From the Times-Picayune, New Orleans:
Ivan's damage to pipelines in Gulf worse than expected
Oil, gas can't be transported
Tuesday, October 12, 2004
By Stewart Yerton
Business writer
Hurricane Ivan's impact on oil and gas production in the Gulf of Mexico has been worse than initially anticipated because of damage to pipelines, and it could be six months before operations are restored to prestorm levels, the agency that regulates offshore oil and gas operations in the Gulf said.
Chris Oynes, regional director of the U.S. Department of the Interior's Minerals Management Service in New Orleans, said Monday that the pipeline damage has emerged recently as a significant problem. Although Ivan did considerable damage to drilling rigs and production platforms -- the storm sank several structures entirely -- much of that damage has been accounted for or repaired. Indeed, only nine of the 575 platforms evacuated before the storm remained empty late last week.
The broader problem, and one that is still being assessed, is that pipelines designed to carry oil and gas away from the production sites also have been damaged, Oynes said. This means that some production facilities capable of working remain shut down because the normal means of transporting the oil and gas is, in some cases, unusable. Companies are approaching the MMS with requests to transport oil by tanker from production platforms to delivery sites on shore.
"Quite frankly, we're still getting many reports in from the pipeline surveys, so there's still potential for other things to come to bear here," Oynes said. "Companies are starting to realize that the pipelines are going to potentially be a longer-term problem. I think it's fair to say that the lasting nature of this is a bit of a surprise."
Three weeks after Ivan surged through the Gulf of Mexico before battering the Alabama and Florida coasts on Sept. 16, the effects of the storm continue to be felt. More than a fourth of the oil and more than a 10th of the gas normally produced in the Gulf each day has been left untapped, or "shut in," because of Ivan.
In total, the amounts shut in since Ivan-related evacuations began equal more than 17 million barrels of oil and 74 billion cubic feet of natural gas; this lost production, equivalent to 3 percent of the oil and 2 percent of the gas produced in the Gulf each year, has combined with other factors to drive oil prices to record highs in recent weeks.
Crude for November delivery rose 33 cents to $53.64, surpassing Friday's record price of $53.31 on the New York Mercantile Exchange. While this price represents a record in nominal terms, it is more than $25 below the 1981 record when adjusted for inflation.
Although federal regulators did not release new data on Monday due to the Columbus Day holiday, the latest figures, reported on Friday, showed that about 475,000 barrels of oil and 1.8 billion cubic feet of gas remain untapped daily in the Gulf of Mexico.
Oynes said it was not clear when operations will return to normal. However, the MMS predicts that 150,000 barrels of the approximately 475,000 barrels of oil that are shut in each day will be back on line by month's end. At the same time, the agency predicts that approximately 1 billion cubic feet of the 1.8 billion cubic feet of natural gas shut in daily will be back on line by month's end. The agency expects about 96 percent of normal production in the Gulf to be back on line within six months.
In the meantime, he said, one possible solution is to carry the oil away from the facilities by ship.
"The companies are starting to get pretty serious about coming to talk to us about that," he said. "There have been several that have come in to talk to us."
Details of the storm are still coming into focus, Oynes said. However, he and others said the most extensive damage appears to have been caused by waves and undersea mud slides.
Like the pipeline damage, the waves stirred up by Ivan also appear to have been greater than originally thought. The National Oceanic and Atmospheric Administration measured waves of about 52 feet south of Mobile and near the mouth of the Mississippi River, said Gregory Stone, a Louisiana State University coastal scientist. However, Stone said, reports of much higher seas have come in, as companies have inspected offshore facilities that were in deeper water where the storm raged most intensely.
"I think it's pretty common knowledge now that waves were 70 feet high in some instances, maybe 90 feet high," Stone said. However, he added, "it's all anecdotal evidence, as far as I know."
Matt Carmichael, a spokesman for ChevronTexaco, said that the company's crippled Petronius platform, located south of Mobile, had been hit by waves 65 feet high. And Oynes said the MMS had indications that a solitary "rogue wave" measuring 80 feet had gone through some sections of the Gulf, possibly causing platform damage.
"This apparently was a rogue wave, so there was just one of them," he said. "But nonetheless, that is a very powerful source of physical forces."
But the more destructive force might have shown itself beneath the ocean's surface. Taylor Energy was one of several companies to lose a structure entirely to Ivan. According to John Pope, Taylor's chief operating officer, the company's massive production platform sank not because of wind or waves but because of an undersea mudslide, which he likened to a "mud avalanche."
"If you can picture a snow avalanche, when that avalanche comes through, it just takes down everything in its path," he said.
The mudslide also damaged the pipeline connected to the platform, Pope said, so that any other platform tied into the pipeline downstream also would have been shut in, regardless of whether the platform was damaged.
"Our line is repaired, so the ones that were downstream of us are back on line," Pope said.
Oynes that because they were more exposed to the elements, the platforms would have seemed the most vulnerable to storm damage.
"We all sort of made that assumption," he said. "But each storm is different; each has its own characteristics. We're still trying to find out what exactly was the nature of what went on, and we don't have a final, definitive answer."
Altogether, the MMS reported on Friday, 12 pipelines were damaged by Ivan. These included facilities owned by El Paso, BP, ChevronTexaco and Taylor. They were in addition to seven platforms destroyed and another six severely damaged.
Oynes said environmental impact has been relatively minor; however, at least one major oil spill was reported due to a pipeline problem. According to the U.S. Coast Guard, about 201,600 gallons of oil and about 211,638 gallons of oily water have been collected after a spill from the junction of pipelines owned by Shell Pipeline Corp. and BP America Inc. The spill took place about 30 miles east southeast of Venice. |
