By Russ Britt, MarketWatch – GRAND ISLE, La. (MarketWatch) — The BP oil spill has fouled the waters and devastated the fishing community on this island at the very tip of Louisiana, but it’s hard to find anyone here who favors a moratorium on deepwater drilling in the Gulf of Mexico.

Oil companies and fishing vessels have peacefully co-existed in the Gulf for decades. And even though the spill threatens the livelihoods of most Grand Isle residents, it seems few — if any — favor pulling the plug on what is the state’s biggest source of revenue.

“It will trickle down; the economy will get even worse,” said Perry Clement, a local who serves as a deck hand on several fishing boats, and is struggling for income. “It’s the delicate balance we have, with the oil and the fishing.”

Dean Blanchard has lost a lot more, and yet he feels the same way. His Dean Blanchard Seafood Co. is the region’s biggest shrimper. This year was supposed to be a bonanza, hauling in $100 million in product, he says.

Now, Blanchard may have to start fishing off Costa Rica in order to maintain his business. But he nixes the idea of a moratorium on drilling.

“We’ve been living together a long, long time,” Blanchard said of the oil drillers. “They closed the wrong thing down. They should have closed the government down.”

Indeed, it’s hard to find anyone in the state of Louisiana that favors President Barack Obama’s plans to put a cap on deepwater drilling in an attempt to deal with safety issues arising from the BP spill. Not even the industry most damaged by it, fishing, is in favor of the ban.

While the state’s fishermen have provided the nation with a third of its seafood and kept New Orleans’ renowned restaurants stocked with plenty of product, Louisiana and its offshore fields lead domestic oil production and the industry is the state’s biggest job generator. It’s also put many a patron at the table in those restaurants, locals say.

Partner, not polluter

Fishermen here don’t look at the oil industry as a potential polluter. They look at it as a partner. The rigs in the Gulf are not eyesores to them; instead the subsea structures on which they rest act as artificial reefs that are potentially rich with products they can sell.

Hundreds of offshore platforms and rigs in the waters off Louisiana provide the state with 30% of its gross domestic product, says Michael Hecht, president of the trade group Greater New Orleans Inc. Each deep-water rig employs roughly 300 people averaging nearly $100,000 a year in income.

With roughly four other workers directly supporting each rig worker, that translates to 22,000 jobs that could be lost with the ban. The loss of the large income of these workers is expected to create a huge ripple effect throughout Louisiana.

Hecht and other civic leaders, including Louisiana Democratic U.S. Sen. Mary Landrieu, have been pleading with the Obama administration to rethink the moratorium. They say the BP spill is an anomaly, as drillers have been operating in deep water for more than two decades without major problems.

This week, U.S. District Court Judge Martin Feldman, who presides in New Orleans, ordered that the drilling ban be lifted. But the Obama administration has vowed to appeal, and Interior Secretary Ken Salazar has said he may issue another, modified drilling ban that addresses Feldman’s concerns.

The plan to keep a lid on deepwater drilling could be fatal for numerous companies and an economy that’s just getting revitalized five years after Hurricane Katrina swept through the region and flooded three-fourths of New Orleans.

Katrina added jobs, spill takes away

Hecht and others say that Katrina’s economic impact ended up being positive; the region added jobs in construction and reformulated its way of doing business. The rebuilding effort helped the area ride out the 2009 recession better than any other area, as New Orleans’ unemployment remained at a low 3%.

The spill, and the subsequent impact on fishing and the oil business, will kill jobs, Hecht says. While it could easily go longer, even if the ban lasts exactly six months, it will take another 12 to 18 months for drilling to get back into full swing.

“You’re talking about impoverishing Louisiana,” he said. “It’s an extremely inelegant solution to a complicated problem.”

One thing that federal officials may not have picked up on is the region’s changed attitude, or at least the perception of it.

After Katrina, New Orleans was viewed as a city seeking a handout. Many now say they don’t necessarily want a generous settlement from BP; they just want to get back to work.

Peter Vujnovich, an oyster fisherman, has been out of work for a month. But he says: “I hope BP steps up to the plate. Instead of making us whole, keep us whole.”

Leslie Bertucci, owner of R&D Enterprises, which supplies drilling equipment to deepwater rigs, echoes that sentiment.

“I personally had equipment on the [Deepwater] Horizon rig that we lost, although that is the least of my concerns,” she said. “I don’t really want to make a claim. We just really want to go back to work.”

And Steve Perry, chief executive of the New Orleans Convention and Visitors’ Bureau, says the region is even willing to work with BP to help mitigate the issue.

“We have a better chance if we have a strategy that works with them,” he said.

Oilmen don’t see relief

As expected, Louisiana oilmen vehemently oppose the drilling ban, but they don’t expect to see any relief soon.

Don Briggs, president of the Louisiana Oil and Gas Association, says the Obama administration seems likely to use the ban as a bargaining chip to push through a climate change bill. That bill is expected to include a “cap-and-trade” provision that could force companies to trade pollution credits based on their emissions levels.

According to Briggs, the drilling ban is unnecessary because the spill resulted from poor planning and management on BP’s part. There are more than 590 producing wells in the Gulf’s deep water, he adds. Deep water is defined as anything 500 feet or more below the surface.

“He [Obama] doesn’t have to do what he’s doing,” he said. “What the hell does he know? He’s a freaking Chicago guy.”

Two hours west of New Orleans, the city of Lafayette is somewhat of an oil hub. Oilfield service companies along with drillers and marketers are worried that city will be crippled by the drilling ban.

Badger Oil Corp., a privately held oil producer in Lafayette, is too small a company to drill in deep water, but it’s feeling the effects of the government’s skittishness. The Minerals Management Service, under heavy scrutiny for its cozy relationship with the industry, is rethinking some of its routine permits, Badger officials say.

MMS issued, then withdrew three Badger permits several weeks ago. The agency is expected to come back and grant them, but it’s clear MMS is operating in a different environment.

“Nobody wants to be the guy that grants the permit where there was a problem,” said David Etienne, Badger’s vice president in charge of exploration.

Two industries damaged

For both the oil and fishing industries, however, the BP experience has been devastating.

Perhaps no one is feeling the ban more than Kirk Rousse. Born and bred on the Bayou, Rousse knows that fishing and oil are engrained in the culture. He grew up fishing and worked on a number of boats when he was younger.

The father of six children, Rousse started his own trucking business with his wife, Sheila, to transport oilfield equipment to vessels that would take the gear to offshore platforms, most of them deepwater rigs. Now it’s questionable whether Rousse will be able to work in either industry.

Rousse has lost 60% of his business due to the drilling ban and sees the rest of it hemorrhaging. He expects he’ll have to look far and wide to find income.

“I’m going to have to leave my family,” he said. “Six months from now, I probably won’t be living here.”

To him, and to numerous others in the region, oil and fishing are joined at the hip in Louisiana.

“A lot of people who retire from the oilfield, they start fishing,” Rousse said.

Is there an iPhone app for everything?

http://hannity.blogs.foxnews.com/2010/06/23/is-there-an-iphone-app-for-everything/

When it comes to the iPhone, there is just about an app for everything! Now there is even an app for the BP oil spill!

LOGA, (Louisiana Oil and Gas Association) introduced this new app to communicate with the public. The app provides news updates, stats, pictures and commentary. It also aims to educate about the business and political side of the oil and gas industries, procedures used to clean up the mess and how to help.

Can the oil spill crisis be fixed any time soon? Help!

If you would like to download the iPhone App follow this link http://phobos.apple.com/WebObjects/MZStore.woa/wa/viewSoftware?id=375861472

WASHINGTON — The Obama administration is revising its blanket moratorium on deep-water drilling and could replace it with a more targeted ban that lets some projects go forward, Interior Secretary Ken Salazar told Congress on Wednesday.

Salazar’s announcement came one day after a federal court struck down the initial moratorium as too broad. It was delivered even as government officials took more steps to revamp the federal regulatory agency that polices offshore energy production.

Both the deep-water drilling ban and the overhaul of the agency, the Minerals Management Service, were prompted by the April 20 blowout of a BP well in the Gulf of Mexico.

The administration is appealing a federal judge’s ruling Tuesday that blocks the May 27 ban on oil and gas drilling in more than 500 feet of water. Salazar said he is also responding to the ruling by rewriting the moratorium with more nuance and justification.

Wednesday night, the administration asked a court to delay the Tuesday ruling as it appeals. The Justice Department said a delay would serve the public by eliminating risk of another drilling accident while new safety rules are considered.

Salazar’s determination that a threat exists has firm support from a variety of sources, the Justice Department argued in seeking the delay. And no relevant provisions in the Administrative Procedure Act, the Outer Continental Shelf Lands Act or related regulations require the Interior Department to prepare a formal decision document or findings of fact prior to issuing a drilling suspension, the government’s court papers said.

Earlier before Congress, Salazar suggested that the new ban could treat drilling projects differently based on risk – distinguishing between projects in well-known reservoirs and those trying to tap new fields where pressure readings and other data are unavailable. The distinction could mean a continued blockade of exploratory drilling even as the government outlines plans for letting companies resume drilling appraisal wells and development wells where pockets of oil already have been discovered. The doomed BP well was in the exploratory stage.

Sen. Lisa Murkowski, R-Alaska, said 28 of the 33 Gulf rigs idled by the deep-water ban were working on the less risky post-discovery projects.

“There is a difference between an exploration well you’re drilling in formulations where you don’t know anything … versus drilling into reservoirs where you already have the geophysical information,” Salazar said.

Sen. John Cornyn, R-Texas, who has been critical of the broad moratorium on deep-water drilling, said Salazar’s suggestion of a more narrowly drafted ban was promising , adding it also is important to try to find ways to mitigate job losses.

While the Interior Department reformulates its deep-water drilling ban, the agency in charge of policing the industry is getting a major overhaul. Michael Bromwich, the new leader of the Interior Department’s just-launched Bureau of Ocean Energy Management, Regulation and Enforcement, one of the successor agencies replacing the Minerals Management Service, told a Senate panel he is creating a “SWAT team” to root out the kind of misconduct documented in the former Minerals Management Service.

Bromwich, a veteran investigator who previously led a probe of the Houston Police Department crime lab, said he would not allow coziness or corruption.

“There will be zero tolerance for what has apparently been tolerated in the past,” Bromwich said, referring to a series of investigative reports documenting lax enforcement of drilling rules and a cozy relationship between regulators and industry employees.

Sen. Dianne Feinstein, D-Calif., the head of the Senate Appropriations subcommittee that dictates spending on the Interior Department and the new bureau, said Bromwich faces a Herculean task in revamping the agency and urged Salazar to resist enormous pressure to go back to business as usual.

“There is no technology today that can absolutely prevent and give the public the general assurance that nothing dire is ever going to happen again,” Feinstein said. But, she said, that technology should be “in place before we drill” and should be monitored by independent, well-trained inspectors.

In other spill news:

Salazar said the new Bureau of Ocean Energy Management, Regulation and Enforcement needs more than 200 additional inspectors to police rigs and platforms. He said at least 228 more are needed just in the Gulf of Mexico – to bolster the current team of 60 inspectors monitoring 3,800 platforms.

The House of Representatives voted 420-1 to pass legislation to give the commission investigating the spill the power to subpoena documents and compel reluctant witnesses to testify.

Original Article

U.S. District Judge Martin Feldman of New Orleans granted a South Louisiana wish this week when he lifted the Obama adminstration’s six-month moratorium on deepwater drilling.

We’ve urged the end of the moratorium because of the economic havoc it’s likely to wreak in Acadiana. The Lafayette Economic Development Authority did its own estimate and found that just the Lafayette area could lose 7,000 jobs and half a billion dollars in wages. Even if LEDA has overestimated the impact by a factor of two, the impact will be bad enough.

We wish we could have more faith in the staying power of Judge Feldman’s ruling as it moves through the appeal the administration has pledged to pursue. Luckily, Louisiana’s U.S. senators have presented a way out that maximizes the safety in deepwater projects while allowing drilling to continue. We hope the Obama adminstration will finally listen. Maybe, if comments Wednesday by Interior Secretary Ken Salazar are any indication, it already has:

“We will in the weeks and months ahead take a look at how it is that the moratorium in place might be refined,” said Salazar, quoted by BusinessWeek after Feldman’s ruling. “It might be that there are demarcations that can be made based on reservoirs, when we do know the pressures and the risks associated with that versus those reservoirs which are exploratory in nature where you don’t know as a company what it is that you are drilling in.”

The take-away from Feldman’s decision has been the judge’s feeling that there’s no reason to close down all deepwater wells because one of them is responsible for a massive spill. This sounds a little like the people who say the moratorium is like grounding all planes because one crashes. The fact is that the cause of the Deepwater Horizon blast and spill — and the 11 fatalities on April 20 — remains unknown. The consequences are potentially catastrophic, and the industry, as represented by BP, hasn’t exactly impressed the world with its ability to respond and remediate.

Our argument with the Obama administration isn’t that its action was unreasonable. It should be that we can make the deepwater operations safer without dropping an anvil on South Louisiana’s economy.

U.S. Sens. Mary Landrieu, D-New Orleans, and Sen. David Vitter, R-Metairie, have, separately or in agreement, suggested alternatives such as “immediate rigorous” inspections, differentiating between operations likely to cause accidents and those that aren’t, and other steps that allow drilling to continue. We hear faint echoes of their ideas in Salazar’s statement.

By employing these alternative methods, regulators can make deepwater operations as safe as possible without the rise in unemployment and the drop in income that some predict as the moratorium’s result. Those methods would protect us as well as the nation’s energy production capacity.

Original Article

BP may be collecting less crude from its blown out well in the Gulf of Mexico since the company’s oil containment cap was reinstalled after it was bumped by an underwater robot.

Oil collections were increasing almost daily since June 3 when BP installed the containment cap over the leak.

The system allows oil to flow up a riser pipe to a ship, the Discoverer Enterprise, where it is transferred to a tanker and then shipped to a refinery.

The cap provided BP with its first success since the Deepwater Horizon oil rig exploded April 20, killing 11 workers.

In the last three weeks or so, the company has collected about 15,000 barrels of oil almost daily from the cap.

Almost two weeks ago, the company started collecting an additional 10,000 barrels a day when it added the vessel Q4000 to its collection fleet.

The Q4000 does not get its oil from the containment cap. Instead, it siphons oil directly out of the lower part of the blowout preventer.

The most oil the company ever reported collecting was Tuesday when 27,097 barrels were captured through the combined systems.

But those numbers dipped Wednesday and Thursday.

The containment cap was removed for about 10 hours Wednesday after a robot bumped into it.

During the 14 hours that the cap was installed and again working Wednesday, the company reported that the Discoverer Enterprise and the Q4000 — which continued to collect oil uninterrupted for the entire day — collected a total of only 16,830 barrels.

During a 12-hour period on Thursday, the company only collected a total of 11,255 barrels of oil from the two systems.

It was unclear why less oil was being collected. BP officials at the federal response headquarters in New Orleans were in a meeting Thursday evening — after the company released its collection numbers  — and were unable to answer questions.

U.S. Coast Guard Capt. Roger Laferriere, who is in charge of the response in Louisiana and   provided an update on the program late Thursday, said he didn’t know why the numbers were down.

A group of government scientists has estimated that about 35,000 to 60,000 barrels of oil are leaking daily.

Even when the collection system is working, oil still billows out into the seawater from venting holes and from beneath the containment cap.

BP has said only a trickle will leak by next month when it replaces the containment cap with one that has a tighter fit.

Also on Thursday, a federal judge in New Orleans refused to reconsider his block of the Obama administration’s six-month moratorium on deepwater drilling for oil and gas in the Gulf of Mexico.

The U.S. Department of the Interior and the federal Bureau of Ocean Energy Management, Regulation and Enforcement immediately sent the case to the 5th U.S. Circuit Court of Appeals in New Orleans.

Earlier this week, Department of Justice attorneys told U.S. District Judge Martin L.C. Feldman that the moratorium would give the federal government sufficient time to determine the cause of the BP well’s continuing blowout. Justice attorneys also argued the drilling shutdown was needed to reduce the chances of similar catastrophes.

But Feldman concluded he lacked evidence to justify endangering 150,000 jobs that he said are “directly related to offshore operations.”

Added the judge: “Oil and gas production is quite simply elemental to Gulf communities.”

Feldman said administration officials failed to show the moratorium could “justify the immeasurable effect on the … local economy, the Gulf region, and the critical present-day aspect of the availability of domestic energy in this country.”

Federal officials had stated in court filings that they would seek an emergency stay of Feldman’s decision from the 5th Circuit.

As of 6 p.m., however, the 5th Circuit had not entered any decision in the record of the appeal.

Also Thursday, the National Wildlife Refuge Association weighed into the dredging controversy that has pitted state and local officials against the federal government.

The NWRA praised the U.S. Fish and Wildlife Service and the U.S. Army Corps of Engineers for their decision Wednesday to halt Louisiana’s dredging operations for five to seven days near the Chandeleur Islands.

The corps said that the state was dredging too close to shore which the corps said could be detrimental to the environment.

The state asked the corps to allow dredging to continue in the shallow water for the five to seven days it will take to  assemble a  pipeline at the new location 2 miles out in the water. The corps refused and said the dredge has to sit idle until the pipeline is assembled.

Gov. Bobby Jindal and Plaquemine Parish President Billy Nungesser were critical of the federal government’s decision, saying it was unnecessary to shut the operation down and instead argued that it was more important to build sand berms quickly that they say will help keep oil out of the wetlands.

“The state of Louisiana has blatantly disregarded the terms of federal dredging permits, conducting massive dredging operations close to the Chandeleurs despite a legally binding agreement to dredge farther offshore,” Refuge Association President Evan Hirsche said.

“The federal government did the right thing in calling a halt to this illegal activity,” he added.

In another issue that has caused controversy, an official with the Occupational Safety and Health Administration said the agency has been in the Gulf since the last week of April monitoring the health and safety of workers. Not only on oil rigs and boats on the water, but also on the beaches cleaning up oil.

The agency is making sure that workers are wearing the appropriate safety gear, including gloves, coveralls and even respirators when needed, said Jordan Barab, the deputy assistant secretary of labor for OSHA.

OSHA has also been conducting its own air monitoring and air sampling programs, Barab said.

“I will just let you know … that we have found no exposure levels to any chemicals that are of any concern,” Barab said.

He said the main problem workers are facing in the oil response is exposure to heat.

“We’ve had a number of incidents that we have to deal with heat including some hospitalizations,” he said.

He said that heat and fatigue are causing workers the most problems and concern OSHA inspectors the most.

In the beginning, Barab said, the agency’s relationship with BP had a few “road bumps” but has since improved.

“We continue to verify every day that workers are working safely and any problems that we identify are being handled,” he said.

Original Article

Natural gas companies are pushing to avoid two-thirds of the proposed extraction taxes that a Pennsylvania policy group is supporting.

But Pennsylvania Budget and Policy Center Director Sharon Ward urged state lawmakers Thursday to oppose what she called “front-end and back-end exemptions” being considered for natural gas drillers.

Ms. Ward said that under the exemptions drillers would not have to pay taxes during the first three years of production and once a well is past its prime and production dwindles.

The taxes, which some see as a crucial component to this year’s budget, would cover less than a quarter of a well’s average lifespan, she said.

Ms. Ward was joined at a news conference by state Rep. David Levdansky and Jan Jarrett, president of the environmental group PennFuture.

“I don’t really think at this point there needs to be any additional givebacks to an industry that is characterized by … increasingly large, multinational energy giants,” said Mr. Levdansky, D-Forward.

But Nathan Benefield, of the conservative Commonwealth Foundation, said it is unfair to tax natural gas companies in Pennsylvania on a higher level than other businesses.

“I don’t think they understand what a tax exemption is,” he said. “What they are calling for is a new tax specifically on those new companies.”

Original Article

Read more: http://www.post-gazette.com/pg/10176/1068115-454.stm#ixzz0rrkryfKt

China is playing catch up to Asian rivals in the race to buy into North America’s shale gas sector, underlining how the world’s second-largest energy consumer is waking up to the potential of a technology that could unlock a massive resource at home.

In a week when India’s Reliance Industries Ltd. placed its second big bet on shale gas—a $1.36 billion deal for a 45% stake in Pioneer Natural Resources Co.’s Eagle Ford asset in the U.S.—China made a less high-profile move.

China National Petroleum Corp., China’s biggest state oil company, signed an initial agreement Thursday with Canada’s Encana Corp. that could lead to the companies jointly investing in the development of shale gas reserves in British Columbia.

[CHINAGAS0625]

“CNPC would invest capital to earn an interest in the assets and gain an advanced understanding of unconventional natural gas development through an ongoing sharing of technical knowledge,” Encana said in a statement.

The move is significant as the International Energy Agency estimates China has reserves of 26 trillion cubic meters of shale gas, which it hasn’t been able to access due to a lack of drilling know-how. Shale gas is trapped in relatively impermeable rock, and producers need to crack the tight rock formations using streams of water and chemicals.

Up to now, China has focused on persuading other countries to share this technology, arguing that a better use of its own energy resources would ease pressure on tight global markets. A Sino-U.S. Shale Gas Resource Cooperation Initiative was launched during U.S. President Barack Obama’s first state visit to China last year.

China has also flirted with opening up its tightly controlled onshore gas sector to foreign companies in order to exploit its shale gas reserves. In November, Royal Dutch Shell PLC and CNPC’s listed unit, PetroChina Co., signed an agreement to evaluate shale gas in southwestern China’s Sichuan province.

But a reluctance by China’s state companies to share a resource that could become a major growth area for output and profits is hindering talks with foreign companies for further deals.

This is creating problems—China’s Ministry of Land and Resources wants annual shale gas output capacity to reach 15-30 billion cubic meters by 2020, from negligible levels now.

Boosting output would aid China’s efforts to cut its reliance on crude oil and reduce greenhouse gas emissions, and could help avoid a repeat of widespread natural gas shortages earlier this year that led to the rationing of supplies to industry.

Beijing wants natural gas to account for 10% of the nation’s energy mix by 2020, up from 3% in 2005. It now accounts for around 4%.

The CNPC-Encana framework agreement signals China’s state companies are starting to take a more aggressive approach to acquiring expertise in shale gas development to ensure it meets these goals.

Investment from well-heeled Chinese companies in shale gas is likely to be attractive to North American producers, especially those with small market capitalizations, as it would help them to keep drilling despite restricted cashflow from low natural-gas prices.

Randy Eresman, Encana’s president and chief executive officer, said a joint venture with CNPC has the potential to lower costs, reduce risks, improve project returns and tap natural gas opportunities “that would otherwise remain dormant for some time.”

A delegation headed by CNPC President Jiang Jiemin and Vice-President Wang Dongjin visited ConocoPhillips’ Barnett shale gas development in Texas in mid-April, CNPC stated on its website.

Original Article