Posted in Uncategorized | 5 Comments »
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 | Leave a 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 ban on new wells, Commissioner Parke, North County, onshore oil, Planning Commission, property rights, Santa Barbara County, 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 »
“Honored to be named Inspector of the Year. I’m sincerely thankful to my supervisor and the management involved for recognizing my commitment to this mission, and I’m proud to work alongside the Well Operations Inspection team, whose support and professionalism elevate all of us. This award reflects our shared dedication to safety and the environment.”
Posted in Gulf of Mexico, Offshore Energy - General, Regulation | Tagged BSEE, Frank Musacchia, Inspector of the Year, New Orleans District, offshore safety, well operations | Leave a Comment »
My wife has native American (Micmac) heritage. Her family has deep respect for the Wampanoag tribe, in part because of their friendship with Aquinnah Wampanoag elder and activist Frank B. (Wamsutta) James.
Frank rescued my father-in-law after a car crash on Cape Cod and was a close friend for the rest of his life. Frank and my father-in-law, who headed the Art Dept. at Barnstable H.S., had common interests in art and history. Frank was also a talented musician, and was my wife’s music teacher at Eastham Elementary School on the Outer Cape.
Frank fought for the rights of Native Americans long before it was fashionable. In 1970, the speech be wrote to commemorate the 350th anniversary of the arrival of the Mayflower was never delivered, because it was deemed to be inflammatory. In his draft remarks, Frank succinctly summarized the tribe’s recent history:
“Although time has drained our culture, and our language is almost extinct, we the Wampanoags still walk the lands of Massachusetts…. Our spirit refuses to die.”
This spirit is evident in their opposition to wind projects that impact their historic and cultural homeland.
If Frank was alive today, he would no doubt be tirelessly supporting the preservation efforts of the Aquinnah Wampanoag Tribe. Most recently, the tribe joined the Narragansett Tribe, Green Oceans, commercial fishermen, and others in a suit challenging federal approvals for the Sunrise Wind project. Green Ocean’s press release is attached.
Posted in energy policy, Offshore Wind, Regulation | Tagged Aquinnah Wampanoag, Frank Wamsutta James, Green Oceans, law suit, Narragansett Tribe, Sunrise Wind | 1 Comment »
If Beacon and HEQ are willing sellers of their majority share in the impressive Shenandoah field, as appears to be the case (per Reuters), the big dogs are interested in buying. And why wouldn’t they be? Production began last July and the targeted rate of 100,000 bopd has already been achieved from just four phase-one wells.
Reuters reports that Total, Shell, BP, Repsol, and Chevron are interested in Beacon and HEQ’s 51% stake. More about Shenandoah:
- located in Walker Ridge blocks 51, 52, and 53
- ~150 miles off the coast of Louisiana
- floating production unit (FPU) in 5800′ of water in WR block 52
- true vertical reservoir depths ~30,000′
- high pressure ~20,000 psi
- Paleogene, Inboard Wilcox trend
- FPU can host production from nearby subsea systems
- capacity is being expanded to 140,000 bopd
- estimated 600 million BOE recoverable including nearby tiebacks
- other owner: Navitas Petroleum (49% share)
Investment companies like Beacon (owned by Blackstone) are positive, and increasingly necessary, contributors to the offshore program. These companies bring capital and new exploration strategies that increase development and production. They must, of course, be committed to safety excellence, which seems to be the case for Beacon.
It’s noteworthy that Anadarko and Conoco Phillips, Shenandoah’s major original partners holding 33% and 30% interest respectively, withdrew from the project in 2018 citing unsatisfactory appraisal results and weak commodity prices. Evaluation mistakes like this are common, which is why broad and diverse industry participation is needed. With mergers reducing the number of US majors (remember Amoco, Arco, Sun, Texaco, Getty, Mobil, Phillips, Marathon, Unocal, Superior, Hess, etc.), investment companies play an increasingly important role in OCS development.
Posted in Gulf of Mexico, Offshore Energy - General | Tagged Beacon, Blackstone, bp, Chevron, HEQ, investment companies, Shell, Shenandoah, Total | Leave a Comment »
The EIA has revised Gulf of America oil production slightly downward for Nov. and Dec. such that we now have an absolute dead heat between 2025 and 2019. Production for both years averaged exactly 1.898 million bbls/day.
Because of the ~6 month lag in obtaining verified OCS production data from the Office of Natural Resources Revenue (ONRR), the monthly EIA reports are based on ONRR’s more timely sales of production data. The final sales and production numbers are typically very close. For the 2019 record OCS production year, both the EIA and ONRR report identical Gulf production of 1.898 million bopd.
Meanwhile, 2026 Gulf production (chart below) is off to a strong start – 2.019 million bopd in January. This is the third highest monthly oil production in the history of Gulf operations.
Finally, California OCS oil production, which has been hobbling along at ~10,000 bopd (2nd chart) will see a massive increase of up to 500% should Santa Ynez Unit production continue.
Posted in California, Gulf of Mexico, Offshore Energy - General | Tagged 2025 vs. 2019, Calfornia, dead heat, EIA, Gulf of America, offshore oil production, ONRR, record OCS oil production, Santa Ynez Unit | Leave a Comment »
Bud's Offshore Energy (BOE) 
Comments from the California AG and Sable Offshore on the special permit application to PHMSA
April 8, 2026 by offshoreenergy
I’m attaching the complete comment letters from Sable Offshore and their main antagonist, California Attorney General Bonta, in response to PHMSA’s public notice and request for comments on Sable’s special permit application.
Summary of the California AG’s assertions:
“First, PHMSA is without authority to grant such a special permit because Lines CA-324/325 are intrastate pipelines and California regulators have sole regulatory oversight over any attempt to restart these Lines and issue state waivers. Second, California has vested interests in ensuring Lines CA-324/325 operate safely and PHMSA’s proposed special permit would dilute the higher state safety standards that were imposed on Sable and therefore it is inconsistent with pipeline safety. 49 C.F.R. § 190.341(d). Third, given the fact Line CA-324 already failed and caused a catastrophic oil spill in 2015 in Santa Barbara County, even if PHMSA had authority to issue a special permit (which it does not), a more robust environmental analysis needs to be performed. Fourth, PHMSA unlawfully invokes the Endangered Species Acts’s emergency consultation procedures and has given no indication that it will consult with the National Marine Fisheries Service, in violation of the Act. Finally, Secretary Wright’s March 13, 2026, order (“DPA
Order”) does not change anything about the propriety of the Application, because the DPA Order itself is unlawful.”
Summary of Sable’s position (screenshot):
You can sample the other public comments, some of which are quite good, by visiting the Regulations.gov docket.
Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation | Tagged California AG, comment letters, PHMSA, pipeline, Rob Bonta, Sable Offshore, Santa Ynez Unit, special permit | 2 Comments »