After the Exxon Valdez oil spill, Interior Sec. Manuel Lujan had an idea: Why not build more deepwater oil terminals to lessen the risk of near-shore tanker accidents?
Even though the Transportation Department has responsibility for such things, Lujan ordered Interior's Minerals Management Service to study the idea.
He made the mistake of not giving MMS a deadline, so MMS took a year to complete the study. And when it was released last week, it raised more questions than it answered.
AMONG THE FINDINGS
The study admits, "Further analysis of offshore oil terminals, including evaluation of site specific environmental and operational factors, will be required before their economic and environmental benefits can be fully assessed."
The study said more than four fifths of U.S. crude oil and product shipments are handled by 11 ports: Valdez, Seattle, San Francisco, Los Angeles, Houston, Beaumont, New Orleans, Pascagoula, Philadelphia, New York, and Boston. The depth of most of those ports limits them to tankers of no more than about 80,000 dwt, requiring lightering of larger tankers.
It said most of the nation's tanker volume could be handled with as few as six ports: Valdez, Los Angeles, Houston, Port Arthur/Beaumont, Philadelphia, and New York.
Proposals for deepwater ports were first raised in the late 1960s but drew opposition. Some groups opposed their construction because they feared the superports would lead to development of new onshore storage and refining facilities.
Congress passed the Deepwater Port Act of 1974 setting licensing rules, but the only terminal built was Louisiana Offshore Oil Port (LOOP), which started up in 1982.
MMS said depending on its design, pipeline, and onshore storage, a new deepwater port would cost $69 million to $1.5 billion. LOOP's operating costs are $93 million/year.
It listed some advantages of deepwater terminals: They would reduce the potential for harbor accidents, could be placed safe distances from ecologically sensitive areas and navigational hazards, would reduce lightering, and could lower transportation costs by as much as 330/bbl.
Among the disadvantages: Offshore oceanographic/weather conditions will be harsher, spill cleanup methods are more effective in confined harbors, and larger tankers using offshore terminals have the potential for larger spills.
MMS also admitted, "A major reason for the lack of interest in constructing new offshore terminals has been LOOP's failure to earn a return on investment for its owners. Only in recent years has LOOP even been able to meet its operating budget from the fees it charges. Therefore, without some form of government encouragement, offshore oil terminals will attract little interest from private investors."
BOUND FOR OBLIVION
What will happen next? Probably nothing.
The fact is, offshore terminals are not a clear solution to tanker spills and raise too many problems in themselves.
Lujan has sent the MMS report to Transportation Sec. Sam Skinner for his consideration. Then it's destined for oblivion in a gray government file cabinet somewhere.
However, its entirely possible Transportation or Congress could push for deepwater ports if tanker spills continue to plague U.S. coastlines with the frequency of the past year.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.