Minerals Management Service Pipeline and Natural Disasters- Are we Prepared? Restoring Trust in Pipeline Safety A Conference for all Stakeholders November 2, 2006 Alex Alvarado

Minerals Management Service Overview  Planning and Preparedness  Response and Recovery

Minerals Management Service GOM Pipeline Infrastructure  33,900 total miles of pipelines  In 2001 and 2002 MMS approved 2,049 and 2,017 miles respectively- record years

Minerals Management Service Pipelines Approved (Updated October 21, 2006)

Minerals Management Service GOM Production  GOM production to continue to increase during the next decade (deepwater)  GOM provides 30% oil and 22% gas of US supply  Pipeline technology has kept up with increased water depths –World deepest installation & operation is in GOM at 7,570 ft (November 2003)

Minerals Management Service Planning and Preparedness  MMS focus –Evacuate workers Release of MMS contract helicopters –Protect environment from oil spills Ensuring compliance with safety equipment requirements and maintenance –Continuity of Operations Plan (COOP) MMS has a COOP that has been implemented several times

Minerals Management Service Planning and Preparedness  Industry focus –Evacuate workers –Protect environment Empty oil storage tanks Secure wells and pipeline systems –Protect company assets –Develop hurricane season operation plans to implement response and recovery

Minerals Management Service Planning and Preparedness  Based on recent experiences MMS and Industry will need to further improve response plans –Hurricane Katrina & Rita most demanding response experienced –MMS met with USCG on April 13, 2006 to discuss improvements to MMS COOP CG liaison officer at MMS COOP MMS to accompany CG while conducting C-130 aircraft flyover after storm landfall

Minerals Management Service Response and Recovery  MMS –Implement COOP Set up office in Houston Pipeline Office has worked in 4 different buildings –Assess damage and identify area of storm impact –Issue guidance (NTL) to inspect, assess, repair, and return to pipelines to service –Worked with industry in the reporting and permitting Big demand for information on extent of damage Worked with industry to ensure safety and environmental protection during repairs, modifications, decommission and replacement of damaged pipelines

Minerals Management Service Response and Recovery  Industry –Damage assessment Initially very difficult due to onshore impacts –Communications, fuel, impacts to personnel –Implement response and recovery plans Companies implemented post storm pipeline inspection and integrity plans –One fatality –No significant pollution incidents

Minerals Management Service Response and Recovery  Industry-Cont –Shut-in oil production is 324,445 BOPD (5/3/06) % of the daily oil production (1.5 MMBOPD) 11% shut-in as of June 2006 –Shut-in gas production is BCFPD (5/3/06) 12.95% of the daily gas production (10 BCFD) 7% shut-in as of June 2006

Minerals Management Service 2006 Offshore Hurricane Readiness and Recovery Conference November 1-2, 2006 Hilton New Orleans Riverside Hotel Co-sponsored by Offshore Operators Committee and MMS

Minerals Management Service Summary  Over all industry is doing a good job in planning, response, and recovery –One fatality –No significant pollution incidents  Hurricane Katrina & Rita most difficult hurricane response and recovery  Repairs still on going and will continue through this hurricane season and into next year