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From the
President’s Desk:
NOTE:
Secretary of the Interior Ken Salazar hosted a regional
public meeting in New Orleans, Louisiana on Wednesday, April
8, 2009 to gather information and public comment to help
build a comprehensive energy strategy for the U.S. Outer
Continental Shelf. The meeting was held at Tulane
University's McAlister Auditorium . After
opening remarks by the Secretary, a panel of Minerals
Management Service and U.S. Geological Survey scientists
presented a summary of a report Salazar commissioned on the
known extent of U.S. offshore energy resources -
conventional and renewable - along with information
regarding sensitive environmental areas and resources on the
Outer Continental Shelf. Regional Governors and elected
federal officials, private citizens, interested
organizations, energy producers, advocacy groups, and local
governments were invited to attend and offer comments.
As President of AADE I submitted the text shown below. In
addition, my
remarks can also be viewed on the session webcast which is
accessible at:
http://www.doi.gov/ocs my comments are at the
2:17:50 time mark in the webcast.
They differ somewhat from my prepared remarks since many of
my points were already made by prior speakers.
This is a
critical issue for our organization and industry. I
encourage you to also submit a written statement, comments
or documents, electronically at www.MMS.gov, "Five Year
Program," "How to Comment," or by mail to Ms. Renee Orr,
Chief, Leasing Division, Mineral Management Service, MS
4010, 381 Elden Street, Herndon, VA 20170-4817.
I am Joseph Leimkuhler, President of
the American Association of Drilling Engineers (AADE). As an
industry technical professional who has worked in drilling
operations since 1981 I would like to offer my perspective on
further Energy Development of U.S. Outer Continental Shelf. My
educational background is in Geology (BS) and Petroleum Engineering
(MS) I have worked in offshore deepwater drilling engineering and
management roles for over 20 years. I have been the President of
AADE since 2007.
Offshore Oil & Gas
Drilling,
…mention the subject and unfortunately the average American imagines
a hazardous, dirty business that creates lasting environmental
damage, onshore and offshore. The reality of course in terms of
safety, environmental record and technology is quite different than
prevailing perceptions.
SAFETY
:
In Safety, the
Exploration & Production (E&P) business is actually one of the safer
industries, with an overall TRIR of 1.7 (OSHA 2007,
http://www.bls.gov/iif/oshwc/osh/os/osnr0030.pdf ). TRIR is the
Total Recordable Incident rate, the number is meant to reflect how
many incidents occur in a workforce of approximately 100 people over
a full year. The Occupational Safety and Health Administration or
OSHA defines an incident as “recordable” if, prescription medication
or stitches are required or the person is unable to return to work.
For rig operations specifically, the TRIR is 5.1 onshore, 1.4
Offshore and averages 2.1 worldwide (IADC, 2007 YTD). This compares
to 5.4 for construction and 5.6 for manufacturing and 4.2 for
private industry overall (OSHA 2007). To really put Safety in
perspective, the average 1.7 TRIR for oil and gas operations is
lower than the 2.7 TRIR for Real Estate! You are safer working in
oil and gas operations than driving around with a real estate agent.
ENVIRONMENTAL
IMPACT
In terms of
environmental performance drilling is perceived as being a major
risk to the environment from spills and blowouts. Once again reality
tells a different story with only 2% of the oil entering the worlds
oceans each year due to E&P operations; the remainder is due to
natural seepage, municipal runoff and shipping/transport operations
(Source:
http://seawifs.gsfc.nasa.gov/OCEAN_PLANET/HTML/peril_oil_pollution.html).
Many of us in the industry routinely discuss (perhaps defend is a
better description) the environmental performance of offshore
exploration and & production operations (E&P). Most people do not
distinguish between offshore drilling & oil and gas transport
operations and few are aware of the cutting edge technology and
practices we employ to safely drill for oil and gas offshore. Ask
anyone not familiar with the industry when the last oil spill
associated with E&P operations reached a US beach; while many can
cite the last tanker spill few can cite the E&P event to impact a
beach. The answer is over 40 years ago in 1967, in the Santa Barbara
Channel. Over 57% of the US population is younger than 40 (2000
Census) and were not alive at the time of that event. . Yet too many
of the public feel the risk and frequency of spills associated with
E&P is too high, despite the industry record and studies that show
the impact of offshore oil and gas development results in less
environmental risk than transporting oil via tanker operations
(Drilling, Tankers, and Oil Spills on the Atlantic Outer Continental
Shelf, Travers and Lune, Science 19 November 1976: 791-796)
ACCESS to
RESOURCES:
In terms of access to resources, especially offshore, it is the view
of AADE that increased domestic offshore reserves can be accessed
safely with minimal environmental impact. However, as mentioned
above, US public perception of the environmental risk associated
with drilling operations onshore and offshore is not consistent with
the industry track record and reality. It is this fear-based
perception by the public and government that is at the root cause of
our restricted access to oil and gas reserves.
The United States
consumes close to 20 million barrels of oil a day, two-thirds of
which comes from outside America, and two thirds of those imports
come from parts of the world where there is uncertainty in terms of
the continuous supply of that product. By implementing a
comprehensive energy strategy, involving increased domestic
production of oil and gas from conventional and unconventional
sources, greater use of renewable energy and increased energy
efficiency and conservation the US has the means to achieve energy
security for the future. This strategy involves a combination of
technologies and programs, with the two biggest immediate impact
areas being conservation and increased development of conventional
oil and gas, especially offshore. When basic economics,
feasibility, scale and yes, environmental risk, are fully accounted
for, conventional oil and gas does and should play a major role in
our economy and national energy strategy. The bottom line is the
United Sates is still the third largest producer of oil and gas in
the world behind Russia and Saudi Arabia. However, our domestic
production peaked in the early ‘70s and we now import the majority
of the oil consumed in the US.
Have we run out of
oil in the US?
No we have not. What we have run out of is ”easy oil” that can be
accessed at a relatively low cost. We have chosen a strategy to
import more oil and not further open up the Outer Continental Shelf
to oil and gas exploration. The result of this policy is 110 billion
barrels of known conventional oil and gas exist that oil companies
are not allowed to access. That has been our choice. We could
further open up the Gulf of Mexico, we could open up the Atlantic
Outer Continental Shelf, but it would take approval of the original
5 Year MMS OCS Plan 2007-2012 to start the recovery of those
resources.
Will development of these resources
both onshore and offshore make the US energy independent? No, but
access to these resources provides an opportunity to increase our
energy stability as well as national and economic security while we
work on a broader more sustainable energy policy for the future.
The bottom line is if the US is to achieve energy independence a
broad strategy must be developed that will include not just
increased renewable energy, but serious conservation, additional
development of conventional and unconventional oil & gas, cleaner
coal technology, nuclear, and hydrogen. Conventional Oil and Gas is
still the dominant provider of energy to the US and will remain so
as we develop a more diverse energy strategy. Continued or
increased reliance on imported oil as a key part of our energy
strategy is environmentally irresponsible, and deprives Americans of
needed jobs and economic development. From Europe to Africa to Asia
and South America, countries are developing their offshore energy
resources to the benefit of their citizens. Why can we not do the
same in the United States, what is it they know and can do but we
cannot?
Finally, with
regard to global warming and CO2; the role of CO2 has
the potential to play a dominant role in oil and gas leasing and
drilling activity. What is the role of CO2 and global warming? For
some the relationship is clear, the debate is over the jury is in
and there must be a government policy and program to manage CO2
emissions. For others the relationship is not that clear, they take
the position that other factors, solar, cosmic and long-term weather
cycles play a more dominant role and we should wait to see if the
CO2 dominated climate models are verified with actual data before
taking action on CO2 emissions. At AADE we do not take a position
on the relative impact of CO2 on Global Warming, it is an area that
is outside our expertise, thus we will defer to the government
to develop the proper national and global regulatory frameworks.
Regardless of what strategy we choose
to address CO2 emissions the hard truth is the United States will
require the oil and gas that lies on the undeveloped OCS. Even if
we were to increase our renewable energy from 8% to 30% of demand by
2050; current oil and gas reservoir production decline combined with
global economic growth will require us to continue to access
additional supplies of oil and gas from the OCS. It is imperative
that we economically develop our own oil and gas reserves with the
smallest environmental footprint at the lowest level of
environmental risk. As we Americans continue our journey to energy
independence and a sustainable national energy strategy, responsible
and prudent development of our domestic offshore oil and gas will be
required to successfully make that transition and maintain a viable
globally competitive economy.
On a closing more personal note, this
issue really hit home for me in 2005. My son was a Staff Sergeant
In the Louisiana National Guard, stationed right here at Jackson
Barracks in New Orleans. In 2004 through 2005 he spent 12 months in
Baghdad as part of Operation Iraqi Freedom. While I am proud of his
service it was also a very stressful time for his family and for me
as a parent. During this time I was often struck by the irony of
the situation; I work in an industry that is capable of developing
our own oil and gas resources from the OCS safely and efficiently,
yet due to the moratorium our industry is prohibited from doing so.
We have become so dependent on imported oil from unstable areas we
need to deploy our sons and daughters to those areas to ensure the
continued flow of oil to the worlds markets. Are there other
reasons for his deployment? Yes there are, but I firmly believe at
a significant level our need for stability in the Middle East (and
the resulting military presence) and our refusal to further develop
our own oil and gas resources on the OCS are related. I personally
believe that the security of supply justification alone, is a strong
enough reason for the United States to further develop the oil and
gas from the OCS
As President of
the AADE I urge you to approve the MMS Proposed OCS Oil and Gas
Leasing Program 2007-2012 as originally planned without the areas
withdrawn on 6/12/2009.
Respectfully submitted
Joseph Leimkuhler, President American Association of
Drilling Engineers April 7, 2009
132 Century Oak Lane’
Mandeville Louisiana, 70471
____________________________________________________________________________________
AADE is a non-profit, volunteer organization founded
in New Orleans in 1978 it is made up of an affiliation of
independent chapters licensed and governed by a National Board.
Nine chapters are now active in New Orleans, Lafayette, Houston,
Dallas-Fort Worth, Midland (Permian Basin), Oklahoma City-Tulsa
(Mid-continent), Denver, Bakersfield (West Coast), and Anchorage
with a new Appalachian Chapter recently chartered in Pittsburgh.
National membership is over 6,000 active members, and has remained
steady despite the fluctuations experienced by the industry. AADE
offers a forum for the exchange of information, among its members
and guests, specifically on drilling related topics.
Your National
Board of Directors President,
Joseph Leimkuhler
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