Cool heads in the hot zone
  from: Offshore Engineer
  by: Jennifer Pallanich
  Tuesday, July 08, 2008

The Atlantic hurricane season 2008 opened on 1 June, a day after Tropical Storm Arthur, the first named storm of the year, formed off the coast of Belize. Meteorologists are forecasting about a dozen named storms to form this year, and the US Minerals Management Service has revamped its guidelines for storm-readiness. As companies ready for severe weather, they can take some comfort, according to a leading data company, in how little hurricane evacuations have affected Gulf of Mexico output on average. Jennifer Pallanich reports

Over the 45 years covered by an IHS study, hurricanes have had an average impact of disrupting 1.4% of oil and 1.3% of gas output in the Gulf of Mexico. IHS came to this conclusion after analyzing production data from 1960 to 2005.

Hurricanes Katrina and Rita combined to inflict record damage to offshore Gulf of Mexico oil and gas production and facilities in 2005. Following the two storms, the Minerals Management Service (MMS) reported that 75% of the platforms and 67% of the pipelines were in the path of the storms. By mid- December 2005, IHS data showed that cumulative shut-in oil was 101.7 million barrels, 18.5% of yearly Gulf oil production, and shut-in natural gas production was 526.2bcf, 14.4% of the Gulf ’s natural gas production.

‘While Hurricanes Katrina and Rita were an exception, historically, our data shows the overall impact to be much less than most people might expect,’ says Steve Trammel, a senior product manager at IHS.

Pete Stark, IHS vice president for industry relations, adds: ‘We did this in 2006, so the 2005 hurricane season was very fresh.’

Trammel attributes this low level of impact on production to industry planning to keep personnel safe. ‘Operators make the decision to pull crews off rigs well before a storm moves into the Gulf. Therefore, most disruptions to production are caused by suspension of operations as a safety precaution in the event that an approaching hurricane does threaten offshore production. As a result, average hurricane disruptions are shortlived with full production re-established within a month,’ Trammel says.

Worth noting since the original study was done, believes Stark, is how the industry is responding with improved rules and procedures to mitigate damage. ‘Even though the averages haven’t been severe, we felt that for an energy security point of view, that was a major positive step,’ he says, referring to proactive production shut-ins in 2006 and 2007.

According to Stark, the study can give a foundation against which to understand what the perceived hurricane risk might be for this year or future years. ‘We release not to be predictive, but here are some fundamentals. If storms actually hit facilities this year and really cause damage, what we have set up is the ability to have a much more rapid response on what the degree of impact represents and what it means to different market factors.’

The biggest surprise from the study, he says, was that ‘the annual average impact from hurricanes was surprisingly small, and that was really within the context of having had the tremendous hit from the 2005 hurricane season.’

‘Even though you have that double whammy from 2005, on average, there’ve been modest disruptions,’ explains Stark, with the industry recovering fairly rapidly.

Be prepared

Compared to three years ago, the MMS and the offshore oil and gas industry working in the Gulf of Mexico are better prepared for the coming hurricane season, according to Walter Cruickshank, MMS deputy director.

Part of that readiness, adds MMS Gulf of Mexico regional director Lars Herbst, relates to the MMS incorporating American Petroleum of Institute guidelines into its own regulations via a notice to lessees. The new criteria will increase platform survivability during hurricane conditions and result in fewer damaged platforms, according to the MMS.

Cruickshank says the new criteria ‘will improve the protection of critical oil and gas infrastructure and allow oil and gas operators to restore production sooner following a hurricane event.’

The guidelines concentrate on the ‘hot zone’ of the central Gulf of Mexico, increasing the air gap needed between the bottom of a rig and the water surface and often increasing the number of mooring lines needed for a rig.

‘The Central Gulf is where the metocean criteria really changes,’ notes API upstream policy advisor Andy Radford. ‘You want to beef up the structure underneath so it can take the force of the wave.’

In the past, Herbst points out, engineers designed to 100-year storm standards, but ‘this criteria increases what a 100-year storm is’. The MMS is analyzing engineering on structures located in the hot zone, reports Herbst.

The MMS initially identified 65 ‘high-consequence’ structures in the Gulf, defined as such because of water depth, production levels, and other variables. That number has since grown to 90 as operators complete their assessments. As of mid-June, the MMS was still evaluating the engineering of the structures and mitigation plans submitted by the companies. Mitigation plans, according to Herbst, could include such basic steps as removing unused boat decks or as drastic as jacking the deck higher.

In other readiness preparations, Herbst says the MMS has pre-approved certain locations and pipelines where operators may reroute production in case of damaged pipelines. ‘We’re dealing with a very complex energy program in the Gulf of Mexico,’ he adds, but the MMS is working with multiple agencies to secure the energy supply.

Forecasts

AccuWeather.com hurricane forecaster Joe Bastardi believes waning La Niña conditions and continued warm water in the Atlantic Basin will be the two defining factors influencing the 2008 hurricane season, creating a slightly above average number of storms and increasing the chance for storms to strike land along the US.

‘The Gulf of Mexico will have a normal distribution of tropical cyclone activity, with energy interests experiencing at least seven to 10 days with disruptions or threats of disruptions,’ says Bastardi. ‘Specifically, the forecast is for two or three storms that affect the energy infrastructure in and around the Gulf and bring at least tropical storm force winds to the Gulf coast, including one or two that bring hurricane force winds.We do not expect a near record high number like in the 2005 season.’

Last season, the spread of the storms shifted southwest with one such bunch in the northern Caribbean. This year, early indications show that the spread will move north and east with a target closer to the southeast US.

‘Although we are forecasting a total of 12 named storms in 2008, much more important than the forecast storm number are the facts that a relatively high percentage of tropical storms are expected to make landfall and that the major threat area is farther north than normal,’ says Bastardi. ‘We believe at least 40% of named storms will cause tropical storm or hurricane conditions on the US coastline, which is about 1.6 times the norm.’

The US National Oceanic & Atmospheric Administration’s Climate Prediction Center forecasts a near normal or above normal hurricane season in the Atlantic Basin for 2008. The center’s calculations for the year indicate a 60-70% chance of 12 to 16 named storms, including six to nine hurricanes and two to five major hurricanes. An average season is considered to be one with 11 named storms, including six hurricanes for which two reach major status.

According to Gerry Bell, lead seasonal hurricane forecaster at NOAA’s Climate Prediction Center, the combination of ocean and atmospheric conditions that have spawned increased hurricane activity since 1995 and the anticipated lingering effects of La Niña are the major factors influencing this year’s outlook.

‘If you read through the parameters – the data that we’re looking at for seasonal projections – they’re all unsure about one thing, and that’s whether or not an El Niño is going to going to be developing by the August-September timeframe,’ says Chris Hebert, lead hurricane forecaster at ImpactWeather.

Predicting sea surface temperatures in the tropical Pacific is difficult because of the lack of data, he adds. It appears the models are projecting that by August and September temperatures will continue to warm off the coast of South America and out to the central tropical Pacific. Hebert says this means that perhaps a weak El Niño will develop. The warmer than normal temperature in the tropical Pacific tends to result in a great deal of thunderstorm activity in the Pacific. That air rises in the Pacific but it sinks out over the Atlantic Basin, he says, noting that sinking air knocks out the thunderstorm activity.

This results in a tendency for fewer named storms in the Atlantic Basin during an El Niño year.

‘We’re uncertain about that as well,’ Hebert says about the possibility of the El Niño effect becoming a factor in this year’s hurricane season.

It appears that temperatures are continuing to warm, which may lead to a weak El Niño rather than a La Niña year, Hebert reckons. Based on what appears to be a higher likelihood of an El Niño year, he says, ImpactWeather is forecasting 15 named storms, of which five are to remain tropical storms and seven are to be hurricanes, with three of those considered major. He cautions that having fewer storms in a year doesn’t make any portion of the Gulf more protected.

‘Don’t focus so much on the numbers. Just be prepared now,’ concludes Hebert.OE

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