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Archive for the ‘Alaska’ Category

Energy related Executive Orders

Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, Offshore Wind, Regulation, tagged , , , , , , , , , on January 21, 2025| 1 Comment »

Withdrawal from the Paris Climate Change Agreement:The US Ambassador to the UN shall immediately submit formal written notification of the US withdrawal from the Paris Agreement under the United Nations Framework Convention on Climate Change. 

Regulatory Freeze: Agencies may not propose or issue a rule until approved by a Presidential appointee. OMB may exempt emergency or urgent rules (déjà vu for regulators 😉).

Alaska: Withdraws a Secretarial Order intended to halt ANWR oil and gas leasing. Rescinds cancellation of ANWR leases.

Gulf of America: Renaming the Gulf of Mexico.

Unleashing American Energy (long, main items highlighted below):

  • Encourage energy exploration and production on Federal lands and waters, including on the Outer Continental Shelf.
  • Eliminate the electric vehicle (EV) mandate.
  • Requires immediate review of actions that could burden the development of energy resources.
  • Develop and begin implementing action plans to suspend, revise, or rescind all unduly burdensome agency actions.
  • Revoke climate change and “clean energy” EOs.
  • Terminate all activities, programs, and operations associated with the American Climate Corps (RIP 😉).
  • Expedite and simplify permitting processes.
  • Facilitate the permitting and construction of interstate energy transportation and other critical energy infrastructure, including pipelines.
  • Disband the Interagency Working Group on the Social Cost of Greenhouse Gases.
  • Terminate the Green New Deal.  All agencies must immediately pause the disbursement of funds appropriated through the Inflation Reduction Act of 2022 (Public Law 117-169) or the Infrastructure Investment and Jobs Act (Public Law 117-58).
  • The Secretary of Energy is directed to restart reviews of applications for LNG export projects as expeditiously as possible.

Offshore Wind

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President Biden’s offshore leasing ban dwarfs all other Sec. 12(a) withdrawals. It may be difficult to reverse.

Posted in Alaska, California, decommissioning, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , on January 7, 2025| Leave a Comment »

As expected, the White House announced the largest ever permanent ban on offshore oil and gas leasing in the US, and to the best of my knowledge, anywhere in the world.

The sheer magnitude of the ban makes other such withdrawals appear modest by comparison. It’s amazing how bold Presidents (and their handlers) become when they are about to leave office.

The permanent ban includes:

  • The entire Atlantic Outer Continental Shelf (OCS): While there are no current oil and gas leases in the US Atlantic, the region is highly prospective and could contain more than 20 billion barrels of oil equivalent (BOE).
  • The Eastern Gulf of Mexico: This is the OCS area that many petroleum geologists find most attractive. The best prospects are >100 miles from shore which minimizes coastal risks, and the high natural gas potential aligns with Florida legislation supporting the use of gas for power generation.
  • The entire Pacific OCS: While the resources are substantial, their loss has been a foregone conclusion for 25 years. When you can’t even decommission old platforms or restore production on important existing facilities (i.e. the Santa Ynez Unit), how can you possibly expect to issue new leases?
  • The remainder of the OCS offshore western Alaska. The wishes of the majority of Alaskans, who support offshore exploration and development, have been largely ignored for decades.

President-elect Trump has vowed to reverse President Biden’s leasing ban, but that may not be so easy. This is not a matter of simply reversing an executive order. Sec. 12(a) of OCSLA grants the authority to withdraw lands to the President and does not provide for reversal by future Presidents. The attached NYU Law brief concludes that “a subsequent president lacks authority to restore previously withdrawn lands to the federal oil and gas leasing inventory.”

The new Administration will no doubt have a different view than that expressed in the NYU Law brief, but any reversal decision will likely be challenged in court.

Those who wrote and approved Sec. 12(a) should have had more foresight. However, 72 years ago the authors presumably thought Presidents would only use the authority to remove small, especially sensitive areas from leasing consideration, and never thought that a President would remove both of our oceans and much of the Gulf of Mexico!

Congress could of course reverse the Biden bans, but given the complexity of offshore energy issues, such legislation may be difficult to pass.

Leske-FINALDownload

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The next Guyana? “String of Pearls” offshore Jamaica?

Posted in Alaska, Guyana, Jamaica, Offshore Energy - General, tagged , , , on July 31, 2024| Leave a Comment »

United Oil and Gas excels at promotion and isn’t shy about making bold statements. Can they find a strong partner and move their Jamaican exploration program forward?

The term “string of pearls” was used about 30 years ago to describe discoveries in the Beaufort Sea and on adjacent Alaska lands. Although they were modest individually (by Arctic standards), the sense was that these discoveries would collectively support sustained production in the region. While there has been some success in that regard, the optimistic expectations have not been realized.

Below is a recent United Oil & Gas presentation to prospective investors. Previous Jamaica posts.

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The opinions of State and local govts and tribes are fully considered ….

Posted in Alaska, energy policy, Regulation, tagged , , , , , , on July 11, 2024| 3 Comments »

….as long as they are aligned with the preordained political decision. 😠

No where has this been more apparent over the years than in Alaska. Most recently, the North Slope Borough filed suit to challenge the Bureau of Land Management (BLM) rule making the National Petroleum Reserve in Alaska (NPR-A) off limits to oil and gas development.

Mayor Josiah Patkotak of the North Slope Borough

“The rule would significantly and irrevocably harm the North Slope’s right to self-determination and ability to provide essential services for residents. This suit is filed alongside the complaints of the Voice of the Arctic Inupiat and the State of Alaska, demonstrating the unity of North Slope communities and Alaskans in opposing the BLM’s unjust and unilateral action to harm the livelihoods of the residents of the North Slope,” the borough explained in a press statement.

“When I was sworn in as Mayor of the North Slope Borough, I made a solemn promise to protect and provide essential services for the people of the North Slope Borough. The BLM claims to act on our behalf but what they are truly doing is undermining my ability to fulfill that fiduciary obligation,” said Mayor Josiah Patkotak. “We on the North Slope don’t have the luxury of keeping quiet and waiting for a new industry to swoop in and replace our largest economic driver. We have to speak up for our future as a people.”

Other important points raised in the Must Read Alaska article:

  • NPR-A is entirely within the boundaries of the North Slope Borough (NSB).
  • The NSB represents the ancestral homelands of the Inupiat people.
  • The NSB is the largest employer in the region and provides the majority of essential services depended upon by residents.
  • Taxes on infrastructure account for 95% of the Borough’s revenue.
  • Members of the North Slope Inupiat Tribes, Village Corporations, Regional Corporations, and their elected leaders have been unanimous in their opposition to the rule.
  • The Supreme Court’s decision in Loper, which removed the Chevron Deference, restricts the authority of Federal agencies to take regulatory actions without clear legislative authority.
  • The State of Alaska also filed a lawsuit claiming that the Fed govt had not consulted with affected parties, and that the BLM had exceeded its congressional authorization.

This should be an easy win for Alaska and the NSB.

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Senator Sullivan (AK) could have just as easily been talking about the Gulf of Mexico

Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , on April 26, 2024| Leave a Comment »

After the announcement of further restrictions on resource development in the National Petroleum Reserve of Alaska (NPR-A), Senator Sullivan (AK) called on the administration to stop sanctioning Alaska and to instead restore sanctions on Iran. 

The US OCS is being similarly sanctioned by its own government. The 5 year OCS “leasing plan” not only excludes all areas except the Gulf of Mexico, but authorizes a maximum of only 3 sales, the fewest ever for a 5 year program. The number of sales may well have been zero were it not for the requirement to hold an oil and gas sale during the year prior to the issuance of a lease for wind development.

2024–2029 Proposed Final Program Lease Sale Schedule
CountSale NumberSale YearOCS Region and Program Area
12622025Gulf of Mexico:  GOM Program Area
22632027Gulf of Mexico:  GOM Program Area
32642029Gulf of Mexico:  GOM Program Area
Most limited 5 year leasing program in history

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US OCS compliance data for 2022 and 2023

Posted in Alaska, California, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , on February 5, 2024| Leave a Comment »

The 2023 Safety Honor Roll list will be posted tomorrow.

As background information, below is a summary of compliance data for 2022 and 2023.

The performance of Fieldwood and Cox skewed the 2022 and 2023 data. In 2022, Fieldwood was issued 448 INCs, 26% of the Gulf of Mexico total. In 2023, Cox was by far the leading violator with 718 INCs, 39% of the GoM total (780/43% when Cox affiliates are included). These data point to the importance of considering safety and compliance in approving lease assignments and making supplemental bonding determinations.

20222023
facility inspections33093100
inspection types1085610341
W INCs8091050
CSI INCs530600
FSI INCs376180
total INCs17151830
INCs/facility inspection0.520.59
INCs/inspection type0.160.18
Pacific facility inspections280300
Pacific inspection types802744
Pacific W INCs2211
Pacific CSI INCs1314
Pacific FSI10
Pacific total INCs3625
Pacific INCs/facility inspection0.130.08
Pacific INCS/inspection type0.040.03
Alaska facility inspections85
Alaska inspection types3722
Alaska W INCs01
Alaska CSI INCs01
Alaska FSI INCs00
Alaska INCs total02
Alaska INCs/facility inspection00.4
Alaska INCS/inspection type00.09
INC=incident of noncompliance, W=warning, CSI=component shut-in, FSI=facility shut-in.
No Alaska facilities are located on the Federal OCS. One Alaska facility, Hilcorp’s Northstar island, has wells that are completed on the OCS; hence the limited BSEE inspections.

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15,537 comments on a nerdy bid adequacy rule…

Posted in Alaska, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , , , , on January 24, 2024| Leave a Comment »

15,531 of the 15,537 comments on the bid adequacy rule were from a single organization, Friends of the Earth. I have no problem with the Friends of the Earth campaign given that their comment letter is pertinent to the topic. Their main point is that the bid adequacy process fails “to factor in the climate and social costs of continued Outer Continental Shelf oil and gas lease sales into the bid process.” Although that may be a reasonable position, those issues are addressed in the programmatic and sale specific environmental reviews which factor into when and where sales are held, tract exclusions, special lease stipulations, and the comprehensive operating regulations. Once bids are submitted, the issue (and the sole purpose of the bid adequacy rule) is whether those bids represent fair market value for the oil and gas resource potential of the leases being offered.

Given that 96.3% of the US OCS is off-limits to oil and gas leasing, only 0.7% is currently open to exploration, and the new 5 year plan includes the fewest lease sales in OCS program history, it’s rather a stretch to argue that environmental concerns are not being prioritized.

The State of Alaska submitted very good comments (attached) that point to the historical differences in Gulf of Mexico and Alaska leasing. The State argues that a simpler approach to determining fair market value would encourage exploration and development on offshore lands that have seen little of either in recent years. Knowing BOEM’s expectations prior to the sale, perhaps through higher minimum bid requirements, would ensure that companies do not underbid and that tracts are successfully leased.

The Gulf of Mexico leasing program of today is looking more like the frontier area leasing of the past. As previously noted, the uncertainty regarding future sales changes the historic GoM leasing dynamic. The next opportunity for purchasing unleased GoM tracts is now a troubling unknown. This would seem to make it less prudent to reject bids based on uncertain prospect evaluations. Absent leasing and exploration, the true resource and revenue potential will never be known.

It was good to see the strong comments submitted by my former Minerals Management Service colleagues Dr. Marshall Rose and Ted Tupper. Marshall, who was our Chief Economist, commented that the proposed rule did not identify the problem and explain how the rule addressed that problem. Ted, a senior statistician, points to past failures of the bid adequacy process and proposes specific changes. It’s great to see the passion that our retired employees have for the program they were so instrumental in developing and managing.

The rule was finalized without any substantive changes.

boem-2023-0008-0005_attachment_1Download

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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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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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Lease sale 257 challenges finally over?

Posted in Alaska, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on May 5, 2023| Leave a Comment »

That would appear to be the case now that the US Court of Appeals for DC dismissed litigation challenging the sale.

Meanwhile, challenges to Cook Inlet Sale 258 (humble as it was with only one bid) and GoM Sale 259 continue. It’s a great country (if you like endless litigation)!

In addition to Lease Sale 257, the IRA also required Interior to offer three other lease sales in Alaska and the Gulf that it previously declined to hold. Lease Sale 258, in Alaska’s Cook Inlet, was held in December but received only one bid. Earthjustice is challenging that sale. Earthjustice is also challenging Lease Sale 259, in the Gulf of Mexico, which was held in March. Lease Sale 261, also in the Gulf, will be held by September of this year. 

EarthJustice

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