How Safe is Oil Drilling?

June 17, 2010

Our last morning in Harstad started with a greeting by Mayor Helge Eriksen outside Statoil. Last night, we had mentioned wanting a Harstad pin to add to our collection and Lise, who conveniently worked with the mayor before, texted him and asked him to meet the US delegation in town. Since we didn’t have enough time to make a visit to City Hall, Mayor Eriksen made a special visit to meet us at Statoil before our morning appointment at the local oil powerhouse. That makes three mayoral visits in two weeks!

Our host at Statoil was a 16-year veteran employee, Anne-Mette Fjærli, who recently took over as communications officer for the Northern Norway headquarters in Harstad. Anne-Mette gave us a brief overview of the company. With over 30,000 employees representing 40 countries, Statoil is a large entity in Norway and Europe, though the brand has not carried over the seas to the United States. Statoil is very much a Norwegian company. It was started in the 1960s when Norway discovered oil and was entirely governmentally owned. Today, the government still owns 70 percent of the company but individuals can buy stock in the company with shares being sold on Wall Street. Statoil produces 1.95 million barrels of oil equivalent per day. It is one of the largest net sellers of crude oil and the second largest importer of gas to Europe. It remains the largest operator in water deeper than 100 meters and is a world leader of carbon capture and storage. Most importantly, Statoil is the biggest retailer of oil products in Scandinavia. Norway is in a unique position because it is able to sell most of the gas produced in the country. Statoil is responsible for all of the oil drilling north of 62 degrees.

Our tour took us to the command center of the only oil operation managed by the Harstad office, Norne. This drilling started several years ago and was initially scheduled to end in 2016 but after the latest research, has been scheduled to run through 2030. The team managing the operation includes engineers, drill safety specialists, architects and planners and program managers. The team checks in with the vessel every morning for 24 hour reports and planning updates for the next 24 hours. They then analyze data and decide what the next steps are in laying out the foundation for and continuing to drill for oil in reservoirs several meters below the surface. This particular project works about 380 meters below the surface. The daily operational cost of the drilling is 1 million dollars and therefore efficiency is a priority on any project.

After learning about the above-sea operations, we met with head geologist Anna Fauke who works with seismic data to develop a picture of the sea bed and plan for the best areas to set up oil rigs. The cost for a seismic data test is approximately 1 million dollars, which is quite pricey itself but the cost of installing a rig is about 6 million dollars. To save money from putting in a rig in a wrong location, the seismic data analysis is vital and is conducted every two years. The test is done by blasting cannons or sending out sound waves to bounce off the floor of the sea bed. The geologists calculate the amount of time it takes to receive the waves and then by using other known data like the speed of sound in water and the speed of sound through various objects like rocks, they can develop a fairly accurate picture of the sea bed. No picture is as accurate as going down and drilling, so that must be kept in consideration when analyzing the data available. It is amazing to see how much information they can gather from these sound waves though!

As with any company, we only heard the positives at Statoil and it was reiterated several times that no shortcuts are made and all regulations are rigorously upheld so as to avoid the Gulf disaster that is currently plaguing the Gulf of Mexico. The people at Statoil and any oil company around the world are anxiously watching the Senate hearings play out and are anxious to know the outcome both in terms of the cause of the spill and the resulting fallout for BP and the countries involved.

Speaking of oil, the great debate that has haunted us from the first day we arrived in town is the question of whether to pursue drilling in what is deemed to be new profitable oil reservoirs off the coast of Lofoten. Lofoten, as we know from our travels, is the home to world renowned fisheries. Just nearby the fisheries are deep pockets of oil guaranteed to make the Norwegians richer. The Great Oil Debate in Norway is whether or not the government should pursue digging these wells and risk affecting the fish in the area. Research suggests that the fish are not affected heavily by the digging but there are also possibilities indicating that the fish are affected in the immediate future but learn to move beyond that in time. We’ve heard both sides of the debate but I think the general consensus is that Norwegians have had it too good for the last several years and are now fearing what would happen should their oil money dry up. When we first started our trip, it sounded like the government would vote to drill in the next few years but in the last few days, it seems like the government is going to vote no as a direct response to the oil spill in the Gulf. I guess time will tell but if the project is rejected today, it will certainly be up for debate again tomorrow!

Goodbye Harstad… hello Narvik!