Rig count off La. rises to highest since BP oil spill

12 17, 2011 by Houma Courier

The weekly count of oil rigs operating in federal waters off Louisiana’s coast has reached its highest point since last year’s BP oil spill, state officials say.

But the current 35 rigs is still lower than the average weekly count of 42 that was recorded over the three months before the spill and resulting six-month deepwater-drilling ban enacted by the Obama administration.

Scott Angelle, Louisiana’s Natural Resources secretary, released the figures late Friday.

After the Deepwater Horizon disaster in April 2010, federal regulators issued no new deepwater-drilling permits until this February, Angelle said. In the weeks after the drilling moratorium was enacted, the rig count in the Outer Continental Shelf off Louisiana fell as low as 11.

Gov. Bobby Jindal in 2010 designated Angelle to head the Back-To-Work Coalition. The association of oil-industry officials and others with an interest in Gulf exploration continues to work with federal regulators to find a “regulatory middle ground” that Angele said seeks to ensure safe and responsible operations while allowing development of resources that provide energy and jobs.

“Throughout this effort, we have remained focused on restoring Gulf of Mexico energy production and the jobs that depend on that activity,” Angelle said in a news release. “While I am pleased to see the rig count increase, we are not yet where we want to be, and we will continue to work this issue until we do get to where we want to be — which is to a pre-moratorium level and a strong confidence in consistent permitting and regulation.”

The report is the latest in a flurry of news affecting the Gulf oil-and-gas industry, the main driver of Houma-Thibodaux’s economy.

The federal government’s first auction of offshore oil and gas leases in the Gulf since the spill attracted $337.7 million in winning bids Wednesday. That total is more than twice the figure the federal government received during its last auction of western Gulf leases in 2009.

Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, said the total is promising considering the competition that inshore oil shale finds, including major fields in north and central Louisiana, have created for investment dollars.

“Louisiana citizens will directly benefit from the jobs created by this sale,” he said.

An estimated 222 million to 423 million barrels of oil and 1.49 trillion to 2.65 trillion cubic feet of natural gas is expected to eventually be produced from the tracts, John said.

“The potential benefits for the economies of the Gulf Coast are very promising,” he said in a news release. “This lease sale is a huge step forward for the industry getting back to work and back to creating high-wage jobs for Americans.”

Environmental groups, however, filed a lawsuit Tuesday in Washington challenging the environmental-impact study conducted before the sale and seeking to have the bids voided. The groups — the Natural Resources Defense Council, Oceana, Defenders of Wildlife and the Center for Biological Diversity — claim the federal government has failed to ensure safety precautions have been taken to prevent another disastrous oil spill.

“The federal government is failing to learn from one of the most environmentally and economically destructive incidents in U.S. history,” said David Pettit, senior attorney with the Natural Resources Defense Council. “Fresh oil from the Macondo well continues to wash ashore nearly two years later, and the government is being negligent by issuing leases to drill now and drill deeper without ensuring all necessary precautions.”

In his opening remarks at the lease sale, however, U.S. Interior Secretary Ken Salazar cited steps he and other federal regulators have taken since the BP spill.

“Offshore drilling will never be risk free, but over the last 19 months we have moved quickly and aggressively with the most significant oil-and-gas reforms in U.S. history to make it safer and more environmentally responsible,” he said. “Today’s sale is another step in ensuring the safe and responsible development of the nation’s offshore energy resources.”

Also last week:

n An investigative report by the National Academy of Engineering and the National Research Council cited government and industry failures the groups claim contributed to the Deepwater Horizon disaster. The report calls for radical design changes to ensure that blowout preventers used in emergencies to seal off wells and prevent explosions like last year’s don’t occur again. But the report also says safety has improved since the spill and that it is reasonable to continue drilling in the deepwater Gulf.

n A report by energy research firm WoodMackenzie says that despite regulatory challenges, the Gulf is still a smart bet for energy companies. It estimates that $25 billion worth of undiscovered oil-and-gas resources remain to be tapped and can be done so profitably as long as oil prices remain above $75 a barrel.

n Anadarko, a Texas-based oil company, said it has launched a $2 billion project that will drill oil in 7,100 feet of water about 250 miles south of Lafayette. Drilling will begin next year for the Lucius project, scheduled to produce oil starting in 2014. The company estimates reserves of 300 million barrels of oil can be tapped there.