The nation’s oversupply of oil means lower gas prices for American households, but for businesses that rely heavily on the drilling industry in the Gulf of Mexico it’s a vastly different story.
“In a good year, we might be able to clear $3 million by working a lot,” said James Spalt, owner of Cape Coastal Marine in New Orleans. “But our yearly revenue right now is virtually zero.”
That’s because geophysical survey companies that often use Spalt’s fleet of offshore support vessels are idle themselves.
“Our industry’s in the toilet right now,” Peter Seidel, director of Marine Acquisition at TGS in Houston told Watchdog.org. “My company has already laid off 35 percent of its workforce, and we’re actually in a better position than most.”
But it’s not just low prices that are hurting his business.
Seven ‘Alarming’ Regulations
A small, little-known federal agency called the Bureau of Ocean Energy Management (BOEM) is constructing a plan to limit energy exploration in the Gulf in an effort it says will protect dolphins and other animals from the purported dangers of airgun blasting used in seismic surveying. Depending on which recommendation the agency implements, seismic surveys could be severely restricted, or wiped out altogether, even though the Gulf’s marine populations are not endangered or even threatened.
According to Nikki Martin, president of the International Association of Geophysical Contractors (IAGC), seismic surveys have led to a huge increase in recoverable oil resources – from 9.57 billion barrels in 1987 to 48.4 billion in 2011. “That’s a five-fold increase based simply on geophysical surveys out there looking for recoverable resources,” Martin told Watchdog.org. “And I’m sure that estimate’s even higher today and will be higher in the future. When you look for resources, you find them.”
The BOEM plan is part of the settlement in a federal lawsuit filed by the Natural Resources Defense Council and other environmental activist groups. The suit claimed a seismic survey permitted following the 2010 Deepwater Horizon Oil Spill violated the Marine Mammal Protection Act because airgun blasts used to shoot sound waves underwater are too loud and interfere with mating and feeding of marine mammals.
Immediate restrictions on seismic activity included increasing the distance between survey ships, prohibiting airgun blasts in “biologically important areas” and during bottlenose calving season, and employing around-the-clock whale-watchers. But the settlement also required BOEM to draft a “programmatic environmental impact statement” or PEIS to guide future decisions on oil and natural gas exploration in the Gulf of Mexico.
Martin says the plan is more than just an impact statement — it includes seven recommendations ranging from keeping current rules to a ban on new permits. “Some of the alternatives, including the across-the-board reduction in seismic exploration or shut downs, as they mention for dolphins, are really alarming,” she said.
Rules ‘Expensive, Time-Consuming’
Seidel agrees, explaining that existing rules dealing with whales are expensive and time-consuming enough without adding dolphins to the mix.
“So when a whale comes by and shuts the [survey] vessel down, the vessel has to circle around and come back on the line. That typically is going to take about 10 hours and it can take as long as eight to 10 hours to circle around,” he said. “And those vessels in a normal market cost in the region of a quarter of a million dollars a day. So we’re looking at close to $100,000 every time we have to shut down.”
“You know, dolphins tend to follow a boat around,” Seidel added. “So out of all mitigation measures proposed, that is probably the one that would be hardest to live with.”
The NRDC insists harsher rules are necessary because, according to its website, the noise can cause “hearing loss, injury and potentially death, behavioral changes like abandoning habitats,” and can also destroy the “animals’ ability to communicate and breed.” But even the BOEM says there is no hard evidence to support such claims about airgun activity.
Martin points to history to bolster the case for exploration, noting that marine mammals continue to thrive in the Gulf of Mexico despite 50 years of geophysical survey activity.
‘No Evidence’ of Harm
“We keep looking, but to date, there’s no evidence that sound produced from exploration for oil and gas has a known impact on marine mammals or their populations,” she said. “The federal government itself has stated conclusively there’s no evidence that there’s any sort of injury to marine mammals or negative impact to marine mammal populations.”
The BOEM itself has stated in several publications that so far, no correlation has been found between airgun blasts and harm to marine animals.
From August 2014: “To date, there has been no documented scientific evidence of noise from air guns used in geological and geophysical (G&G) seismic activities adversely affecting marine animal populations or coastal communities.”
And in March 2015: ” Federal stock assessments for the dolphin do not identify air gun seismic surveys as adversely impacting stock sustainability in the Gulf of Mexico, where air gun surveys are routine.”
Martin says the lack of scientific evidence from the BOEM or from 15 years of industry research suggests the pressure to stop seismic surveys has very little to do with saving animals.
“Seismic is the first step to oil and gas drilling,” Martin said. “[Environmental groups] know we provide the blueprint for oil and gas and without that blueprint, it’s difficult to continue exploration for oil and gas.”
So far, the NRDC has not responded to a request for comment. However the group has long been a strident opponent of fossil fuels.
Michael Jasny, director of the NRDC’s marine mammal protection project, has often said seismic exploration is “a gateway drug” to offshore drilling, a statement Martin says is a fair assessment — although a bad metaphor — of the industry’s role.
“If seismic surveys are not performed, wells will not be drilled,” she said.
With implementation of the BOEM recommendations set for September 2017, Martin expects the process to move forward, even with new faces in Washington. “We certainly look forward to working with this new administration to promote policies that increase, not decrease, access to those areas available to us for offshore exploration and development,” she said.
Regulations Make Operating Difficult
In the meantime, Seidel and Spalt attended public hearings recently held by BOEM in several Gulf Coast cities, and hope the agency will consider the impact of the more severe recommendations on their businesses as well as the industry as a whole.
“It would make it very, very difficult for us to operate in the gulf,” said Seidel. “And the likelihood is it would be so cost-prohibitive that we might not — we would probably dramatically reduce what we’re doing in the Gulf of Mexico.”
As for Spalt and Cape Coastal Marine, “We’re not a Schlumberger or a Halliburton.” he said. “It’s my father and I who own the business. My brothers work for the business. It’s everything we’ve got.”
Kathy Hoekstra ([email protected]) is the regulatory policy reporter for Watchdog.org and a policy advisor to The Heartland Institute.
[Originally Published at Watchdog.org]