Blog Archives

Offshore Drilling: Sneaky Sneaky Administration

Offshore Areas Open for Drilling when President Obama Took Office

Offshore Areas Blocked for Drilling under President Obama’s Final 2012-2017 Plan

By Ashlee Smith on July 13, 2012

The Obama administration is continuing its war on affordable energy for the American public. This time the effects of the administration’s policy decisions will come through the reduction of offshore drilling sites in the 2012-2017 offshore lease plan.  The administration isn’t jumping up and down to bring attention to this issue, probably because there are no positives to be excited about. Further proof of this is the fact the Obama administration released the final plan the day of the Supreme Court’s ObamaCare decision. This distraction diverted most attention away from the drilling plan. Thankfully, the Obama administration doesn’t get the final word in this instance. Offshore drilling plans go through a process of public comment and Congressional review.

The Outer Continental Shelf Lands Act (OCSLA) requires a five-year plan for the production and sale of oil and gas needed to meet American energy needs. The Obama lease plan for the next five years will close 85 percent of the American offshore drilling areas from production. The “new” five-year plan essentially reinstates the 30-year moratorium for offshore energy production. Obama under his “all-the-above” energy plan has been working to restrict offshore drilling access. The uncertainty of the oil and gas drilling industry is causing companies to look to other countries to allow them to do offshore drilling. President Obama is causing unnecessary increases in energy costs and hampering  job creation in various parts of the country, which have millions or even billions of barrels of untouched oil and natural gas. I thought the president said he was going to create jobs and help restore our economy? He has the perfect opportunity to do just that by opening up our Continental Shelf, but he’d rather push unaffordable, unattainable, and unreliable ‘green’ energy companies.

President Obama can’t run from the facts of the situation. His energy policy record is anything but promising for our future. In the last three years of President Obama’s term, offshore lease sale revenue is down over 250 times of what it was prior to him taking office, we went from collecting $9.48 billion to only $36 million in revenue. Even land oil production is down 13 percent from last year.  The new plan Obama is supporting will only exacerbate the problem. The whole Atlantic and Pacific coasts, along with a majority of the Alaskan OCS areas off limits as well. Leases will become shorter, fewer in number, and increasingly costly. Yet Obama continues to stick by his statement that he’s increasing production and reducing oil imports.

Energy Research’s Vice President Dan Kish:

“Millions of Americans are still looking for jobs. The Gulf Coast economy has yet to recover from President Obama’s moratorium on offshore drilling. President Obama has signaled today that he has no regard for our energy future, nor the jobs that a sensible, long-term plan for offshore development would create.”

House Energy Committee Chairman, Fred Upton had this comment to make on the issue:

“While we have seen some respite from rising gasoline prices, Americans are still paying almost double at the pump what they were when President Obama was inaugurated, and we are still just one natural disaster or foreign crisis away from a major supply disruption that could send prices soaring. To stabilize prices, we need a visionary, long-term supply solution. Earlier this month, the House passed a proposal with bipartisan support to remove the president’s barriers to American energy production and job creation. Today’s announcement underscores the urgent need for these commonsense reforms.”

The House Committee on Natural Resources has come up with a replacement plan to Obama administration. This congressional plan would allow for additional oil and natural gas leases, create jobs, encourage offshore energy development, and increase domestic energy production to give America more energy security.


Bill would require vessels on standby

Published: Sunday, April 24, 2011 at 6:01 a.m.
By Kathrine Schmidt
Staff Writer

HOUMA — A safe ride should be close by if something goes wrong offshore.

That’s the goal of a bill introduced last week by U.S. Rep. Jeff Landry, R-New Iberia, which would require that a “standby vessel” be within 12 miles, or a one-hour range, of manned offshore platforms or drilling rigs in the Gulf.

Even though there were life boats and life vests aboard the Deepwater Horizon, when the rig went up in flames some still had to make the “unimaginable” decision to jump overboard in hopes of saving their lives, Landry said.

Had it not been for a supply vessel that happened to be nearby and a fishing boat that helped rescue workers, the death toll could have been higher, he said.

“We could end up with fatalities for no reason,” said Landry, who announced the bill earlier this week and said it would be considered by the House Natural Resources Committee, of which he is a member. “I felt the industry could use a little nudge.”

The bill could mean a big economic benefit for the local offshore vessel industry.

That could translate into valuable support as Landry fights to keep his seat after the redistricting session carved up his 3rd Congressional district, forcing him to run against U.S. Rep. Charles Boustany, R-Lafayette, in a district that favors Boustany.

A spokesman for Landry, Millard Mulé, rebuffed the suggestion that the bill intends to curry favor.

“Saving lives is not political at all,” he said. “That’s what this legislation is about.”

U.S. Rep. Billy Tauzin of Chackbay introduced a similar bill back in the mid-1980s, but it failed amid industry opposition because of the expense.

Landry said he intends the latest legislation, H.R. 1572, to be a “common-sense” solution improving worker safety, but is also willing to work with industry and be flexible on the specifics.

The fate of the bill is still uncertain: Landry doesn’t have any cosponsors yet, and Louisiana Sens. David Vitter and Mary Landrieu didn’t respond to requests this week about whether one of them would introduce a corresponding bill in the Senate.

“The most valuable resource in the Gulf of Mexico is not the oil and gas underneath the Gulf; it is the men and women who are willing to risk their lives to extract America’s energy,” Landry said in a release this week.

But some contend the bill as written would be impractical and redundant, given the thousands of manned platforms in the Gulf, high level of service traffic already present and response capacity from the Coast Guard.

“You can’t put a policeman at every corner,” said Don Briggs, president of the Louisiana Oil and Gas Association. As for safety response, he said, “I think we have those practices in place.”

Others say Landry’s bill is a step in the right direction when it comes to planning for the worst, particularly if a platform is especially remote or inaccessible by air because of bad weather.

Jim Adams, CEO of the Offshore Marine Service Association, said the group has not taken an official position on the bill.

“One of the lessons learned from a year ago is that the industry, in a comprehensive fashion, needs to have better contingency planning for safety,” he said.

“There is a role for an identified vessel to provide emergency response. The particulars of what that capacity would be, and the proximity, needs to be developed in a collaborative matter.”

Original Article

Cuba explores for oil as U.S. watches

Drilling for oil could occur just south of the Florida Keys — in Cuban waters, where the U.S. has little say in operations

By Lesley Clark

WASHINGTON — Less than 75 miles off the Florida Keys, Cuba’s plan to explore for oil and gas in waters even deeper than BP’s Deepwater Horizon well has U.S. officials on alert.

U.S. Interior Secretary Ken Salazar acknowledged this past week that Cuba’s oil and gas explorations are an “issue of concern.’’

“We’re watching it closely,” Salazar said. “Obviously, because it’s located 60 miles off the coast of Florida… it’s an issue that we’re monitoring carefully.”

Cuba is eager to explore for energy off its coast near Havana. The Spanish energy giant Repsol, which drilled an exploratory well in 2004, is expected to drill another five to seven such wells as soon as this fall, said Jorge Piñon, an energy expert and visiting research fellow at the Cuban Research Institute at Florida International University.

Piñon, who attended an oil and gas conference in Havana last week, said the Cuban government is cognizant of its tourism-dependent economy and “is reviewing everything it can from the Deepwater Horizon.” But he acknowledged the country doesn’t have the assets to respond to a spill like the one in the Gulf of Mexico.

“Houston is 900 miles from where the well is going to be deployed and equipment could be there in a matter of hours, but it won’t available because we haven’t sat down with Cuba,” Piñon said.

The Unite States and Mexico — which share the Gulf of Mexico with Cuba — have been meeting to strengthen standards for drilling in the Gulf, but Cuba hasn’t been part of the talks.

The U.S. Bureau of Ocean Energy Management, Regulation and Enforcement has talked with Repsol about its plans in Cuba, but agency director Michael Bromwich says there’s no agreement on a drilling standard. He acknowledged U.S-Cuba policy makes direct talks difficult.

The presidential commission that investigated last year’s BP spill recommended that Cuba and the United States. talk about oil drilling.

A spokesman for the State Department says it hasn’t held any discussions with the Cuban government on oil exploration. “However, we expect any company operating in Cuba’s oil and gas sector to adhere to industry environmental, health, and safety standards and have adequate prevention, mitigation, and remediation systems in place in the event of an incident,” spokesman Charles Luoma-Overstreet said. “We will pursue activities within our legal authority in order to minimize risk to U.S. territory.”

Critics of further engagement with Cuba argue that Cuba has proposed offshore drilling for more than a decade without delivering.

“We’ve seen this dog-and-pony show for 10 years and the fact remains, there’s no drilling,” said Mauricio Claver-Carone, director of a leading pro-embargo lobby, the U.S. Cuba Democracy political action committee. He contends the plans are part of a propaganda campaign by the regime to attract investors and to secure the oil industry’s support for joining the lobby against the embargo. The embargo has already affected Cuba’s operations: It had to secure a rig that didn’t violate the U.S. law that prevents vessels with more than 10 percent of U.S. parts from operating in Cuba.

Claver-Carone suggested that if the rig — now in Singapore — approaches Cuba, there’d be time for Congress to make it even more difficult and expensive for Repsol to proceed. Florida lawmakers have already filed legislation aiming to block Cuba by making it more difficult for foreign oil companies to do business there.

“I don’t understand why anyone would want to facilitate the creation of a petro-dictatorship 90 miles away,” he said.

( Original Article )

Oil companies new Gulf drilling plans called inadequate

Posted on Sun, Apr. 17, 2011 03:00 AM
McClatchy Newspapers

Oil companies recently turned in their first plans for exploratory drilling in deep waters of the Gulf of Mexico, including new information the government has required since last year’s BP blowout about how they’d try to prevent and cope with another oil disaster.

The oil companies that want to explore the seabed below the deep water say they’ve learned from last year’s accident and have better plans in place than they did a year ago, when an explosion on the Deepwater Horizon drilling rig set off the nation’s worst oil spill.

Environmental groups cited several reasons the plans fall short: The system to capture oil at a broken wellhead still hasn’t been proved in the very deep waters; systemic problems with blowout preventers haven’t been solved, and companies were too optimistic about how quickly they could drill the kind of relief wells that ultimately plugged the BP spill.

The plans for the new exploratory wells come as Republicans use high gas prices to push the Obama administration into speeding up permit approvals and expanding drilling.

Government regulators put three exploration plans up for public review earlier this month. The three plans – from Shell Oil, Statoil, the Norwegian state oil company, and BHP Billiton of Australia – follow the government’s new regulations by spelling out details of what worst-case scenarios the companies expect, how they calculate it, what they’ve done to reduce the risk of a blowout and what they’d do to stop the oil if prevention failed.

The Interior Department’s drilling regulatory agency on March 21 approved the first exploration plan – one by Shell Offshore Inc. to drill three wells at 2,950 feet deep. Interior Secretary Ken Salazar said that it met a “strong new standard for safety and environmental protection.”

Environmental groups express concerns during the review period, which ended this past week.

“We’re being told don’t worry, we have these new safety standards. But when you look at what it is, what they have to prove, it’s not very satisfying,” said Jackie Savitz, director of pollution campaigns at Oceana, an ocean conservation group that opposes an expansion of offshore drilling.

Shell Oil, Statoil and BHP Billiton say they have a new system to cap and contain oil in case of an accident and that they’d be able to drill relief wells faster than the five months BP needed last year for the Macondo well.

The exploration plans must be approved before companies can apply for permits to drill. Regulators have approved permits to drill 10 deep-water wells since a post-spill moratorium was lifted.

Oceana and another group, Environment America, argued in written comments that the companies underestimated the time it would take them to drill a relief well. BHP Billiton said it would take 81 days; Statoil said 62 days; and Shell said 128 days.

The environmental groups argued the time probably would be longer, meaning that more oil would flow over a longer period than the companies’ plans show.

They said that the government should require the companies to dig a relief well at the same time as they dig the exploratory well as a precaution or have a drilling rig standing by ready to dig. The companies told the government they each had two rigs that would be in the Gulf and could be called into service. The environmental groups said those rigs would be doing other work, which would delay them from getting started on a relief well.

The groups also said that blowout preventers can’t be counted on, as shown when the device failed in last year’s accident. They also said it’s not clear how long it would take to contain oil in an accident.

Shell, Statoil and BHP Billiton all are members of Marine Well Containment Co., a Houston-based consortium that says its containment system is ready for deployment, could operate in 8,000-foot depths and could process 60,000 barrels of oil a day.

The plans don’t say how long it would take to cap a broken wellhead. Shell’s plan, for example, says only that the equipment could be brought in rapidly.

Marine Well Containment Co. was formed last July. It owns and maintains a containment system that it says is significantly better than previous systems in the Gulf. Houston-based Helix Energy Solutions Group Inc., whose equipment was used in the BP spill, also has equipment to cap a well in deep water.

“The big change compared to how things were before Macondo is that we now have a capping and containment solution for each and every well. That is a big change,” said Ola Morten Aanestad, a Statoil vice president and spokesman in North America.

He said that the industry and its regulators didn’t approve of drilling a relief well in advance, “because every well has a risk and if you drill more than you need you’re actually increasing the risk instead of reducing it.”

But David Pettit, an attorney with the Natural Resources Defense Council, another group that filed critical comments about the plans, said Marine Well Containment’s system is “not ready for prime time.”

Pettit said NRDC, Sierra Club and other groups mainly argued that the government should do a more extensive environmental impact assessment than it planned to do.

The Bureau of Ocean Energy Management, Regulation and Enforcement has 30 days to decide on whether to approve the plans or ask for more information. The agency must look at the amount of oil the companies think could flow and the specific characteristics of the well and decide whether they have the right equipment to be able to stop the flow at the wellhead, drill relief wells and clean up.

Democrats on the House Natural Resources Committee on Wednesday offered amendments that they said would improve safety by requiring measures to prevent blowouts, but the amendments failed.

The Republican-controlled House of Representatives is expected to pass legislation that would set deadlines for permit approvals in the Gulf of Mexico and open waters off Southern California, much of the Atlantic Coast and parts of Alaska to offshore drilling.


Republicans argue that President Barack Obama’s restrictions on drilling are leading to higher gasoline prices.

If the U.S. were to step up domestic oil production, would it make a difference on the price of oil? That’s debatable and in some senses not completely knowable.

The price of oil is a global price, set by financial markets and not end-users or oil producers, although both can influence the price depending on circumstances. Oil prices went up to $114 a barrel this month because of unrest in Libya, even though Libya isn’t a major producer and Saudi Arabia stepped in to replace the lost production.

In 2009 and 2010, the U.S. boosted domestic oil output – thanks mostly to deepwater drilling – after years of net declines. Oil prices peaked in 2008 and then collapsed along with the economy later that year. With the economy recovering, oil prices are back over $100 a barrel despite the greater U.S. supplies.

So if the U.S. was pumping another 500,000 barrels per day of domestically produced oil, few analysts think it would significantly lower oil prices.

That’s not to say that additional U.S. supply would have no effect.

“It’s definitely part of the equation,” said John Kilduff, a veteran energy trader with Again Capital in New York.

Kilduff and other traders think additional U.S. supply gets cooked into a complex equation that includes not only the risks of oil supply disruption in production regions globally but also the strength or weakness of the U.S. dollar. A less risky source of supply helps boost expectations of adequate supply, but this is weighed against other global factors such as risk and developments in currency markets.

( Original Article )

Republicans push bills to boost offshore oil drilling


By Tom Doggett

WASHINGTON | Thu Apr 14, 2011 8:58am EDT

(Reuters) – Republican lawmakers in the House of Representatives on Wednesday pushed a trio of bills through a congressional committee that would boost offshore oil drilling and ease some regulations on oil companies.

Republicans said the bills would reverse the Obama administration energy policy of the last two years that they claimed has reduced domestic oil production and made the United States more reliant on foreign suppliers and vulnerable to oil price spikes.

“Congress must take action to increase energy production,” said Representative Doc Hastings, who chairs the House Natural Resources Committee that approved the three bills.

The legislative action comes as oil and gasoline prices are soaring and the Energy Department forecasts U.S. oil production in the Gulf of Mexico will decline by 190,000 barrels per day this year and in 2012.

Democrats countered that with the one-year anniversary of the BP oil spill next week, now is not the time for Congress to open new areas to drilling and weaken offshore safety regulations.

“This legislative package reflects a pre-spill mentality of speed-over-safety,” said Representative Edward Markey. “It would open up huge swaths of our coasts to drilling, without first applying any new safety standards learned from the BP disaster.”

The legislation is likely to clear the full House of Representatives next month, but it probably will not find enough support in the U.S. Senate to pass. The White House would likely threaten a veto on the legislation as well.

The three bills would require the Interior Department to lease tracts in the Gulf of Mexico and off the Virginia coast, new areas the Obama administration delayed from development after the BP oil spill.

Leasing could also occur off most of the U.S. Atlantic Coast and the West Coast.

The department would have 60 days to review and decide whether an oil company’s new drilling permit should be approved. Permits that were cleared before the White House imposed a drilling moratorium after the oil spill would be restarted within 30 days.

The legislation also commits the Obama administration to higher domestic oil and gas production, requiring the White House to boost offshore oil production to 3 million barrels a day and natural gas output at 10 billion cubic feet each day in the government’s upcoming 2012-2017 offshore drilling plan.

Those production goals would have to be met by 2027, allowing companies 10 years to fully develop the offshore tracts they lease.

(Reporting by Tom Doggett; Editing by Gary Hill)

( Original Article )

SWESC Statement on House Committee Approval of Energy Legislation

HOUSTON, April 13, 2011 /PRNewswire-USNewswire/ — Jim Noe, Executive Director of the Shallow Water Energy Security Coalition, issued the following statement in response to approval of energy legislation by the House Natural Resources Committee:

“We are pleased that the House has taken this first step to approve the American Energy Initiative. H.R. 1229, H.R. 1230 and H.R. 1231 are a welcome effort to expand offshore energy production, lower energy prices and create jobs.

“In particular, we commend the adoption of the Flores amendment on H.R. 1229, which would provide a one-year extension to the hundreds of leases impacted by the drilling moratorium. While rigs are idled due to regulatory delay, Congress should prevent time from running out these leases. The Flores amendment allows leaseholders to make up for lost time.

“We hope that this House action will spur the Senate to consider companion energy legislation. A bipartisan consensus exists to put the Gulf of Mexico back to work. We have the resources and technology to make America less dependent on foreign oil. All we need is for Congress to supply the will – the will to drill.”

About the Shallow Water Energy Security Coalition

The Shallow Water Energy Security Coalition comprises a group of companies—Apache Corporation, Arena Offshore, Chevron, Delta Towing, Dynamic Offshore Resources, Energy XXI, Ensco, Hall-Houston Exploration, Hercules Offshore, Phoenix Exploration, Rowan Companies, Seahawk Drilling, W&T Offshore, and Walter Oil & Gas— that explore, develop and drill for natural gas and oil in the shallow waters of the Gulf of Mexico.  The coalition was established to enhance the understanding of shallow-water operations as policymakers develop legislative and regulatory responses to recent events. Follow us on Twitter @ShallowWaterNRG

SOURCE Shallow Water Energy Security Coalition

( Original Article )

Duncan: Obama’s energy policy blocking job creation

by Jason Evans

NATION — As the nation’s gas prices rise, Rep. Jeff Duncan believes that President Obama needs to re-examine his administration’s energy policy.

The president recently praised Brazils’ energy policy, commending their exploration of off-shore drilling.

But at the same time, Duncan says, the Obama administration is tying the hands of energy producers here at home, by refusing to issue permits that would allow for offshore drilling for oil and natural gas.

“We’ve got the president going to a foreign country and applauding them for what we should be doing,” Duncan said.

The administration has lifted the moratorium placed on drilling that was put into place after the disaster on the Deepwater Horizon rig, which left 11 people dead and blanketed the Gulf of Mexico in oil for months.

But though the moratorium has been lifted, Duncan says new permits are being issued at a glacial pace.

Duncan serves on the Natural Resources Committee, which has been meeting recently with groups such as the Deepwater Horizon Commission, the Bureau of Land Management, the National Marine Fisheries Service and the National Oceanic and Atmospheric Administration.

“The theme on the committee has been ‘How do we get the folks back to work in the Gulf of Mexico back and address rising gas prices in the nation?’” Duncan said.

Duncan believes the administration’s policy on offshore drilling and drilling on federal land is standing in the way of economic development.

“He seems to have a policy of ‘Drill there, not here,’” Duncan said. “We’ve got the resources to meet America’s independent energy needs, through offshore drilling and drilling on federal lands that have been taken off the table.

“We’ve got a president applauding a foreign country for what we’re not doing, thanks to his policy,” he said. “We need to be tapping American resources.”

Issuing permits to those wishing to drill — who have met all requirements — will lead spur economic recovery, Duncan said.

“I truly believe that energy is a segue to job creation,” he said.

More drilling would benefit not only the energy companies themselves, but a variety of services industries tied to energy-producing areas and beyond, Duncan said.

“We know we have the resources,” he said. “It’s time to put our money where our mouth is.”

Approving and investing in more drilling would also have an impact at the gas pump, Duncan said.

“It would signal to the market that we are serious about American resources,” he said. “We’d see a lessening of the price at the pump.”

That would be a boon to industry and small businesses alike, Duncan said.

“Their costs of business would go down, based on their fuel prices going down,” he said.

Duncan said he is a “huge fan” of nuclear energy, and disagrees with Sen. Joseph Lieberman, who has said America “needs to put the brakes on” building new nuclear plants, in light of the disaster at Japan’s Fukushima No. 1 reactor.

“I say no,” Duncan said. “We need to proceed cautiously, but we’ve been proceeding cautiously for the past 30 years.”

He said residents of Pickens and Oconee counties know first-hand the value of nuclear energy, thanks to Duke Energy’s Oconee Nuclear Station plant.

“You know it’s safe,” he said. “The energy source is stable, it’s consistent. You don’t have the fluctuations in the power grid.”

New nuclear technology will ensure that reactors stay cool in the event of a catastrophe.

New plants can be built with gravity-fed reactors, in which the cooling water is kept above the reactor, Duncan said.

If a power failure occurs, the water falls on the reactors, cooling them and preventing a meltdown.

Plants such as Fukushima No. 1 rely on force-fed cooling, which is why the pumps failed when the power failed, he said.

“The new reactors aren’t going to have that issue,” Duncan said.

Duncan said he believes in an “all-encompassing” energy policy for the United States, including wind and solar power.

“I believe in using it all but I also believe that we have needs that have to be met,” Duncan said. “Wind and solar would provide only a slim fraction of our energy needs. We cannot ignore the natural resources that God gave us, the resources we need to be tapping.”

( Original Article )

%d bloggers like this: