Importance of Offshore Drilling Rigs in Toda’s Time
The energy requirements in the United States are going up significantly every year. Therefore, besides local consumption, the country is looking to use additional reserves to trade in international markets to gain economic self-reliance and energy self-sufficiency. One of the significant sources of energy is offshore oil. In this post, we will discuss the importance of offshore oil. What are offshore oil rigs, what is offshore drilling, how do they install oil rigs, and what are the pros and cons of the offshore drilling process?
The Energy Context
In 2018 the US became the largest oil producer globally, surpassing countries like Russia, Saudi Arabia, and Canada. Thirty-two states in the US produce crude oil, and out of the total oil produced, as much as 15% is from offshore wells located in the Gulf of Mexico.
The Bureau of Ocean Energy Management BOEM oversees about 2,287 active oil and gas leases on approximately 12.1 million acres in the Outer Continental Shelf (OCS). As of 2020, Offshore Federal production was 641 million barrels of oil and 882 billion cubic feet of gas. The good news is that while current oil and gas production is high, estimates indicate that in the OCS, there are several undiscovered oil fields with the potential for oil drilling to yield 68.79 billion barrels of oil and 229.03 trillion cubic feet of gas.
What is Offshore Drilling?
Offshore or deep-sea drilling is a process by which oil is mined from under the seabed using a mechanical excavation method through a wellbore. Ocean oil rigs conduct drilling as part of an initial exploratory process. Once the oil is discovered, it is extracted using ocean oil rigs suitable for offshore drilling. There are different types of offshore oil drilling technology and infrastructure. Platforms leverage steel framework anchored to the floor of the ocean. In addition, the drilling rigs often use a movable structure to drill multiple wells.
On the other hand, barges work best in shallow water, usually less than 20 feet deep. The lower hull is sunk to the ocean floor, and the drilling rigs are floated to the drilling site. Jackups work like platforms, but their foundation/legs are never permanently attached to the ocean bed.
Submersibles are barges designed to work in deep water 50 feet deep.
Semi-submersibles and drill ships are floaters that do not fix the bottom of the sea but rather float and can be used for drilling in waters as deep as 3000 meters.
Offshore Drilling: Pros and Cons
There is a lot of debate about oil pros and cons of offshore drilling. While many industry advocates emphasize the benefits of offshore oil drilling, some detractors make the case that offshore drilling causes more problems than it solves. So what is the reality around these claims? Let’s take a closer look.
Pros of Offshore Drilling:
- Higher oil production – If countries relied only on land-based explorations and extraction, they would miss out on significant quantities of their oil production mix, which come from deep-sea drilling. The OCS is an example of how just one oceanic region accounts for close to one-sixth of locally produced oil in the US. This helps the economy through higher oil and natural gas yields. It also helps the country gain more self-reliance and less dependency on other countries.
- Ecosystems – Many people would quickly point out that offshore drilling is destructive to the environment. However, while poorly managed rigs, improper drilling practices, and irresponsible management of materials can negatively impact the environment, there is evidence to show that offshore rigs also enable the creation of small ecosystems of birds, fish, and marine life.
- More employment – Offshore drilling creates more local jobs in a community. For instance, with the OCS situated between Texas and Florida, many offshore oil rigs have created innumerable jobs in these states. At a national level, offshore drilling facilities account for new jobs and a continuous stream of employment opportunities across generations of workers. It is not uncommon to see entire towns and communities built around the launch of a new offshore drilling facility.
- Oil Prices – With the self-sufficiency in oil and natural gas production, there is more supply to buffer the market demand. This enables prices to be kept in check. However, if countries operated without offshore drilling, the resulting lower total produce would significantly spike the prices of fuels and related commodities, having a domino effect on the cost of living.
- Technology Innovations – Offshore drilling poses unique problems because of the complex and challenging environment offshore rigs must operate. However, this has resulted in and continues to enable countless scientific breakthroughs, technology adoption, and innovations.
- Benefits to taxpayers – With the government earning substantial revenues through licenses and leases issued to offshore oil producers, there are infinite possibilities for using these funds to benefit taxpayers. Federal royalties earned for extracted resources also enable the government to increase earnings; in 2016, the government earned over $2.5 billion in revenues from oil-related projects.
Cons of Oil Offshore Drilling:
- Environmental Impact – Offshore drilling indeed poses specific threats to the environment. These can be a result of the hydrocarbons produced during extraction and the materials used in drilling operations. Oil spills have been known to wreak havoc on the local plant and animal life. Some oil spills like the Deepwater Horizon accident impacted as many as 15,000 birds, 1200 fish, and 29 mammal species. The oil spill affected about forty-five thousand square miles of water, spilling 4.8 million barrels of oil. In addition, substances like mercury are often released during extraction, and seismic waves sometimes caused by the drilling process impact animal and plant life. These accidents and day-to-day activities have a long-lasting impact, and the environment takes many years to come back into a state of balance.
- Risk to life and Property – The very nature of oil rigs offshore presents unique risks. With the materials on-site, the complex processes involved, and the fact that safety, emergency, and healthcare support from land is often many miles away increases the risk to workers on offshore drilling facilities. Besides the immediate threat to life, working on offshore rigs is known to cause health issues like respiratory problems caused by air pollutants and reproductive health issues.
- High Costs – Since offshore drilling involves special equipment and the many constraints of erecting a facility mid-sea, the initial costs and the cost of maintaining equipment can be very high. Estimates indicate that a single offshore rig can cost anywhere between 200 and 650 million dollars, some even going as high as a billion dollars.
- Financial Risk – While the exploration and excavation processes in offshore drilling are relatively reliable, it is not always guaranteed to bring the expected results. Despite the most precise exploration techniques, specific sites may not yield as much oil as expected and may not offer easy access to the available reserves. This has both a financial and operational impact causing businesses severe setbacks.
Offshore drilling rigs present massive opportunities to leverage vast natural resources that can benefit society and a country’s economy. It is very crucial, though, that the excavation processes are managed responsibly to ensure sustainability and profitability hand in hand.