Oil Drillers Rush Back to the Gulf of Mexico

The Gulf of Mexico has been left for dead more than once over the past half-century. It’s now roaring back to life with at least 10 recent mega-discoveries that have renewed oil explorers’ enthusiasm for the region. Billions of dollars are being poured into new wells in the ultra-deep waters off Texas and Louisiana, fueling a resurrection that could set a production record this decade and complete a recovery from the worst offshore oil spill in U.S. history.

In 2014, output from the deepest parts of the Gulf, where the water is more than 1,300 feet deep, will be equivalent to about 1.5 million barrels of oil a day, 15 percent more than this year, according to estimates by energy consultants Wood Mackenzie. By 2020, the firm says, the deepwater Gulf, which accounts for about half the Gulf’s 252,000 square miles of federal waters, is expected to produce an average of more than 1.9 million barrels a day, a new high. “Investors should not sleep on the Gulf of Mexico,” says Brian Youngberg, an analyst with Edward Jones in St. Louis. “Onshore shale is obviously the main driver in the growth in U.S. production, but going forward, the Gulf of Mexico should start contributing to that.”

U.S. crude production has surged in recent years, largely because companies used hydraulic fracturing and advanced drilling technology to open onshore shale formations. Now producers including Chevron (CVX), Royal Dutch Shell (RDS/A), and Anadarko Petroleum (APC) are preparing to surpass the Gulf’s 2009 peak; production collapsed after BP’s (BP) 2010 spill. That disaster, and the five-month drilling moratorium that followed, led to an exodus of rigs and drilling equipment as regulators bolstered safety requirements. As large oil companies have begun drilling again, so has BP, which remains a major operator in the deep Gulf. It was the biggest producer there in 2012 and has ownership stakes in more than 650 leases.

In the late 1970s energy companies began referring to the Gulf as “the Dead Sea.” Shallow-water wells drilled decades earlier were tapering off, and the industry lacked the technology to find oil in the deeper waters. New seismic equipment has since let explorers see through once-opaque layers of rock. Engineering innovations enable companies to lower their drills through 10,000 feet of water to the seabed. There the drills penetrate 5 miles into the earth’s crust, where temperatures are hot enough to boil water and high pressures approach the weight of four cars resting on one square inch. That seismic and drilling technology has improved even since the 2010 oil spill, allowing ventures into deeper and deeper waters.

Chevron, with a company-record five rigs drilling, is among the most bullish. The company expects its $7.5 billion Jack/St. Malo platform to begin producing oil and gas in 2014, with a long-range target of 177,000 barrels per day. Other deep-water projects that may begin producing in the Gulf next year include Anadarko’s Lucius, Hess’s (HES) Tubular Bells, and Murphy Oil’s (MUR) Dalmatian. Gulf projects can cost $15 billion for infrastructure, wells, and facilities, and take more than a decade to bring into production.

The U.S. Department of the Interior estimates the Gulf has 48 billion barrels of oil yet to be discovered. “What catches our attention,” says Robert Ryan, vice president for global exploration at Chevron, “is the potential—billions of barrels right in our own backyard.”

 

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Gulf rig safety was ‘team effort’, says BP

Responsibility for safety on the Deepwater Horizon rig was shared between the companies involved in the project, a BP executive told the trial in New Orleans over the 2010 Gulf of Mexico oil spill.

Lamar McKay, BP’s US president at the time of the disaster, said that although the company had accepted in its settlement of criminal charges last year that it had “ultimate responsibility” for the safety of the project to drill the Macondo well, “It doesn’t mean sole exclusive responsibility, it means shared responsibility”.

Safety, he said, was “a collaborative team effort”.

His evidence reflected BP’s argument that the accident was a “multi-party, multi-causal event”, involving other companies including Transocean, the owner of the rig, and Halliburton, which supplied cement intended to seal the well.

Mr McKay, who was recently promoted to run BP’s global exploration and production business, took the stand on Tuesday afternoon, called as a witness by lawyers for private sector plaintiffs suing for compensation.

He is scheduled to be the most senior BP executive to give evidence at the trial to determine liability for civil penalties and damages arising from the spill.

Earlier, the trial was told by an expert witness that BP’s failure to implement effective safety systems led to the disaster.

Bob Bea, a veteran safety expert who is professor at the University of California, Berkeley, said the accident on the Deepwater Horizon was rooted in a failure of “process safety”: the protection of a complex system from catastrophic accidents.

Professor Bea, who worked on inquiries into disasters including the 1989 Exxon Valdez spill and the 2003 Columbia space shuttle explosion, co-wrote a report for the plaintiffs’ lawyers, which argued: “BP management knowingly ignored process safety and risk management for deepwater exploration wells.”

His evidence was challenged by BP, which argued in a court filing last year that his approach was “flawed” because he had looked in detail at BP, while making only a “superficial” review of evidence from Transocean and Halliburton.

Prof Bea told the court there was “ample evidence of the pressure to save time and money” from BP in the run-up to the accident.

Tony Hayward, BP’s chief executive during 2007-10, had set as the company’s mantra the slogan “every dollar counts”, in an attempt to boost profitability. Between 2008 and 2009, BP’s production in the Gulf of Mexico rose 55 per cent while cash costs were cut 22 per cent, he said

Prof Bea also highlighted the fact that BP’s operating management system (OMS), described by Mr Hayward as the “cornerstone” of its safety framework, was not in effect on contractors’ rigs in the Gulf of Mexico.

Mr McKay told the court that under the OMS standards, when BP used what were considered to be competent drilling contractors, such as Transocean, it was their safety systems that were in effect, rather than BP’s.

Questioning Prof Bea, Mike Brock, BP’s chief lawyer, asked whether Mr Hayward’s repeated statements that “safety is our number one priority” were the right message for senior management to deliver. Prof Bea replied that they were.

Mr Brock described steps that BP had taken to improve safety and asked whether they were evidence of a company that was “cutting corners”.

Prof Bea replied: “No”.

The first phase of the trial, covering the causes of the accident and the liabilities of the companies involved, is expected to last for three months.

 

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Drilling twist: Environmentalists want to keep idle offshore oil rigs

For more information, please visit this link to watch a video on the Rigs to Reef Program

Idle oil rigs are at the center of an unusual battle over fish in the Gulf of Mexico.

In a twist on their usual positions, oil companies and the federal agencies regulating them want to remove the old rigs, while fishermen and environmental groups are fighting to keep them in place.

For the oil companies, the rigs pose safety and liability threats. Fishermen and environmentalists see them as a boon to sea life.

Hundreds of the rigs have stood in the same spot for decades, long enough for corals to anchor on them and draw schools of fish. Sea life on the rigs is so abundant that taking them out causes environmental and economic harm, say critics of the removal program.

Fishermen and environmental groups are pushing the National Marine Fisheries Service to designate oil rigs and other artificial reefs in the Gulf of Mexico as essential fish habitat — a label that would require oil companies to get approval from the fisheries service before removing them.

But that could be complicated.

Vast areas of the Gulf of Mexico, including seagrass beds and underwater canyons, are managed as essential fish habitat, all of them naturally occurring environments. The designation is set for individual fish species, such as red snapper or grouper, and requires proof that the species needs that habitat for survival.

If the fisheries service considers rigs and artificial reefs as important as the natural ecosystem, it will be a first.

The designation could also backfire for those who want to fish at rigs and artificial reefs, because the essential fish habitat designation sometimes carries tighter fishing restrictions.

Meanwhile, oil companies want to make sure they are not forced to maintain inactive rigs — including warning lights needed for navigation — forever.

‘Idle Iron’

After the BP Deepwater Horizon oil spill, the federal government ordered that oil rigs must be plugged and taken out within five years of going idle. The move was meant to prevent oil seepage and increase navigational safety, particularly after hurricanes.

Roughly 3,000 oil rigs tap underwater reservoirs in the northern Gulf of Mexico. About 650 are slated for removal under the new policy, called Idle Iron.

Bob Shipp, a marine science professor at the University of Southern Alabama and member of the Gulf of Mexico Fisheries Management Council, said rigs are being pulled out at the rate of about two to three each week, mostly off the Texas coast.

“The irony of it is, they only have taken out the ones that have been decommissioned, and unfortunately in some cases, have been there the longest,” Shipp said. “The older ones that are slated to be removed are the ones that have the best habitat.”

A single rig can turn an otherwise barren mud-bottom environment into a completely new landscape, with coral, tiny fish and large predator fish. Grouper, snapper, barracuda and other reef fish naturally are drawn to any type of structure, whether it is a natural ledge, a sunken ship or an oil rig.

The rigs and artificial reefs alter the natural system in a way many feel benefits wildlife.

But scientists have not settled the debate over whether the rigs simply shift fish away from more natural areas, making it easier for people to see and catch them.

“They seem to catch lots of fish on the platforms. They put one and one together and said, ‘Well don’t take them out because they’re important to the fishery,'” said Steve Bortone, executive director for the Gulf of Mexico Fisheries Management Council, an advisory board to the fisheries service. “The question wasn’t answered if, overall, you were harming the population.”

Shipp said the rigs do alter the environment. But taking them out now would hurt the fish and corals that live there, and the economies built around fishing the rigs.

“It’s extremely important fish habitat that needs to be maintained,” Shipp said.

Historically, few red snapper lived in the northern Gulf. After oil companies put rigs there in the 1940s, the underwater nature changed. Now, more than half the red snapper taken from the Gulf comes from that altered habitat, Shipp said.

“It’s been a major ecosystem transformation,” he said. “We totally transformed from mud bottom to hard bottom. In the opinion of most people, that’s a positive.”

Answering questions

The essential fish habitat designation could help fishing regulators learn more about artificial reefs, Bortone said.

If the designation allows fisheries managers to limit fishing on some reefs and rigs for preservation, researchers may be able to finally answer questions about whether artificial reefs and oil rigs set up new fish communities or simply draw fish away from where they would reside naturally.

Although essential fish habitat is not off-limits to fishing, it is scrutinized more. Some habitats can become restricted if regulators feel that any activity there, including fishing, harms the habitat.

For example, if a rig is designated essential habitat for coral and an endangered coral grows there, federal regulators may prohibit fishing there, Bortone said.

So far, the management council has only looked at the issue from the fishermen’s perspective. The council is seeking reaction from the general public and oil companies. A deadline for public comment has not been set.

The advisory panel’s recommendation to the fisheries management council could come as early as February.

The oil industry is not enthusiastic, mainly because companies do not want to have to maintain the rigs and make sure lights work on them continuously. Maintaining the lights takes hundreds of thousands of dollars every year, especially during hurricane season.

There is already a program in place, called Rigs to Reefs, in which decommissioned rigs are cleaned and buried either on-site or in shallower water.

“We think the program we have in place today is a very sufficient program,” said Don Briggs, president of the Louisiana Oil and Gas Association.

 

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Exploring Gulf of Mexico deep water oil

To meet demand for oil, industry has pushed the limits of technology to reach new oil reserves. In the deep water of the Gulf of Mexico, some estimates say there is enough oil to power the United States for 10 years or more. Geoscientist Lesli Wood is a Senior Research Scientist with the Bureau of Economic Geology at the University of Texas at Austin. Dr. Wood talked with EarthSky about the current challenges and future innovations involved in exploring for oil in the deep waters of the Gulf of Mexico.

How much oil is there in the Gulf of Mexico?

There seems to be always more than we conservatively estimate. And so that speaks very well for our energy future. In fact, I think that as long as we have intelligent people who are out there searching for energy sources, and looking to pave that way, the future for energy in the U.S. looks very bright.

What we think now is that there are about 50 billion barrels of oil equivalent in the deep Gulf of Mexico. Back in the 1990s, we thought that there were about 25 billion barrels, but there’ve been some new discoveries recently.  And that’s made us look at some new opportunities in the Gulf.

We think we have a fairly good idea of the conventional traps – that is, places where we are used to finding hydrocarbons.  We’re fairly confident that if we go in and we drill a well into one of those similar places we’ll be able to find them again.

And then there’s an entire area in the Gulf of Mexico that’s very, very deep.  It’s an area in the Gulf where we currently have very few wells. It’s very difficult to see so deeply down in the stratigraphy – that is, the order and relative position of strata below Earth’s surface – related to those areas of the Gulf. But based on what we know, we can make some estimates of hydrocarbons in those areas of the Gulf of Mexico. What we know about the gas, the oil, and other types of energy reserves that exist in the deep Gulf is changing all the time. With every new data point that’s found, with every new student who wants to go in and do some research, with every new seismic line or piece of data that’s shot, or every well that’s drilled, we discover new things about the oil resources in the Gulf of Mexico. We do know there is a lot of oil still remaining in the Gulf region. And it’s imperative for us to understand it better in order to contribute to the energy security of the United States and the world.

How do you know this oil is there, thousands of feet below water and ground?

For over 100 years, people have drilled wells looking for oil, millions of wells. Some have proved to be successful, and some have proved to be not successful.

We rely on our ability to predict what are productive trends and what are not productive trends. We know that large basins around the world that have big deltas and big river systems feeding sediment into them have a source rock for oils. And we believe that the Gulf of Mexico basin has a history where rich organic shales and rocks were laid down that could be buried and heated and matured into oil. Just by the very nature of the setting, we think that it might be a profitable place to look for oil and gas.

Then, we go in and assess the basin through remote sensing. We can’t reach down there and put our hand in an oil and gas reservoir. But we can use geophysical information to image the subsurface – much as you would obtain an x-ray image of someone’s body – to help see inside the stratigraphy – or the body of the Gulf of Mexico – and map the rocks that are down there.

For example, the way the sound waves respond to the rocks can sometimes tell us what types of fluids are in the rocks. We’re always looking for new tools and technologies such as nanotechnologies or new geophysical technologies that can tell us something interesting about what’s down beneath the surface of the Earth.

But the ultimate proof of whether there are oils down in the Gulf of Mexico is going to be the drill bit. There’s no better technology than to drill down and see what is down there. And with tens of thousands of wells drilled in the Gulf of Mexico over the years, we have a pretty dense data set.

It also is good to go where you have been successful. We have had a lot of success in the Gulf of Mexico. We produce almost two million barrels of oil and five million cubic feet of gas a day from the Gulf of Mexico now. We know there are hydrocarbons down there. It’s just a matter of extracting it safely, economically and efficiently.

What are some of the biggest challenges in exploring for deep water hydrocarbons – oil, and natural gas?

In 2002, a well called the Trident was drilled in the southern Gulf of Mexico in about 8,000 feet of water. The well discovered the Great White oil field, now being produced through the Perdido Spar (see Perdido photo in this interview). Then in 2010, a company drilled another well in 10,000 feet of water. In a very short amount of time, we were drilling deeper and deeper in the Gulf of Mexico.

Often times the information that we have is not keeping pace with the challenges that we face in drilling deeper and deeper into the Gulf of Mexico. One of the biggest challenges that we face is trying to predict not only what we’re going to see stratigraphically, in the various Earth layers, but also what we’re going to face in terms of safety and environmental issues as we drill down into these deeper and deeper waters. It is a dangerous business.

But you cannot discover new frontiers without exploration risk. Explorers going to the North Pole at the turn of the century knew that they were trying to explore new territories, and they had very little information to fall back on. You have to make the best guess that you can about the conditions and opportunities that you’re going to face. You have to move forward. If we’re going to open up new frontiers and new ideas in energy resources, we’re going to have face some challenges.

So I think the biggest challenge that we face is trying to explore ever deeper in the Gulf of Mexico and trying to contribute to the energy resources of the U.S. in more challenging environments – like the Arctic and the ultra-deep Gulf of Mexico – with very little data. As we collect our data we’re going to run into some challenges. Each new challenge is an opportunity to learn.

Once you know oil and hydrocarbons are there, how are they reached?

Once we know where we want to drill, researchers go in and do an assessment of the sea floor and the hazards that exist. Before engineers can even design a rig and deploy it for drilling , we need to know things like, what types of sea floor colonies of animals exist? What is sub sea floor like? Is it muddy, is it firm? What are the dangers that we face with currents and waves?

When the engineers and drillers take over, a geologist and a geophysicist work with them to make sure that things are done safely and that they hit their target. Hitting the exact target is kind of like extending a soda straw from an airplane at 33,000 feet and trying to hit someone’s house. The offshore drilling industry has become very successful at hitting small targets miles below the seafloor.That’s the type of the challenge that you face when you’re trying to drill a well in deep water.

After they’ve found the target, they’ll then go in set up a fairly large structure for production operations. Additional wells are drilled to develop the newly discovered field. Throughout this entire process, we have new technologies which are attached to drillstring near the drill bit to monitor the conditions in the borehole, and there are geoscientists both on the rig and on shore who are remotely monitoring what’s going on at the bottom of the hole. For example, what’s the pressure? What’s the temperature? How fast is the bit turning? Do we have gas or oil that are coming back into the well? They also assess the rocks that are getting drilled as small chips of rock come up out of the borehole to see what formation are they in.

Where are the new ideas coming from that will create innovation and oil and other hydrocarbon explorations in deep water?

As we’ve developed computing technologies, we’ve developed an increased ability to do things a lot more efficiently. For example, we can image the subsurface of the Earth like never before. We can image it in four dimensions – three-dimensional imaging of reservoirs in the subsurface and then we can track that over time. We can actually see how a borehole is filling with oil and how the hydrocarbons are evacuating the reservoir. We can improve our efficiency of production.

The other thing that seems to be growing these days is research programs in the development of the use of nanotechnologies. An example of this is the concept of developing micro-sensors,micro-feeders of information that you could actually put down in the borehole and that will travel through the rocks and the pore spaces of the rocks. These little micro sensors are small, way smaller than a human hair. They could feed back information to computers on what the inside of the rock looks like, getting a vision of the rocks in the subsurface like we’ve never had before.

My last point is that we need to continue – always – to be looking ahead at new sources and types of energy. We’re not married to oil. We’re not married to gas. We should look at wind energy. We should look at solar energy. And we should look at all types of alternatives to conventional hydrocarbon energy.

Anything else you want to tell our readers?

I think some of the biggest challenges facing us today are how to continue to produce the large amounts of hydrocarbon that we use and need in this country. We need it to continue to build our socity and maintain our economic standard of living. Also, there’s the challenge of how we do that safely and efficiently, while balancing people’s concerns about environmentally-sensitive areas and safety-sensitive exploration developments.

I read Shackleton’s account of his trip to Antarctic, and I’m amazed at what people will put themselves through both intellectually and physically to search and discover new things.

Energy as the biggest challenge that’s facing the world today. People are going to apply their intellectual capabilities – and sometimes their physical capabilities – to meet that challenge for the betterment of society as a whole.

 

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Proposed legislation terrible for oil and gas industry

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The Gulf of Mexico is the oil and gas hub for the Western Hemisphere, with several thousand platforms standing at any given time. As with any industry, safety is of utmost concern. When a platform is built in the Gulf, there are safety concerns for human life, aquatic life, the environment and the Gulf of Mexico itself, to name but a few. However, certain legislation is being proposed in the U.S. Congress that would be detrimental to the oil and gas industry and have a stifling financial impact on Gulf of Mexico drilling activity — Section 608 of the U.S. Coast Guard Reauthorization Bill, also known as H.R. 2838.

U.S. Rep. Jeff Landry, R-New Iberia, recently amended the bill in the House before passing it on to the Senate. Landry’s House amendment includes Section 608, which is language regarding the use of stand-by vessels. The language requires stand-by vessels to be located within three miles of every manned oil and gas platform facility in the Gulf of Mexico, including mobile offshore drilling units. This requirement would increase cost to oil and gas operations in the Gulf of Mexico by hundreds of millions of dollars.

The alleged intention of Landry’s amendment of this bill is to improve the safety of offshore workers by adding these so-called stand-by vessels. However, the oil and gas industry does not agree with this notion. A recent report by the Bureau of Safety and Environmental Enforcement (BSEE) stated that from the period of 1996 to 2009, there were only three fatalities that were related to hypothermia in the Gulf of Mexico. During this same timeframe, the industry voluntarily reported 1.04 billion man-hours equating to a workforce with an annual average of more than 35,000 personnel.

The industry is projecting that an additional 150 to 200 vessels would be needed to meet the stand-by language requirements. Also, additional personnel would be required to operate the additional vessels. All in the name of safety, adding these stand-by vessels and personnel would not increase safety, but exponentially increase cost to the oil and gas industry by several hundred million dollars.

Regulations already exist using the most efficient technology that is designed specifically to protect offshore workers, and the regulations have been deemed adequate by the regulating bodies. Reports like the BSEE document and historical incident data do not show a need for such an onerous requirement like the Stand-By language pursues.

The Senate has now voted on the bill, passing it out without language regarding stand-by vessels. However, this issue is far from dead. The bill can potentially go before a conference committee where the final language would be decided, but this will most likely not happen until after the November elections. If this stand-by language were to be added in the conference committee and passed within the reauthorization bill, the outcome would be stifling for the oil and gas industry and its future production and success.

As the country is already trying to recover from the worst recession since the Great Depression, it is vitally important that the U.S. Congress not create barriers that prevent energy and economic development within the Gulf of Mexico region.

Don Briggs is president of the Louisiana Oil and Gas Association. His column is published every other Thursday.

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Planned Gulf lease sale to open 38 million acres for drilling

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The Obama administration announced plans Monday to auction 38 million acres of offshore oil and natural gas leases in the central Gulf of Mexico next year, the second lease sale in a year in the same area where BP’s Macondo well erupted in April 2010.

The lease sale will include about 7,250 federally owned oil and gas drilling tracts between three to 230 miles off the coasts of Alabama, Louisiana and Mississippi. The areas are located in water depths of nine to more than 11,115 feet, the Bureau of Ocean Energy Management, which regulates offshore drilling and reviews each winning bid, said Monday.

Estimates indicate that the proposed sale could lead to nearly a trillion barrels of oil and almost 4 trillion feet of gas resources, according to federal regulators.

The sale, slated to be held March 20, 2013 in New Orleans, will be the second under the Obama administration’s five-year, Outer Continental Shelf Oil and Gas Leasing Program, and the first of five annual central Gulf lease sales.

In June, the first oil and gas lease sale in the same area since the Deepwater Horizon exploded there two years ago, attracted more than $1.7 billion in high bids from energy companies. It put about 39 million acres — or 7,434 tracts — up for bid, from as close as three miles to as far as 230 miles off the coasts of Louisiana, Mississippi and Alabama.

Some of the money will make its way back to Louisiana, where it is now constitutionally required to go to coastal protection and restoration projects.

Last December, ConocoPhillips emerged as the biggest winner among energy companies trying to ramp up domestic deepwater exploration and production, placing high bids on more than a third of the available tracts off the coast of Texas in the first oil and natural gas lease sale in the Gulf of Mexico since the 2010 BP oil spill.

The lease sale attracted $337.7 million from 20 companies that submitted winning bids for 191 federally owned oil and natural gas drilling tracts across more than 21 million acres in the western Gulf.

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Operators return to gulf platforms, rigs after Isaac

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Operators were returning to Gulf of Mexico oil and gas platforms and rigs to restore operations following Hurricane Isaac, the US Bureau of Safety and Environmental Enforcement reported.

As of information received from industry by 11:30 a.m. CDT on Sept. 5, BSEE said 680,749 b/d, or 49.33%, of the gulf’s crude oil production and 1.15 bcfd, or 25.71%, of its gas production remained shut in. The shut-in production figures are estimates based on historic production reports.

Offshore operator reports showed personnel were evacuated from 18 production platforms, or 3.02% of the manned platforms in the gulf, and 1 rig, or 1.32% of the rigs working there.

Previously, industry had shut in most gulf offshore crude production before Hurricane Isaac made its first landfall in Plaquemines Parish, La., Aug. 28 as a slow-moving Category 1 hurricane.

Louisiana received the brunt of Isaac’s 70 mph winds and heavy rain as it veered west of New Orleans 7 years to the day after Hurricane Katrina and subsequent flooding devastated New Orleans (OGJ Online, Aug. 29, 2012).

In early September, BSEE said that inspectors were flying offshore to the platforms and rigs. The agency said it received reports of mainly minor damage from some operators and would continue to issue daily updates.

About 100,000 b/d of production was restored from Sept. 2 to Sept. 3, according to the Louisiana Oil & Gas Association. Some 1.3 million b/d of production was off-line at the storm’s height.

LOGA cited a DOE report that nine refineries in Isaac’s path are restarting or operating at reduced rates and most employees have returned to work.

Phillips 66 Co.’s Alliance refinery at Belle Chasse, La., remained shut down as of Sept. 5 because its power has not been restored, the association said.

US President Barack Obama, as he visited St. John the Baptist Parish on Sept. 3, commended work by federal and local governments and volunteers in recovering from the storm.

Citing Louisianans and Missippians’ resilience in responding to disasters, he said: “When disasters like this happen, we set aside whatever petty disagreements we may have. Nobody is a Democrat or a Republican—we’re all just Americans looking out for one another.”

Meanwhile, Republican presidential nominee Mitt Romney visited Louisiana Aug. 31 to survey the storm’s damage and local recovery efforts a day after the party’s convention ended in Tampa, Fla.

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Officials aided by past storm lessons

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Lessons learned from past tropical storms and hurricanes helped reduce the amount of pollution released during Hurricane Isaac’s sweep through Louisiana, officials at the state Department of Environmental Quality said this week.

However, environmental groups countered there is still too much pollution released from industrial sources during hurricanes. They said better preparations are needed in advance of a storm’s arrival.

“Every year, we get better and better at our response,” said Peter Ricca, emergency response manager with DEQ.

At 72 hours before landfall, he said, DEQ staff and other agency staff start calling industries reminding them about shutdown procedures and getting prepared. It appears to be working, he said, considering that the state saw fewer containers floating away from businesses after Hurricane Isaac when compared to the floating debris during Hurricanes Katrina and Rita.

Still, some spills and releases were reported during Hurricane Isaac because of flooding, rainfall and wind.

The incidents ranged from the spill of .003 gallon of crude oil into a private canal in Galliano to a barge sinking that released 2,178 tons of petroleum coke to the Mississippi River, according to information reported to the National Response Center. The National Response Center is where oil and other spills and releases are required to be reported.

There were problems reported during shut downs and start up of some industries in Hurricane Isaac’s path. For example, ConocoPhillips in Belle Chasse reported the release of an unknown amount of sulfur dioxide into air during the final stages of the planned shutdown of the refinery on Aug. 27.

In another shutdown the same day, Chalmette Refining LLC in Chalmette reported the release of 200 pounds of hydrogen sulfide and 46 tons of sulfur dioxide from a flare.

Ed Ballow, DEQ Incident Commander for Hurricane Isaac, said pollutants are sometimes released during shutdown operations, but it’s much more important for them to go through that process rather than not shut down their operations for a storm.

Ballow said that all the reports DEQ has received say no one has had any serious problems in the startup process.

“We couldn’t get to all of the facilities to monitor, but the few we did didn’t show any problems,” Ballow said.

Environmental groups, though, say more needs to be done to protect the environment.

During a news conference Thursday, the Louisiana Bucket Brigade, Gulf Restoration Network and the Sierra Club called for industry to improve their hurricane preparedness activities and for regulatory agencies to make companies pay fines for hurricane-related accidents.

“Some of them (releases) were small and some of those reports are just the tip of the iceberg,” said Anne Rolfes, director of the Louisiana Bucket Brigade, of incidents reported to the federal National Response Center.

Rolfes said storms are known to occur in Louisiana and industry should be prepared to deal with them.

Don Briggs, president of the Louisiana Oil and Gas Association, said oil and gas production has been operating in the state and in the Gulf of Mexico for decades and that the industry doesn’t prepare properly for storms are unfounded.

Briggs said more than 4,000 facilities in the Gulf of Mexico and thousands of pieces of equipment need to be secured, all of which would be subject to damage in a storm environment. If the Louisiana Bucket Brigade has counted 93 incidents from Hurricane Isaac, he said, that shows industry is doing a good job of being prepared.

“In reality, when you have storms like that, it’s not just the oil industry that gets impacted,” Briggs said.

One item that received numerous reports to the National Response Center was of the release of oil from electrical transformers around the hurricane-affected area. The use of PCBs in the oil was discontinued some years ago, but some transformers still contain the material so it is also reported to the National Response Center, Ricca said.

“We take those seriously when they spill,” Ricca said.

After a storm has passed, DEQ staff work with State Police to do quick assessments of affected areas Ricca said.

“We make sure they’re on the grid and that they had no leaks or discharges,” Ricca said, referring to facilities and operations that are a part of this first response. After that, a parish is cleared to allow assessment teams to do a more detailed look at the facilities and operations in an area along with flights over affected areas, he said.

One spill area that DEQ is monitoring occurred in the Myrtle Grove area in Plaquemines Parish.

“A storage tank got damaged from flooding and wave action,” Ballow said. There is no estimate yet about how much material from the oil production facility was released, he said.

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Production restorement in Gulf of Mexico under way after Hurricane Isaac

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Offshore oil and gas operators in the Gulf of Mexico continue to restore production following Tropical Storm Isaac. 

The Bureau of Safety and Environmental Enforcement (BSEE) Hurricane Response Team is activated and monitoring the operators’ activities. The team will continue to work with offshore operators and other state and federal agencies until operations return to normal.

Oil and gas operators continue to assess their facilities and are submitting damage reports to BSEE as required. Reports continue to indicate mainly minor damage.

Evacuations update

Based on data from offshore operator reports submitted as of 11:30 a.m. CDT September 5, personnel remain evacuated on a total of 18 production platforms, equivalent to 3.02 percent of the 596 manned platforms in the Gulf of Mexico. 

Personnel remain evacuated from one rig, equivalent to 1.32 percent of the 76 rigs currently operating in the Gulf.

Shut-in procedure activated

As part of the evacuation process, personnel activate the applicable shut-in procedure, which can frequently be accomplished from a remote location. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas.

During previous hurricane seasons, the shut-in valves functioned 100 percent of the time, efficiently shutting in production from wells on the Outer Continental Shelf and protecting the marine and coastal environments. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

From operator reports, it is estimated that approximately 49.33 percent of the current daily oil production in the Gulf of Mexico has been shut-in. It is also estimated that approximately 25.71 percent of the current daily natural gas production in the Gulf of Mexico has been shut-in. 

Shut-in production information included in these reports is based on the amount of oil and gas the operator expected to produce that day. The shut-in production figures therefore are estimates, which BSEE compares to historical production reports to ensure the estimates follow a logical pattern. The remaining shut-in oil and gas production has been slow to return due to damage at onshore processing facilities.

Facilities under inspection

Offshore oil and gas facilities are currently being inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back on line immediately. Facilities sustaining damage may take longer to bring back on line.

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Gasoline prices could spike if Isaac shuts down refineries

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Hurricane Isaac is on its way west along the Gulf Coast, where much of the nation’s gasoline, diesel, jet fuel and heating oil are produced. With many refineries shut down, it could increase the price of gas.

According to a survey by motorist group AAA, the national price for a gallon of regular gas crept up 0.6 cents to $3.76 Tuesday. According to the same survey, sharper prices were recorded in states along Isaac’s path, with gas jumping 2.5 cents to $3.64 a gallon in Louisiana, a little more than 2 cents to $3.56 in Mississippi and 1.3 cents to $3.58 in Alabama.

Don Briggs, president of Louisiana’s Oil and Gas Association, spoke to Eyewitness News about Isaac’s potential effect on gas prices.

He said they’ll spike for a short period of time but that will be the extent of it. But with Hurricane Isaac’s new path west, encompassing the entire gulf region from Florida to Texas, there’s fear both Louisiana and Texas refineries could shut down at the same time, which could be catastrophic for drivers.

“That would probably run it up some. I would hate to venture what it would be,” Briggs said.

In Charlotte, gas prices jumped two cents overnight. Eyewitness News spoke to people filling up, fearing it could happen again.

“I thought ahead and that’s why I’m here. Even though it is $67, I thought ahead,” Paul Incalcatera said.

The United States consumes about 19 million barrels of oil per day.

Gulf oil rigs produce more than a quarter of the nation’s crude oil. While refineries account for more than 60 percent of the nation’s oil and gas production.

With rigs and refineries shut down close to two billion barrel of oil are not being produced per day.

President Barack Obama has already talked about dipping into the nation’s strategic oil reserve, but if Isaac moves out of the Gulf region by the weekend, oil executives said that won’t be necessary.

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