Offshore Production is Important

27% of U.S. oil production; ~$40 B /yr Katrina knocked out production & refining causing

large spike in prices

Weather Impacts Industry in Many Important Ways

Tows

Operations

DowntimeAnalysis

FatigueExtremes

PollutantFates

Hurricanes

Generate waves up to 90 ft Damage infrastructure

– Production platforms– Pipelines– Refineries (50% of U. S. capacity)– Logistical support, e.g. shore bases

Affect cost of new facilities e.g. deepwater production facility costs $1 B

Generate evacuation costs & personnel risks ($100-$500 M/yr)

Changes in future hurricanes will affect all of the above

Ongoing Study: Climate Change & Hurricanes

Purpose: Estimate effect of climate change on future Gulf hurricanes

Scope– Modeling study conducted by NCAR– Validate by hindcasting past 11 yrs– Forecast 20 yrs in the next 50 yr– Funding from DOE & 20 Oil Companies– Finish in Feb 2010 with workshop of

world-wide expertsNCAR model results showing

change in hurricane potential in 2030 (blue indicates increase)

Summary

Gulf of Mexico is an important contributor to US energy

Severe weather (hurricanes) costs:– Capital investments – Storm-related damage– Lost production– Supply interruptions & price increases

To properly plan, Industry needs to estimate future hurricane activity

Regional climate modeling is only viable tool to estimate future change

Benefits of Regional Climate Modeling

for the

Offshore Oil Industry

Dr. Cortis Cooper, Fellow