Marine Log - September 2008 - (Page 4)

Nick Blenkey Senior Editorial Consultant Second Thoughts Drill, drill, drill? What with? omehow or other, offshore drilling has found itself tangled up in what passes for political debate in this election year. Whether or not areas of the U.S. Outer Continental Shelf (OCS) now off limits to drilling should be opened up is surely a matter for serious and considered bipartisan study and debate. Personally, not being much of a bicycling or hiking enthusiast, I think they should be. But right now, Congressional action—or more correctly, inaction— will be needed to make that happen. Some 60% of respondents to a poll on marinelog.com, don’t think there’ll be a vote on the matter until George W. Bush has left office. However, Congressman Jeb Hensarling (R-Tex.), Chairman of the House Republican Study Committee, and Senator Jim DeMint (R-S.C.), Chairman of the Republican Senate Steering Committee have launched an effort to protect what they’ve dubbed “American Energy Freedom Day” on October 1, 2008. On that day, the current prohibitions on energy leasing on most of the OCS and on oil shale leasing on federal lands will expire—unless Congress proactively acts to extend them. According to media reports, Senate Majority Leader Harry Reid has said he intends to try to renew the bans when Congress returns in September by tacking them on to a continuing spending resolution—a measure used to bypass the annual spending bills, and adopt the current spending levels until the new Congress takes over. But S to pass his version, Reid will need a filibuster-breaking 60 votes, which could prove difficult. Senator DeMint and 36 Senators have signed a letter to Harry Reid saying they will “actively oppose” any attempt to extend bans on offshore drilling and oil shale beyond their expiration at the end of September. It’s just conceivable, then, that we could see the U.S. Government shut down over the issue of offshore drilling. It’s time we got real about all this. Even if the ban is lifted, it will be a long time before we see any kind of drilling frenzy beyond what’s happening right now. Just about every available offshore drilling rig is already at work and yards that build them are committed into the fairly far future. Even if you can find a new entrant yard that would like to get into the rig building business you then run into a bottleneck in the availability of the actual drilling equipment for the rigs. Evidence of the tightness in the market is the decision by Pride International, announced last month, to order a fourth drillship at Samsung Heavy Industries. It is expected to be delivered in the fourth quarter of 2011. Louis A. Raspino, president and CEO of Pride International, Inc., said access to the world’s premium shipyards “is highly constrained, with no known opportunities to provide customers with new ultra-deepwater capacity before the end of 2011 and with several units already ordered with expected deliveries in 2012, we have decided to move forward and commit to our fourth ultra-deepwater construction project with SHI. We believe demand for ultra-deepwater rig capacity extends well into the next decade, providing excellent prospects for contracting this latest unit.” It’s also worth looking at the implications of last month’s Western Gulf of Mexico Oil and Gas Lease Sale 207, in New Orleans. It attracted $487,297,676 in high bids—the most the area has generated in a decade. “The level of bidding, which peaked at $61.1 million for a single tract in the Alaminos Canyon region, at times drew gasps of surprise from the crowd,” reports the New Orleans TimesPicayune. “In the midst of the national discussion about energy production, the activity at today’s sale signals that the offshore oil and gas industry is serious about developing our nation’s resources,” said Interior Secretary Dirk Kempthorne. Maybe. The sale statistics reveal that only 10% of the acreage offered attracted bids—and many tracts got only a single bid. And the big bids came from the big players. The preponderance of single bids and the interest in only limited areas may reflect a lack of up to date data on what’s out there. Something else that suggests that even if the OCS ban is lifted, “drill, drill, drill” won’t happen in any hurry. nblenkey@sbpub.com 4 MARINE LOG SEPTEMBER 2008 www.marinelog.com http://www.marinelog.com http://www.ebdg.com http://www.ebdg.com http://www.marinelog.com

Table of Contents Feed for the Digital Edition of Marine Log - September 2008

Marine Log - September 2008 Editorial Second Thoughts Update Contents Inside Washington Slick Cleanup The Women of WISTA Keeping Ships at Sea Connected Shipbuilding Shakeup Newsmakers Tech News Contracts Events Website Directory ML Buyer's Guide ML Marketplace Letters Marine Salvage

Marine Log - September 2008

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