Staff Presentation on Offshore Drilling Statistics and Draft Findings

8/8/2019 Staff Presentation on Offshore Drilling Statistics and Draft Findings

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1. The nation is currently and will in the foreseeable future be highly

dependent on offshore drilling in the outer continental shelf,

including in deep waters.

2. The oil and gas industry developed highly innovative and

advanced technologies to explore oil and gas reserves increasingly

deeper and further offshore.

3. Offshore production has helped offset declines in production

elsewhere in the U.S., moderated dependence on foreign imports,

thereby contributing to national security and reduction of the trade

deficit.

4. Offshore oil production is part of a broader picture that includes

strategies for managing demand, the role of alternative fuels, and

the availability of domestic reserves for future generations.


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0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Thousand

Barrels

PerDay

Year

U.S. Crude Oil Production, 1981-2009

Total U.S. Crude Oil Production

Offshore U.S. Crude Oil Production

Source: Commission staff, adapted from U.S. Energy Information Administration


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0

2,000

4,000

6,000

8,000

10,000

12,000

1940 1950 1960 1970 1980 1990 2000 2010

WaterDepth

Year

Wells Drilled in the Gulf of Mexico by Water Depth, 1940-2010

Source: Commission staff, adapted from Bureau of Ocean Energy Management, Regulation and Enforcement


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0

1

2

3

4

5

6

7

8

1990 2000 2008 2015 2025 2035

MillionBarrelsPerDay

Year

Domestic Crude Oil Production by Source, 1990-2035

Onshore L48 Offshore L48 Alaska Total



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0

1

2

3

4

5

6

7

8

1990 2000 2008 2015 2025 2035

MillionBarre

lsPerDay

Year

Domestic Crude Oil Production by Source, 1990-2035

Alaska Offshore Lower 48 Onshore Lower 48



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$0

$10

$20

$30

$40

$50$60

$70

$80

$90

$100

$110

$120

$0

$2

$4

$6

$8$10

$12

$14

$16

$18

$20

Dollarsper

Barrel

BillionDollars

Year

Total Federal Offshore Revenues Collectedby MMS/BOEMRE, by Fiscal Year

Lease Acquisitions

Oil and Gas Royalties

Cushing, OK WTI Spot Price FOB (Dollars per Barrel)

Source: Commission staff, adapted from Bureau of Ocean Energy Management, Regulation and Enforcement


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0

20

40

60

80

1990 2000 2008 2015 2025 2035

Net import share of U.S. liquid fuels consumption in three cases, 1990-2035

History Projections

Reference

High Oil Price

Low Oil Price

Source: U.S. Energy Information AdministrationYear

Percent


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0

5

10

15

20

25

1970 1990 2008 2020 2035


Year

U.S. Liquid Fuels Supply, 1970-2035

Biofuels Petroleum Supply

CTL and GTL Natural Gas Plant Liquids

Net Petroleum Imports

Source: Commission staff , adapted from U.S. Energy Information Administration


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0

2

4

6

8

10

12

14

16

18

1990 2000 2008 2015 2025 2035


Year

Liquid Fuels Consumption by Sector, 1990-2035

Resident & Commercial Industrial Transportation Electric Generation

Source: Commission staff , adaptedy from U.S. Energy Information Administration


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5. Despite the impressive technology developed for offshore drilling,

there were not comparable developments in the technologies that

provide safety in the challenging new environments in which the

industry operated.

6. Offshore rigs have complex management problems because of the

combination of prime operators, subcontractors, and equipment

manufacturers needed to make them work.

7. Some companies in the Gulf of Mexico failed to apply process

safety measures to provide unified coordination of the range of

complex technical tasks on large rigs and the diversity of companies

working on them.

8. The entire oil and gas industry failed to provide adequate

contingency plans, including the availability of adequate containment

systems, for a major well blowout in the Gulf of Mexico, or to

advance technologies for oil recovery.


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0

5

10

15

20

25

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008

Volume(millio

ngallons)

Year

Total Volume of Spills In & Around U.S. Waters by Spill Source, 1973-2008

Unknown

All Other Non-Vessels

Pipelines

Facilities

All Other Vessels

Tankbarge

Tankship

Source: Commission Staff, adapted from Polluting Incidents In and Around U.S. Waters, a Spill/Release Compendium: 1969 2008, U.S. Coast Guard


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0

1

2

3

4

5

6

7

0

10

20

30

40

50

60

70

1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

FatalitiesperQ

uadrillionBtusProduced

Fatalities

Year

Outer Continental Shelf Fatalities Relative to Energy Production1991-2009

Fatalities

Fatalities per Quadrillion BtusProduced

Source: Commission staff, adapted from Bureau of Ocean Energy Management, Regulation and Enforcement & U.S. Energy Information Administration


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Data presented by John Gisclair, a supportservices coordinator for a unit of Halliburton, to afederal panel investigating the April 20 disastershows there was a sharp rise in pressure that waslater followed by a sharp drop in pressure.

Gisclair said that could have been an indicator thatsomething was wrong.

But Gisclair said one of his workers who was onthe rig later told him that there were so manysimultaneous activities -- starting with the

displacing of mud to the pumping of fluidsoverboard -- it was difficult to see what was goingon.

"We're pretty close to blind," at one point, Gisclair

testified.
http://www.facebook.com/sharer.php?u=http://www.nola.com/news/gulf-oil-spill/index.ssf/2010/10/distractions_hampered_deepwate.html&t=Distractions%20hampered%20Deepwater%20Horizon%20safety%20monitoring,%20contractor%20says%20|%20NOLA.com&src=sp


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9. The national interest requires the continuation and expansion

of a strong offshore drilling program, but one with a better

balancing of risk and with greater safety protections for human

life, the environment and the economy.

10. The oil and gas industry is planning for exploration and

development in frontier areas outside the Gulf of Mexico,

including the Arctic, which would introduce new safety

challenges, many of which have not been fully analyzed.

11. By forming a Marine Well Containment Company, some in the

oil and gas industry are beginning to address the absence of a

readily available containment system for the Gulf ofMexico. Many key decisions that will help determine the long-

term viability and success of the organization, however, have yet

to be made.


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Source: U.S. Energy Information Administration


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Source: U.S. Energy Information Administration


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0

50,000

100,000

150,000

200,000

250,000

1975 1980 1985 1990 1995 2000 2005 2010

Billion

Barre

ls

ofOil

Year

U.S. Production and Proved Reserves,1977-2008

Cumulative Production

Proved Reserves



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0

5

10

15

20

25

1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2020


Year

U.S. Production and Consumption of Petroleum Products

Production Consumption

Source: Commission staff, adapted from U.S. Energy Information Adminis tration

Imports

Staff Presentation on Offshore Drilling Statistics and Draft Findings

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