Offshore drilling: (Too) big business?

We hear a lot about big government and government regulations, but when you look into the offshore drilling operations, you wonder if offshore drilling isn't big business gone awry with little or not enough regulation.

Offshore drilling is undoubtedly the most massive industry imaginable, diverging in all directions with virtually no standards of organization or operation.

It is shocking when you look at the size and numbers. According to Wikipedia, the online encyclopedia, there are 570 offshore drilling rigs in the North Sea of the Gulf of Mexico. According a 2006 National Oceanic and Atmospheric Administration map, there are 3,858 oil and gas platforms in the whole Gulf of Mexico. When you consider the horrible results from the BP/Transocean eruption, it is frightening and beyond comprehension to think of the potential hazard with this many rigs operating in our backyard.

The corporations and partnerships that own these platforms are so diverse and complex that it would be almost impossible to determine who is responsible for such a spill. Transocean is said to be the biggest provider of U.S. rigs and services, having acquired Santa Fe National in 2007, specializing in offshore drilling. Schlumberger NV is the largest based on capitalization. As of 2008, Petrobras is the largest contractor (about 80 percent) of the deep-water rig production, while BP and Exxon Mobil compete for the remaining 20 percent.

When I said "diverging in all directions," it is because there are so many different types of platforms, and all these different operators appear to have designed their own, virtually resulting in no two being alike.

There are fixed platforms, semisubmersibles and jack-up platforms. In 2010 Perdido Spar (Shell) will be the deepest unmanned installation at 8,000 feet.

There are drill ships, which are vessels exploring for new oil up to 12,000 feet.

There are satellite platforms, which are unmanned small processing plants connected to production platforms by flow lines.

The world's deepest platform is the Independence Hub, a floating semisubmersible in Gulf of Mexico water 8,000 feet deep.

There are numerous contractors of equipment, services and parts serving every platform.

After consider all the above, one might conclude that's it -- no more offshore drilling. But there is another side of the coin.

In 2007, we processed 15.2 million barrels of oil a day. About 10 million barrels (66 percent) was imported, and about 25 percent came from offshore drilling in the Gulf of Mexico. Any reduction in offshore petroleum would result in an increase in oil imports in direct proportion to the reduction in the Gulf and, needless to say, an increase in petroleum prices in the U.S.

In view of the above, offshore drilling has become a major perplexing issue for the government, the oil industry and the U.S. people. It is so vast and complex that there is probably little the government can do other than limiting permits for further offshore drilling and possibly limiting the depth of drilling, which might increase the risk.

Improving safety devices and adhering to the warning signals would seem to be an industry problem and would be difficult to police by government regulations.

Being raised in south Texas, I am no stranger to oil-well blowouts on land. They were common then, but in the early 1930s oil-well drilling muds were developed that were fairly successful in containment. My grandfather, Frank Knowlan, developed one of the first -- is not the first -- pieces of oil-well drilling equipment. He drilled the first artesian well for Victoria, Texas, in 1901 and an oil well in Cuero, Texas, in 1904 to a depth of 1,000 feet.

The Texas Company (Texaco) produced the first steel barge drilling rig in 1930. Pure Oil (later Chevron and Exxon Mobil) had the first platform 18 miles offshore in 1946. Kerr-McGee and partners ConocoPhillips and Standard Oil (BP) completed 32 offshore wells in 1947.

Jack H. Knowlan Sr. is a Jackson resident.