Federal Environment Minister Steven Guilbeault formally approved the Bay du Nord offshore oil megaproject Wednesday, making a decision that will infuriate environmentalists but boost the Newfoundland and Labrador economy.
CBC News
Archive for April, 2022
Good news for Newfoundland – Bay du Nord project approved
Posted in Canada, Offshore Energy - General, tagged Bay du Nord, Canada, Equinor, FPSO, Newfoundland on April 6, 2022| Leave a Comment »
Another important advance from the MMS/BSEE Spill Response Research Program
Posted in Offshore Energy - General, oil spill response, tagged atomizer burner, BSEE, Environment Canada, in situ burn, MMS, NIST, NRL, oil spill response on April 6, 2022| Leave a Comment »
MMS, the National Institute of Standards and Technology, and Environment Canada were leaders in developing and testing in situ burn spill response capabilities in the 1990’s. Tests at the MMS (now BSEE) Ohmsett facility and at sea offshore Newfoundland demonstrated this important spill response option.
BSEE has continued to advance the MMS spill response research program, and recently announced an exciting enhancement to in situ burn capabilities. BSEE and the Naval Research Laboratory invented a low-emissions atomizer burner designed to cleanly and quickly burn spilled oil, even after oil has been emulsified with water. See the video below.
The atomizer works by converting a stream of liquid, in this case, neat or emulsified crude oil, into a fine spray. The combustible spray is then able to completely burn without the plume of black smoke or residue, leaving the area safer for people, wildlife, and the environment. The burner interfaces with off-the-shelf pumps and air compressor equipment, so the collected fuel can be pumped to the burner. It can be mounted on a floating platform to stand freely in the water and has been successfully tested on waves.
NRL
Gulf of Mexico exploration slump continues through the first quarter of 2022
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged exploratory drilling, Gulf of Mexico exploration slump, well starts on April 5, 2022| Leave a Comment »
With regard to shelf drilling activity (<1000′ water depth), a total of 55 wells were started in 2021 and 2022 (first quarter). Only 2 of these wells, both by Walter Oil and Gas, were classified as exploratory. The most active drillers (by far) were Arena Offshore (30 well starts) and Cantium LLC (16 well starts). Ankor, EnVen, and Talos were the only other operators with drilling activity.
Reasons for concern:
- Absence of new discoveries
- Reduction in spare OPEC capacity
- Leasing inaction
- Financing issues
- Over-reliance on shale
- US Atlantic, Pacific, and Eastern Gulf of Mexico are closed to exploration despite high potential
500 days
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, Russia, tagged 500 days since the last offshore lease sale, Lease Sale 257, offshore oil and gas, Senator Kelly, Senator Manchin on April 4, 2022| Leave a Comment »
500 days (and counting) since the last US offshore oil and gas lease sale. Abbreviated chronology:
- 11/18/2020 – BOEM holds Gulf of Mexico oil and gas lease sale 256 (listing of all offshore oil and gas leases sales); WTI = $41.64/bbl
- 1/27/2021 – President Biden issues EO 14008 which pauses all oil and gas leasing on Federal lands, onshore and offshore; WTI = $52.81/bbl
- 6/15/2021 – Federal court in the Western District of Louisiana issues a preliminary injunction blocking the administration’s leasing moratorium
- 7/1/2021: WTI price reaches 75.23/bbl
- 8/11/2021 – White House urges OPEC to increase oil production.
- 8/16/2021 – The administration appeals the Louisiana Federal court injunction that blocked the leasing pause
- 8/31/2021 – BOEM issues Record of Decision (ROD) to proceed with Sale 257 Concurrently, a suit is filed in DC Federal Court to block the sale. WTI= $68.43/bbl
- 9/30/2021 – BOEM announces Lease Sale 257 as necessary to comply with the order of the Louisiana Federal Court. DOI will “continue its comprehensive review of the deficiencies associated with its offshore and onshore oil and gas leasing programs.”
- Oct/Nov 2021 – Media coverage sensationalizes Sale 257, a typical GoM lease sale, by focusing on the sale area, of which the area receiving bids is just a small fraction.
- 11/15/2021 – Press Secretary Psaki: “We believe the (Louisiana court) 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.” WTI = $80.85/bbl
- 11/17/2021: Sale 257 bids opened and announced despite pending litigation. In a surprising twist, Exxon was the sole bidder on 94 carbon sequestration tracts offshore Texas. Neither the Notice of Sale nor the environmental review announced or assessed carbon sequestration operations in Federal offshore waters. BOEM/DOI have not commented publicly on the CCS bidding.
- 11/26/2021: DOI issues report on the Federal Oil and Gas Leasing Program. With regard to the offshore program, the report is rather moderate in tone and no new deficiencies are identified.
- 1/27/2022: Judge Contreras, DC Federal Court, vacates Sale 257. The Judge agreed with the plaintiffs’ assertion that BOEM failed to consider the effect that reduced production (and thus higher prices) would have on foreign consumption and the associated GHG emissions. The judge not only decided in favor of the plaintiffs, but ruled that BOEM’s omission was so serious that the lease sale had to be vacated. The judge reached this decision even though (1) the five year leasing plan expires in June leaving the timing of any future sale very much in doubt and (2) all of the sale 257 bids, which are based on proprietary assessments, are now public information, thus compromising the integrity of the leasing process at the next sale (if and when that occurs). WTI= $87.61/bbl
- 2/8/2022: API and the State of Louisiana appeal the Sale 257 decision.
- 2/24/2022: Russia invades Ukraine
- 2/28/2022: The Administration announces that it will not appeal the Sale 257 decision. WTI = $96.13
- 3/8/2022: WTI peaks at $123.70/bbl
- 3/30/2022: EIAP Report for API and NOIA estimates economic impacts from leasing program delays noting: In most cases, additional leases are required to produce an existing field fully or to underpin the economics of processing and transportation infrastructure. It is thus important for the industry to have continued opportunities to secure leases through a predictable leasing program. (US lease blocks are too small for optimal development in deepwater and frontier areas, increasing the importance of regular lease sales.)
- 3/31/2022: President Biden directs the release of 1 million bbls/day from the Strategic Petroleum Reserve for 6 months, lowering oil prices.
- 3/31/2022: Senators Manchin (D-WV) and Kelly (D-AZ) urge President BIden to develop and implement the new 5 year leasing plan without delay.
- 4/2/2022: 500 days since the last lease sale. WTI = $99.27
LNG projects should give a boost to Gulf of Mexico natural gas production
Posted in energy policy, Gulf of Mexico, natural gas, Offshore Energy - General, tagged Gulf of Mexico LNG, Louisiana, New Fortress Energy on April 3, 2022| Leave a Comment »
New Fortress Energy’s Fast LNG liquefaction solution is particularly interesting.
New Fortress Energy Inc. (NASDAQ: NFE) (together with its affiliates, “NFE”) today announced that it has concurrently filed applications with the U.S. Maritime Administration, the U.S. Coast Guard and U.S. Department of Energy to request all necessary permits and regulatory approvals to site, construct and operate a new offshore LNG liquefaction terminal off the coast of Louisiana (“the Project”) with a capacity of exporting approximately 145 billion cubic feet of natural gas per year, equivalent to approximately 2.8 million tons per annum (MTPA) of LNG.
The Project will be located in federal waters approximately 16 miles off the southeast coast of Grand Isle, Louisiana, and will access abundant U.S. gas supply by leveraging existing infrastructure. Procurement of all long-lead materials is complete and modular assembly of equipment is underway. Subject to the receipt of all required permits and approvals, NFE targets beginning operations in the first quarter of 2023.
businesswire
January GoM oil production held steady at ~1.7 million BOPD
Posted in Gulf of Mexico, Offshore Energy - General, tagged EIA, Gulf of Mexico, oil production on April 1, 2022| Leave a Comment »
Even after full recovery from Hurricane Ida, Gulf of Mexico production remained well below the August 2019 monthly peak of 2.044 million BOPD. Production should trend upward in the near term as the Vito, Anchor, Argos, King’s Quay, and Whale floating production units come online. However, to sustain production near or above 2 million BOPD, exploration activity needs to be stimulated. This will be difficult given the suspension of leasing, and the continuous legal and administrative challenges.
Meanwhile the April 1 rig count held steady at 14.
Fellow Democrats Manchin and Kelly urge President Biden to implement 5 year program “without delay”
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, Gulf of Mexico, Senator Kelly, Senator Manchin on April 1, 2022| Leave a Comment »
The current 5 year leasing program expires on June 30, 2022. Absent a new program, no lease sales may be held.
We are writing to urge you to develop and implement a new Five-Year Program for oil and gas production in the Gulf of Mexico without delay.
SPR Withdrawal and the US offshore oil and gas program
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged Gulf of Mexico, offshore oil and gas, SPR release on April 1, 2022| Leave a Comment »
In addition to the obvious concerns about depleting the strategic petroleum reserve, further mortgaging our economic future, and increasing national security risks, the directive to withdrawal 1 million BOPD from the Strategic Petroleum Reserve for 6 months raises a few comments specific to US offshore production:
- The 1 million BOPD withdrawal is equivalent to ~60% of the daily production from the entire Gulf of Mexico offshore sector. How will this massive 6-month withdrawal will effect regional markets and logistics?
- Will the Dept. of Energy have to assess the GHG effects associated with their withdrawal of oil from the SPR? More specifically, will DOE be required to assess the increase in GHG emissions as a result of the increased foreign oil consumption that will result from the reduction in oil prices? This is what Judge Contreras ordered BOEM to do when he vacated Gulf of Mexico sale 257.
- If it’s okay to produce and consume oil from the SPR facilities (mapped below), why is new leasing and exploration being constrained in the adjacent Gulf of Mexico?
Bud's Offshore Energy (BOE) 