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USA: Environmental Groups Challenge EPA’s Permits for Shell’s Drillships

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On October 21, the U.S. Environmental Protection Agency issued an air pollution permit for the Kulluk drill ship that Shell Offshore Inc. plans to use in offshore oil drilling efforts that could begin as early as next summer.

Yesterday, on behalf of the Native Village of Point Hope, Resisting Environmental Destruction of Indigenous Lands (“REDOIL”), Alaska Wilderness League, Center for Biological Diversity, Natural Resources Defense Council (“NRDC”), Northern Alaska Environmental Center, Ocean Conservancy, Oceana, Pacific Environment, Sierra Club, and The Wilderness Society, Earthjustice filed an appeal with the EPA’s Environmental Appeals Board challenging a similar EPA permit for the Discoverer drill ship that the agency approved last month.

The following statement is from Earthjustice attorney Colin O’Brien:

“The EPA essentially is green-lighting dangerous Arctic Ocean oil drilling by approving the air permit for the Kulluk drill ship. Shell Oil​ has proposed a massive drilling operation in one of the most remote places on the planet. Each year, this fleet of ships could emit 30 tons of particulate matter, 240 tons of nitrogen oxides and 80,000 tons of carbon dioxide. Not only is oil drilling risky, these ships would double the amount of global warming pollution produced by roughly all of the North Slope Borough households.

“This permit for the Kulluk marks the beginning of a wave of potential offshore industrial activity in the Arctic. Unfortunately, on the eve of a potentially massive influx of oil company development, the EPA has turned a blind eye to the cumulative impacts that would be harmful to the health of Alaska Natives and the environment for years to come.

“The EPA unfortunately has already approved another drill ship permit, for the Discoverer. That permit ignored the impacts these drill ships will have on air quality in the region and we filed an appeal today with the EPA’s Environmental Appeals Board challenging the Discoverer permit.

“Arctic Ocean oil drilling is simply a bad idea. In an area with 20-foot sea swells, walls of ice 6 feet thick, and complete darkness two months out of every year, the thought of cleaning up an oil spill is ludicrous. The EPA’s decisions on these air permits moves us closer to the inevitable disaster that would be a large oil spill in the Arctic Ocean.”

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Obama’s obligation to free up Gulf oil

More oil-drilling permits would bolster economy and decrease deficit

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By Lori LeBlanc
The Washington Times

One year ago last week, President Obama lifted his moratorium on deepwater drilling that five months earlier had halted operations on 33 rigs producing energy in the Gulf of Mexico. Since then, the industry has worked tirelessly to comply with new federal regulations and permitting requirements, while independently developing and implementing operating practices designed to further enhance safety and environmental protection on deepwater rigs. Yet a full year after the moratorium was lifted, federal permitting for drilling in the Gulf continues to greatly lag behind America’s demand – and capacity – for domestic energy development.

Every day, thousands of Americans whose livelihoods depend on a healthy Gulf energy industry feel the impact of the Gulf slowdown through lost wages, delayed jobs and a general sense of unpredictability about the future of an industry they count on to put food on the table. Local, state and federal government budgets also feel the impact through decreased sales tax and royalty revenue. The Gulf energy industry stands ready and waiting to provide jobs to a nation desperately in need of them. It’s high time to put American energy back to work.

In the wake of the Gulf spill, industry and government have collaborated in an unprecedented effort to rethink and re-engineer safety and response procedures and capabilities in the Gulf of Mexico. Workers are ready to get back to work fueling this nation. The rest lies in the hands of the Department of the Interior, whose regulators verify compliance and issue permits for exploration and drilling operations. Unfortunately, this permitting process continues to move at a pace that does not reflect an industry’s capability to invest and create good-paying jobs.

Permits are essential to the industry’s viability. Since the deepwater moratorium was lifted, only 14 permits have been issued for unique new wells allowing operators to drill to full depth for the purpose of production. For such a capital-intensive industry, where each new deepwater drill ship costs about $1 billion and employs hundreds of workers, those 14 permits over an entire year are simply insufficient to meet production demand or even to keep rigs in the Gulf. Of the original 33 rigs affected by the moratorium, 10 have left the Gulf in favor of markets where permitting is more predictable and transparent. Given the time and expense required to move these floating factories, it’s unlikely they’ll return anytime soon.

The most glaring loss, however, is the significant job opportunities forsaken each and every day as the permitting slowdown lingers. A recent study by IHS CERA concluded that a more-efficient and timely permitting process could create more than 200,000 new jobs in the United States, one-third of which would be generated outside the Gulf region in states like California, Florida, Illinois, Pennsylvania and New York. In today’s world, that amounts to a stimulus package in itself – and one that doesn’t require American taxpayers to foot the bill.

In fact, a healthy Gulf industry puts money back into the pockets of American taxpayers via revenue flows to the U.S. Treasury. The offshore industry paid $8.3 billion in royalties and $9.4 billion in new lease bids in 2008. In 2010, those numbers shrank to $4 billion in royalties and $979 million in lease bids. While the numbers for 2011 aren’t in yet, they’re likely on track with 2010 figures. Yet, according to the IHS CERA study, an industry operating under an improved permitting process could generate $12 billion in tax and royalty revenues by 2012.

The last ripple effect of the permitting slowdown may not pinch Americans today, but it has the potential to hit our pocketbooks in the months and years to come. By allowing rigs to depart the Gulf and discouraging the large-scale investment necessary to meet our future energy needs, our government’s lack of urgency to restoring Gulf energy puts us all in a precarious position. If and when we decide to harness the true potential of the Gulf, we may find that the investment and equipment simply isn’t there. This translates to greater reliance on foreign suppliers, less control of our own energy supplies, and living in the hope that unforeseen political developments somewhere overseas don’t push prices at the pump even higher.

The Gulf has a lot to offer Americans: jobs, revenue and a valuable domestic energy supply. A multitude of American workers are motivated to get back to work today. Virtually every American stands to gain by encouraging investment in domestic energy production. It’s time for our government to clear the permitting bottlenecks for Gulf drilling activity and get this nation back to work with American energy.

Lori LeBlanc is the executive director of the Gulf Economic Survival Team.

 Source

Breaking Precedent: Oil Firms Face Liability Protection Challenges

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By gCaptain Staff

HOUSTON —The U.S. government broke precedent by issuing citations to contractors Halliburton Co. and Transocean Ltd. in the Deepwater Horizon oil spill, along with rig operator BP PLC.

While now facing greater scrutiny from regulators, contractors in the oil-service industry have considerable liability protection to fight the citations and any subsequent fines, legal experts say. They also have enough market muscle to strengthen liability protection in their contracts with oil companies.

Previously, U.S. regulators have held the rig operator responsible for whatever happens under its watch. The operator hired contractors, who perform drilling, seismic or cementing operations and whose contracts protected them from any liability.

That was upended by the Deepwater Horizon mishap in April 2010, which resulted in 11 deaths, the biggest accidental marine oil spill in history, and tens of billions of dollars in costs. BP said blame also falls on Halliburton, which was in charge of cementing the failed well shut, and Transocean, the drilling contractor that owned the Deepwater Horizon rig. U.S. investigations have widely cast the blame among all three companies.

The citations, issued Wednesday, set a precedent for holding contractors at least partially responsible for such accidents, and may increase the contractors’ exposure to civil suits from anyone claiming damages from the spill, analysts said.

The contractors have pledged to fight the accusations. Halliburton said that it is fully protected against penalties and losses from the Deepwater Horizon incident by its contract with BP. Transocean also said it intends to appeal.

However, if the courts determine that the government has the right to issue a citation to oil-service contractors, there is no contract that will protect them from the fine, according to Larry Nettles, an environmental attorney with Vinson & Elkins, a Houston law firm. “In most jurisdictions the courts do not allow indemnification for fines and penalties, because it defeats the purpose,” which is to punish bad behavior, Mr. Nettles said.

Still the industry is expected to bulk up its contracts even more in the wake of the regulators’ action, legal experts say, to get as much liability protection as possible. The contractors currently have considerable bargaining power to win such new concessions from rig operators on contract protection. Relatively high oil prices have led to a shortage of drilling crews and have put oilfield services at a premium, giving the contractors the upper hand in negotiations.

“When oil prices are high and there’s lots of activity, service contractors can drive a very hard bargain,” said Owen Anderson, a professor of law specializing in energy at the University of Oklahoma.

(c) 2011 Dow Jones & Company, Inc.

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IER Identifies Coal Fired Power Plants Likely to Close as Result of EPA Regulations

“So if somebody wants to build a coal-fired plant they can. It’s just that it will bankrupt them…”

– Barack Obama speaking to San Francisco Chronicle, January 2008

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Will EPA‘s regulations shut down power plants in your state?

The United States has the world’s largest coal resources. In fact we have 50 percent more coal than Russia, the country with the next largest reserves. But coal use in the United States is under assault.

Before becoming President, Barak Obama promised to bankrupt coal companies. As President, he has tried various strategies to force Americans to use less coal. After failing to pass a national energy tax (cap-and-trade), the President vowed to continue his attack on coal stating, there is “more than one way to skin a cat.”

Currently, EPA is leading the Obama administration’s assault on coal with a number of new regulations. Two of the most important are the “transport rule” and the “toxics rule” (Utility MACT). Combined, these regulations will systematically reduce access to affordable and reliable energy. According to our report:

EPA modeling and power-plant operator announcements show that EPA regulations will close at least 28 gigawatts (GW) of American generating capacity, the equivalent of closing every power plant in the state of North Carolina or Indiana. Also, 28 GW is 8.9 percent of our total coal generating capacity.

  • Current Retirements Almost Twice As High As EPA Predicted

EPA’s power plant-level modeling projected that Agency regulations would close 14.5 GW of generating capacity.  That number rises to 28 GW when including additional announced retirements related to EPA rules, almost twice the amount EPA projected.  Moreover, this number will grow as plant operators continue to release their EPA compliance plans.

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How to produce energy and jobs without all the waste

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Simply issue drilling permits, and Gulf oil rigs will do the rest.

By Jim Noe
The Washington Times

As news continues to break about the bankruptcy of the government-backed solar- panel manufacturer Solyndra LLC, much commentary has focused on who said what inside the ad- ministration prior to the company’s collapse. But the implosion of a company once touted as a symbol of the booming job creation that would accompany America’s energy future brings larger lessons about our country’s energy and economic needs.

Our country’s energy future hinges in large part on how we manage the gradual transition to a blended energy supply portfolio based in part on next-generation, sustainable energy sources such as solar, geothermal, wind and others that have yet to emerge. The question we need to ask ourselves as we undertake this long-term process is: What do Americans need now, and where can we find it?

Unfortunately, the administration seems inclined to duck that question, favoring poster-ready solutions like Solyndra over more pragmatic discussions about how best to use our country’s existing resources. Its reluctance is a shame, as it comes at the cost of unrealized energy production and forsaken American jobs – particularly in the Gulf of Mexico region.

How have administration energy policies – so friendly to unproven prospects like the solar-powered Solyndra – treated the proven assets we have in the Gulf of Mexico? Not quite as sunnily, to say the least. A host of new permitting requirements have been developed in the past 1 1/2 years for exploration and development of offshore resources in the Gulf. While meant to promote the safest and most environmentally friendly operations possible – goals heartily shared by industry, whose long-term viability depends on sustainable production – the process by which companies secure permits for exploration and production has become unpredictable and opaque.

While there is robust demand for drilling in the Gulf, the pace of issuing permits for new wells (5.2 per month) has slowed to a trickle not seen since energy demand nearly evaporated during the recessionary days of 2009. What this means in real-world terms is that it can take an operator three months to secure a permit for a new well – a time frame that is insufficient to satisfy demand. On top of that, the backlog of permits awaiting decisions within the Department of the Interior just reached its highest level since the Gulf spill 1 1/2 years ago.

According to the administration’s own Energy Information Administration (EIA), U.S. energy output is slated to decrease by 250,000 barrels per day per year under domestic energy production policies. EIA forecasts show Gulf production declining 14 percent both this year and next, a drop of approximately one-third of 2010 amounts by the end of 2012.

By the same token, our current energy policies have allowed a historic loss of drilling rigs to occur, jeopardizing our ability to produce our natural resources. Since 2001, 78 jack-up drilling rigs have left the Gulf, leaving 42 currently available. Thirteen rigs have left the Gulf since April 2010 alone. The departure of these high-technology, capital-intensive rigs means our country’s capacity to ramp up production likely has been curtailed for years to come.

The job losses associated with the administration’s reluctance to support offshore production are also severe. According to a study by IHS Global Insight, run by renowned energy analyst Daniel Yergin, “In 2012, the [Gulf oil and gas] industry could create 230,000 American jobs, generate more than $44 billion of U.S. [gross domestic product], contribute $12 billion in tax and royalty revenues, produce 150 million barrels of domestic oil, and reduce by $15 billion the amount the U.S. sends to foreign governments for imported oil.” The study also cites benefits outside of the Gulf, with one-third of new jobs generated in California, Florida, Illinois, Georgia and Pennsylvania.

There is one final lesson to be noted here. While the Solyndra collapse likely will end up costing the American taxpayers who helped fund the company’s expansion, production of our natural resources in the Gulf adds money to the U.S. Treasury – something you don’t see a lot these days. In 2008, the offshore industry paid $8.3 billion in royalties and $9.4 billion in bids on new leases. In 2010, the numbers fell sharply because of the spill and the drilling moratorium, with payments falling to $4 billion in royalties and just $979 million in lease bids. The outlook for 2011 revenues under the current pace of permitting is more on track with 2010 than 2008.

The future of U.S. energy supplies will no doubt hinge on developing resources that are only now emerging onto the scene. Today’s needs call for more tangible action. To boost jobs, energy supplies and U.S. Treasury revenue, the administration should prioritize improvement in the Gulf permitting regime rather than let energy policy be guided by politics.

Jim Noe is senior vice president, general counsel and chief compliance officer of Hercules Offshore Inc., the largest shallow-water drilling company in the Gulf of Mexico. He also is executive director of the Shallow Water Energy Security Coalition.

Original Article

Vitter to Feds: Lower Deficit by Increasing Energy Production

Energy lease sales drop to zero as permitting remains slow under Obama administration

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Even as the Obama administration postures on behalf of deficit reduction and job creation, it continues to advance policies that undermine energy production in the Gulf region and lower federal revenue, Sen. David Vitter (R-La.) has pointed out in his correspondence with top officials in Washington D.C.

In a letter addressed to Interior Secretary Ken Salazar and Bureau of Ocean Energy Management Regulation and Enforcement (BOEMRE) Director Michael Bromwich, Vitter warned of a severe revenue falloff attached to declining energy lease sales.

“Under the Obama administration’s management, revenue from our offshore lease sale program has gone from $10 billion to nothing in just three years,” Vitter said. “Revenue cannot be generated from sales that do not happen, and jobs cannot be created on leases that private industry cannot acquire. We’re in a severe fiscal crisis and we’re facing significant economic challenges related to job creation, yet the administration continues to neglect our offshore resources.”

In fiscal year (FY) 2008 revenue from bonus bids on offshore leases was approximately $10 billion, but for FY 2011 that amount is down to zero, according to Vitter’s letter.

Unless the administration reverses course, Vitter anticipates “long-term economic impacts that include lost jobs, lost royalties and lost rental fees.” Companies will be reticent to own a lease if they cannot be reasonably certain that exploration plans or permits will be approved, he added.

Daniel Kish, senior vice-president of policy with the Institute for Energy Research (IER), sees an “opportunity cost” for the Gulf region that may not be recaptured anytime soon.

“The Obama administration has virtually put a stop to energy development in federal waters,” Kish said. “This is like planting seeds, if the government won’t allow to the seeds to be planted now, they are preventing future production. We are talking about a lost generation of economic activity.”

In September, President Obama rolled out a new deficit reduction plan built around income tax increases for higher income Americans.

“We can’t just cut our way out of this hole,” Obama said during a speech at the White House.  “It’s going to take a balanced approach. If we’re going to make spending cuts … then it’s only right that we ask everyone to pay their fair share.” Obama also said that would veto any deficit reduction plan that includes only spending cuts and no tax increases.

“When you include the $1 trillion in cuts I’ve already signed into law, these would be among the biggest cuts in spending in our history,” Obama continued. “But they’ve got to be part of a larger plan that’s balanced –- a plan that asks the most fortunate among us to pay their fair share, just like everybody else. And that’s why this plan eliminates tax loopholes that primarily go to the wealthiest taxpayers and biggest corporations –- tax breaks that small businesses and middle-class families don’t get.”

But the slow pace of permits for oil drilling also contributes to the deficit, Vitter explained in a previous letter to administration officials. The right mix of policies could unleash America’s abundant supply of domestic energy resources, which would in turn boost revenue into the federal treasury, Vitter argued.

“I share the frustration of Louisianians and Gulf Coast residents with the disparity between  the president’s rhetoric and the Interior Department’s actions,” Vitter said. “The administration’s policies have led to massive deficits and job losses, especially in Louisiana, and it’s time for the president to stop lecturing about job creation and allow our energy industry workers to get back to work.”

Without a higher volume of additional permits, the number of active oil rigs will continue to decline in the Gulf, Vitter warned in one of his earlier letters. The 2011 permitting rate is well below the historical average, Vitter observed.

As of early September, “there were 19 floating units operating in the Gulf, up from four in the third quarter of 2010, but down from the average of 28 recorded in the 2007-2009 period,” he wrote.

Up to 20 oil rigs could leave the Gulf, in addition to 11 that have already left, since the administration’s moratorium on deepwater oil and gas drilling went into effect in May 2010, the Pelican Institute has reported.

The future could still be bright for the Gulf coast with the right mix of policies, the American Petroleum Institute (API) has concluded in a new study.

If U.S. companies were permitted to drill with fewer regulatory hurdles, they could boost government revenues by $800 billion and generate over a million new jobs by 2030, according to API.
But even with a change in administration heading into 2013, the Gulf region is not likely to experience a robust recovery in the short term, Kish, the IER policy expert, warns.

“It will take time to correct these policies,” Kish said. “The Obama administration has shifted the entire ground on which the Gulf of Mexico operates.”

Kevin Mooney is an investigative reporter with the Pelican Institute for Public Policy. He can be reached at kmooney@pelicaninstitute.org and followed on Twitter.

Original Article

Obama’s Interior Chokehold on America

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By Jim Adams

How could a bureaucratic bottleneck in the Gulf of Mexico cost the U.S. economy nearly $20 billion and wipe out hundreds of thousands of jobs as far away as Ohio, Pennsylvania and California? Unfortunately, with this White House administration, anything is possible.

President Obama recently announced yet another jobs initiative — knowing all the while that one very simple action on his part would indeed create new jobs, infuse federal and state budgets with billions of dollars, and make us less reliant on imports. But that didn’t happen.

On Oct. 12, 2010, Interior Secretary Ken Salazar said, “We’re open for business,” signaling that drilling for new oil in the Gulf of Mexico would resume. But, Mr. Salazar has an odd interpretation of the words “open for business.”

Eleven months after the Secretary’s announcement, drilling in the Gulf remains near a standstill. The government has used every stall tactic imaginable to delay permits and other administrative approvals that would help our economy and put hundreds of thousands back to work.

The Gulf Economic Survival Team (GEST) commissioned IHS Global Insight and IHS CERA Inc. to quantify the economic impacts of the government’s slow pace of permitting since lifting the moratorium. Their study revealed that the number of exploration plans and permit applications are on par with levels in 2009 through early 2010, clearly signaling the industry’s intent to return to full operations. Industry also has invested billions of dollars in well containment technology to stop a Macondo-size spill if it ever became necessary. So safety can no longer be blamed for permitting delays.

That leaves the Department of the Interior. The IHS study points to a backlog of project approvals. Despite their earnest efforts to process the growing stack of applications, regulators on the front line don’t appear to understand the new regulations that Washington D.C. has foisted upon them.  The blame for this falls squarely on the shoulders of this Administration’s politically appointed bureaucrats, who know nothing of the complexities involved in safe and environmentally sound deepwater drilling. Naturally, they don’t let expertise or experience get in the way, they just pile on more regulations.

This politically minded bureaucracy comes at tremendous cost.

The number of people who depend on a thriving oil and gas industry is staggering. Another research study, by Quest Offshore Resources, found that energy production in the Gulf of Mexico employed 240,000 Americans in 2010. And not all of them worked directly for the oil and natural gas industry, as oil rigs need everything from steel pipes to IT support.

What’s more, the effects of the government’s continued foot-dragging isn’t limited to the Gulf. The study’s authors found that for every industry job tied to operations in the Gulf, three non-industry jobs are reliant in sectors such as manufacturing, construction and real estate. And for every three Gulf Coast workers, there’s one American employed elsewhere — in New York, Michigan, California, Oklahoma, Colorado, Pennsylvania, Ohio, Illinois and nearly every other state.

The Quest study also came to a distressing conclusion: Had the Administration truly lifted the moratorium last October, the industry would have created nearly 190,000 more jobs in the U.S. over a three-year period. That would have meant 8,500 additional jobs in California, where unemployment currently flirts with 12 percent; 10,000 more jobs in Pennsylvania and Ohio, manufacturing-dependent states; and in the President’s home state of Illinois, a total of 3,000 jobs.

Keeping Americans out of work. Denying struggling state and local governments billions of dollars in additional revenue. Making us more dependent on energy imports. Is this the change Mr. Obama says we can believe in?

Or can we only believe in shovel-ready jobs if they’re created by the alternative energy industry? Would we even be having this yearlong debate if solar energy producers contributed more than $12 billion a year in tax and royalty revenues to state and federal treasuries? What if hydro energy producers accounted for $44 billion of GDP? The only thing separating 190,000 Americans from a paycheck and states from more than $7 billion in local taxes is obvious: Political will.

President Obama talks about job growth, stimulating the economy and investing in innovation that will lead the way forward, but turns a blind eye to an obvious, if not practical, solution. Mr President: Lift your de facto moratorium on energy exploration in the Gulf of Mexico; business will safely do the rest.

Jim Adams is president and CEO of Offshore Marine Service Association, which represents the owners and operators of U.S. flag offshore service vessels and the shipyards and other businesses that support that industry.

Original Article

Family firm still struggling, 18 months after Gulf oil spill

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Leslie Bertucci, co-owner of R&D Industries in Harvey, stands in front of the company’s compartmentalized storage tank, designed by her husband and co-owner Dan Ness.

Earlier this month, a flatbed truck lumbered slowly out of the gravel parking lot at R&D Enterprises in Harvey, bearing a huge red-and-yellow storage tank bound for an oil rig in the Gulf of Mexico.

Watching it leave, co-owner Leslie Bertucci raised her camera phone and snapped a couple of pictures of a cherished sight in the last few months: a paying customer.

For R&D, this was rain after a drought, a breath of oxygen flowing into a small oilfield supply company that has been gasping for air. The company, which rents modular storage containers and racks to offshore rigs, has managed to stay in business since the Deepwater Horizon exploded last year and radically reshaped deepwater drilling in the Gulf.

But it’s been grueling.

R&D survived a four-month deepwater drilling moratorium that ended in October. Since then, it has been struggling to navigate the re-made regulatory environment that has settled over the Gulf, leaving drilling activity far short of where it was when Deepwater Horizon blew, killing 11 workers.

Bertucci and her husband, Dan Ness, founded R&D 11 years ago in their house in Metairie to manufacture and rent specialized equipment to deepwater drillers. When the moratorium clanged down and the Gulf went quiet, Bertucci said revenue plunged 80 percent almost overnight.

The company survived, in part, by enforcing furious economies, Bertucci said.

The couple slashed their own salaries by 75 percent. Months later they eliminated them entirely, and then began shoveling personal savings into company operations.

Bertucci said they slashed every discretionary nickel, ended their practice of cookouts or gifts for customers, cut off all charitable contributions.

Remarkably, over the course of 18 months, R&D has held on to its small workforce of a dozen or so employees.

“We didn’t lay off anybody but ourselves,” she said.

‘Not a penny

Meanwhile, Bertucci learned that R&D didn’t qualify for compensation from a $20 billion fund that BP established shortly after the spill.

Although the company had contracts in hand, it received no compensation for lost revenue, or for the estimated $144,000 in equipment that went to the bottom of the Gulf with the Deepwater Horizon.

“We haven’t received a penny. Not a penny,” she said.

However, since the spring, business has inched back up, “but it’s excruciating how slow it is.”

“I didn’t think a year and a half ago I’d be excited to have the numbers I have today,” she said. “They’re not great. But they’re creeping back up slowly.”

Bertucci said she and Ness are back on the payroll, but business is still down more than a third of what it was before the oil spill. The day of the BP disaster, Bertucci said her company had equipment on 23 deepwater rigs; today they’re on 12.

If her projections work out, Bertucci expects that next summer the business will be where it was in June of 2010.

Depressed deepwater drilling

On the day BP’s rig blew, 33 deepwater rigs were operating in the Gulf.

Today there are about 34, but only about half are drilling, said Eric Smith, associate director of the Tulane University Energy Institute. The rest are awaiting permits.

Just last week, a joint report by the Coast Guard and the Bureau of Ocean Energy Management, Regulation and Enforcement found that BP, Halliburton, its drilling contractor and Transocean, owner of the Deepwater Horizon, took disastrous shortcuts that led to the blowout of the 18,000-foot Macondo well, killing 11 crew members and spilling nearly 5 million barrels of oil into the Gulf.

Since the relaxation of a moratorium after the spill, Gulf deepwater drillers have been operating in a new environment in which regulators have ordered increased oversight at every stage of oil and gas development, and invited more government agencies to consult and comment on drilling permit applications, Smith said.

The result is that permit applications are significantly backlogged and deepwater drilling remains depressed.

Pleading their cases

In the months since the spill, Bertucci has become a highly visible spokesperson for thousands of small secondary businesses that support — and are supported by — the multi-billion-dollar corporate behemoths in the oil and gas industry.

Bertucci has pleaded the case of small businesses in Washington and before the president’s National Oil Spill Commission in New Orleans. She is the subject of a short pro-business video by the Heritage Foundation and the Institute for Energy Research.

Her message is clear: although the blowout was a disaster, the moratorium was an overreaction, and the post-moratorium regulatory environment has tilted the balance of oversight versus production too far in favor of oversight.

During the slowdown, Bertucci and Ness began looking to other markets for business. In the last few months, they have sought an international technical certification for their tanks and racks so they can bid on deepwater jobs in other regions — especially Brazil, which appears to be the preeminent new deepwater market.

During the darkest days of the moratorium, Bertucci frequently said the company needed to keep a full workforce on hand for the day the moratorium was lifted, for on that day, she believed, R&D would be swept off its feet with customers stampeding back into the Gulf.

It hasn’t worked out that way at all.

“It turned out to be sort of a joke. A joke on us,” she said.

“It was a very cruel joke.”

Bruce Nolan can be reached at bnolan@timespicayune.com or 504.826.3344.

Original Article

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