Posted in energy policy, tagged 2024 additions, SPR depletion, Strategic Petroleum Reserve on August 29, 2024| Leave a Comment »
Given the relatively moderate oil prices during much of 2024, DOE has made some progress in adding to the Strategic Petroleum Reserve. However, the 31 million bbls added since July 2023 only amount to about 10% of the reserves withdrawn during the 3 years prior (July 2020 to July 2023) and about 4% of the SPR’s capacity.
Posted in energy policy, Offshore Wind, tagged BOEM, BSEE, Cape May County, New Jersey Board of Public Utilities, Ocean Wind leases, Orsted, suspension of operations on August 28, 2024| Leave a Comment »
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged Anchor, Argos, Beacon Offshore, bp, Chevron, deepwater production, Gulf of Mexico production, high pressure production, Kaskida, King's Quay, Murphy, Paleogene, Shell, Shenandoah, Sparta, Vito, Whale on August 21, 2024| Leave a Comment »
Four of the five simpler, safer, greener deepwater platforms featured on this blog are now producing. The 5th platform (Whale) is on location and scheduled to begin production later this year.
| platform | operator | first production |
| King’s Quay | Murphy | April 2022 |
| Vito | Shell | Feb 2023 |
| Argos | bp | April 2023 |
| Anchor | Chevron | Aug 2024 |
| Whale | Shell | late 2024 |
These platforms are in 4000 to 8600′ of water, are expected to reach peak production rates of 100-150,000 boe/day, and have favorable emissions characteristics on a per barrel basis.
This is all good, but what is next? Will technological advances once again sustain GoM production? The short answer appears to be yes!
The efficiencies achieved with the simpler platform designs combined with the high pressure (>15,000 psi) technology developed over the past 2 decades will facilitate production from the highly prospective Paleogene (Wilcox) deepwater fans. (For those interested in learning more about the geology, see the excellent presentation by Dr. Mike Sweet, Univ. of Texas, that is embedded below.)
Chevron’s Anchor is the first deepwater, high-pressure development. Three similar deepwater hub platforms (table below) will begin production over the next 5 years. These host platforms will also facilitate additional production from nearby fields. Each will have production capacities of approximately 100,000 boe/day. Note the long lead times in achieving first production given the technological issues that had to be evaluated and addressed.
| platform | operator | discovery date | first production |
| Kaskida | bp | 2006 | 2029 |
| Sparta | Shell | 2012 | 2028 |
| Shenandoah | Beacon | 2009 | 2025 |
Wood Mackenzie sees these high pressure projects as the key to sustaining GoM production rates. Their projections for 2024 and 2025 seem optimistic based on 2024 YTD data, which adds to the importance of the projected new production.
Posted in energy policy, Offshore Wind, tagged Atlantic wind, decline in bidding, irrational exuberance, Offshore Wind on August 20, 2024| 1 Comment »
In the wake of last week’s lackluster Atlantic wind lease auction (summarized above), an excellent Renewable Energy World article documents the sharp decline in participation and bidding since the massive February 2022 sale of 6 leases offshore NY and NJ. That sale garnered bids ranging from $285 million to an astounding $1.1 billion, with total high bids of $4.37 billion! The sale was touted as the “nation’s highest grossing competitive energy lease sale in history.” The extravagant bidding, which made little sense then, seems downright irrational now.
Even the December 2022 California offshore lease sale, where development will be dependent on more expensive floating turbines, attracted substantially higher bids for leases (5) smaller than those auctioned last week.
The highly promoted Gulf of Mexico wind auctions were busts with the first sale receiving only one bid for $6.5 million and the second being cancelled due to lack of interest.
Major oil companies like bp and Shell seem to have exited the market for new US offshore wind leases. That leaves Equinor (2/3 Norwegian govt ownership) as the only major oil company pursuing US offshore wind leases.
In just 2 years, cost increases, coastal resident opposition, a troubling blade failure, and developer uncertainty have dramatically changed the outlook for US offshore wind. Nonetheless, the Administration’s wind advocates continue to sing from the same song sheet:
“Today’s lease sale reflects the forward momentum we are seeing to power millions of American homes with clean energy and create good-paying, climate jobs,” said White House National Climate Advisor Ali Zaidi. “With nine commercial-scale projects approved in the last three years and more to go, we are using every available tool to grow the American offshore wind industry as we strengthen the nation’s power grid and tackle the climate crisis.”
Posted in energy policy, pipelines, tagged Nord Stream, pipeline sabotage, Ukraine on August 16, 2024| Leave a Comment »
Posted in energy policy, Gulf of Mexico, Guyana, Offshore Energy - General, tagged expenditures growth, flowlines, risers, Rystad, subsea market, umbilicals on August 16, 2024| Leave a Comment »
Rystad Energy projects a 10% annual compound growth rate for the subsea market from 2024 to 2027, with total spending anticipated to exceed $42 billion by the end of this period.
Brazil dominates the subsea umbilical risers and flowlines (SURF) market. Unsurprisingly, the US is lagging given the absence of a robust offshore leasing program and the dearth of deepwater discoveries in recent years.
Posted in accidents, energy policy, Offshore Energy - General, Offshore Wind, tagged BOEM, BSEE, Macondo blowout, regulatory fragmentation, turbine blade failure, Vineyard Wind on August 14, 2024| 2 Comments »
From the Nantucket Current:
Additionally, ultimate authority over the wind farm remained unclear, with various federal agencies claiming responsibility over different portions of the permitting, licensing, review, and operation of the wind farm.
“Sometimes I have a hard time figuring out, who do we talk to? Who is going to keep us safe? Who is the responsible boss here? Who is going to make the hard decision?” Select Board member Matt Fee asked.
As previously discussed, regulatory fragmentation is a safety and environmental risk factor.
Causes of regulatory fragmentation:
The Dept. of the Interior’s division of responsibilities for offshore wind, which was finalized in January 2023, inexplicably assigns review and approval of Construction and Operations Plans to the Bureau of Ocean Energy Management (i.e. the land manager, lessor, and wind energy promoter) rather than the Bureau of Safety and Environmental Enforcement (i.e. the principal regulator of the activities described in those plans).
More significantly, the offshore wind responsibilities of the 2 bureaus are so intertwined (as is also the case for offshore oil and gas), that attempts to separate the functions have, at a minimum, created inefficiencies and increased regulatory and operational costs.
FTR, the idea that having the BOEM and BSEE functions combined in a single bureau, as was the case with the predecessor bureau (MMS), had anything to do with the Macondo blowout is a complete fallacy. Regarding the accusations that were made toward MMS, the Chief Counsel for the national commission that investigated the tragic incident found no evidence that ethical lapses on the part of MMS employees played any role in causing the blowout.
There were important regulatory changes made after the Macondo blowout. These included capping stack requirements, mandatory safety management systems, and updated rules and standards for cementing/zonal isolation and blowout preventer systems. None of these improvements were precipitated by or dependent on the division of MMS into two bureaus.
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged 5 year leasing plan, API, Chevron Doctrine, DOI, litigation, offshore oil and gas on August 13, 2024| Leave a Comment »
API is challenging the Dept. of the Interior’s 5 year oil and gas leasing plan, which includes the fewest lease sales in program history. That challenge was filed on 12 February, 60 days after Secretary Haaland approved the 5 plan and the first day appeals could be filed pursuant to 43 U.S. Code § 1349.
18 weeks after the API suit was filed, the Supreme Court overturned the Chevron Doctrine. That doctrine (described above) instructed judges to defer to agency interpretations when the language in a law was unclear.
Interior’s 5 year OCS oil and gas leasing plan provides for the fewest (3) lease sales in history and may not have included a single sale were it not for legislation prohibiting the issuance of offshore wind leases unless an offshore oil and gas lease sale was held during the prior year.
This unprecedented oil and leasing decision was based on “the need to confront the climate crisis through reducing greenhouse gas emissions” and on achieving “net zero pathways.” Neither of those objectives is articulated in the OCS Lands Act or other governing legislation.
Extending the Secretary’s general safety and environmental authority for OCS operations to include global climate considerations is a stretch and the type of interpretive administrative decision that the Supreme Court struck down.
Posted in accidents, energy policy, Offshore Wind, Regulation, tagged BOEM, GE Vernova, Norway, Offshore Wind, quality control, safety culture, Siemens Gamesa, turbine blade failure, Vestas, Vineyard Wind on August 8, 2024| 1 Comment »
As the above examples illustrate, turbine blade failures, like the Vineyard Wind incident near Nantucket, are not unique to GE Vernova. GE’s rivals, Siemens Gamesa and Vestas, have also experienced serious quality control issues.
Per ReviewEconomy (2023), “Unexpected and increasing wind turbine failure rates, largely in newer and bigger models, are savaging the profits of some of the world’s biggest manufacturers, as Siemens Gamesa, GE and Vestas report heavy repair and maintenance losses.”
All 3 manufacturers will be providing turbines for US Atlantic wind development. The table below lists the manufacturers for active projects with approved Records of Decision (RODs).
In light of the manufacturing challenges, all 3 companies report increased emphasis on quality control. Why has quality control to date been inadequate and how will the past problems be corrected?
Has the wind industry’s sense of entitlement, as evidenced in their tax credit, rate increase, and departure expectations, affected their safety and quality culture? Has industry and governmental wind energy promotion rushed development and compromised design and fabrication decisions? It’s time for wind developers, manufacturers, and regulators to make sure their priorities are in order.
| project | turbine towers | manufacturer |
| Coastal VA Offshore Wind | 202 | Siemens Gamesa |
| Revolution Wind | 100 | Siemens Gamesa |
| Sunrise Wind | 94 | Siemens Gamesa |
| Atlantic Shores South | 200 | Vestas |
| Ocean Wind 1 | 98 | GE Vernova |
| Vineyard Wind 1 | 100 | GE Vernova |
| Empire Wind 1 & 2 | 147 | Vestas |
| New England Wind (phases 1&2) | 150 | Vestas |
Posted in accidents, energy policy, Offshore Wind, Regulation, tagged BOEM, BSEE, CVA, departures, DNV, fabrication, investigation, quality control, turbine blade failure, Vineyard Wind on August 6, 2024| 2 Comments »
BOEM’s long list of approved departures from the renewable energy regulations includes the eyebrow-raising approval of Vineyard Wind’s request to shortcut the review of design, fabrication, and installation reports.
Contrary to the regulations, Vineyard Wind was authorized to begin the fabrication of facilities before BOEM “received and offered no objections to the their Facility Design Report (FDR) and Fabrication and Installation Report (FIR).” The approval letter is attached, and excerpts (emphasis added) are pasted below. [Note: The requirement that was then at §585.700(b) is found at §585.632 in the current regulations.]
“Vineyard Wind requests a regulatory departure from §585.700(b) requiring that fabrication of approved facilities not begin until BOEM provides notification that it has received and has no objections to the submitted Facility Design Report (FDR) and Fabrication and Installation Report (FIR). Vineyard Wind proposes to fabricate, but not install the following project elements:
1) Monopile foundations;
2) Electrical service platform;
3) Export cable;
4) Inter-array cables; and
5) Wind turbine generator facilities.
….allowing these fabrication activities to take place earlier in time would allow Vineyard Wind to adhere to its construction schedule, maintain its qualification for the Federal Investment Tax Credit, and meet its contractual obligations under the Power Purchase Agreements with Massachusetts distribution companies.
30 cfr 585.103 requires that a departure provide safety and environmental protection equal to or greater than the provision in the regulations that is waived. BOEM’s letter fails to explain how allowing fabrication to begin before fundamental design and fabrication reports are submitted and reviewed meets this test.
It’s noteworthy that GE Vernova has attributed the Vineyard Wind turbine blade failure to a fabrication issue. The FIR is thus particularly pertinent, because it addresses quality assurance measures, significant factors in the Vineyard Wind blade failure.
Perhaps even more troubling is BOEM’s response to subsequent requests by other companies to waive the FDR and FIR requirement (example). In these responses, BOEM asserts that their “current interpretation” is that no departure is needed because “the regulation prohibits only fabrication and installation activities on the Outer Continental Shelf (OCS) itself.” How does that make sense given the important activities, including the fabrication of turbine blades and other turbine components, that take place onshore?
In their letters approving the Vineyard Wind and other departures, BOEM implies that their review of these reports is unnecessary because “the design and fabrication of these components would occur under the supervision of the approved CVA” (Certified Verification Agent). That assertion misconstrues the role of the CVA. These agents, nominated and funded by the operator, provide third party oversight that is complementary to, not a substitute for, BOEM/BSEE project reviews.
According to this memo, DNV was the CVA for Vineyard Wind. Their insights on the turbine blade failure will presumably be included in BSEE’s investigation report.
The Vineyard Wind and other departures reinforce concerns that BOEM’s commitment to promoting offshore wind and accelerating development influenced their regulatory decisions. This concern, along with the division of responsibilities between BOEM and BSEE, should be part of the Vineyard Wind investigation. Hopefully, the investigation panel will be accorded a high degree of independence.
