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9/10/2010

Houston Business Journal: What's Next? FAQ with Energy Industry Experts

Houston partner John English co-authored a column, “What's Next? FAQ with Energy Industry Experts,” in the September 10-16, 2010, Houston Business Journal Energy magazine. The column discussed oil spills in the Gulf of Mexico and the long-term effects of these.

“Blowouts and oil spills are not new to the offshore oil and gas industry in the Gulf of Mexico. Over the last half-century, the majority of these events created only a minor stir in the news media; however, a handful of major offshore disasters and subsequent oil spills captured the attention of the public, resulted in changes in regulatory and industry practices, and underscore a parallel with the current Deepwater Horizon blowout and ongoing spill.”

The column examined historical Gulf Coast oil spills and their impact. “In February 1970, a Chevron platform located offshore Louisiana caught fire and burned for seven weeks, causing the largest oil spill in U.S. history at that time. The well spilled an estimated 30,500 barrels of oil in to the Gulf and nearly 1,500 barrels of chemical dispersants were applied to the spill. Ten months later, a blowout on a Shell platform discharged oil into the gulf for four and half months, until relief wells killed the burning well and ended the spill. Estimates of oil spilled ranged from 25,000 barrels to as many as 100,000. In 1979, the largest oil spill occurred at PEMEX's Ixtoc Well into the Bay of Campeche when a drilling rig exploded, severing the riser and causing an oil spill that spewed an estimated 30,000 barrels of oil per day for 270 days until a relief well was completed. In each of these instances, as in the current Macondo spill, all efforts to stop the oil flow were unsuccessful until completion of relief wells stopped the discharges. In addition, the federal government issued orders temporarily halting drilling and new lease sales, and then established new guidelines and procedures for future drilling operations.”

English also addressed related environmental issues. “Warm temperatures accelerated the evaporation, weathering and microbial consumption of the oil; however, it should be noted that in the earlier spills, much of the oil stayed offshore evaporating or settling to the sea floor and, unlike the current spill, there was no extensive contamination of wetlands. As in the current situation, fishing and shrimping grounds were closed, but eventually reopened and were found to have significantly larger fish populations. In short, in each of these instances, the Gulf, the environment and the affected industries have rebounded. At this point, there is no reason that current expectations should differ.”

At Baker Hostetler, English represents a clients in oil and gas, energy and environmental matters.