According to the New York Times , BP’s internal
"documents show that in March, after several weeks of problems on the
rig, BP was struggling with a loss of ‘well control.’ And as far back as
11 months ago, it was concerned about the well casing and the blowout
preventer.”

The problem is that this methane, located deep in the
bowels of the earth, is under tremendous pressure…

Some speculate as much as 100,000 psi — far too much
for current technology to contain. The shutoff vales and safety measures
were built for only 1,000 psi.

It was an accident waiting to happen… And there are
many that say it could get worse — much worse.

Geologists are pointing to other fissures and cracks
that are appearing on the ocean floor around the damaged wellhead.

According to CNN:

The University of South Florida recently discovered a
second oil plume in the northeastern Gulf. The first plume was found by
Mississippi universities in early May.

And there have been other plumes discovered by
submersibles…

Some geologists say that BP’s arrogance has set off a
series of events that may be irreversible. There are some that think
that BP has drilled into an deep-core oil volcano that cannot be
stopped, regardless of the horizontal drills the company claims will
stop the oil plume in August.

Need the mudlogs

Geologist, Chris Landau, for instance, has called for
a showing of the mudlogs. A mudlog is a schematic cross sectional
drawing of the lithology (rock type) of the well that has been bored.

So far, no one has seen them… BP keeps them hidden.

Mr. Landau claims:

It is a dangerous game drilling into high pressure
oil and gas zones because you risk having a blowout if your mud weight
is not heavy enough. If you weight up your mud with barium sulfate to a
very high level, you risk BLOWING OUT THE FORMATION.

What does that mean? It means you crack the rock deep
underground; as the mudweight is now denser than the rock, it escapes
into the rock in the pore spaces and the fractures. The well empties of
mud. If you have not hit high pressure oil or gas at this stage, you are
lucky.

But if you have, the oil and gas come flying up the
well and you have a blowout, because you have no mud in the well to
suppress the oil and gas. You shut down the well with the blowout
preventer. If you do not have a blowout preventer, you are in trouble as
we have all seen and you can only hope that the oil and gas pressure
will naturally fall off with time, otherwise you have to try and put a
new blowout preventer in place with oil and gas coming out as you work.

Obviously, the oil and gas pressure hasn’t fallen off

In fact… it’s increased.

The problem is that BP may not only have hit the
mother of high-pressure wells, but there is also a vast amount of
methane down there that could come exploding out like an underwater
volcano.

I recently heard a recording of Richard Hoagland who
was interviewed on Coast to Coast AM.

Mr. Hoagland has suggested that there are cracks in
the ocean floor, and that pressure at the base of the wellhead is
approximately 100,000 psi.

Furthermore, geologists believe there are another 4-5
cracks or fissions in the well. Upon using a GPS and Depth finder
system, experts have discovered a large gas bubble, 15-20 miles across
and tens of feet high, under the ocean floor.

These bubbles are common. Many believe they have
caused the sinking of ships and planes in the Bermuda Triangle.

That said, a bubble this large — if able to escape
from under the ocean floor through a crack — would cause a gas explosion
that Mr. Hoagland likens to Mt. St. Helens… only under water.

The BP well is 50 miles from Louisiana. Its release
would send a toxic cloud over populated areas. The explosion would also
sink any ships and oil structures in the vicinity and create a tsunami
which would head toward Florida at 600 mph.

Now, many people have called Hoagland a fringe
thinker and a conspiracy theorist. And they may be right… But that
doesn’t mean he isn’t on to something.

EPA finds high concentrations of gases in the area

The escape of other poison gases associated with an
underground methane bubble (such as hydrogen sulfide, benzene, and
methylene chloride) have been found.

Last Thursday, the EPA measured hydrogen sulfide at
1,000 parts per billion — well above the normal 5 to 10 ppb. Some
benzene levels were measured near the Gulf of Mexico in the range of
3,000 – 4,000 ppb — up from the normal 0-4 ppb.

More speculation of doom

The Oil Drum , an industry sheet, recently ran an
article about the sequence of events that tried to stop the oil spill.

The upshot of industry insiders was that after trying
a number of ways to close off the leak, the well was compromised,
creating other leaks due to the high pressure. BP then cut the well open
and tried to capture the oil.

In other words: BP shifted from stopping the gusher
to opening it up and catching what oil it could.

The only reason sane oil men would do this is if they
wanted to relieve pressure at the leak hidden down below the seabed…
And that sort of leak — known as a “down hole” leak — is one of the most
dangerous kind.

No stopping it

It means that BP can’t stop if from above; it can
only relieve the pressure.

So, more oil is leaking out while BP hopes it can
drill new wells before the current one completely erodes.

BP is in a race against time… It just won’t admit
this fact.

According to the Oil Drum:

There are abrasives still present, a swirling flow
will create hot spots of wear and this erosion is relentless and will
always be present until eventually it wears away enough material to
break it’s way out. It will slowly eat the bop away especially at the
now pinched off riser head and it will flow more and more. Perhaps BP
can outrun or keep up with that out flow with various suckage methods
for a period of time, but eventually the well will win that race, just
how long that race will be?

… No one really knows…

Which leads us back to Mr. Landau’s point about the
mudlogs and why BP won’t release them.

I don’t know… Maybe I’m wearing my tinfoil hat too
tight this morning… But this stuff seems possible — if it’s only a
worst case scenario.

What strikes me as odd is the way the leadership of
BP and the Obama administration is acting.

BP is running around apologizing to everyone they can
find. Obama says give us $20 billion in escrow and $100 million for the
people Obama put out of work on the oil rigs due to his six month ban —
and BP says, "Sure thing mate, no problem."

And all of this in a 20-minute meeting?

I’ve been dealing with oil companies for a long time
and it just doesn’t add up…

Contrast it, for instance, with the Exxon situation
in Alaska or the Union Carbide disaster in India.

Exxon fought tooth and nail for its shareholders; it
appealed court rulings for 19 years. Union Carbide wasn’t settled for 25
years.

BP is rolling over like a simpering dog. Why?

The only reason I can think of is that the company
knows — better if not as well as the Obama administration does — that it
will get worse.

Much worse.

I’ve put together a list of oil cleanup stocks for
the readers of my Crisis & Opportunity . Many are running, and one
has pulled back into a solid buy range. Three more are on my buy list.

All I know is that this spill isn’t even half over.

Oil in the Gulf will lead the news-cycle for the
foreseeable future.

And the companies that make products that stop,
absorb, or disperse oil have an endless supply of work.

Their share prices have nowhere to go but up.

Christian DeHaemer is the Editor of Energy and
Capital.