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Archive for July, 2022

since the last US offshore oil and gas lease sale. As a result…

  • the number of active leases has fallen below 2000 (1987 as of July 1, 2022) for the first time in at least 40 years
  • 99.4% of the US OCS is closed to exploration
  • exploration opportunities continue to dwindle negatively affecting reserves (more on this in an upcoming post)

Of the 1.7 billion acres on the US OCS, 10.6 million are currently open to exploration and development.

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SEE MONSTER is due to arrive by sea into Weston-super-Mare on Tuesday, 12 July. The transformation of this decommissioned North Sea offshore platform is a world first that is set to become one of the UK’s largest public art installations, aiming to inspire global conversations about the repurposing of large industrial structures and design-led solutions to sustainable futures.

Learn more about See Monster. Were they inspired by our Rigs-to-Reefs +++ page? 😀

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Like offshore platforms, BOE readers are useful long after “retirement”😁

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April production increased from March by 72,000 BOPD to 1.763 million BOPD. The increase is associated, at least in part, with Murphy’s King’s Quay field which began producing in early April. 2022 GoM production remains below the levels reached in the first 7 months (pre-Hurricane Ida) of 2021, and is well below BOEM’s forecasted 2022 production rate of 1892 MBOPD. Perhaps BOEM was assuming earlier startup dates for other projects that will begin production later this year or next year. The 2022 YTD dip in production points to the importance of sustained exploration and development.

BOEM’s short-term production forecast is considerably more optimistic than EIA’s. This optimistic forecast, along with unrealistic expectations regarding the “energy transition” are reasons for proposing so few lease sales in the new 5 year leasing program. The logic for this minimalist leasing program seems to be that future production is neither necessary nor desirable. Indeed the program implies that the long-term nature of offshore production is a liability and is justification for limiting OCS oil and gas leasing:

BOEM’s short-term (20-year) production forecast for existing leases shows steady growth from 2022 through 2024 and declining thereafter (see Section 5.2.1). The long-term nature of OCS oil and gas development, such that production on a lease can continue for decades makes consideration of future climate pathways relevant to the Secretary’s determinations with respect to how the OCS leasing program best meets the Nation’s energy needs.

5 Year Leasing Program, p.3

Basing leasing decisions on “future climate pathways” would seem to be a considerable stretch of the Secretary’s authority under the OCS Lands Act and may be inconsistent with the recent SCOTUS decision in West Virginia vs. EPA. A strategic shutdown of the offshore oil and gas program would dramatically increase energy supply and security risks going forward, and should be authorized by Congress.

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Piper Alpha Memorial Garden, Aberdeen, Scotland
Scottish Hazards

In terms of the total number of fatalities, the Piper Alpha fire was the worst disaster in the history of offshore oil and gas operations and sent shock waves around the world. Eight months later another interactive pipeline-platform fire killed 7 workers at the South Pass 60 “B” facility in the Gulf of Mexico. A US Minerals Management Service task group reviewed the investigation reports for both fires and recommended regulatory changes with regard to:

  1. the identification and notification procedures for out-of-service safety devices and systems,
  2. location and protection of pipeline risers,
  3. diesel and helicopter fuel storage areas and tanks,
  4. approval of pipeline repairs, and
  5. location of ESD valves on pipelines.

Paul Schneider and I wrote a paper on the task group’s findings and that paper was published in Offshore Operations Post Piper Alpha (Institute of Marine Engineers,1991). The proposed regulations that followed summarized these findings and can be be found at this Federal Register link.

Lord Cullen’s comprehensive inquiry into the Piper Alpha tragedy challenged traditional thinking about regulation and how safety objectives could best be achieved, and was perhaps the most important report in the history of offshore oil and gas operations. Per Cullen:

Many current safety regulations are unduly restrictive because they impose solutions rather than objectives. They also are out of date in relation to technological advances. Guidance notes lend themselves to interpretations that discourage alternatives. There is a danger that compliance takes precedence over wider safety considerations and that sound innovations are discouraged.

Cullen advocated management systems that describe the safety objectives, the system by which those objectives were to be achieved, the performance standards to be met, and the means by which adherence to those standards was to be monitored. He called for safety cases that describe major hazards on an installation and provide appropriate safety measures. Per Cullen, each operator should be required in the safety case to demonstrate that the safety management systems of the company and the installation are adequate to assure that design and operation of the platform and its equipment are safe.

Links for the full Piper Alpha Inquiry: volume 1 and volume 2

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“Norwegian offshore oil and gas workers went on strike Tuesday. The stoppage could reduce the country’s gas output by almost a quarter and intensify supply chain shortages due to Russian gas boycotts by EU nations.” 

dw.com

I couldn’t find any data on the typical length of these strikes, but my recollection is that they are usually rather brief.

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EIA

Yet the proposed 5 Year OCS leasing program (p. 3) tells us that long term offshore production is not needed because the IEA’s “roadmap to net-zero emissions by 2050 for the global energy sector would require no new investment in fossil fuel supply projects (IEA 2021).”

Does the IEA dictate US energy policy? Dan Yergin has a far better grasp on the realities of energy consumption and transitions.

Oil, discovered in 1859, did not surpass coal as the world’s primary energy source until the 1960s, yet today the world uses almost three times as much coal as it did in the ’60s.

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Perdido, Gulf of Mexico

Special thanks to the offshore workers who help provide the energy needed for a free and independent society.

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IDF photo

Haaretz article

Background information

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The April oil production figure for the Gulf of Mexico has thus not yet been released.

These ongoing issues must be rather embarrassing for a data driven agency.

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