Gulf of Mexico pipeline operators have been so busy picking up the pieces from last year’s hurricane season that they’ve apparently had little time and resources for building new Gulf of Mexico infrastructure. But if current indications are correct, the 2006 hurricane season will be something of a vacation compared to last year.

Every year since 1994 the Department of Interior’s Minerals Management Service (MMS) has approved more than 1,000 miles of new Gulf of Mexico gas and oil pipeline. “This year I don’t think we’re going to make that,” Alex Alvarado, chief of MMS’s pipeline section told attendees at the Southern Gas Association Offshore Conference in Houston last week.

That could be best described as an understatement as Alvarado conceded MMS has only approved 286 miles of Gulf pipe this year. He speculated but would not say definitively that it’s because Gulf pipeliners have been too busy picking up after hurricanes Katrina and Rita. Indeed, MMS still is repairing its New Orleans office with hopes of returning in December, Alvarado said.

Also speaking at the conference was Houston-based ImpactWeather Inc.’s Jim Gooding. He had some good news for the offshore operators, for whom the Gulf of Mexico is a vessel holding billions of dollars in capital. “We have much cooler overall sea surface temperatures than we had a year ago,” Gooding said.

That means the likelihood of a repeat of last year’s hurricane season is greatly diminished. Besides sea surface temperatures other indicators of potential Gulf hurricane activity are the likelihood of wind shear, caused by the El Nino effect; and steering wind behavior, which is affected by the size and strength of the pressure zone called the Bermuda High as well as North American cold fronts. How wind shear and steering winds interplay determine whether and how a storm makes landfall.

“It’s the ever-changing nature of all these things and how they interact with each other that makes the forecast so difficult,” Gooding said. All things considered, Gooding said the setup for hurricanes this season is less aggressive than what we had a year ago.

Still, that doesn’t mean the era of prolific and violent hurricane seasons is over. Gooding said meteorologists generally fall into two camps: global warming believers, and adherents to weather cycle theory. If the world is getting warmer, and warmer temperatures bring on more and stronger hurricanes, then that suggests hurricane seasons will get progressively worse.

However, Gooding said he falls into the latter camp and believes that weather comes and goes in cycles. We’re in a high-powered Gulf hurricane cycle now, he said.

During the 1960s and ’70s, the Gulf saw numerous hurricanes make landfall. During the 1980s and ’90s there were relatively more landfalls on the Atlantic Coast. The new millennium has brought an impressive number of strong storms to the Gulf again. “It may be another decade or more before we see a swing back to more mild conditions,” Gooding said. “It appears from the evidence available that we’re heading back into another one of these warm [water] cycles.”

For now at least, 2006 is expected by Gooding and others to be mild compared to last year. Last week the National Oceanic and Atmospheric Administration (NOAA) reduced the number of storms it expects for the season but said it still expects a more active than normal season (see related story).

“We’re starting to see some indications of more wind shear building across the Gulf, said Gooding. “The shearing and [wind] steering, if you will, is looking more protective of the Gulf.”

ImpactWeather’s most recent outlook was for 16 named storms, nine hurricanes with four of them intense, Gooding said, noting that those numbers are being tweaked downward given the latest meteorological developments.

As for this year, anything less would be more as far as the industry is concerned. Hurricanes Katrina and Rita last year caught about 20,000 miles of pipelines in their paths of hurricane-force winds. That’s about 60% of all Gulf of Mexico pipes, Alvarado said. Inspections are still under way, and so far 545 pipelines have reported storm-related damage to the MMS, which still is getting monthly reports.

About 41% of the damage to Gulf pipes from Katrina and Rita was caused by associated platform damage, Alvarado said, and 28% was due to riser damage. Katrina destroyed 46 platforms and Rita 69.

For operators still counting the costs of last year’s hurricane season, Alvarado Thursday delivered some unwelcome and possibly surprise information: The MMS is instituting new fees for certain Gulf of Mexico infrastructure development/modification permits. The final rule for these new fees was published July 19, he said, and the fees take effect Sept. 1. “A lot of people don’t know [about the new fees] because so much was going on at the time the rule was published,” he said.

For instance, an application for a new Gulf platform will need to be accompanied by payment of $2,850 before it is considered, Alvarado said. The application to repair/modify a platform will cost more, $3,400, since review of this is often more complicated for MMS than considering a new project. A pipeline lease term application will cost $3,100, which affects producers. The cost to apply for pipeline repair will be $340. MMS will accept check, credit card or payment by automated clearing house. “If you don’t send in a payment, we’re going to send the application back to you,” Alvarado said.

Happy hurricane season.

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