Oil Spill in the Gulf

U.S. Offshore Oil Fire May Delay Lift of Drill Ban

September 2, 2010

Reuters - The Obama Administration is likely to stay focused on toughening regulatory oversight of the U.S. offshore oil industry and may push back lifting a ban on deepwater drilling after the latest accident in the Gulf of Mexico, analysts said on Thursday.

The fire on a Mariner Energy oil and gas platform in shallow waters of the U.S. Gulf on Thursday was a major setback for companies hoping for an early end to the government's drilling moratorium and raised more questions about the safety of offshore drilling.

"This explosion will make it less likely that the moratorium on offshore drilling will be lifted," said Rick Muller, senior analyst for Energy Security Analysis Inc in Boston.

The United States is still reeling from the BP oil spill in the Gulf of Mexico.

Interior Department officials declined to comment on whether the Mariner accident would prompt Interior Secretary Ken Salazar to consider expanding the current deepwater drilling moratorium to shallow waters.

Such a action would be a blow to the oil industry, which has complained that the department has been too slow to approve permits for shallow water drilling since the Gulf oil spill.

The Interior Department imposed a six-month halt on exploratory deepwater drilling in late May after an explosion on April 20 left a well spewing crude into the Gulf.

The oil industry and regional lawmakers slammed the drilling ban and said it would drive idled rigs to foreign waters, cost thousands of jobs, and cut regional production.

On Wednesday, a federal judge ruled against the government's request to throw out an industry lawsuit challenging the moratorium, though this accident could strengthen the government's case, analysts said.

"This will help the government argue in court that it should be careful about putting safety rules in place before letting producers get back to drilling," Muller said.

The Interior Department had said it was considering lifting the ban for "certain categories" of rigs before November 30, when the ban is due to end. But after Thursday's accident the department may hesitate to do so, analysts said.

"Anything that casts any kind of shadow on the industry right now certainly complicates lifting the moratorium," said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Texas.

President Barack Obama, whose administration was accused of being slow to act on the BP spill, has insisted a "pause" on drilling was needed to give the government time to impose tougher oversight on the industry.

"Any headline of a rig explosion so close on the heels of the deepwater explosion will have psychological effects," said Peter Beutel, president of Cameron Hanover in New Canaan, Connecticut.

"The fire will give fresh ammunition to those supporting a moratorium against offshore drilling to suggest that running rigs in the middle of the ocean is dangerous," Beutel said.

SAFETY A BIG CONCERN

U.S. Representative Edward Markey, a Democrat from Massachusetts, said in a statement the accident "highlights the significant risks associated with offshore drilling, and that much is left to be done to keep America's workers and waters safe from those risks."

Environmental groups criticized offshore oil and gas operators after Thursday's accident.

"We know that this kind of disaster is a result of a dirty and dangerous industry that cuts corners on safety, and takes too many risks in the effort to find more oil and make bigger and bigger profits," Greenpeace USA Oceans Campaign director John Hocevar said in a statement.

Kieran Suckling, executive director of the Center for Biological Diversity, called on the government to put all offshore oil and gas operations on hold until it can be determined they are safe.

"Offshore drilling in the Gulf of Mexico is like playing Russian roulette. It's not a matter of if something will go wrong, it's a matter of when," Suckling said.

Oil Platform Explodes Off Louisiana Coast; Crew Rescued

September 2, 2010

Associated Press – An oil platform exploded and burned off the Louisiana coast Thursday, the second such disaster in the Gulf of Mexico in less than five months. This time, the Coast Guard said there was no leak, and no one was killed.

The Coast Guard initially reported that an oil sheen a mile long and 100 feet wide had begun to spread from the site of the blast, about 200 miles west of the source of BP's massive spill. But hours later, Coast Guard Cmdr. Cheri Ben-Iesau said crews were unable to find any spill.

The company that owns the platform, Houston-based Mariner Energy, did not know what caused the fire. Mariner Energy's Patrick Cassidy said he considered the incident a fire, not an explosion.

"The platform is still intact and it was just a small portion of the platform that appears to be burned," he said.

Mariner officials said there were seven active production wells on the platform, and they were shut down shortly before the fire broke out.

Louisiana Gov. Bobby Jindal said the company told him the fire began in 100 barrels of light oil condensate.

The Coast Guard said Mariner Energy reported the oil sheen. In a public statement, the company said an initial flyover did not show any oil.

Photos from the scene showed at least five ships floating near the platform. Three of them were shooting great plumes of water onto the machinery. Light smoke could be seen drifting across the deep blue waters of the gulf.

By late afternoon, the fire on the platform was out.

The platform is in about 340 feet of water and about 100 miles south of Louisiana's Vermilion Bay. Its location is considered shallow water, much less than the approximately 5,000 feet where BP's well spewed oil and gas for three months after the April rig explosion that killed 11 workers.

Responding to any oil spill in shallow water would be much easier than in deep water, where crews depend on remote-operated vehicles to access equipment on the sea floor.

Click here to see photos from the explosion scene

AP/Gerald Herbert

A Homeland Security update obtained by The Associated Press said the platform was producing 58,800 gallons of oil and 900,000 cubic feet of gas per day. The platform can store 4,200 gallons of oil.

White House press secretary Robert Gibbs said the administration has "response assets ready for deployment should we receive reports of pollution in the water."

All 13 of the platform's crew members were rescued from the water. They were found huddled together in life jackets.

The captain of the boat that rescued the platform crew said his vessel was 25 miles away when it received a distress call Thursday morning from the platform.

The Crystal Clear, a 110-foot boat, was in the Gulf doing routine maintenance work on oil rigs and platforms. When Capt. Dan Shaw arrived at the scene of the blast, the workers were holding hands in the water, where they had been for two hours. They were thirsty and tired.

"We gave them soda and water, anything they wanted to drink," Shaw said. "They were just glad to be on board with us."

Shaw said the blast was so sudden that the crew did not have time to get into lifeboats. They did not mention what might have caused the blast.

"They just said there was an explosion, there was a fire," Shaw said. "It happened very quick."

Crew members were being flown to a hospital in Houma. The Coast Guard said one person was injured, but the company said there were no injuries. All of them were released by early Thursday evening.

Jindal met with some of the survivors. He would not identify them except to say most were from Louisiana.

Environmental groups and some lawmakers said the incident showed the dangers of offshore drilling, and urged the Obama administration to extend a temporary ban on deepwater drilling to shallow water, where this platform was located.

"How many accidents are needed and how much environmental and economic damage must we suffer before we act to contain and control the source of the danger: offshore drilling?" said Rep. Frank Pallone, a New Jersey Democrat.

Mike Gravitz, oceans advocate for Environment America, said President Barack Obama "should need no further wake-up call to permanently ban new drilling."

There are about 3,400 platforms operating in the Gulf, according to the American Petroleum Institute. Together they pump about a third of the America's domestic oil, forming the backbone of the country's petroleum industry.

Platforms are vastly different from oil rigs like BP's Deepwater Horizon. They are usually brought in after wells are already drilled and sealed.

"A production platform is much more stable," said Andy Radford, an API expert on offshore oil drilling. "On a drilling rig, you're actually drilling the well. You're cutting. You're pumping mud down the hole. You have a lot more activity on a drilling rig."

In contrast, platforms are usually placed atop stable wells where the oil is flowing at a predictable pressure, he said. A majority of platforms in the Gulf do not require crews on board.

Many platforms, especially those in shallower water, stand on legs that are drilled into the sea floor. Like a giant octopus, they spread numerous pipelines and can tap into many wells at once.

Platforms do not have blowout preventers, but they are usually equipped with a series of redundant valves that can shut off oil and gas at different points along the pipeline.

Numerous platforms were damaged during hurricanes Katrina and Rita. The storms broke pipelines, and oil spilled into the Gulf. But the platforms successfully kept major spills from happening, Radford said.

"Those safety valves did their job," he said.

Industry representatives sought to minimize Thursday's incident and distance it from the well blowout in April.

"We have on these platforms on any given year roughly 100 fires," said Allen Verret, executive director of the Offshore Operators Committee.

Federal authorities have cited Mariner Energy and related entities for 10 accidents in the Gulf of Mexico over the last four years, according to safety records from the Bureau of Ocean Energy Management, Regulation and Enforcement.

The accidents range from platform fires to pollution spills and a blowout, according to accident-investigation reports from the agency formerly known as the Minerals Management Service.

In 2007, welding sparks falling onto an oil storage tank caused a flash fire that slightly burned a contract worker. The Minerals Management Service issued a $35,000 fine.

Mariner Energy Inc. focuses on oil and gas exploration and production in the Gulf. In April, Apache Corp., another independent oil company, announced plans to buy Mariner in a cash-and-stock deal valued at $3.9 billion, including the assumption of about $1.2 billion of Mariner's debt. That deal is pending.

On Friday, BP was expected to begin the process of removing the cap and failed blowout preventer from its ruptured well, another step toward completion of a relief well that would seal the leak permanently. The Deepwater Horizon exploded April 20, setting off a three-month leak that totaled 206 million gallons of oil.

Gulf Oil Spill: A Crisis Created to Back Door Climate Legislation?

• April 20, 2010: BP oil rig explosion causes 'volcano of oil' to erupt into the Gulf of Mexico.


• June 7, 2010: According to a federal document, a nearby drilling rig, the Ocean Saratoga, has been leaking since at least April 30 (this story is not covered by mainstream news sources).


• July 15, 2010: After 85 days, after 206 million gallons of crude oil gushed into the Gulf, and after dumping two million gallons of the highly-toxic dispersant Corexit into the Gulf, BP places a temporary cap on the well.


• July 16, 2010: Two oil pipelines near China's Dalian's Xingang Harbor expode, igniting a roaring inferno shooting flames 60 feet into the air and spilling an estimated 11,000 barrels of oil into the Yellow Sea.


• July 26, 2010: Pipeline spills more than one million gallons of oil into Michigan's Kalamazoo River before leak is stopped.


• July 28, 2010: Barge hits wellhead of an abandoned well in southeastern Louisiana, spewing a mixture of oil, natural gas, and water into Barataria Bay.


• July 30, 2010: In response to the oil spill in the Gulf, House passes scaled-back version of the CLEAR Act, aimed at reforming offshore drilling (but with the possibility of adding caps on carbon emissions back into the bill during "conference" talks between the House and Senate).


• August 4, 2010: BP claims victory in plugging blown-out oil well in Gulf.


• September 2, 2010: A fire breaks out on another oil rig platform in the Gulf.


• September 3, 2010: New blowout preventer is placed on the blown-out Deepwater Horizon well.

The Deepwater Horizon had a general alarm to warn of dangerous gas leaks on the rig and automated emergency shutdown systems to keep gas out of the engine room and to prevent it from igniting on working electronics. But rig leaders had decided to bypass those key safety functions before the disastrous explosions April 20, according to staggering testimony from the rig's chief electronics technician. The technician, Mike Williams, an employee of rig owner Transocean, said he didn't like the practice of "inhibiting" critical warning and safety systems. But higher-ups insisted on it for such reasons as not wanting to be awakened in the middle of the night. - The Times-Picayune, Deepwater Horizon Safety Alerts were Bypassed to Avoid False Alarms, Witness Says, July 23, 2010

Halliburton was forced to admit in testimony at a congressional hearing last month that it carried out a cementing operation 20 hours before the Gulf of Mexico rig went up in flames. The lawsuits claim that four Halliburton workers stationed on the rig improperly capped the well. Oil services contractor Halliburton Inc. says it safely finished a cementing operation 20 hours before a Gulf of Mexico rig went up inflames, killing 11 men and ultimately causing a massive oil spill. In testimony prepared for a congressional hearing, Halliburton says it completed work on the well according to accepted industry practice and federal regulators. Halliburton executive Tim Probert says a pressure test was conducted after the work was finished, and the well owner decided to continue. The cause of the April 20 explosion is under investigation, but lawsuits filed after the disaster claim it was caused when Halliburton workers improperly capped the well -- a process known as cementing. Halliburton denies wrongdoing. - The Associated Press, Halliburton Says It Finished Cementing Operation 20 Hours Before Rig Explosion, May 10, 2010

In the House of Representatives, Democrats are preparing to vote on a tough bill (CLEAR Act) Friday that would clamp down on offshore oil and gas drillers. In addition to eliminating the oil spill liability cap, the bill would impose tough new safety rules and ban BP from getting new offshore oil exploration leases for up to seven years for its role in the Gulf oil spill. Any differences between the House and Senate bills would have to be reconciled, which could prove difficult with the looming August recess and November elections. Some Republicans fear that Democrats could use a possible post-election session to ram an energy and climate control bill through Congress. - Reuters, Senate Unveils Scaled-back Version of Climate Bill, Taking Advantage of the 'Crisis in the Gulf' by Focusing on Offshore Drilling Rather Than Carbon Emissions, July 27, 2010

Senate Democrats unveiled a bill on Tuesday that omits setting caps on carbon emissions -- the key element of a more comprehensive energy and climate bill that failed to gain sufficient support in the Senate. Obama said it was "an important step in the right direction" but it was not enough: "I want to emphasize it's only the first step and I intend to keep pushing for broader reform, including climate legislation." Obama, who spoke before details of the Senate proposal were disclosed, did not set out a timetable for a future climate push and it is very unlikely that any legislation on the subject will be passed this year. If likely Republican gains in November elections change the balance of power in Congress, climate change legislation would face an even more uncertain future. With that in mind, the White House indicated on Tuesday that climate provisions could be added back into a bill once negotiators from the Senate and the House of Representatives hammer out differences between their respective versions during "conference" talks. The House bill, passed last year, includes climate provisions to cut greenhouse gas emissions. - Reuters, Obama Says will Keep Pushing for Climate Bill, July 27, 2010

The House approved a bill (CLEAR Act) Friday to boost safety standards for offshore drilling, remove a federal cap on economic liability for oil spills, and impose new fees on oil and gas production. Democratic leaders hailed the bill as a comprehensive response to the Gulf of Mexico oil spill and said it would increase drilling safety and crack down on oil companies such as BP. The legislation, which passed 209-193, has yet to be taken up in the Senate, where partisan disagreements will likely delay final consideration of a joint House-Senate bill until after the August congressional recess. - Associated Press, House Approves Bill on Drilling, Oil Spills (CLEAR Act), July 30, 2010

By the time the full Congress completes action on this offshore drilling bill (CLEAR Act) -- and it is uncertain that it will -- it could be November or later. A similar offshore drilling bill is pending in the Senate, without the House's new provision to end the drilling moratorium. But it was unlikely that measure would pass before that chamber begins its summer recess on August 6... The Senate energy bill has an added component: new incentives to encourage more natural gas-powered trucks and electric vehicles to clean up the environment. It also provides $5 billion to help improve home energy efficiency. But Senate Democrats abandoned attempts to attach climate change provisions that would have set mandatory limits on some companies' carbon dioxide emissions. - Reuters, House approves oil spill reform bill, July 30, 2010