New OSHA Administrator Talks Tough; BP Accident Imperils Offshore Gas Expansion

June 2010 Vol. 65 No. 6

The irony of the situation is that the environmental risks of offshore gas drilling are nowhere near those of offshore oil drilling. There have been gas accidents offshore, but they have been minor. In March 2008, for example, a natural gas explosion injured six crew members of a pipeline maintenance vessel off the coast of Louisiana. The problem is that exploration companies drilling in the Gulf or anywhere else offshore are never sure whether they will find oil or gas.

If anything, the outcry from environmentalists over the BP accident will result in the imposition of new safety regulations on offshore drilling from the Minerals Management Service. BP, like any other company asking for approval to drill offshore, completed an environmental impact statement (EIS). It downplayed the possibility of an accidental oil spill, according to a story in the Washington Post.

FERC Consideration Of Renewable Incentives Worry Gas Advocates
The main focus of Climate Change legislation, of course, is not cancelling the eastern Gulf drilling moratorium but providing a spur to the development and use of renewable energy sources such as solar and wind. While Congress huffs and puffs on the "development" side of the equation, FERC is working on the "demand" side, with potential dangers for interstate pipelines. That danger could arise if the Federal Energy Regulatory Commission (FERC) decides to make it easier for regional electric transmission grids to use renewable sources, thereby disadvantaging natural gas sources.

That is the concern raised by FERC's issuance of a Notice of Intent in January. The comment period ended in April.

Patricia W. Jagtiani, vice president of regulatory affairs, Natural Gas Supply Association, says not only should renewable sources not be favored over gas, but that quick-start gas generation will be needed to "offset the reliability challenges posed by renewable resources." Equity dictates, she adds, that if, for instance, the Commission were to provide enhanced balancing procedures over broad geographic regions, such flexibility should be provided not only to variable energy resources (VERs) but also to conventional sources to avoid discrimination. Also, the costs of transmission system upgrades to accommodate VERs should be allocated in a fair manner.

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