Oil and Gas Technologies for the Arctic and Deepwater
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Oil and Gas Technologies for the Arctic and Deepwater May 1985 NTIS order #PB86-119948 Recommended Citation: Oil and Gas Technologies for the Arctic and Deepwater (Washington, DC: U.S. Congress, Office of Technology Assessment, OTA-O-270, May 1985). Library of Congress Catalog Card Number 85-600528 For sale by the Superintendent of Documents U.S. Government Printing Office, Washington, DC 20402 Foreword Nearly 2 billion acres of offshore public domain is owned by the United States adja- cent to Alaska and the lower 48 States. Much of the Nation’s future domestic petroleum supply is expected to come from this area. Areas of highest potential apparently occur in deeper water and in the Arctic where operating conditions are severe, development costs high, and financial risks immense. As the pace of exploration increases in these ‘ ‘fron- tier’ regions, questions arise about the technologies needed to safely and efficiently ex- plore and develop oil and gas in harsh environments. The Office of Technology Assessment undertook this assessment at the joint request of the House Committees on Interior and Insular Affairs and on Merchant Marine and Fisheries. The study explores the range of technologies required for exploration and develop- ment of offshore energy resources and assesses associated economic factors and financial risks. It also evaluates the environmental factors related to energy activities in frontier regions and considers important government regulatory and service programs. In March 1985, the Secretary of the Interior announced the Administration’s pro- posed new 5-year offshore leasing program that will determine the pace of oil and gas ex- ploration in Federal offshore waters through 1991. The proposed leasing schedule will be under review by the 99th Congress, with final approval slated for the Summer of 1986. OTA’s report on Arctic and deepwater oil and gas is intended to provide a timely and useful reference for the Congress as it reflects on the Department of the Interior’s pro- posed program. OTA is grateful to the Offshore Technologies Advisory Panel and participants in OTA’s workshops for their help in the assessment. Splendid cooperation was received from a number of executive agencies during the course of the study, including the Minerals Management Service, National Oceanic and Atmospheric Administration, and the U.S. Coast Guard. Special thanks go to the Arctic Environmental Information and Data Center of the Univer- sity of Alaska and its Director, David Hickok, for field assistance to OTA in Alaska. JOHN H. GIBBONS Director Oil and Gas Technologies for the Arctic and Deepwater Advisory Panel Dr. John H. Steele, Chairman Director, Woods Hole Oceanographic Institute Jacob Adams Frank J. Iarossi President President Arctic Slope Regional Corp. Exxon Shippingco. Larry N. Bell Don E. Kash Vice President Director Arco Oil & Gas Co. Science and Public Policy Program University of Oklahoma Charles L. Blackburn Executive Vice President Paul Kelly* Exploration and Development Vice President, Government Relations Shell Oil Co. Rowan Companies, Inc. Sarah Chasis Dan R. Motyka Senior Staff Attorney Vice President-Frontier Natural Resources Defense Council Gulf Canada Resources, Inc. Clifton E. Curtis C. Robert Palmer Executive Vice President Board Chairman and President The Oceanic Society Rowan Companies, Inc. Gordon Duffy Sandford Sagalkin* * Secretary, Environmental Affairs Counsel for North Slope Burrough State of California Stanley Stiansen Walter R. Eckelmann Vice President Senior Vice President American Bureau of Shipping Sohio Petroleum Corp. Wallace Tyner William Fisher Professor State Geologist Purdue University State of Texas Michael T. Welch Robert Grogan Vice President Associate Director for Governmental Citibank, N.A. Coordination Office of the Governor of Alaska ● Represented C. Robert Palmer at panel meetings ● “Represented Clifton E Curtis at panel meetings. iv OTA Project Staff—Oil and Gas Technologies for the Arctic and Deepwater John Andelin, Assistant Director, OTA Science, Information, and Natural Resources Division Robert W. Niblock, Oceans and Environment Program Manager Project Staff James W. Curlin, Project Director Peter Johnson, Senior Associate Cheryl Dybas Nan Harllee Daniel Kevin Candice Stevens William Westermeyer Administrative Staff Kathleen A. Beil Jacquelynne R. Mulder Kay Patteson Contributing Staff Richard Rowberg, Program Manager, Energy and Materials Program Jenifer Robison, Energy and Materials Program Dennis Dobbins, Health Program Contractors/Consultants Edward Horton, Deep Oil Technology Virgil Keith, ECO Francois Lampietti Leslie Marcus Peter Noble, Marine Technology Corp. Denzil Pauli Robert Schulze Dr. James Smith, University of Houston Robert Visser, Belmar Engineering Other Contributors Thomas Albert Ronald L. Geer North Slope Borough Senior Mechanical Engineering Consultant Vera Alexander Shell Oil Co. Professor University of Alaska John Gregory Minerals Management Service Alan A. Allen Spiltec Richard Griffiths U.S. Environmental Protection Agency Jean Audibert Earth Technology Corp. John Haeber Vetco Offshore, Inc. Robert G. Bea Senior International Consultant Dillard Hammett PMB Systems Engineering, Inc. Sedco, Inc. David Benton Jim Hecker Benton & Associates Terris and Sunderland Ken Blenkhern R. P. Hermann Amoco Production Co. Sonat Offshore Drilling, Inc. Ted Bourgoyne David Hickok Professor Professor Louisiana State University University of Alaska Katherine R. Boyd Sharon Hillman American Petroleum Institute Sohio Alaska Petroleum Co. Robert E. Bunney W. E. Holland National Oceanic and Atmospheric Exxon, U.S.A. Administration Baxter D. Honeycutt Gus Cassity Arco Oil and Gas Co. Placid Oil Co. Jerry Imm Bruce Clardy Minerals Management Service Sohio Petroleum Corp. James K. Jackson Gordon Cox American Petroleum Institute U.S. Army Cold Regions Research Leland A. Johnson and Engineering Lab President Charles Ehler Arctic Slope Consulting Engineers National Oceanic and Atmospheric Graham King Administration Arco Oil and Gas Co. Mark Fraker Joseph H. Kravitz Sohio Alaska Petroleum Co. National Oceanic and Atmospheric John Norton Garrett Administration International Petroleum Consultant vi Jack Lewis John Shanz Minerals Management Service Congressional Research Service Gary Lore William H. Silcox Minerals Management Service Standard Oil of California Bonnie A. McGregor Walt Spring U.S. Geological Survey Mobil Research and Development Corp. D. B. McLean Tim Sullivan Gulf Canada Resources, Inc. Minerals Management Service Jim Mielke Rod Swope Congressional Research Service Alaskan Governor’s Office David Norton Pete Tebeau Professor Lieutenant Commander University of Alaska U.S. Coast Guard Paul O’Brien Ed Tennyson Alaska Department of Environmental Minerals Management Service Conservation J. Kim Vandiver John Oktollik Professor Alaska Eskimo Whaling Commission Massachusetts Institute of Technology Raj Phansalkar R. H. Weaver Conoco, Inc. Exxon Corp. Richard Pomfret Robert Wilson Exxon International Co. U.S. General Accounting Office Jim Ray Doug Wolfe Shell Oil Co. National Oceanic and Atmospheric Administration Joe Riva Congressional Research Service John Wolfe, Jr. Conoco Oil Co. William M. Sackinger Professor University of Alaska vii Contents Chapter Page 1. Summary, Issues, and Options . 3 2. The Role of Offshore Resources . 21 3. Technologies for Arctic and Deepwater Areas . 47 4. Federal Services and Regulation . 89 5. Economic Factors. 117 6. Federal Leasing Pol icies . 131 7. Environmental Considerations. 163 Appendix A. Offshore Leasing Systems . 205 Appendix B. Glossary . 219 Index . 223 Chapter 1 Summary, Issues, and Options Contents Page Introduction . 3 Offshore Resources and Future Energy Needs . 4 Technologies for Arctic and Deepwater Areas . 5 Arctic Technologies . 5 Deepwater Technologies . 6 Offshore Safety . 7 Federal Offshore Services . 7 Economic Factors . ........ 8 Federal Leasing Policies . .... 9 Environmental Considerations . ... 10 Issues and Options. .. .... 11 Energy Planning and Offshore Resources . 11 Area-Wide Leasing . 12 Military Use Conflicts. 12 Disputed International Boundaries . 12 Lease Terms. 13 Alternative Bidding Systems. 13 Alaskan Oil Export Ban . 14 Environmental Information . 14 oil spills . 15 Offshore Safety . ... 15 U.S. Coast Guard Programs . 16 Ice Information . , , . 16 Government Information Services . 16 Chapter 1 Summary, Issues, and Options INTRODUCTION This assessment addresses the technologies, the States, environmentalists, and the industry. These economics, and the operational and environmental criticisms have sharpened in the 1980s as offshore factors affecting the exploration and development activities have expanded into the deepwater and of energy resources in the deepwater and Arctic re- Arctic frontier areas. gions of the U.S. Outer Continental Shelf (OCS) The revised leasing system mandated by the 1978 and the 200-mile Exclusive Economic Zone (EEZ) amendments has been in place slightly more than established in March 1983. For the purposes of this 6 years. During this period, two Presidents and four study, OTA defined ‘‘deepwater’ as those offshore Secretaries at the Department of the Interior left areas where water depths exceed 400 meters or their mark on the implementation of the offshore 1,320 feet. The ‘ ‘Arctic’ is defined as the Beaufort, leasing program, In addition, Secretary James Watt Chukchi, and Bering Seas north of the Aleutian initiated a major departmental reorganization Islands.