Offshore Oil Drilling and Hurricane Risks

It’s time to stop blaming BP — alone.  At least four other oil companies hired the same firm to write their plans for handling spills in the Gulf of Mexico.  They ended up with nearly identical plans, complete with thoughtful concern about impacts on walruses.  The CEO of ExxonMobil called it “unfortunate” and “embarrassing” that the plan included walruses, which have not been present in the Gulf region for millions of years.

On the other hand, according to U.S. Rep. Ed Markey, the oil industry’s standard plan for Gulf spills never mentions hurricanes or tropical storms, which do appear in the region on an annual basis.  This makes perfect sense under only one interpretation: the oil companies were certain that accidents never happen.  If there are no oil spills, your spill response plan can talk about unicorns, and no one will be the wiser.

We are, unfortunately, wiser now.  We are leaving the era of low-risk, conventional energy supplies; for the future, everything depends on how we manage the risks of finding and producing fuel.  Last year, 30 percent of U.S. oil production came from offshore wells, almost entirely in the Gulf of Mexico.  Since U.S. onshore production is rapidly falling, our dependence on offshore drilling is bound to increase.

Drilling safely and responsibly is sure to raise the cost of producing oil.  Hopefully the industry will learn the most obvious lesson from the Deepwater Horizon disaster, and install better blowout protectors on drilling rigs.  Although this looks expensive, it is quite the bargain when compared to the alternative of cleaning up a major spill.  But the next draft of the spill response plan really has to talk about hurricanes.

The 2005 hurricane season, which devastated New Orleans and other coastal areas, was even more intensely violent over the open water.  The top three storms of 2005, Katrina, Rita, and Wilma, were all Category 5 hurricanes in the Gulf of Mexico.  One thing that the troubled Minerals Management Service (MMS) did right was to commission a detailed oceanographic study of that year’s hurricanes, in order to understand their effects on offshore drilling.

Katrina vs. Offshore Oil

Katrina reached its maximum intensity in an area just south of Louisiana, full of oil wells and coincidentally close to the site of the Deepwater Horizon accident.  It had sustained wind speeds of 175 mph, and may have created 80-foot waves.  Katrina destroyed 50 offshore oil platforms and drilling rigs, and did serious damage to Shell’s Mars platform, the top producer in the Gulf.  Mars is a 36,500-ton structure, which cost $1 billion to build.  The storm knocked a 1,000-ton drilling rig off the top of the Mars platform, into the center of the structure.  The repairs to Mars required eight months and 600,000 person-hours of labor.

According to MMS statistics, total U.S. offshore oil production was one-third lower in the eight months after Katrina than in the eight months before.  If nature is going to wipe out one-third of the industry from time to time, drilling in the Gulf of Mexico doesn’t sound like much of a plan for energy security.

Or maybe the 2005 hurricane season was an outlier, a once-in-a-century event that we don’t have to worry about in normal life?  Between disasters, it’s always more appealing to ignore risks and avoid the costs of being prepared; that’s why New Orleans had such shoddy levees in 2005.  This option doesn’t really hold water, though: climate change is making hurricanes, on average, more intense.

By one reckoning, a hurricane season as destructive as 2005 would have occurred once in 110 years without climate change, but will happen once every 40 years with climate change.  And that doesn’t mean 39 trouble-free years for every Katrina!  Moderately dreadful hurricanes, perhaps bad enough to knock out only one-sixth of the industry for a few months, will happen more often than once every 40 years.  We’re already being warned that BP’s ill-starred attempt to control the Deepwater Horizon blowout could be blown away by this year’s tropical storms.

So we’re overusing fossil fuels, causing climate change — which intensifies hurricanes and makes our fuel supply less secure.  We could try building bigger and bigger platforms, to withstand stronger and stronger winds and waves.  Or we could look for an alternative source of energy.

Wait a minute, we’ll think of something.  I hope.

Frank Ackerman is an economist specializing in climate change.  This article was first published in Triple Crisis on 5 July 2010; it is reproduced here for non-profit educational purposes.

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