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Preventing blowouts: drilling safety top priority in state.

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The Macondo oil well blowout in the U.S. Gulf of Mexico has heightened concern over safety practices in the oil and gas industry like nothing since the Exxon Valdez tanker accident in Alaska in 1989. Like Exxon Valdez, Macondo was a wake-up call. Drilling safety has moved to the forefront in terms of concerns about the industry. In Alaska, this has manifested itself in the intense focus on plans by Shell and other companies to drill in the Arctic offshore in 2012 and 2013. But there are concerns for everything offshore with oil, including the new drilling by a jack-up rig in Cook Inlet, in southern Alaska and also onshore wells. A lot of attention by the public and government regulators is on oil spill cleanup and how it could be done in the Arctic, but the attention of regulators also is focused intensely on spill prevention, which really means the prevention of an accidental release of oil and particularly the prevention of a well blowout, as happened at the Macondo well.

"Our message to the president's commission reviewing the Macondo disaster is that the emphasis of regulators should be on prevention, not so much response," said John Norman, one of three Commissioners of the Alaska Oil and Gas Conservation Commission. "The emphasis should be on keeping the cage door closed and locked, not just planning how to recapture the tiger after it has escaped," Norman said. The AOGCC is an independent State regulatory commission that provides oversight on drilling safety and other industry practices.

STRINGENT RULES

The State of Alaska's drilling rules were very strong even before Macondo--stronger that the federal government's--and a detailed post-Macondo review of regulations by the AOGCC and outside experts revealed no major flaws except in one area, a specific requirement for a plan to control a blowout, according to Kathy Foerster, another AOGCC Commissioners. The authority to require such a plan will be requested from the State Legislature in its 2012 session, Foerster said, because it will require an amendment to the conservation commission's governing statute.

Interestingly, Alaska is the only U.S. state to conduct a detailed review of drilling regulations following the Gulf of Mexico disaster. The Commission is also adding to its staff of inspectors and drilling engineers because of the greater scrutiny that the State is giving drilling operations, Norman said.

The federal government has moved aggressively to institute reforms of its offshore drilling regulatory practices, including splitting the former U.S. Minerals Management Service into three new agencies, with one of them, the new Bureau of Safety and Environmental Enforcement (BSEE) charged with regulation of drilling safety. "The reorganization is designed to remove the complex and sometimes conflicting missions of the former MMS by providing each of the new agencies with clear areas of focus," the BSEE said in a policy paper. New requirements include offshore operators demonstrating that they have the capability of handling a blowout, new standards for well design, environmental compliance and other safeguards.

For the first time, federal rules will require offshore drillers to maintain comprehensive safety and environmental programs, including performance standards for drilling and production operations, and management oversight of operations and contractors, according to information supplied by the BSEE. New workplace safety rules will require companies to maintain a safety and environmental management system.

PROTECTION FROM BLOWOUTS

As Macondo vividly demonstrated, a blowout is the industry's worst nightmare. It is an uncontrolled flow of petroleum up the well-bore, often at high pressure. In the old days it was called a "gusher" and it was then often considered good, because it showed an early wildcatter's well had hit oil. However, in the modern petroleum industry, with deeper and higher-pressure wells, blowouts are extremely dangerous. They can lead to loss of life, heavy damage to equipment, loss of a valuable resource (oil that is spilled or gas vented to the atmosphere) and a possible spill of oil to land or water around the well. All of these things happened in the Macondo blowout.

They have happened in Alaska, too, although they are rare and blowouts in the state so far have been gas blowouts, not oil. There has never been a case of oil released in an Alaska blowout reaching land or open water, Foerster said. Since 1962 there have been four offshore blowouts in Cook Inlet, all involving releases of gas. The last one was in 1987. On the North Slope, there have been seven blowouts of 5,000 wells drilled since the Prudhoe Bay oil field was discovered in 1967. None of them involved a release of crude oil, and none caused injuries.

Off Alaska's coasts, such as in the Arctic offshore that is beyond the State's three-mile territorial limit, the industry operates under the regulatory jurisdiction of a federal agency, the U.S. Bureau of Energy Management (formerly the U.S. Minerals Management Service. In offshore areas within the State's three-mile limit, in water bodies like Cook Inlet and onshore, the State of Alaska has regulatory authority, which is exercised through the Alaska Oil and Gas Conservation (AOGCC) on all lands and the Division of Oil and Gas on State-owned onshore lands.

Onshore, on federal lands where oil and gas exploration is allowed, the managing federal agency has authority along with the State's AOGCC. This would include the U.S. Bureau of Land Management for the National Petroleum Reserve in northern Alaska and the U.S. Fish and Wildlife Service for the Kenai National Wildlife Refuge, where there is not only petroleum exploration but also production.

ATTENTION KEY

There is special attention being focused on drilling safety in the Arctic with Shell and other companies because the Arctic is a new frontier where cleanup of an oil spill is even more challenging than in other places, and where a blowout in ice could have catastrophic consequences. Arctic regions, however, aren't the only parts of Alaska where there is new scrutiny of drilling safety. In Cook Inlet, jack-up rigs operated by a small independent company, Escopeta Oil Co., began working in Cook Inlet in late 2011. Drilling was to be suspended for the winter months in November and will resume drilling in early 2012. In 2012 Escopeta will be joined in Cook Inlet by a second jack-up rig drilling for Buccaneer Energy, another small independent company also new to Alaska. Buccaneer has drilled one onshore exploration well on the Kenai Peninsula, however.

For both Escopeta and Buccaneer, the oversight challenges are magnified because the drilling companies are new to Alaska as well as the oil companies owning the leases. Blake Offshore, the company drilling for Escopeta, has operated in the Gulf of Mexico for years but is new to Alaska and Cook Inlet. Buccaneer's wells, meanwhile, will be drilled by a new company, Kenai Offshore Ventures, in which Buccaneer is part-owner. Interestingly the State of Alaska will own part of this rig as well, through a $30 million equity investment by the Alaska Industrial Development Authority.

The State's AOGCC and the State Division of Oil and Gas, which provides oversight of industry activity on State-owned lands (AOGCC's jurisdiction is on drilling on all lands, private and federal) are paying special attention to the two companies. State inspectors will give attention to the safety equipment on the rigs and particularly the blow-out preventers. State rules require the testing of blowout preventers every seven days on exploration wells being drilled and "workover," or maintenance wells, and every 14 days on new production wells being drilled. The test results must be filed with the Commission. AOGCC inspectors are also on-scene to witness many tests and the Commission's records indicate State inspectors attend tests of well control systems on every active drill rig in the state once every two months. The AOGCC's data shows a "pass rate" of 98 percent for blowout control equipment.

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BOP PROTECTION

A blowout preventer, or BOP, is the mechanical device intended to control and close off a well if there is an uncontrolled flow of oil and gas. The BOP is positioned at the top of a well and just under the drilling floor of the rig while the well is being drilled. It contains mechanical "rams," which are to be closed if there is an uncontrolled flow of fluids up the well. The rams seal off the well, preventing the oil and gas from reaching the rig floor where a fire or explosion might occur, or from where oil might spill off the rig into the environment.

As the well is drilled, drilling fluid, or "mud" is pumped down the drill string to the drill bit at the bottom and returns up the well-bore in the space, or annulus, between the outside of the drill pipe and the casing, or the larger-diameter pipes, that line and protect the well. The column of drilling fluid being pumped down, which would be a mile or more long when a well extends 5,000 feet to 10,000 feet or more, has considerable weight and exerts a tremendous downward hydrostatic pressure in the well. At the bottom, where there is an "open hole" with no casing, the circular tubing through which the well drilled, the hydrostatic pressure provides an "overbalance" of pressure that exceeds the natural pressure of the reservoir into which the well is drilled. The overbalance of pressure prevents oil and gas fluids from entering and coming up the well-bore.

Sometimes the drillers encounter a gas "kick" or a surge of unexpected high pressure if they encounter a pocket of high-pressure gas. Shallow gas pockets are the cause of all of Alaska's blowouts except one.

Instruments in the well typically detect a rapid gas and pressure buildup this and the drillers can counter this by closing the BPO and pumping heavier fluids under higher pressure through a choke, or restricted pipe, in the BOE This is to overcome the pressure of the petroleum fluids and pushes them back down the well, bringing it back under control. Surveys of drilling locations are required to detect shallow gas hazards but sometimes drillers can be unpleasantly surprised. However, improvements in seismic technology, which can detect shallow gas hazards, and the increased regulatory scrutiny has greatly reduced the chances of a blowout in recent years.

ALASKA SAFE?

However, if the unexpected upward flow of fluids is not brought under control a blowout can result, potentially pushing the steel tubing, or pipe, back up out of the well, damaging the well, the rig and potentially causing loss of life or injuries to the drill crew. The primary danger is the oil and gas itself, which are flammable and explosive. The mud system and the pressure it exerts is the primary method for controlling the well. The blowout preventer is a final defense, and a vital one. Blowout preventers are used on both land and offshore rigs. In both cases the BOP is secured to the top of the wellbore. With a deep offshore well this would be at the sea bottom, with a "riser" or flexible pipe extending up to the drill rig on the surface. The riser provides a secure and enclosed path for the drill string, which rotates to drill the well, and drill fluids, or muds, that are pumped down the well to control pressure and then recirculated back to the rig at the surface.

On the Macondo well, the blowout preventer on the Deepwater Horizon rig failed to function, causing an explosion and fire that killed several people, destroyed the rig and caused one of the worst peacetime oil spills in the history of the industry. One of the conclusions of the investigations following the Macondo blowout is that the types of BOPs in use in 2010 were not sufficient to prevent very powerful ruptures, such as was experienced in the Deepwater Horizon blowout, and that improvements in design and engineering are needed. The industry is now working on this.
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Title Annotation:OIL & GAS
Comment:Preventing blowouts: drilling safety top priority in state.(OIL & GAS)
Author:Bradner, Mike
Publication:Alaska Business Monthly
Geographic Code:0ARCT
Date:Dec 1, 2011
Words:1995
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