Formal Proposal

Proposal To British Petroleum For Oil Evacuation Safety Measure For Offshore Oil Drilling Rigs

Matti Joyner, Shane Goff, Michael Carlock & Robert Feagans

New Mexico State University

Las Cruces, New Mexico

2011

Table of Contents

Tittle Page 1
Table of Contents 2
Abstract 3
Description of Problem 3
Executive Summary 5
-Method Procedure 5
        -Why oil drilling makes sense 5
-Alternatives 7
-Cost and Resources 8
-Personnel 9
Conclusion 10
References 11

Abstract

Being British Petroleum, one of the biggest oil companies in the world,  you must be very aware of our nation’s consumption; oil is used in every aspect of our daily lives, everything from cars to lawnmowers and even some toys run on oil. To say that it is important to our lives would be an understatement. Without oil our lives would dramatically change in many ways. The biggest would be traveling to work and to other locations.  Offshore oil drilling helps us obtain this oil needed to maintain our standard of living. No matter how many ways we try to make it safe there are always unexpected occurrences that can happen. You can try to prevent these occurrences but something unexpected is bound to happen. We are proposing to design a pressure gauge that when it hits that max pressure it opens a valve that releases the pressure. This may prevent the explosions that are happening on the offshore drills. Adding this gauge may prevent the oil drills from blowing up by stopping the pressure before it gets to the top of the drill creating the explosion. This may help decrease the numbers of drills that explode due to pressure build up. In the end this can help save the lives of many workers onboard the oil rigs and also of those animals around the rigs. The amount of money that would be saved is astronomical, when your oil rig exploded in the gulf there were many different ways in which mass amounts of money was used for unforeseen costs, including: bereavement checks, cleanup of oil and those who depend on the gulf for work were unable to do so at that time.

Description of Problem

The United States consumes an average of 20% of the world’s oil, and only provides about 2% (Obama, 2010, Remarks Offshore Drilling). This large gap in oil consumption accounts for 30% of the country’s trade deficit, due to the dependency of foreign oil (Gibson, 2005, US Oil Consumption). Offshore drilling is when the land that is going to be drilled cannot provide a base for the platform, meaning that an artificial platform must be created in order to extract the oil being pursued.  These platforms can be situated in water up to several hundred meters in depth and are classified as either permanent rigs or rigs that can be moved from place to place (used more for exploratory purposes), with the latter being more prominent.

Oil rigs are fixed to the seabed with steel posts, are built to house a number of the workers as well as harbor all the processing equipment used in extraction. The building of the rig can take anywhere between 2-4 years.  An investment in offshore drilling, according to President Obama, is expected to create or save more than 700,000 jobs throughout America (Obama, 2010, Remarks Offshore Drilling).  An estimated additional 18 billion barrels of oil is contained in the areas where the original congressional law had taken effect.  America is averaging around 7 billion barrels of consumption a year, and this figure seems to be rising steadily within the current decade.  The majority of American oil, sixty percent, is supplied by other nations. If America could provide oil on its own accord there would be no fear of what takes place outside American borders.
The oil has been 99.99% clean since the year 1980.  620,500 barrels of oil will naturally leak from the ocean floor each year; the number of barrels lost to the ocean due to human error is vastly smaller at approximately 6,000. Through this time 17 permits along with 90 regulations have been established to ensure that every step is taken to optimize efficiency as well as keep in mind the sanctity of the ecosystem. When Hurricane Katrina as well as Rita occurred, 3,050 rigs lay in the path of these two terrible storms, of those 3.050 rigs, slightly over 200 of them were damaged. However, they were able to be capped thus avoiding disaster while keeping the integrity of the operations (Murdock, 2008, Vol. 64 Issue 26, p8-8, 1/3p).

Oil is used to fuel vehicles, heat homes, lubricate machinery, make asphalt for roads, plastics, and even is used to create electricity.  President Obama addresses that both traditional sources and renewable energy must be utilized by stating, “This is not a decision that I’ve made lightly. But the bottom line is this: Given our energy needs, in order to sustain economic growth and produce jobs, and keep our businesses competitive, we are going to need to harness traditional sources of fuel even as we ramp up production of new sources of renewable, homegrown energy.”  United State will consume around 22 million barrels of oil a day with only 27% being of our own accord. With an estimated 18 billion lying within US coastal areas we could reach economic stability by keeping money in our own economy. This will raise the equilibrium for the supply and demand of oil, thus helping the economy and our living standards.

Executive Summary

Method and Procedure

The initial stage of the project will involve a basic research and development cycle. We will begin with work in AutoCAD (computer animated design), where the initial design of the wastegate will be conceptualized. Due to the fact that our product is not a new idea, but simply an update of an existing design, the development process will be fairly short. Once we have designed the initial product we will make a prototype which will allow the testing stage to begin. In this stage we will make sure that the product functions as planned. After the product has been proven to work, we will begin the final productions stage in which the product will be produced in a timely manner without compromising quality. In order to create the required 8,000 waste-gates it will take a great amount of time. However, our plan is to begin working on each rig as soon as enough of the product is available. We hope to have this done in a year’s period. This is assuming a day to install with travel time, and at about 16 waste-gates a day.

Why Oil Drilling makes Sense

An investment in offshore drilling, according to President Obama, is expected to create or save more than 700,000 jobs throughout America (Obama, 2010, Remarks Offshore Drilling). You, BP are one of the largest oil companies in our countries, there is great potential for growth in the U.S. With the economy in need to stabilize offshore drilling provides the chance for economic growth, and ultimately expanding our nation’s capacity to generate renewable electricity from sources like the wind and sun. An estimated additional 18 billion barrels of oil is contained in the areas where the original congressional law had taken affect (Baird, 2008, Vol. 68 Issue 3, 13-17, p5.). America is averaging around 7 billion barrels of consumption a year, and this figure seems to be rising steadily within the current decade, it is without question that the potential is there to become energy independent rather than reliant. Due to the congressional ban on offshore drilling rigs in the Gulf of Mexico, which account for nearly all of US offshore oil production, our foreign dependency for oil has risen. A statement like this instills the thought of having to ultimately rely in foreign nations due to the dependency of the oil that these nations provide to our country. This statement contains more truth than most would like to believe. The majority, sixty percent, of American oil is supplied by other nations. South American nations are the major provider of our oil, other nations near the Persian Gulf, and Africa (Gibson, 2005, US Oil Consumption) are other major providers. The ability to drill for our own oil keeps Americans safe from the mercy of the world oil market. When prices of crude oil rise, prices of gasoline rise. Drilling for our own oil removes the other markets from the equation and thus removes markups on prices.

Alternatives

There are several alternatives to offshore oil drilling, such as oil shale, natural gas, oil sand, and coal. Each of these alternatives has their own pros and cons, but none are viable.
                                                                                                 
Oil shale is an organic rich stone that contains a variable type of oil.  After the shale is mined, it is taken for whatever use one may want. It can be burned like a crude cheap dirty heat source or to power districts. It can also be processed to retrieve the oil out of the shale, and then process the oil into something useable. There are a few big problems with oil shale, the mining causes irreversible damage to the landscape from which it is harvested, the mining process is expensive, after all is said and done from shale to useable material almost as much energy that can be created has been spent. This keeps oil shale from being a viable option until a better method of farming, and processing has been achieved.

Oil sand is another alternative that fairs poorly on profit, and on being environmentally friendly. The oil sand can be gathered in many different ways. Surface mining, cold flow where the oil is pumped out of the sand which can only be done in ideal conditions, steam assisted gravity drainage  where they inject steam into the sand to heat the oil making it more liquid so it can be pumped out, and several others. The problems with this are profit can be lost at any moment if the steam cannot supply enough oil to the well to be pumped with the steam assisted gravity drain. With surface mining, it takes roughly two tons of oil sand to produce an eighth of a barrel of oil. As you can imagine, the effort required to get oil from this source in comparison with the returns it offers renders it a very cost inefficient option. However, it is an option that may be looked upon when oil wells begin to run dry, leaving us with no other options for acquiring oil.

Natural gas is harvested many ways, including a way very similar to oil drilling. Finding natural gas is sometimes a mistake, and causes a great deal of damage in coal mines as its usually odorless and always colorless. The gas can accidentally be ignited and kill hundreds at any time. The gas also must undergo a lot of processing depending on how it is to be used. It can simply power a furnace, or be processed into several other gasses for specific purposes. This can make natural gas a variable constantly on profit, feasibility, and safety.

Coal is a cash cow for the United States. It is in abundant supply, and therefore can be sold for a fair and good looking low price. The downside to coal is it destroys the earth where it’s gathered via surface and strip mining. Coal must also go a lot of traveling before it reaches its destination, and as it can’t be broken down, compacted, or preprocessed, it must be shipped as solid chunks. This makes it very heavy, and hard to transport. Coal burning also comes at a cost, containing many air pollutants, it yields large amounts of carbon dioxide, carbon monoxide, nitrogen oxides, sulfur dioxide, and these are the greenhouse gasses believed to be responsible for global warming.

Cost

The cost of our proposed oil pressure release system, known simply as: a wastegate will be a fraction of BP’s yearly profit margin. If you factor in the costs associated with clean-up of an oil spill, our device has the potential to save vast amounts of money for your company. The overall cost of the project can be seen in a number of different areas. The cost can be seen in three basic areas, materials, labor and tools. These three areas can be seen here:
• Labor, needed to operate the machines
• Materials, needed to create the actual product
• Tools, needed to install the completed product

The materials needed to create our waste-gate will be limited to aluminum. Other metals are available at a cheaper price; however, the product needs to be strong in order to avoid failure from the high pressures seen inside the oil pipeline.  At this point in time the price of aluminum is approximately one dollar per pound. In order to create one waste-gate, we will need 5.85 pounds of aluminum. For the waste-gates to properly evacuate all of the oil from the pipeline, we will need 4 per pipe. This results in a total of 23.4 lbs. of aluminum per pipe and a price of $24 dollars in materials.

The cost to actually create the waste-gate will be $15,000 for the initial tooling price(cost to make the initial design plans and setup the machine) and 188 dollars per unit. We will need four units per oil rig, giving us a total of 3040 units. For this number of units, we get a total of $659,480 for all of the units, including the initial tooling price.

Installing the waste-gates will require a welder that is proficient in underwater, deep sea welding. For each and every rig to be outfitted, it will cost another $45,600. This is assuming $15 and hour, four hours a rig, for 760 rigs. The overall total to outfit all of the rigs with our product will come to: $705,080.

Personnel

Ronald Shane Goff

• Studying Electrical Engineering
• Worked as a mechanic for one year
• Time Management
• Organizational Skills
• Public Speaking
• Training Skills
• High school General Education

Matti Joyner

• Studying Civil Engineering
• High School General Education
• People Skills
• Organization Skills
• Welding

Michael Carlock
• Studying Industrial Engineering
• High School General Education
• Taken Manufacturing process experience
• Experience with networking through Government contracts
• 3-D modeling experience
Robert Feagans
• Studying Mechanical Engineering
• High School General Education
• Experience with mechanics
• Welding including: Arc, Mig, Oxy Acetylene and Brazing
• 3-D modeling experience

Conclusion

While the overall cost of fitting multiple wastegates to 4,000 oil rigs is neither a cheap, nor a quick process, the implications of doing so are great. When an oil spill happens, it is often due to a quick pressure wave traveling through the oil pipe line. It is common for this to break a large amount of expensive equipment and has the overarching danger of creating a fire. The addition of the multiple wastegates will allow that quick pressure wave to be evacuated from the pipe line and in-turn, stop the oil explosion from ever happening. Whenever an oil spill happens, it often kills people due to the explosions and will also spread throughout great areas of the ocean harming animals and other parts of the area’s ecosystem. While our product doesn’t stop the latter, it keeps the pipeline from being damaged and allows the well to be capped quicker, safer and easier, which will stop the further spread of oil. We are greatly looking forward to discussing the details of our project with your company. Our goal is to make oil rig explosions a thing of the past, enhancing safety for both people and the ecology around the rigs.

References

Obama, Barrack, (2010). Obama’s Remarks on Offshore Drilling
The New York Times, Full text of Speech.
Legislative Bodies, (2010). Legislative Background on Offshore Oil Drilling (offshore oil well law and legislation) Congressional Digest, Vol. 89 Issue 6, p177
Baird, Stephen L. (2008). Technology Teacher
Offshore Oil Drilling: Buying Independence or Buying Time? Vol. 68 Issue 3, 13-17, p5.
National Environmental Health Association, (2010). Article: Safety measures.
Journal of environmental health, Vol. 73 Issue 2, p5-40, 2p
Murdock, Deroy, (2008). Industrial Safety: Offshore Oil Drilling Cleaner than Mother Nature. Human Events, Vol. 64 Issue 26, p8-8, 1/3p.
Donatoni, Matthew, (2002). Offshore drilling. What is it?
Technological Breakthroughs, Article: Offshore Drilling
NaturalGas.org. (2004-2010). Offshore Drilling
Extraction- Natural gas, http://www.naturalgas.org/naturalgas/extraction_offshore.asp
Gibson, Dick, (2005). American oil consumption
US oil demand, Gibson Consulting online-Article: US oil consumption
http://www.metalprices.com. (2011). Cost of Aluminum
http://www.qafinc.com. (2011). Cost comparison between Hogout and precision forging