Storms destroyed mostly old rigs in Gulf of Mexico

Oct 01, 2005 02:00 AM

by Brian P. Nanos

Interior Secretary Gale Norton compared the country's reliance on oil and natural gas from the Gulf region to having all of one's eggs in one basket and, she said, "we've now dropped the basket."
According to the Department of the Interior, 3,050 of the 4,000 platforms that the government Minerals Management Service administers were in the path of last month's hurricanes.

Norton said that before the hurricanes damaged both the region's ports, and the on- and offshore facilities, natural gas prices had been high enough to cause some jobs and industries to move overseas. She expects the cost of natural gas to be even higher when demand increases this winter. She does not expect oil prices to be affected as strongly because the country can tap into strategic oil reserves.
The initial effects of Katrina and Rita were felt mainly by the states most directly in the paths of the hurricanes, Norton said, "The reverberations will continue to be felt in our oil and gas supplyin every state."

Recently, the MMS reported that 90 % of Gulf oil production and 72 % of Gulf natural gas production remained shut down. Repairs on facilities with substantial damage may not be complete for months, Norton said.
The rebuilding has been slowed by the cumulative effects of having two hurricanes in one region and by the high demand for the construction materials and equipment needed to get the system back up and running.

Although 109 platforms in the Gulf were destroyed by the storms, all but one were older rigs, accounting for only 1.7 % of the region's oil production and 0.9 % of its production of natural gas.
The newer platform destroyed by the hurricane may have been damaged not by winds but by a collision with an offshore drilling unit which the storms had torn from its moorings.

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