Offshore Oil Port Is Clean--and Unprofitable : Environment: The Louisiana Offshore Oil Port was to be a model for others, but that hasn’t happened.

The nation’s only offshore port for supertankers has not had a serious spill in eight years of operation, but neither has it made a profit.

It was hoped that the Louisiana Offshore Oil Port could become a model for others around the country, but its mixed performance leaves that matter open to question.

The port, known as LOOP, sits 19 miles off the coast in 115 feet of water--deep enough for the biggest tankers in the world to tie up and unload their cargo.

In proposing it in 1972, supporters said it would cost $250 million, create tens of thousands of jobs and stimulate onshore investments.

Environmentalists fought the idea, warning that there was a potential for oil spills that could devastate Louisiana’s fragile wetlands.

Both predictions proved wrong.

LOOP cost more than $700 million and has yet to make a profit. And it has been so clean that Interior Secretary Manuel Lujan Jr. says building more deep-water ports around the country would help avoid spills such as the one involving the Exxon Valdez in Alaska’s Prince William Sound.

“The loss of oil has been just a thimbleful from every barrel that’s been through there,” Lujan said after a visit to the port in September, “and it confirms my original thought that the way to avoid oil spills is to make sure that tankers don’t run aground. That’s what has happened in all our oil spills.”

LOOP was built to accommodate the supertankers that carry oil from the Middle East. The ships are so large that they cannot get into most U.S. ports.

LOOP looks like a three-deck offshore oil platform. Around it at distances of 1 1/2 miles are three buoys that resemble 42-foot-tall bird cages.

The tankers tie up to these as they pump oil into long hoses attached to concrete bases on the ocean floor.

A consortium of five oil companies called Loop Inc. owns LOOP and operates the platform and is responsible for paying off the bonds for the project. They are, by stake size, Marathon Oil Co., Texaco Inc., Shell Oil Co., Ashland Oil Inc. and Murphy Oil Corp. The bonds were issued by a state agency to qualify them for tax-exempt status.

Shortly before taking office in 1974, then-Gov. Edwin Edwards told reporters: “The projections are that it could pay for itself in less than 10 years.”

After eight years of operation, however, $565 million is still owed on $731 million in bonds, Louisiana Controller Paul Simoneaux said.

It handles only half of the projected 63 million gallons of crude oil a day, and it was losing money until last year, when it broke even for the first time.

Will there be a profit this year?

“I’d rather not comment on that,” said R.C. Thompson, president of LOOP Inc.

LOOP was predicated on a strong demand for imported oil, but U.S. imports of oil rose far less than expected in the 1970s and stayed relatively low in the mid-1980s. The prospects for LOOP’s making a profit have improved with the recent rise in oil imports. Nationally, imports averaged about 8 million barrels a day for the first 10 months of 1989.

The increase in imported oil “makes me believe that oil ports would be successful in other places,” Lujan said.

As for its environmental record, LOOP is almost squeaky clean. Thompson estimates that of 1.5 billion barrels of oil brought ashore there since 1981, 850 have been spilled. That works out to about a teaspoon for every 2,300 gallons transferred.

A 36-square-mile safety zone is continuously monitored by radar, and special mooring masters guide the tankers to and from the buoys.

“Exxon said it’s going to cost them $1.5 billion to clean up Prince William Sound and the surrounding area,” Lujan said. “Wouldn’t it be better to spend $1.5 billion to prevent oil spills than to spend it cleaning it up?”

Environmentalists, however, are not convinced that ports such as LOOP are the answer. Lisa Speer, senior scientist at the Natural Resources Defense Council in New York, said that alternatives could include building tankers with double hulls, improving the control of traffic and reactivating Coast Guard stations.

Speer also contended that building and maintaining such ports could harm the environment.

She pointed out that spills can affect beaches 20 miles away. For example, she said, “In Rhode Island within a few hours, you had a spill that had covered 25 square miles. Offshore spills can still impact the shore.”

And there is the matter of the expense to duplicate the Louisiana port in states such as Texas, California, Pennsylvania and Alaska. Various estimates put the cost of building another deep-water port between $800 million and $1 billion. Sean Connaughton, marine transportation associate with the American Petroleum Institute, said he has seen estimates up to $2 billion.

On top of that, oil users such as refineries that now get direct deliveries would have to hook up to a network of pipelines that has yet to be built. Building those could be even more expensive than building the ports, Connaughton added.