- Should CCS leases have been offered in a separate sale as is the case for salt, sulfur, and wind operations?
- Was CCS activity considered in the environmental reviews for this sale?
- Was CCS mentioned in the Notice of Sale?
- How will these CCS bids be evaluated?
- Will the CCS bidding influence the Judge’s decision on the pending Sale 257 litigation?
Archive for November, 2021
More questions on the Sale 257 “CCS leases”
Posted in CCS, energy policy, Gulf of Mexico, Offshore Energy - General, tagged BOEM, CCS, Exxon, Lease Sale 257 on November 18, 2021| Leave a Comment »
Carbon sequestration provision in the new infrastructure legislation seems to explain Exxon’s Sale 257 intentions
Posted in CCS, energy policy, Gulf of Mexico, Offshore Energy - General, tagged CCS, Exxon, infrastructure bill, Lease Sale 257 on November 18, 2021| Leave a Comment »
Excerpt from SEC. 40307. GEOLOGIC CARBON SEQUESTRATION ON THE OUTER CONTINENTAL SHELF:
(b) Leases, Easements, or Rights-of-way for Energy and Related Purposes.--Section 8(p)(1) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(p)(1)) is amended--
(1) in subparagraph (C), by striking ``or'' after the semicolon;
(2) in subparagraph (D), by striking the period at the end and inserting ``; or''; and
(3) by adding at the end the following:
``(E) provide for, support, or are directly related to the injection of a carbon dioxide stream to sub-seabed geologic formations for the purpose of long-term carbon sequestration.''.
(c) Clarification.--A carbon dioxide stream injected for the purpose of carbon sequestration under subparagraph (E) of section 8(p)(1) of the Outer Continental Shelf Lands Act (43 U.S.C. 1337(p)(1)) shall not be considered to be material (as defined in section 3 of the Marine Protection, Research, and Sanctuaries Act of 1972 (33 U.S.C. 1402)) for purposes of that Act (33 U.S.C. 1401 et seq.).
(d) Regulations.--Not later than 1 year after the date of enactment of this Act, the Secretary of the Interior shall promulgate regulations to carry out the amendments made by this section.
This will be an interesting challenge for the DOI folks (BSEE/BOEM?) charged with writing the regulation given the jurisdictional issues related to capturing onshore CO2 and transporting it to the OCS. Also, when was this provision added to the infrastructure bill and did its apparent obscurity and delayed enactment give certain parties some type of competitive advantage at the sale?
Sale 257 Stunner!
Posted in Gulf of Mexico, Offshore Energy - General, tagged Exxon, Lease Sale 257 on November 17, 2021| Leave a Comment »
- Exxon was the sole bidder on 94 tracts, all on the Texas shelf. All of the bids were $27.50/acre, just above the $25/acre minimum for shelf tracts.
- Those bids accounted for 100% of Exxon’s bids and 30.5% of the high bids for the entire sale!
- Either Exxon sees resource potential that no one else (including Exxon) has seen for decades (I’m not discounting this possibility) or something else is going on here.
- Stay tuned!
Absent Exxon’s surprise activity, this was a pretty typical sale of recent vintage: $177 million in high bids on 214 tracts. Even with all of the Exxon bids included, only tracts totaling 1.7 million acres received bids. (See previous post.)
Complete Nonsense!
Posted in Gulf of Mexico, Offshore Energy - General, tagged Gulf of Mexico, Lease Sale 257, oil and gas leases on November 17, 2021| Leave a Comment »
U.S. To Sell Area the Size of New Mexico For Offshore Drilling Just 5 Days After COP26
Newsweek
- 80 million acres is the total area in the Gulf of Mexico that is open for possible leasing in Sale 257. The area receiving bids will be only a small fraction of that.
- In the previous sale (256), which was almost exactly one year ago, the same area was open for sale and only 0.6% of that area received bids. Only 93 of the nearly 15,000 tracts offered received bids. 7 of the high bids were rejected, so only 86 new leases were issued.
- There are currently only 2,027 active GoM leases (10.8 million acres), less than half the number that existed in 1/2016 (4460) and less than 1/3 the number that existed in the beginning of 2011.
- US offshore leases are among the smallest in the world, only a fraction of the sized of those offered by most other nations with offshore oil and gas programs.
- Modern deepwater development is noteworthy for high production from very few platforms. Only 57 surface facilities account for more than 90% of current GoM oil production.
Q&A on Sale 257 at yesterday’s White House press briefing
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged Lease Sale 257, White House on November 16, 2021| Leave a Comment »
Q Can I just ask one more on oil and gas? So, we just saw President Biden take action now in terms of the — protecting oil and gas development on Native lands and Tribal lands. But later this week, the U.S. government will open up for auction many, many acres — an area larger than several states, actually — to oil and gas leasing because of this legal situation.
So there are critics who say that you should have done more to avert this action. And I wonder if you can just say, you know, what action could potentially be done. Is there — are there any last-minute steps that could be taken to prevent those auctions from going forward?
MS. PSAKI: Well, you know, the President did — as you know, Andrea, but just to get others up to speed — issue an executive order pausing oil and gas leasing on public lands and in offshore waters to facilitate the identification and implementation of long-needed permitting and leasing reforms.
Shortly thereafter, the Interior Department cancelled the pending offshore oil and gas lease in the Gulf of Mexico known as Lease Sale 257.
So, what you’re referring to, I believe, is the fact that, in June, a federal district court in Louisiana stopped the President’s leasing pause and ruled that the Interior Department is legally required to go through with the sale of the Lease Sale 257, which is what you’re refer- — what Andrea is referring to in terms of putting up a bunch of lease sales — oil and gas lease sales.
We believe the decision is wrong, and the Justice Department is appealing it. So it’s in the courts; it’s in a legal process. We’re required to comply with the injunction. It’s a legal case and legal process, but it’s important for advocates and other people out there who are following this to understand that it’s not aligned with our view, the President’s policies, or the executive order that he signed.
Go ahead.
Q So there’s no more la- — so, you can’t take any last-minute action to prevent that from going forward?
MS. PSAKI: I would point you to the Justice Department. They, of course, are appealing this, and I would point you to them for any legal action or what their options are.
White House
Often attempted in industry and government, but seldom successfully executed 😃
Posted in energy policy, Regulation, Uncategorized, tagged reorganization on November 15, 2021| Leave a Comment »
OCS Lease Sale 257 scheduled for Wednesday (11/17)
Posted in Gulf of Mexico, Offshore Energy - General, tagged Judge Moss, Lease Sale 257, Louisiana on November 15, 2021| Leave a Comment »
Not much news regarding the suit to block Sale 257. U.S. District Judge Randolph Moss had previously authorized Louisiana Attorney General Jeff Landry to join the case as a defendant alongside the Department of the Interior (DOI), meaning that at least one party is sincerely interested in defending the sale. This comment by Judge Moss was telling:
Moss said he agreed to the state’s request to join the case because he harbored sufficient doubts that the state’s interests would be adequately represented by the federal government.
Reuters
Marvels of ingenuity juxtaposed; exploring the two great frontiers
Posted in energy, Offshore Energy - General, Uncategorized, tagged Gulf of Mexico, Perdido, SpaceX Dragon, spars on November 12, 2021| Leave a Comment »
Which platform is pictured in the International Space Station photo (re-posted below)? It is clearly a spar (basically a large vertically floating cylinder), and like most GoM spars appears to be the truss type (see diagram below depicting spar types). There are currently 18 GoM spars (list in table below). Looking at photos of these spars, my guess is that the SpaceX Dragon is pictured above Perdido (bottom photo).
| Name | Operator | Water Depth | Spar Type | Installed |
| Horn Mountain | Anadardo | 5400′ | truss | 2002 |
| Front Runner | Murphy | 3330′ | truss | 2004 |
| Gunnison | Anadarko | 3150 | truss | 2003 |
| Constitution | Anadarko | 4970 | truss | 2005 |
| Neptune | Fieldwood | 1930 | classic | 1996 |
| Boomvang | Anadarko | 3650 | truss | 2002 |
| Devil’s Tower | Eni | 5610 | truss | 2004 |
| Tahiti | Chevron | 4000 | truss | 2008 |
| Genesis | Chevron | 2590 | classic | 1998 |
| Holstein | Anadarko | 4340 | truss | 2004 |
| Hoover | Exxon | 4825 | classic | 2000 |
| Perdido | Shell | 7835 | truss | 2009 |
| Lucius | Anadarko | 7000 | truss | 2014 |
| Medusa | Murphy | 2223 | truss | 2003 |
| Mad Dog | BP | 4420 | truss | 2004 |
| Nansen | Anadarko | 3675 | truss | 2001 |
| Gulfstar | Hess | 4600 | classic | 2014 |
| Heidelberg | Anadarko | 5300 | truss | 2016 |
Good Washington Post article on hydrokinetic projects in the Orkneys
Posted in Offshore Energy - General, UK, Uncategorized, tagged hydrokinetic energy, Orkney Islands on November 11, 2021| Leave a Comment »
Conceptually, these projects have great promise. To date, the main challenges have been durability, mooring system integrity, and space preemption. As noted in the Post article:
The idea is simple; execution less so. As these devices — and their computers, turbines and hydraulics — must survive in some of the harshest conditions on Earth.
Need to reverse these trends to reduce the risk of oil supply crunches in the future
Posted in drilling, energy policy, Gulf of Mexico, Offshore Energy - General, tagged drilling, Gulf of Mexico, Lease Sale 257, rig counts on November 10, 2021| Leave a Comment »
- Chart 1: Gulf of Mexico rig count remains low
- Chart 2: Exploratory drilling continues to decline and may be insufficient to replace reserves
- Chart 3: Well starts and number of operators drilling remain at historic low levels
- Chart 4: (1) One company (Shell) accounted for 39% of the 2021 YTD deepwater well starts in the GoM. (2) Five companies (Shell, Oxy/Anadarko, Chevron, Murphy, and BP) accounted for 80% of the deepwater well starts.
More certainty regarding lease sales would help. Prospective participants need assurances that they will have opportunities to apply findings and test exploration and development strategies. Will Lease Sale 257 be held on schedule next week?
Bud's Offshore Energy (BOE) 