“One of the problems that we face in Louisiana, is not just the tragedy of the spill - that's one part of it, but half of the workers in the Gulf are either fisherman or they work in oil production. So Obama's embargo on drilling could finish Louisiana off”
Ocean Therapy Solutions made headlines a month ago, when co-founder and Hollywood actor Kevin Costner held a press conference to bring attention to the firm's siphoning machines that separate oil from water. At the conference, Costner said the machines would be given to BP to help with the disastrous Gulf of Mexico oil spill, as the largest machines can separate 200 gallons of oil a minute. After being tested by BP, the machines are now being sent out to the Gulf of Mexico to begin collecting oil and cleaning the water.
As BP is being held to account for the disaster by Congress this week, Ocean Therapy Solutions CEO John Houghtaling talks to NG Oil & Gas about BP and the world's reaction to the machines and also about the greater effect the drilling embargo will have on oil workers and their families if President Obama follows it through.
NG O&G: I read the NOAA saying that the oil at sea was not just on the surface, and I just wanted to discuss whether your machines are solely surface skimmers?
No, no. Well, in the beginning they're going to be utilized that way, yes, however, the machines are the separators. So what's happening now is we've partnered with Edison Chouest, which is the largest offshore supply company in the Gulf of Mexico. Gary Chouest, who's the CEO, has basically told us he's throwing the whole weight of his company behind our deployment. So the machine is a massive separator, but you also need a device that as efficiently as possible get the oil and water to the machine.
So, the first way to do that is with skimmers, basically with massive boats. But we're also going to have the machines on a mother ship, and also have other collection devices that will work on bringing the oily water to the mother ship, where the machines are going to be working.
NG O&G: I read that there was a problem with one of the machines. Was that in the trial stage?
Yes, totally false. In the beginning, BP were testing these machines, but not deploying them on vessels, but keeping them on shore, so the samples were being brought to the machines. One of the samples that they brought to the machine was some of the water that was no longer oily water because of the dispersant. The oil emulsified as it sits on the top of the water and it goes to shore. The oil now, because of the dispersant, has a different consistency. It also degrades as it gets to shore - it turns into a consistency like peanut butter in some cases, where it is very thick. And some of the water that they brought us had the consistency of peanut butter, and they wanted to see if the machine would cut it. It actually did do it, but it was clogging some of the filters so what we did was find a way to solve that.
NG O&G: How many machines do you think you'll be able to get in the Gulf, and how long do you think it will take?
Well, because we have just been running this factory with no customers, it's practically been dormant. So we have spun the factory back up. We have ten [machines] that are already manufactured. Those are either on vessels right now, or they're being put on vessels in Venice, Louisiana.
Then in addition to that, we're spinning up the factory. When I say "ten," I'm talking about the V20s - these are the huge machines. In addition to that, we have medium-size machines - we have about 15 medium-size machines. The orders that we have gotten from BP is for the huge ones, the V20. So to fill that order, we've got ten of those down on the ground, and we're starting the factory up. By August 1st, we will have all 32 of the big V20s working. And after August 1st, we're going to be able to make, at a minimum, ten a week.
In addition to that, we have 15 of the medium-sized machines, and we have been requested by Billy Nungesser, that he wants those medium-size machines to use for the brown-water applications.
NG O&G: Can the machines work in shallow water?
NG O&G: And BP, have they been cooperating?
They really have. I'll tell you, I sat with Doug Suttles (President of BP operations in Alaska) about four days ago. And he told me at the very beginning when we talked about the technology, he had looked into it and he just without any doubt says, "Let's go with these [machines] immediately - let's get them out there."
When I spoke with Doug Suttles last, after he had placed the order with us, Kevin [Costner] said, "My vision is not that we come to the plate for just PR. Thirty-two machines are not enough for the Gulf of Mexico."
Really, the machines need to be in place on boats, and rigs, before there's a spill, so that we can deploy. Had we had machines out there at the spill, we would be recapturing all the oil without any dispersant. So what Doug Suttles said to me and Kevin was simply, "we will support you. These machines need to be with the supply companies, who are supplying for the rigs. And the largest supply company is Edison Chouest." So I spoke to Gary Chouest of Edison Couest. Doug Suttles said, "BP would be willing to allow Chouest to pass those costs on, as service providers, to BP."
So Doug Suttles didn't just say, "Look, we want these machines." He said, "We need to find a way of deploying these in the future." Our vision was be a metaphorical fire truck. And we have a fire solution, in case there's a problem. And Suttles said he would be in favor of a program like that.
So we went to Gary Chouest, who is now looking into working with Edison Chouest to put together a plan to put on the President's desk, where by August 31st, he would deploy V20s with support vessels, with each of the 33 deepwater rigs that are in the Gulf of Mexico that are currently shut down.
One of the problems that we face in Louisiana, is not just the tragedy of the spill - that's one part of it, but half of the workers in the Gulf are either fisherman (they work in that industry), or they work in oil production.
So currently, this is a massive problem for Louisiana. As crippling as this was, this will finish Louisiana off. We have moratorium for six months.
These 33 rigs deep water rigs are now going to pull anchor, and they're going to go to Brazil and Africa (and we've already gotten reports). So this is a major problem. Gary Chouest told me that he may potentially have to lay off 4,000 employees. That's just one company.
This is the outcome if the moratorium is not lifted. If these rigs leave, they're not coming back. They're gone. This is a problem for all of us, and it's a very serious problem, I believe, for the Obama administration.
About three days ago, I sat with Kevin, and Rahm Emanuel, the Chief of Staff. We told him that we were working with Edison Chouest, and we want to put a proposal before the administration so that we can basically lift the moratorium,. because we have an ability to drill safely. We have - with these machines - an ability that these rigs can operate safely.
I've also sat with Senator Mary Landrieu, and Senator Buchanan, and they're in favor of this program. I also sat with Kevin, and with John McCain, and John McCain has spoken with the governor, and they are both in favor of the program. In addition to doing what we can to work on the clean-up, we are very intent on being able to help as a preventative measure.
The biggest issue facing us is the moratorium is crippling the industry. The rig operators alone, the leaseholders, are losing $16 million a day. Now that's just the people that lease the rigs to the industry.
That's why the rigs are going to leave. Gary Chouest told us that he could potentially lose a half a billion dollars with this crisis. That's what it could cost.
So you can imagine all the workers and all of the people in the industry in Louisiana, both on the shore and offshore, all these people are now going to be faced with going out of work. Because once the clean-up ends, they'll be out of work. And people are literally facing losing their houses at this moment. It's frustrating, because they can still be going into the deep water and servicing these rigs.
If that happens, like I said, just one company will lose a half a billion dollars and will have to lay off 4,000 workers. That's just our partner - so it's a very, very serious problem.