priceless.

pigpen's picture

I have worked with Matt before and he is a brilliant energy analyst who loves data analysis and understands the oilfield service industry better than most.

Few people are more passionate and knowledgeable about the energy industry.

However, he is prone to doomerism at times and it affects his credibility within his firm and the industry.


DaveyJones's picture

Peak oil doomerism raises his credibility

Mr Lennon Hendrix's picture

Simmons knows his stuff, and the industry should be worried, peak oil is about to turn world growth negative, if the banksters have not done that already.

Zé Cacetudo's picture

Saw this somewhere earlier today:

"Sir, how would you like your fish today? Regular or unleaded?"

Miles Kendig's picture

Fact remains that soon enough the only blue plate special that will be gettin' served is North Atlantic Scrod with Quaker State.  Classic Good Will Hunting

almost_have_a_name's picture

Are they planning to sourround the hamptons with the national guard ?

"You see what happens, Larry, you see what happens  !?!"

ZerOhead's picture

It's better in the Bahamas! (Old tourism jingo...)

Mr Lennon Hendrix's picture

Looks like the Super rich will have to hide out in the Hamptons during the collapse this summer due to their Caribbean playground taken over by the oil slick.

Money Squid's picture

I agree with Apostate - Twilight in the Desert is a good book that needs to be read. Great info on the Saudi oil field ops and the likely production from their fields, which directly relate to peak oil and the end of cheap energy.

Does BP control the all the video feeds? If so, we will never see what is really going on down there.

Apostate's picture

Matthew Simmons is great, but he puts a bit too much faith in the numbers provided by nationally owned oil companies. ARAMCO et al snowed the fuck out of him.

Despite that, I recommend his "Twilight in the Desert."

Buy it if you want to learn more about the energy industry and the chicanery of the NOCs and state-supported oil majors. 

He's an example of the old-school of investment banker that actually understands the industry that he covers on an engineering/geology level as well as the business side.