What's new in production

	Vol. 226 No. 6
ROBERT E. SNYDER, EXECUTIVE ENGINEERING EDITOR

Offshore Technology Conference 2005. With a focus on “Sustaining the success of offshore industry,” OTC ’05, held in May in Houston, reached a 20-yr high attendance of 51,320 for the four-day show. Attendees from 110 countries were there. The exhibition included 2,087 exhibiting companies, filling more than 9.2 acres (3.7 hectares) in the massive Reliant Center – a major challenge to walk past and still take in a few of the continual technical paper presentations going on for 3-1/2 days.

Hurricanes and politics challenge US offshore development. While the news we hear about important sources of oil/gas from US areas, onshore and offshore, has focused on ANWR in the Arctic, major sources of added production lie off the East and West Coasts in waters now under federal drilling moratoria. Another challenge for Atlantic coast development is its location in “Hurricane Alley,” a favored pathway for hurricane-force storms moving up the coast from Florida to Maine.

The vulnerability of offshore drilling and production via pipelines has been brought to light by expensive loss and damage to facilities, and shut-in production resulting from Hurricane Ivan, which entered the Gulf of Mexico on Sept. 14, 2004, as a Category 5 storm, moving NW, then North, and slowly weakening to a Category 3, with 105-knot winds when it made landfall west of Gulf Shores, Alabama, on Sept. 16. Its path took it over developed areas of the Mississippi Canyon, Viosca Knoll and Main Pass regions. Some 150 platforms and 10,000 mi of pipelines were in the storm’s direct path. Some of the devastation caused by Ivan is still not repaired.

A special session was held at OTC to present seven papers on “Ivan the Terrible.” The storm’s “forward velocity for ocean response and its large outer core wind field structure,” conspired to generate record measured peak states for a Gulf hurricane of 52 ft (16.1 m) in its right front quadrant, as reported by Oceanweather, Nansen Environmental and Remote Sensing Center, and Ocean Numerics, in paper OTC 17736. In OTC 17735, ChevronTexaco suggested the highest waves were near 72 ft by one of its platforms in 340-ft water, 4 ft above API L-1 guidelines for this water depth.

Despite the fact that some 150 platforms were in Ivan’s path, damage to offshore platforms was less that that incurred by Hurricane Andrew in 1992, a storm of similar wind intensity to Ivan, but with smaller waves. Damage assessments by MMS indicate seven platforms were destroyed by Ivan, with significant damage to at least 24 others.

ChevronTexaco said fixed platforms in Ivan’s path performed well, despite the fact that design criteria were exceeded in many locations, indicating present design practices and “conservatisms” in API RP-2A guidelines generally assure robust structures that can withstand loads 20 – 30% higher than design values. Ivan’s center passed close to 29 ChevronTexaco platforms, four of which sustained repairable damage, and one “non-redundant” minimal platform was toppled.

In paper OTC 17733, Shell reported three facilities with major damage, Ram-Powell in V K 956A, moored in 3,214-ft water; Main Pass 252 (two bridge connected platforms in 300-ft water); and Cognac in MC 194A, in 1,025-ft water. Shell says repairs were executed safely with minimal environmental impact.

Pipeline damage was major in the shallower waters, causing significant production loss. MMS reported in February that 13 oil and gas pipelines were damaged because of mudslides and remained shut-in. Four additional gas lines of over 10-in. diameter were still shut-in in federal waters not related to mudslides. Shell said in paper OTC 17734 that its crude oil systems in the Eastern GOM were completely disabled, and Ivan’s forces impacted pump stations, delivery terminals and pipelines along the entire system used to transport over 400,000 bopd.

So, the Gulf of Mexico remains vulnerable to hurricanes; and while designs are being modified and older equipment (especially instrumentation logic equipment) is being updated, the fact remains that hurricanes are an important consideration in offshore development.

What about Hurricane Alley? The US Gulf is not the only hurricane-prone US area. A wrap-up of US mainland hurricane strikes from 1900 to 2004 shows 248 Category 1-5 hurricanes (including 100 Category 3-5) have struck eastern Florida to Maine; of these, 29 hit North Carolina. Thus, the US East Coast is also vulnerable.

Well, hurricanes or not, there is increased interest on the Atlantic Coast, where energy companies reportedly hope, and environmentalists fear, that momentum is building to relax restrictions of oil and natural gas extraction off the nation’s coasts, including South Carolina’s. The American Gas Association says it “would like to believe there is some hope to at least evaluate the Atlantic, saying it could provide up to 30 Tcf natural gas, though it is not yet clear how much might lie off South Carolina and whether extraction would be feasible.”

Although a federal moratorium prevents coastal drilling, several factors signal that the rules could change. The government’s decision this year to open the Arctic National Wildlife Refuge (ANWR) to drilling has given energy companies hope of exploring other land now off-limits to them; and rising gasoline prices have highlighted the nations’ reliance on foreign oil, heightening demand for domestic fuel.

A Republican Senator from Tennessee has proposed a measure that would give states the right to exempt themselves from the federal offshore drilling moratorium, thus allowing drilling off their states’ coasts. Virginia lawmakers in March passed a bill, which was then vetoed by the Governor, to request an exemption from the federal drilling ban. The Bush administration has indicated a willingness to permit drilling in a now-protected area off the Florida coast.

But, for now, the moratorium on drilling seems stronger than the forces that would end it. Congress in 1981 first banned new offshore leases for energy extraction and has renewed the prohibition each year since. A separate ban, put in place by President George H. W. Bush in 1990 and extended by President Clinton, won’t expire until 2012. Thus, about 90% of the nation’s coastline remains protected from drilling.

Strong constituencies – in Washington and particularly South Carolina – want to keep the drilling bans firmly in place, as tourism there is the state’s No. 1 industry.