Tag Archives: oil

Rena: Too unstable to pump oil

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SALVAGE: “The dangerous job of emptying the ‘Rena'”

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Study: Oil spill cleanup workers suffered chromosome damage, respiratory issues

Spanish fishermen who took part in a clean-up operation after the Prestige oil tanker spill in 2002 have shown symptoms of chromosomal damage and respiratory problems, a study released Tuesday said.

The study, conducted by Spanish researchers between September 2004 and February 2005 on 501 fishermen who helped clean up Europe’s worst oil spill, was published in the American review Annals of Internal Medicine.

On November 19, 2002 Liberian-flagged oil tanker the Prestige broke up and sank off Galicia in northwestern Spain, a region famed for its pristine coastline and ecological diversity.

The ship spewed 64,000 tonnes of thick, heavy fuel oil into the waters, polluting thousands of kilometres (miles) along the Atlantic coast of France, Spain and Portugal.

The Spanish study said “those who participated in the clean-up had a higher prevalence of respiratory symptoms, higher levels of markers suggestive of airway injury in exhaled breath condensate, and chromosomal alterations in lymphocytes compared with those who did not participate in clean-up activities.”

It said “chromosomal damage in circulating lymphocytes is an early marker of genotoxicity associated with increased risk for cancer.”

It concluded that “participation in clean-up of a major oil spill seemed to have adverse health effects.”

But it warned that “the study does not prove that oil exposure caused the abnormalities.”

And it said “the findings cannot be extrapolated to spills of other types of oil” and “therefore cannot predict what effects individuals exposed to other oil spills, such as that in the Gulf of Mexico and elsewhere, might experience.”

But the researchers urged that “the authorities responsible for organizing (oil) clean-up operations take appropriate measures to guarantee the health protection of those involved in the clean-up activities and establish registries to systematically assess possible adverse health outcomes in exposed workers over time.”

Source: Agence France-Presse

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MARITIME | U.S. panel eyes more self-regulation for oil

(Reuters) – The White House oil spill commission could push for the oil industry to create a self-regulating agency that would fill a gap in the sector’s oversight exposed by BP’s massive oil spill, a co-chair of the panel said on Wednesday.

A structure modeled on the nuclear industry’s Institute of Nuclear Power Operations, or INPO, would allow oil companies operating offshore to hold their counterparts more accountable, commission co-chair Bill Reilly told Reuters.

“An INPO-like facility very strongly backed by a regulatory authority, by the government, could really fill that gap,” Reilly told Reuters in an interview.

He stressed that any self-regulating agency would not be a substitute for a strong federal regulator, but instead would act as supplement to those rules.

Any measures that the commission proposes would be in addition to tough new legislation passed by the House in July, but that still needs to get through the Senate.

Prior to its massive oil spill that battered the Gulf coast for months, BP (BP.L) (BP.N) had a reputation in the oil industry for taking safety risks, Reilly said.

“There was a sense for some time that BP did not have adequate attention to safety and environment,” he said. “Yet the industry … didn’t have any way to influence BP with respect to that problem.”

Charged with issuing recommendations on the future of offshore drilling, the seven-member commission is strongly considering a structure similar to the nuclear sector’s agency for offshore oil producers.

Such a regulatory regime would be a sweeping overhaul for an industry that once prided itself on safety, but is struggling to regain its footing with a suspicious public after the largest oil spill in U.S. history.

At its second public hearing next week, the presidential panel will examine the details of how such an agency might work within the oil and gas industry.

The nuclear industry’s agency was established by nuclear companies in 1979 following the recommendations of a presidential commission after the Three Mile Island nuclear plant accident that sent shockwaves through the sector.

The industry-funded institute conducts regular evaluations of nuclear plants, establishes performance objectives and helps train nuclear plant employees.

Spurred by the BP oil spill, oil companies are also weighing the implications of setting up a self-regulating agency.

“It’s something the industry will be taking a look at and considering and seeing if there’s an opportunity that could work down the road,” said Erik Milito, of the American Petroleum Institute, the main oil industry trade group.

Reilly, a former Environmental Protection Agency head, said during his time on the board of Texas-based Energy Future Holdings Corp, which operates a nuclear plant, he was impressed by the respect in the nuclear industry for INPO evaluations.

A new oil oversight body may be tasked with inspecting the safety of the massive offshore rigs, affecting companies from Exxon (XOM.N) to the drilling leader Transocean (RIG.N).

Some believe an industry-backed watchdog would be necessary if companies are forced to share in costs of accidents and spills, as some lawmakers have proposed.

It may be difficult to gain public support for such an agency, however, especially as critics charge it was the government’s cozy relationship with oil companies that helped lead to the Gulf spill.

“The industry sort of regulating itself is probably not going to sell very well with the American public,” said Ken Medlock, an energy fellow at the Baker Institute at Rice University.

Instead, Medlock said another outcome would entail a tax on oil companies that would support an expanded government offshore regulatory agency.

Reilly said he believes if the nuclear industry could overcome public misgivings, then the oil industry can also.

“If there was an industry that was even less in favor in the past 30 or 40 years since Three Mile Island, it’s that industry,” he said. But INPO “has been accepted and proved itself effective,” Reilly added.

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CONTAINER TRADE | Will oil ever be cheap again?

Mike Wackett | ci-online

Oil is the new tobacco. We crave it, but we are about to learn the full cost of the addiction.

With a horrendous 60,000 barrels of oil a day estimated still to be gushing into the Gulf of Mexico, nearly two months since BP’s Deepwater Horizon oil rig exploded claiming the lives of eleven oil workers; blackly scaring the white-sanded coastlines, killing wildlife and impairing the livelihood of residents, questions are being asked within and without the oil industry about the safety of deep offshore drilling – a factor that ensures post-spill exploration costs will soar.

BP ceo Tony Hayward was ‘sliced and diced’ on Thursday by US Congressmen as he ineptly tried to deflect blame for the spill, following the British oil giant’s climb down the day previously in agreeing to a USD20 billion ‘uncapped’ escrow fund.

Indeed, Hayward was accused of ‘kicking the can down the road’ in his misguided PR disaster hearing attempt at stonewalling many of the questions from the emotionally-charged Senators, baying for the gaff-prone ceo’s blood.

Moreover, the USD20 billion compensation and clean-up cost could ultimately rise to USD100 billion, as no-win-no-fee ambulance-chasing lawyers in the US climb on the bandwagon in the belief that several Christmases have arrived at once.

Conscious of easing the current anti-oil sentiment in the US, BP’s peers, Chevron, Exxon Mobil, Petrobras and Royal Dutch Shell may publicly be saying that the accident was ‘preventable’, but privately they might just be thinking: ‘there but for the grace of God.’

Meanwhile, the Obama administration has imposed a minimum six-month moratorium on deep drilling offshore while the accident is investigated and the President figures out ‘whose ass to kick’ for the blowout on BP’s 5,000ft deep well.

And elsewhere, in the wake of the Gulf of Mexico spill, the oil industry is in reflective mood: oil firms are reviewing their technology and systems, in anticipation of a crackdown by regulators.

‘What’s happening now is that the industry is looking at how it does things, checking that they are following the correct procedures, and that they aren’t inadvertently straying from good practices, making sure all their equipment is functioning as it should be,’ UK Health and Safety Executive inspector Donald Dobson told the BBC in an oil disaster debate this week.

‘It’s making people go back and double-check things that they’ve taken for granted in the past,’ added the official.

According to the BBC review – which  centred on Aberdeen, Scotland, one of the world’s leading support centres for offshore drilling –  of particular concern in the light of BP’s nightmare is the increased risk of deep wells offshore vis a vis:

  • The sheer distance from rig to seabed means that the usual hydraulic systems – for example those used to shut off a well during an emergency – cannot be relied on to respond rapidly enough.
  • Waters deeper than 400m are beyond the reach of divers and although remotely operated vehicles are increasingly sophisticated, there are limits to their effectiveness.
  • Temperatures are so low at depth that if there’s a leak in the riser pipe – bringing oil to the surface – the icy waters could freeze the methane that flows with the oil and block the flow.

President Obama has described the Gulf of Mexico oil catastrophe as having an impact like the terrorist attacks of 9/11; since when the world changed forever.

If after the oil is finally stemmed from BP’s damaged Macondo well, as diversionary wells come on stream as predicted in August, and the clean-up and compensation claims progress smoothly, will the market regain its appetite for the ‘risk’ involved in deepwater production?

There is little doubt that post-spill, companies working offshore will be required to obtain more insurance; and that insurance will become dramatically more expensive and harder to get in the light of the expected avalanche of claims resulting from BP’s disaster.

It follows that the drive for oil exploration will hereon in become muted, as significantly higher costs are factored into production costs.

What does this all mean to the shipping industry?

Hitherto, oil prices have largely clung onto the coat tails of stock markets: soaring to USD147 a barrel in the mid-2008 boom times; plunging to USD40 a barrel as the market bottomed at the end of 2009, and hovering around USD80 in today’s fragile recovery.

However, several analysts are now predicting a spike in crude prices as increasing costs and stymied exploration combine to drive the price higher than warranted by reason of growth demand.

And with the daily fuel spend for a single post-panamax boxship nudging USD100,000 per day – even allowing for slow-steaming – ocean carriers will not want to be bitten twice by losses from soaring bunker costs and will pile on further surcharges in the direction of the downtrodden shipper.

President Obama – a smoker himself – hiked tobacco tax as one of his first acts in office, a popular move; but fuel rises stemming from an overly severe punishment of oil majors may not be quite so opinion poll boosting.

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OIL & GAS | Norway bans new drilling

Norway has banned any new deepwater drilling until a full inquiry is conducted into the Deepwater Horizon oil spill disaster.

“We are moving ahead with the 21 licensing round. We will have the accident in the Golf of Mexico in mind going forward,” said Norway’s energy minister Terje Riis-Johansen.

“There will be no drilling in any licenses on deep waters coming out of the 21st round before we have sufficient knowledge of this accident, including possible implications for our regulation.”

“In addition to that, before awarding licenses in the 21st round, I will ensure I have deeper knowledge about the accident.”

“The precautionary principle combined with a predictable framework, have to be the foundation for our petroleum politics,” Riis-Johansen said.

Reports say this is the first such decision outside the US, which has placed a six month ban on deepwater drilling in the Gulf of Mexico.

On Tuesday the UK’s department of energy announced it would increase its inspection of drilling rigs and monitoring of offshore compliance.

Energy Secretary Chris Huhne has also asked a new oil industry group to report back on its findings on the UK’s ability to prevent and respond to oil spills.

“I’ve had an urgent review undertaken to reassure myself and the public that all appropriate measures are in place around our shores,” Huhne said.

On Tuesday trading in global energy stocks were mixed despite the fallout from the Deepwater Horizon disaster.

Goldman Sachs downgraded the oil services sector Tuesday from attractive to neutral suggesting deepwater drillers are in for a tough time.

The US investment bank says the current six-month drilling memorandum could stretch to 12 months.

On Monday US-listed offshore contractor Oceaneering International cut its full-year earnings forecasts by up to 14% due to the spill.

It said demand for ROV and other equipment used in offshore drilling has tumbled since new drilling restrictions in the US were announced.

Source: TRADEWINDS.NO

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Deepwater Horizon’s sinking could scupper US drilling plans

Martyn Wingrove – LLOYD’S LIST

THE sinking of the Transocean’s semi-submersible rig Deepwater Horizon last week will weaken the US administration’s attempts to open up the Atlantic seaboard for oil and gas drilling.

The oil pollution coming from the blown subsea wellhead is creating not just a physical scar on the environment but also a psychological one in the minds of the US public, which could scupper any plans for expanding the areas allocated for drilling.

Last month, US President Barack Obama unveiled plans to open up areas off Virginia, Alaska and Florida to drilling rigs and seismic survey ships from as early as 2012 as part of a broader energy package.

His plans were based on those proposed by his predecessor George Bush and need to go through Congress and in the Senate before they can be enacted.

But the oil slick from the rig disaster in the Mississippi Canyon area will make the path of the energy bill even tougher, delaying the leasing of new exploration areas by the Department of the Interior’s Minerals Management Service.

“It will definitely ratchet up the debate on offshore drilling. But at this point the administration looks pretty committed to opening up the eastern coast,” said Judson Bailey, an analyst with Houston-based Jefferies & Co.

Oil companies can only drill in the US Gulf, except off Florida, in limited areas off Alaska and only from existing platforms off California.

They have been calling for new areas to be opened off Virginia and Florida to drilling rigs as a way for the US to eventually reduce the amount of oil and gas it imports.

The sinking of Deepwater Horizon and loss of 11 oil workers will also bring into question the safety of exploration drilling in what was though to be a region of good health and safety management.

The focus will tomorrow turn to British oil major BP, which hired the drilling semi-submersible. It will come under pressure from investors and the media to explain how the explosion occurred on the rig as it reports first quarter profits.

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