A well respected expert in offshore drilling has said that accidents on offshore oil rigs will likely continue for some time to come due to the way shallow water drills are operated.
Eric Smith, who is the associate director of Tulane’s Energy Institute, spoke about the short comings of offshore drilling procedures and regulations following last week’s West Delta 32 accident that led to the loss of at least one worker’s life and injured 11 others. Smith told local news agencies that offshore oil drilling like energy company Black Elk’s West Delta 32 rig fall into a dangerous economic model. Like many small energy companies, Black Elk is currently using platforms that are more than 50 years old and have been discarded by larger oil companies with a larger source of capital. Smaller energy operators are encouraged by government regulators to keep drilling the platforms until the wells are completely dry.
According to Smith, there is an incentive for smaller oil companies to continue to tap spent oil fields from old platforms, because there is a cost involved in closing an existing well, with no additional financial benefit. The federal Bureau of Ocean Energy Management is also encouraging operators in this practice as it is eager to collect as many royalty checks as possible by extracting every last drop of oil from existing oil fields.
Current legislation requires oil companies to decommission platforms that don’t produce any new oil for five years. Following the Deepwater Horizon oil spill in the Gulf of Mexico in 2010, President Obama instituted new legislation regarding the closure of old and unsafe oil fields, leading to a record number of 240 platforms being closed down and dismantled in 2011.
However, these promising advancements have slowed this year, says Smith. A recent investigation done by a British oilfield monitoring organisation has said that as many as 813 of the 3700 platforms in the Gulf of Mexico meet the criteria for removal. So far in 2012 only 23 platforms have been removed from the Gulf, however, and the government has only granted 93 permits for removal.
While larger oil companies have the expertise and capital to perform drilling operations as well as maintenance, welding, repairs and plugging and abandonment on their platforms, smaller companies usually cannot afford to fully integrate these services. As a result, a number of companies are subcontracted to perform the different tasks, which can lead to a dangerous situation when the subcontractors do not communicate well.