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Archive for the ‘energy policy’ Category

Energy transitions don’t happen on command

Posted in climate, energy policy, tagged , , , , , , on November 25, 2024| 1 Comment »

Bjorn Lomborg graphics using IEA data:

Wisdom from Dan Yergin:

The 19th century is known as the “century of coal,” but, as the technology scholar Vaclav Smil has noted, not until the beginning of the 20th century did coal actually overtake wood as the world’s No. 1 energy source. Moreover, past energy transitions have also been “energy additions”—one source atop another. Oil, discovered in 1859, did not surpass coal as the world’s primary energy source until the 1960s, yet today the world uses almost three times as much coal as it did in the ’60s.

Aissatou Sophie Gladima, the energy minister of Senegal, put it more pithily: Restricting lending for oil and gas development, she said, “is like removing the ladder and asking us to jump or fly.”

Christyan Malek, JPMorgan’s top energy strategist: That intrinsic demand that is not visible is so significant that we don’t see demand peaking – I don’t think we’ll see [oil] demand peaking in our lifetimes,” he said. “Particularly as demand growth in [emerging markets] continues to surprise the upside.” 

Alex Epstein graphic:

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More Nord Stream intrigue!

Posted in energy policy, pipelines, tagged , , , , on November 22, 2024| Leave a Comment »

American businessman Stephen Lynch wants to acquire the Swiss company that controls the Nord Stream 2 pipeline.

From his investment firm’s website: Over the last twenty years, Mr. Lynch has acquired and managed distressed assets in Eastern Europe, Central Asia, Russia, and Ukraine. He specializes in securing cross-border collaboration on transactions and settlements around special situations and corporate conflicts. Lynch is a life member of the Council on Foreign Relations.

Lynch has worked closely with the US Department of The Treasury’s Office of Foreign Assets Control (OFAC) to acquire and de-Russify important industrial assets in U.S. partner nations.

With regard to Nord Stream: “The bottom line is this: This is a once-in-a-generation opportunity for American and European control over European energy supply for the rest of the fossil-fuel era,” Lynch told the Wall Street Journal.

Nord Stream 2 bankruptcy proceedings are scheduled to begin in January.

A “US official” told the Washington Post that a Nord Stream revival is not in the US interest right now. However, a resumption of the flow of Nord Stream gas could be a significant consideration in talks to end the Ukraine – Russian war. Also, in light of economic and energy supply challenges, there is growing German interest in restoring ties with Russia.

This appears to be a serious initiative on the part of Mr. Lynch that should not be discounted.

Also looming is a court decision in the litigation between Nord Stream AG and their insurers.

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A detailed Der Spiegel article on the Nord Stream sabotage

Posted in energy policy, pipelines, tagged , , , , on November 21, 2024| 2 Comments »

sailboat Andromeda
testing candidate bomb designs

Der Spiegel: “Wie ein ukrainisches Geheimkommando Nord Stream sprengte“

Observations:

  • Der Spiegel’s detailed account is based on interviews with the perpetrators whose identities are being withheld.
  • ~a dozen men and one woman, all Ukrainians, were involved in the sabotage. Some were soldiers, some were civilians; some had past connections with the CIA.
  • <$300,000 budget funded by a Ukrainian businessman
  • Saboteurs received no payments
  • Low tech operation using the sailboat Andromeda
  • The article includes details on how the mission was accomplished.
  • To the commandos, Nord Stream sabotage was viewed as a military objective, a legitimate act of self defense.
  • The team understood that only a small hole in the outer wall would suffice to burst the pipe given the gas pressure in the lines.
  • Tested bomb designs in a lake, and trained in a flooded mine to depths of 100 m.
  • Zelensky was not fully trusted and was intentionally not informed of the plan. (However, the authors are not completely ruling out some Zelensky involvement in the planning.)
  • Western intelligence heard about the plan 3 months before the operation. Zelensky was then informed by a CIA officer in Kiev.
  • A CIA agent contacted one of the commandos who he knew. To protect the mission, the commando said he didn’t know anything about such a plan, but would inquire further.
  • The commandos decided they needed to get on with the operation before sea conditions worsened in the fall.
  • 6 bombs were planted under sometimes difficult conditions. One did not explode, so the Nord Stream 2 B pipeline remained intact.

Der Spiegel’s account seems credible. If that is the case, Seymour Hersh and his informant have some explaining to do.

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Thoughts on the appointment of Doug Burgum as Secretary of the Interior

Posted in CCS, energy policy, Offshore Energy - General, Regulation, tagged , , , , , , , , on November 19, 2024| Leave a Comment »

  • The Secretary of the Interior is the most important energy production position in the US govt, particularly for the offshore sector.
  • In recent years energy policy has been increasingly influenced (if not directed) by White House staff, most notably the White House Climate Office. Given that Burgum will also lead the new created National Energy Council, direction from White House staffers or other departments should not be an issue.
  • Burgum should work effectively with Dept. of Energy appointee Chris Wright, an engineer who understands energy production.
  • There is no apparent Republican dissent, so Burgum should have no problem being confirmed.
  • All of the offshore policy forecasts in the post-election post still stand.
  • Burgum is currently the Governor of North Dakota. Some energy production stats for the state:
    • 2023 oil production: 435,080,323 bbls. ND is the 3rd leading oil production state behind TX and NM. Most ND production is from the Bakken formation (shale).
    • ND ranks 4th if the OCS, for which Bergum will soon be responsible, is included. The OCS ranked 2nd in oil production, behind only TX, despite seemingly being managed to fail.
    • 2023 gas production: 1.2 tcf. ND ranks 10th in natural gas production.
    • Current number of active drilling rigs: 39
    • Wind: In 2023, wind was the second-largest electricity generating source in ND behind coal. At the beginning of 2024, ND had about 4,000 megawatts of installed wind power generating capacity.
  • What about carbon sequestration (disposal)?
    • As Governor, Burgum supported CCS projects that could be lucrative for North Dakota.
    • As Interior Secretary and Energy Czar, he will have to consider the high Federal subsidy costs, efficacy, and net environmental benefits.
    • Companies looking to benefit from publicly financed CCS projects will lobby hard for Federal support. Budget hawks and most environmental activists will be strongly opposed. It will be interesting to see who prevails.
    • This blog has consistently opposed offshore carbon disposal.

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Chris Wright: “Thank you, North Face”

Posted in energy policy, tagged , , , on November 18, 2024| Leave a Comment »

Three years ago, the Colorado Oil and Gas Association brought smiles to our faces by recognizing North Face for their hypocrisy in refusing to sell jackets to an oil industry service company.

North Face, whose products are dependent on oil and gas, was given the Association’s first ever Customer Appreciation Award to draw attention to the company’s hypocrisy and chutzpah.

Fast forward three years and Chris Wright, the man behind the North Face award, has been nominated to be Secretary of Energy! BOE enthusiastically endorses this nomination!

Chris Wright’s bio: MIT engineer, shale gas innovator, entrepreneur, and more

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EIA associated gas production analysis omits the Gulf of Mexico

Posted in energy policy, gas, Gulf of Mexico, natural gas, tagged , , , , on November 15, 2024| Leave a Comment »

The EIA reports an 8% increase in 2023 US associated gas production as crude oil production rose to record levels.  The Permian Basin, the dominant US crude oil producer, is unsurprisingly the leading associated gas producer.

EIA’s analysis inexplicably ignores the Gulf of Mexico OCS. The Gulf produced an average of 1.64 bcf/d of casinghead (associated) gas in 2023, ranking the GoM just behind the Eagle Ford and significantly above the Niobrara and Anadarko regions (see chart above). It’s also noteworthy that most production from the regions on the EIA chart is from private land, and is not constrained by 5 year leasing plans and other restrictive Federal policies.

80% of GoM gas production is from deepwater leases. The % of associated gas produced on deepwater leases is even higher. The 2 leading GoM gas producers, Shell and bp, only operate deepwater leases. The % of their 2023 gas production that was associated gas was 93% for Shell and 100% for bp.

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Does Exxon fear the collapse of the CCS house of cards?

Posted in CCS, climate, conferences, energy policy, Offshore Energy - General, Regulation, tagged , , , , , , on November 14, 2024| 4 Comments »

Exxon CEO Darren Woods’ is concerned that US withdrawal from the Paris climate agreement would threaten carbon capture and sequestration (CCS), the foundation for which is government mandates and generous taxpayer subsidies.

Exxon projected a $4 trillion carbon capture and sequestration (CCS) market by 2050. The company was a primary driver behind the late additions to the 2021 Infrastructure Bill. That bill authorized carbon disposal on the OCS, exempted such disposal from the Ocean Dumping Act, and authorized $2.5 billion for commercial CCS projects.

Exxon sought an edge over CCS competitors by improperly acquiring 163 OCS oil and gas leases (map below) for carbon disposal purposes. Conversion of these leases is not authorized, which means they will expire at the end of their primary (5 year) term absent legislative or regulatory action.

The only solid support for CCS is from companies hoping to benefit from subsidies and charges to industries and individual energy consumers. It’s time to end the Federal government’s CCS programs.

199 oil and gas leases were wrongfully acquired at Sales 257, 259, and 261 with the intent of developing these leases for carbon disposal purposes. Repsol was the sole bidder at Sale 261 for 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).

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Outer Cape residents reject pro-wind ballot initiative

Posted in energy policy, Offshore Wind, tagged , , , , , , on November 12, 2024| Leave a Comment »

Ballot Question 7: Shall the State Representative from this district be instructed to vote in favor of legislation that would support the development of SouthCoast Wind and Commonwealth Wind and other possible future offshore and onshore wind power developments in Massachusetts?

This nonbinding initiative, which was reportedly the work of an individual wind advocate, was a surprise addition to the ballot for residents of the 4th Barnstable District of the Massachusetts House. That district includes the Outer Cape towns of Chatham, Eastham, Harwich, Orleans, Provincetown, Truro, and Wellfleet (see map above).

While nonbinding, the ballot initiative was intended to demonstrate support among Outer Cape residents for offshore wind development. However, perhaps unexpectedly, the initiative failed with 52.4% voting against (graphic below). It’s noteworthy that 82% of South Shore (Massachusetts) voters supported offshore wind development when a similar initiative was on the ballot in 2008. That’s a massive decline in support albeit in a different coastal area of the state.

The opinion of Outer Cape residents is important because their towns are the closest to 3 of the 4 leases (0564, 0567, and 0568 in the graphic below) receiving bids at the Gulf of Maine sale. Those leases are directly offshore from the Cape Cod National Seashore.

Interest in the Gulf of Maine sale was weak. All bids were for the minimum allowable amount of only $50/acre.

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Another small step toward the resumption of Santa Ynez Unit production

Posted in California, energy policy, Offshore Energy - General, Regulation, tagged , , , , , , on November 11, 2024| Leave a Comment »

The Santa Barbara County Planning Commission has approved the transfer of the onshore pipeline from Exxon to Sable Offshore. Although the Environmental Defense Center (EDC) is appealing that decision to the Board of Supervisors, the Board’s vote will likely be a 2-2 tie. Supervisor Hartmann’s property is close to the pipeline and she has recused herself from votes on the matter. A 2-2 vote would be a win for Sable, because a tie vote means the planning commission decision stands.

As an investment, Sable is a “pure California permitting play,” which means the risks are high. The company’s chances for success are almost entirely dependent on receiving the necessary approvals from State and local agencies.

If Sable is able to navigate the permitting gauntlet, the company’s prospects are good. The Santa Ynez Unit, Sable’s only asset, has substantial oil and gas resources and well-maintained production facilities.

Sable’s share price soared to $23.43 on 9/3 after the company reached agreement with Santa Barbara on the installation of required pipeline valves. The price bounced further to $28.30 on 9/19 before falling sharply to $19.43 on 10/9 after being cited for failing to get California Coastal Commission approval to install the required valves. The price rebounded to $24 following the County Planning Commission’s approval of the transfer from Exxon to Sable before settling at $23 on Friday, the date of the EDC appeal.

Expect the financial and psychological roller coaster ride to continue.

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The 2024 election results will have major implications for the OCS program

Posted in energy policy, Offshore Energy - General, Offshore Wind, tagged , , , , on November 6, 2024| Leave a Comment »

Offshore oil and gas:

  • The current 5 year OCS oil and gas leasing plan, which provided for the fewest sales in history, will be rewritten.
  • The new program will include at least one Gulf of Mexico lease sale annually.
  • Where there is State support (e.g. Alaska), other offshore areas may be added to the program.
  • Reversal of the Beaufort Sea Presidential withdrawals, either by executive order or, if necessary, by congressional action, is a distinct possibility.
  • A Gulf of Mexico oil and gas sale will be held during the first half of 2025. This can be accomplished under the Biden administration’s 5 year plan.
  • Judge Boardman’s ruling requiring a new biological opinion under the Endangered Species Act (ESA) has created some uncertainty regarding the timing of a GoM sale. Her decision is being litigated and the effective date of her ruling is now 5/21/2024 (see attached). Congressional action could also reverse this decision.
  • Expect other litigation on NEPA and ESA grounds with the intent of stalling oil and gas leasing. Congressional action could reverse or limit such litigation.

Offshore wind:

  • Expect offshore wind leasing to be “paused.”
  • Current leaseholders are contractually entitled to continue developing and operating their leases. Expect construction and operation plans to be more closely scrutinized.
  • Expect BSEE’s report on the Vineyard Wind turbine blade failure to receive added attention and publicity.
  • Expect considerable tension between North Atlantic governors, strong supporters of offshore wind, and the new administration.

Expect less babble about absurd topics like “petro-masculinity.” 😉

241021 – NMFS GOM BiOp – Order for MarylandDownload

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