The New York Times: Offshore Oil and Hurricanes: Deeper May Mean Riskier

By REUTERS
Published: May 23, 2007
Filed at 11:50 a.m. ET

HOUSTON (Reuters) – As oil companies working in the Gulf of Mexico prepare for an active hurricane season, experts say more drilling in deeper waters farther out to sea has made the United States more vulnerable to energy disruptions.

Forecasters have predicted that as many as 17 named storms, five of which could be major hurricanes, will form this season in the Atlantic Basin, which includes the gulf. The season starts June 1 and runs through November 30.

Companies have shored up offshore rigs with additional mooring lines and higher decks and added sophisticated equipment to monitor operations during storms and immediately afterward.

But experts say the quest for oil and natural gas in deeper waters has put more drilling rigs, producing platforms and pipelines in the path of storms intensified by the warm “loop current” in the middle of the Gulf.

“The theory is that storms get over the warmer loop current and intensify — not all of them, but some,” said Andy Radford of the American Petroleum Institute. “The problem is, as we have gone deeper into the Gulf, we’re getting farther offshore, and we’re feeling the effects.”

The Gulf of Mexico is the source of 30 percent of U.S. domestic oil production and 20 percent of its natural gas output. Refineries supplying the nation with fuel dot the Gulf Coast. Gas pipelines run from the Gulf across the country.

Seventy percent of the gulf’s oil and 40 percent of its gas come from waters deeper than 1,000 feet, even though 1 percent of the 3,800 platforms are there, the U.S. Minerals Management Service says. Thus, storm damage to one has a big impact.

In 2005, Hurricanes Katrina and Rita knocked out a quarter of U.S. crude and fuel production, toppling offshore platforms, destroying undersea pipelines, flooding coastal refineries and sending energy prices to then-record highs.

This year, refining and pipeline companies have stocked up on generators, food and trailers to keep operations running in the event of a major storm.

Offshore operators have increased the number of mooring lines on most mobile drilling rigs from eight to 12 to keep them from breaking free during a storm.

Jackup rigs — which float out, lower legs and stand on the bottom to drill — are setting decks higher to avoid storm waves. And better planning is expected to keep them out of undersea mudslide areas and minimize risks to pipelines.

BETTER PREPARED

The first named storm of 2006, Andrea, formed in May, before the start of the season, boosting companies’ concern.

“Having already seen a storm, they’re working frantically to make sure everything is ready,” BP Plc spokesman Neil Chapman said.

Officials have put particular emphasis on keeping oil and gas flowing by using backup pipeline routes and barges or ships to move oil if pipelines break. “We’re working with other operators to come up with options for flow assurance,” said Shell spokesman Fred Palmer.

To improve future preparedness, companies have installed more data-gathering equipment on rigs and platforms.

“When we see the next big storm, we’ll have more data and will probably make more refinements to our standards,” said API’s Radford.

Meanwhile, the hope is to avoid the record disruptions of 2005, a season in which Katrina killed at least 1,300 people and did an estimated $81 billion in damage, a U.S. record.

“We feel pretty confident at this point, but you never know what could happen,” said Bill Holbrook, spokesman for the National Petrochemical and Refiners Association.

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