First US deepwater oil port nearly complete
What may be the largest US energy project of 1981 will not produce a drop of oil, but it may help the country get by with less. That is the ultimate benefit that sponsors claim for the nation's first deepwater oil port, the Louisiana Offshore Oil Port (LOOP). The project now is rounding the corner toward expected completion sometime in May.
The $700 million facility will propel the United States into the modern era of oil transportation, allowing for safer and more energy-efficient handling of imported crude. Deepwater ports, necessary to handle the growing world fleet of oil supertankers with drafts of more than 90 feet, are now relatively common throughout the world. The notable exception has been the United States, where oil is loaded onto smaller ships for transport ashore.
LOOP will allow the large supertankers to empty their oil 19 miles off the coast of Louisiana into a pipeline that will bring it on shore for processing. It will move the oil much faster -- 40 hours to unload a ship compared with up to 12 days under the present system -- and actually reduce the energy consumption involved in transporting oil by replacing shipping traffic with more fuel-efficient pipelines.
All things considered, LOOP president William Read estimates the project could shave the cost of transporting oil by 10 cents a barrel.
By reducing shipping traffic in the Gulf of Mexico, LOOP also may make the transportation of oil safer. Shipping accidents are relatively frequent around the mouth of the Mississippi River. And some environmentalists see LOOP as a way of warding off potential disasters by transferring the oil to pipelines out at sea instead of from one ship to another.
The project was begun in 1972 and was seen at the time as a necessary step to cope with the nation's growing appetite for imported oil. In fact, during the early days of the project critics charged that it was deliberaately designed too small so as to keep the oil transportation market tight and the price of oil high.
Today, however, Mr. Read says the project may well have become a "white elephant" if it had been constructed to handle more than its current capacity of 1.4 million barrels of crude a day. With US oil imports falling and national energy policy designed to further cut the demand for overseas oil, LOOP will begin operation at a time when its market is declining.
"If the decision was made today it probably would be not to build LOOP," says Read.* But he is confident the offshore terminal will operate at capacity because the amount of oil imported into Louisiana still exceeds what LOOP can handle.
Construction delays have slowed LOOP's progress and boosted its cost from an estimated $600 million just one year ago to $700 million today. The partners in the private project are Ashland Oil Inc., Marathon Pipeline Company, Murphy oil Corporation, Shell Oil Company, and Texaco Inc.
The project includes three buoys out at sea where ships will anchor and off-load their crude into pipelines buried in the ocean floor.* Crude will be pumped into salt caverns onshore and from there fed into the nation's pipeline system. About half the oil will eventually be pumped to refineries in the US Midwest, the other half remaining for processing in Louisiana.
The main environmental objection to LOOP has been that the discharge of brine into the gulf of Mexico from hallowing out the salt caverns for oil storage on shore would hurt the fish population. so far, however, state officials monitoring the project say the brine has had no negative impact.
Although US Crude oil imports are declining -- down 20.7 percent in 1980 compared with the previius year, according to the US Department of Energy -- oil companies still find deepwater ports attractive. Just last month a consortium of companies applied for a license from the US Department of Transportation to build a deepwater port near Freeport, Texas.
Charles Brace, president of the Texas Offshore Port Consortium, says it will take many years to eliminate crude imports to the US.* Meanwhile, deepwater ports remain attractive because they offer "economies of scale" in importing oil , he says.