Aboard a shallow-water gas rig, regulatory confusion keeps crew waiting


ABOARD THE SEAHAWK 2602 DRILLING RIG, GULF OF MEXICO — Under a sweltering sun, rig manager Joe Boop watched as three of his crew yanked with grease-stained hands on a huge red wrench to adjust long brown pipes that stretched down through 210 feet of water and nearly a mile beneath the seafloor.

A few feet from the rig, globs of orange-brown oil floated in the sparkling ocean water — a reminder that Boop’s rig sits about 32 miles northwest of where the Deepwater Horizon sank nearly eight weeks ago.

On Friday afternoon, Boop estimated that his rig, which is about half the size of a football field, had only 24 hours of work left and then would have to sit idle because of delays in permits and confusion about new safety regulations.

President Obama has declared a six-month moratorium on drilling in deep water in the Gulf of Mexico in the wake of the Deepwater Horizon accident. In shallow water — up to 500 feet deep — he said drilling by rigs such as Seahawk’s could continue.

But rig owners say that confusion over safety regulations issued last week by the Interior Department and uncertainty about additional rules Interior says are on the way could extend delays in the issuance of shallow-water permits, creating a de facto moratorium. That in turn could force companies to idle rigs and furlough thousands of workers. Since the April 20 accident, the number of rigs actively drilling in shallow waters of the gulf has dropped by half.

“Putting semantics aside, there are no new permits being issued in shallow waters,” said James W. Noe, general counsel of Hercules Offshore, the biggest shallow-water rig operator in the gulf. Noe and other executives met with lawmakers from Gulf Coast states on Thursday and Friday, including some of the 10 senators who had earlier urged Obama to exempt shallow-water rigs from his moratorium.

“The pace of new contracting and permitting is slowing down . . . as operators and contractors get up to speed on the new requirements,” said a report by Jefferies & Company, an investment firm. It said that that four of Seahawk’s jack-up rigs — whose legs stand on the seafloor — have permits pending.

“We’ve submitted the paperwork we think they’re asking for, but nothing’s really clear,” Rick Storey, Seahawk’s director of sales and marketing, said of the Minerals Management Service, which oversees the industry. “The regulations are so vague.”

The Houston-based Seahawk, with roughly 1,000 employees, has 10 rigs in the gulf. Two of them are idle because of permitting delays, costing the company about $60,000 a day.

“We’ll start laying off pretty quick . . . because you just can’t afford to keep paying crews if you can’t work the rig,” Storey said.

Despite calls in Congress and from Interior Secretary Ken Salazar last week for BP to pay lost wages to workers affected by Obama’s deep water moratorium, BP has balked at the suggestion. “A line has to be drawn somewhere,” said a person familiar with senior BP officials’ thinking. “And this would seem to be on the other side of that line.”

Not only rig owners and workers are hurt — the costs are spilling onto shore too. Chett Chiasson, executive director of Louisiana’s Port Fourchon, said the six-month deep-water moratorium along with delays in shallow-water drilling could mean a loss of $750 million for the area and layoffs among the 4,000 workers there who provide support to rigs.

“It used to be that if fishing was down, people would go work on the rigs,” Chiasson said. “Now you’ve got fishing and shrimping gone and now the drilling side of our economy is gone. It leaves us in a bad, bad situation.”

Just up the bayou from Chiasson’s office, outside a Conoco gas station, Kerry Romero, 49, of Loreauville, La., took a break from the searing heat Thursday to chat with a fellow truck driver, Gary Nerry, 60, of New Iberia.

Both men, who haul drill pipe and other supplies to Port Fourchon, said they’ve seen a slowdown in deliveries. Nerry said he’s lost about $4,000 of business in one week.

“If we don’t bring in stuff for them then we don’t make nothing and we stay at home,” Nerry said, looking out at his 18-wheeler.

It is not the new safety regulations that are causing problems for shallow-water rig operators. “We can live with that,” said Randall Stilley, chief executive of Seahawk. But, he said, , MMS officials are now too nervous to issue new permits without approval from senior administration officials.

Stilley and Noe also argue that drilling in shallow water is inherently safer than in deep water. BP, which was leasing the Deepwater Horizon, has blamed the accident in part on the failure of the blowout preventer, which was sitting on the seafloor a mile below the surface. But shallow-water jack-ups can keep their blowout preventers on the rig deck, making it easier to maintain them.

Boop, a 31-year veteran of rig work, showed off his bright red blowout preventer. “This is made so that you can close off Mother Nature,” he said.

In a small office, just off the floor of the rig, a large brown box is used to operate the device. It has red and green buttons with black wording above each. One reads “kill line.” Another says “top pipe rams.” Another is labeled “choke line.” And the button of last resort: “Blind shear.”

“If you can’t close it down any other way, the blind shear will cut that drill pipe in two,” Boop said.

Crew members say they’re even more alert about safety regulations since the Deepwater Horizon tragedy, which killed 11 rig workers. A few of the men say they saw fire from the explosion in the distance.

“You’re not playing with a Tinkertoy out here,” Boop said. ” You have to stay on top of your business.”

“We all know coming out here how dangerous this job can be, but now the Horizon incident has added a little extra thought to it,” said Andy Dent, 44, of Houston, a drill operator who has spent 18 years working on rigs. Now the threats to the rig workers are economic, regulatory and political too.

The Seahawk 2602 set up in this location on April 28, eight days after the Deepwater Horizon accident. Since then, the crew members have drilled three wells to tap natural gas under the ocean floor. They need to do more work on the wells — what’s known as tying back on one well, prepping another to start pumping gas, and digging 200 feet deeper on a third to reach a new gas reservoir. To do any of it, Seahawk needs new permits from the MMS.

“If they’re not going to issue the permits, we’re going to sit here and freelance,” Boop said, explaining that his crew would spend the weekend painting, maintaining equipment and cleaning the rig.

That’s not the main mission of the Seahawk crew of about 40 men, including concrete mixers, mud loggers, roughbacks (a term for those who work the drills), roustabouts (men who offload supply boats of drill pipe and clean the rig), safety managers, cooks and other technicians.

Ordinarily the crew members work 12-hour shifts for 14 days straight. A crew leader records the work they did every 30 minutes in computerized reports.

They eat their meals in a galley at two folding tables, as the rig sways ever so slightly. The cook’s two-week supply includes 3,000 pounds of ribs and beef, 400 pounds of chicken, 250 pounds of shrimp and fish and two large pallets of bottled water and Gatorade.

Over a lunch of fried shrimp, fried catfish, fried okra, frog legs and potatoes, the men chat about how they spent 14 days off — camping and fishing with friends and family. Nearby, a local newspaper headline screams, “Spill Could Be Double the Size.” No one pays it any heed.

After lunch, Boop holds one of his daily safety meetings. Updates: none.

“I really don’t know what to tell y’all,” he said to the men, as a few spit into plastic water bottles. “Right now we don’t have permits.”

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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