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Page added on July 1, 2010
US Offshore Drilling Ban Compounding the damage?
As analyst Robert Rapier points out, the large companies doing the drilling “will not be the big losers from this decision. That honor is reserved for many of the individuals and businesses along the Gulf Coast that have added jobs and made investments to serve this growing market.”
Oil is a product of the sea. Nature’s most prolific biomass, ocean algae, settles into the mud and silt on the ocean bottom. The mud is covered by other layers like sand, salt, and sea shell limestone, and it cements into shale, the source rock for the world’s oil and much of its natural gas. If you discover oil on land, it’s a place that once was a sea bottom. We have found and produced most of the land and near-shore based “easy oil.” The majority of what’s left is in the deeper ocean.
The US Department of Energy forecasts that “a vast majority” of projected increases in US oil production in the near term will come from Gulf of Mexico deepwater fields similar to the site of the tragic Deepwater Horizon spill. Such deepwater fields currently represent about 70% of all gulf oil production (the other 30% comes from shallow depths, typically of a few hundred feet).
Offshore oil provides almost a third of total US oil production of 5.5 million b/d, and that percentage is rising rapidly.
The president’s decision to halt new deep water drilling projects makes sense as we review safety procedures. But the decision regarding ongoing wells compounds the economic damage to an already stricken region.
There’s an eerie similarity between the cancellation of 51 American nuclear reactor builds after the 1979 Three Mile Island meltdown and President Obama’s cancellation of 30 ongoing deepwater drilling programs in the Gulf of Mexico.
Those 51 additional nuclear reactors could have been producing low-cost, carbon-free power like the 104 US reactors that did go online. Those ongoing gulf drilling projects are by operators with a long record of safe drilling programs, seeking oil the US won’t have to import.
Shortly after the explosions and fire, Interior Sec. Ken Salazar ordered Minerals Management Service (MMS) personnel to inspect those deepwater drilling rigs and their blowout preventers. According to the inspectors’ report on May 9, there was only one incident of noncompliance, and all were fit for duty.
Aware of the economic impact of those drilling programs with their numerous onshore suppliers, Charlotte Randolph, president of LaFourche Parish, said she spoke to Obama in person during one of his visits to the oil-stricken region. “I expressed to the president that we are dying because of the oil spill, but if he allows this suspension to happen it will kill us,” she told reporters.
The companies drilling have paid the government millions for leases and have contracts with drillship and rig suppliers and others. They cannot afford to leave rigs and crews in place for 6 months or longer. They will need to find homes outside the US, leaving the partially completed wells as dry holes.
2 Comments on "US Offshore Drilling Ban Compounding the damage?"
Edpeak on Sun, 4th Jul 2010 10:17 am
““will not be the big losers from this decision. That honor is reserved for many of the individuals and businesses”
Of course not, you’re not thinking of your own profits, oh no, you’re kind-heartedly thinking about OTHERS. Always thinking about OTHERS and how you can help them…
“Offshore oil provides almost a third of total US oil production”
A perfect example of lying with numbers. The question is not “offshore” but deepwater and ultra-deepwater, those make about 23% of production. But more relevant, what percent of U.S. consumption, that is what percent of what we actually need and use? (it’s going to be a smaller percent of this larger “consumption” number)
Gulf of Mexico deepwater and ultra-deepwater are about 8% of U.S. CONSUMPTION. That’s right, conservation alone of 8% would mean no need to drill in Gulf deepwater or ultra-deepwater.
But Obama didn’t even stop all deepwater drilling, only new projects, existing ones get to continue (he was way too lenient on your oil-profits-over-safety corporate rear ends). So that decline is even less, so even less than 8% conservation…you are you kidding, you want more profits, and you want them NOW and you’ll play the same “the world will come to an end if we get any regulation” tactics that every. flaming. big-business. in. history. Has always played: “we can’t afford air-bags in cars”, “we can’t afford a in cars”, we can’t this, we can’t that, boo hoo, give us more tax-payer subsidied taking tax-payers money and giving subisidies to Big Oil by the bushel, but don’t you dare ever, ever, give a penny to help the ordinary people working class and middle class, cause then you’re gonna get named a so-shu-list and other bad names, just keep the gravy train of billions going to make bombs, wars, prisons, and subsidizing big oil, and big coal (and with loan guarantees and more, big nuke power too, and those are far far from ‘carbon free’, another myth) and let the environment go to hell, that’s the ticket, that’s the plan, but you’re doing it all for OUR good, for OUR sake, out of caring not for your profits in the tens and tens of billions per year, oh no, Big Oil just is looking for us…just like BP and TransOcean were “looking for our interests”
Edpeak on Sun, 4th Jul 2010 10:19 am
Reference: “According to the US Energy Information Administration, deep-water and ultra-deep water drilling..in the Gulf of Mexico, accounts for 23.5% of US oil production. ” and thus about 8% of U.S. consumption. http://news.bbc.co.uk/2/mobile/world/us_and_canada/10177716.stm