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Archive for 2021

  • Executive Branch fiats don’t work in this country (and we can be thankful for that), but those in power sometimes don’t get that (or don’t care). Fortunately, we (MMS) weren’t tasked with many political rules, largely to the credit of our leadership.
  • OSHA had done a good job of reinventing itself and improving its reputation and image. Now this.
  • OSHA has a no-win assignment: issue a complex rule disguised as an Emergency Temporary Standard (a convenient regulatory hook that is being challenged legally).
  • This is a very labor intensive exercise for OSHA. The 490 page rule standard that was issued today is just the beginning.
  • Well managed companies should have already developed a policy that best serves their business interest and fully considers the needs of customers and employees.
  • The OSHA directive takes the lagging companies off the hook. Rather than actually managing, corporate execs can simply point to the government directive.
  • It looks like enforcement falls on the companies which “must maintain a record and a roster of each employee’s vaccination status.”
  • OSHA is a bit late to the party. BSEE has been collaboratively working COVID issues with the offshore industry for nearly 2 years. Will they now be asked to inspect facility COVID records and enforce the OSHA mandate?
  • For the record, 100% of BOE’s employees are thrice vaccinated for COVID (initial Pfizer doses plus the booster).😃

The legal challenges are already in motion, and the arguments are compelling:

“The order is unconscionable. OSHA does not know how to run our companies. We do,” said Steve Fettig, Secretary and Treasurer of Tankcraft and Plasticraft. “OSHA does not know how to keep our employees safe. We do. And we have done so successfully since the start of the pandemic without the interference of a federal bureaucracy. We respect our employees’ fundamental right to make their own private, difficult medical choices.”

Milwaukee Journal

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Among other provisions, EPA’s proposed rule, issued on 11/2/2021, specifies that associated gas be handled as follows:

Route associated gas to a sales line. If access to a sales line is not available, the gas can be used as an onsite fuel source, used for another useful purpose that a purchased fuel or raw material would serve, or routed to a flare or other control device that achieves at least 95 percent reduction in methane and VOC emissions.

Because the Dept. of the Interior has jurisdiction over air emissions on most of the Gulf of Mexico OCS, I assume this proposed rule does not apply to those facilities. However, the EPA proposal is not entirely clear in that regard. If the EPA proposal does not apply, will BOEM/BSEE be proposing similar restrictions in their regulations?

MMS/DOI considered prohibiting venting, but determined that adding flaring capability was not feasible for many shelf platforms, and for some platforms there would have been a net increase in emissions. That said, venting is not insignificant. A 2017 Argonne study indicated (table 2) that, for shelf platforms from 2011 through 2015, more than 3 times as much gas was vented as was flared. More recent data should be reviewed to get a better sense of the costs, benefits, and safety considerations associated with achieving further reductions in venting.

Current flaring/venting regulations for OCS facilities are here.

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But here’s the thing. Whether you think it was the right thing to do, the reality is that passing legislation that is hostile to the U.S. oil and gas industry makes it even more difficult for domestic production to bounce back. So, instead of asking Russia and OPEC to pump more oil, we could look internally to what we could do in the U.S. to pump more oil. 

Forbes

From a US offshore perspective, there should be serious dialogue about how we can increase exploration and production. The risks associated with over reliance on imports have been repeatedly demonstrated over the past 5 decades. The horizontal drilling/well stimulation revolution has been a blessing, but given the sharp decline rates for fracked wells, we cannot solely rely on onshore production from tight reservoirs.

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Veteran marine science advocate Jerry Schubel, former president of Long Beach’s Aquarium of the Pacific, is among those pushing for offshore oil platforms to be transformed for new ocean uses. He points out that the underwater portion of the structures already are a boon to marine life.

“They have enormous value as ecosystems because of the life that has grown on and around them,” he said.

He points out that other states have rigs-to-reefs programs — and California does as well, though it needs funding before it can function. Once the ball gets rolling, oil companies could be tapped to cover costs with fees drawn from the money they would save by not having to haul dismantled rigs ashore. Schubel estimated that turning platforms into reefs could cut decommissioning costs in half.

But Schubel says artificial reefs should be just the beginning. How about fish farms? Research labs? Windmills? Hotels for divers?

“The uses,” he said, “are limited only by our imagination.”

Orange County Register

Well said Dr. Schubel! For a full list of alternative uses for offshore platforms see the official Rigs-to-Reefs+++ page.

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May be a cartoon of text

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As we await the outcome of the nationally important gubernatorial race here in the Commonwealth of Virginia, I wanted to acknowledge the political appointees whom I had the opportunity to work for in the OCS oil and gas program. While they had different backgrounds and interests, all respected the importance of the program and were committed to safe operations and protection of the marine environment. Remarkably, they all managed the OCS program in a rather non-partisan manner.

Republican AppointeesDemocrat AppointeesNotes
Harold DoleyDon KashDr. Kash was Chief of the Conservation Div. (USGS), which was roughly the equivalent of BSEE Director
Bill BettenbergTom FryBill Bettenberg was a career Federal employee appointed as MMS Director by a Republican administration
Bob KallmanCynthia Quarterman
Barry WilliamsonWalt Rosenbusch
Scott SewellTom KitsosDr. Kitsos was a career Federal employee appointed MMS Director by a Democrat administration
Johnnie
Burton
Liz
Birnbaum
Randall Luthi

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Oil prices went negative a year ago: Here's what traders have learned since  - MarketWatch
MarketWatch
Monthly Oil Production
Forbes

U.S. oil production plummeted and is unlikely to recover to pre-pandemic levels. The Gulf of Mexico will not be picking up the slack. GoM production peaked in August 2019 at 2.044 million BOPD. Absent increased exploration, that peak will never be exceeded.

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More than 400 private jets carrying world leaders and business executives to Cop26 will blast 13,000 tonnes of CO2 into the atmosphere.

Matt Finch, of the Transport and Environment campaign group, said: “The average private jet, and we are not talking Air Force One, emits two tons of CO2 for every hour in flight.

It can’t be stressed enough how bad private jets are for the environment, it is the worst way to travel by miles.Our research has found that most journeys could easily be completed on scheduled flights.

“Private jets are very prestigious but it is difficult to avoid the hypocrisy of using one while claiming to be fighting climate change.

Daily Record UK

For the record, BOE does not own a private jet. Our Air Force 1 is pictured below 😃

Nike Air Force 1 Low OFF-WHITE University Gold Metallic Silver - DD1876-700

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Data from EIA

1.60 to 1.74 million BOPD were shut-in from 8/28 to 8/31, reducing the average daily production for August to 1.535 million barrels per day, a net reduction of 312,000 BOPD from July. The September production figure will be significantly lower given that more than half of the GoM production was shut-in for 13 days in September and several hundred thousand BOPD were shut-in for the rest of the month. September production will be released at the end of November.

Shell is now anticipating that their GoM production will be fully restored by mid-November.

Hurricane_Ida_landfall.jpg
Hurricane Ida – JPT graphic

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According to ExxonMobil Guyana, the Liza Unity FPSO is the world’s first FPSO to be awarded for its sustainable design, documentation and operational procedures. The vessel has been awarded the SUSTAIN-1 notation by the American Bureau of Shipping (ABS), which is the Classification Society for the unit.

Guyana Chronicle
Liza Unity FPSO

Here are the criteria for the ABS Sustainability Notation, This looks like a solid program.

Based on the schematic for the sister FPSO Liza Destiny (below), gas that is not used to power the vessel will be reinjected.

The quality of offshore facilities and the attention to safety and environmental details have improved dramatically over time. The offshore industry deserves recognition for their efforts in that regard.

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