Mariner Gulf Fire Sparks Calls to Keep Drilling Ban

The blaze aboard a Mariner Energy Inc. oil platform yesterday shows President Barack Obama should maintain the drilling ban imposed after the BP Plc blowout in April, lawmakers and environmentalists said.

The fire in the Gulf of Mexico “is further proof that offshore drilling is an inherently dangerous practice,” Senator Frank Lautenberg, a New Jersey Democrat, said in a statement yesterday. Obama halted deep-water exploration after BP’s Macondo well exploded in April, killing 11 workers and causing the biggest U.S. offshore oil spill in history.

The Mariner fire was put out, all 13 crew were rescued unhurt and aircraft were scanning the ocean for any oil spill, U.S. Coast Guard Captain Peter Troedsson said yesterday at a New Orleans press conference.

The fire, initially reported by the Coast Guard as coming after an explosion, will give regulators a new reason to slow permits even though Mariner’s oil and natural-gas production platform in 340 feet (104 meters) of water wasn’t covered by the moratorium, said Michael McKenna, president of MWR Strategies, an oil-industry consulting firm in Washington.

“The Obama guys are going to use this as a reason to slow, complicate and retard the issuance of permits,” McKenna said in an interview. The moratorium was devised to halt exploratory drilling in more than 500 feet of water.

Photographer: Mario Tama/Getty Images

Boats spray water on an oil platform after it exploded in the Gulf of Mexico. Close

Boats spray water on an oil platform after it exploded in the Gulf of Mexico.

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Photographer: Mario Tama/Getty Images

Boats spray water on an oil platform after it exploded in the Gulf of Mexico.

Job Loss

Gulf coast officials, including Republican Governor Bobby Jindal of Louisiana, have criticized the drilling ban, which the administration has estimated may cost 23,247 jobs.

Interior Department officials have said the ban, which expires Nov. 30, may be lifted earlier if the industry shows it has improved safety and developed means to contain another spill. Interior Secretary Kenneth Salazar declined to comment on whether the fire would affect the moratorium, according to an e- mail yesterday from his spokeswoman Kendra Barkoff.

The Interior Department and Coast Guard said they will investigate the incident on the Mariner platform. Fire erupted on or near the platform’s upper-deck living quarters and there wasn’t an explosion, Patrick Cassidy, a spokesman for Houston- based Mariner, said in an e-mail.

Six Coast Guard helicopters operating yesterday around the platform failed to find oil or a sheen on the water that had been reported earlier by Mariner, Coast Guard Chief Petty Officer Edwards said today in an interview. The Coast Guard will make another aerial search for oil on the water this morning, he said.

Much to Be Done

The Mariner blaze highlights the risks of offshore drilling and shows “that much is left to be done to keep America’s workers and waters safe from those risks,” Representative Edward Markey, a Massachusetts Democrat, said in a statement.

“What it shows us is that the moratorium doesn’t go far enough, that if we continue to drill for oil we’re going to continue to have accidents,” Jacqueline Savitz, senior campaign director for the Washington-based environmental group Oceana, said in an interview.

The industry’s current approach to offshore drilling “is simply too dangerous,” Michael Brune, executive director of the San Francisco-based Sierra Club, said in a statement.

Representative Henry Waxman, a California Democrat who heads the House Energy and Commerce Committee, which is probing the BP spill, sent a letter to Scott Josey, Mariner’s chief executive officer, requesting a briefing by Sept. 10 on the incident and its possible causes.

‘Another Drag’

“It’s another drag, it’s another challenge, it’s another issue that we have to explain,” said Jim Noe, general counsel for Hercules Offshore Inc., the largest owner of shallow-water rigs in the Gulf. “This really is an industrial accident that can occur at any industrial setting where you have oil and gas.”

Thirteen workers were on Mariner’s Vermilion 380 platform off the Louisiana coast at the time of the fire and were rescued after evacuating into the water, Coast Guard Petty Officer Thomas Blue said in a telephone interview.

“The president and secretary have made it very clear multiple times that production was not the issue,” Louisiana Lieutenant Governor Scott Angelle, a Democrat, said in an interview. “Anybody who would try to take the drilling moratorium and bring it into this is somebody who has an agenda.”

Price Jump

Crude and natural-gas prices yesterday jumped on concern the incident will extend a federal crackdown on offshore production in a region that supplies 30 percent of domestic oil output and 13 percent of U.S. gas production.

Last week, a report by the Bipartisan Policy Center, a Washington-based research group, said the moratorium on deep- water drilling is no longer needed because new rules reduce the risk of an uncontrolled spill. The report was prepared for the presidential commission investigating the BP spill.

The new rules, issued in June, “deal with drilling operations, well-control issues and well-design issues,” and would not have prevented yesterday’s fire, Noe said. “This was a production platform.”

Before yesterday’s incident, regulators were likely to take about six months from the official end of the drilling ban to work through new safety regulations and environmental reviews before issuing deep-water permits, according to Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based policy analysis firm. That review could now run through the end of 2011, he said.

“This is going to make it lot harder to delineate what acceptable risk is,” Book said in an interview. “Moratorium or not, no one’s getting a new permit at minimum until this accident is properly understood.”

To contact the reporter on this story: Jim Efstathiou Jr. in New York at jefstathiou@bloomberg.net.

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