Two US oil and natural gas industry task forces have come up with more recommendations to the Department of Interior in a bid to have a say on how best practices are achieved following the Macondo well disaster. The American Petroleum Institute, the industry’s national trade association, said the recommendations are part of a comprehensive effort by the industry to strengthen all aspects of off-shore safety while continuing to produce energy and create jobs.
The task forces provided more than 50 recommendations, including ways to respond faster and more effectively to a runaway well and to better remove oil from water to block it from the coastline. In May, two other industry groups provided another set of recommendations. Erik Milito, API’s Upstream director, said in a statement:
We will continue to build on what has been achieved since the accident, and we must remain vigilant. However, producing the energy our nation needs and creating jobs are also important. It is time to end the deepwater moratorium that has sent many Gulf workers to the unemployment lines. People are hurting and have to get back to work.
Certainly the pressure is on the Obama Administration to lift the moratorium on new deepwater drilling and support the oil and gas industry at a time of slow recovery. API said its more than 400 oil and natural gas company members supply most of America’s energy, support more than 9.2m US jobs, account for 7.5 per cent of the US economy, and, since 2000, has invested nearly $2tn in US capital projects to develop all forms of energy, including alternatives, while reducing the industry’s environmental footprint.
But the US government is holding fast. The Bureau of Ocean Energy Management will be holding hearings in different states through mid-September to gather facts about how the industry should be improved following the April 20 well explosion that killed 11, injured 17 and resulted in the world’s worst accidental oil leak. And the as-yet-unexplained Mariner Energy fire on one of its oil production platforms in the gulf last week did not help ease the administration’s concerns about the industry.
Those who have long followed the oil and gas industry insist the accident was a rarity. Robin West, chairman of PFC Energy, the consultancy, testified to Congress that, before the spill, the US offshore industry had an exemplary safety record. Between 1971 and 2010, he said, a total of 24.7bn barrels of oil were produced from US waters. Over the same period, oil spills as a result of blowouts were 1,715 barrels. This was an average of 44 barrels per year, or one out of every 14mn barrels produced. On top of that, most oil spills in US and global waters came from accidents involving tankers, pipelines and loading facilities. That said, even he has issues with the ability of the industry to respond to a major disaster. From the speech:
I often say that the complexity, scale and technical challenges of deepwater exploration and production are comparable to landing a person on the moon. You might say the challenge is even greater, since a human can walk on the moon, but not in 5,000 feet of water. Yet neither our offshore regulations nor our technology for containing and cleaning up after accidents have kept pace with our ability to find and produce oil and gas.
The question is whether API’s recommendations will do the job. Will they go far enough to ensure there will not be another Macondo disaster? Despite the group’s best effort, the reality is there really is no guarantee. For all the regulations in place in all the industries around the world, there are accidents – whether by human or technological or some other failure. The only way to feel good about letting the industry back into the deepwater is to ensure the companies are investing not only in the technology to go deeper and further out into the gulf and other deepwater basins, but rather to invest equally in the ability to prevent and contain any accidents in those new frontiers.
Certainly the industry has the money. Some of the bigger players – ExxonMobil and Chevron, for example – have been putting a lot of it into share buybacks in recent years. Perhaps this is one area in which those funds could be better spent.
