- DC Federal Court decision on Gulf of Mexico Oil and Gas Lease Sale 257: Will the Court uphold the 11/17/2022 sale? If the Court upholds the sale, will BOEM accept the carbon sequestration bids without having announced that tracts would be offered for those purposes, and without advising about lease terms and bid analysis procedures?
- Investigation reports for the 6 fatal US offshore incidents in 2020: When will these overdue reports be issued? Also, we know that there were at least two 2021 fatalities? When will those reports be issued?
- Platforms Hogan and Houchin, Santa Barbara Channel: When will we learn more about the Inspector General’s findings regarding the improper use of decommissioning funds? Why was the lessee, Signal Hill, allowed to withdraw funds from those accounts for purposes unrelated to decommissioning? How does this affect the liability of predecessor lessees?
- Investigation of the Huntington Beach pipeline spill: When will the the joint investigation team report be issued? To what extent can the pipeline operator be held liable for a leak caused by anchor dragging, particularly given the leak detection limitations for low pressure pipelines?
- Globetrotter 2 incident during Hurricane Ida: When will the Coast Guard issue their report on the delayed relocation of the Noble Globetrotter 2 drillship during Hurricane Ida? In light of this incident, the fatality on the Pacific Khamsin prior to Tropical Storm Laura (2020), and similar incidents, further attention to the timely relocation of dynamically positioned drillships would seem to be in order.
- US offshore drilling and production trends: With several deepwater fields scheduled to begin producing in 2022, will GoM oil production meet or exceed the August 2019 peak of 2.044 million BOPD, at least temporarily? Will exploratory drilling activity increase to levels needed for reserve replacement? Will the prolonged decline in US offshore gas production be reversed?
- Russell Peterson liftboat tragedy (2008): Will the Coast Guard ever explain why their investigation report in unavailable?
Archive for the ‘decommissioning’ Category
Decisions, investigations, reports, and trends that BOE will be tracking in 2022
Posted in accidents, decommissioning, energy policy, hurricanes, Offshore Energy - General, tagged 2020 offshore fatalities, Beta Unit pipeline, Globetrotter II, Hogan and Houchin, Huntington Beach, Khamsin, Lease Sale 257, offshore production, Russell Peterson on January 10, 2022| Leave a Comment »
Cool promo for “The Rig”
Posted in decommissioning, rigs-to-reefs, Uncategorized, tagged rigs-to-recreation, rigs-to-resorts, rigs-to-rides, rigs-to-roar, Saudi Arabia on January 9, 2022| Leave a Comment »
Per our 10/20/2021 post about this Saudi recreation venture, below is a nice promotional video. This greatly exceeds what we had envisioned many years ago!
$Billions in the Infrastructure Bill for CCS; what could possibly go wrong?
Posted in CCS, climate, decommissioning, energy policy, Gulf of Mexico, tagged CCS, DOE, GAO, infrastructure bill on December 28, 2021| Leave a Comment »
Quite a bit per the GAO, and their report only deals with DOE management of demonstration projects. The Infrastructure Bill authorizes $2.5 billion for commercial projects (and much more for other CCS purposes).
DOE provided nearly $684 million to eight coal projects, resulting in one operational facility. Three projects were withdrawn—two prior to receiving funding—and one was built and entered operations, but halted operations in 2020 due to changing economic conditions. DOE terminated funding agreements with the other four projects prior to construction.
DOE provided approximately $438 million to three projects designed to capture and store carbon from industrial facilities, two of which were constructed and entered operations. The third project was withdrawn when the facility onto which the project was to be incorporated was canceled.
GAO
So DOE’s actual success ratio was 0.182 (2 for 11) – not very compelling.
With regard to proposals for offshore carbon sequestration, who will be liable for future cost overruns, operating losses, infrastructure failures including pipeline and well leaks, and decommissioning costs? Who ensures that there will never be any leakage from CO2 disposal reservoirs? Does all of this fall on the Federal government?
Corporations that want to engage in carbon sequestration for commercial or other purposes should fund the projects with their own revenues or fees charged to the companies whose emissions they are collecting. The Outer Continental Shelf is publicly owned and those wishing to dispose of substances should pay a usage fee, be responsible for all costs, and be liable for pollution and damages.
Sad End for Taylor Energy
Posted in accidents, decommissioning, Gulf of Mexico, Offshore Energy - General, tagged consent decree, Hurricane Ivan, Mississippi Canyon, mudslide, Taylor Energy on December 27, 2021| Leave a Comment »
Taylor Energy’s Mississippi Canyon Block 20 “A” platform was destroyed by a massive mudslide during Hurricane Ivan in 2004 (see illustrations below). Per Naval Research Laboratory sensors, “Ivan the Terrible” generated freak waves as high as 91 feet, and NRL computer models suggest that wave heights may have exceeded 130 feet. The changes in pressure resulting from the motion of the huge waves triggered the flow of the unstable Mississippi delta sediments. The platform was swept 500 feet downslope and the wells were severed and buried under a deep layer of sediment. That was essentially the end for Taylor Energy, as the company would spend the next 17 years locating and plugging wells, decommissioning piping, collecting seepage, and mitigating pollution. Since 2008, when Taylor sold its remaining oil and gas assets, the company has been solely engaged in the MC-20 response.
Last week, Taylor and the Justice Department signed a consent degree that transfers the company’s remaining assets and control of the decommissioning trust fund to the Federal government. Questions remain as to whether the platform and wells could have been better designed to withstand the mudslide (note that the platform was installed and operated by BP prior to being sold to Taylor), and whether more should have been done to mitigate the seepage. Taylor does a good job of making its case at their response website.
Few offshore operators would argue that what happened to Taylor couldn’t happen to them. That would be brash and foolish. Hopefully, the companies that remain have absorbed the lessons of MC-20 and are applying them to their operations and management programs.
Rigs to Roe (Redfish, Rockfish)!
Posted in decommissioning, energy policy, Gulf of Mexico, Offshore Energy - General, rigs-to-reefs, tagged aquaculture, GORI, Innovasea, rigs-to-reefs, rigs-to-roe on December 22, 2021| Leave a Comment »
An old offshore platform in the U.S. Gulf of Mexico is set to be converted into a working fish farm, creating a blueprint for future aquaculture re-use projects and providing repurposing options for old oil and gas assets.
offshore-energy.biz
Congratulations to the Gulf Offshore Research Institute (GORI) and Innovasea on their plans to transform an offshore Texas gas platform into a working fish farm.
For the complete list of alternative uses for offshore oil and gas platforms, see our Rigs-to-Reefs+++ page.
California Decommissioning: old disputes prevent common sense solutions
Posted in California, decommissioning, energy policy, rigs-to-reefs, tagged California, decommissioning, rigs to reefs on November 30, 2021| Leave a Comment »
Despite scientific support, California’s “rigs to reefs” program has made little progress. Comments in yesterday’s LA Times article help explain why:
Fed by concerns from some environmental advocates and a skepticism about the motives of California’s billion-dollar oil industry, the Rigs to Reefs program that passed in 2010 was so complicated by political compromise that the permitting process became almost unworkable, (State Sen.) Hertzberg said.
Not a single oil company has applied in the history of the program, according to the State Lands Commission, which has jurisdiction over state waters.
LA Times
“Oil companies want a clear path to compliance,” he said. “They’re operating in many cases at a loss, but it’s cheaper to operate at a loss than it is to face millions for decommissioning.”
Gary Brown, Orange County Coastkeeper
A truly remarkable lease sale: OCS Sale 53, Pacific Region, May 28, 1981
Posted in California, decommissioning, Gulf of Mexico, Offshore Energy - General, tagged Chevron, Lease 0450, Lease Sale 257, Lease Sale 53, Platform Hidalgo, Pt. Arguello Field on November 23, 2021| Leave a Comment »
Were it not for the surprising CCS bidding, which was accomplished without public notice, last week’s Gulf of Mexico sale would have been pretty ordinary – $177 million on 214 tracts.
A 1981 lease sale offshore California was quite another matter. That sale (no. 53) set records that will never be surpassed. A single lease (OCS-P 0450) encompassing a little more than 5000 acres was sold to Chevron and Phillips for an astounding $333 million. This equates to $1.013 billion in 2021 dollars. That single bid (in 1981 dollars) exceeds the total high bids for any Gulf of Mexico sale since 2015.
High bids for Sale 53 totaled $2.3 billion ($7.0 billion in 2021 dollars!) for only 81 tracts. A GoM sale in 2008 received $3.7 billion in high bids, but that was for 603 tracts.
Unfortunately, production from lease 0450 never met expectations. Platform Hidalgo (0450) and the other two Pt. Arguello field platforms (Harvest and Hermosa) are no longer producing and are in the process of being decommissioned. An interesting criminal case involving Platform Harvest, then operated by Texaco, will be discussed at a later date.
John Smith’s Pacific decommissioning update
Jerry Schubel on the benefits of rigs-to-reefs programs
Posted in California, decommissioning, energy policy, Offshore Energy - General, rigs-to-reefs, tagged California, decommissioning, Jerry Schubel, rigs-to-reefs on November 2, 2021| Leave a Comment »
Veteran marine science advocate Jerry Schubel, former president of Long Beach’s Aquarium of the Pacific, is among those pushing for offshore oil platforms to be transformed for new ocean uses. He points out that the underwater portion of the structures already are a boon to marine life.
“They have enormous value as ecosystems because of the life that has grown on and around them,” he said.
He points out that other states have rigs-to-reefs programs — and California does as well, though it needs funding before it can function. Once the ball gets rolling, oil companies could be tapped to cover costs with fees drawn from the money they would save by not having to haul dismantled rigs ashore. Schubel estimated that turning platforms into reefs could cut decommissioning costs in half.
But Schubel says artificial reefs should be just the beginning. How about fish farms? Research labs? Windmills? Hotels for divers?
“The uses,” he said, “are limited only by our imagination.”
Orange County Register
Well said Dr. Schubel! For a full list of alternative uses for offshore platforms see the official Rigs-to-Reefs+++ page.
Rigs-to-Rides?
Posted in decommissioning, Uncategorized, tagged PIF, rigs-to-reefs, rigs-to-rides, Saudi Arabia, the Rig on October 20, 2021| Leave a Comment »
Are the Saudis reading BOE?
The Public Investment Fund (PIF) announced today the launch of “THE RIG.”, a new tourism project. Inspired by offshore oil platforms, “THE RIG.” will be located in the Arabian Gulf and will span a combined total area of more than 150,000 square meters and provide a multitude of hospitality offerings, adventures, and aquatic sporting experiences.
PIF News Release
Were they inspired by this BOE exclusive?
Is the removal of decommissioned offshore pipelines good policy?
Posted in decommissioning, energy policy, Offshore Energy - General, pipelines, Regulation, tagged decommissioning, pipelines, Regulation, Scandpower on October 19, 2021| Leave a Comment »
Scandpower study (2004) for MMS:
Overall Conclusion
Currently, there are no regulations that require removal of subsea pipelines if they are not an obstruction to navigation. Based on the high costs for removing the pipelines, the personnel risk involved in the removal operations, the negative effect on overall emissions to air and the very limited reduction in discharges to sea, the overall conclusion is that it is better to leave the pipelines in place. If possible, re-use of the pipelines is the optimal solution.
Environmental Impacts
The impacts on the environment and the marine environment from pipelines and cables left in place were found to be very minor. Conversely recovery operations will have a negative impact on the environment. The number of vessels required for removal operations and long operating hours will result in considerably more releases and emissions than leaving the pipelines in place. In addition the energy savings benefit from recycling the pipeline materials will be exceeded by the energy required to remove the pipelines and separate the materials.
Pipeline Decommissioning: Environmental Impact Metric (per Scandpower)
| Remove/ recycle | Remove/ landfill | Reuse or preserve | Bury | Abandon in place | |
| Energy | High | High | Low | Moderate | None |
| Emissions | High | High | Low | Low | Low |
| Discharges | Low | Low | Moderate | Low | Low |
| Habitat | Low | Low | Moderate | Low | Low |
| Aesthetics | Low | Moderate | None | None | None |
| Resource Utilization | High | None | High | None | None |
| Littering | Low | Low | Low | Low | Moderate |
The “Habitat” impacts row seems questionable. Pipeline removal certainly has a greater impact on habitat than abandonment in place, particularly for buried pipelines.
Bud's Offshore Energy (BOE) 