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Jason’s message, pasted in full below, is important for all who are associated with offshore oil and gas operations, in the US and internationally.
Be The Difference
On the Outer Continental Shelf, BSEE (or MMA) annually oversees ~70 million manhours of offshore personnel, production of >650 million barrels oil, and activities on ~1300 platforms and 75-90 rig / rig units. We all have a profound respect for the men and women who work offshore and put their lives on hold for 14-28 days to deliver much needed OCS production to meet the US demand, and that could not be clearer today.
Last month, Lou Holtz, a legendary coach and person passed away, and it reminded me of the rules of life he lived by and often promoted to others – 1) Do the right thing, 2) Do the best you can, and 3) Always show people you care.
Since February, BSEE has lost two great engineers, Tom Meyer and Bobby Nelson, who were both men of conviction. Tom and Bobby made a difference in all of us as they constantly worked with integrity, moral clarity, and high standards, choosing to act based on principles rather than preference or ease. While at BSEE, I have no doubt both of these men acted from internal motivation to adhere to their principles, not based on external applause or convenience. During their careers, both Tom and Bobby personified Lou Holtz’s rules of life.
Sixteen years ago, to this day, a phone call took place from the Deepwater Horizon to BP’s onshore office. The phone call discussed the anomalies encountered in the negative pressure test, and it was between the Well Site Leader and the lead drilling engineer. BP drilling engineer, Mark Hafle, allowed the temporary abandonment operations on the Deepwater Horizon to proceed even though he told Donald Vidrine, the Deepwater Horizon well site leader, that “you can’t have pressure on the drill pipe and zero pressure on the kill line in a [negative] test that is properly lined up.” Furthermore, Hafle did nothing to investigate or resolve the pressure differential issue even though he remained in BP’s office until 10:00 p.m. the evening of April 20 and had access to real‐time well data (which he logged out of at 5:27:35 p.m.). Hafle’s failure to investigate or resolve the negative test anomalies noted by Vidrine was a possible contributing cause of the kick detection failure that resulted in the Macondo blowout and 11 fatalities (Jason Anderson, Aaron Burkeen, Donald Clark, Stephen Curtis, Gordon Jones, Wyatt Kemp, Karl Kleppinger, Jr., Blair Manuel, Dewey Revette, Shane Roshto, Adam Weise).
Every day your actions, no matter how small, have a profound impact on others at the platform, in the company, and in industry. If you know something is not right, something is not possible, or even if you have doubt, consider being the difference.
For the remainder of the year, I challenge all of us, as regulators, to urge individuals on our teams to use their personal strengths to influence change rather than waiting for others to take initiative – including yourself. Also, promote the idea that one does not have to follow the crowd and can take a unique, personal stance to improve the offshore workplace. Be the difference just like Tom and Bobby.
Be The Difference and do whatever it takes to ensure the people offshore return from work the same way they arrived.
Respectfully,
Jason P. Mathews
Petroleum Engineer
Field Operations – OSM
Posted in accidents, Gulf of Mexico, Offshore Energy - General, Regulation | Tagged Be the Difference, BSEE, Deepwater Horizon, Jason Mathews, macondo, offshore safety | Leave a Comment »
I am again sharing this touching tribute to the 11 men who lost their lives on the Deepwater Horizon on April 20, 2010. The video is introduced by country singer Trace Atkins, a former Gulf of Mexico rig worker. The video and Trace’s song serve as a memorial to the 11 Deepwater Horizon workers and others who have died exploring for and producing oil and gas around the world. Please take a moment to watch.
Macondo revisited series:
- Part 1: Tribute to the 11
- Part 2: Background Information & pre-Macondo BP
- Part 3: The delayed cementing standard
- Part 4: What might have been
- Part 5: Did the National Incident Command unnecessarily prolong the blowout?
- Part 6: The shameful prosecution of BP Well Site leaders Vidrine and Kaluza
Reiterating this proposal: Make April 20th International Offshore Safety Day to honor those who have been killed or injured, to recognize the many workers who provide energy for our economies and way of life, and to encourage safety leadership by all offshore operators, contractors, and service companies.
Posted in accidents, Gulf of Mexico, well control incidents | Tagged 11 men died, 16 years ago, blowout, Bob Kaluza, bp, cementing standard, Deepwater Horizon, Don Vidrine, macondo, Trace Atkins, transocean | Leave a Comment »
The Constance Gee letter (pasted below) is entertaining no matter where you stand on the Vineyard Wind debacle. A couple of quotes 😉:
It’s been a mess from the beginning and in a mess it will end, but the current “he said she said” over who owes more millions to whom is especially trashy.
Poor Vineyard Wind doesn’t have a clue how to service and maintain the 62 turbines they’ve hammered into the seabed 15 miles off our coast, and they are upset that GE Renewables won’t hand over the troubleshooting manual.
The Vineyard Wind Court filing is accessible here.
Posted in energy policy, Offshore Wind | Tagged Constance Gee, litigation, Vineyard Wind, wind farm graveyard | 2 Comments »
The first public comments on BOEM’s proposed revisions to the decommissioning financial assurance requirements have been posted. A good comment letter (attached) was submitted by natural resource management students at the University of Arizona. The students oppose the proposed revisions. Among their concerns (additional thoughts added in parentheses):
- Increased environmental risks. (Accidents, hurricanes, and other events may introduce decommissioning risks that require both immediate and longer term attention and financial resources. Such incidents typically increase decommissioning costs by orders of magnitude, and can even bankrupt financially sound companies. See “Sad End for Taylor Energy.”)
- Firms with lower credit ratings would no longer have to hold as much capital in reserve and would have a lower bar of entry into projects. (See comments by John Smith.)
- The possibility of cascading economic impacts in the event that bankruptcy does occur. (Which predecessors will be affected and how? What about contractors? How long will bankruptcy litigation delay resolution of claims? Will bankruptcy court asset sales increase public financial, safety, and environmental risks?)
- Taxpayers would be facing a portion of the risk. (Predecessors are only accountable for the facilities they installed, so holding predecessors liable doesn’t free the taxpayers from all financial risks.)
- The entire energy sector faces increased risks when operating companies fail. (Prominent failures damage the reputation of the industry and the OCS program, with implications for the economy and national security.)
Before relaxing financial assurance requirements, BOEM should consider the role that lax lease assignment and financial assurance policies had in the growth of Fieldwood, Cox, Signal Hill, Black Elk, and other failed companies.
Posted in decommissioning, Offshore Energy - General, Regulation | Tagged Black Elk, BOEM, Cox Operating, decommissioning, environmental risks, Fieldwood, financial assurance, natural resource management, regulations, Signal Hill, taxpayer risks, Univ. of Arizona | Leave a Comment »
The Case for Reefing California Platforms by John Smith
Environmental groups like the Environmental Defense Center and Get Oil Out continue to oppose converting the jackets of California oil and gas platforms to artificial reefs despite scientific studies (Claisse et al. 2014) showing “oil and gas platforms off the coast of California have the highest secondary fish production per unit area of seafloor of any marine habitat that
has been studied.”
Another important factor environmental groups and the 2023 BOEM Programmatic EIS for Decommissioning failed to consider and acknowledge is the huge amount of air emissions that would be released by world-class heavy lift vessels like the Thialf or Balder Semi-submersible Crane Vessels (SSCVs) that would be required to safely and efficiently remove the large federal OCS platforms like Harvest, Hermosa, and Hidalgo (HHH). The HHH platforms are in waters depths ranging from 430-675 feet and have combined deck and jacket weights ranging from 20,000 – 25,000 tons. In comparison, the wrought iron structure of the Eiffel Tower weighs about 8,000 tons.
The SSCVs and accompanying Anchor Handling Tugs (AHTs) used to remove the HHH platforms will likely to be mobilized from distant locations like the North Sea or Gulf of America where they typically operate. Because SSCVs like the Thialf and Balder are too large to enter the Panama Canal, this would involve a 20,000 nautical mile roundtrip voyage around the tip of South America.
Three to four campaigns, and separate SSCV and AHT mobilizations and demobilizations, are projected to be required to fully remove the HHH platforms because the challenging oceanographic conditions offshore Point Arguello restrict heavy lift operations to a 150-day period between May and October.
Four campaigns by the SSCV and AHT would consume about 300,000 metric tons (mt) of marine diesel oil and release approximately 470,000 mt of CO2 and 11,000 mt of NOX emissions. To put these numbers into context, 470,000 mt of CO2 and 11,000 mt of NOX are:
- the amount of CO2 emissions released by providing electrical power to 97,600 homes annually (the city of Santa Barbara has about 38,000 housing units).
- the amount of CO2 emissions released by burning 1.1 million barrels of oil.
- the amount of CO2 emissions released by 102,000 gasoline burning cars annually.
- the amount of NOX emissions released by four large oil or coal-fired power plants annually.
- the total annual NOX emissions in Santa Barbara County.
And this is only the emissions released during mobilization and demobilization of the SSCV and AHT. If full removal is required, an additional 50 days of operational time by the SSCV and AHT is estimated to be required to remove the topside and jacket of each HHH platform. This could be reduced to about 15 days per platform if the jackets are converted to artificial reefs. Only one SSCV and AHT campaign may be required if the HHH jackets are reefed, compared to the four campaigns required for the full removal scenario. This would result in a 75 percent reduction in CO2 and NOX emissions.
Posted in California, climate, decommissioning, energy policy, Offshore Energy - General, Regulation | Tagged air emissions, BOEM, California, decommissioning, HHS platforms, John B Smith, offshore platforms, reef effect | Leave a Comment »
Excerpt from p.3 of Vineyard Wind’s suit against GE Renewables (attached):
“As was widely reported in national and local news, in July 2024, one of the GER offshore blades collapsed and fell into the waters off Nantucket, necessitating a massive environmental cleanup, and a six-month construction hiatus during which GER performed a “root cause” analysis. That analysis concluded that 68 of the 72 GER blades installed at the Project (nearly all manufactured by GER in Gaspé, Canada) were also defective because they were inadequately bonded together, and were so poorly made that they were beyond repair. GER’s remediation plan required it to remove all of the blades and to replace all Gaspé blades with others manufactured at a different facility in Cherbourg, France.
Regulatory issues of concern:
- Nearly 2 years after the blade failure, all Vineyard Wind (VW) turbine blades have been installed, yet BSEE has still not issued their investigation report. The primary purpose of independent Federal investigations is to prevent recurrences at this or other projects in the US and worldwide. The investigation should assess the extraordinary VW blade defect rate.
- A global assessment of turbine blade failures should be considered. These failures are far too common.
- DNV was the Certified Verification Agent (CVA) for the VW project, and was thus required to verify the design, fabrication, and installation procedures. When will we hear from them?
- BOEM waived the requirement that the Facility Design Report (FDR) and Fabrication and Installation Report (FIR) be “received and offered no objections to” before beginning the fabrication of facilities. They did so to “allow Vineyard Wind to adhere to its construction schedule, maintain its qualification for the Federal Investment Tax Credit, and meet its contractual obligations under the Power Purchase Agreements with Massachusetts distribution companies.” Did BOEM’s commitment to promoting offshore wind and accelerating development influence their regulatory decisions?
- Dr. Edgar Gunter, founder of the University of Virginia’s Rotor Dynamics Lab, suggested the cause of the Vineyard Wind blade failure was not a material bonding problem, but rather “a classical torsional fatigue failure of the blade at the base.” Is there any merit to this assertion?
- Is the fragmented turbine blade symbolic of the regulatory regime?
Posted in accidents, Offshore Wind, Regulation | Tagged blade defects, BOEM, BSEE, CVA, DNV, Dr. Edgar Gunter, fabrication, GE Vernova, investigation report, litigation, regulatory fragmentation, Vineyard Wind, waivers | 1 Comment »
John Smith‘s excellent comments on the BOE post about the proposed revisions to decommissioning financial assurance regulations warrant a separate post. John’s comments are pasted below.
It’s clear the proposed rules have been designed to reduce financial burdens on OCS oil and gas operators, especially small independents. The proposed rules do this by:
- Waiving the requirement of the operator/lessees to obtain supplemental financial assurance to cover decommissioning obligations if jointly and severally liable predecessors are determined to have the financial capability to cover the obligations.
- Lowering the credit rating threshold BOEM uses for evaluating the financial health lessees and grantees from BBB- to BB- from S&P Global Ratings (S&P) or Baa3 to Ba3 from Moody’s Investor Service Inc.
- Revising the level of BSEE probabilistic estimates of decommissioning cost used for determining the amount of supplemental financial assurance required from P70 to P50.
I don’t see any rationale for lowering the credit rating threshold, which would apply to both current and predecessor lessees. A BB- and a Ba3 rating is considered “non-investment grade” or “junk,” meaning the company is more vulnerable to adverse economic conditions, such as a downturn in oil and gas prices. Current market estimates place the 3-year probability of default for a BB- rating at approximately 12.5% to 13%. Lowering the credit rating significantly increases the risks of default by lessees and transfers the risk to the federal government and taxpayers.
Reducing the BSEE probabilistic criteria for determining the amount of supplemental financial insurance required from P70 to P50 means there is a 50% chance BSEE cost estimates for decommissioning are underestimated further increasing risks borne by the federal government and taxpayer.
BOEM should reverse course and maintain the current credit rating threshold (BBB- and Baa3) and the P70 criteria.
Posted in decommissioning, Offshore Energy - General, Regulation | Tagged BOEM, decommissioning, financial assurance, higher default risk, John B Smith, lower amount, lower credit rating, predecessor liability, proposed regulations | Leave a Comment »
Background: By a 3-2 vote, the Santa Barbara County Planning Commission, acting under the direction of the Board of Supervisors (also by a 3-2 vote), passed ordinances to ban new onshore oil and gas wells and phase out old wells.
“We keep discovering new oil and new techniques to recover it,” said Commissioner John Parke. “The only thing to stop the oil industry and the production of oil is legislation.”
Comments:
- The first sentence is perceptive, acknowledging that resources are not really finite given the ingenuity of engineers and geologists.
- The second sentence is disturbing. The Commissioner believes he is legally and morally entitled to terminate an industry that has been present in Santa Barbara County for >130 years. He believes the Commission can do so by a slim majority and without compensation to those whose property rights are being abrogated.
- The 2 Commissioners voting against euthanizing the County’s oil industry represent Districts 4 and 5 (maps below) where most of the wells are located. In essence, South County Santa Barbara is terminating an industry that is important to North County.
- Pertinent to the County’s action is a suit filed by John and Melinda Morgan, who inherited the mineral rights to two parcels in the Cat Canyon Field (District 4). They argue that a similar provision in CA Senate Bill 1137 amounts to an unconstitutional taking of their property.
Posted in California, energy policy, Regulation | Tagged Santa Barbara County, Planning Commission, ban on new wells, onshore oil, North County, Commissioner Parke, property rights, vote | 1 Comment »
Yet another chapter in the Vineyard Wind saga:
New Bedford Light: Vineyard Wind on Wednesday sued its turbine supplier, GE Renewables, in civil court in Boston, alleging GE is breaching its contract and planning to abandon the project by April 28 — during the critical final stage of coming fully online.
According to the complaint, GE filed a termination notice with Vineyard Wind in late February for its contracts to supply wind turbines and service and maintain them, citing more than $300 million in claims unpaid by Vineyard Wind.
If GE exits, Vineyard Wind says, the project “will likely fail, leaving the windfarm stranded.”
The New Bedford Light provides more details on the litigation.
Remember, BOEM waived the “pay as you build” decommissioning financial assurance requirement for Vineyard Wind and subsequently relaxed financial assurance requirements for all offshore wind projects.
Posted in decommissioning, energy policy, Offshore Wind, Regulation | Tagged BOEM, decommissioning, financial assurance, GE Vernova, litigation, Vineyard Wind | Leave a Comment »
Some of us remember when the UK and Norway were friendly North Sea oil and gas rivals – competing to be tops in production, technology, safety, and even promotion at conferences like OTC. Take a look at the production chart below and note the UK’s production leadership followed by the extraordinary decline.
So what happened? Norway may have better oil and gas resource potential, but that is only part of the story. While Norway was managing their offshore sector to succeed, the UK was seemingly managing theirs to fail.
Norway’s North Sea remains far more active because the government promotes exploration through predictable licensing, cost-recovery incentives, and a focus on adding resources to existing infrastructure.
The UK, by contrast, has shifted toward limited development and decommissioning. In recent years, the UK’s windfall tax on oil and gas profits was raised to 78 percent, and licences for exploratory drilling in new areas were banned.
In 2022, the UK government even changed the name of the Oil and Gas Authority to the more trendy North Sea Transition Authority. (Changing names is one thing; delivering reliable energy at reasonable prices is quite something else.)
The stark policy differences are evident in the exploration drilling numbers – sustained drilling vs. sustained decline (charts below).
JL Daeschler shared this excellent response by Natalie Coupar (excerpts below) to tired anti-exploration arguments that are popular in the UK and elsewhere:
“Claim: Hundreds of North Sea licences have delivered only “36 days of gas”, proving new drilling does not improve energy security.
“This actually proves the opposite. In a mature basin like the North Sea, you need a constant churn of investment and new licences just to stand still. Without ongoing activity, decline accelerates and import dependence rises faster. That is why countries like Norway continue to license and develop new projects. Their approach allows them to replace what they produce and manage decline more effectively. In industry terms, this is measured through the reserves replacement ratio – how much new resource is added compared with what is produced. Norway consistently produces a higher reserves replacement ratio than the UK. Over the 5 year period 2019-2024, through exploration, Norway replaced on average 46% of the reserves that were produced, the UK however, replaced just 14%.“
“Today, the North Sea still provides over half of the UK’s oil and gas needs. With the right conditions, we can sustain production for longer, reduce exposure to imports, and manage the transition more securely. Without licensing and investment, the UK simply becomes reliant on overseas supplies sooner – regardless of demand falling.“
Claim: 93% of UK North Sea oil and gas has already been extracted, so new drilling makes little difference.
“Official projections show several billion barrels of oil and gas still expected to be produced between now and 2050. Independent analysis commissioned by OEUK shows that, with the right conditions, significantly more could be delivered from known projects and discoveries.“
“And even beyond that, the UK’s own regulator identifies large volumes of oil and gas in:
- approved projects
- existing discoveries
- areas that haven’t yet been developed“
Pressure is mounting on the UK govt to approve the Rosebank and Jackdaw projects and ease exploration restrictions. Will it work?
Posted in Offshore Energy - General, Norway, UK, energy policy | Tagged North Sea, JL Daeschler, exploration, oil and gas production, Jackdaw field, UK vs. Norway, NTSA, Natalie Coupar, Rosebank | Leave a Comment »
Bud's Offshore Energy (BOE) 