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Explosion in Gulf Coast Results in Death of Two Workers

November 27, 2012


Earlier this month there was a fire on an offshore oil and gas platform in the Gulf of Mexico owned by Black Elk Energy Co. While workers were cutting into a line on the platform, sparks hit a storage tank resulting in a large explosion. The platform was not operating during this event, but merely undergoing maintenance. Aboard the platform were over 20 workers, at least half employed by Grand Isle Shipyard Inc. The explosion occurred about 20 miles offshore Grand Isle, a barrier island at the far southern tip of Louisiana. This island was also deeply affected by the August 2012 explosion resulting in the worst offshore oil spill in U.S. history.

Immediately following the accident, at least four individuals were in critical but stable condition, primarily suffering from second and third degree burns. A “command center” was activated by the Coast Guard to investigate consisting of two helicopter teams and two small boat stations. Emergency crews were searching a 14,000 square-mile area for more than 32 hours to locate two missing workers, but suspended searches a few days later. However, the two bodies were identified as those of the missing Filipino workers, confirmed by the Filipino Embassy. The fatality toll from the November 16 event is so far up to two.

Hurricane Sandy Shuts Down Oil Refineries

October 30, 2012


As hurricane Sandy trails the Northeastern coast, several oil refineries have been forced to shut down in advance. In total, three of the major six refineries located in the NE have effectively shut down operations, including Phillips 66 in Linden, New Jersey, the second largest refinery in the area. The major ports that serve to supply the area with about one million barrels of fuel per day were temporarily closed down as well. One major concern is the expected fall in oil and gas demand. With power lines down and power outages throughout many cities, demand could dramatically fall for days. Chief oil analyst at Oil Price Information Services Tom Kloza predicts that the drop could be as significant as the Katrina caused.

On the other hand, prices could rise if there is severe refinery damage or long-term shutdowns extend longer than the power outages last. Philadelphia Energy Solutions refinery is running some units only at minimum safe operating levels. Most other refineries are operating at minimum capacity. If damage is limited, many experts expect fuel supplies to be regular within a few days. According to AAA, gas prices at the pump fell nationally half a penny from Sunday. Further, Natural gas prices and heating oil rose. Crude oil prices fell $1 per barrel in trading on the New York Mercantile Exchange.

John Auers, senior vice president and refining specialist at Turner, Mason & Co. in Dallas explains that “markets have already bumped up prices to some degree. If there’s no major catastrophes then prices are going to go in the other direction.”

Educational Opportunities for Oil and Gas Workers, University of Phoenix

October 18, 2012


           Opportunities are arising for oil and gas workers to further their education thanks to a partnership between the University of Phoenix and the American Petroleum Institute. Due to continual growth of demand for experienced oil and gas workers and a decrease in supply of such individuals, this partnership strives to bridge the gap while meeting industry and workforce needs.

The program works by allowing students to use work and life experiences towards college credits through a process called Prior Learning Assessment. Students may gain credits in their field of study at the University of Phoenix based on their completed API University training courses.

API President and CEO Jack Gerard explains “new technologies are leading to a game changing energy revolution in America that no one could have predicted just a few years ago. The oil and natural gas industry will need a new generation of highly skilled employees to safely develop our country’s vast energy resources. By partnering with University of Phoenix, we can create opportunities for students interested in careers in the growing oil and natural gas sector and fueling America’s future.”

Discover more about the program here:


Despite BP Oil Spill, Drilling Continues in the Gulf

September 25, 2012


Immediately following BP’s five million barrel oil spill in April 2010 the U.S. government issued a six-month suspension on drilling for certain areas of the Gulf of Mexico. However, the government has since been issuing an increasing number of deep-water drilling permits for those areas. About 44 permits were issued in the first quarter of 2012 alone, an all-time high since the 2010 suspension.

Growth in drilling in the GOM can be attributed to both economic and political factors. As prices of crude oil continue to rise, oil production will too, even in the fragile GOM. Additionally, the United States and Mexico entered into an agreement regarding hydrocarbon exploration and production in the GOM in February 2012, increasing freedoms for U.S. oil corporations. Growth in investment and in drilling can be expected to follow.

Deep-water drilling in the GOM is expected to return to levels experienced prior to the spill by the end of 2012. International oil companies such as BP and Chevron Corporation, with the means to fund potential liability risks in the event of another accident, have continued to spearhead these operations.


GOM Offshore Production Restored After Hurricane Isaac

September 7, 2012


Following the destruction caused by Hurricane Isaac, offshore oil and gas operators in the Gulf of Mexico continue to restore production. The Bureau of Safety and Environmental Enforcement (BSEE) Hurricane Response Team is monitoring the operators’ activities and will work with the offshore operators until operations return to normal. As damage reports are being sent in, reports continue to indicate only minor damage.

18 production platforms had to evacuate their personnel, which is only about three percent of the platforms in the Gulf of Mexico. Production platforms are the structures located offshore from which oil and natural gas are produced. These stay in the same location throughout a project’s duration.

As part of the evacuation, personnel of the platforms activate the applicable shut-in procedure. This involves closing the sub-surface safety valves located below the surface of the ocean floor to prevent the release of oil or gas. Shutting-in oil and gas production is a standard procedure conducted by industry for safety and environmental reasons.

It is estimated the almost 50 percent of the current daily oil production in the Gulf of Mexico has been shut-in. Offshore oil and gas facilities are currently being inspected. Once all standard checks are done, production to undamaged facilities will start again immediately.

Sinclair Oil Pays $3.8 Million Penalty to Resolve Violations of 2008 Consent Decree

August 22, 2012


The U.S. Environmental Protection Agency (EPA) and the U.S. Department of Justice settled a dispute with Sinclair Oil Corporation about alleged violations of air pollution. The limits were established in a 2008 consent decree at refineries in Casper and Sinclair, Wyo. The violations included exceeding nitrogen oxides emissions limits and failing to comply with requirements to operate and maintain a flare gas recovery system that resulted in excess emissions of sulfur dioxide.

“EPA is committed to ensuring that companies comply with environmental requirements that protect people’s health,” said Cynthia Giles, assistant administrator for EPA’s Office of Enforcement and Compliance Assurance.

Sinclair will pay penalties totaling nearly $4,000,000 and spend approximately $10.5 million on additional pollution control equipment to resolve their case. Sinclair must reduce emissions of nitrogen oxides by 24 tons per year, sulfur dioxide by 385 tons per year, and particulate matter by 59 tons per year. Sinclair will also complete a project to provide road paving at its Casper refinery that will reduce particulate matter emissions.

The settlement is subject to a 30-day public comment period and final court approval.

American Waterways Operators Testifies at Congressional Hearing

August 8, 2012



A U.S. Senate Homeland Security Appropriations Subcommittee field hearing in Kodiak, AK was held at the request of Sen. Lisa Murowski focusing on the need for a robust U.S. Coast Guard presence in Alaksa. Bruce Harland, Vice President-Commercial Services of Crowley Maritime Corporations testified on behalf of Crowley and the AWO about the safe navigation requirements. As the U.S. pursues expanding navigation in the Arctic regions, there are many concerns with the safety of workers in such harsh regions.


“In spite of extreme weather events, unpredictable ice conditions, draft limitations and the area’s sheer remote location, AWO member companies have worked for many years within these limitations as well as in close coordination with the Coast Guard and State of Alaska to develop a safe, efficient and cost effective system that provides transportation and fuel delivery services to villages and business in the region,” Mr. Harland states.


When considering how to continue safe navigation, Harland urged the Subcommittee to consider accurate charting, establishment of a Deepwater Arctic Port, a vessel traffic system for Unimark Pass and Bering Straits, greater Coast Guard response and stronger ice breaking capabilities. Harland finished his proposal stating, “the industry has developed innovative tools and procedures to adapt to the unique conditions that navigation in the Arctic regions poses. We greatly appreciate the Subcommittee’s consideration of what is necessary for safe operation and expansion moving forward.”

U.S. House Rejects Offshore Drilling Plan

July 26, 2012


The U.S. House of Representatives rejected H.R. 6168 today. This bill would have implanted President Obama’s offshore drilling plan that would place 85 percent of America’s offshore energy resources locked under U.S. control.

Directly after, the House approved H.R. 6082, that would replace Obama’s plan with a robust energy plan that offers 29 lease sales in areas thought to have oil and natural gas resources. This will create tens of thousands of new jobs and will also increase American energy production.

            U.S. Senator Lisa Murkowski introduced bipartisan legislation to expand American offshore energy production with a revised leasing plan spread out over five-years to provide revenue sharing to all participating coastal states. The Offshore Petroleum Expansion Act of 2012 is supported by many states, including Virginia, Louisiana and Oklahoma.

            The Obama Administration announced its proposed 2012-2017 plan for offshore lease on June 28 and it is now undergoing a mandatory 60-day congressional review. The decision made today in the House calls for review in the plan if it intends to pass in the future.

Growth in Offshore Expansion Brings Wage Pressure

July 19, 2012


As the offshore sector continues expanding internationally, higher salaries are being paid to employees. This puts wage pressure on other industry segments such as classification societies and port state administrations. The increase in demand for specialists in the offshore sector is the main reason for the widening wage gap with other parts of the industry, since government employers fix many of the salaries.

Europe’s offshore expertise may be in short supply if more is not done to create higher stability between the specialists and offshore industry workers. Since many EU nationals’ salaries are being undercut by other employers outside of the EU, many personnel will be less attracted to working as surveyors in classification societies. Many of the international crews are more cost-competitive, making many of the EU participants in the offshore market face the potential to be out priced.

“We are obviously in favor of an international workforce,” says Spinnaker Business Development Director Teresa Peacock. “Some of our clients have raised concerns that a plentiful supply of lower cost crew may jeopardize the EU’s ability to provide skilled personnel for the offshore sector in the future.”

This issue does not just face the industry as a whole, but also an issue for each country individually. Employers with greater finances must cooperate with the industry so that it does not hurt the industry as a whole. The ability for EU employees to compete in a demanding international environment will be key for the EU to keep up with their experienced workforce in the future.

China Opposes Vietnamese Maritime Law Over Sovereignty Claim

June 26, 2012

Vice Foreign Minister Zhang Zhijun summoned Vietnamese Ambassador to China to discuss the recent passing of a Vietnamese maritime law that extends the country’s jurisdiction to islands claimed by China. The Vietnam National Assembly passed the “Vietnamese Law of the Sea,” that describes China’s Xisha Islands and Nansha Islands as being within Vietnam’s sovereignty and jurisdiction.


Since China has indisputable sovereignty over the islands, Vietnam has infringed upon China’s sovereignty. The Declaration on the Conduct of Parties in the South China Sea (DOC) has been violated by Vietnam’s unilateral action.


“Vietnam’s action is illegal, invalid and detrimental to peace and stability in the South China Sea,” said Zhang, indicating that China will firmly safeguard its national sovereignty.


China requests that Vietnam remove its ships in order to secure relations and not jeopardize the peace and stability of the South China Sea. Vietnam has not taken any action yet, so China will just have to wait to see how this controversy plays out.

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