Offshore Drilling in the USA

abarrelfullabarrelfull wrote on 01 Apr 2010 08:22
Tags: chevron exploration gulf shell usa

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Bearing in mind the date, I was not sure whether to believe the headlines.

Barack Obama eases offshore oil drilling ban.

After all this is a man who has said a lot about climate change and the enviornment in general. However, when I read some of the commentary, I was convinced. Nobody is happy.

President Barack Obama's plan to expand oil and natural gas drilling in untouched Atlantic waters while walling off parts of the Pacific and Alaskan coasts represents a bid to bridge the divide separating environmentalists and drilling advocates on the issue. But the middle-ground approach announced on Wednesday alienated environmental advocates who say new offshore production threatens marine life; drew quick criticism from Republican drilling advocates in Congress who said it doesn't go far enough; and received only muted enthusiasm from energy industry leaders who are wary about the administration's commitment to oil and gas development.

The change of heart will not enable drilling everywhere, but does open up a significant number of places where there may be a decent amount of oil & gas. The fact that everyone is upset is probably evidence of a reasonable compromise rather than anything else. After all both sides of the argument are using pretty week rhetoric.

Pro-drilling politicians like to pretend that the USA can drill its way out of trouble, and wean itself off foriegn oil. Whilst every little helps, this is conpletely beyond the realms of possibility, as the USA consumes 1/5 of the worlds oil production, and not even the wildest optimist expects massive volumes to be found offshore.

Anti-drilling environmentalists on the other hand act as if they can reduce the USA's carbon emissions by stopping drilling. This is also stupidity of the first order, but that is the default classification of most of their arguments anyway. Arguments about local environmental impacts are far more relevant.

It is perfectly possible for the USA to come up with a solution that reduces carbon emissions, and increases domestic hydrocarbon production.

In a great piece of timing, Shell & Chevron, were announcing the start up of an important new project, in the Gulf of Mexico.

The Perdido deepwater project, located in the U.S. Gulf of Mexico, has started crude oil and natural gas production. Production from the Great White, Silvertip and Tobago fields utilizing the Perdido hub is expected to reach full capacity of 130,000 barrels of oil-equivalent per day after the drilling of additional wells.

The volume of crude is not earth shaking, but the development is important for another reason.

Located in an isolated, ultra-deep sector of the Gulf of Mexico, Perdido marks a new era in innovation and safely unlocks domestic sources of energy for US consumers. The facility sits in approximately 2,450 metres (8,000 feet) of water, which is roughly equivalent to six Empire State Buildings stacked one atop the other, and will access reservoirs deep beneath the ocean floor. Perdido smashes the world water depth record for an offshore platform by more than 50%.

So the benchmark has been raised (or lowered) and even deeper water is now a possibility. Whilst I would love to know what the costs are on such projects, I admire the people who are responsible for these breakthroughs, however the economics pan out. Without people like that, we would still be in the stone age.


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