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Archive for the ‘climate’ Category

More buzz about ultradeep geothermal

Posted in climate, drilling, energy, tagged , , , , on August 17, 2022| Leave a Comment »

Quaise Energy’s ultradeep geothermal energy concept is most intriguing and media interest continues to build. Ultradeep geothermal has a big advantage over other renewable concepts which have much greater space and aesthetic challenges and suffer from intermittency. As is very well explained in the quote below, it’s now up to Quaise to demonstrate gyrotron drilling and the associated technology in pilot projects.

“A lot of the technology advances [needed] are coming into that proof step where you’ll have physical proof that they work. So I would say we are ready to launch, if we can just bring together the right utility, the right contract and engineering expertise, and the right site to launch the proofs to show that this can be done,” said Ken Wisian, a geothermal geophysicist and associate director of the Bureau of Economic Geology at the University of Texas, Austin. “The picture could be accelerating dramatically over the next few years. We just need the proof projects to land.”

altenergymag.com

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Inflation Reduction Act: BOE’s top 3 takeaways

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on August 15, 2022| Leave a Comment »

Final text

  • The flaring provision complicates compliance and may increase safety risks: (p. 649) Exception 1 exempts “gas vented or flared for not longer than 48 hours in an emergency situation that poses a danger to human health, safety, or the environment.” This is inconsistent with the carefully constructed BSEE regulations which allow limited (48 hours cumulative) flaring for certain operations (e.g. during the unloading or cleaning of a well, drill-stem testing, production testing, and other well-evaluation testing). Such flaring is essential but not normally “an emergency situation.” The bill could thus compromise safety by unnecessarily restricting or complicating well operations and by limiting flaring in circumstances where such flaring reduces safety risks.
  • Time for BOEM to get to work 😉: (p. 650): Per our previous post, the highlight section of the bill (from an offshore oil and gas standpoint) reinstates Lease Sale 257 (GoM) and requires that the scheduled 2022 lease sales 258 (GoM) and 259 (Cook Inlet) be held by 12/31/2022. Lease Sale 261 (GoM) must be held by 9/30/2023.
  • Petty but perhaps necessary: p. 655: The provision restricting wind leasing when no oil and gas lease sale has been held in the prior year is in the final bill.

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179 Proposed House Amendments to H.R. 5376 – Inflation Reduction Act of 2022 (Schumer-Manchin bill)

Posted in climate, energy policy, Offshore Energy - General, tagged , , on August 11, 2022| Leave a Comment »

They are listed here. This one is the most entertaining 😀

AMENDMENT TO SENATE AMENDMENT TO H.R. 5376
OFFERED BY MR. ROY OF TEXAS
Strike line 1, page 1, and all that follows.

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Funding studies to support a pre-determined narrative

Posted in climate, energy policy, tagged , , , on August 4, 2022| Leave a Comment »

WASHINGTON, D.C. — The Biden-Harris Administration, through the U.S. Department of Energy (DOE), today announced $26 million to fund projects that will demonstrate that America’s electricity grid can reliably run with a mix of solar, wind, energy storage, and other clean distributed energy resources.

DOE

Shouldn’t the research precede DOE’s declaration of victory?

Rest assured that none of the studies will question the reliability of a grid dependent on DOE’s preferred energy mix; nor will they raise concerns about the associated economic, national security, or environmental risks. These are the types of projects that the WSJ calls “Green Pork.”

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DOE production (not satire)

Posted in climate, energy policy, Uncategorized, tagged , , on August 2, 2022| Leave a Comment »

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Wind vs. oil and gas: Is this necessary?

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Wind Energy, tagged , , , on August 1, 2022| Leave a Comment »

When we (MMS) drafted the OCSLA amendments (incorporated into the Energy Policy Act of 2005) that authorized offshore wind operations, we envisioned complementary and synergistic programs. Offshore wind and oil/gas development have many similarities and a common purpose – energy production. There is considerable overlap among the operating companies and contractors.

Unfortunately, politicians are better at dividing than uniting, and a provision in the Schumer-Manchin legislation pits the offshore wind and oil/gas programs against each other. The text (pasted below) from p. 646 of the bill restricts wind leasing when no oil and gas lease sale has been held in the prior year.

I share the concerns about the OCS program evolving into a wind-only program, as has already happened in the Atlantic (more on this at a later date). However, oil and gas sales should be held because they make economic and environmental sense, not because they are a condition for holding wind sales. Oil and gas sales are not punishment and wind sales are not rewards, and holding a single GoM lease sale each year does not balance the offshore program.

(b) LIMITATION ON ISSUANCE OF CERTAIN LEASES OR RIGHTS-OF-WAY.—During the 10-year period beginning on the date of enactment of this Act—

(2) the Secretary may not issue a lease for offshore wind development under section 8(p)(1)(C) of the Outer Continental Shelf Lands Act (43 U.S.C.1337(p)(1)(C)) unless—
(A) an offshore lease sale has been held during the 1-year period ending on the date of the issuance of the lease for offshore wind development; and (B) the sum total of acres offered for lease in offshore lease sales during the 1-year period ending on the date of the issuance of the lease for offshore wind development is not less than 60,000,000 acres.

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More on the Manchin-Schumer bill

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Offshore Wind, Regulation, tagged , , , , , on July 29, 2022| Leave a Comment »

Here is a link to the entire bill. Good weekend reading for energy policy nerds. 😀

The energy sections begin on page 232 and continue until the end (page 725!). Some highlights from an offshore energy perspective (more important items in bold):

  • p. 429 – Tax credit eligibility for offshore wind energy components including blades, nacelles, foundations, and towers.
  • p. 447 – Credits for CCS equipment
  • p. 460 – For offshore wind facilities, this section specifies the % of the total costs that must be expended in the US for the facility to qualify as being manufactured in the US. That % rises gradually to 55% after 12/31/2027.
  • p. 518 – Eligibility of CCS for credits
  • p. 615 – $100 million for offshore wind electricity transmission planning, modelling, and analysis. (Seems like a lot for planning and analysis.)
  • p. 621 – $10 million for oversight by DOE Inspector General. (Those folks will have their hands full!)
  • p. 628 – Authorizes wind leasing in the EGOM and South Atlantic areas withdrawn from all leasing at the end of the Trump administration.
  • p. 631 – Authorizes offshore wind leasing adjacent to US territories. (Should be interesting!)
  • p. 632 – Codifies increase in offshore royalty rates: range of 16 2/3% – 18 3/4% for 10 years; not less than 16 2/3 % thereafter
  • p. 640 – The provision requiring that royalty be paid on flared/vented gas could be problematic. The exceptions are not consistent with those currently in the regulations, and would be difficult for BSEE/ONRR to manage. The proposed legislation (exception 1) exempts “gas vented or flared for not longer than 48 hours in an emergency situation that poses a danger to human health, safety, or the environment.” However, current BSEE regulations allow limited (48 hours cumulative) flaring for certain operations (e.g. during the unloading or cleaning of a well, drill-stem testing, production testing, and other well-evaluation testing). This flaring is essential but not normally an emergency situation. Requiring royalty payments for such essential, but not emergency, flaring would be unreasonable and inconsistent with the intent of this provision (minimize unnecessary flaring and venting).
  • p. 641 – Per our previous post, this section reinstates Lease Sale 257 (GoM) and requires that the scheduled 2022 lease sales 258 (GoM) and 259 (Cook Inlet) be held by 12/31/2022. Lease Sale 261 (GoM) must be held by 9/30/2023. Saddle up!

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“Manchin-Schumer” energy legislation reinstates lease sale 257 and requires additional lease sales in accordance with the 2017-2022 program

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on July 28, 2022| Leave a Comment »

p. 643

(b) LEASE SALE 257 REINSTATEMENT.—
(1) ACCEPTANCE OF BIDS.—Not later 30 days after the date of enactment of this Act, the Secretary shall, without modification or delay—
(A) accept the highest valid bid for each tract or bidding unit of Lease Sale 257 for which a valid bid was received on November 17, 2021; and
(B) provide the appropriate lease form to the winning bidder to execute and return.

As predicted by BOE (with no inside information) on 5/27/2022. 😀

What about the CCS bids? More to follow.

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Re. the Strategic Petroleum Reserve sales, who knew…?

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on July 25, 2022| Leave a Comment »

  1. …that the SPR legislation authorized the sale of large volumes of oil for the purpose of easing worldwide prices. Per section 151 of the statute, which was passed following the oil embargoes in the 1970’s, the SPR was intended to diminish the vulnerability of the United States to the effects of a severe energy supply interruption.
  2. …that SPR oil could be sold to all entities including Chinese companies that are also buying oil from Russia, the country being boycotted. How absurd is that? (The confirmation of one such transaction is pasted below.)
  3. …that increased worldwide emissions from the consumption of SPR oil are okay, but emissions from the consumption of our offshore oil and gas are not. Remember that Lease Sale 257 was vacated because BOEM did not analyze the effect that lower prices (from increased US production) would have on GHG emissions. Why are EarthJustice et al silent on the SPR sales? Where is DOE’s environmental assessment of these sales?

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April GoM production, BOEM’s production forecast, and the proposed OCS leasing program

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on July 7, 2022| Leave a Comment »

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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