GOM doomed as E&P Dead Sea under “Americanization” proposals

Congressional proposals to “Americanize” offshore vessels in the US Gulf of Mexico will inevitably grind OCS development and production to a halt and result in massive layoffs across the Gulf Coast and throughout the nation. A plethora of bills in the US House and Senate, among them HR 5619 and HR 3534 (the so-called CLEAR Act; see separate article) call for US flagging and 75% US ownership of the entire GOM fleet of drilling rigs, pipelay vessels, and construction and specialty vessels.

While this seems consistent with “Buy American” bumper sticker logic, these requirements present huge obstacles to stable offshore development. For example, of the worldwide drilling fleet capable of operating in 400 ft of water or deeper, only one is US flagged. That rig is currently on contract outside the US, according to a joint-industry White Paper warning of the severe implications of this train of legislation.

Find a link to this informative White Paper at www.iadc.org/offshore_GOM_reform. Look under IADC Documents.

Similarly, mobile offshore drilling units capable of drilling in 250 ft of water or greater, as well as specialty vessels, are largely flagged by countries outside the US.

There is no evidence that vessels outside of the US are less safe than those registered in the US. All non-US flagged vessels are inspected by the US Coast Gard. In addition, the principal nations of registry require standards that equal or exceed those of the US.

Building a US fleet of offshore vessels in any reasonable amount of time is essentially impossible. US shipyards would require several years to install the infrastructure necessary to fabricate the massive hulls required for deepwater facilities, drillships and semisubmersibles. (Many jackups, however, are constructed in the US.)