Archive for 2022
On Memorial Day weekend, I’m re-posting this 2010 BOE tribute to the Coast Guard
Posted in accidents, hurricanes, Offshore Energy - General, tagged Coast Guard, macondo, Memorial Day on May 28, 2022| Leave a Comment »
Will the Manchin – Schumer talks lead to a timely resumption of offshore oil and gas leasing?
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged leasing, Manchin, offshore oil and gas, Schumer on May 27, 2022| Leave a Comment »
There won’t be a deal without significant energy production provisions and Manchin is on the record regarding the need for action on offshore oil and gas leasing. We’ll see what happens.
Energy at the End of the World Seminar – Peter Zeihan
Posted in energy policy, Russia, tagged international energy, Peter Zeihan, Ukraine on May 26, 2022| Leave a Comment »
Dr. Malcolm Sharples, a leading offshore engineer for many years, forwarded this interesting presentation by Peter Zeihan. It’s long (2.5 hours) but you can watch in chunks or jump around based on your particular interests.
I was surprised by Peter’s firm prediction that a US oil export ban was coming soon, but now I see that such a ban is actually being considered. This excellent assessment by the Federal Reserve Bank of Dallas explains why a ban on crude exports would not lower gasoline prices, but would reduce domestic exploration and production, increase the trade deficit, and increase US dependency on crude oil imports. Offshore projects, which require massive capital investment, could be particularly hard hit. Unfortunately, an oil export ban would be such a bad decision that it might actually happen.
HSBC exec suspended for questioning climate hysteria
Posted in climate, energy policy, tagged climate, HSBC, Stuart KIrk on May 26, 2022| Leave a Comment »
His speech began with a slide declaring that “unsubstantiated, shrill, partisan, self-serving, apocalyptic warnings are ALWAYS wrong.” Stuart Kirk, HSBC
Financial Times
Here is the presentation that caused the furor:
Sadly, any oil industry exec who dared to publicly question climate orthodoxy would face a similar or worse fate.
I do like this very sensible quote:
A former Blackrock executive focused on sustainable investment said Kirk’s remarks had “done us a service” in discussions on climate change risk by “infusing a dose of honesty into a debate that is otherwise leading us nowhere,”
NY Post
FOGCO revisited
Posted in energy policy, Guyana, Offshore Energy - General, tagged deepwater production, FOGCO, Guyana, Marcellus, national oil company on May 25, 2022| Leave a Comment »
Guyana’s pending decision regarding the formation of a national oil company brings back memories of unsuccessful attempts to do the same in the US in the 1970s.
The most serious attempt at forming a national oil company in the US was a 1975 Senate bill to establish the Federal Oil and Gas Corporation or FOGCO. (Oddly, the bill’s sponsors weren’t troubled by that acronym.) FOGCO was proposed at a time when natural gas supplies didn’t satisfy demand, and that was the primary impetus behind the legislation. (Supply issues went away when price controls were lifted.)
Concerns about a FOGCO then and now:
- The political pressures under which a national oil company operates are not conducive to sound, expeditious decisionmaking. (Unfortunately, some current industry execs seem overly responsive to pressure from governments and activist organizations, which is not always in the best interest of the company and its shareholders).
- Would limit competition and private investment.
- Would delay or prevent innovation:
- The shale revolution was driven by nimble private companies operating on private land in supportive states. Why is there Marcellus shale development in PA, WV, and OH, and none in NY? (Hint: It’s not the absence of resources.) Why could the US shale experience not be replicated in Europe?
- Innovative deepwater development projects were driven by private companies and the supportive public policies of the 1990s.
- A national oil company could be the first step in the process of nationalizing the petroleum industry.
Guyana is far different from the US and should do what is perceived to be in their best interest. Best wishes to the people of Guyana as they weight their options.
Stupid use or stupid comment?
Posted in climate, energy policy, natural gas, Russia, tagged CCS, Enel, natural gas on May 24, 2022| Leave a Comment »
I vote for stupid comment.
The CEO of Italian power firm Enel has cast doubt on the continued benefit of using gas to produce electricity, telling CNBC it is “stupid” and that cheaper and better alternatives are now available.
“You can produce electricity better, cheaper, without using gas … Gas is a precious molecule and you should leave it for … applications where that is needed,” he added.
Francesco Starace to CNBC
Gas is scarce and expensive in Europe because of bad foreign and energy policy decisions, most notably dependence on Russia and unrealistic expectations regarding renewables. Mr. Starace seems intent on doubling down on the latter. Of course, Enel is a large renewable energy generator and a natural gas purchaser and consumer (not a producer). His comments are thus rather self-serving.
I do agree with Enel on CCS:
Although the company could rely on carbon offsets or carbon capture to hit that target, Bernabei said the technology has failed to take off, despite receiving funding from the EU and national governments. He said there is no reason to expect that situation to change, especially since carbon capture and storage, or CCS, technology is not guaranteed to eliminate 100% of emissions.
“These are very big and complex projects. And at the end, they will not solve the problem,” Bernabei said. “We already tried CCS in the past and it didn’t lead to success. So why do it again?”
SPGlobal
Good investigation report from Alaska
Posted in Alaska, drilling, tagged Alaska, Alpine field, AOGCC, ConocoPhillips, gas release on May 24, 2022| Leave a Comment »
In March, a gas release incident occurred while drilling a disposal well in the Alpine field on the North Slope of Alaska. While there were no injuries or environmental impacts, the investigation and findings will help minimize well construction risks during future operations. The report is attached.
Some comments:
- I like the way the report, related information, and all situation reports were posted in a timely manner on the Alaska Oil and Gas Conservation Commission (AOGCC) homepage. It’s refreshing that the AOGCC homepage is 100% substantive and completely devoid of the spin and propaganda you find on most government and corporate websites. (For comparison purposes, check out the Department of Energy and Department of the Interior homepages.)
- The ConocoPhillips (CP) incident report is concise, logically organized, and clearly written.
- The findings are consistent with the data, and the supporting figures are legible and understandable.
- Instead of blaming the crew or using the “human error” cop out for the leak-off test execution and subsequent monitoring issues, the report rightfully attributes those failures to company procedures and communications. This reflects well on CP’s understanding of the human and organizational factors that contribute to safety performance, and CP/AOGCC efforts to foster a strong safety culture. (Remember the shameful prosecution of well site leaders Bob Kaluza and Don Vidrine following the Macondo blowout.)
Lithium shortage? Petroleum engineers to the rescue!
Posted in climate, drilling, energy, tagged Kyung Jae Lee, lithium, Marcellus Shale, Pennsylvania, Petroleum Engineer, University of Houston on May 23, 2022| Leave a Comment »
Through her research of Pennsylvania’s Marcellus Shale play, Lee found that highly concentrated lithium was found in the produced water (water produced as a byproduct during the extraction of oil and natural gas) along with produced natural gas and oil.
“We found lithium in the petroleum-based rock brines, which opens new pathways to address the shale plays as a substantial source of lithium, given that they are ubiquitous in the U.S.,” Lee said.
University of Houston
Coming to the Gulf of Mexico to work for BOE (the E&P company, not the blog 😀)
Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged atlas, Beacon, Blackstone, BOE, titan, transocean on May 23, 2022| Leave a Comment »
The drilling business, particularly the deepwater sector, has never been for the faint of heart, and the past few years have included the added stresses of COVID, negative oil prices, anemic exploration activity, and offshore leasing “pauses.” Transocean nonetheless managed to build two 8th generation drillships, the Deepwater Atlas and Titan, both of which are slated to operate in the Gulf of Mexico.
The Atlas will begin drilling for Beacon Offshore Energy (unrelated to the BOE blog 😀) in the Shenandoah field (almost heaven?😀) later this year. The Titan is expected to begin drilling for Chevron next year. The rigs will be outfitted with 20,000 psi blowout prevention equipment and will be well-equipped for the growing number of high pressure prospects in the Gulf. Here is Transocean’s promotional video for the two rigs.
Both Beacon and Chevron fared well on our Gulf of Mexico scorecard. A bit of information about Beacon (BOE):
- Wholly owned by funds managed by Blackstone Energy Partners.
- CEO Scott Gutterman was previously the CEO of LLOG.
- There are a number of related investment partnerships under the Beacon umbrella and they are often joint lease owners.
- Per BOEM data, BOE has interest in 11 Gulf of Mexico leases.
- The company has an excellent compliance record: 12 facility inspections (presumably all were drilling units) resulted in only 1 INC (violation).
- Per BSEE, Beacon had 22 well starts since 2008. (Mystery: While the Blackstone and Beacon websites indicate that the company was formed in 2016, BSEE’s online borehole file shows 10 well starts prior to that year with the exact same company name. Presumably, the borehole file data are in error because BOEM data do not show any Beacon lease interest prior to 2018.)
- Beacon bid on one tract in Lease Sale 257 (Nov. 2021) and was the sole bidder (sale was voided by DC Federal Court).
- Beacon bid on 3 tracts in Sale 256 (Nov. 2020) and was the high bidder on one.
- Beacon acquired interest in 2 leases in Sale 254 (March 2020), 7 in Sale 252 (March 2019), and 2 in Sale 251 (Aug. 2018)
- In February 2022, Blackstone reportedly advised clients that they would no longer invest in oil and gas projects. Presumably, that doesn’t affect the Beacon operations (or perhaps the folks at Blackstone have come to their senses 😀).
California says YES to offshore drilling…
Posted in California, energy policy, Offshore Energy - General, tagged Andrew Meredith, California, offshore drilling, Rock Zierman, SB953 on May 21, 2022| Leave a Comment »
Not really, but current economic and energy security realities doomed a bill to prohibit drilling and production in State waters. Strong quotes from bill opponents:
“SB 953 was held because it didn’t work — it was going to cost the state billions of dollars for a symbolic victory,” Andrew Meredith, president of the State Building and Construction Trades Council of California, said in a statement. “The California Senate is rightfully more concerned with actually improving the plight of workers and our environment than chasing headlines.”
Politico
“I think most legislators understand that every barrel of oil we don’t produce here under our strict environmental rules must be imported by foreign tankers floating offshore in our crowded ports from Iraq, Saudi Arabia, or the Ecuadorian rainforest,” California Independent Petroleum Association CEO Rock Zierman said in a text message.
Politico
Bud's Offshore Energy (BOE) 