Bruce Beaubouef • Houston
Rig exodus limited to date
In the wake of the federal moratorium that followed theDeepwater Horizon oil spill, industry groups and pro-development observers have been openly wondering whether a six-month stoppage in exploration would lead to a major exodus of drilling rigs from the Gulf of Mexico.
The recent transfer of two deepwater drilling rigs from the Gulf to waters elsewhere prompted critics of the government’s drilling ban to repeat predictions of a mass flight that would wreck the region’s economy and severely curtail US energy production.
But nearly two months after US Interior Secretary Ken Salazar announced a six-month moratorium on deepwater drilling, 31 of the 33 rigs that were operating in the Gulf when theDeepwater Horizon incident occurred remain there. As of press time, only two rigs had left the Gulf for foreign waters. Diamond Offshore is sending one to the Congo, and another to Egypt. While at least one other rig could be moved soon, several experts say an exodus is unlikely. So far, most are staying put, and many companies are reluctant to abandon the Gulf.
The vast majority of the oil from the BP oil spill has evaporated or been burned, skimmed, recovered from the wellhead, or dispersed.
The Gulf’s deepwater reservoirs are critical to the growth plans of major operators such as Chevron and Royal Dutch Shell. And in general, oil companies have found few other promising reservoirs where they could immediately transfer their rigs. So, they are working with drilling contractors to try to keep as many of the rigs in the Gulf as possible. They are doing this by agreeing to pay standby fees or doing maintenance or other work unrestricted by the ban.
Noble Corp., for example, which owns six deepwater rigs in the Gulf, reached an agreement with Shell that will keep at least some of its rigs in place. Reportedly, Shell will pay a reduced rate for the duration of the moratorium, and Noble will keep the rigs ready to begin drilling as soon as the ban is lifted. The deal works for both companies: Shell wants to move ahead with its deepwater projects, and Noble does not want to search for another customer and move its rigs in the meantime.
To be sure, the moratorium is hurting companies that operate in the Gulf. The effect is evident in Diamond’s second-quarter results: drilling revenue fell 11%, and the company cut its special quarterly dividend by almost half.
Two oil industry analysts predict that only about one-fourth to one-third of the Gulf’s deepwater rigs will end up leaving, and many will eventually return or be replaced. The equation could change if drilling is restricted beyond November, or if oil companies find the new regulations unpalatable. But right now, oil companies are taking a wait-and-see attitude before changing drilling plans, even as they vehemently oppose the moratorium.
Federal report updates oil spill
The vast majority of the oil from the BP oil spill has evaporated or been burned, skimmed, recovered from the wellhead, or dispersed, and much of the remaining oil is in the process of being degraded. A significant amount of this is the direct result of the robust federal response efforts, according to the Deepwater Horizon Incident Joint Information Center.
A third (33%) of the total amount of oil released in theDeepwater Horizon/BP spill was captured or mitigated by the Unified Command recovery operations, including burning, skimming, chemical dispersion, and direct recovery from the wellhead, says a recently released federal science report.
An additional 25% of the total oil naturally evaporated or dissolved, and 16% was dispersed naturally into microscopic droplets. The residual amount, just over one quarter (26%), is either on or just below the surface as residue and weathered tarballs; has washed ashore or been collected from the shore; or is buried in sand and sediments. Dispersed and residual oil remain in the system until they degrade through a number of natural processes. Early indications are that the oil is degrading quickly.
These estimates were derived by the National Oceanic and Atmospheric Administration (NOAA) and the Department of the Interior (DoI), who jointly developed an Oil Budget Calculator to provide measurements and best estimates of what happened to the spilled oil. The calculator is based on 4.9 MMbbl of oil released into the Gulf, says the government’s Flow Rate Technical Group estimate. More than 25 of the best government and independent scientists contributed to or reviewed the calculator and its calculation methods.
The estimates do not make conclusions about the long-term impacts of oil on the Gulf. Fully understanding the damages and impacts of the spill on the Gulf of Mexico ecosystem is something that will take time plus continued monitoring and research.
Dispersion increases the likelihood that the oil will biodegrad, either in the water column or at the surface. While there is more analysis to be done to quantify the rate of biodegradation in the Gulf, early observations and preliminary research results from a number of scientists show that the oil from the spill is biodegrading quickly. Scientists from NOAA, EPA, DOE, and academia are working to calculate more precise estimates of this rate.
It is well known that bacteria that break down the dispersed and weathered surface oil are abundant in the Gulf of Mexico, in large part because of the warm water, the favorable nutrient and oxygen levels, and the fact that oil regularly enters the Gulf of Mexico through natural seeps.
Residual oil is also degraded and weathered by a number of physical processes. While microbes consume the oil, wave action, sun, currents and evaporation and dissolution continue to break down the residual oil in the water and on shorelines.
The oil budget calculations are based on direct measurements wherever possible and the best available scientific estimates where measurements were not possible. The numbers for direct recovery and burns were measured directly and reported in daily operational reports. The skimming numbers also were based on daily reported estimates. The rest of the numbers were based on previous scientific analyses, best available information, and a broad range of scientific expertise. These estimates will continue to be refined as additional information becomes available.
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