FREE SPEECH ZONE | Gulf oil drilling has too great a risk, with too little reward


In a recent editorial, the Dallas Morning News urged us to ignore the disaster in the current Gulf oil spill, and continue to drill as before.  What else would you expect from a major newspaper in the oil patch?  Not only is this a bad idea, but a case could even be made to stop oil production in the Gulf before another disaster befalls us. As Draconian, radical, and potent as this idea may be, there is a strong case to be made for such an action.  Foremost in this case is that the risk/reward ratio for continued drilling opts in favor of stopping new oil production there immediately…a program of planned capping of existing wells over a reasonable period of time…and eventually getting oil rigs out of the Gulf altogether before the next tragedy happens.

The Morning News editorial notes: “The oil industries’ record, while not perfect, if one of advancing safety.”  It further goes on to claim a disaster of this dimension has not occurred for over 41 years (presumably the Santa Barbara spill).  This is not entirely correct (on a world wide scale), and sugar coats what has been an ongoing saga for oil spills creating serious and tragic cases of environmental damage.

The real dangers and damages

To begin with, there are currently 115 oil rigs (plus many more static platforms) operating in the Gulf of Mexico – and each provides an opportunity and exposure for another mishap and major crisis.  Many are doing exactly the kind of extreme deep water drilling the BP platform was doing – and extending technology into areas not entirely understood or well managed by the oil industry (as is the BP situation proves).  More importantly, there are about 500 offshore drilling rigs operating worldwide, and they have been far from safe. Offshore operators continue to spill thousands of barrels of oil, fuel and chemicals into federal waters each year, government records show.

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“This is not a zero-risk proposition,” said John Rogers Smith, an associate professor of petroleum engineering at Louisiana State University, who monitors such statistics.

Offshore operators have had 40 spills greater than 1,000 barrels since 1964, including 13 in the past 10 years, according to data from the U.S. Minerals Management Service, which oversees exploration and production in federal waters.

Moreover, spills from the rigs and actual drilling, are only part of the story. Drilling offshore has other potential dangers:

  • Tanker transportation. Oil extracted on the continental shelf accounts for a considerable part (probably at least 50%) of annual volumes of oil transported by tankers (the latter constitute over 1 billion tons). On some fields, the shuttle tankers are the main way of delivering hydrocarbons to the onshore terminals. In short, there have been tanker spills ranging from modest to catastrophic virtually annually.
  • Storage. Underwater reservoirs for storing liquid hydrocarbons (oil, oil-water mixtures, and gas condensate) are a necessary element of many oil and gas developments.  A risk exists of damaging the underwater storage tanks and releasing their content, especially during tanker loading operations and under severe weather conditions
  • Pipelines. Complex and extensive systems of underwater pipelines have a total length of thousands of kilometers. They carry oil, gas, condensate, and their mixtures. These pipelines are among the main factors of environmental risk during offshore oil developments.  Any number of events can cause leaks, and they do.

All three have a history of problems, dangers and significant damages over the decades, far too lengthy to recite here; but coasts, wildlife, and the seas have been inundated with pollution continually.

Energy Independence

This is among the greatest myths of all regarding offshore drilling. To begin with, the United States has only about 4% of the world’s oil reserves, and only part of that is offshore in the Gulf. So drilling in that area will never provide us with “energy independence”.  But what is further lost in this debate is the fact that many of these leases are not even owned by American companies!

The exposure of BP (British Petroleum) underscores this fact.  BP, in their corporate documents states the following: “London is where BP’s corporate headquarters are located, and the UK is therefore a centre for trading, legal, finance and other mainstream business functions. The UK is also home to three of BP’s major global research and technology groups“. As an aside, last quarter BP made about $6 Billion in net profit – plenty of resources to compensate the residents and workers of the land and industries they are destroying.

Additionally, in a recent auction for Gulf leases, Petrodata, the organization that reports such information noted that: The U.S. Minerals Management Service received over $1.3 billion in bids for Central Gulf of Mexico blocks offered in Lease Sale No. 213, which took place March 17… The most active bidder was not a U.S. company. Denmark’s Maersk Oil submitted 63 apparent high bids, followed by Anadarko with 48, Chevron with 46 and Mariner Energy with 45. All told, 77 companies participated in the sale, with 71 as lead bidder or partner in apparent high bids”.

But that is not the worst of it. Under American law the U.S. Energy Information Administration reminded us that: “Production in the United States has several unusual aspects. One is the private ownership of resource rights. In most major producing countries, the government owns the rights to develop resources. For privately owned property in the United States, the decision to explore for and produce oil is between the landowner and the producing company.” The reality of this is BP was free to sell production from the blown out well to whomever it pleased — world wide. In other words they can come to our Gulf…buy a lease, despoil our coast…and sell their oil anywhere else. This is not energy independence for America!

So what is this about?

To start with, even though such accidents as the current oil spill may be infrequent, their consequences are cataclysmic.  Secondly, many of the rigs in the Gulf are old, and should cause concern for their structural integrity; meanwhile, the newest rigs, like the BP platform, are drilling to unheard of depths with unknown dangers as we have seen.  Thirdly, the idea that we can drill our way to energy independence is a myth because we will need to continue to import oil in the short term, and our reserves of fossil fuels will not provide independence in the long term. But mostly it is about legacy.  By continuing to drill in the Gulf we must ask the question: what kind of an energy world are we going to turn over to the next generations?  Will it be a damaged environment, a ruined ecology, and a continued reliance on diminishing fossil fuels with ever increasing costs and dangers for extraction – or will it be a cleaner planet and safer, greener energy sources?  That is the true meaning of the vast amount of dirty oil now seeking to damage the beaches, birds and sea life in the Gulf of Mexico; and the decision our generation now must make for the future.