History of Offshore

In the late 1800’s, the citizens of Summerland, California, began producing the numerous springs of crude oil and natural gas that dotted their landscape. After drilling a large number of wells, these early oilmen noticed that those nearest the ocean were the best producers. Eventually, they drilled several wells on the beach itself. Then in 1887, one citzen, H.L. Williams came up with the idea of building a wharf and erecting the drilling rig on it. His first offshore well extended about 300 feet (90 meters) into the ocean. As expected, it was a good producer and before long the entrepreneurs built several more wharfs. The longest stretched over 1,200 feet (nearly 400 meters) in the Pacific.

By 1910, America had quickly turned to oil as its primary resource. The invention of the internal combustion engine boosted the consumption of gasoline. At the same time, Americans were discovering new and faster ways to retrieve oil. The steel cable was used in place of rope for cable tool drilling and by 1919, the first diamond drill was used.

Almost every year for the next ten years, technology advanced to tap into this precious resource. The valves and controls which gauged the flow of oil – nicknamed the Christmas tree – was developed in 1922, followed by the creation of drilling control instrumentation in 1925. Scientists also became involved with the search for oil and in 1926, modern seismology was developed.

Moving Offshore

In the mid-1940s, significant changes in the oil industry were made as America was making its transition from a wartime to a peacetime economy. The petroleum industry witnessed the end of government controls on crude-oil prices, and the states began disputes over offshore water bottom ownership. There was an enormous public demand for oil and gas, and offshore exploration encountered challenges, such as underwater exploration, weather forecasting, tidal and current prediction, drilling location determination and offshore communications.

Despite the difficulties, Kerr-McGee Corporation drilled the first well from a fixed platform offshore out-of-sight of land in 1947. Its barge and platform combination was a major breakthrough in drilling-unit design for offshore use. This event marked the beginning of the modern offshore industry as it is known today. By 1949, 11 fields were found in the Gulf of Mexico with 44 exploratory wells.

Governing Offshore Operations

The industry continued to rapidly evolve through the 1950s. Revenue generated from the production of oil became the second-largest revenue generator for the country, after income taxes. The U.S. government played a part, by passing the U.S. Submerged Lands Act in 1953, which set the federal government’s title and ownership of submerged lands at three miles from the state coastline. The Outer Continental Shelf Lands Act (OCSLA) was also passed, which provided for Federal jurisdiction over submerged lands of the OCS and authorized the Secretary of the Interior to lease those lands for mineral development.

After the Santa Barbara Oil Spill in 1969, Congress passed several acts which spurred the development of oil spill regulation and research. They included the National Environmental Policy Act, which required a detailed environmental review before any major or controversial federal action, the Clean Air Act, which regulated the emission of air pollutants from industrial activities, and the Coastal Zone Management Act, which required state review of federal action that would affect land and water use of the coastal zone. In 1977, the Clean Water Act regulated the discharge of toxic and nontoxic pollutants into surface waters.

Meanwhile, investment in the U.S. Gulf rose to $16 billion, and the number of platforms in the Gulf rose to 800. While scientists were using analog computers to study ocean wave data to enhance platform design, oil companies were coming out with production rigs that moved via robotics and remote control. Shell Oil Company began operation of the robotic forerunner of ROVs – remotely operated vehicles – and launched the “Eureka,” the first self-positioning drillship. This innovative vessel tolerated 20-foot seas and 40-mph winds.

The Last 20 Years

Though world economic recession in the 80s reduced the demand for oil, technology pressed even further. The first offshore horizontal well was drilled and drilling water depth reached 7,500 feet, or nearly 1.5 miles. Scientists began to get a clearer picture of the reserves beneath the sea floor through 3-D seismic imaging. In 1982, Unocal Corporation drilled the first horizontal well in the North Sea, and Shell installed “Bullwinkle,” the world’s tallest standing structure from 1,350 feet of water.

Congress passed the Federal Oil & Gas Royalty Management Act in 1982, which required oil and gas facilities to be built while protecting the environment and conserving federal resources. Later, the Minerals Management Service was created as a bureau of the Department of the Interior. Their mission, “to manage OCS mineral resources in an environmentally sound and safe manner and to timely collect, verify, and distribute mineral revenues from Federal and Indian lands,” still stands today.

President Reagan set a political landmark for the offshore industry in 1983, when he signed Proclamation 5030, which established the U.S. Exclusive Economic Zone (EEZ), claiming all rights to 200 miles off the coastline for the United States.

As the industry entered the last decade of the 20th century, advancing technology ensued. New depth records for drilling reached 7,625 feet in the Gulf of Mexico, and Shell Oil’s platform “Troll,” which stands in the North Sea in 1,000 feet of water, 1,500 feet high, became one of two man-made objects visible with the naked eye from the surface of the moon. The other is the Great Wall of China.