History of the Offshore Oil and Gas Industry in Southern Louisiana Interim Report
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OCS Study MMS 2004-049 History of the Offshore Oil and Gas Industry in Southern Louisiana Interim Report Volume I: Papers on the Evolving Offshore Industry U.S. Department of the Interior Minerals Management Service Gulf of Mexico OCS Region OCS Study MMS 2004-049 History of the Offshore Oil and Gas Industry in Southern Louisiana Interim Report Volume I: Papers on the Evolving Offshore Industry Authors Diane Austin Bob Carriker Tom McGuire Joseph Pratt Tyler Priest Allan G. Pulsipher Prepared under MMS Contract 1435-01-02-CA-85169 by Center for Energy Studies Louisiana State University Baton Rouge, Louisiana Published by U.S. Department of the Interior Minerals Management Service New Orleans Gulf of Mexico OCS Region July 2004 DISCLAIMER This report was prepared under contract between the Minerals Management Service (MMS) and Louisiana State University’s Center for Energy Studies. This report has not been technically reviewed by MMS. Approval does not signify that the contents necessarily reflect the view and policies of the Service, nor does mention of trade names or commercial products constitute endorsement or recommendation for use. It is, however, exempt from review and compliance with MMS editorial standards. REPORT AVAILABILITY Extra copies of the report may be obtained from the Public Information Office (Mail Stop 5034) at the following address: U.S. Department of the Interior Minerals Management Service Gulf of Mexico OCS Region Public Information Office (MS 5034) 1201 Elmwood Park Boulevard New Orleans, Louisiana 70123-2394 Telephone Number: 1-800-200-GULF 1-504-736-2519 CITATION Suggested citation: Austin, D., B. Carriker, T. McGuire, J. Pratt, T. Priest, and A. G. Pulsipher. 2004. History of the offshore oil and gas industry in southern Louisiana: Interim report; Volume I: Papers on the evolving offshore industry. U.S. Dept. of the Interior, Minerals Management Service, Gulf of Mexico OCS Region, New Orleans, LA. OCS Study MMS 2004-049. 98 pp. iii TABLE OF CONTENTS Page 1. Introduction and Background (Allan G. Pulsipher).............................................................1 1.1. Project Objectives.........................................................................................................2 1.2. Rationale ......................................................................................................................2 1.3. Methods ......................................................................................................................3 1.4. Organization of the Project ...........................................................................................4 1.5. Organization of the Interim Report...............................................................................5 2. The Brave and the Foolhardy: Hurricanes in the Early Offshore Oil Industry (Joseph Pratt) ................................................................................................................7 2.1. References...................................................................................................................25 3. History of U.S. Oil and Gas Leasing on the Outer Continental Shelf (Tyler Priest).........29 3.1. Introduction.................................................................................................................29 3.2. Claiming the Coastal Sea: From the Tideland’s Controversy to the Landmark 1962 Sale.....................................................................................................................30 3.2.1. “Tidelands” Controversy.............................................................................30 3.2.2. Early Federal OCS Leasing and the “Interim Agreement”..........................35 3.3. Sales that Revived the Gulf.........................................................................................42 3.4. References...................................................................................................................50 4. Technology and Strategy of Petroleum Exploration in Coastal and Offshore Gulf of Mexico (Tyler Priest)..............................................................................................53 4.1. Introduction.................................................................................................................53 4.2. Salt Domes and Salt Water: Gulf Coast Exploration Technology to 1945.................55 4.2.1. Grand Entrance of Geophysics ....................................................................55 4.2.2. Pirogues, “Pack Mules,” and Marsh Buggies ..............................................67 4.2.3. Exploratory Drilling from Wetlands to Open Water ...................................71 4.3. References...................................................................................................................74 5. Work Plan: Tyler Priest and Joseph Pratt, History International.......................................79 5.1. Technology and Strategy of Petroleum Exploration in Coastal and Offshore Gulf of Mexico............................................................................................................79 5.1.1. “Salt Domes and Salt Water: Gulf Coast Exploration Technology to 1945”......................................................................................................79 5.1.2. “The Pursuit of Data: New Methods of Seismic Exploration and Prospect Evaluation, 1945-1962”..............................................................79 5.1.3. “Seeing the Subsurface: The Digital Revolution and Its Impact on Exploration in the Gulf of Mexico, 1962-1988”...................................80 5.1.4. “Beyond the Shelf: Taking Geologic and Economic Risks in Deepwater, 1974-2000”.............................................................................80 v 5.2. History of State and Federal Leasing in Southern and Offshore Louisiana ...............81 5.2.1. “The Harvest from the Hayride: Louisiana’s Leasing of Petroleum Lands, 1908-1945”.....................................................................................81 5.2.2. “Claiming the Coastal Sea: From the Tideland’s Controversy to the Landmark 1962 Sale”................................................................................81 5.2.3. “Searching for ‘Fair Market Value’: The Tract Selection System, 1962-1978” ................................................................................................82 5.2.4. “Reviving the ‘Dead Sea’: The Origins and Development of the Area Wide Leasing System, 1978-2000”...................................................82 6. History and Evolution of the Offshore Oil and Gas Industry in Southern Louisiana: A Brief Look at Commercial Diving and the Role of People, Technology, and the Organization of Work (Diane Austin).......................................83 6.1. Brief Overview............................................................................................................83 6.2. Construction Diving....................................................................................................83 6.2.1. Diving as a Factor in Offshore Oil and Gas Development ..........................84 6.3. Innovation and Adaptation..........................................................................................88 6.3.1. Getting Divers and Keeping Them at Work ................................................88 6.4. Underwater Welding: An Example of Technological Change in the Offshore Oilfields .......................................................................................................92 6.5. Work Organization and Labor Issues .........................................................................93 6.6. Discussion and Conclusions .......................................................................................96 6.7. References...................................................................................................................97 vi 1. Introduction and Background The evolution of the oil and gas industry and its movement to the offshore has been one of the fundamental forces shaping Louisiana’s culture, geography, society and economy during the twentieth century. In the late 1920’s and into the ‘30’s, the lakes, marshes and bayous of southern Louisiana began to rival the famous Spindletop salt dome in neighboring Texas in the production of fossil fuels. Workers flocked in from northern Louisiana, Arkansas, Oklahoma, Texas – all of them “Texians” to the local shrimpers, trappers, and farmers. The locals, for the most part, accommodated the outsiders. And many soon found jobs as roustabouts, roughnecks, and drillers with the big operators - the Texas Company, the California Company, Humble, and Shell. Others put their invaluable knowledge of the waters and the marshes to good advantage. The Texians needed these skills to explore the foreign geography of the coast. A consortium of companies led by Kerr-McGee and Phillips Petroleum completed the first out- of-sight-of-land well in 1947 off Morgan City, marking a new phase in the evolution of Louisiana’s oil and gas industry. Hamlets and towns would be transformed to support the offshore industry, which now is producing oil and gas in water depths of 8,000 feet, 200 miles off the coastlines of Alabama, Mississippi, Louisiana, and Texas. As a collection of structures, the more than 4,000 offshore platforms represent a significant part of the nation’s stock of productive physical capital. As habitat for fish and other sea life, these structures are some