The Associated Press September 2, 2010, 5:24PM ET

Second Gulf spill puts moratorium back in question

Just when America's ban on offshore exploration seemed like it might end, another disaster in the Gulf of Mexico put Big Oil back on the defensive.

An offshore production platform owned by Mariner Energy Inc. caught fire Thursday morning about 200 miles west of BP's blown-out well. The incident raised more doubts in Congress about the risks of offshore drilling.

"This explosion highlights the significant risks associated with offshore drilling, and that much is left to be done to keep America's workers and waters safe from those risks," U.S. Rep. Edward J. Markey, D-Mass., said in a statement.

The Obama administration had been mulling a quick end to its drilling moratorium, now that BP has brought its leaking well under control. White House spokesman Robert Gibbs said the Mariner explosion shouldn't affect a decision on the ban, and he would not link it with BP's well.

"At this point based on what we know I don't want to marry those two up," Gibbs said.

Everyone else will, however, said Fadel Gheit, an analyst with Oppenheimer & Co.

"This is nothing. It's a fire cracker compared to BP's spill," Gheit said of the Mariner fire. "Yet it's another mishap. Now, people who wanted to know about the safety of the industry will want an even closer look."

Despite years with no major accidents, the offshore oil industry will now be forced to recover from a stigma that it's accident-prone and can't be trusted. BP has a reputation for costly mistakes. Mariner, a smaller independent company based in Houston, also has had numerous run-ins with regulators for safety issues.

Federal records show Mariner and related entities have had dozens of minor leaks and 10 accidents in the Gulf of Mexico over the last decade. The accidents include platform fires, pollution spills and a blowout.

The fact that different companies would experience major accidents within a few months of each other is a disaster for drillers hoping to be welcomed back to the Gulf, Gheit said.

Mariner shares lost 60 cents, about 2.6 percent, to close at $22.75 in Thursday trading. Apache Corp., which plans to buy Mariner for $2.7 billion, saw shares fall $1.16 to $91.30.

Most of Mariner's assets are close to its Houston headquarters. It produces oil and natural gas in West Texas and along the Gulf Coast. The company also owns more than 240 blocks in shallow parts of the Gulf of Mexico.

The platform that caught fire is in an area called the Vermilion Block 380, about 100 miles off the Louisiana coast and in about 340 feet of water. All 13 members of the crew on the platform were evacuated safely, the company said.

Mariner said that the platform was producing both oil and natural gas. During the last week of August, the Vermilion produced an average of 9.2 million cubic feet of natural gas per day and 1,400 barrels of oil, the company said.

If oil were to spill from the Mariner platform, experts said it would be handled differently than the BP spill. The Vermilion sits in shallow water, so oil would be easier to get to. In contrast, BP's well lies at a depth of 5,000 feet, and crews were forced to rely on remote-operated vehicles to tend to the underwater equipment.

The Vermilion is a production platform, with completely different equipment than the BP rig. Usually, platforms are much more stable than rigs, said Andy Radford, an API expert on offshore oil drilling.

"On a drilling rig, you're actually drilling the well," Radford said. "You're cutting, you're pumping mud down the hole. You have a lot more activity on a drilling rig."

There are about 3,400 platforms operating in the Gulf, according to the American Petroleum Institute. Together they pump about a third of the America's domestic oil, forming the backbone of the country's petroleum industry.

Platforms usually deal with stable wells where the oil is flowing at a predictable pressure, he said. A majority of platforms in the Gulf do not require crews on board.

Many platforms, especially those in shallow water, stand on legs that are drilled into the sea floor. Like a giant octopus, they spread out numerous pipelines that can tap into many production wells at once.

Those wells don't come with blowout preventers. Instead, they're equipped with a series of redundant valves that can shut off oil and gas at different points along the pipeline.

Numerous platforms were damaged during hurricanes Katrina and Rita in 2005. The storms broke pipelines and oil spilled into the Gulf. Radford said the platforms successfully kept major spills from happening.

"Those safety valves did their job," he said.


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