BP Share News (BP.)

(This article was originally published Thursday.) By Al Lewis A DOW JONES NEWSWIRES COLUMN Steve Wereley, 43, was just another mechanical engineering guy until last month when he got a call from NPR. The Purdue University professor had co-authored a book called "Particle Image Velocimetry" in 2007, describing ways to calculate flow rates by tracking particles within a stream using video. NPR's Richard Harris wanted Wereley to analyze a video of the ongoing Gulf spill that BP PLC (BP, BP.LN) released on May 12. In two hours, Wereley estimated the flow at 70,000 barrels a day, give or take 20%, since he didn't know how much of this stream was oil versus gas, the shape of the broken pipe and a few other variables, including a low-quality video. Still, this was exponentially larger than the 5,000 barrels a day BP was claiming. And it made Wereley an instant media sensation. If you've been watching the news, you've probably seen Wereley on CNN, ABC, CBS, NBC, PBS or maybe even the BBC. U.S. Rep. Edward Markey (D, Mass.) brought Wereley to Washington, D.C., within days for a Congressional hearing. Markey then used Wereley's estimates as a stick to beat better videos, data and estimates out of BP. Wereley is now on a government task force that will ultimately quantify the amount BP has spilled. So when President Obama says he's going to make BP pay, Wereley is one of the guys who will help determine how much. Under the U.S. Clean Water Act, BP could be fined as much as $4,300 per barrel spilled. BP also may have to pay royalties on the spilled oil, too. Its drilling lease with the Minerals Management Service calls for an 18.75% royalty on the value of oil or gas leaked due to negligence. And then there's the billions more required for the cleanup and addressing economic damages. But determining precisely how much has spilled remains an ongoing project, with BP likely low-balling all along the way. "It ain't 5,000 barrels a day," Wereley said. "That's the thing we know for sure." Wereley's latest estimate, based on better videos and data and more scientists, is now 35,000 to 60,000 barrels a day. A barrel of oil has 42 gallons. This puts Wereley's top estimate at 2.52 million gallons of oil per day, or another Exxon Valdez nearly every four days. If BP can stop the gusher with the relief wells it plans to complete by August, it will have spilled roughly 7.8 million barrels, Wereley estimates, or nearly 30 Exxon Valdez-sized spills. When I called Wereley at his home in Indiana on Wednesday, he was busy cleaning up another mess. "One of my hobbies is probably washing dishes," he said over clanks, running water and children at play, "because it seems like I'm doing that all the time." (He also runs half-marathons and rides bikes.) Do you know how much water is coming out of your faucet? I asked. "Yeah," he said, "This is the way I see the world, in terms of flow and fluid phenomena. I see research problems wherever I look." Wereley isn't an oil guy. He's an expert in fluid mechanics on microscopic scales. He hadn't thought of analyzing BP's spill video until NPR called him, and he never thought his work in nanotechnology was going to put him in the national spotlight. "Among people in the know, nanotechnology is a hot topic," he said. "But if I go to my friends who have real jobs, selling insurance or something, they're thinking, 'What a nerd. What a geek.'" But now he's suddenly cool, battling BP. "BP claims to have no knowledge of how to do this sort of measurement," Wereley continued. "In the media, they said, this just can't be measured, which is patently wrong. I believe that soon they are going to know how to do it and be challenging the numbers that are out there now." Earlier this week, I spoke with another science celebrity, TV's Bill Nye the Science Guy, who had once been misreported as being killed in a giant vinegar-and-baking-soda explosion by spoof newspaper The Onion. Nye estimated that BP's well has enough pressure to flow for 10 years if it isn't capped, which is longer than any other vinegar-and-baking-soda experiment I've ever seen. What if BP's relief wells fail? I asked Wereley. "BP hasn't inspired confidence," he said. "In every approach they've tried so far, they haven't had a win yet. But what a petroleum company is good at is drilling. "August is probably ambitious," he continued, "and it will be September or October by the time it actually happens, but I think they will get it done." Then the litigation will go on for years. "If you look at litigation from the Exxon Valdez spill, I would expect I'll be busy for 20 years messing with this," Wereley said. Perhaps another mistake that BP made is that it didn't hire Wereley before the government got to him. "The strategic move for BP would have been to say, 'Hey, Dr. Wereley, we want to get a really good handle on the flow rates...We'll pay you whatever it is.' And then quash the work. "I don't know what I would have said," Wereley conceded. "I'm terribly naive about politics. I am happiest in my lab working with my grad students. Probably my friends would have weighed in and said, 'You ought not work for BP.'" (Al's Emporium, written by Dow Jones Newswires columnist Al Lewis, offers commentary and analysis on a wide range of business subjects through an unconventional perspective. The column is published each Tuesday and Thursday at 9 a.m. ET. He can be reached at 212-416-2617 or by email atal.lewis@dowjones.com, or on his blog at tellittoal.com.) (We invite readers to send us comments on this or other financial news topics. Please comment on Al Lewis's blog at http://tellittoal.newswires-americas.com/. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.) (END) Dow Jones Newswires June 18, 2010 07:35 ET (11:35 GMT)