OFFSHORE:

2nd Gulf rig blowout spurs calls to speed up safety rules

HOUSTON -- The partially collapsed Hercules Offshore natural gas drilling rig in the Gulf of Mexico continued burning late yesterday, as response crews struggled to regain control.

The accident, the second major one to occur in the Gulf of Mexico this month, is already leading to calls for new government scrutiny of offshore oil and gas drillers and the reliability of blowout preventers, equipment designed to prevent spills. The loss of well control comes some two weeks after a different installation lost control of another well, releasing gas and condensates into the environment.

Gas escaping from this latest well blowout, at an exploration block off the coast of Louisiana, ignited late Tuesday night, setting fire to the jackup rig operated by Houston-based Hercules Offshore. The drilling rig's blowout preventer failed to stop the uncontrolled release of gas earlier that day.

The rig operator was able to safely evacuate 44 crew members Tuesday before the fire escalated. Three firefighting vessels were dispatched to attack the blaze.

A Coast Guard photograph of the scene showed a massive fireball eating away at the rig.

Authorities said the fire has destroyed the drilling derrick and part of the rig, but Hercules reported late yesterday that the rest of the structure was still standing. The company also said it was mobilizing another rig to the scene in anticipation of drilling a relief well that may be necessary to stop the flow of gas.

The Bureau of Safety and Environmental Enforcement (BSEE), which overseas offshore safety and environmental performance for the Department of the Interior, said that the blowout did not cause any crude oil to leak into the sea.

Walter Oil & Gas hired the rig and Hercules to drill on its offshore shallow water lease. BSEE says the jackup rig is mounted in 154 feet of water about 55 miles off the coastline.

"Under BSEE's direction, Walter Oil & Gas has begun preparations to move a jack-up rig on location to potentially drill a relief well," the agency said in a release. "BSEE continues to review and approve all operational plans and procedures."

BSEE is in the process of revamping its regulations on blowout preventer standards in an effort to improve safety. In 2010, the blowout preventer on the Deepwater Horizon drilling rig also failed, prompting the worst offshore oil spill in U.S. history.

Environmental groups said the accident at the Hercules 265 jackup rig and the one that occurred a few weeks before it have shown that offshore drilling is still too unsafe. On July 15, Talos Energy LLC reported that a subsidiary it recently acquired had successfully regained control of a well that began leaking natural gas the prior week.

In a statement, Natural Resources Defense Council (NRDC) President Frances Beinecke said the incidents show BSEE needs to move quickly to implement all the recommendations of an investigative commission formed to study what led to the 2010 Gulf oil spill. Beinecke served on that commission.

"More than three years after the BP blowout, we still have a long way to go," Beinecke said. "The Department of the Interior needs to deliver on critical safety and environmental recommendations by the oil spill commission; including rules to strengthen the integrity of blowout preventers."

Speaking to reporters at an event in May, BSEE Director James Watson said he expected new proposed blowout preventer standards would be finalized before the end of the year. But he cautioned that BSEE proposals would face more scrutiny and undergo public comment before implementation.

And even after the rules take effect, likely next year, Watson said the standards would have to be phased in over time, to give offshore drillers and platform operators time to meet compliance. That could involve companies' continuing to drill with noncompliant blowout preventers as they are given a grace period to gradually swap out older equipment with newer technology.

"We will have to have a phase-in of new requirements, because it takes time for the industry to be able to gear up," Watson said.

Having two well control loss incidents in less than a month could speed up the pace of those reviews. NRDC's Beinecke is calling on the industry itself to take the lead and not wait for the government to assume most of the responsibility.

Some are using this accident to suggest that offshore drilling should be scaled back entirely and kept off the Eastern Seaboard permanently.

"Coastal economies, which depend on healthy oceans, simply cannot afford more offshore drilling disasters. And we absolutely cannot afford to bring this risk to the East Coast," said Jacqueline Savitz, a deputy vice president at the conservation group Oceana, in a statement that group circulated yesterday.

Talos workers brought their leaking well under control by injecting it with drilling mud. In an update, Hercules indicated that it expected a relief well may be necessary to bring this newest offshore gas leak under control.

"The company is working with Walter Oil & Gas and their third party expert in efforts to regain control of the natural gas well, including preparation to drill a relief well," Hercules representatives wrote. "The company continues to coordinate response activities with the U.S. Coast Guard and the Bureau of Safety and Environmental Enforcement."

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