T Boone Pickens Says BP TopKill Effort in Gulf of Mexico Has Low Probability of Success

T Boone Pickens, the legendary oilman who at the age of 83 is still an active businessman who now operates a hedge fund, recently appeared on the Larry King show. When asked by Larry King what he thought about the British Petroleum top kill effort to shut down the wild oil well in the Gulf of Mexico brought about by the Deepwater Horizon explosion he said that it was really an act of desperation by BP that had a low probability of success.

As Pickens says about himself he has been around quite awhile and has seen a lot during his lifetime, including quite a lot in the oil patch. Pickens worked for Phillips Petroleum for three years before striking out on his own in 1954. With $2,500 of borrowed money, Pickens and two investors formed an oil and gas firm, Petroleum Exploration Inc., which focused on domestic oil and gas opportunities.

A few years later, he formed Altair Oil & Gas Co. to pursue oil and gas exploration opportunities in western Canada. Both were predecessor companies to Mesa Petroleum, which Pickens took public in 1964. Pickens built Mesa into one of America’s largest independent natural gas and oil companies. Mesa produced more than 3 trillion cubic feet of gas and 150 million barrels of oil from 1964 to 1996. Over the years T. Boone amassed a personal fortune estimated by Fortune Magazine to be about $3 billion.

Pickens’s assessment of the junk shots being carried out by BP along with the top kill operation is that they are also a low probability desperate attempt at stopping the flow of oil now gushing for the 41st day into the Gulf of Mexico. Pickens told Larry King that in his opinion we would still be witnessing the oil gushing into the Gulf 38 days from now. His appearance on the Larry King show was on day 38 of the Deepwater Horizon event.

When asked by King why he was so pessimistic about the outcome of the top kill operation T Boone replied that he was not pessimistic but based upon his considerable experience in oil drilling operations he was being realistic. According to T Boone Pickens the wild oil well will more than likely keep spewing crude oil into the Gulf of Mexico until a relief well can be completed.

An interesting ongoing discussion of the Deepwater oil spill can be found at The Oil Drum website. This is a web site where oil industry engineers, geologists, oil drilling experts, and others with an interest in the oil industry hangout, so much can be learned from the discussion threads that are now taking place about the DeepWater oil spill.

A number of postings concur with T. Boone Pickens assessment that the present efforts by BP have a low probability in killing the oil flow and that it will take a relief well to satisfactorily complete the task. Unfortunately, for BP, the Gulf of Mexico, citizens of the Gulf states, and all the rest of us, the drilling of the relief well will probably take at least two months to complete. Even that time period may be optimistic as with the Deepwater Horizon oil spill event Murphy’s Law seems to be fully operational.

No doubt, BP will feel compelled to continue to initiate low probability of success efforts in order to stop the oil from gushing into the Gulf. Public and government pressure is intense to “do something”. The problem is that fooling around with the damaged oil drilling equipment lying one mile deep in the waters of the Gulf of Mexico is a risky business. BP runs a real risk of creating an additional accident that would increase the flow of oil into the Gulf.

The Deepwater Horizon explosion and oil spill event is a disaster of the first order. While the loss of 11 lives due to the explosion on the Deepwater Horizon drilling rig was tragic enough, the full extent of the tragedy will likely extend over decades. At this time the environmental damage and the damage to the economy of the United States is impossible to calculate but will likely be in the high multi billions of dollars.

Should T. Boone Pickens be correct in his assessment that only a relief well will stop the flow of oil then the long term damage will indeed be frightening in scope. The Deepwater Horizon oil spill event may be the mother of all Black Swans. The event is a horrific reminder of just how badly things can go wrong in a society that depends upon complex technology to supply its energy requirements.