Posted in climate, energy policy, tagged AEi, climate, energy cost, energy reliability, voters energy priorities on July 9, 2025| Leave a Comment »
The full report is attached.
Not at all shocking:
The public is most interested in the cost and reliability of the energy they use and the convenience and comfort of their energy-using products. They are unwilling to sacrifice much at all financially to address climate change or significantly change their consumer behavior.
Posted in deep sea mining, energy policy, tagged consolidated licensing, deepsea mining, DSHMRA, NOAA, UNCLOS on July 8, 2025| Leave a Comment »
The proposed rule is attached. Important points:
How can the US issue mining licenses in international waters (controversial)?
“The International Seabed Authority (ISA) regulates deep seabed mining in areas beyond national jurisdiction for countries that are parties to the United Nations Convention on the Law of the Sea (UNCLOS). The United States is a non-party to UNCLOS. Under U.S. law, NOAA may issue licenses and permits to U.S. citizens in areas beyond national jurisdiction under the Deep Seabed Hard Mineral Resources Act (DSHMRA).“
Main objective of the proposed rule (paraphrased):
The deepsea mining industry has gained experience from site specific exploration activities. As a result, later entrants may be able to capitalize on the information gained by previous explorers and lessen the need for further exploration of previously explored areas. In such cases there may be a need for a consolidated licensing process in which permit applicants could meet exploration license requirements to establish priority of right, and permit requirements, simultaneously.
Comment: The proposed rule seems reasonable in that qualified companies that gather the necessary site information would have the right (after NOAA review and approval) to collect the minerals. This would align deepsea mining more closely with offshore oil and gas in that companies acquiring licenses would be able to proceed to production after regulatory approvals.
Posted in energy policy, Offshore Energy - General, Regulation, tagged Big Beautiful Bill, energy policy, Gulf of America, lease sale 262 on July 7, 2025| Leave a Comment »
See the differences in the OCS oil and gas provisions in the House and Senate versions.
We preferred the House version, but the Senate Parliamentarian killed the provisions that reduced the risk of litigation and processing delays.
Whether justified or not, the royalty rate is now capped at 1/6 and a 10-year deepwater lease term is locked in.
The favorable terms and assurance of regular GOA lease sales put the ball squarely in industry’s court. We are looking for a good showing at Sale 262, including some new bidders and the return of some prominent companies.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged Big Beautiful Bill, carbon disposal, drilling requirements, joint bidding restrictions, lease stipulations, OCS Sale 262, oil and gas only, Sale Notice, UNCLOS on July 1, 2025| Leave a Comment »
Eye catching sentences in the news release and Proposed Notice of Sale:
“Leases awarded through Lease Sale 262 will be for oil and gas exploration and development only.” (News Release)
“Leases issued as a result of GOA Lease Sale 262 are expressly limited to oil and gas exploration and development.” (p. 16 of the Sale Notice)
Comment: Why would BOEM stipulate, for the first time ever, that an Oil and Gas Lease Sale is only for oil and gas exploration and development? Perhaps because, at the last 3 sales, 2 companies wrongfully acquired oil and leases for carbon disposal purposes. Those leases will likely expire at the end of their primary term, and the lessees will have nothing to show for their investment.
Other items of interest:
“Congress may enact legislation through reconciliation efforts sometime after publication of this Proposed NOS“
Comment: The Offshore Oil and Gas Leasing provisions in the “Big Beautiful Bill” make OCS leases more attractive in that they minimize sale uncertainty and return royalty rates to pre-IRA levels.
Proposed Primary Terms
Comment: Time for an update. The drilling requirements for a primary term extension should be the same for leases in 0-400 m as for those in 400-800 m. The requirement for an ultra-deep subsurface well is selectively punitive to shelf operations. These operations, although typically less lucrative, are important to the Gulf’s infrastructure.
Restricted Joint Bidders
On April 29, 2025, BOEM published the most recent List of Restricted Joint Bidders in the Federal Register (90 FR 17832). Potential bidders are advised to refer to the Federal Register prior to bidding for the most current list at the time of the lease sale. Please refer to the joint bidding provisions at 30 CFR 556.511-556.515
Comment: It’s past time for Congress to do away with the joint bidding restriction.
Comment: No surprises in the Lease Stipulations. Can BOEM finally drop the Law of the Seas stipulation (No. 6)?
Conclusion: There are no excuses for not participating in this sale!
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged Big Beautiful Bill, differences, lease terms, offshore leasing, Parliamentarian, royalty rate, Senate vs. House on June 30, 2025| 1 Comment »
The differences between the House and Senate versions of the Big Beautiful Bill are summarized in the table below. (See the previous post on the House version.)
The Senate bill includes royalty and lease terms that favor deepwater lessees, but excludes the provisions in the House bill that streamline the leasing process and minimize litigation risks. At least some of those House provisions were rejected by the Senate Parliamentarian.
The House will vote on the version that passes the Senate. So the Senate version is more likely to be enacted.
| House | Senate | Comment |
| royalty: 12.5% to 18.75% | royalty: 12.5% to 16 2/3% | Lowering the royalty cap to 1/6 (16 2/3%) unduly limits the Secretary’s discretion and may reduce revenues without significantly increasing production. |
| 2 GOA sales/yr over next 15 yrs. | same as House | Would have liked the opportunity for consideration of very limited Atlantic leasing or stratigraphic test drilling, but that is not politically feasible at this time. |
| use Sale 254 form and stips 4-10, may update stips 1-3 | sale 254 lease form and stips 4-9, may update stips 1-3 and 10 | The minor difference favors the Senate version. Stip 10 pertains to restrictions due to Rights-of-Use and Easement for Floating Production Facilities, and needs to be updated with each sale |
| mandates 10 year lease term for water depths >800 m | Although a 10 year term for deepwater leases is generally prudent, the Secretary should be able to choose a shorter term if concerns about timely exploration and diligent development arise (more likely given the increase in leases that could be issued as a result of the 2 sales/yr mandate). | |
| requires approval of subsurface commingling unless there is “conclusive evidence” of safety or ultimate recovery issues | Although BSEE’s policy change on downhole commingling was warranted, the legislative change removes essentially all discretion by mandating approval unless there is “conclusive evidence” to the contrary. Conclusive evidence is dependent on production history, at which point it may be too late. | |
| Adherence with the Biological Opinion shall satisfy the Secretary’s obligations under the Endangered Species Act of 1973 and the Marine Mammal Protection Act of 1972 | This provision reduces govt/lessee litigation risks | |
| Previous EIS’s for the Gulf of Mexico shall satisfy the Secretary’s NEPA obligation. | Rejected by the Senate Parliamentarian. | |
| Consistency determinations prepared by BOEM for Lease Sale 261 for the States of Texas, Louisiana, Mississippi, Alabama, and Florida will satisfy the Secretary’s CZMA obligations. | The States or Parliamentarian may not have been comfortable with this provision which simplifies plan approval processes. | |
| The Secretary may waive any requirement under the Outer Continental Shelf Lands Act that the Secretary determines would delay issuance of a lease. | Rejected by the Senate Parliamentarian? | |
| A lease must be issued to the highest responsible qualified bidder not later than 90 days after the sale date. | Rejected by the Senate Parliamentarian. | |
| A Governor may nominate for leasing under a lease sale held under this section an area of the OCS that is adjacent to the waters of the State | Never understood the need for this provision. | |
| G&G surveys must be approved within 30 days after a complete application is received. | Not feasible in some cases given endangered species concerns. | |
| A lease awarded under Lease Sale 259 or Lease Sale 261 shall not be set aside, vacated, enjoined, suspended, or cancelled except in accordance with section 5 the Outer Continental Shelf Lands Act (43 U.S.C. 1334). Also, new terms or conditions may not be added to these leases. | Reduces litigation risks. | |
| Any action to approve, require modification of, or disapprove any exploration plan, development and production plan, bidding procedure, lease sale, lease issuance, or permit or authorization related to oil and gas exploration, development, or production, or any inaction resulting in the failure to hold a lease sale shall be subject to judicial review only in a United States court of appeals for a circuit in which an affected State is located. | This provision significantly reduces litigation risks. Rejected by Parliamentarian? | |
| 6+ Cook Inlet sales over next 10 yrs. | 6+ Cook Inlet sales over the next 7 years | |
| 90% of Cook Inlet revenues to the State of Alaska. | 70% of Cook Inlet revenues to the State of Alaska. | The percentages are high, but the revenues are likely to be low. |
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged applicability to DC court decisions on the Gulf of America, restricts Federal district courts, SCOTUS, universal injunctions on June 27, 2025| 1 Comment »
Today’s Supreme Court decision limits the power of federal district judges to issue universal injunctions. I wonder if this decision restricts courts in DC and Maryland from ruling on oil and gas operations in the Gulf of America? Perhaps not, because those decisions are linked to Federal agencies in the DC area even though the activity is in the Gulf.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged bidding restrictions, Chevron, farm-ins, Gulf of America, joint bidding, lease acquisition, leasing, Total on June 20, 2025| Leave a Comment »
This week Total announced the acquisition of a 25% working interest in 40 Chevron leases in the Gulf of America. Total already owned interest in Chevron’s producing Ballymore (40%), Anchor (37.14%), Jack (25%), and Tahiti (17%) fields. Ironically, Federal regulations prohibited Total from jointly bidding with Chevron for any of those leases at the time of the sales. How does that make sense?
Restrictions limiting joint bidding by major oil companies date back to the Energy Policy and Conservation Act of 1975. Although these restrictions were intended to increase competition and revenues, OCS program economists have asserted, and studies have shown, that the ban results in fewer bids per tract and lower bonuses to the government.
Total did not submit a single bid in any of the past 4 Gulf of America lease sales. Perhaps they prefer to acquire interest in blocks previously leased to companies like Chevron. That is a reasonable acquisition strategy. However, farm-in acquisitions yield no bonus dollars to the Federal government. Wouldn’t it have been in the government’s best interest if some of those acquisition dollars were spent at lease sales where the bonus bids go to the US Treasury? It’s long past time to remove the joint bidding restrictions!
Posted in energy policy, Jamaica, Offshore Energy - General, tagged Jamaica, license extenstions, next Guyana, partner search, United Oil and Gas, Walton Morant License on June 19, 2025| Leave a Comment »
While Jamaica’s Walton Morant Block has impressive potential, that doesn’t equate to oil and gas reserves, and speculation about the “next Guyana” is highly premature.
The block’s licensee, United Oil & Gas (UOG), lacks the financial resources to fulfill its drilling commitment, and is thus dependent on finding industry partners. The Government of Jamaica has generously granted multiple license extensions to UOG, the latest through 1/31/2028.
Will UOG succeed in their quest for partners? Is the confidence expressed below justified? Stay tuned.
Posted in energy policy, Offshore Energy - General, UK, tagged Argyll field, bp, first oil production, Forties field, Hamilton Brothers, North Sea, Queen Elizabeth on June 18, 2025| Leave a Comment »
JL Daeschler recalls the inauguration of production at the Argyll field (18 June 1975) and Forties field (3 Nov 1975):
Posted in deep sea mining, energy policy, tagged American Samoa, BOEM, lease sale, marine minerals, request for information on June 16, 2025| Leave a Comment »
For those who want to provide input on an American Samoa marine minerals sale, now is your chance. See the attached Request for Information and Interest.
Bud's Offshore Energy (BOE) 