_

Much like they did before congressional committees, officials of the three chief firms involved in the operation of the oil rig that exploded in the Gulf of Mexico  are blaming each other in the wake of a national oil leak commission report that criticized them.

The review concluded poor decisions on the rig saved the companies time and money in the operation.

The National Commission on the BP Deepwater Horizon Spill and Oil Drilling released a chapter of its upcoming report Monday.

It said all of the companies had a role in the disaster that killed 11 workers and resulted in a continuous discharge of almost 5 million barrels of oil into the Gulf over a three-month period beginning in April.

The seven-member commission, established in May, is scheduled to release its full report with recommendations to President Barack Obama on Tuesday.

Two of the companies involved in the operation blame BP for the problems leading up to the disaster.

BP, the operator of the rig, has in turn said all three companies share the blame.

The release of the report “largely adopts the preliminary findings of the commission’s chief counsel and like several other inquiries, including BP’s internal investigation, concludes that the accident was the result of multiple causes, involving multiple companies,” a BP statement said.

The commission listed BP alone as the decision maker in five of the nine critical actions that it said led to the blowout.

The company saved time by not waiting for equipment known as centralizers that would have braced the well tubing, as recommended by its engineers, Halliburton.

The action would have improved the injecting of cement into the well to help block any gas surge up the well, the commission said.

BP removed drilling mud from the well bore that would have helped prevent hydrocarbons from entering the well and causing the blowout, the commission said.

BP also made late-stage decisions on the operation without proper risk assessment, the commission said.

Halliburton was criticized specifically for not waiting for stability tests on the cement it intended to use on the job to block any gas surge to the surface.

The company also didn’t tell BP about two failed tests on the material days before the explosion.

Transocean, the owner of the Deepwater Horizon rig, said it was BP that directed decisions in the hours before the blast.

Transocean also took a shot at federal government overseers.

“Consistent with industry standards, the procedures being conducted in the final hours were crafted and directed by BP engineers and approved in advance by federal regulators,” Transocean said in a statement.

Many of the rig workers were Transocean employees.

The commission found BP and Transocean workers failed to detect the surge of gas expected to have caused the blast by not reacting to a negative pressure test that signaled a problem just before the explosion.

Transocean said its rig workers were well-trained and considered to be among the best in the business.

“Based on the limited information made available to them, the Transocean crew took appropriate actions to gain control of the well,” the statement said.

Halliburton has come under scrutiny by the commission and congressional committees probing the accident for its handling and quality of the cement.

BP failed to run a test that would have indicated the integrity of the cement, Halliburton contends.

The company also challenged commission findings that it failed to properly test the cement. Halliburton acknowledged two failed tests on the bonding but a third test indicated it was stable, the company said.

Halliburton also criticized the commission, saying it selectively omitted information the company provided to it in response to numerous inquiries.

“Halliburton acted at the direction of BP,” the Halliburton statement said. “Halliburton is fully indemnified by BP.”

Since the accident, BP has instituted significant changes to further strengthen safety and risk management, the company said.

The company has created a new safety and operational risk division that answers directly to the company CEO.

The Justice Department is suing BP, Transocean and five subcontractors for violating the Clean Water Act and Oil Pollution Act.

The government intends to prove the companies acted grossly negligent in their operations. Halliburton is not included in the lawsuit.

Original Article

_

A proposed noise ordinance regulating, among other things, noise from permanent oil and gas structures was tabled Wednesday by the Bossier Parish Police Jury, giving jurors time to review responses to industry concerns submitted that day by the acoustic consultants who drafted the ordinance.

One of the most pressing concerns among oil and gas industry representatives was about how noise measurements would be taken.

Under the proposed noise ordinance, noise from temporary activities, those 90 days or less, would be measured from the receptor line — the nearest occupied structure or public place where the noise could be heard. Permanent activities would be measured at the property line. Under the draft ordinance, noise cannot exceed more than 5 decibels of an area’s ambient noise level. Oil and gas structures and other significant noise generators that do must implement a plan to bring their noise level into compliance.

Representatives of CenterPoint Energy and Louisiana Oil and Gas Association voiced concern over permanent activity noise being measured at the property line instead of the receptor line, particularly in rural areas.

“This is far more stringent than what we’re regulated at from a federal standpoint,” said Jodee Bruyninckx, Louisiana Oil & Gas Association’s North Louisiana director.

Jerald Jones, a representative for CenterPoint Energy, said while CenterPoint understood the policy reasons for measuring at the property line, the company has only seen property line noise measurements applied in urban environments where property lines are in close proximity.

Measuring noise from the property line would require a company to spend more money to mitigate the noise, he said.

After hearing a detailed explanation of the situation from the parish attorney, jurors agreed measurements should be taken from the property line despite the additional cost a company would incur to mitigate the noise.

“I realize it does create more cost, but it protects that individual house and their property line to what (an oil and gas company) can do,” Police Juror Glenn Benton said.

Parish Attorney Patrick Jackson said while he felt confident reasonable solutions would be found for most of the concerns raised at Wednesday’s meeting, the location of noise measurement would remain an issue.

Police jurors will reconsider the issue Jan. 19. If approved, the noise ordinance would take effect in April.

Original Article

_

HOUMA — Analysts who track the price of crude oil are predicting it will hit $100 per barrel as early as the first three months of this year.

Some are saying the rising price has the potential to break the permitting deadlock that has prevented oil companies from resuming deepwater drilling following the Deepwater Horizon spill in April. That could be a big plus for the Houma-Thibodaux economy, but it could also mean higher gasoline bills for consumers.

Oil on Monday hit a 26-month high of $92.66 a barrel.

Loren Scott, a professor emeritus at LSU who has studied the state’s economy for decades, predicts a per barrel price of $100 or more will provide a boost to the Houma-Thibodaux economy by increasing pressure on the U.S. Bureau of Ocean Energy Management to allow more wells to be drilled more quickly. He predicts that higher gas prices will lead to public frustration and mounting calls for Congress and the president to expand domestic drilling.

“The price of oil is so important a player in this,” he said. “We’d have a very active Gulf of Mexico right now, but somebody’s got a foot on the brake. The only thing that’s going to kickstart this is an outcry from the voting public. … It has the potential to totally break down the permit barrier.”

Houma-Thibodaux’s economy has historically followed the fate of the oil-and-gas industry, booming when the price of crude is high as companies hire new workers to drill new wells. Today, the economy is hardly languishing — its unemployment rate of about 6 percent has been the lowest in the state for months, and retailers say the holidays went well. But the oilfield business is still slow as regulators work to implement new rules and recraft the permitting process in the wake of the BP oil spill. The changes are meant to prevent such disasters, but business leaders say that has come at a cost for the local economy. Oil prices in the $80 to $90 range, where they have hovered lately, ordinarily would have spurred red-hot growth in the economy.

When oil last climbed to $100 per barrel in 2008 and spiked to near $150, local unemployment dropped to about 2 percent and real-estate values rose dramatically. But locals and businesses were also burdened with gas prices nearing $4 a gallon.

A wide range of global causes determine the price of crude, which in turn plays a major role in the price of gasoline at the pump. Chief among them is the supply and demand of oil. Though the economy in the U.S. is slowly climbing out of its recession, developing countries such as China and India are demanding more energy. Other factors, including investment speculation and concerns about long-term supply, can also influence the price. To that effect, uncertainty in the Gulf can affect the local economy, analysts said, though they are divided on how much impact it has on the global market.

Jason Schenker is president of Prestige Economics, an Austin, Texas-based firm that predicts oil prices. This year, he predicts the price of oil will average $93 a barrel and says gasoline will range from $3.25 to $3.75 a gallon.

“There’s a very strong chance we are going to see $100 oil for sustained periods of 2011,” he said. “There’s a lot of demand, there’s a lot of growth.”

J.P. Morgan Chase is one of many also predicting the $100 mark and a three-month average of $95 per barrel in the first quarter of 2011. That’s thanks to increasing demand from new Chinese vehicles and commuters in the developing world, according to its Daily Oil Note memo for Jan. 3.

Don Briggs, president of the Louisiana Oil and Gas Association, was skeptical that the $100 -per-barrel prediction would be enough to change the Obama administration’s mind and speed up permitting.

“Oil prices were between $80 and $90 and it made no difference to the administration,” he said. “The companies will be going other places to work.”

Chett Chiasson is director at Port Fourchon, which serves the most of the Gulf’s deepwater oil-and-gas operations. Ordinarily high oil prices mean good business, he said.

“Right now, it’s really, really slow,” he said. “The price of oil going up helps to wake up the rest of America.”

Original Article

_

The average price for regular gas in New Orleans is up to about $2.93 per gallon. One local expert says in just a few months we may well be wishing were paying less than three bucks.

“Being at $3.75 this coming spring is a possibility,” Louisiana Oil & Gas Association President Don Briggs said. “Many are expecting to be at $4.00 by year end.”

The price has jumped 16 cents since last week. AAA says the current price is nearly 40 cents more than what we were paying a year ago.

Briggs blames increasing demand without the supply to match.

“China and India, and other emerging economies that are growing, their demand for oil has increased,” Briggs noted. “Consequently world demand in growing.”

Original Article

_

Noise from residential and commercial development in Bossier Parish would not exceed five decibels of the ambient noise in surrounding areas under a draft noise ordinance the Bossier Police Jury will consider Wednesday.

Designed to regulate, among other things, noise from permanent oil and gas structures, the proposed ordinance would require industrial and other significant noise generating sites to submit management plans on how structures and/or activities would comply with maximum permissible sound levels, according to parish attorney Patrick Jackson, who has worked closely with industry representatives on revisions to the ordinance.

“This is a proactive stance to make sure as the oil and gas industry and Haynesville Shale matures … there are reasonable protections for landowners,” Jackson said. “This is a way to keep the gas industry booming and a way (for residents) to live in these areas when compressor stations come.”

Bossier Parish’s current noise ordinance limits noise to street-level sounds. The Police Jury will meet at 2 p.m. Wednesday at the Bossier Parish Courthouse.

“I think in some instances it may be helpful,” said Jodee Bruyninckx, Louisiana Oil & Gas Association’s North Louisiana director. “But when you’re talking about development close to a number of property owners, it’s going to be difficult to get anything like that accomplished.”

Bruyninckx said the Police Jury and parish attorney worked hard to create the “best form” of the ordinance, but she still had a few concerns, one of which was new provisions to grandfathered properties, which she will bring up Wednesday.

In 2009, Bossier and Caddo parishes jointly hired Arpeggio Acoustic Consulting to evaluate ambient noise levels in both parishes and draft a proposed ordinance based on their findings. The areas evaluated ranged from noise sensitive areas such as schools and hospitals to residential areas and higher ambient noise areas such as industrial plants and motor sports parks. In situations when the ambient level cannot not be effectively measured, a predetermined maximum noise level outlined in ordinance will be used.

An initial draft of Arpeggio’s noise ordinance was presented in August 2010 and has since been revised to reflect suggestions and concerns from industries affected by its regulations.

One of the most recent changes came as a result of an industry suggestion to provide another option for companies to resolve noise issues with property owners.

Defined as a “noise impact right,” the option allows a company to financially negotiate exceeding the noise limit, the hours or duration of operation with a property owner provided an official agreement between the two parties is filed with the parish, according to Caddo Parish attorney Charles Grubb, who has been working with Jackson to craft a similar ordinance for Caddo Parish.

Grubb plans to have a committee of Caddo commissioners review the latest draft of the Caddo noise ordinance in a couple weeks.

Original Article

_

By BEN CASSELMAN And DANIEL GILBERT

More than two months after the Obama administration lifted its ban on drilling in the deep-water Gulf of Mexico, oil companies are still waiting for approval to drill the first new oil well there. Experts now expect the wait to continue until the second half of 2011, and perhaps into 2012.

The administration says it is simply trying to enforce new safety rules adopted in the wake of the April 20 explosion of the Deepwater Horizon drilling rig, which killed 11 workers and set off the worst offshore oil spill in U.S. history. Environmental groups say the administration is right to take its time because the Gulf disaster exposed the risks of offshore drilling.

But the delay is hurting big oil companies such as Chevron Corp. and Royal Dutch Shell PLC, which have billions of dollars in investments tied up in Gulf projects that are on hold and are paying hundreds of thousands of dollars a day for rigs that aren’t allowed to drill. Smaller operators such as ATP Oil & Gas Corp., which have less flexibility to focus on projects in other regions, have been even harder hit.

The impact of the delays goes beyond the oil industry. The Gulf coast economy has been hit hard by the slowdown in drilling activity, especially because the oil spill also hurt the region’s fishing and tourism industries. The Obama administration in September estimated that 8,000 to 12,000 workers could lose their jobs temporarily as a result of the moratorium; some independent estimates have been much higher.

The slowdown also has long-term implications for U.S. oil production. The Energy Information Administration, the research arm of the Department of Energy, last month predicted that domestic offshore oil production will fall 13% this year from 2010 due to the moratorium and the slow return to drilling; a year ago, the agency predicted offshore production would rise 6% in 2011. The difference: a loss of about 220,000 barrels of oil a day.

Drilling in waters of less than 500 feet also has been snared by the government’s increased scrutiny. Regulators requested modifications to 101 shallow-water drilling plans in 2010, compared with 59 such requests in 2009 and just 31 in 2008. Rig operators say drilling permits once approved in a matter of weeks have taken up to five months to process as the government introduced new rules.

The lengthy delays in reviewing new permits have caught the industry off guard. When the Obama administration lifted its ban on deep-water drilling on Oct. 12, many experts had expected a few permits to be issued before the end of 2010, followed by a gradual ramp-up of activity this year.

Among the new rules: Companies must hire outside engineers to certify key well-safety equipment and subject the gear to more rigorous tests. They require more worker training, more documentation and detailed plans of how they would respond to a worst-case well blowout.

Environmentalists say the Deepwater Horizon disaster proved reviews needed to be more thorough. “The process can work efficiently. Maybe not as quickly as it did before, but that’s understandable,” said Elgie Holstein, a staff expert at the Environmental Defense Fund.

But with no deep-water permits yet issued and companies still struggling to comply with new, tougher safety rules, experts say it could be 2012 before drilling approaches pre-disaster levels. Even when it does, projects that were once approved in weeks will likely take months to get past increased regulatory scrutiny.

“There was a sense that we would start to see deep-water permits approved by year end,” said Arun Jayaram, an energy analyst with Credit Suisse in New York. Mr. Jayaram said he now doesn’t expect much deep-water drilling at all this year.

Some companies are shifting investments out of the Gulf. BP PLC recently said it would move a brand-new rig that was meant to work in the Gulf, Pride International Inc.’s Deep Ocean Ascension, to Libya. Marathon Oil Corp. has tried to cancel a contract for a newly built Gulf rig owned by Noble Corp. Noble declined to comment, but last month it said it would “vigorously defend its rights under the drilling contract.”

Erik Milito, a senior official at the American Petroleum Institute, the oil industry’s main lobbying group, said more rigs will leave soon if drilling isn’t allowed to resume. “They’re doing everything they can to keep the contracted rigs in the Gulf,” said Mr. Milito. “But they’re idle, they’re not able to do the work they intended to be out there doing, and that can only go on so long.”

This isn’t the first time the industry has issued such warnings. When the Obama administration first announced its moratorium on deep-water drilling in May, industry leaders predicted thousands of layoffs and a quick exodus of rigs from the Gulf. Instead, most companies either kept their rigs on stand-by or kept them busy with jobs that weren’t covered by the moratorium, such as cleaning up old wells.

There are signs that companies remain committed to the Gulf. Chevron has in recent weeks announced two major deep-water projects there, which together will cost nearly $12 billion.

“The deep-water business is a very long-term business, so we take a very long-term view,” Gary Luquette, the head of exploration and production for Chevron in North America, said in an interview. BP and Shell also have said they have no plans to sell their Gulf properties.

Smaller oil companies, however, are less able to wait out the slowdown. ATP Oil & Gas, one of the smallest deep-water operators in the Gulf, has seen its share price fall 27% since the Deepwater Horizon exploded, a sign investors are concerned about lost revenue from its delayed wells. ATP’s chairman, Paul Bulmahn, has said the company is now looking for projects in other countries. In a letter to President Barack Obama last month, Mr. Bulmahn pleaded for a drilling permit.

The slow pace of permitting has drawn fire even from some Congressional Democrats, especially Louisiana Sen. Mary Landrieu, who has said the policy is hurting the region’s economy.

Louisiana Department of Natural Resources Secretary Scott Angelle pushed for a return to drilling last month. “It’s time to get the men and women of this industry back to work, as well as the other industries that are dependent upon drilling activity for survival—the welders, the boat captains, the pipefitters and caterers,” he said. “There is a multitude of individuals on the coast who want to get back to work finding the fuel to energize America.”

The Obama administration’s newly formed offshore drilling regulator, the Bureau of Ocean Energy Management, Regulation and Enforcement, says it isn’t trying to stall new drilling but won’t be rushed by industry pressure. The agency notes it has approved permits for deep-water activity that wasn’t covered by the moratorium, such as modifications of existing wells.

“We will not cut corners in the permit review process,” agency spokeswoman Melissa Schwartz wrote in an email. “Our priority remains, as it must, to ensure that oil and gas drilling is done in a safe and environmentally responsible manner.”

Original Article