How is the Natural Gas And Oil Industry Preparing?

America's oil and natural gas industry is committed to protecting the environment and to continuously improving its hurricane preparation and response plans. After any hurricane or tropical storm, the goal is to return to full operations as quickly and as safely as possible. For hurricane season, the industry continues to build upon critical lessons learned from 2008's major hurricanes, Gustav and Ike, as well as other powerful storms, such as 2005's Katrina and Rita or 2012’s Superstorm Sandy.

API plays two primary roles for the industry in preparing for hurricanes. First, API communicates generally how the industry prepares for and responds to significant events, before, during and after the event to alleviate some of the burden on the companies who are actively responding to potentially damaging events. Second, API works with member companies, other industries and with federal, state and local governments to prepare for hurricanes and return operations as quickly and as safely as possible.

API member companies also independently work to improve preparedness for hurricanes and other natural or man-made disasters. They have, for example, reviewed and updated emergency response plans, established redundant communication paths and made pre-arrangements with suppliers to help ensure they have adequate resources during an emergency.

API, the International Association of Drilling Contractors, and the Offshore Operators Committee, serve as liaisons to regulatory agencies, coordinate industry review of critical design standards, and provide a forum for sharing lessons learned from previous hurricanes in the offshore environment.

These combined efforts are critical since the Gulf of Mexico provides over 15 percent of the oil and about three percent of the natural gas produced in the United States. Approximately 91 percent of the Gulf oil supply comes from deepwater facilities and the Gulf Coast region accounts for over 45 percent of total U.S. refining capacity.

Onshore, there are various API committees and subcommittees that work with members, including the Downstream Committee, which addresses potential refinery impacts and the Oil Spill Emergency Preparedness and Response Subcommittee, which addresses broad company response operations and integration into the National Response Framework.

Background

2012: The 2012 Atlantic hurricane season was marked by above-average tropical cyclone activity with the formation of 19 tropical storms, of which 10 became hurricanes. For the U.S. oil and natural gas industry, Superstorm Sandy was the most impactful storm of the season. “Sandy moved northeast of the United States until turning west toward the mid Atlantic coast on the 28th. Sandy transitioned into a post-tropical cyclone just prior to moving onshore near Atlantic City, NJ. The track of Sandy resulted in a worst case scenario for storm surge for coastal regions from New Jersey north to Connecticut including New York City and Long Island. Unfortunately, the storm surge occurred near the time of high tide along the Atlantic Coast. This contributed to record tide levels.”¹

Wind and flooding caused damage to critical fuel facilities such as terminals, pipelines, storage facilities and truck racks, as well as to the electric power infrastructure that energizes those facilities. Docks, control systems, vapor recovery units, and electric switching gear within facilities were some of the supporting infrastructure that sustained serious damage. Replacement of parts and components and the complexity of the systems required time and technical expertise to safely restore services. At the height of the storm, 6 east coast refineries were either shut down or at reduced runs, several product pipelines were down and 24 terminals were impacted. More than 8 million customers were without power in 21 states, including the District, with more than a million each in New Jersey, New York and Pennsylvania.²   In addition to the impacts of Sandy, beginning November 7th, a Nor’easter impacted the Mid-Atlantic and Northeast with strong winds, rain or snow, and coastal flooding. The oil and natural gas industry worked in coordination with government partners to restore critical services and by the end of November, all refineries were running at normal levels, only 2 terminals remained out of service and all pipelines servicing the area were in operation.

Upstream (Exploration and Production)

During the major 2005 hurricanes, waves were higher and winds were stronger than anticipated in deeper parts of the Gulf so the industry moved away from viewing it as a uniform body of water. Evaluating the effects of those and other storms, helped scientists discover that the Central Gulf of Mexico was more prone to hurricanes because it acts as a gathering spot for warm currents that can strengthen a storm.

The revised wind, wave and water current measurements ("metocean" data) prompted API to reassess its Recommended Practices (RPs) for industry operations in the region.

The upstream segment continues to integrate the updated environmental (metocean) data on how powerful storms affect conditions in the Gulf of Mexico into its offshore structure design standards. This effort led to the publication in 2008 of an update to RP 2SK, Design and Analysis of Stationkeeping Systems for Floating Structures, that provides guidance for design and operation of Mobile Offshore Drilling Unit (MODU) mooring systems in the Gulf of Mexico during the hurricane season and has been reaffirmed since its publication with its proven practices. API RP 95J, Gulf of Mexico Jack-up Operations for Hurricane Season, which recommends locating jack-up rigs on more stable areas of the sea floor, and positioning platform decks higher above the sea surface, published in 2006 and also reaffirmed since its publication with its successful guidance.

API publications are available at our (Search and Order)

API recently issued several new standards that improve structural design and assessment considerations for Gulf hurricanes. These include:

Recommended Practice 2MET, Derivation of Metocean Design and Operating Conditions, which gives general requirements for the determination and use of meteorological and oceanographic (metocean) conditions for the design, construction, and operation of offshore structures of all types used in the petroleum industry.

Recommended Practice 2A-LRFD, Planning, Designing, and Construction Fixed Offshore Platforms – Load and Resistance Factor Design, which serves as a guide for the design and construction of new fixed offshore platforms and for the relocation of existing platforms used for the drilling, development, production, and storage of hydrocarbons in offshore areas.

Recommended Practice 2MIM, Mooring Integrity Management, which provides guidance for the integrity management (IM) of mooring systems connected to a permanent floating production system (FPS) used for the drilling, development, production, and/or storage of hydrocarbons in offshore areas.

Recommended Practice 2RIM, Integrity Management of Risers from Floating Production Systems, which provides guidance for the integrity management (IM) of risers connected to a permanent floating production system (FPS) used for the drilling, development, production, and storage of hydrocarbons in offshore areas.

Recommended Practice 2FSIM, Structural Integrity Management of Floating Systems, which provides guidance for floating system integrity management (FSIM) of floating production systems (FPSs), which include tension leg platforms (TLPs), used by the petroleum and natural gas industries to support drilling, production, storage, and/or offloading operations.

API has also recently reaffirmed several standards that have demonstrated the structural design and assessment capabilities for Gulf hurricanes. These include:

Recommended Practice 2A-WSD, Planning, Designing, and Construction Fixed Offshore Platforms - Working Stress Design, which serves as a guide for the design and construction of new fixed offshore platforms and for the relocation of existing platforms used for the drilling, development, production, and storage of hydrocarbons in offshore areas.

Recommended Practice 2GEO, Geotechnical and Foundation Design Considerations, which contains requirements and recommendations for geoscience and foundation engineering aspects that apply to a broad range of offshore structures rather than a particular type.

Recommended Practice 2SIM, Structural Integrity Management of Fixed Offshore Structures, which serves to provide guidance for the structural integrity management (SIM) of existing fixed offshore structures used for the drilling, development, production, and storage of hydrocarbons in offshore areas.

API also has issued bulletins to help better prepare for and bring production back online after Gulf hurricanes. These include:

• Bulletin 2TD, Guidelines for Tie-downs on Offshore Production Facilities for Hurricane Season, which is aimed at better-securing separate platform equipment. 
• Bulletin 2HINS, Guidance on Post-hurricane Structural Inspection of Offshore Structures, which provides guidance on determining if a structure sustained hurricane-induced damage that affects the safety of personnel, the primary structural integrity, or its ability to perform the purpose for which it was intended. 

Production and Hurricanes (steps industry takes to prepare for and return after a storm)

• Days in advance of a tropical storm or hurricane moving toward or near their drilling and production operations, companies will evacuate all non-essential personnel and begin the process of shutting in production.
• As the storm gets closer, all personnel will be evacuated from the drilling rigs and platforms, and production is shut in. Drillships may relocate to a safe location. Operations in areas not forecast to take a direct hit from the storm often will be evacuated and/or shut in as well because storms can change direction with little notice.
• After a storm has passed and it is safe to fly, operators will initiate "flyovers" of onshore and offshore facilities to evaluate damage from the air. For onshore facilities, these "flyovers" can identify flooding, facility damage, road or other infrastructure problems, and spills. Offshore "flyovers" look for damaged drilling rigs, platform damage, spills, and possible pipeline damage.
• Many offshore drilling rigs are equipped with GPS locator systems, which allow federal officials and drilling contractors to remotely monitor the rigs' location before, during and after a hurricane. If a rig is pulled offsite by the storm, locator systems allow crews to find and recover the rig as quickly and as safely as possible.
• Once safety concerns are addressed, operators will send assessment crews to offshore facilities to physically assess the facilities for damage.
• If facilities are undamaged, and ancillary facilities, like pipelines that carry the oil and natural gas, are undamaged and ready to accept shipments, operators will begin restarting production. Drilling rigs will commence operations.

Refineries and Pipelines

Despite sustaining unprecedented damage and supply outages during the 2005 and 2008 hurricanes, the industry quickly and safely brought refining and pipeline operations back online, delivering to consumers near-record levels of gasoline and record levels of distillate (diesel and heating oil) in 2008. The oil and oil-product pipelines operating on or near the Gulf of Mexico continue to review their assets and operations to minimize the potential impacts of storms and shorten the time it takes to recover. While there have been some shortages caused by hurricanes, supply disruptions have been temporary despite extensive damage to supporting infrastructure, such as electric power generation and distribution, production shut-ins and refinery shutdowns. Pipelines need a steady supply of crude oil or refined products to keep product flowing to its intended destinations.

To prepare for future severe storms, refiners and pipeline companies have:

• Worked with utilities to clarify priorities for electric power restoration critical to restarting operations and to help minimize significant disruptions to fuel distribution and delivery.
• Secured backup power generation equipment and worked with federal, state and local governments to ensure that pipelines and refineries are considered "critical" infrastructure for back-up power purposes.
• Established redundant communications systems to support continuity of operations and locate employees.
• Worked with vendors to pre-position food, water and transportation, and updated emergency plans to secure other emergency supplies and services.
• Provided additional training for employees who have participated in various exercises and drills.
• Reexamined and improved emergency response and business continuity plans.
• Strengthened onshore buildings and elevated equipment where appropriate to minimize potential flood damage.
• Worked with the states and local emergency management officials to provide documentation and credentials for employees who need access to disaster sites where access is restricted during an emergency.
• Participated in industry conferences to share best practices and improvement opportunities.

Refineries and hurricanes (steps industry takes to prepare for and return after a storm)

• Refiners, in the hours before a large storm makes landfall, will usually evacuate all non-essential personnel and begin shutting down or reducing operations.
• Operations in areas not forecast to take a direct hit from the storm often are shut down or curtailed as a precaution because storms can change direction with little notice.
• Once safe, teams come in to assess damage. If damage or flooding has occurred, it must be repaired and dealt with before the refinery can be brought back on-line.
• Other factors that can cause delays in restarting refineries include the availability of crude oil, electricity to run the plant and water used for cooling the process units.
• Refineries are complex. It takes more than a flip of a switch to get a refinery back up and running. Once a decision has been made that it is safe to restart, it can take several days before the facility is back to full operating levels. This is because the process units and associated equipment must be returned to operation in a staged manner to ensure a safe and successful startup.
• If facilities are undamaged or necessary repairs have been made, and ancillary facilities - like pipelines that carry the oil and natural gas - are undamaged and ready to accept shipments, operators will begin restarting production.

Pipelines and hurricanes (steps industry takes to prepare for and return after a storm)

• Pipeline operations can be impacted by storms, primarily through power outages, but also by direct damage.
• Offshore pipelines damaged require the hiring of divers, repairs and safety inspections before supplies can flow. Damaged onshore pipelines must be assessed, repaired and inspected before resuming operations.
• Without power, crude oil and petroleum products cannot be moved through pipelines. Operators routinely hold or lease back-up generators but need time to get them onsite.
• If there is no product put into pipelines because Gulf Coast/Gulf of Mexico crude or natural gas production has been curtailed, or because of refinery shutdowns, the crude and products already in the pipelines cannot be pushed out the other end.
• Wind damage to above ground tanks at storage terminals can also impact supplies into the pipeline.

Background

2008: The 2008 hurricane season was very active, with 16 named storms, of which eight became hurricanes and five of those were major hurricanes. For the U.S. oil and natural gas industry, the two most serious storms of 2008 were Hurricane Ike, which made landfall in mid-September near Baytown, Texas, and Hurricane Gustav, which made landfall on September 1 in Louisiana.

Hurricane Gustav, a strong Category 2 storm, kept off-line oil and natural gas delivery systems and production platforms that had not yet been fully restored from a smaller storm two weeks earlier, and brought significant flooding as far north as Baton Rouge.  Hurricane Ike, another strong Category 2 hurricane, caused significant portions of the production, processing, and pipeline infrastructure along the Gulf Coast in East Texas and Louisiana to shut down. Ike caused significant destruction to electric transmission and distribution lines, and these damages delayed the restart of major processing plants, pipelines, and refineries. As many as 3.7 million customers were without electric power following the storm, with about 2.5 million in Texas alone.

At the peak of disruptions, more than 20 percent of total U.S. refinery capacity was idled. The Minerals Management Service - now called Bureau of Safety and Environmental Enforcement (BSEE) estimated that 2,127 of the 3,800 total oil and natural gas production platforms in the Gulf of Mexico were exposed to hurricane conditions, with winds greater than 74 miles per hour, from Hurricanes Gustav and Ike.  A total of 60 platforms were destroyed as a result of Hurricanes Gustav and Ike. Some platforms which had been previously reported as having extensive damage were reassessed and determined to be destroyed. The destroyed platforms produced 13,657 barrels of oil and 96.5 million cubic feet of natural gas daily or 1.05 percent of the oil and 1.3 percent of the natural gas produced daily in the Gulf of Mexico.

2005: The 2005 hurricane season was the most active in recorded history, shattering previous records.  According to the Department of Energy, refineries in the path of hurricanes Katrina and Rita accounting for about 29 percent of U.S. refining capacity were shut down at the peak of disruptions. Offshore, the Minerals Management Service (MMS) estimated 22,000 of the 33,000 miles of pipelines and 3,050 of the 4,000 platforms in the Gulf were in the direct paths of the two Category 5 storms. Together the storms destroyed 115 platforms and damaged 52 others.

Even so, there was no loss of life among industry workers and contractors. An MMS report found "no accounts of spills from facilities on the federal Outer Continental Shelf that reached the shoreline; oiled birds or mammals; or involved any discoveries of oil to be collected or cleaned up".

1. https://www.weather.gov/okx/HurricaneSandy5Year
2. http://www.oe.netl.doe.gov/docs/2012_SitRep5_Sandy_10302012_300PM_v_1.pdf