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Archive for October, 2023

Exxon’s acquisition of Pioneer is impressive, but their business strategy seems a bit hypocritical

Posted in climate, energy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , on October 12, 2023| 2 Comments »

Impressive acquisition:

Hypocrisy?

  • Exxon is clearly intent on maximizing production in the Permian. This makes good business sense and is good for the US economy.
  • Contradictorily, Exxon intends to establish a CO2 disposal business (“carbon sequestration”) in the Gulf of Mexico. Is their goal to profit from emissions resulting from the consumption of the production that they are maximizing?
  • If Exxon believes the consumption of oil and gas is harmful to society, as suggested by their CO2 disposal plans, perhaps they should be curtailing their oil and gas production business rather than expanding it.
  • Deepwater Gulf of Mexico production, which Exxon has shunned, has much lower carbon intensity than Permian production, but Exxon’s sole GoM interest is CO2 disposal. Shouldn’t a company that is intent on reducing upstream GHG emissions be active in the leading offshore region in that regard, the region that is adjacent to their world headquarters?

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How NOT to manage our oil and gas leasing program

Posted in Alaska, climate, energy policy, Florida, Gulf of Mexico, Offshore Energy - General, tagged , , on October 11, 2023| 1 Comment »

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Important reports and comments on the Rice’s whale restrictions in the Gulf of Mexico

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on October 10, 2023| Leave a Comment »

API’s comments on the Rice’s whale restrictions include a balanced assessment by Darren Ireland (begins on p. 22), a respected marine mammal scientist, and a good analysis of the economic impacts by EIAP.

Darren Ireland concludes (emphasis added):

“The proposed critical habitat has been deemed, by NMFS, to have the essential physical and biological features needed for the Rice’s whale to feed, breed, and reproduce. However, direct evidence for what oceanographic features within the 100-400 m isobath band identified by NMFS are required to sustain the Rice’s whale is lacking, and the extent of those truly important features elsewhere in the GOMx is uncertain and may not reach into the central or northwestern GOMx as predicted by the habitat based density model (Garrison et al. 2023). Even though there is evidence to support the possible occurrence of Rice’s whale near the FGBNMS in the northwestern GOMx, there are no data that show this area is being used to support important life history functions such as breeding, feeding, or migrating. Additionally, the sightings and acoustic detections that have been recorded there are much less frequent than those recorded for Rice’s whale in the core habitat in the northeastern GOMx. Based on the limited data available on the use and occurrence of Rice’s whale in the central and northwestern GOMx (one acoustic study (Soldevilla et al. 2022b), one confirmed sighting (NMFS 2018a) and a few unconfirmed sightings (Rosel et al. 2021)), there is insufficient scientific evidence to determine that essential features for Rice’s whale conservation are indeed present in the central and northwestern GOMx. In fact, data on the life-history requirements of Rice’s whale even in the core habitat are still lacking and need further investigation.“

EIAP’s key findings on the estimated economic impacts from these restrictions are summarized in the table below. Those are very significant costs given the uncertainty of the whale habitat in the central and western GoM.

Separate comments submitted by the Offshore Operators Committee are also quite strong. Their letter is attached.

2023_10_06_ooc_comment_letter_proposed_rule_designation_of_critical_habitat_for_the_rices_whale_finalDownload

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Israel and US offshore gas production are nearly equivalent

Posted in energy policy, Offshore Energy - General, tagged , , , , , on October 9, 2023| Leave a Comment »

Production at Chevron’s Leviathan, a giant offshore gas field

This may come as a surprise to many, but Israel produced 752 billion cubic feet of gas in 2022, which is nearly equivalent to US offshore gas production (788 bcf in 2022).

Chevron is the main operator in Israel, having purchased Noble’s assets in 2020. Absent Noble’s bold and pioneering exploration in the Eastern Mediterranean, Israel would have continued to be an energy importer dependent on coal for power generation.

Presumably, the protection of these offshore assets is a high priority for the Israeli Navy.

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Israel, Gaza, and offshore gas

Posted in energy policy, Offshore Energy - General, tagged , , , on October 9, 2023| Leave a Comment »

In June, Israel gave preliminary approval for the development of a gas field off the Gaza Strip. The Gaza Marine field is 30 km offshore and is estimated to hold more than a trillion cubic feet of gas.

Hamas has affirmed their rights to the resources offshore Gaza.

Prime Minister Netanyahu’s office linked approval to progress on “preserving the State of Israel’s security and diplomatic needs.”

Hopes for developing the Gaza Marine field have presumably been dashed along with the associated economic benefits for the people of Gaza.

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RIP Ed Tennyson – leading oil spill response researcher and innovator

Posted in Canada, energy policy, Offshore Energy - General, tagged , , , , , , , , on October 6, 2023| Leave a Comment »

Ed Tennyson

Edward J. Tennyson passed away last Friday at his Smith Mountain Lake, Virginia home. Ed worked in the Department of the Interior’s offshore program for more than 20 years, and arguably has done more than any single individual to advance oil spill response capabilities. A few of Ed’s many achievements:

  • Ohmsett: EPA operated the Ohmsett spill response test tank in Leonardo, New Jersey, beginning in the early 1970s, but the facility fell into disrepair in the 1980s. Thanks to Ed’s vision and persistence, and the enactment of the Oil Pollution Act of 1990, the Minerals Management Service (MMS) began restoring the facility. Ed led the effort and did everything from operating forklifts to designing upgrades. Senator Frank Lautenberg (NJ) and a host of dignitaries participated in the grand reopening event in 1992. It was an amazing day, and Ohmsett, MMS’s only industrial facility, has exceeded even Ed’s lofty expectations. 
  • Burning oil slicks: Ed and a few of his US and international partners were the first to consider in situ burning as an oil spill response method. After some lab work, Ed proposed larger scale testing at Ohmsett in the presence of ice. The testing was amazingly successful, removing almost all of the oil. When Ed told a leading skeptic about the impressive results, his response was “you didn’t do it right.” 😀 
  • Newfoundland burn: Because research spills were prohibited in US waters, Ed worked with his Canadian partners to conduct an in situ burning test offshore Newfoundland in 1993. Ed was an amazing leader during any kind of field trials, and was always the first person on the dock directing team members to their stations!
  • Remote sensing: Ed’s research led to a patent on the use of shipborne radar for locating oil slicks. Ed greatly advanced this capability by developing tools for airborne mapping and thickness determinations. As Ed frequently said, “90% of the oil is in 10% of the area.” By identifying where the oil was thickest, you could optimize spill response. (Ed was also an expert at identifying slicks with what he called his mach 20 eyeball 😀).
  • Chemical treatment: Ed was a leader in researching dispersants, herding agents, and other chemical methods for preventing spills from impacting shorelines or other sensitive areas.

Ed was an entertaining and informative speaker and was often called upon to brief congressional panels, and discuss his research at public meetings and professional conferences. He was rightfully a media darling and was often contacted for comments on oil spill response matters. Perhaps his most famous quote was in the Wall Street Journal during the Valdez spill in Prince William Sound. Ed described the spill response as follows: “Like mowing a 40 acre field with a 1/4 inch lawn mower.” 😉

RIP Ed, you made a difference!

Newfoundland Offshore Burn Experiment, 1993

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Odd rig choice for the cover of the leasing program (Part 1)

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on October 5, 2023| Leave a Comment »

That’s the Polar Pioneer, an arctic class rig built in 1985 that last operated in the Chukchi Sea in 2015. The rig was recycled in Aliaga, Turkey in 2020. The US arctic, like 96.3% of US offshore waters, is no longer open to oil and gas leasing, and was not included in the new leasing program.

The Polar Pioneer was once a good rig for sub-arctic operations, but is not at all similar to the modern drilling units that are used on the deepwater Gulf of Mexico leases that now account for 93% of OCS oil production and 76% of the natural gas. With the exception of the GoM shelf, which is laudably being gleaned by independent producers, the deepwater GoM blocks are all that is left of the once robust US offshore leasing program.

Unless the picture of the scrapped drilling rig is intended to be symbolic of the current state of the leasing program, the photo choice implies inattention to significant technical details. The document does not include a single picture of a deepwater drilling unit or production facility.

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Respected Deputy Secretary, Tommy Beaudreau, exits Interior

Posted in Alaska, energy policy, Offshore Energy - General, tagged , , , , , on October 5, 2023| Leave a Comment »

Tommy Beaudreau, an Obama appointee during the turbulent months following the Macondo blowout, has announced that he will be leaving the Department of the Interior (DOI) at the end of the month.

Tommy first served as Senior Advisor in the Bureau of Ocean Energy Management, Regulation, and Enforcement (BOEMRE), a transition bureau in the wake of the blowout, and was later named Director of the Bureau of Ocean Energy Management (BOEM), one of the two new bureaus that were established to manage the offshore program. He subsequently served as DOI Chief of Staff, and was appointed Deputy Secretary in 2021.

Tommy was a strong leader and an energy moderate. He was highly regarded by the rank and file in BOEMRE and BOEM.

The press release announcing his departure is very professional with appropriate quotes from Secretary Haaland and Tommy. No reasons for his resignation are provided. However, given his balanced perspective on energy development, it would not be wildly speculative to suggest that he might have been a bit uncomfortable working in the policy bubble that produced documents like the latest offshore leasing plan.

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Jamaica update – the suspense builds

Posted in Jamaica, Offshore Energy - General, tagged , , , , on October 4, 2023| Leave a Comment »

Per the Jamaica Gleaner:

United Oil and Gas Plc, which holds the right to search for oil offshore Jamaica, gave notice to investors that it would announce a preferred drilling partner in weeks.

The UK-based explorer requires a partner to split the risk for drilling offshore, which it estimates at US$30 million.

United Oil holds oil and gas assets in Egypt, United Kingdom and a high-impact exploration licence in Jamaica. Its net worth, at US$27.7 million, is less than the cost to drill a test well, but its team of professionals are betting on the island.

The Walton-Morant license

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Five year plan: proponents of offshore leasing won the popular vote by a convincing margin

Posted in climate, energy policy, Offshore Energy - General, tagged , , , , on October 4, 2023| Leave a Comment »

BOEM’s five year plan presented one of the few recent opportunities to “vote” solely on the issue of offshore oil and gas leasing. Advocates facilitated the voting process by providing form letters for and against leasing. Both opponents and supporters are quite good at these campaigns, so neither side had a significant organizational advantage.

BOEM summarized (Table A-11 of the plan) the public comments, and I tabulated the 748,719 letters on the attached spreadsheet. The number of letters supporting oil and gas lease sales exceeded those opposed by 72,383 or 21.4%. The supporters campaign also had more breadth in that there were 49 separate campaigns vs. 45 for leasing opponents.

The NRDC demonstrated their organizational clout with the largest single campaign (107,355 letters). Denise Neal, a name that is unfamiliar to me, impressively organized the largest proponent campaign (61,122 letters).

Summary:

  • letters supporting offshore oil and gas leasing: 410,551
  • letters opposing offshore oil and gas leasing: 338,168
  • letter campaigns supporting leasing: 49
  • letter campaigns opposing leasing: 45
  • largest campaign: NRDC – 107,355 letters in opposition (32% of all such letters)
  • largest pro-leasing campaign: Denise Neal – 61,122 letters in support (15% of all letters in support)

Reasons for and against leasing per BOEM Table A-11:

Reasons for supporting lease salesReasons for opposing lease sales
reduce energy costs, farming costs, prices of gasoline and other goodsclimate
jobsenvironmental justice, local communities
energy independencefisheries
intl competitivenessmarine environment
national securitymarine mammals
GoM production is lower in carbon intensity, higher US environmental stds.fossil fuel dependency, unnecessary to meet energy needs, oppose new fossil fuel investments, leasing “would not reduce gas prices”
domestic oil and gas preferable during transitionoil spill risks
help improve supply chainair pollution
help address inflationstockpiling ocean space, energy price gouging

Interesting contradiction: Opponents of Sale 257 argued in Federal Court that BOEM failed to consider the positive GHG effect that higher prices (the logical result of lower production) would have as a result of reduced demand. The judge agreed with that argument and vacated the sale. Some of the same groups have now commented (per the BOEM summary) that additional leasing “would not reduce gas prices.”

leasing-plan-letters-sheet1-1Download

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