The People of America's Oil and Natural Gas Indusry

Oil Spill Response Level Rises

Jane Van Ryan

Jane Van Ryan
Posted May 18, 2010

The response to the Deepwater Horizon accident reached a new level yesterday as activities in Washington and along the Gulf Coast continued to expand.

On Capitol Hill, hearings resumed as lawmakers sought information about the administration's spill response as well as its handling of offshore energy development. And yesterday, a top-ranking official of the Minerals Management Service (MMS) resigned. According to reports, he already was planning to retire at the end of June.

At the White House, a spokesman announced the president will convene a special commission to investigate the oil spill. The commission will be patterned after similar groups that investigated the 1986 explosion of the Challenger space shuttle and the Three-Mile Island accident.

API President and CEO Jack Gerard indicated his support for the presidential commission in a statement released today.

In both print and broadcast outlets, reporters filed stories about an underwater plume of oil. National Oceanic and Atmospheric Administration (NOAA) head Jane Lubchenco said the information was "misleading, premature and, in some cases, inaccurate," adding that the hypothesis "remains to be verified."

Using ocean models, other scientists cautioned that some of the spilled oil could be entering the Gulf's Loop Current, which could pull oil south to the Florida Keys, hold it in place or perhaps move it toward Texas. As one scientist commented, "Use your best quarter and flip a coin." (Greenwire)

Meanwhile, the permitting of new offshore wells remains at a standstill. The Interior Department (DOI) has stopped all Gulf of Mexico drilling permits until it completes a report on offshore operations and sends it to the president on May 28th. Dr. Lee Hunt, president of the International Association of Drilling Contractors (IADC), says the ban is threatening economic harm to Gulf oil workers.

In a letter to DOI Sec. Ken Salazar, Hunt explained that rig owners operating in shallow waters could face a loss of $3 million a day in aggregate and be forced to lay-off workers:

"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...The resulting unemployment could possibly exceed that created by Hurricanes Katrina and Ike, and even that caused by the Macondo oil spill itself."

API believes offshore permitting should be resumed for all Gulf drilling in both shallow and deepwater. The United States must produce more domestic oil and natural gas to fuel the nation's economy, generate government revenues, create jobs and improve U.S. energy security.