Exploration and Development Risks

What Causes Spills?

Where there are people, there are mistakes. The causes of BP’s Deepwater Horizon blowout in the Gulf of Mexico have not yet been determined. But the Exxon Valdez oil spill was caused by human error. The Montara well blowout and spill in the Timor Sea in 2009 was very likely caused by human error in setting the cement casing. Eighty percent of spills and accidents in all industries, including oil and gas, are estimated to be caused by human error.

Additionally, the Arctic Ocean presents an array of hazardous operating conditions. The difficulty of responding to BP’s Deepwater Horizon spill in the Gulf of Mexico was exacerbated by the difficult conditions of extreme water depth. In the Arctic, dangerous conditions could include gale force winds, extreme fog, prolonged periods of darkness, shifting sea ice and sub-zero temperatures. 

When multiple risk factors combine, accidents are even more likely to occur. For instance, the aging oil infrastructure at Prudhoe Bay is succumbing to corrosion and inadequate monitoring of that problem has led to a spate of recent spills on the North Slope. 

An increase in oil exploration and production will create oil spill risks from offshore platforms, associated pipelines, storage tanks and shipping activities. At the same time, changing sea ice conditions are opening new shipping routes and extending the season for existing routes. Increasing vessel traffic will only add to the potential risk of oil spills beyond the oil and gas industry. 

Not If, But When

How likely is a spill in U.S. Arctic waters? The federal government’s Minerals Management Service estimates the chances of a major spill are 26 percent in the Beaufort Sea and 40 percent in the Chukchi Sea over the life of oil development. The risk of small spills is nearly 100 percent. The government’s statistics are based on an assumption of only 2 billion barrels of production between the two lease areas out of an estimated 19 billion barrels of economically recoverable oil.

If Arctic oil development proves profitable and activity increases, the risks could be much higher, amplifying over time. Aging oil infrastructure on Prudhoe Bay spilled 660,000 gallons of oil, natural gas and water in only three years – from 2006 to 2009. Recent spills on the North Slope in Alaska include:

• In November 2009, an estimated 46,000 gallons of crude oil, high-salinity water and natural gas leaked from a pipeline rupture caused by ice plugs.
• In February 2009, corrosion of a pipeline resulted in a spill estimated at 1,900 gallons of crude oil, high-salinity water and natural gas.
• January, 2009, an estimated 24,000 gallons of crude oil and water spilled after a failure in the automated flow control system

The oil industry plans on an exploration, development and production timeline of 50 years in the Beaufort and Chukchi seas.

Recent Spills from Offshore Exploration and Development

Spills happen. Even with modern equipment and modern safety measures, spills are a part of the offshore oil and gas industry. The Deepwater Horizon blowout in April 2010 caused a massive oil spill that foiled all modern technological safeguards designed to prevent such an accident. Other spills in recent years include:

• In 2001, a sinking oil platform released about 9,500 barrels of oil and killed several people in Brazil.
• In 2004, a spill from an offshore platform released about 1,000 barrels of oil off the coast of Newfoundland, Canada.
• In 2007, 25,000 barrels of oil spilled from a platform off the coast of Norway.
• In 2009, a 10-week blowout at the Montara oil field off the coast of Australia released between 29,600 and 222,000 barrels of oil into the Timor Sea.

How big is a spill likely to be?

The “large” spills considered in the government’s environmental impact statement for the Chukchi and Beaufort seas are only 1,500 bbl and 4,600 bbl. BP’s Deepwater Horizon spill has been a grim lesson in how vastly that underestimated the potential of a major spill. During the first five weeks alone, the Gulf blowout spewed an estimated 440,000 to 700,000 barrels of oil.

Other Major Spills from Offshore Oil

As BP’s Deepwater Horizon disaster has illustrated, blowouts of offshore oil wells can be some of the most difficult spills to control. A federal Minerals Management Service report recorded 117 failures of blowout preventers in a two year period in the 1990s, while another report noted 39 actual blowouts between 1992 and 2006. Though blowouts are the most dramatic and devastating spills, every piece of the offshore oil and gas industry, from pipelines to boats, causes spills. Much of the offshore oil industry was shut down before hurricanes Katrina and Rita in 2005, but at least 741,000 gallons were spilled from broken pipelines and other sources.

In addition to the recent offshore disasters mentioned above, this list shows some of the major blowouts in the history of the offshore oil and gas industry:

• In 1969, Santa Barbara was polluted with 80,000 barrels of oil from an 11-day blowout that continued leaking oil for months.
• In 1977, more than 200,000 barrels were released from Phillips Petroleum Ekofisk B platform
• In 1979, a blowout at the Ixtoc I well in the Gulf of Mexico took nine months to control, spilling 3.5 million barrels of oil, and creating the second largest oil spill in history. 
• In 1980, a two-week blowout sent 200,000 barrels into the Niger Delta.
• In 1980, 100,000 barrels was spilled after an exploratory well exploded in the Persian Gulf and killed 19 workers.

Risks from Exploration

Even exploring for oil is risky. The Minerals Management Service’s 2009 environmental impact statement for Royal Dutch Shell’s proposed exploration drilling in the Chukchi Sea discounted the risk of a spill as improbable. But BP’s Deepwater Horizon blowout occurred as the rig completed exploration drilling. The 1979 Ixtoc I spill in the Gulf of Mexico also happened during exploration drilling as did the Persian Gulf spill. Additionally, there were 11 documented well-control incidents from 1977 to 2000 in which natural gas and/or drilling muds (a mixture of clays, chemicals and water) were released into the environment.

The lack of data on drilling in Arctic offshore environments means that most information is based on the U.S. industry’s experience in the Gulf of Mexico, a much different operating environment. Despite industry assurances that drilling in shallow water versus deep water is less risky, the Timor Sea’s Montara blowout was a vivid example of a recent shallow water disaster using a relatively new drilling rig. See our recommendation for an oil spill risk assessment.

Human Error

No matter how technologically advanced exploration and development equipment becomes, there is still a chance that it will not be operated correctly. Mistakes happen. In the summer of 2009, a blowout in the East Timor Sea spewed oil for months while crews and experts tried to stop the spill. Even though the platform was almost new – delivered in 2008 – reports suggest that the procedure to cap the well was not followed accurately, leading to the blowout.

ENDNOTES: