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The subject IEc report for the US Coast Guard may be of interest to BOE followers. The Coast Guard is requesting comments by July 28, 2026. You can download the full report (129 pages) here.
The report is intended to update the Coast Guard’s methodology for estimating the cost savings resulting from spill prevention regulations. The paragraph pasted below is a good summary of the objective.
The offshore industry could benefit from this report, because the estimated cost of spills >100 gallons is reduced, dramatically so when the DWH/Macondo blowout is excluded (see the second table below). That reduction would support regulatory reform initiatives, and could thus generate some controversy.
My main concern is that there is only a single distance-from-shore category for offshore spills (see text below). The natural resources damage from a spill 3 miles from shore will almost always be much greater than from an equivalent volume spill 100 miles from shore.
The single-offshore-category issue is illustrated in the 2 tables pasted below. The first table presents a summary of expert opinions on the smallest spill size that is likely to result in measurable natural resource damages. The mean response to Question 3 (offshore) is 7782 gallons. A spill of that size occurring 3 miles from shore is much more likely to result in resource damage than a spill originating 50 or 100 miles from shore.
In the second table, note the new methodology results in the same cost estimates for large nearshore/coastal spills as for offshore spills. Again, this is presumably because there is only a single offshore category.
The public comments on this report should be interesting.
Posted in energy policy, Offshore Energy - General, oil spill response, Regulation | Tagged benefits of avoiding spills, oil spills, regulations, report, US Coast Guard | Leave a Comment »
Massachusetts Judge Peter Krupp confirms that GE Rewables (GER) can’t quit now, but must continue working on the Vineyard Wind (VW) project! As we approach the 2 year anniversary of the blade failure, this ugly legal dispute among the responsible parties is another black eye for the troubled project.
Judge Krupp: In discussing irreparable harm in the April Memorandum, I found that the project “is at a critical phase,” that GER’s termination “would set the project back immeasurably and threaten VW’s financing,” that the requirements “to bring the project into commercial viability is highly dependent on GER’s capabilities, personnel and technology,” and that “[t]o pretend that VW could go out and hire one or more contractors to finish the installation and troubleshoot and modify GER’s proprietary design without GER’s specialized knowledge is fanciful.” Nothing has been brought to my attention that would alter any of these conclusions.
Project completion declarations by VW and Gov. Healey did not reflect the reality of the project (expected grandstanding, nothing to see there 😉):
Moreover, the fact that VW declared the COD (Commercial Operation Date) – or that Gov. Healey and VW’s parent commented on it – does not change the reality on the ground. It does not change the fact that the Project requires GER’s expertise and proprietary know-how to bring the turbines up to operational capacity.
The judge’s order is attached.
Posted in Offshore Wind | Tagged can't quit project, court order, GE Vernova, injunction, Vineyard Wind | Leave a Comment »
BOEM Press Release: “The Bureau of Ocean Energy Management announced today the critical role of offshore leasing, resource assessment and long-term planning in supporting record oil production on the U.S. Outer Continental Shelf, which reached more than 714 million barrels in 2025.”
Was 2025 a record OCS oil production year? No, 2025 came very close, but barring belated revisions, 2019 retains the record.
Did 2025 oil production exceed 714 million barrels? Not even close according to the US Energy Information Administration (EIA), which reported a final OCS production total of 692.6 million barrels for 2025. The Office of Natural Resources Revenue (ONRR), to whom all production data must be reported, has yet to post their final 2025 numbers, but they are normally very close to the EIA totals. Also, ONRR’s fiscal year totals do not suggest calendar year production in excess of 700 million barrels. BOEM’s announced 714 million barrel CY 2025 total is more than 60,000 bopd higher than the actual EIA CY or ONRR FY daily averages, and even exceeds the total posted in BOEM’s data center.
See the 2019 and 2025 oil production totals in the table below. The BOEM 2025 numbers appear to be erroneous.
| Oil Production (includes condensate in all cases) | 2019 | 2025 |
| Gulf of America OCS | ||
| ONRR | 692,681,303 | not yet posted; fiscal year total was 681,760,441 |
| EIA | 692,831,000 | 692,634,000 |
| BOEM | 693,004,577 | 707,847,938 |
| All OCS including Pacific & Alaska | ||
| ONRR | 697,610,350 | not yet posted; fiscal year total was 686,544,402 |
| EIA | 697,217,000 | 697,020,000 |
| BOEM | 697,933,210 | 712,543,491 |
On the plus side, per EIA’s latest update, Jan. 2026 was a record production month for the Gulf. January’s ave. production of 2.060 million bopd surpassed the Aug. 2019 ave. of 2.044 million bopd.
Barring significant tropical storm shut-ins over the next 6 months (hurricane season starts today!), a production record in 2026 seems like a good possibility.
Posted in Gulf of Mexico, Offshore Energy - General | Tagged 2025 production, BOEM, EIA, ONRR, record production | Leave a Comment »
As part of the recent focus on decommissioning and financial assurance requirements, I looked at borehole data for platforms A, B, and C on Lease OCS-P 0241 in the Santa Barbara Channel. Platform “A” is where a well blew out in 1969, permanently scarring the US offshore program. Observations:
- There are 140 completed and unplugged wells on the 3 platforms. None of the wells on these platforms have been permanently plugged and only one is temporarily abandoned.
- The latest available production information (2024 data) indicates ave. daily oil production of 3791 bopd for the lease, including 1901 bopd from Platform A, the highest production for any platform in the region in 2024.
- 41 of the lease’s completed (unplugged) wells are on Platform A.
- The number of these wells that are currently producing is not publicly available.
- 30 of the completed Platform A wells were drilled prior to 1985.
- The blowout well was the 5th well drilled from platform A. All 4 of the wells drilled prior to the 1/28/1969 blowout are still unplugged:
- well A-20: spudded on 11/19/1968, reached total depth on 12/2/1968
- well A-41: spudded on 11/27/1968, TD on 12/19/1968
- well A-25: spudded on 12/18/1968, TD on 12/28/1969
- well A-38: spudded on 1/12/1969, TD on 1/24/1969
- Note how quickly the wells were drilled. The wells were shallow (2299-4051′ true vertical depth), and the operator (Union Oil) saved time by omitting a casing string. (This decision was a root cause of the blowout and thus changed history 😡)
Lease documents and regulations at 30 CFR § 250.1710 require that all wells be permanently plugged within one year of lease termination. For leases like 0241 that are still active, 30 CFR § 250.1711 stipulates that BSEE will order a well to be permanently plugged if the well poses a hazard to safety or the environment, or is not useful for lease operations and is not capable of oil, gas, or sulphur production in paying quantities. In the Gulf of America Region, the policy is to require wells that have not been used in the past 5 years to be permanently plugged. Allowing old wells to remain unplugged is neither prudent nor consistent with the regulations.
Posted in California, decommissioning, Gulf of Mexico, Offshore Energy - General, Regulation, well control incidents | Tagged decommissioning, Dos Cuadras field, Lease OCS-P 0241, Platform A, Santa Barbara blowout, well plugging and abandonment | Leave a Comment »
Sable Offshore (SOC) surged 12% on Thursday. Here’s why:
Judge Stephen V. Wilson, US District Court for the Central District of California ruled that Sable’s pipeline doesn’t imminently harm Gaviota Park. Judge Wilson said the state “is grasping at straws,” for evidence of real environmental harm, and the federal consent decree governing the terms of the system’s restart is controlled by the California Office of the State Fire Marshall, not the parks department.
The judge didn’t rule on the larger question of whether the Defense Production Act order to restart the Las Flores pipeline system was lawful.
Posted in California, Offshore Energy - General, pipelines, Regulation | Tagged California, Gaviota State Park, Judge Stephen Wilson, no imminent harm, Sable Offshore | Leave a Comment »
John Smith’s update on California OCS Decommissioning Obligations is attached. His comments:
Chevron and FMC hold joint and several liability responsibilities for many platforms and all of those operated by DCOR. This reflects Chevron’s long history in developing CA onshore and offshore oil and gas resources. A 2020 report issued by BSEE estimated the nine platforms operated by DCOR had a combined decommissioning cost of $397 million. The actual cost could be 2-3-fold higher based on estimates for decommissioning California state water platforms prepared by experienced decommissioning consultants.
Chevron may be checking out of California by moving its corporate offices to Houston, but as someone once said about decommissioning – referring to the popular Eagles Hotel California song “You can check out but you can never leave.”
Official decommissioning anthem 😉: Hotel California
Excerpt from the lyrics – Hotel California, Eagles, 1976
Last thing I remember
I was running for the door
I had to find the passage back
To the place I was before
“Relax, ” said the night man
“We are programmed to receive
You can check out any time you like
But you can never leave”
Posted in California, decommissioning, energy policy, Offshore Energy - General, Regulation | Tagged California, Chevron, cost, DCOR, decommissioning obligations, Eagles, Freeport-McMoRan, John B Smith | Leave a Comment »
Per yesterday’s discussion comparing recent onshore and offshore lease sales, the investments are really quite different. When you acquire Permian and Delaware Basin shale tracts you are essentially buying oil in place that should be producible with current technology.
At offshore sales, you are typically acquiring the opportunity to learn more, either through site surveys or drilling. Your lease exploration and development strategy will also be influenced by drilling outcomes for similar targets on other leases. A return on your investment is far from certain.
I looked back at the top ten leases (by high bid) issued at Central Gulf Sale 235. That sale was chosen because it was 11 years ago, giving time to explore and initiate development, and the bidding was strong. The top ten leases received bids ranging from $12.8 million to $52.2 million. See the screenshot below.
Surprisingly, only four of the leases were ever drilled and nine of the ten leases have expired. The only lease remaining is the highest bid block (OCS-G 35724, Walker Ridge Block 107, $52.2 million) now owned by Talos (27% and operator), Red Willow (22.5%), Shell (22.5%), CSL (9%), and two investment partnerships. This lease is being held by operations given that a well was drilled within the past year. However, Talos has announced a discovery, and the well has been temporarily abandoned to preserve future utility:
The discovery well was drilled to a total vertical depth of 33,228 feet utilizing the West Vela deepwater drillship and encountered oil pay in multiple high-quality, sub-salt Miocene sands. A comprehensive wireline program was conducted, acquiring core, fluid, and log data to evaluate the reservoir.
So the bottom line is $308.3 million in bonuses for 10 leases, 9 of which have now expired, and one discovery which could prove to be commercial down the road.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General | Tagged Delaware Basin, high bids, OCS Sale 235, onshore vs. offshore, Permian Basin, Talos, Top Ten, West Vela | Leave a Comment »
The Federal onshore oil and gas program was always secondary to the offshore program, at least in the opinion of those of us who worked in the offshore program 😉. That was before the shale era revolutionized US energy production.
The onshore program is now free to flex 💪 following recent sale results, most notably last week’s impressive BLM New Mexico sale that featured the Delaware Basin. See the attachment for details.
The table below compares the last two Big Beautiful Gulf sales and the record 2008 Gulf of Mexico sale with the BLM NM sale. Most astonishing is the record $357,129 per acre bid for a single NM tract. Devon Energy, which exited the Gulf in 2010, was the mega-bidder acquiring 24 tracts for $2.6 billion! (Devon is still bogged down in the Hogan/Houchin decommissioning dispute in the Pacific, a case which should temper enthusiasm for relaxed lease assignment and financial assurance policies.)
The attractiveness of the Permian, Delaware, and similar onshore basins has been greatly enhanced by vastly improved drilling and well completion technology. The short lead times to first production are a big advantage relative to offshore development.
The total high bids for Gulf Sale 206, which dwarfed the BBG1 and 2 sales, are still a Federal oil and gas leasing record when converted to 2026 dollars, but the sale area was much larger than for the NM sale.
| Sale | date | tracts bid on | acres bid on | total high bids | highest bid/acre |
| BLM NM | 5/20/2026 | 74 | 33,529 | $4,007,609,288 | $357,129 |
| BBG2 | 3/11/2026 | 25 | 140,753 | $46,976,423 | $3,647.57 |
| BBG1 | 12/10/2025 | 181 | 1,023,526 | $300,425,222 | $3,227.79 |
| 206 | 7/21/2008 | 615 | 3,323,047 | $3,677,688,245 ($5.7 million in 2026 dollars) | $18,333.47 ($28,300 in 2026 dollars) |
Posted in energy policy, Gulf of Mexico | Tagged Delaware Basin, Devon, Gulf of America, New Mexico, onshore leasing, record lease sale, sale 206 | Leave a Comment »
Thinking of those who gave their lives to protect our freedoms, including workers who died providing the energy needed to power our economy.
abundant, reliable, affordable energy 🡆 economic strength, security, & independence
Posted in energy, energy policy, Uncategorized | Tagged energy independence, energy workers, gratitude, Memorial Day, security | Leave a Comment »
Steve Milloy, National Center for Public Policy Research: GE Vernova is losing money on wind turbines and will continue to lose money for the foreseeable future. Wind losses are real and guided to persist at ~$400 million in 2026.
On the other hand, GE Vernova’s gas turbine business is booming. The gas turbine backlog and slot reservations surged from 83 GW to 100 GW in Q1, with a target of at least 110 GW by year-end. There is strong demand for reliable, dispatchable power to support data centers and grid stability. This segment is a major profit driver.
Milloy is asking GE Vernova shareholders to support the following resolution:
RESOLVED: Shareholders request that the Board of Directors of GE Vernova Inc. publish a report within the next year—prepared at reasonable cost and omitting proprietary or competitively sensitive information—assessing the extent to which the Corporation’s sustainability goals have been authorized and maintained on the basis of net-present-value and return-on-investment calculations.
The company’s Board of Directors has unanimously recommended that shareholders vote “AGAINST” this proposal, arguing that the Company already provides comprehensive, transparent disclosures on sustainability‑related risks, opportunities, goals, and progress.
Meanwhile, GE Vernova remains locked up in an ugly dispute with Vineyard Wind and is still prevented by court order from exiting that project.
Posted in natural gas, Offshore Wind, Wind Energy | Tagged costs, FEP, gas turbines, GE Vernova, Steve Milloy, sustainability goals, wind turbines | Leave a Comment »
Bud's Offshore Energy (BOE) 