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Production of oil and natural gas on federal lands has brought billions of dollars of revenue into federal and state treasuries. • In 2030.S.S.1 million Americans.7 trillion in government revenue. Department of the Interior. in fiscal year 2008.2 • Oil and natural gas industry exploration and production wages in 2006 were more than double the national average. These revenues would be earned over the life of the resource.6 billion from these revenues. 1 U.000 jobs would be created.S.2 Increased federal leasing could bring additional high paying jobs to Americans. developing America’s vast domestic oil and natural gas resources that were kept off-limits by Congress for decades could generate more than $1.4 billion to the federal government.1 According to an ICF International study commissioned by the American Petroleum Institute (API). 2 PWC Study. According to the U. Minerals Management Service (MMS) press release. These royalties are one of the largest sources of income to the federal government. Economy: Employment. September 2009. • A total of 35 states received $2. including $1. the agency distributed a record $23. • A part of that revenue included $10 billion in bonus bids paid by companies to lease tracts for offshore energy exploration on the Outer Continental Shelf in the Gulf of Mexico and Alaska. with another seven million jobs supported by the industry.Access to Domestic Sources Increasing access to domestic sources of oil and natural gas would create new high paying jobs. November 29. Nearly $22 billion of that amount came from oil and natural gas production. • New manufacturing jobs would be created to develop and install the infrastructure to bring new resources to market. 160. Labor Income and Value Added. . reduce our balance of payments and enhance America’s energy security. 2008. bring billions of dollars to federal and state treasuries. states and American Indian tribes from onshore and offshore energy production. The Economic Impacts of the Oil and Natural Gas Industry on the U. Our industry directly employs 2.3 trillion in revenues from offshore development alone. • Local employment also would benefit with the addition of construction jobs as well as service and support positions.

New resources could be found in the federal waters off the United States. • A new ICF International study. • Any proposed plan goes through an extensive review before any final decision. found that opening up these areas could lift domestic crude production by nearly 1 million barrels a day and natural gas production by 3 billion cubic feet per day.2 • The Interior Department’s Minerals Management Service. • Congress has allowed the decades-old moratoria banning leasing on most of the Outer Continental Shelf (OCS) off the lower 48 states to expire. the federal agency responsible for regulating oil and natural gas leasing in federal waters. Oil and Gas Resources. .S. Strengthening Our Economy: The Untapped U. still needs to set out a leasing schedule before any oil and natural gas development offshore the East and West coasts can take place. if the government allows access to them.Outer Continental Shelf Resources Where can we find new resources? Right here. • In February 2009. Interior Secretary Ken Salazar announced he would extend the comment period by six months for a proposed plan and leasing schedule to open up additional offshore areas for leasing from 2010 to 2015.

• Advances in drilling and production technology have allowed the industry to develop fields close to existing infrastructure without the installation of additional platforms. Minerals Management Service. this has allowed the industry to use a single platform to access supplies from 4 miles away. According to the U.3 billion barrels of oil and 55 trillion cubic feet of natural gas. where more than 90 percent of the resources are located within 50 miles of the shores. areas of the Atlantic and Pacific Oceans that had been off limits to drilling contain an estimated 14.S. oil and natural gas industry to do what it does best – produce the energy America needs.for the next 13 years. All of these areas should be available for exploration and production without buffer zones.000 barrels a day. These resources can replace output from maturing fields and strengthen our energy security. • 74 percent of the undiscovered oil resources and 48 percent of the natural gas resources in the Atlantic and Pacific Oceans are located within 50 miles of the shore. since these areas can be developed in an environmentally safe manner with a minimal impact on coastal communities. resulting in additional production of 10. • 55 trillion cubic feet of natural gas is enough to heat 60 million households – or every home that heats with natural gas in the United States -. What does that really mean? • 14.3 billion barrels of oil is enough to fuel 237 million cars on the road for more than 2 years and heat 8. . Atlantic and Pacific Resources Congress should allow the U. including 12 fields off the shore of California.9 million households that use heating oil for more than 21/2 years. • Some of the most promising and known reserves.Source: API projections based on MMS resource estimates by water depth for the Outer Continental Shelf. For example. With energy consumption expected to grow in the coming decades. would be off-limits if an arbitrary coastline buffer zone were established. This is particularly important in the Pacific. America needs access to its untapped domestic resources. off the coast of California.S.

promising areas in the Eastern Gulf of Mexico remain off limits. the federal agency responsible for overseeing federal offshore lands. . The federal government continues to prohibit oil and natural gas exploration in the majority of the areas in the Eastern Gulf of Mexico. According to the Minerals Management Service.Eastern Gulf of Mexico Resources While Congress in late 2008 lifted the moratoria on oil and natural gas development in the Atlantic and Pacific oceans. Florida. the Destin Dome. For example. there are several known fields with discovered oil and natural gas resources in the Eastern Gulf of Mexico. a discovery located 25 miles from shore off Pensacola. could produce anywhere from 110 to 165 billion cubic feet of natural gas a year for the next 20 years. according to exploration plans filed with the agency.

usually with a very costly seismic survey followed by an exploration well. to acquire permits. Litigation. Only after the lease is acquired will the company be in a position to evaluate it. to install production facilities (or platforms for offshore leases) and to build the necessary infrastructure to bring the resources to market. only to find that it does not contain oil and natural gas in commercial quantities. but it is an essential part of the energy business. critics claim it is “idle. But there sometimes can be delays – often as long as ten years – for environmental and engineering studies. It is not unusual for a company to spend in excess of $100 million only to drill a dry hole. There is nothing idle about it. If a company finds resources in commercial quantities. it will produce the lease. Companies can spend millions of dollars to purchase a lease and then explore and develop it. non-producing leases are not idle at all. landowner disputes and regulatory hurdles also can delay the process. incurs the loss of invested money and moves on to more promising leases.The Myth of Idle Leases The purchase of a lease is always a gamble. Companies purchase leases hoping they will hold enough oil or natural gas to benefit consumers and become economically viable for production. The reason is that a company usually only has limited knowledge of resource potential when it buys a lease. . Exploration is not a risk-free proposition. If a company does not find oil or natural gas in commercial quantities. they are under geological evaluation or in development and could become an important source of domestic supply. Sometimes when a lease is not producing.” Much more often than not. the company hands the lease back to the government.

This “virtual drilling” can help protect the environment by reducing the number of wells needed for exploration and production. Geophysicists and engineers also use 4D seismic technology. By using 4D models. computers can use the seismic data to create a 3D map of what lies below the surface. engineers and geologists can gauge how many wells a reservoir might need and where to place them. Image courtesy of Halliburton . they can create images that show where oil or natural gas deposits may remain. More precision in locating the resources can optimize field development and the location of drilling sites and production facilities. which adds the dimension of time to the survey process.Seismic Technology The search for oil and natural gas has been revolutionized. such as 3D seismic surveys. Since sound travels at different speeds as it passes through various types of rocks. Advanced technology. These steps can help to reduce a project’s environmental footprint. By combining several 3D seismic surveys taken as the field is producing over time and arranging them in a sequence. has revolutionized the exploration process for oil and natural gas. This technology improves the industry’s ability to locate potential oil and natural gas reserves with greater accuracy. allowing the industry to have “eyes” underground. Seismic surveys send high-energy sound waves into the ground and reflect information on underground rock layers back to the surface. This is especially helpful as engineers plan the most efficient way to produce resources from the reservoir.

used for drilling in waters more than 300 feet deep. In the search for oil and natural gas under the ocean. and is used in shallow waters up to 300 feet. the more technologically advanced the equipment must be.Drilling Offshore The deeper the water. .000 feet deep. specially designed rigs mounted on ships can drill a well in waters 10. These rigs float and can be attached to the ocean bottom using traditional mooring and anchoring systems or they maintain their position by using thrusters to counteract winds. Semi-submersibles are floating vessels supported on large pontoon-like structures submerged below the sea surface. Semi-submersibles are attached to the ocean floor using strong chains or wire cables. three general types of drilling rigs are used: • A “jackup” drilling rig is a floating barge with drilling equipment on its deck and long support legs. • A semi-submersible is the most common type of offshore drilling rig. • Farther offshore. waves and currents.

3 Deepwater Development Systems. or early production platform for larger deepwater discoveries.500 feet. and production facilities.mms.gomr. Each of these systems is designed to withstand the wide range of wind and wave forces. It can also be used as a utility.S.000 feet. here is a description of each type of platform:3 A Fixed Platform (FP) consists of a jacket (a tall vertical section made of tubular steel members supported by piles driven into the seabed) with a deck placed on top. the compliant tower withstands large lateral forces by sustaining significant lateral deflections. The world’s first mini-TLP was installed in the Gulf of Mexico in 1998. The fixed platform is economically feasible for installation in water depths up to 1. Minerals Management Service. satellite. based on the depth of water.000 feet. Gulf of . Unlike the fixed platform. A Tension Leg Platform (TLP) consists of a floating structure held in place by vertical. www. Courtesy of the U. a drilling rig. The larger TLPs have been successfully deployed in water depths approaching 4. A Mini-Tension Leg Platform (Mini-TLP) is a floating mini-tension leg platform of relatively low cost developed for production of smaller deepwater reserves which would be uneconomic to produce using more conventional deepwater production systems. A Compliant Tower (CT) consists of a narrow. including severe winter storms and hurricanes.Image courtesy of MMS Offshore Production Platforms There are different types of production facilities. Tensioned tendons provide for the use of a TLP in a broad water depth range with limited vertical motion. tensioned tendons connected to the sea floor by pile-secured templates. providing space for crew quarters.000 and 2. flexible tower and a piled foundation that can support a conventional deck for drilling and production operations. and is usually used in water depths between 1.

and a hull which is moored using a taut caternary system of six to twenty lines anchored into the seafloor. Production from subsea wells is transported to the surface deck through production risers designed to accommodate platform motion. or TLP to multiple wells producing through a manifold and pipeline system to a distant production facility. . An FPSO may be suited for marginally economic fields located in remote deepwater areas where a pipeline infrastructure does not exist. three types of risers (production.500 feet.000 feet. A Floating Production. Storage and Offloading System (FPSO) consists of a large tanker type vessel moored to the seafloor. and export).000 feet. or can be dynamically positioned using rotating thrusters. The FPS can be used in ultra deep water. It is anchored in place with wire rope and chain. A Subsea System (SS) ranges from single subsea wells producing to a nearby platform. FPS. drilling. although existing technology can extend its use to water depths as great as 7. A Floating Production System (FPS) consists of a semi-submersible unit which is equipped with drilling and production equipment. An FPSO is designed to process and stow production from nearby subsea wells and to periodically offload the stored oil to a smaller shuttle tanker.Image courtesy of MMS A SPAR Platform (SPAR) consists of a large diameter single vertical cylinder supporting a deck. The shuttle tanker then transports the oil to an onshore facility for further processing. SPARs are presently used in water depths up to 3. These systems are presently used in water depths greater than 5. It has a typical fixed platform topside (surface deck with drilling and production equipment).

gas and produced water are separated for transport to shore through a pipeline. Image courtesy of Shell . separating the oil. which are tethered to a vessel. where the oil. The equipment on the seafloor is maintained using robots.000 feet of water in the Gulf of Mexico. where deepwater development plays a significant role in current and future energy production. including the ability to produce and transport these resources using equipment installed on the floor of the ocean. Subsea production systems include a series of gathering lines that connect the production from multiple wells into a single processing hub. ROVs serve as eyes underwater for these operations. The most sophisticated systems operate as a processing system underwater. gas and produced waters so the product can go directly into pipelines to shore. Using this advanced technology. known as Remote Operating Vehicles (ROVs). These systems are being installed at depths of almost 10. allowing the production from the wells to be Image courtesy of Shell transported to a platform. producers can use a single platform to develop resources from 40 miles away. and are designed to connect to the subsea equipment.Subsea Technology The search for resources deep below the ocean has spurred tremendous technological innovation.

Minerals Management Service.000 feet below that. • Chevron’s Tahiti Field is the deepest producing field in the Gulf of Mexico. Department of the Interior.Technologically Amazing Results The deepwater areas of the Gulf of Mexico represent a proving ground for technology – and a key component of America’s energy future. May 2009 .000 feet to find resources.000 feet of water.S.000 feet. which MMS defines as ultra deepwater. the deepest producing well in this field is at 26. A total of 16 wells from 10 natural gas fields in the Eastern Gulf of Mexico flow into this single semisubmersible platform. if new discoveries are allowed.4 But the technological advances have allowed the industry to go much deeper. Minerals Management Service.000 barrels of oil and 210 million cubic feet of natural gas. Perdido also set a new record as the deepest SPAR.4 Thunder Horse is also the largest semi-submersible facility in the world. Minerals Management Service reports that about 70 percent of all the oil and 36 percent of all the natural gas produced in the Gulf of Mexico is found in water depths greater than 1.000 feet of water. which is defined as deepwater. Located about 190 miles south of New Orleans. Image courtesy of Eric Hamilton • BP’s Thunder Horse Platform. which is located about 150 miles southeast of New Orleans. is the first energy hub facility in the world and it is capable of handling 1 billion cubic feet of natural gas per day.356 feet – Shell set that record in December 2008 at its Perdido Development about 200 miles south of Houston. 4 “Deepwater Gulf of Mexico 2009: Interim Report of 2008 Highlights.300 tons. These drillships can operate in water that is almost 10. • The record water depth for drilling and completing a well in the Gulf of Mexico is 9. How amazing is this technology? Drillships positioned in the deep waters of the Gulf of Mexico can drill to a total depth of about 40. In early 2009. The U. the largest natural gas producing facility in the Gulf of Mexico. • Anadarko’s Independence Hub. according to the U.100 feet.700 feet below the surface of the water in depths of about 4. The facility has the capacity to add an additional 10 wells.S.000 feet deep – that’s almost two miles to the ocean floor – and then another 30. It is expected to begin production in 2010. They account for about 11 percent of the total gas production from the Gulf. installed in 8. Thunder Horse’s 7 wells were producing about 260. and resources are being found at depths of more than 5. is the largest producer in the Gulf of Mexico.S. weighing in at 143.” U.

org www. all rights reserved. perform numerous drills and inspections throughout the year to test oil and natural gas companies’ response and action to appropriate situations.001 percent of the oil produced in the federal waters offshore has been spilled.api. 1220 L Street. Well planning and engineering.Oil Spill Prevention Technology allows us to explore safely while protecting our oceans. Between 2000 and 2007. offshore leases produce about 1. Companies operating in these federal waters must comply with a rigorous set of preparedness and planning requirements. and the training of personnel – each play a critical role in achieving prevention of oil spills. API and the API logo are either trademarks or registered trademarks of API in the United States and/or other countries. Specialized equipment. MMS calculates that since 1980 less than 0. such as blowout preventers and subsurface safety valves. NW Washington. safeguard the ocean waters. API Creative: 2009-070 | 09.energytomorrow. Spills prevention is key to the protection of the ocean and marine environment. including MMS and the United States Coast Copyright 2009 – American Petroleum Institute.584. According to the Minerals Management Service. drilling practices and standards. Federal agencies. These design standards were strengthened again following Hurricanes Katrina and Rita in 2005.09 | PDF . Industry standards are designed to ensure that both the design of the platform and the equipment protect the ocean waters.4 million barrels of oil per day. the design of offshore rigs and other facilities. the number of spill drills and exercises has increased from 669 to 1. DC 20005-4070 USA www.

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