Deep Do Do

[Bayou Dude]

Impacts of President Obama's Order Halting Work on 33 Exploratory Wells in the Deepwater Gulf of Mexico
*The Presidential Order does not affect the 4,515 shallow-water wells, and it does not affect 591 producing deepwater Gulf wells.
*
Roughly 33% of the*nation's domestically produced oil comes from the Gulf of Mexico, and 10% of the nation's natural gas.
*
80% of the Gulf's oil, and 45% of its natural gas comes from operations in more than 500 feet of water - the deepwater (2009 data).
*
Suspension of operations means roughly 33 floating drilling rigs - typically leased for hundreds of thousands of dollars per day - will be idled for six months or longer.
*
$250,000 to $500,000 per day, per rig - results in roughly $8,250,000 to $16,500,000 per day in costs for idle rigs;
Secondary impacts include:
• Supply boats - 2 boats per rig with day rates of $15,000/day per boat - $30,000/day for 33 rigs - nearly $1 million/day
• Impacts to other supplies and related support services (i.e., welders, divers, caterers, transportation, etc.)
*
Jobs
Each drilling platform averages 90 to 140 employees at any one time (2 shifts per day), and 180 to 280 for 2 2-week shifts.
Each E&P job supports 4 other positions.
Therefore, 800 to 1400 jobs per idle rig platform are at risk.
Wages for those jobs average $1,804/weekly; potential for lost wages is huge, over $5 to $10 million for 1 month - per platform.
Wages lost could be over $165 to $330 million/month for all 33 platforms.
*
Secondary Impacts: Many offshore workers live in Louisiana. The state is going to see a decrease in income taxes and sales taxes that would normally be paid by those employees. (The state does not collect a sales tax on oilfield supplies and equipment used offhsore.)
*
Oil Companies Impacted
*
Shell has seven (7) exploratory wells that will be impacted
*
Others include:
Chevron (4)
Anadarko (3)
Marathon (2)
Noble Energy (2)
Eni US Operating Co. (2)
ATP Oil & Gas (2)
Statoil (2)
ExxonMobil (1)
Petrobras America (1)
BHP (1)
BP (1)
Kerr McGee (1)
Murphy (1)
LLOG (1)
Newfield (1)
Hess (1)
*
The 33 gulf wells where operations are suspended were the ones inspected immediately after the Deepwater Horizon blowout (per Interior Secretary Ken Salazar); in the inspections, "only minor problems were found on a couple of rigs". Salazar believes "additional safety measures can be taken including dealing with cementing and casing of wells and significant enhancements and redundancies of blowout prevention mechanisms. Although these rigs passed inspections, we will look at standards that are in place."
*
Longer Term Impacts
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Idle drilling rigs in the Gulf could mean that they will be contracted overseas for work in other locations, and if/when the halt is lifted, rigs will not be available for completing the work in the Gulf.
*
Loss of tolls on LA Highway 1 resulting from loss of traffic related to deepwater operations; tolls go directly to retiring the bond debt for construction of LA Highway 1 improvements, and if those tolls are lost, the state of Louisiana - as the other responsible party on the bonds - will have to pay to retire that debt, meaning loss of funding for some other programs in the state's budget.
*
A 6-month halt in new drilling would defer 80,000 barrels/day, or 4% of 2011 deepwater Gulf of Mexico production. (Wood MacKenzie)
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Higher drilling costs might jeopardize exploration in frontier areas. More immediately, estimates are that seven current discoveries could be rendered sub-economic, putting U.S. $7.6 billion in future government revenues at risk. Proposals to increase the cap on oil companies' liability for oil spill damages to U.S. $10 billion could exclude U.S. independents from offshore Gulf of Mexico activities. (Wood MacKenzie)
*
Since these wells are not yet producing, there is no decrease in the available oil supply. However, it could lead to a decrease in the availability of domestic oil, and it is hard to tell how commodity speculators are going to respond over the next six months; there is the possibility for driving oil prices to levels well over $100 per barrel.

[fyremanbill]

Maybe he'll throw some TARP money at it...a new acorn office or something else useful.

[bandit]

Maybe he'll throw some TARP money at it...a new acorn office or something else useful.

The sad part about this mess is , we're in the middle and the @@@@ just keeps getting worse.
Why didn't we have transparency when it counted , before this all happened!!
I guess i'm just 1 of the minority of slightly under 50%
RichardKCMo

[Master Oil Racing Team]

Bayou Dude is exactly right. Just look at the safety record over the years. How many wells have been drilled and produced without a major mishap. How does that compare to coal mining, air transportation, rail transportation, agriculture where we are continually hearing about recalls of vegetables for salmonella, etc.

The demand for petroluem products has caused drilling to step out into ever deeper water, but continual research and development has been at the forefront of the technology that allows this. Billions have been spent over the years since offshore rigs moved off the coast and into a few feet of water. There is no better bunch of workers than our Louisiana bretheren at drilling offshore. One disaster and the political schemers look to take advantage while causing an unneccessary economic disaster on one segment of the economy.

Let's face reality. Government is the the biggest employer in the U.S. and has been a growing career path for workers for decades. It is also the least responsible sector of our economy (excepting the military, and public safety people) where no one takes the blame. Look out how Fannie Mae and Freddie Mac brought down our economy and the people who helped get them into position to do that are still in place and in power. Now, before the well is killed and plugged, our FFF attorney general is looking to file criminal charges against BP. BP is doing all it can, while our government is getting in the way. Does anybody really think that under direction of our federal government that a half dozen different types of equipment could have been engineered, built, towed out and been lowered in 5,000 feet of water in an attempt to stem the flow of oil and gas in only 6 weeks. Try several years for each attempt at best if it were totally under government control.

Politicians are quick to dump on oil companies but are ready to bail out auto companies and the unions. Detroit would be nothing if it weren't for the oilfield. For more than a hundred years Americans have been the best at finding and producing petroleum products that go into virtually everything we use. Had the U.S. not been bringing up petroluem products cheaply and abundant for so long the automotive industry would have not come about as we know it. We would have been a country of mass transportation, and not the economic powerhouse we are today.

As Bayou Dude says, the offshore industry is a mighty contributor to our economy both directly and secondarily. Everyone in the United States will be affected by offshore drilling moratoriums. If a survey were conducted you would find that no industry buys a larger percentage of U.S. manufactured vehicles than the oil and gas industry. Ford did not take a bailout and I think a major reason why is because of all the pickups in the oilfield. Ford has the largest share of the oilfield by far. I would guess 75% of the inland oilfield runs Ford. I myself drive an offroad Dodge, and most hotshot drivers use Dodge because of the Cummins Diesel. GM accounts for the smallest share.

Not only that, but there are many valve manufacturers, specialty steel casting companies, fabricators, and other companies that make highly specialized parts that have been kept in business while other segments of our economy have slowed down. Then there are the engineers, research and development people, acquisition and pre drilling companies that prepare everything from proposals to paperwork, prior to drilling.

I have told this on another thread some time back, but during a slowdown in offshore drilling in the mid 80's a seismic company was pulling a 3-D seismic towed array to survey the floor of the Gulf of Mexico. They did not have a contract because drilling had halted due to the "Take or Pay" clauses on natural gas, and the low oil prices, so they did the seismic survey on speculation hoping someone would buy their product so they could stay in business. After criss crossing and mapping thousands of square miles of the Gulf of Mexico near the Yucatan Peninsula, one of the men discovered a huge crater filled with sediment. I remember reading his speculation in an article he wrote that was published in "OFFSHORE", that he thought this was the crater that had long been speculated came from a gigantic asteroid that contributed to the demise of the dinosaurs. In months that followed that article he was derided by scientists saying he didn't know what he was talking about....he was just a dumb oilfield worker. Then nothing more was said. A few years later some scientists came in with that same theory that the crater was a result of a large asteroid hit after they researched it with "real scientific equipment" and authentic credentialed scientists. This oilfield guy's discovery was never mentioned. I think in the last few years he was finally credited with the original discovery. But the point is....the Obama administration is doing everything it can to destroy business. If our politicians don't have the sense to get clear minds to think of the economic impact of the contribution by the oil and gas companies and employees to our country, we are going to see unemployment spike up even more.

[ferv888ipba]

I am so sick of the political class and their stupidity. Look at all the monies wasted by these sick pups. Not only are they liars, will not use disingenuous, they are liars of first word they speak!

All that money that the ONE wants from BP would not be there if the stupidity of Hillary and the ONE had their way on those excess profits tax had been enacted. Where the hell do you think that the funds to pay for the clean up were going to come from. It is called profit and it is not a dirty word.

Ray

[David Mason]

This is for RTM. I am sure he will not approve.