Tag: Deepwater drilling

Sheila McNulty

A year after the Macondo disaster, the industry has pulled together in the US and built not one, but two spill containment systems. These systems are really state-of-the-art and aimed at containing a massive spill in the deep water.

The first one, the Containment Response System, cost $1bn and is designed to be trucked to anywhere along the Gulf of Mexico, loaded onto a vessel, shipped out to a drill site and dispatched under water to contain oil spilling from a runaway well.

The system, complete with capture vessels, was developed by ExxonMobil, Royal Dutch Shell, Chevron and ConocoPhillips. It took several months to build and testing has shown it can operate in 8,000 feet of water, capturing 60,000 barrels of fluid per day at pressures of 15,000 pounds per square inch. A more comprehensive system, which can operate in 10,000 feet of water, and capture 100,000 barrels of fluid a day, will be available by the middle of next year.

Sheila McNulty

An oil rig in the Gulf of MexicoWhat a difference a year makes. Or does it?

Activity in the Gulf of Mexico remains slow following the Macondo disaster – but it is moving again. And despite all the talk about how the US risked driving away the industry by tightening up processes and procedures, just about everyone is still here.

Seahawk Drilling was forced into bankruptcy and Plains Exploration & Production is moving to exit the deepwater, but, for the most part, it is the same people, working for the same companies (BP was even among the first companies to get permission to resume drilling in the deepwater), using the same technology. Even the much maligned blowout preventer that got jammed and failed in the Macondo disaster is still here as the last line of defence.

And the gulf coast economy has remained pretty resilient. Michael Hecht, chief executive of the Greater New Orleans economic development agency, said the local economy received a boost from BP’s spill response effort that gave work to fishermen and tour boat workers who had lost jobs with the spill. That false economy is only now ending in some places, leaving the real economic cost still to be seen.

Kiran Stacey

In this week’s readers’ Q&A session, Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, answers your questions.

In this second post, he discusses the reliability of blowout preventers (BOPs), the future of drilling in Alaska, and whether commercial concerns dictate his decision making.

Earlier, he talked about how his organisation balances safety concerns with political ones, what technological improvements have been made since the BP oil spill and whether new regulations on BOPs will delay the issue of new permits.

Next week, Steve Cunningham, chief executive of Landis+Gyr, the world’s biggest smart meter maker, will be in the hotseat. Email your questions to energysource@ft.com by the end of Sunday, April 17th.

But for now, over to Michael:

Kiran Stacey

In this week’s readers’ Q&A session, Michael Bromwich, director of the Bureau of Ocean Energy Management, Regulation and Enforcement, answers your questions.

In the first of two posts, he discusses how his organisation balances safety concerns with political ones, what technological improvements have been made since the BP oil spill and whether new regulations on blowout preventers (BOPs) will delay the issue of new permits.

In the second post, published above, he talks about the reliability of BOPs in general, the future of drilling in Alaska, and whether commercial concerns dictate his decision making.

Next week, Steve Cunningham, chief executive of Landis+Gyr, the world’s biggest smart meter maker, will be in the hotseat. Email your questions to energysource@ft.com by the end of Sunday, April 17th.

But for now, over to Michael:

Kiran Stacey

Deepwater Horizon explosionThe chief regulator of US offshore oil drilling has dismissed warnings from the industry about the risk to oil output from delays in issuing new permits.

Reacting to warnings that a two-year delay could put at risk up to 680,000 barrels of oil equivalent a day by 2019, Michael Bromwich, director of the US ocean energy regulator, pointed out that no output had so far been lost. He also insisted he would not be swayed either by companies or politicians when making permitting decisions.

Sheila McNulty

President Barack Obama is calling on oil companies to increase production in the US, accusing them of sitting on tens of millions of unused and unexplored acres of leases on public land waiting to be tapped. But this must be put in context.

It would be one thing to make this accusation if companies were simply able to lease acreage and set to work exploring, drilling and producing. But the reality is not so. Even before the Macondo accident in the Gulf of Mexico, regulators have long forced oil and gas companies to go through a variety of hoops before producing on a lease. In some cases, they did approve permits without proper scrutiny, but there were many others, such as in Wyoming, where they forced the industry to go above and beyond before granting permission to drill.

Sheila McNulty

The oil and gas industry has been afraid there might be repercussions from the recent  investigation that found Macondo’s blowout preventer failed to close because a section of drill pipe had buckled during the accident and blocked efforts to seal it off.

Gary Luquette, Chevron’s president for North America exploration and production, said the industry would learn from the report. But he hopes it will not lead regulators to stop the permitting process just when companies have started to see progress. He explained:

The best way to deal with a blowout is never to have one. In this case, the pipe was blown up the hole because of a loss of control situation. If you have complete loss of control, you can’t imagine a BOP that can be designed for that.

Sheila McNulty

Deepwater Horizon explosionIt turns out the reason why the blowout preventer on BP’s Macondo well failed to close was because a section of drill pipe had buckled inside the well during the accident and blocked efforts to seal it off. This is according to Det Norske Veritas, a consultancy hired by the US interior department to investigate why the blowout preventer failed.

Cameron International, the maker of the blowout preventer, responded:

The BOP was designed and tested to industry standards and customer specifications. We continue to work with the industry to ensure safe operations.

Sheila McNulty

Ken Salazar, the US interior secretary, and Michael Bromwich, director of the US oceans regulator, held a press conference amid great fanfare on Monday to unveil that they had approved a plan by Shell for deepwater oil and gas exploration.

The approval was trumpeted as the first plan approved since the Macondo disaster last April, and one that provided a template for the industry to follow to get their own plans approved.

But the approval does not mean Shell can drill. Its plan calls for drilling three exploratory wells in about 3,000 feet of water, 130 miles offshore Louisiana. To actually drill, Shell must still get permits for each well. And, despite the fanfare, nobody has received a permit to drill a new deepwater well in the Gulf of Mexico since BP’s accident.

FT Energy Source

- Industry thrown into turmoil

- Companies feel effects of Macondo disaster

- Opportunities west of Shetland

- Ice thaws on Canadian oil sands projects

- Huge prize lies under pristine Arctic wilderness

- Shale extraction technology leads to oversupplied market

- Two different disasters will have profound effects on US energy policy

- UK suffers from legacy of North Sea gas abundance

- Plant power seen as only viable long-term alternative to petrol

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