Big oil companies to present plan to respond to future spills
Wednesday, July 21, 2010; 6:43 PM
Four oil giants are going to spend $1 billion to jointly design, manufacture and store equipment to respond to an oil spill in the Gulf of Mexico, part of an effort to bolster their capabilities in the wake of the BP disaster and to reassure Congress members worried about future drilling.
Exxon Mobil, Royal Dutch Shell, ConocoPhillips and Chevron announced Wednesday a plan to form a non-profit Marine Well Containment Co. and to prepare equipment similar to what BP began to design and assemble only after the April 20 explosion that sank the Deepwater Horizon drilling rig and triggered the massive oil spill in the gulf.
Exxon Mobil will lead the engineering and construction efforts, which the companies said they hoped to complete in 18 months.
The new response plan focuses on how to quickly stop the flow of oil from a leaking subsea well and how to channel the oil to vessels nearby. It does not include new measures for how to skim oil from water or to clean soiled shorelines.
The group of companies said that the plan will include a containment cap similar to the one now on top of BP's damaged Macondo well. It will also include specially designed subsea manifolds, flexible riser pipes to link a damaged well to the water surface, and ships capable of capturing and storing the oil. The companies said that "dedicated crews" will ensure regular maintenance, inspection and readiness of the equipment.
The plan comes as Congress is mulling new requirements for deepwater offshore drilling, which has been halted by an Obama administration six-month moratorium. The House Wednesday passed two bills that would push for better oil spill response and safety technologies.
The joint response plan is in part a response to recent hearings of the House Energy and Commerce Committee, whose members harshly criticized the major oil companies for having nearly identical oil spill response plans. Some of the plans included boilerplate about walruses that are not found in the gulf and a contact number of a dead marine expert. All the plans claimed to be able to handle spills much larger than the one BP has been wrestling with. At the time, chief executives from the oil giants admitted the plans were "an embarrassment."
"As an industry, we must rebuild trust with the American people in order to demonstrate that we can produce energy in a safe and environmentally responsible manner," Marvin Odum, president of Shell Oil, the U.S. affiliate of Royal Dutch, said in a statement. "Beyond Shell's absolute commitment to oil spill prevention and robust well designs, additional safeguards must be strengthened across the industry to develop the capacity to quickly respond and resolve a deepwater well blowout in the Gulf of Mexico, regardless of how unlikely it is that this situation will reoccur."
The plan got a mixed review with one key lawmaker.
"This is only one possible tool in what must be a more robust tool kit for oil companies to respond to spills," said Rep. Edward J. Markey (D.-Mass), chairman of the House Energy and Commerce's subcommittee on energy and environment. "This could be a positive step, but it cannot be the industry's last."
"While this proposal's response time could be quicker than this spill, the proposal these companies are submitting is essentially the current BP cap system and plan for 100 percent collection of oil," Markey added. "This current, ad hoc system erected by BP cannot and should not be the final proposal by these companies. While this could be a rapidly-deployed system, the oil companies must do better than BP's current apparatus with a fresh coat of paint. The oil companies must also invest more in technologies that will prevent fatal blowouts in the first place."
The companies said that they plan to construct equipment that would be "flexible, adaptable and able to be deployed within days on a wide range of well designs and equipment, oil and natural gas flow rates and weather conditions." They said the system would be designed to work in depths up to 10,000 feet and to contain up to 100,000 barrels (4.2 million gallons) a day.
Clarence P. Cazalot, chief executive of Marathon Oil, was part of an American Petroleum Institute group in Washington this week to urge lawmakers to refrain from setting too many rules for offshore drilling. He said the industry would "engineer, design, build" a sealing cap for underwater wells. He said the goal would be "to be able to plan in advance and to have this equipment on standby to deploy not just in the gulf but anywhere in the world."