Oil companies plan $1b rapid response to Gulf spills

Four large oil  companies are committing $1 billion to set up a rapid response system to deal with oil spills in the Gulf of Mexico’s deep waters. The effort is aimed partly at deflecting efforts by some state and federal officials to stop or severely restrict drilling in the gulf in the wake of the BP spill.

The plan is expected to be announced on Thursday and involves Exxon Mobil, Chevron, ConocoPhillips  and Royal Dutch Shell. But it will be open to any company with offshore drilling and production in the gulf — including BP, whose runaway Macondo well has shown how unprepared the industry was for a major drilling accident.

According to a document describing the plan, the initial funding will be used to build containment equipment, including underwater systems and pipelines, that will be able to deal with a variety of deepwater problems. The companies expect the system will be able to operate in waters as deep as 10,000 feet and capture 100,000 barrels of oil a day.

The April 20 explosion of the Deepwater Horizon and subsequent oil spill has been a wakeup call for the industry. While it has invested billions of dollars to develop oil and gas resources offshore, in ever-deeper waters, its spill-response technology has not advanced much in recent decades.

Oil companies hope the initiative will help persuade government regulators and the administration to allow them to resume offshore drilling in the Gulf of Mexico as soon as possible. The Obama administration imposed a six-month ban on deepwater drilling days after the Deepwater Horizon accident.

“Chevron knows that it can only operate with the public’s confidence that the energy we need will be produced safely and reliably,” said John Watson, chairman and chief executive officer of Chevron, in a statement. “We are committed to advancing safe operations through enhanced prevention, better well containment and intervention and improved spill response. This new system significantly enhances the industry’s ability to effectively respond to any unforeseen incidents.”

It has taken BP nearly three months to finally cap its gushing oil well in the gulf, after repeated failures to plug the well. While it was drilling a relief well to permanently seal its damaged well, BP has relied on inflatable booms, chemical dispersants, and controlled burning to address the spill. The new initiative comes after four weeks of intensive effort by the major oil companies. It is the first product of a larger discussion within the industry on how to operate safely in the Gulf of Mexico.

The response system will include specially designed sub-sea containment equipment that will be ready for rapid deployment in the event of a spill, as well as a team of permanent specialists.

As part of the plan, a new not-for profit entity, called the Marine Well Containment Company, will be created and will be in charge of operating and maintaining this emergency capability.

The new entity will also have a research and development arm charged with devising ways of tackling an underwater spill.

Frank Verrastro, an energy expert at the Center for Strategic and International Studies, said such an initiative was badly needed.

“The spill exposed the fact that the industry’s capability on capture and clean-up was 1980s vintage, in part because there was so much reliance on blowout preventers,” he said. “Companies have used their technology to get into the deepwater but they didn’t have an adequate plan to intervene at these depths or to contain a large-scale spill.”

Source: The New York Times

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