Offshore Drilling Operations and their Effect on the Environment

Production Profits or Environmental Protection

Author: John Parker | December 2014

Abstract:

Marine oil spills occur due to accidents while transporting oil by water or when extracting oil from underwater and cause pollution. Marine oil spills are often the result of lenient regulations and negligent operations that are common in the offshore oil industry. The largest oil spill in history occurred on the 22nd day of April in 2010 in the Gulf of Mexico due to an accident while extracting oil from deep in the ocean and is known as the Deepwater Horizon oil spill. Oil was being extracted from the bottom of the ocean in a United States exclusive economic zone for the multinational oil company known as BP by using a floating oil rig which was built by a Korean company named Hyundai Heavy Industries and owned by one of the worlds largest offshore drilling contractors named Transocean. There was an explosion on the floating oil rig which caused oil to flow directly into the deep ocean for eighty-seven days. The oil spill effected a large area of the marine environment. Investigation into the incident determined it would not have occurred if the required safety precautions were executed. The United States government and other authorities responded by holding the companies involved responsible for the clean up and recovery of the marine ecosystem as well as compensating the communities and people effected. Changes in regulation were also made as a result of operation failures that contributed to the incident. The Deepwater Horizon oil spill is an international pollution issue that can provide insight into the process in which federal and local agencies hold multinational companies accountable for pollution.

Keywords: off shore drilling operations; effect on the environment; production profits; environmental
protection; regulation consideration; Gulf of Mexico; Deepwater Horizon; oil spill; federal government

Offshore jack up drilling rig and supply boat in the middle of the ocean. Copyright:  / 123RF Stock Photo
Offshore jack up drilling rig and supply boat in the middle of the ocean. Copyright: / 123RF Stock Photo

 

1. Introduction: Development of off-shore oil operations

Petroleum, also known as crude oil, and simplified to oil has been used for a long time by humans, often for fuel. The first use of oil by humans occurred a long time ago but the commercial extraction of oil began recently. Advancement in the uses for oil, such as making kerosene, encouraged the commercial drilling of oil. The first commercial oil well in the United States located in  Pennsylvania opened in 1859 and is known as Drake’s Well. It was owned by the first oil company in the United States, the Pennsylvania Rock Oil Company of New York, which was established in 1854. Operation of Drakes Well is considered the beginning of the United States oil industry. Oil quickly became a major part of the world economy. By 1870, the Standard Oil Company from Ohio had  become the largest oil refiner in the world, as well as one of the first multinational corporations. Oil fields began to develop across the country including the Summerland oilfield located on the coast of California. As the extraction of oil in Summerland reached the shore, tests were conducted to determine if the oilfield extended into the ocean. The tests concluded that there was oil offshore and piers were built to drill for oil offshore. The offshore drilling was a success and by 1897, “22 companies soon joined the boom, constructing 14 more piers and over 400 wells”(American Oil and Gas Historical Society). The Summerland oilfields produced oil for “25 years- fueling the growth of California’s economy”(American Oil and Gas Historical Society). Oil production became an increasingly important to the economy and other offshore drilling operations began. Offshore drilling operations eventually abandoned the use of piers and began using other methods to reach underwater wells. An 1869 United States patent made by Thomas Fitch Rowland detailed a “submarine drilling apparatus”(American Oil and Gas Historical Society). The submarine drilling apparatus was made of “a fixed, working platform for drilling offshore to a depth of almost 50 feet” and would be an “anchored, four-legged tower – with telescoping legs” and “suitable hydraulic attachments or devices”(American Oil and Gas Historical Society). Rowland’s submarine drilling apparatus is similar to the modern drilling equipment used.

2.  Development of Operations in the Gulf of Mexico

As offshore drilling was a new industry, regulations had to develop at the same time the industry developed. Unfortunately regulations were usually enacted and enforced after accidents had already occurred. Analyzing the development of the offshore oil industry in comparison to the process of regulating its operations will show the international, national, and local processes involved in attempting to balance the economic benefits with the environmental risks involved. An applicable example for showing the relationship between the environment and the economy created by the offshore oil industry is the drilling operations in the Gulf of Mexico.

The exploration of oil drilling into the Gulf of Mexico dates back to 1938, when the Pure Oil and Superior Oil company built a “320-foot by 180-foot freestanding wooden deck in 14-feet of water about a mile offshore” of Creole, Louisiana (American Oil and Gas Historical Society). The  exploration into the Gulf of Mexico was fueled by the discovery of salt domes in the area. Salt domes are formed underground as rock salt moves to the surface due to its density being lower than the rocks above it. As a salt dome grows, it pushes on the rocks above it and can create a pocket where oil accumulates (King, Hobart). The first extraction of oil from a salt dome occurred in 1901 and produced “over 100,000 barrels of crude oil per day – a greater yield than any previous well had ever produced”(American Oil and Gas Historical Society). Oil extracting companies in the Gulf of Mexico wanted to have a similar success with extracting oil from salt domes offshore. The owner of Kerr- McGee Oil Industries Incorporated stated that he wanted to extract oil from salt domes but since all the ones on land were used, he had to“move out in the shallow water and, in effect, get into a virgin area where we could find the real class-one type salt dome prospect”(American Oil and Gas Historical Society). The Gulf of Mexico was a prime area for exacting oil out of class-one type salt domes as its shallow waters made the offshore drilling easier. Even 10 miles out into the Gulf, the Pure Oil and Superior Oil Company owned Kermac No. 16 well was only in about “20 feet of water”(American Oil and Gas Historical Society).

Offshore drilling in the Gulf of Mexico proved to be successful, and by 1949, “11 oil and  natural gas fields were found in the Gulf of Mexico with 44 exploratory wells”(American Oil and Gas Historical Society). The offshore oil industry in the Gulf of Mexico quickly grew but also caused legal problems. The offshore oil industry promised to be a big economic benefit and the legal claim to the areas being drilled offshore began to be questioned. The Pure Oil and Superior Oil company operated   in the Gulf of Mexico under a lease agreement with Louisiana. A similar lease agreement was made in California for the offshore drilling in Summerland. In June 1947, the federal government filed a case against the state of California with the Supreme Court claiming that the leasing of land for offshore drilling was the federal governments responsibility. The federal government won the California case as the Supreme Court ruled that “the marginal sea is a national, not a state, concern, and national rights are paramount in that area” (United States vs. California, 339). On June 5th 1950, the federal government filed a similar case against Louisiana for their leasing of offshore areas. The Supreme Court ruled in favor of the federal government and Louisiana was ordered to “account for the money derived by it from the area after June 23, 1947”, which displays the economic interest involved(United States vs. California, 339). The states fought the Supreme Court decision and the dispute had to be resolved by  the passing of the Submerged Lands Act of 1953, which gave states the legal rights to lease up to three miles off their coasts. The federal government assigned the task of leasing offshore areas to the Department of Interior in 1954 and the offshore oil industry officially became a national economic factor. As the federal government took over the leasing of offshore drilling, they also became responsible for the regulation of offshore drilling. The federal government was not prepared to regulate the industry as “it had no specialized bureaucracy, regulations, or models to follow, other than what the states and companies were already doing offshore”(Austin, 94). The federal government assigned The

Bureau of Land Management (BLM) and the Conservation Division of the U.S. Geological Survey(USGS) to conduct the leasing program. The BLM was in charge of the “issuance of leases and pipeline rights of way, as well as all title matters relating to such leases, and prepared the official leasing maps” (Austin, 95). The USGS “managed all operational matters, collecting rentals and royalties and policing the operations” (Austin, 95). The directors of each department held government conferences and met with industry leaders to determine the regulations. Most of the suggestions of regulation from industry leaders were adopted since they were assumed to have the most knowledge in the field. It may be questioned whether or not the suggestions from industry leaders were in the interest of profit or safety.

As oil production was such a large part of the United States economy, it had to be monitored in accordance with the production of oil being imported from other countries. One of the first national laws made to manage the United States oil industry was the Mandatory Oil Import Quota Program. The program was enacted in 1953 by President Eisenhower and ruled the amount of imported oil to not exceed “12.7 percent of the domestic production”(Cicchetti, Charles). The quota program caused the market for domestic oil to grow. The increased use of automobiles during the 1950s also caused an increase in the demand for oil.

3.  The Race to deeper waters and larger profits

As the market for oil grew, so did the ambitions of the offshore drilling industries. Leaders in the industry began to develop technology to allow them to drill in deeper waters. By 1960, Shell Oil company had “secretly designed a floating drilling vessel that could take exploratory drilling into 300- feet plus water depths” (Austin, 106). Although companies were eager to reach the oil concentrations at deeper depths, they did not have experience of working with the winds and tides of the ocean. The companies were essentially learning as they progressed as “every-day operations offshore required engineering adjustments in the design of drilling rigs, pipelines, and construction equipment” (Austin, 117). As the industry quickly moved into deeper and more dangerous waters, the regulation struggled to stay current. The industry also invested more in developing extraction methods than it invested in   safety measures.

4.  Catastrophe Prompts Environmental Awareness

Thirteen years after the federal government took over the leasing of offshore drilling, the United States experienced its first large offshore drilling oil spill. The spill occurred on January 28, 1969, in  the same location that the offshore oil industry started, about five miles off the coast of Summerland, California. The spill was a result of an accident at a “Union Oil platform called Alpha, where pipe was being extracted from a 3,500 foot deep well” (Clarke, 1). It is common for oil spill accidents to be caused by many combined failures, partially caused by “wide-spread subcontracting and the time pressures to complete projects and accelerate production”, as it was in this case (Austin, 139).

A failure to compensate pressure differences during the extraction process caused the casing (reinforcement shell) of the well to be strained. An attempt to cap the well caused the pressure to increase and “under extreme pressure a burst of natural gas blew out all of the drilling mud, split the casing and caused cracks to form in the seafloor surrounding the well” (Clarke, 1). The initial solution of capping the well only caused more problems but the original problem of the casing being strained was a result of regulation failure. Investigations revealed that the Union Oil company was “granted a waiver by the United States Geological Survey that allowed them to use a shorter casing on the pipe than Federal Standards prescribed”(Clarke, 1). The accident allowed oil to spill into the ocean for eleven days as “approximately three million gallons of oil escaped” due to not having the technological resources to stop the spill at the time (Clarke, 1). Chemical mud was eventually used to seal up the leaks. The spill had a catastrophic impact on the area as “eight hundred square miles of ocean were impacted, and 35 miles of coastline were coated with oil up to six inches thick”(Clarke, 2). The impacted animals included “3,600 dead ocean feeding seabirds and a large number of poisoned seals and dolphins” (Clarke, 2). The oil also “killed innumerable fish and intertidal invertebrates, devastated kelp forests and displaced many populations of endangered birds”(Clarke, 2). The clean up efforts included the use of “piles of straw” to absorb oil as well as the use of “skimmer ships” to take oil from the surface of the water (Clarke, 3). Contaminated beach sand was “bulldozed into piles and trucked away”(Clarke, 3). The Union Oil Spill of 1969 was significant not only for its size and impact but also for the importance of environmental consideration it evoked. President Nixon passed the  Environmental Policy Act later that year which “was one of the first laws ever written that establishes the broad national framework for protecting our environment”(Summary of the National  Environmental Policy Act). The Environmental Policy Act was followed by the creation of the Environmental Protection Agency a year later, in 1970.

5.  Increased Accountability

The Union Oil Spill exposed the failure of regulation in the offshore oil industry by the federal government. The lack of regulation was known as offshore drilling workers profess that the USGS “did not inspect installations on a regular basis” and it was common to find “ inexperienced supervisors, employees who overlooked rules and regulations, the purpose of which they did not understand” (Austin, 145). The regulations were based on data collected by the American Petroleum Institute (API). The API created the Offshore Committee which included representatives of the offshore oil industry and became influential in the regulation process. In February of 1970, a large blow out at Chevron’s Platform C in the Gulf of Mexico evoked accountability in the oil industry. Chevron’s accident polluted the water which “damaged wildlife, and drew a $31.5 million suit against the company by Louisiana oyster fisherman and a $70 million suit from the shrimp fishermen” (Austin, 146). The federal government also fined “Chevron $1 million for failing to maintain storm chokes and other required safety measures” (Austin, 146). After using the Chevron incident as an example, the federal government began fining other oil companies for similar violations. As the accountability of oil companies under the federal government increased, so did the safety considerations for offshore oil workers. Working on a offshore drilling operation was always considered a dangerous job and workers were often injured without opportunity for compensation. Changes that allowed workers to collect money to compensate injuries due to negligence by supervisors brought legal protection to the workers and “a steady stream of personal injury lawsuits hit offshore operators, drillers, and construction companies” (Austin, 147). Safety continued to be a big concern in the industry and in 1970 new regulations required “additional safety features on platforms and pipelines, including the first time requirement that subsurface safety valves be installed on all producing wells” (Austin, 147).

Other regulation was created that required “testing of safety devices prior to and when in use; more careful control of drilling and casing operations; prior approval of plans and equipment for exploration and development drilling; and new practices and procedures for installing and operating platforms” (Austin, 147). Despite the new regulations, accidents still occurred, including the July 6th, 1988  accident on the Occidental Petroleum’s Piper Alpha platform in the North Sea. The accident brought increased concerns over safety regulations for the offshore drilling industry. The regulations set in 1970 focused on the equipment requirements of drilling operations but the Occidental Petroleum accident  and other incidents like it can be traced back to “human error stemming from inadequate training and supervision, rote reliance on regulations, and generally poor operating practices” (Austin, 150). The workers on offshore oil facilities often perform under highly stressful conditions due to the dangers involved which causes them to become tired and make mistakes.

The struggle between environmental protection and offshore oil industry production was intensified after the passing of the National Energy Act of 1978 which encouraged domestic energy production. That same year the Continental Shelf Lands Act called for the “development of new and improved technology for energy resource production which will eliminate or minimize risk of damage to the human, marine, and coastal environments” (The Gulf Oil Disaster and the Future of Offshore Drilling, 60).

6.  Change in Oversight of Industry Operations

In January 1982, a change in regulation of the offshore oil industry occurred as the Department of Interior created the Mineral Management Service and assigned them to permitting and leasing for offshore drilling operations. The Mineral Management Service was a combination of “authority for regulatory oversight with responsibility for collecting for the U.S. Treasury the billions of dollars of revenues obtained from lease sales and royalty payments from producing wells” (The Gulf Oil Disaster and the Future of Offshore Drilling, 56). The Mineral Management Service had the power to regulate but was also inclined to create regulations that would encourage the generating of billions of dollars from the offshore drilling industry. Once again the regulation of the offshore oil industry was put in opposition to the production of the industry and the government profits derived from it.

7.  The Deepwater Horizon Incident

Accidents on offshore oil operations continued to occur but none were as big as the Deepwater Horizon blowout on April 20th, 2010. The Deepwater Horizon oil rig was operating at the Macondo  well in the Gulf of Mexico to extract oil for the British oil company known as BP. BP leased the area in 2008 by paying “a little over $34 million to the Minerals Management Service” (The Gulf Oil Disaster and the Future of Offshore Drilling, 89). The rig itself was owned by the Transocean corporation which had recently become the largest contractor of offshore drilling rigs. The rig was cemented to the oil  well by the Halliburton company. The cementing of the well was the first step of the operation and tests were conducted to ensure the cementing done by Halliburton was adequate before closing the well for a scheduled period of abandonment. Two pressure tests were done on the well, one for high levels of pressure and the other for low levels. The high level pressure test was to ensure the casing of the well could handle high levels of pressure and not become strained. The high level pressure test was a  success and caused optimism for the low pressure test. The low pressure test was conducted on the well to “simulate its state after the Deepwater Horizon had packed up and moved on” (The Gulf Oil Disaster and the Future of Offshore Drilling, 4). If the low pressure test failed it would be seen as a “ sign that somewhere the casing and cement had been breached” (The Gulf Oil Disaster and the Future of Offshore Drilling, 5). The initial low pressure test failed as the level of pressure in the drill pipe continued to increase. A second low pressure test was conduct and the pressure in the “kill line” pipe was found to be zero but not in the drill pipe. Jason Anderson, a tool pusher that had been on the rig for many years and was considered knowledgeable about the drilling process stated that the increase in pressure during the test was due to a common “bladder effect”. The crew determined the negative pressure test should be considered successful and attributed the increases of pressure to the “bladder effect”. The crew then proceeded to prepare for the abandonment period by setting a cement plug deep in the well. Moments later mud began to shoot out of the well fallowed by two explosions.

8.  Determining the Failures of the Deepwater Incident

The cause of the Deepwater Horizon blowout determined by the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling is “traced to a series of identifiable mistakes made by BP, Halliburton, and Transocean that reveal such systematic failures in risk management that they place in doubt the safety culture of the entire industry” (The Gulf Oil Disaster and the Future of Offshore Drilling, 1). It is also important to note failures of regulation through the agencies assigned by the federal government. The failures of regulation are attributed to the agencies putting profits before safety concerns. The favoring of production instead of safety through regulation is evident through the exclusion of the Gulf of Mexico from the National Environmental Protection Agencies (NEPA) review of potential environmental impacts. The Gulf of Mexico was excluded due to its economic value and political leaders did not want to slow down the industry by making them go through tedious review processes. Specifically at the Macondo well, the Mineral Management Service “performed no meaningful NEPA review of the potentially significant adverse environmental consequences associated with its permitting for drilling of BP’s exploratory Macondo well”(The Gulf Oil Disaster and the Future of Offshore Drilling, 82). The MMS also “excluded from any NEPA review the multiple applications  for drilling permits and modification of drilling permits associated with the Macondo well”(The Gulf Oil Disaster and the Future of Offshore Drilling, 82). BP was also largely to blame due to their  negligent management. In September 2009, a BP safety audit “had produced a 30-page list of 390  items requiring 3,545 man-hours of work”(The Gulf Oil Disaster and the Future of Offshore Drilling, 6). The audit was still being reviewed by managers at the time of the explosion. BP was also negligent while creating the well. For the well to be cemented properly by Halliburton, there needed to be a specific amount of centralizers on the well which allow the fluids in the well to flow while the cement  is being applied. The original plan called for more than 16 centralizers but due to supply issues only used 6. It was evident that BP’s “plans for completing the well kept changing, often in ways that saved time but increased risk” (Barstow, David). There were also problems with valves intended to release mud from the well not reaching the correct amount of pressure before managers realized their pressure gauge was broken. There was also uncertainty about the cementing of the well, which is common as the process is conducted miles below the sea surface. The cement must be tested to ensure it will work it certain conditions. The cement used for Deepwater Horizon was tested and BP received a report indicating it was unstable but the worker looking over the report “ did not comment on the evidence of the cement slurry’s instability, and there is no evidence that BP examined the foam stability data in the report at all”(The Gulf Oil Disaster and the Future of Offshore Drilling, 101). Halliburton also tested  the cement using questionable information about the conditions at the Mancondo well but “did not send the results of the final test to BP until April 26, six days after the blowout”(The Gulf Oil Disaster and the Future of Offshore Drilling, 102). Human error also played a role in the accident as the crew struggled to work in unison with many jobs being done at once. One worker that was in charge of monitoring gauges to detect blowouts mentioned other jobs being done such as “transferring mud to a supply vessel, cleaning mud pits, repairing a pump — could throw off his instruments”(Barstow, David). Investigation determined that the low pressure test had failed and that the crew responsible did not “correctly interpret the results” (Barstow, David). The investigation also found that monitors should have allowed the crew to “spot the signs of leaking within the first 20 minutes” (Barstow, David). The investigation could not determine a specific cause for the human error but it is likely that they were “distracted by other tasks or rushing to get done”, as they were experienced and not likely to have ignored the problem on purpose (Barstow, David). The accounts of the day preceding the incident indicate that each member of the crew had confidence in the others abilities to do their job. A master alarm intended to signal the evacuation of the rig in the event of high gas levels being detected was not set be triggered automatically. This alarm did not go off, even with high levels of gas being detected because Transocean had set the general master alarm “to be activated manually” (Barstow, David). Andrea Fleytas, an officer on the rig had the opportunity to manually trigger the master alarm but even with twenty alarms indicating high levels of gases already going off, she did not. She also had the opportunity to initiate the emergency shutdown system which would “shut down the ventilation fans and inhibit the flow of gas” as well as “turn off electrical equipment and limit ignition sources” and even “shut down the engines”, but she did not (Barstow, David). Andrea Fleytas stated in court that she was not taught how to use the systems. Reports show that in 2002, a safety consultant urged  Transocean to change their emergency system “so that human input is not critical for success”  (Barstow, David).

9.  Response to the Deepwater Horizon Incident

Changes in Oversight of Offshore Industry

Many changes have occurred in response to the failures that caused the Deepwater Horizon Blowout. One major change is the replacement of the Mineral Management Service with the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) in 2011. The MMS already had  a tarnished reputation before the spill as “ DOI and congressional investigations had identified a  number of management shortcomings, ethical lapses among personnel, and conflicts of interest” within the agency (Ramseur, 10). The BOEMRE includes the Bureau of Ocean Energy Management (BOEM) which is now in charge of offshore leasing, resource evaluation, review and administration of oil and gas exploration and development plans, renewable energy development. The BOEMRE also includes the Bureau of Safety and Environmental Enforcement (BSEE) which is responsible for development and enforcement of safety and environmental regulations, permitting offshore exploration, development and production, inspections, offshore regulatory programs, oil spill response as well as newly formed training and environmental compliance programs. The new bureaus may be more effective as their responsibilities are more specified. The division of bureaus may also deter industry leaders from having relationships with the bureaus that influence the regulation process. The bureaus are also responsible  for recent regulation that has been implemented since the incident such as the training and environmental compliance programs overseen by the BSEE.

Restoration of Environment

A major component of the restoration process in the Gulf is overseen by the The National Oceanic and Atmospheric Administration (NOAA). The NOAA conducts a natural resource damage assessment (NRDA) which determines the extent of the damage to the area. The agencies conducting the NRDA include “federal agencies designated by the President, state agencies designated by the relevant governor, and representatives from tribal and foreign governments” (Ramseur, 10). The NRDA may take years to complete and is still being conducted. Another major component of the restoration process was the creation of the Gulf Coast Restoration Fund. 35% of the fund is “divided equally  among the five Gulf of Mexico states”, 30% is given to the Gulf Coast Ecosystem Restoration Council, 5% is given “ to support marine research and related purposes”, and 30% is “disbursed by the Council to the five Gulf states, based on specific criteria (Stern, 30).

Regulation Changes

On May 27th, 2010 the Department of the Interior released a report titled “Increased Safety Measures for Energy Development on the Outer Continental Shelf”. The report was done in 30 days by the Secretary of the Interior at direction of President Obama to determine what changes needed to be made regarding offshore drilling operations after the Deepwater Horizon incident. The report contains many recommends regulation to “ensure sufficient redundancy in the blowout preventers (BOPs), to promote the integrity of the well and enhance well control, and to facilitate a culture of safety through operational and personnel management” (Increased Safety Measures for Energy Development on the Outer Continental Shelf). Other recommendations “ include prescriptive near-term requirements, longer-term performance-based safety measures, and one or more Department-led working groups to evaluate longer-term safety issues” (Increased Safety Measures for Energy Development on the Outer Continental Shelf). On August 22nd, 2010 the DOI created regulation that implemented the safety regulations recommended in the report.

The Department of the Interior has made many other regulation changes for offshore drilling since the incident. On October 14th, 2010 they made changes to “drilling regulations related to well control, including: subsea and surface blowout preventers, well casing and cementing, secondary intervention, unplanned disconnects, recordkeeping, well completion, and well plugging” (Federal Register, No.198). On October 15th, 2010 the DOI created “regulations to require operators to develop and implement Safety and Environmental Management Systems (SEMS)”, the implementation requirement is necessary as evident through the failures of the Transocean SEMS during the Deepwater Horizon incident (Federal Register, No.199). About three years later on April 5th, 2013 the DOI created more regulation to ensure the operators of oil rigs are “implementing current best practices and establishing well-functioning SEMS programs” (Federal Register: No.66). The Bureau of Ocean Energy Management (BOEM) proposed regulation changes on February 24th, 2014 that would “ increase the limit of liability for damages applicable to offshore facilities”, “ $75 million to $133.65 million” (Federal Register: No.36).

Financial Compensation

The companies held accountable for the Deepwater incident in court proceedings have had to pay large amounts of money for restoration of the environment as well as compensation for communities, businesses, and individuals affected by the spill. BP has spent “over $14 billion in  cleanup operations” as well as “over $14 billion to the federal government, state and local   governments, and private parties for economic claims and other expenses” (Ramseur, 2). The United States Department of Justice has also had the companies accountable to agree to civil and criminal settlements, which have added up to “almost $6 billion” as of May 12th, 2014 (Ramseur, 2). The New York Times reported on September 2nd, 2014 that Halliburton will pay “$1.1 billion to Gulf Coast residents, local governments and businesses affected by the 2010 Deepwater Horizon oil spill” (Gilbert, Daniel). Transocean has agreed to pay 1 billion to the United States Federal government (Fisk, Margaret). The money from the companies accountable serves to fund the restoration efforts on the environment.

Natural Restoration

Many programs have been created to help restore the Gulf of Mexico but a natural solution has also been discovered. Scientists have determined that the Colwellia species of microbes is capable of digesting “chemicals such as benzene, toluene, ethylbenzene and xylene” (Caulderwood, Kathleen).  The limitation of the microbes is that they cannot consume “polycyclic aromatic hydrocarbons (PAHs)” which are one of the most toxic chemicals caused by the spill (Caulderwood, Kathleen). The PAH’s often fall to the bottom of the ocean and may be a large portion of the “two million barrels of submerged oil” recently found near the Macondo well (Bora, Kukil).

10.  Conclusion

The United States government has made many changes relating to the offshore drilling industry since the Deepwater Horizon incident including changes in regulation and monitoring. The new agencies responsible for offshore drilling monitoring, the BOEM and the BSEE, may bring increased enforcement of regulations. The new regulations and safety precautions may prevent future incidents that could potentially harm the environment. The restoration methods developed in response to the spill may also be useful in the event of another environmental contaminating incident. The legal action taken on the companies responsible for the incident may encourage companies to be more cautious about  their potential impact on the environment. The process of regulating the offshore oil industry must be conducted without influence from the process of collecting profits and production to ensure the  integrity of the industry.

Changes in regulation are often made in response to catastrophic incidents that they should have prevented had they been given a more significant amount of consideration. Unfortunately this trend is present through out the history of the offshore oil industry as regulations have not been given priority over profits. The offshore oil industry in the Gulf of Mexico has continued to operate and there are developing plans for expansion into southern areas near Mexico. The National Hydrocarbons Commission of Mexico is responsible for regulating off-shore oil drilling in the Mexican territory of  the Gulf. By 2016, the National Hydrocarbons Commission will “hold the country’s first open auctions for oil and gas fields, including deepwater regions in the Gulf of Mexico” (Malkin, Ilisabeth).

 

Mexico’s interest in utilizing off-shore oil reserves may change the United States pace of development in drilling the Gulf. It is possible that the United States will want to increase their amount of production from drilling in the Gulf to compete with Mexico. The consideration of regulations may also be diminished as the interest of economic development increases. The struggle between economic development and regulation enforcement is intensified for developing countries, such as Mexico, that are constrained by globalization and pressures to compete with developed countries. Mexico’s involvement in deep-sea drilling could potentially cause another incident comparable to the Deepwater Horizon spill if they do not develop adequate operation practices and regulations. The United States has experience of deep-sea drilling through their trials and errors that could help facilitate Mexico’s development into the Gulf. The United States could provide Mexico with advisers from the BOEM and BSEE to avoid the mistakes made in the past. The Unites States willingness to cooperate with Mexico will reflect either its sense of competition for national profits or their interest in regulations to protect the environment. The United States has attempted to balance its interest in profits with its interest in environmental protection when regulating large industries that cause pollution. Regulation must be given the highest level of consideration to protect the environment that is threatened when utilized for resources.

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