Monday, May 3, 2010

It’s no time to be timid

Is there anyone who doesn’t realize the oil and gas industry faces its toughest political challenge in at least two years because of the Apr. 20 rig accident and subsequent crude oil spill? I didn’t think so. Unlike the 2008 crude oil price spike, however, this could be the kind of challenge that the industry handles well if it responds honestly and decisively to mounting cries of concern.

This didn’t happen in some obscure region, after all. It’s the Gulf of Mexico, where the offshore oil and gas industry began more than 60 years ago and where it has worked harmoniously with other offshore industries ever since. It may look ugly now, but what better place is there to demonstrate a solid offshore emergency response?

If this accident has done nothing else, it has reminded everyone that it can be dangerous out there, even with cutting-edge technology looking thousands of feet below the water’s surface. Every offshore producer, drilling contractor, and service company realizes that safe operations are essential because the risks can be great, even if the potential rewards are high.

Predictably, congressional and other opponents of expanded US offshore oil and gas activity are saying that this event demonstrates it’s too hazardous. The US Minerals Management Service and US Coast Guard’s joint investigation rightly focuses on finding what caused the accident and containing the spill. Other Obama administration departments and agencies are also looking for facts.

US Interior Secretary Ken Salazar ordered inspections on Apr. 30 of all 30 deepwater rigs and 47 production platforms in the Gulf. At his direction, MMS tried to determine that tests of blowout preventer stacks were completed, related records were available for inspection, and emergency well control exercises were taking place. As of May 3, two offshore platforms had stopped production and one was evacuated. Approximately 6.2 million cubic feet of natural gas was shut in, less than 0.1% of the Gulf’s daily gas production.

The situation changes by the hour. But it clearly gives the oil and gas industry an opportunity to show how far it has come since the 1969 Santa Barbara Channel spill. It should seize this chance.


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