Bethel Finance news:
This oil-and-gas platform once bustled with activity. More than a dozen workers toiled aboard it round-the-clock to corral the 12,000 barrels of high-grade crude gushing up each day from reservoirs below.
Today, the platform, 43 miles off Louisiana’s coast, is eerily quiet. Six workers periodically check on pumps and diesel engines. Only six to seven barrels trickle in a day.
The reservoir is nearly empty, and without new federal permits to poke new holes in the surrounding area, the platform is rendered nearly dormant, say officials at Pisces Energy, the platform’s owners.
“We’re just trying to maintain until we get the permits and get the drill back out here,” says Sammy Breaux, the platform’s lead operator. “We’re day by day.”
Tightening of regulations for offshore drilling following last year’s BP oil disaster in the Gulf of Mexico has lengthened the permitting process and brought tighter scrutiny to offshore drilling. But the new process is strangling small independent companies such as Pisces, which need to continually pump to survive, analysts and industry leaders say.
More than just squeezing profits, the increased federal scrutiny threatens the culture of wildcatters — independent oil companies that seek crude and natural gas in areas where typically no one else is looking. Wildcatters have delivered crude to U.S. consumers for more than a century, says Diana Davids Hinton, a history professor at the University of Texas of the Permian Basin who has written books on wildcatters.
“It puts things in a very gloomy perspective for wildcatters,” she says.
Wildcatters have been chasing oil seeps in the region since crude first bubbled up in Spindletop, Texas, in 1901, Hinton says. Wildcatters, then hard-charging, daring frontiersmen, sought oil anywhere they found a seep or in places others wouldn’t dare, such as hillsides.
“Some wildcatters made just completely random tests that worked out,” Hinton says.
By the 1920s, wildcatters were using geology to seek oil. They formed businesses and followed the oil rush into Louisiana’s marshes, and more recently, the deeper stretches of the Gulf, she says. Today, the wildcatter’s dusty image of a wrangler charging over the Texas plains has been replaced by men in suits controlling million-dollar drilling rigs and working out of glimmering Houston high-rises.
Wildcatters nearly disappeared during the 1970s and ’80s, when crude prices crashed and left much of the market to multinational companies, Hinton says. Their numbers may quickly dwindle again under the current regulations, she says.
“There would be a real important sector of the industry that would be lost if the ranks of independents were thinned down to the bone,” Hinton says.
Going where others won’t
W&T Offshore, a wildcatter based in Houston, has drilled for oil and natural gas in the shadow of the majors for 25 years, following the larger companies from Louisiana’s marshes to deep offshore in the Gulf, says Tracy Krohn, founder and CEO. The company survives by tappingareas the bigger firms overlook or don’t want, he says.
The new approval process has slowed W&T’s operations to a crawl, he says. The company is awaiting approval for three shallow-water permits and one deep-water permit. The regulations make it near impossible for smaller firms to chase reservoirs from one area of the Gulf to the next, he says. W&T is shifting part of its operation to onshore natural gas drilling.
“We can’t replace our (offshore) reserves drilling under the current process,” Krohn says. “Nor can anyone else.”
Federal regulators say they’re taking steps to prevent a repeat of last year’s disaster, in which the Deepwater Horizon rig exploded and sank off Louisiana’s coast, killing 11 crew members and unleashing the largest oil spill in U.S. history. The rig was leased by BP, which has assumed the bulk of the responsibility for the spill. BP was widely criticized for not sufficiently planning for the catastrophic event.
The stepped-up regulations since the spill include requiring companies to file safety and environmental plans that were voluntary in the past, as well as increased scrutiny of drilling plans by officials at the Bureau of Ocean Energy Management, Regulation and Enforcement, which oversees the industry.
The increased scrutiny hasn’t slowed the permitting process all that much, agency director Michael Bromwich says. The agency is approving about six permits per month, just under the eight per month it was averaging pre-spill, he says. It has approved 39 shallow-water permits and six deep-water permits since the spill.
No comments:
Post a Comment