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Archive for the ‘California’ Category

Habitat fire may further complicate California offshore decommissioning

Posted in accidents, California, decommissioning, Regulation, tagged , , , , , , , , , on May 14, 2026| 2 Comments »

At a minimum, the fire will further delay and increase the cost of well plugging operations on Platform Habitat. Per BSEE’s borehole file, 17 wells remain to be permanently abandoned, 3 of which have yet to be temporarily abandoned. These wells are 23-44 years old, and have been inactive for 11 years.

If there is significant platform damage, the remediation delays and costs would be substantial, comparable to those associated with major Gulf platforms damaged by hurricanes. Structural damage could increase the urgency of removing the platform. Given California’s decommissioning quagmire, this would be a major challenge.

Who pays, and what does the financial assurance picture look like? Per the attached BOEM spreadsheet (excerpt pasted below):

  • The 2020 cost estimate for decommissioning Habitat was $44.3 million. That number is optimistic even if platform damage is minimal.
  • $13.6 million in supplemental assurance has been provided.
  • A third party guarantee has been secured.
  • The guarantee was provided by Freeport-McMoRan Oil & Gas (FMOG)
  • Per BOEM, FMOG is the guarantor for all DCOR leases. Unless BOEM has allowed otherwise, the guarantor pays all costs not covered by the lessees. Given the number of old platforms and California decommissioning challenges, the risks for FMOG are indeed large.

Although DCOR LLC is the current Habitat operator, the company owns only a 4.18% share of the project. CHANNEL ISLANDS CAPITAL, L.L.C., a private company about which little is known, holds a 95.82% share.

Should the 2 owners default, BOEM/MMA will look to the guarantor and predecessor lessees (see the chart below). Unfortunately for FMOG, they are both the guarantor and the predecessor lessee. FMOG acquired Plains Exploration & Production (PXP), the operator prior to DCOR. Nuevo Energy was acquired by PXP and thus also tracks back to FMOC. (This may explain FMOC’s decision to be a guarantor!).

Should FMOC fail to fulfill their obligation. Chevron would likely be the next target. The original Harvest partners were Texaco (operator) and Union Oil, both of which were acquired by Chevron.

TEPI=Texaco Expl. & Production. Nuevo Energy was acquired by Plains Expl.&Production (PXP), which was acquired by Freeport McMoRan Oil & Gas (FMOG)


2024-03-27 Pacific Decom and Collateralization InformationDownload

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Platform Habitat ceased production more than a decade ago! Is the damaged structure fit for the resumption of decommissioning?

Posted in accidents, California, natural gas, Offshore Energy - General, Regulation, well control incidents, tagged , , , , , , , , on May 13, 2026| 1 Comment »

The Platform Habitat fire was extinguished at 11:40 a.m. on 5/11/2026 after burning for 5 hours.

All 26 workers were safely evacuated from DCOR’s Platform Habitat. The big question now is the fitness of the structure for continuing well plugging/abandonment and platform decommissioning.

As indicated in the attached letter, BSEE had informed DCOR that their Pitas Point Unit leases (where Platform Habitat is located) expired on 3/15/2016 owing to the cessation of well operations 6 months prior. Following the Interior Board of Land Appeals (IBLA) May 7, 2021 affirmation of BSEE’s directive, DCOR was notified that they must permanently plug all wells within one year of the lease termination (i.e. one year after the 2021 IBLA decision). I’ll include the informative IBLA decision in a future post.

Although details have not been shared, it appears that well plugging operations were still ongoing on 5/11/2026 when the fire occurred. According to BSEE’s borehole file, most of the Habitat wells have been temporarily abandoned, but few have been permanently abandoned, and several are still completed (i.e. neither temporarily nor permanently abandoned).

The risks and costs associated with delaying well plugging and abandonment have once again been demonstrated at Habitat. Fortunately, there were no casualties or pollution.

With regard to overall safety compliance, DCOR is the violations leader in the Pacific Region. In 2025 and 2026 (YTD) they were cited for 70 violations, 66 of which required component or facility shut-ins. The age of the 9 DCOR platforms (installed by others between 1968 and 1984) has likely contributed to the compliance challenges.

BSEE spreadsheets for 2020-2024 show 6 incidents at Platform Habitat. BSEE’s incident summaries are pasted in the second attachment.

Neither DCOR nor BSEE has issued a statement on the Habitat fire.

This serious incident further demonstrates the concerns expressed by John Smith and me about the relaxed decommissioning financial assurance regulations proposed by BOEM.

DCOR-Platform-Habitat-Decommissioning-ApplicationsDownload
Untitled documentDownload

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Fire on Platform Habitat during decommissioning; no injuries

Posted in accidents, California, well control incidents, tagged , , , , , , , , on May 11, 2026| Leave a Comment »

  • Crew safely evacuated
  • Prompt response by the USCG and local fire agencies
  • Gas leak during decommissioning operations
  • Fire began at 0700 PT; controlled by 1100 PT
  • 45 year old platform; no longer producing
  • Operated by DCOR LLC
  • No environmental threat
  • Habitat was the only California OCS platform that produced dry natural gas (minimal oil or condensate)
Habitat is SSE of Santa Barbara

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Business as usual for Sable as AG Bonta sues Energy Secretary Chris Wright

Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation, tagged , , , , , on May 8, 2026| 1 Comment »

Rob Bonta
Chris Wright

California Attorney General Bonta asks the Court to stay Energy Secretary Wright’s Order directing Sable, under the Defense Production Act to restart production and preliminarily enjoin Defendants, and all those acting in concert with Defendants (i.e. Sable), from enforcing or relying on it. See the attached Federal Court filing.

The AG’s irreparable harm and public interest arguments seem particularly weak, and this may not be the best time to attempt to halt a 20+% increase in California oil production.

Sable PIDownload

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My comments on BOEM’s proposed revisions to decommissioning financial assurance requirements

Posted in Offshore Energy - General, California, Regulation, Gulf of Mexico, decommissioning, energy policy, tagged , , , , , , , on May 6, 2026| 1 Comment »

Attached are my comments on BOEM’s proposed revisions to the decommissioning financial assurance regulations. These comments were submitted to Regulations.gov yesterday (3 days early 😀). Bud

Concluding Remarks

  1. MMA’s highest priority must be assuring that facilities are safely decommissioned without public funding. Supplemental financial assurance determinations and lease assignment approvals must be consistent with that priority.  
  2. Predecessor liability is an important financial assurance principle, but legal boundaries and administrative procedures must be clearly established. 
  3. Safety and compliance are inextricably related to financial performance, and must be considered in determining supplemental assurance requirements. 
  4. Using reserve estimates to reduce supplemental assurance exposes taxpayers to geologic and accounting risks. 
  5. Unacceptable public risks have resulted from financial assurance decisions intended to advance offshore wind development.
Comments – BOEM financial assurance ruleDownload

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John Smith’s comments on BOEM’s proposed revisions to decommissioning financial assurance requirements

Posted in California, energy policy, Gulf of Mexico, Offshore Energy - General, Offshore Wind, Regulation, tagged , , , , , , on May 5, 2026| Leave a Comment »

The comment period for BOEM’s proposed revisions to decommissioning financial assurance requirements closes on Friday, May 8th.

John Smith’s comments have been officially submitted to Regulations.gov, and are attached for your convenience. Nice work by John.

My comments are being finalized and will be submitted and posted soon.

042926 JB Smith Comments on Proposed Changes to Bonding RulesDownload

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Coastal Commission Apologizes! (to SpaceX, not Sable 😉)

Posted in California, Regulation, tagged , , , , , on May 4, 2026| Leave a Comment »

An apology letter from the California Coastal Commission (CCC) to SpaceX was part of a lawsuit settlement. SpaceX alleged political bias in the commission’s 2024 decision to deny increased Falcon 9 launches at Vandenberg Space Force Base, based on comments about Elon Musk’s political views and SpaceX’s labor practices.

Excerpt:

“In 2024, the Commission reviewed consistency determinations by the U.S. Space Force for SpaceX’s Falcon 9 launch program at Vandenberg Space Force Base. During that review, some Commissioners made negative comments about SpaceX’s labor practices and its Chief Executive Officer’s political views. The Commission acknowledges that these political comments were irrelevant to the Commission’s consistency review and were improper, and the Commissioners apologize for those comments.”

AI confirms my suspicions that formal CCC apologies are highly unusual 😉

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Upon further review, 2019 retains the Gulf oil production record. Jump in California OCS production upcoming.

Posted in California, Gulf of Mexico, Offshore Energy - General, tagged , , , , on May 4, 2026| Leave a Comment »

Update: Another EIA revision to Gulf of America oil production for Dec. 2025 (1.994 to 1.985 million bopd) means that 2019 retains the production record by the narrowest of margins – 1.898 to 1.897 million bopd. Stay tuned because this may not be the final word 😉.

Per EIA, Feb. 2026 production dipped a bit to 1.931 million bopd (chart below).

Meanwhile, California OCS oil production for FEB continued at about 10,000 bopd. This number may increase a bit for March, and more for April data when the first Sable sales are included. A big increase, by as much as 500%, should be apparent in the June report barring a court ordered shutdown.

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Updated Sable PowerPoint plus CEO’s compensation is raising eyebrows

Posted in California, Offshore Energy - General, tagged , , , , on May 2, 2026| Leave a Comment »

Sable’s updated PowerPoint presentation is attached.

Also, the 2025 compensation package for Sable CEO Jim Flores is attracting attention. Flores received $76 million in total compensation. The bulk of his pay came from more than $69 million in stock awards, alongside a $1.3 million salary and a $3.9 million bonus. 

Sable powerpointDownload

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John Smith’s proposal to facilitate the decommissioning of California platforms

Posted in California, decommissioning, Offshore Energy - General, Regulation, rigs-to-reefs, tagged , , , , , , , on April 23, 2026| 1 Comment »

Looking up towards Platform Gilda from a depth of 100 feet, juvenile bocaccio rockfish swirl around the anemone-covered crossbeams (photo by Dr. Milton Love) 

Dr. Jeremy Claisse, Cal Poly Pomona: “The oil and gas platforms off the coast of California are the most productive marine habitats per unit area in the world.” 

Dr. Milt Love, UCSB: “Even the least productive platform was more productive than Chesapeake Bay or a coral reef in Moorea.”

John Smith has made the case for reefing California platforms. He is now proposing a change in the regulations that could facilitate such partial removals of offshore structures. His full proposal is attached.

As background John notes:

“In contrast to the Gulf of Mexico (GOM), where more than 600 decommissioned platforms have been converted to artificial reefs, the State of California does not have reefing legislation considered workable by industry, nor does it have an approved or State funded artificial reefing program which is a prerequisite under MMA (formerly BSEE and BOEM) OCS oil and gas regulations (30 CFR § 250.1730) for waiving platform removal requirements which allows conversion of the structure to an artificial reef.“

He further informs that “operators of the platforms have not expressed any serious interest in reefing OCS platform jackets because they consider the California Marine Resources Legacy Act unworkable in its present form due primarily to its liability provisions, inequitable 80% cost-savings sharing requirement, and the requirement for the first reefing applicant to fund the setup costs for the artificial reefing program.“

John’s proposal is intriguing because it allows qualified 3rd parties to accept title and liability for reefed structures. This would create interesting business opportunities. A company, consortium, nonprofit, or entrepreneur could, for a fee, acquire submerged structures and obtain insurance or other financial protection in accordance with their business plan. Reef preservation and enhancement studies, and other marine research could also be conducted at the sites. Marine ecosystems would be protected, and the cost and efficiency of decommissioning operations would be significantly improved.

“So, you disconnect the jacket… you kill all the fish. There’s an awful lot of animals that die,” said Dr. Love. As our world has become dependent on fossil fuels, so too have these millions of animals become dependent on the structures that pump them from beneath the sea floor. “As a biologist, I just give people the facts, but I have my own view as a citizen, which is I think it’s criminal to kill huge numbers of animals,” said Dr. Love.

John’s proposal warrants serious consideration.

Revised Proposal to Amend MMA OCS Decom Regs 042126.docxDownload

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