Monday, December 18, 2006

Gas Rigs Grow on Horizon

Photo credit: Amazing Walter - "that whistle is loud!"

The oil and gas industry off South Padre Island is experiencing a small boom in wildcatters. I did some research after sitting on the beach and watching a large crewboat head to another rig on the horizon. Sure enough, I found out that Prime Offshore (formerly F.W. Oil) was drilling on a new lease block off Mansfield Pass (THE 202 jack-up rig). You can find out more on the offshore activity at Rigzone. On a clear night you can see the platforms to the East with their very intense lights. The photo here is a completed well-head after the drilling was completed.

I bring up this issue because of several factors, such as clean beaches, good fishing, and economic development. In now way do I mean that the rigs are “bad” although I wouldn’t be surprised if we saw a little more tar on the beach. Maybe we should start from the top.

The US Department of the Interior regulates the offshore oil and gas industry through its Minerals Management Service (MMS). The lands are leased to operators to construct oil & gas gathering facilities, including pipelines. These leases are negotiated every year or so based on an auction system. Since the lease blocks are outside the nine nautical mile state limit, they are approved at the federal level and we are not really consulted at all. In fact, most Islanders were surprised to learn that MMS had approved Prime Offshore to operate in lease blocks 1145 and 1166, which is fairly close to Brazos Santiagos Pass – maybe 12 miles out to sea. Why didn’t anybody ask us?

The reason why is because the Environmental Impact Statement (EIS) for offshore oil & gas drilling was conducted years ago, so no further reviews are needed in the Western Gulf of Mexico (GOM). Should the eastern GOM be allowed to have drilling, a formal EIS would probably have to be conducted. The western GOM is roughly bounded by a line from the Rio Grande to Key West, with the western part being straight south of the Florida-Alabama state line.

Due to the pipeline system, however, the area offshore from South Padre Island was never developed. These pipes can be up to about 22 inches around and carry natural gas, crude oil, and gas condensate. Prime Offshore, which was really just two guys in an office, partnered up with GE and put in a 100 million dollar pipeline. Thus the land off our neck of the woods was no longer “stranded” with regard to hydrocarbon deposits. Using the new pipeline, in 2005 Prime took in over a quarter million barrels of crude and about four million cubic feet of natural gas, yielding about 40 million dollars – not bad for just one rig online. In 2006 another well was completed and they are drilling on a third lease to be completed in early 2007.

Let me start with economic impact. The Todco rig was refurbished at Amfels Shipyard in Brownsville. One or two crewboats is docked at Port Isabel. New federal legislation could allow Texas and other states to share the royalty payments from the offshore leases, which were intended to help with hurricane and coastal erosion efforts. If the operators of planned oil and gas structures can pay for a 100 million dollar pipeline in a matter of several years, we’re talking some serious direct and indirect economic impact here.

As to fishing, basically out part of the GOM is a desert with nothing but some shrimp. The reefs are few, such as Seabree Banks being 17 miles out; the canyons to really deep 100 fathom waters are out maybe 80 miles at sea. The oil & gas structures are famous for holding large numbers of fish. Taken together with a few rigs and the Texas Clipper, fishing could be revitalized by creating new artificial reefs. Such new reefs could take the pressure off over-fished areas such as Seabree.

Finally, let’s talk tar on the beach. We’ve all seen a little more asphalt chips on the beach lately, some of which is natural and some comes from old deposits that fell off older oil & gas rigs. Those chips indicate oil fouling of at least one to two years old. Fresh oil is black oil, the kind you step in and need some serious cleaner to get off your feet. Interestingly, black oil blobs used to be more common over a decade ago, especially after the Ixtoc explosion in Campeche Bay, Mexico. Heavy oil will tend to turn brownish and sink, whereas light oil will float with a sheen but usually evaporates in a few days.

The question as to whether these new rigs – there are four more in the planning stages – could increase oil releases and put more “goo” on the beach is complex. The risks are higher now that drilling and production is underway, although the industry is heavily regulated. One of the main jobs for that crew boat is to deliver supplies and take on drilling or production wastes which back in old days would have been dumped overboard without question. I have confidence that the industry can be safe. The economic impact of even having a small oil release get on SPI beaches, however, would be astronomical.

If you see any oil fouling on the beach please call the Spills Hotline at 1-800-832-8224.

2 Comments:

Blogger mleahy said...

Good story Sam. More exploration and drilling, not to mention refining capabilities are what is needed now to help us gain more independence from foreign oil. Even if it did not lower the price of gasoline, I would rather see my money stay in the U.S. vs. the Middle East.

Regards-- MLeahy

10:46 AM  
Anonymous Anonymous said...

Sam, there are natural oil and gas seeps in the Gulf that are often the source of tarballs on the beach. According to a NASA study done in 2000, "The number is twice the Exxon Valdez's spill per year, and that's a conservative estimate". See:http://www.sciencedaily.com/releases/2000/01/000127082228.htm

4:04 PM  

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