There's an eerie similarity between the cancellation of 51 American nuclear reactor builds after the 1979 Three Mile Island meltdown, and President Obama's cancellation of 30 ongoing deep water drilling programs in the Gulf of Mexico. Those 51 additional nuclear reactors could have been producing low cost carbon free power like the 104 U.S. reactors that did go on line. Those ongoing Gulf drilling projects are by operators with a long record of safe drilling programs, seeking oil we won't have to import.
Shortly after the explosions and fire, Interior Secretary Salazar ordered Minerals Management Service (MMS) personnel to inspect those deepwater drilling rigs and their blowout preventers (BOPs). According to the inspectors report on May 9, there was only one Incident of non-compliance and all were fit for duty.
Aware of the economic impact of those drilling programs with their numerous on shore suppliers, Charlotte Randolph, president of LaFourche Parish, said she spoke to Obama in person during his visit to the oil-stricken region Friday. "I expressed to the president that we are dying because of the oil spill, but if he allows this suspension to happen it will kill us," she told reporters.
The companies drilling have paid the government millions for leases and have contracts with drill-ship and rig suppliers and others. They cannot afford to leave rigs and crews in place for six months or longer. They will need to find homes outside the U.S., leaving the partially completed wells as dry holes.
As analyst Robert Rapier points out, the large companies doing the drilling "will not be the big losers from this decision. That honor is reserved for many of the individuals and businesses along the Gulf Coast that have added jobs and made investments to serve this growing market."
Oil is a product of the sea. Nature's most prolific biomass, ocean algae, settles into the mud and silt on the ocean bottom. The mud is covered by other layers like sand, salt, and sea shell limestone, and it cements into shale, the source rock for the world's oil and much of its natural gas. If you discover oil on land, its a place that once was a sea bottom. We have found and produced most of the land and near shore based "easy oil"; the majority of what's left is in the deeper ocean.
The U.S. Department of Energy forecasts that "a vast majority" of projected increases in U.S. oil production in the near term will come from Gulf deepwater fields similar to the site of the tragic Deepwater Horizon spill. Such deepwater fields currently represent about 70 percent of all Gulf oil production (the other 30 percent comes from shallow depths, typically of a few hundred feet). Offshore oil provides almost a third of total U.S. oil production of 5.5 million barrels per day, and that percentage is rising rapidly.
The president's decision to halt new deep water drilling projects makes sense. But the decision regarding ongoing wells compounds the economic damage to an already stricken region.
ROLF WESTGARD of Deerwood is a member of the Brainerd Dispatch's advisory board, the American Association of Petroleum Geologists and is an investor in the stock of oil and gas producers.