Keeping an eye on the oil industry

Something happened Friday that bears watching.

Texas-based Escopeta Oil Co. started drilling an offshore well in Upper Cook Inlet, north of Nikiski.

Drilling in Cook Inlet is nothing new. The oil industry has been active in those waters for decades.

What makes the Escopeta well unusual is that the drilling is being done with a so-called jack-up rig, which sits on legs pinned to the seafloor. Tugs towed the rig into Cook Inlet in August, capping a long voyage up from the Gulf of Mexico.

The Escopeta exploratory well is the first to be drilled from a jack-up rig in Cook Inlet in nearly two decades.

Oil industry regulators I've spoken with are clearly wary of Escopeta, a small company that went through years of struggle to pull together the money, equipment and state leases for the drilling project.

In recent days, the regulators have questioned Escopeta's adherence to certain regulations. Escopeta's people have rebutted these concerns, and swear they have experienced pros operating the rig.

But the regulators remain less than confident, and on Friday handed Escopeta this letter limiting the depth to which the company can drill.

"A well control incident in Cook Inlet could have devastating consequences for the state and the state's most vital industry," wrote Bill Barron, state oil and gas director.

The industry to which he refers, of course, is the oil industry. But one might easily include the fishing industry.