What we don’t know about oil

The recent oil rig explosion is catastrophic news that could have far-reaching effects beyond just the Gulf Coast area.

And every pundit worth his or her salt is discussing the pros and cons of offshore oil extraction, but there is a lot we don’t know about the industry.

There are more than 3,800 oil rigs in the Gulf of Mexico, most based off the coast of Louisiana, producing 1.5 million barrels per day, which is one-quarter of domestic output and about 2 percent of global production.

The assumption that offshore oil rig workers are paid handsomely is in the eye of the beholder. Without specialized skills, workers average between $40,000 and $60,000 per year. Most crews work two weeks on the rig and two weeks off. It’s considered one of the most dangerous jobs in the world.

First offshore rig

The world’s first offshore oil platform in the Caspian Sea is still producing oil after 60 years. The platform is now a small town with a population of 5,000 built on dirt and landfill.

First major spill

The industry got its first black eye on Jan. 29, 1969, when a Union Oil Co. rig 6 miles off the coast of Santa Barbara, Calif., had a blowout spilling out more than 200,000 gallons of crude oil. The disaster helped spur the environmental movement and severely hampered future oil exploration off the West Coast.

Worst disasters

One of the worst disasters occurred in the North Sea July 6, 1988, when Occidental Petroleum’s natural gas rig Piper Alpha exploded, killing 167 workers. It took three weeks to extinguish the fire and the loss was estimated at $3.4 billion.

The two worst oil spill disasters were on opposite sides of the world and not caused by offshore rig explosions or spills.

In 1991, when Iraqi troops retreated from Kuwait, they opened valves and pipelines allowing 8 million gallons of oil to spill into the Persian Gulf.

On May 24, 1989, the Exxon Valdez ran aground in Prince William Sound, Alaska, spilling out 10.8 million gallons of crude oil. The spill covered 1,300 square miles and resulted in an economic loss in the billions and an environmental loss that is still being felt two decades later. Exxon ended up paying more than $2 billion for the clean up and another $5 billion in punitive damages to victims of the spill. The total amount was reported to be Exxon’s annual profits at that time.

Because of the spill, Congress passed legislative requiring all tankers to be double hulled by 2015. In addition, limits were placed on drilling in environmentally sensitive areas like the Arctic National Wildlife Refuge.

How much is spilled?

The U.S. Department of Energy estimates that 1.3 million gallons of petroleum is spilled each year in U.S. waters. Between 1971 and 2000, there were 250,000 oil spills recorded by the U.S. Coast Guard.

Offshore drilling accounts for 30 percent of U.S. oil production and 11 percent of natural gas production. Only 2 percent of all spills between 1971 and 2000 were attributed to spills or leaks from offshore oil rigs. Almost half of all spills come from oil tankers.

Oil and gas seepage also occurs naturally. The most famous spot in the country is Coal Oil Point off the coast of Santa Barbara, Calif., where 100 to 150 barrels of liquid petroleum and tons of gases are released every day. Although evaporation and weathering helps to dissipate some of the petroleum, tar balls wash up on beaches in the area.

Boost to economy

The oil and natural industry employs more than 9 million people, contributes $90 billion in taxes and $1 trillion to the U.S. economy. Sixty-percent of the nation’s oil is imported – most from Canada followed by Saudi Arabia and Mexico. Nearly 85 percent of all energy consumed in the U.S. comes from oil, coal and natural gas.


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