Offshore Drilling

Giacomo Rimoldi GutierrezCBE 555

October 2, 2007

Done in a 200 mile wide band around the country which is called the Exclusive Economic Zone(EEZ).

(1)Continental ShelfShallow water depths rarely deeper than 200 m Extends seaward from the shoreline to distances ranging from 20 km to 400 km

(2) Continental Slope Bottom drops off to depths of up to 5 kilometers

(3) Continental RiseDips very shallowly seaward from the base of the continental slope

In part composed of down-washed sediments deposited at the base of the slope

History CheckH.L. Williams drilled the first offshore well in 1887 from a wooden wharf that extended 300 feet onto the continental shelf off Summerland, California

The emergence of free-standing and floating platforms in the 1940s allowed drilling rigs to be moved ever-farther away from shore into deeper water

Today, there are around 4,000 platforms producing in Federal waters up to roughly 7,500 feet deep and up to 200 miles from shore

Offshore Drilling1) Accounts for almost 25% of total U.S. natural gas production over the past two decades4.042 trillion cubic feet (Tcf) in 2004 (21% produced in that year)2) It provides with 30% of the total U.S. oil production in recent years565 million barrels produced in 2004 (29% produced that year)3) There are estimated 406.1 Tcf of remaining undiscovered technically recoverable natural gas and 76 billion barrels of oil in U.S. offshore regions4) Of these amounts, an estimated 232.5 Tcf of natural gas and 36.9 billion barrels of oil are located in the Gulf of Mexico.

Federal OCS Share of US Total Production (Percentage)

Year Natural Gas Crude Oil

1990 27 11.3

1991 25.9 12

1992 25.4 13.3

1993 25 14.1

1994 25 15.3

1995 25 17.4

1996 26.1 18.6

1997 26 20.1

1998 25.5 21.8

1999 25.8 25.2

2000 24.8 26.7

2001 24.8 28.3

2002 23.1 29.1

2003 22.4 28.9

2004 20.5 28.9

Oil Production2000-2005

Crude Oil

419 459 451 485 467 409(Million Barrels)

Depth Less Than 200 Meters 185 173 163 149 157 104

Depth Greater Than 200 Meters 234 286 288 336 310 305

Percentage from Depth Greater Than 200 Meters 55.8 62.2 63.9 69.3 66 75

Lease Condensate

106 101 90 78 74 62(Million Barrels)

Depth Less Than 200 Meters 61 50 52 48 47 36

Depth Greater Than 200 Meters 45 51 38 30 27 26

Percentage from Depth Greater Than 200 Meters 42.2 50.2 42.2 38.5 36 42

Natural Gas ProductionDry Natural Gas

4,773 4,913 4,423 4,306 3,874 2,906(Billion Cubic Feet)

Depth Less Than 200 Meters 3,608 3,578 3,095 2,793 2,652 1,837

Depth Greater Than 200 Meters 1,165 1,334 1,328 1,513 1,222 1,069

Percentage from Depth Greater Than 200 Meters 24.4 27.4 30 35.1 32 37

Natural Gas Wet After Lease Separation

4,901 5,027 4,544 4,397 3,967 2,968(Billion Cubic Feet)

Depth Less Than 200 Meters 3,705 3,660 3,180 2,852 2,716 1,898

Depth Greater Than 200 Meters 1,196 1,367 1,365 1,545 1,251 1,070

Percentage from Depth Greater Than 200 Meters 24.4 27.2 30 35.1 32 36

Natural Gas Liquids

199 192 184 148 155 123(Million Barrels)

Depth Less Than 200 Meters 115 96 118 93 104 79

Depth Greater Than 200 Meters 84 96 66 55 51 44

Percentage from Depth Greater Than 200 Meters 42.2 50 36 37.2 41 36

Operating Costs

Numbers per plataform

11,000 barrels of oil per day

40 million cubic feet of gas per day

Barrel $74.97 (9/2007)

One plataform can make up to $824,670 a day

Table 5. Annual Operating Costs for Gulf of Mexico wells in 2006 (Current US Dollars)

Water Depth, feet

Platform Size 100-ft 300-ft 600-ft

12 Slot 9,337,100 9,624,300

18 Slot 11,179,300 11,523,900 12,148,800

GOM Average 10,258,200 10,574,100 12,148,800

Revenues from Federal Offshore Lands, Fiscal Year 2000

(Mineral Management Service)

Royalties

Natural Gas $2,451,875,964

Oil $1,642,700,114

Other $141,221,225

$4,235,797,303

Rents $207,828,582

Bonuses $441,798,474

Other $324,238,283

Total $5,209,662,642

EnvironmentalSince 1975, drilling in the EEZ has had a safety record of 99.999 percent meaning that only .0001 percent of the oil produced has been spilled

Each oil rig dumps about 90,000 metric tons of drilling fluid and metal cuttings into the ocean over its lifetime and each of its 50 to 100 wells (on average) dumps 25,000 tons of toxic metals such as lead, chromium, and mercury into the ocean

Offshore drilling exposes wildlife to the threat of oil spills that would devastate their populations

Pollute the air as much as 7,000 cars driving 50 miles a day.

In real numbers

A platform will dump 1.1 barrels of oil per day

The approximate 11,500 platforms will dump 12,650 barrels per day

The maximum amount of drilling fluid polluting in their lifetime would be equal to 1.035 x 10^9 metric tons

The pollution created by them would be equal to 8.05 x 10^7 cars driving 50 miles per day. This is during the lifetime of the platforms. This is 7.7 x 10^6 kg of CO2 during the lifetime of each platform. Meaning 8.855 x 10^10 kg of CO2 for all the platforms.

More environmental

An ARCO pipeline ruptured in the 1994 Northridge earthquake, spilling 193,000 gallons of oil into the Santa Clara River.

Department of Interior (DOI)Environmental Protection Agency (EPA), Department of Commerce’s National Oceanic and Atmospheric Administration (NOAA), U.S. Fish and Wildlife Service (FWS).

Other ControversiesIn May 1992, Chevron USA pleaded guilty to 65 violations of the Clean Water Act and paid $8 million in fines for illegal discharges from the company's production platform of the California coast

In March 1997, Chevron was fined 1.2 million for operating a well off the coast of Ventura with a broken ant-blowout valve, a key environmental protection on an offshore oil well.

In 1998, a rupture in Torch Oil's pipeline spilled 21,000 gallons of oil, damaging a rich ocean fishing ground and killing wildlife in the delicate coastal ecosystem at the mouth of the Santa Ynez River

State and local authorities repeatedly cited the Venoco Corporation for releases of deadly hydrogen sulfide gas at its Goleta platform in 1998-99.

http://www.eia.doe.gov/kids/energyfacts/sources/non-renewable/offshore.html

http://www.eia.doe.gov/pub/oil_gas/natural_gas/feature_articles/2005/offshore/offshore.pdfhttp://tonto.eia.doe.gov/dnav/pet/pet_crd_gom_s1_a.htm

http://tonto.eia.doe.gov/dnav/pet/pet_pri_wco_k_w.htm

http://www.eia.doe.gov/pub/oil_gas/natural_gas/data_publications/cost_indices_equipment_production/current/coststudy.html

http://i.pbase.com/v3/91/43791/1/50026687._S8E0830_oil_rig_Long_Beach.jpg

http://www.culturechange.org/caoe.html http://nlquery.epa.gov/epasearch/epasearch?typeofsearch=epa&querytext=miles+per+gallon&originalquerytext=car++milage&areaname=&filterclause=%28tssms%3Aepapages%29+AND+&sessionid=45B5B8DC0B6645F11EC576ED4C0BAB02&referer=http%3A%2F%2Fwww.epa.gov%2F&prevtype=epa&result_template=epafiles_default.xsl&areasidebar=epahome_sidebar&areapagehead=epafiles_pagehead&areapagefoot=epafiles_pagefoot&stylesheet=http%3A%2F%2Fwww.epa.gov%2Fepafiles%2Fs%2Fepa.css

Thank you