Gulf Oil Rig Explosion

Q: This week an oil rig in the Gulf of Mexico exploded and caught fire. At this time, 11 crewmen on that rig are still missing. Does of this tragic accident have any implications for U.S. energy supply?

A: On Tuesday, April 20, a semisubmersible drilling rig, the Deepwater Horizon, caught fire during drilling operations and has since sunk. Eleven men are missing and feared lost. Rescue efforts are continuing. The drilling rig, owned and operated by TransOcean, was in the process of “capping” a well drilled in a leasing block owned by British Petroleum in 5,000 feet of water about 41 miles off the Louisiana coast. The well had been drilled to assess the production potential of the reservoir and was in the process of being “capped” or closed off. During this process, an explosion occurred in the well, resulting in the fire on the rig. While there has been oil spilled as a result of the explosion and the sinking of the drilling rig, it is still uncertain whether there will be any oil released from the well itself. As of Friday morning, the U.S. Coast Guard reported that there did not appear to be oil leaking at the wellhead on the ocean floor. Oil spill cleanup equipment stationed in the Gulf of Mexico has been deployed.

The accident raises two principal questions with regard to U.S. energy supply. The first is whether there are immediate effects on U.S. oil production, and the second is whether the accident will impact U.S. energy policy decisions. Because this oil reservoir was not yet in production, current U.S. oil production should not be affected. There are reports that during the immediate period of stabilizing the well some nearby pipelines may be closed, but this would be a temporary issue.

The longer-term question is more difficult to answer. This accident, the worst in over 40 years, comes at a critical moment in the debate on energy security and climate change. Senators Lindsey Graham, John Kerry, and Joseph Lieberman are expected to introduce a bill in the near future to address energy security and climate change. To gain broader bipartisan support, this bill is expected to include language that would lead to greater development of offshore oil and gas. Although public support for offshore drilling has grown, this particular provision has remained controversial in the Congress, especially among Democrats. If this accident, which has already demonstrated the danger to oilfield workers, results in a major oil spill and significant environmental damage, support for offshore drilling could be undercut and affect the viability of any energy and climate bill that included provisions for greater offshore development. On the other hand, successful efforts to control the well and prevent environmental damage could demonstrate that the technology for offshore drilling has improved significantly and contain the debate to one of industrial safety rather than unacceptable environmental risk.

David L. Pumphrey is senior fellow and deputy director of the Energy and National Security Program at the Center for Strategic and International Studies in Washington, D.C.

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