Offshore Oil Drilling and the Oil Rig Disaster in the Gulf

[BridgeTroll]

even though Texas sees less than $50 million and Alabama has never seen more than $200 million

Really?  Do you have that breakdown?  DogWalker posted some similar numbers but cannot seem to provide anything to nail it down. 

[BridgeTroll]

http://www.usnews.com/articles/news/national/2008/02/01/oil-revenues-help-other-states.html

Oil Revenues Help Other States
Minerals help Wyoming, New Mexico, Alaska
By Justin Ewers
Posted February 1, 2008

It may be the worst of times in many states, but it's the best of times in some. Sales and income tax revenue is drying up in California and Florida, but some mineral-rich statesâ€"New Mexico, Montana, and Wyoming, for exampleâ€"are watching tax revenue grow from another income stream: oil.

In Alaska, where almost 90 percent of the state budget is fueled by taxes and royalties on oil and other minerals, the high price of oil has the state sitting on a roughly $3 billion surplus. Up north, the debate in the state Legislature isn't about what to cut but what to spend it on: A massive new hydroelectric dam near Anchorage is being discussed, as is an "energy rebate" that would hand out between $500 and $1,000 to every resident.

Texas, another oil-rich state, has built a $5.7 billion rainy-day fund over the past few years using gas and oil revenues, which usually account for only 3 percent of its total receipts. "Natural-resource-based states definitely did better in the last economic downturn," says Corina Eckl of the National Conference of State Legislatures. Those same states may stay high and dry this time around, too.

[BridgeTroll]

Here is where you heard those numbers...

http://www2.tbo.com/content/2009/oct/21/211914/state-house-panel-holds-hearing-offshore-drilling/news-politics/

Alabama, Texas oil revenues below Florida estimates

The Associated Press

Published: October 21, 2009

Updated: 10/21/2009 07:14 pm


TALLAHASSEE - Texas and Alabama get far less money every year from offshore drilling in their state waters than advocates say Florida can expect, the state's environmental chief told a House panel Wednesday.

Department of Environmental Protection Secretary Michael Sole said Texas gets about $45 million and Alabama from $50 million to $300 million. That compares to an estimate by the pro-drilling group Florida Energy Associates that Florida's treasury can expect $2.25 billion a year from oil and natural gas production.

A drilling opponent jumped on that gap to cast doubt on the estimate.

"The math doesn't add up," said Eric Draper, policy director for Audubon of Florida.

He said the $2.25 billion estimate is based on an assumption 150 million barrels of oil could be pumped from Florida waters annually although Texas produces only 2 million and Louisiana 6 million.

Pro-drilling lawmakers argued that oil reserves in other Gulf Coast states, which have allowed drilling for decades, are dwindling while Florida's have yet to be explored.

"We need to find out what we have by exploring," said Rep. Charles Van Zant, R-Keystone Heights.

Existing law prohibits drilling in Florida waters, which extend three miles into the Atlantic Ocean and 10.35 miles into the Gulf of Mexico.

Opponents and proponents joined Sole, who said he was neutral, in testifying at the first of a series of meetings being held by the House Select Policy Council on Strategic & Economic Planning

The panel is chaired by Rep. Dean Cannon, R-Orlando. Cannon sponsored a bill that would have opened Florida waters to drilling as close as three miles from shore during this year's session. The House passed the measure, but it died when the Senate declined to take it up.

Senate leaders still are wary of reversing a long-standing policy against drilling. That again may short circuit what's potentially one of the hottest issues facing lawmakers as they prepare for the 2010 regular legislative session that opens in March.

Petroleum interests and other supporters argue drilling would provide the cash-strapped state with a new revenue source while helping the nation achieve energy independence. Environmentalists and their allies in the tourism industry say the risk of spills and other pollution to the state's beaches is too great.

"We will listen to experts and citizens from all sides of the issue and remain focused on helping restart Florida's economy while protecting our state's environmental treasures and our important tourism economy," Cannon said in a statement.

Sole said he's keeping an open mind but told the panel it also should consider competing uses for state waters including shipping lanes, fishing, aquaculture, military training and weapons testing and alternative energy such as harnessing wind and ocean currents.

He said another important factor is sand on the gulf bottom needed for beach renourishment because half of Florida's 825 miles of sandy beaches are critically eroded.

"The probability of a major oil spill admittedly is low," Sole said. "The data does show the higher risk issue is transportation. It's not the drilling so much, but it's the pipelines, the barges."

He showed the panel of map of hundreds of pipelines crisscrossing the gulf off Florida's neighboring states. He later said the state faced significant challenges to site just a single pipeline off Tampa due to the beach erosion issue.

[mtraininjax]

So we explore, we estimate and make a business decision to go forward or let it just sit. Better for us to make the decision on our own, than to let some 3rd world country start drilling in International Waters, the energy that sits under our state.

[Dog Walker]

I think that some of the jobs and dollars figures we are dealing with are apples and oranges.  Don't the Alaska, Texas and California figures include jobs and dollars that come from on shore, not off shore development?  I'm sure that the Alaska figures are all on shore and that they don't have any off shore platforms due to the ice.  Is there a way to separate out the information?  I don't understand why the tax revenue figures for Texas and Alabama are so low either.

If we do develop natural gas wells in Florida waters, I hope they don't pipe it all to Texas.  We have about the highest natural gas prices in the nation here in Florida and that stands in the way of motor fleet use of CNG (compressed natural gas) as a fuel.  In some areas all the taxis and buses run on CNG which is a much cleaner fuel than diesel or gasoline.  The tanks are filled at night with gas that comes from the regular supply pipe by compressor "filling stations" right in the fleet garages.  No tankers needed.

[BridgeTroll]

If we do develop natural gas wells in Florida waters, I hope they don't pipe it all to Texas.

Good point... this should be another negotiation area.

[mtraininjax]

Dog, we are looking to convert our fleet of trucks to Nat Gas, but to do so, we would have to purchase a large tank for our property and fill the trucks from it. We need the State to mandate that people who use Nat Gas for fuel receive a rebate or stimulus (a far fetched idea for legislators to think of on their own, but I have hope).

We need the stations first before we have the cars. Even 1 station on the North, South, East and West of town would suffice for now, to see what the demand is. T Boone can tell you the total number of Nat Gas selling stations, but the future number for next year is only like 300 new ones, so this is not a well-embraced plan.

[Dog Walker]

mtrain, Are you sure you aren't talking about converting to propane?  It's a cleaner fuel too, but expensive.

Nat gas is just pulled from the TECO's pipe and compressed into the tank in the trucks.  There are some people who have a compressor in their home garage even.  There is no storage tank required with CNG.

[mtraininjax]

Dog - At our business we would have a huge tank. Nat gas converts, according to the article I read recently in Business Week, to about $1.73 a gallon, when Unleaded is at $2.55 a gallon.

No TECO pipes down our street.

[stjr]

Obviously, we have to assume most of these Florida employees are pumping gas.

Raise your hand if you know of anyplace they pump your gas for you?

Civil, if you had gone to the API link I provided, you would have read that this really refers to all convenience and repair shop employees.  I figuratively used "pumping gas" but obviously  today, that mostly refers to clerks who cashier, call for pump repairs, and/or reset pumps that trip up.

It amazes me how literal some MJ posters are here.  Loosen up a bit.  Life is short.

NAICS 44711. Gasoline stations with convenience stores. This subsector comprises
establishments engaged in retailing automotive fuels (e.g., diesel fuel, gasohol, gasoline)
in combination with convenience store or food mart items. These establishments can
either be in a convenience store (i.e., food mart) setting or a gasoline station setting.
These establishments may also provide automotive repair services.

NAICS 44719. Other gasoline stations. This subsector comprises establishments
known as gasoline stations (except those with convenience stores) primarily engaged in
one of the following: (1) retailing automotive fuels (e.g., diesel fuel, gasohol, gasoline) or
(2) retailing these fuels in combination with activities, such as providing repair services;
selling automotive oils, replacement parts, and accessories; and/or providing food
services

[Dog Walker]

Mtrain, without TECO pipes in your area, how are you going to get CNG to your tank?  You sure you are not talking about LPG (liquefied petroleum gas)  i.e. propane?

The cost of CNG per gallon equivalent is lower than unleaded, but it also doesn't have as much power so mileage would be lower.

Even if propane or CNG were the same cost per mile as gasoline or diesel, they are so much cleaner fuels that maintainence costs for a fleet are much lower and engine longevity is much greater.

[stjr]

Hmmm... wonder what risk these fires and explosions create for the environment.  858 of them just since 2001 per the article below.  Sounds like the risk is pretty high.

Oil rig explodes off Louisiana coast; 11 missing

By KEVIN McGILL (AP) â€" 4 hours ago

NEW ORLEANS â€" An explosion rocked an offshore oil drilling platform, sending a column of fire into the sky and touching off a frantic search at sea Wednesday for 11 missing workers.

Most of the 126 workers on the rig Deepwater Horizon escaped safely after the explosion about 10 p.m. Tuesday, the Coast Guard said. Three were critically injured.

The rig, more than 50 miles southeast of Venice on Louisiana's tip, was still burning Wednesday afternoon. It was tilting about 10 degrees. There was no estimate of when the flames might be out.

Helicopters and boats searched the Gulf of Mexico for any sign of the workers who had not been accounted for.

"We're hoping everyone's in a life raft," Coast Guard Senior Chief Petty Officer Mike O'Berry said.

The Coast Guard said there were 17 workers evacuated by air and sea Wednesday morning but not all required hospital stays. Three were in critical condition, Rear Adm. Mary Landry.

The other 98 workers were being brought in by boat and were expected ashore Wednesday evening.

When the explosion happened, the rig was drilling but was not in production, according to Greg Panagos, spokesman for its owner, Transocean Ltd. in Houston. The rig was under contract to BP PLC. BP spokesman Darren Beaudo said all BP personnel were safe but he didn't know how many BP workers had been on the rig.

Adrian Rose, vice president of Transocean, said crews were doing routine work before the explosion and there were no signs of trouble.

Coast Guard environmental teams were on standby in Morgan City, La., to assess any environmental damage once the fire was out.

According to Transocean's website, the Deepwater Horizon is 396 feet long and 256 feet wide. The semi-submersible rig was built in 2001 by Hyundai Heavy Industries Shipyard in South Korea. The site is known as the Macondo prospect, in 5,000 feet of water.

The rig is designed to operate in water up to 8,000 feet deep and has a maximum drill depth of about 5.5 miles. It can accommodate a crew of up to 130.

A semi-submersible rig is floated to a drilling site. It has pontoons and a column that submerge when flooded with seawater. The rig doesn't touch the sea floor, but sits low in the water, where it is moored by several large anchors.

Last September, the Deepwater Horizon set a world deepwater record when it drilled down just over 35,000 feet at another BP site in the Gulf of Mexico, Panagos said.

"It's one of the more advanced rigs out there," he said.

Panagos did not know how much the rig cost to build, but said a similar rig today would run $600 million to $700 million.

Workers typically spend two weeks on the rig at a time, followed by two weeks off. It is equipped with covered lifeboats with supplies to allow them to survive for extended periods if they must evacuate.

Total offshore daily production in the Gulf of Mexico is 1.7 million barrels in federal waters; 6.6 billion cubic feet of natural gas per day is produced in those waters. There are about 35,000 workers offshore in the Gulf at any one time, according to MMS.

Joe Hurt, a regional vice president for the International Association of Drilling Contractors, said working on offshore oil rigs is a dangerous job but has become safer in recent years thanks to enhanced training, improved safety systems and better maintenance.

"In recent years, there's been a lot more money available and more money spent on training and safety," he said.

Transocean has 14 rigs working in the Gulf and 140 worldwide. There are 42 deep water rigs either drilling or doing workovers â€" upgrades and maintenance â€" in depths of 1,000 feet or greater in the Gulf of Mexico, according to the federal Minerals Management Service.

Since 2001, there have been 69 offshore deaths, 1,349 injuries and 858 fires and explosions in the Gulf, according to the agency, which did not break down the cause of the deaths, the severity of the injuries, or the size of the fires and explosions.

Associated Press Writers Alan Sayre and Mike Kunzelman in New Orleans and Cain Burdeau in Port Fourchon, La., contributed to this report.

[Lunican]

Sunken Oil Rig Off Louisiana Coast is Leaking



The Coast Guard discovered Saturday that oil is leaking from the damaged well that fed a massive rig that exploded this week off Louisiana's coast, while bad weather halted efforts to clean up the mess that threatens the area's fragile marine ecosystem.

For days, the Coast Guard has said no oil appeared to be escaping from the well head on the ocean floor. Coast Guard Rear Adm. Mary Landry said the leak was a new discovery but could have begun when the rig sank on Thursday, two days after the initial explosion.

"We thought what we were dealing with as of yesterday was a surface residual (oil) from the mobile offshore drilling unit," Landry said. "In addition to that is oil emanating from the well. It is a big change from yesterday ... This is a very serious spill, absolutely."

http://www.cbsnews.com/stories/2010/04/24/national/main6429004.shtml

[Dog Walker]

but we should build some more refineries too

Uh yeah! 

The oil companies are actually shutting down refineries because gasoline consumption has dropped so much.

[JC]

Sunken Oil Rig Off Louisiana Coast is Leaking



The Coast Guard discovered Saturday that oil is leaking from the damaged well that fed a massive rig that exploded this week off Louisiana's coast, while bad weather halted efforts to clean up the mess that threatens the area's fragile marine ecosystem.

For days, the Coast Guard has said no oil appeared to be escaping from the well head on the ocean floor. Coast Guard Rear Adm. Mary Landry said the leak was a new discovery but could have begun when the rig sank on Thursday, two days after the initial explosion.

"We thought what we were dealing with as of yesterday was a surface residual (oil) from the mobile offshore drilling unit," Landry said. "In addition to that is oil emanating from the well. It is a big change from yesterday ... This is a very serious spill, absolutely."

http://www.cbsnews.com/stories/2010/04/24/national/main6429004.shtml

I cant believe anyone is surprised by this.  I just want to shout a resounding "WE TOLD YOU SO" from the roof tops.  I know, too soon...