U.S. Interior Secretary Ken Salazar

Drillers' Group Wants OK for Shallow-Water Work

The International Association of Drilling Contractors' president asked Interior Secretary Ken Salazar to allow new drilling, saying these wells pose virtually no threat to the environment and are being unfairly harmed by the deepwater hiatus.

The president of the International Association of Drilling Contractors has sent a letter asking Interior Secretary Ken Salazar to allow new drilling in less than 1,000 feet of water in the Gulf of Mexico, despite the large oil spill from the Deepwater Horizon drilling platform that has not yet been halted. Houston-based IADC announced May 14 that its president, Dr. Lee Hunt, reminded Salazar that wells drilled at this shallower depth use blowout preventers placed above the sea surface (called "surface-stack BOPs") and pose virtually no threat to the environment.

Salazar testified Tuesday at a U.S. Senate Energy & Natural Resources Committee hearing about the Deepwater Horizon spill and apparently clarified an issue raised during testimony last week by a BP executive who appeared to be limiting BP's commitment to cover all claims for compensation coming from the spill. "In a letter to Homeland Security Secretary Janet Napolitano and me that we received this past weekend, BP has confirmed that it will pay for all of these costs and damages regardless of whether the statutory liability cap contained in the Oil Pollution Act applies," Salazar told the committee, according to his prepared remarks. "The bottom line is that the United States and the affected Gulf Coast communities will be made whole. There should be no doubt about that. And while the investigations as to the cause are still underway, we will ensure that those found responsible will be held accountable for their actions." The Oil Pollution Act limits liability to $75 million, which this spill is certain to exceed, but U.S. Sen. Robert Menendez, D-N.J., is trying to raise that cap to $10 billion.

Hunt's letter said the total ban on new Gulf of Mexico drilling threatens the livelihood of thousands of workers and the financial health of dozens of companies. "The International Association of Drilling Contractors understands the necessity to delay new deep-water ventures while improved procedures are established," he wrote. "However, the order issued last week prohibiting the Minerals Management Service from issuing any new drilling permits pending delivery of the Department of Interior's report to the president on May 28, 2010, is creating unintended economic hardships for other companies and individuals engaged in offshore drilling operations in the Gulf of Mexico. These are drilling rigs operating in less than 1,000 feet of water and utilizing blowout preventers located above the surface of the sea."

The letter said shallow-water drilling poses a low risk because:

  • The resource in shallow waters is primarily natural gas.
  • Oil remaining in shallow-water reservoirs has been largely produced and is under-pressured, limiting loss of control.
  • The sea bed is more easily accessed for intervention by remotely operated vehicles and even divers.
  • Blowout preventers are located above the sea surface, not on the sea floor.
  • Temperatures in shallow water are warmer than in deep water, forestalling the formation of crystallized gas hydrates.
  • Relief wells are more expediently drilled.

"Due to the Department's order, rigs completing wells in the next weeks will be unable to take on new work," Hunt wrote. "Over the next six weeks, up to 50 drilling rigs will complete wells and be unable to accept new work. These rigs will be idled, and those employees working directly on the rig face the prospect of unemployment, even if only temporarily. Additionally, employees of supporting service companies will also face unemployment. These workers represent a significant portion of the 75,000 hard-working individuals employed in the offshore Gulf of Mexico. The ripple effects of this abeyance of all new drilling will adversely impact coastal communities across Louisiana, Texas, Mississippi and Alabama. The resulting unemployment could possibly exceed that created by Hurricanes Katrina and Ike, and even that caused by the Macondo oil spill itself."

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