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Archive for the ‘energy policy’ Category

OCS oil and gas leasing provisions in the “Big Beautiful Bill” – good holiday reading 😀

Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , , on May 23, 2025| Leave a Comment »

Part VIII, Offshore OIl and Gas Leasing, is a good read for those interested in OCS leasing policy. This cleverly crafted part of the bill specifies leasing schedules, streamlines the leasing process, and minimizes litigation risks. Highlights:

  • Minimum royalty rates return to 12.5% from 16.67% post-IRA. (This is good for small, shelf producers.) The maximum rate remains 18.75%.
  • Requires a Gulf of America lease sale by 8/15/2025, a sale by 3/15 and 8/15 in each of the following 14 years (2026-2039), and a sale by 3/15/2040. 80+ million acres must be offered at each sale unless that amount of acreage is no longer available for leasing.
  • The lease form, lease terms, economic conditions, and stipulations 4 through 10 must be the same as for Lease Sale 254 (3/18/2020). Stipulations 1-3 may be updated.
  • Requires seven 1+ million acre (if available) Cook Inlet lease sales from 2026 – 2032. Beginning in 2035, 90% of the revenues go to the State of Alaska.
  • The required lease sales may be in addition to the lease sales held under the 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program.
  • 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
  • Previous EIS’s for the Gulf of Mexico shall satisfy the Secretary’s NEPA obligation.
  • 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 Secretary may waive any requirement under the Outer Continental Shelf Lands Act that the Secretary determines would delay issuance of a lease.
  • A lease must be issued to the highest responsible qualified bidder not later than 90 days after the sale date.
  • The Secretary shall establish a process through which 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; and is unleased and available for leasing. If the Governor of a State nominates an area, the Secretary shall include the area in the next scheduled sale. (It appears that this provision applies only to the Gulf of America. Objective?)
  • G&G surveys must be approved within 30 days after a complete application is received.
  • 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. (This protects lessees from pending litigation related to these leases).
  • 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.

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Louisiana, API, and Chevron have also challenged the NMFS biological opinion

Posted in energy policy, Gulf of Mexico, Regulation, tagged , , , , , , , on May 22, 2025| Leave a Comment »

Their filing is attached. I found the following points to be particularly compelling:

p.3: “Despite no evidence that an Oil and Gas Program vessel has ever struck a Rice’s whale, the 2025 BiOp projects that Oil and Gas Program vessels will lethally strike numerous Rice’s whales over the term of the 2025 BiOp. On that basis alone, the Service found that the Oil and Gas Program will jeopardize the continued existence of the Rice’s whale, and developed a multi-step reasonable and prudent alternative which it asserts will reduce projected vessel strikes to zero.“

p. 4: “The Rice’s whale is a rarely found animal that the Service first identified as a new species (separate from the non-endangered Bryde’s whale) in 2021. 86 Fed. Reg. 47,022 (Aug. 23, 2021). There is no evidence that an Oil and Gas Program vessel has ever struck a Rice’s whale (or a Bryde’s whale) despite continued operation in the Gulf over many decades.”

p. 5: “The 2025 BiOp disregards the Bureaus’ logical, fact-based conclusion. Instead, the Service’s 2025 BiOp engages in speculation and guess-work to surmise that Oil and Gas Program vessels could be striking and killing Rice’s whales on a regular basis. The Service ignores the best available data (i.e., showing no recorded observations of an oil and gas vessel striking a Rice’s whale) and instead presumes that forceable and lethal collisions between oil and gas service vessels and 60,000-pound whales are regularly occurring but somehow going unnoticed by the vessels and their crews and that the carcasses silently disappear into the water, never to be seen again.“

250520 – 2025 NMFS BiOp – LA v NMFS ComplaintDownload

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NMFS issues new biological opinion for oil and gas operations in the Gulf of America; Earth Justice promptly sues NMFS

Posted in energy policy, Gulf of Mexico, Regulation, tagged , , , , on May 22, 2025| Leave a Comment »

National Marine Fisheries Service (NMFS) biological opinion dated 5/20/2025

Background:

  • Section 7(a)(4) of the Endangered Species Act (ESA) requires federal agencies to confer with NMFS on any action that is likely to jeopardize the continued existence of proposed species or result in the destruction or adverse modification of proposed critical habitat.
  • Section 7(b)(3) of the ESA requires that at the conclusion of consultation, NMFS provides an opinion stating whether the Federal agency’s action is likely to jeopardize ESA-listed species or destroy or adversely modify designated critical habitat.
  • Last year, the U.S. District Court for the District of Maryland vacated the NMFS 2020 Biological Opinion for Gulf of Mexico Oil and Gas activities effective May 21, 2025, so failure to complete the opinion by that date would have jeopardized oil and gas operations in the Gulf.

Key points in the biological opinion:

  • p. 598: The proposed action is not likely to jeopardize the continued existence of sperm whale, Northwest Atlantic loggerhead sea turtle, Kemp’s ridley sea turtle, North Atlantic DPS green sea turtle, leatherback sea turtle, hawksbill sea turtle, or Gulf sturgeon.
  • The proposed action is not likely to destroy or adversely modify loggerhead or Gulf sturgeon designated critical habitat, or proposed critical habitat for green sea turtle North Atlantic DPS or Rice’s whale.
  • p. 599: The operation of oil and gas vessels in the Gulf of America, in an area where the endangered Rice’s whale occurs, is likely to jeopardize the continued existence of the whale due to the risk of vessel strike.

According to NMFS, the reasonable and prudent alternative (see below) reduces or avoids the primary threat to Rice’s whales, the risk of injurious and lethal vessel strike interaction. The impacts of other stressors are more limited in space and time, diffuse, or not likely to result in adverse effects to Rice’s whale.

The reasonable and prudent alternative (RPA) requires the following as it relates to vessel activity in the action area. More detail on p. 601:

  1. Immediately begin to use technology to enable Rice’s whale vessel strike avoidance and monitoring of presence of Rice’s whale.
  2. Establish an expert working group to support development and implementation of a Rice’s whale vessel strike avoidance technology plan (RW Tech Plan)
  3. Improve understanding of Rice’s whale vessel strike risk associated with the proposed action
  4. Develop a Rice’s whale vessel strike avoidance technology plan (RW Tech Plan)
  5. Undertake independent peer review
  6. Implement Rice’s whale vessel strike technology plan
  7. Monitor Rice’s whales to ensure no likelihood of jeopardy during RPA implementation

Comment: Because the risk to the Rice’s whale in the central and northwestern GoA is highly speculative (see analysis by Darren Ireland), the RPA is arguably excessive. However, I like the RPA’s technological and management system focus.

Unsurprisingly, Earth Justice et al found the NMFS opinion inadequate and filed a suit (attached) in Maryland calling on the court to vacate the opinion and grant injunctive relief.

How can they sue in a Federal court in Maryland, far away from the Gulf? The venue was ostensibly chosen because NMFS headquarters are located in a Maryland suburb of DC. The Maryland court is also likely to favor the plaintiffs, which may have been a factor in the choice of venue. It’s a great country! 😉

1_complaint-for-declaratory-and-injunctive-relief-5.20.25Download

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John Smith’s presentation at 5/15 WSPA luncheon in Santa Barbara

Posted in California, decommissioning, energy policy, Offshore Energy - General, tagged , , , , on May 21, 2025| Leave a Comment »

John Smith’s excellent decommissioning presentation at the recent Western States Petroleum Assoc. luncheon in Santa Barbara is attached. John used an amended version of Bob Byrd’s OTC powerpoint, adding slides on the proposed California Marine Legacy Act amendments.

For those who have been following the Santa Ynez Unit story, Harmony, Heritage, and Hondo are the platforms in that unit. Platform Harmony, where production resumed on the date of John’s presentation (5/15), is in 1198′ of water and is one of the world’s largest offshore structures.

Offshore Decommissioning JBSmith 051425Download

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Offshore wind opponents experiencing whiplash after sudden Empire Wind reversal. What happened?

Posted in energy policy, Offshore Wind, tagged , , , , , , on May 20, 2025| Leave a Comment »

Jens Stoltenberg
Kathy Hochul

The Administration has not yet explained the decision to allow the Empire Wind project to go forward. I suspect the following points apply:

  1. Attorneys advised, probably correctly, that the Administration would likely lose this case in the courts. Although the Secretary of the Interior has broad authority under OCSLA to suspend operations, he would need strong justification to do so indefinitely. Equinor has invested $billions in the project and their contractual rights would be difficult to abrogate.
  2. Equinor is 2/3 owned by the Norwegian govt, which engaged in diplomacy on Equinor’s behalf. Jens Stoltenberg, former PM of Norway and NATO chief, commented on X: “I commend the Trump Administration for our great cooperation in reaching an energy deal that allows Equinor to resume construction of Empire Wind. This will benefit both our countries & deliver energy to thousands of US households.”
  3. The project has strong support from trade unions.
  4. NY Gov. Hochul appears to have relaxed her position on gas pipelines: “I also reaffirmed that New York will work with the Administration and private entities on new energy projects that meet the legal requirements under New York law.” 

A post on X by Protect Our Coast NJ summarizes the position of project opponents: “There are no words. There was a shocking announcement last night that the federal government reversed course on the Empire Wind Project. We were stunned to see this news. We believe that offshore wind anywhere is a terrible idea. And this project off New York and New Jersey lies in an especially important area—from a national security, environmental and economic perspective. We supported the President’s policy against offshore wind development. And we celebrated Secretary Bergum’s decision to stop the Empire Wind project a few weeks ago. At the time, he said Equinor ‘rushed through by the prior administration without sufficient analysis or consultation among the relevant agencies as relates to the potential effects from the project.’ What changed in the past six weeks? Offshore wind is an extremely expensive, inefficient and unreliable source of power. It harms wildlife, including some of the most endangered mammals on planet Earth. We will fight to protect our coastal and marine ecosystems from the devastation brought by offshore wind construction and operations. We won’t stop until every scrap of steel is removed from the ocean. And we will work to ensure that government officials fully understand the ramifications to public safety, commerce and national defense Empire Wind represents.“

There are also concerns among Norwegian investors about this project:

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SPR inching upward, cracks the 400 million barrel mark

Posted in energy policy, tagged , , , , on May 20, 2025| Leave a Comment »

The House Energy and Commerce Committee has proposed $2 billion to repair, replenish, and maintain the Strategic Petroleum Reserve. The proposal includes $1.32 billion for oil purchases and $218 m for maintenance, with the remaining funding allocated for the buyback of previously mandated SPR sales.

Energy Sec. Wright has called for the SPR to be refilled, for the infrastructure to be reviewed, and for plans to be developed to safeguard this strategically important asset.

Although not ostensibly a reason for refilling the reserve, doing so will reduce the risk of a freefall in oil prices and the associated economic turmoil.

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We Spent £220 Billion on Decarbonisation and Saw Zero Financial Benefits: Kathryn Porter

Posted in climate, energy policy, UK, tagged , , , , on May 16, 2025| Leave a Comment »

Kathryn Porter is a well informed and articulate energy consultant. This video linked below is highly recommended.

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After 130 years, Santa Barbara County dismisses the oil industry without consultation

Posted in California, energy policy, tagged , , , , , on May 16, 2025| Leave a Comment »

In 1904 the famous “Old Maud” well (pictured) in Orcutt, Santa Barbara County, produced a million barrels in the first 100 days.

This week, the Santa Barbara County Board of Supervisors voted 3-1 to establish a framework to prohibit new oil and gas operations and phase out existing operations.

Given the industry’s long history in the County, one would have expected consultation with the remaining companies prior to that decision.

County staff informed Supervisor Bob Nelson, who voted against the ordinance, that they had not reached out to oil companies. Nelson described the ordinance as the nuclear option.

Charles Katherman, who started his own company in Santa Barbara 40 years ago, criticized the county for a lack of communication leading up to the ordinance. “What you’re proposing or looking at to vote on is a euthanasia of my industry,” Katherman said.

When John Smith told me about the County’s decision, I wondered what the late Darwin Sainz would think. Darwin was a proud 8th generation Californian, a well known rancher and oil industry veteran, a community leader, and Citizen of the Year in the Santa Maria Valley. His grandfather worked on the famous Old Maud well. Darwin was effective at reaching out to parties with opposing views and promoting dialogue and compromise. Sadly, reasoned dialogue no longer seems to be an option.

Darwin Sainz

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Those who destroyed a vital industry are suddenly concerned about its workforce

Posted in energy policy, UK, tagged , , , , , on May 15, 2025| Leave a Comment »

Aberdeen: once the proud Oil Capital of Europe

JL Daeschler comments that after crucifying the North Sea oil workers who saved the country in the 1970’s, the perpetrators are calling for £1.9 billion in emergency funding to help their victims transition to green energy jobs. How noble of them! How much of the funding will be provided by those responsible for the industry’s premature death? 😡

Times columnist Gillian Blowditch got it right:

“It is difficult to imagine a world in which it makes sense to import oil and gas but not produce it, while forcing our skilled workforce to work offshore in far flung corners of the globe, especially when we are importing from Norway, which is extracting oil and gas from the same seabed for which we are refusing to grant licences.”

How many jobs are being created by government-driven energy transitions that seem to be moving in reverse? Where are those jobs?

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“Chasing unrealistic net zero goals doing us more harm than good” ~ Gillian Bowditch in The Times

Posted in energy policy, UK, tagged , , , , , , , , on May 12, 2025| Leave a Comment »

Our Scottish contributor, JL Daeschler, brought this brilliant Sunday Times piece by Gillian Blowditch (pictured) to my attention. A few excerpts follow, but I recommend that you read the entire column.

“I’m writing this column from Applecross in the Scottish Highlands, where the view from the window is of the Cuillins. These immutable behemoths squat beneath an expanse of sky in which the light is invariably diffuse. It never gets old.” (I second that emotion!)

“Renewables are a vital part of our energy mix, but they require gas-fired back-ups. Yet, instead of tapping into our North Sea reserves, we’re committed to importing foreign gas. It’s not just an issue around energy security and cost, it affects our trade deficit and competitiveness against countries using cheaper, home-grown supplies. It increases our dependence on foreign supply chains.”

“Meanwhile, we risk losing the valuable skills and expertise we have built up over 50 years of North Sea exploration. We are all paying the price for this obsession through higher energy bills and job losses.”

“It is difficult to imagine a world in which it makes sense to import oil and gas but not produce it, while forcing our skilled workforce to work offshore in far flung corners of the globe, especially when we are importing from Norway, which is extracting oil and gas from the same seabed for which we are refusing to grant licences.”

“According to a Survation poll commissioned by the Aberdeen & Grampian Chamber of Commerce and published last week, 68 per cent of voters want the country’s demand for oil and gas to be produced domestically, rather than imported.”

“We all want to protect our environment and Scotland, with its vast natural resources and expertise in energy, should be leading the way. Instead, we have squandered an opportunity in favour of a facile show of moral posturing.”

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