Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged API, Gulf of Mexico, Lease Sale 261, Louisiana Federal Court, Rice's whale on September 22, 2023| Leave a Comment »
Posted in climate, energy policy, Offshore Wind, Uncategorized, tagged Atlantic wind woes, Commonwealth Wind, high bids, Massachusetts, power purchase agreements, SouthCoast Wind on September 20, 2023| Leave a Comment »
A BOE post from last December commented on the seemingly irrational bidding for Atlantic and Pacific wind leases. More recent posts have reported on the woes of Atlantic leaseholders.
Two Atlantic lessees, Commonwealth Wind and SouthCoast Wind, which paid $135 million for each of their North Atlantic leases, have now agreed to pay $48 million and $60 million respectively to cancel their power purchase agreements with electric utilities. Perhaps the effective date of these leases (see below) reflects on the wisdom of their purchase.🍋
Both Commonwealth Wind and SouthCoast Wind are hoping to rebid their projects in a Massachusetts offshore wind procurement scheduled for next year.Â
Commonwealth Magazine
Some northeast states and their public utilities may be in a bit of a bind. Either they accept higher electric rates and the likely public backlash, or they deviate from their staunch anti-gas, anti-nuclear orthodoxy. Similarly, oil companies that have invested heavily in offshore wind may find that they are not just less profitable, but (even) less popular.
Posted in climate, energy policy, Offshore Energy - General, tagged natural gas, New York, offshore platforms, power plants, renewable energy, safety on September 19, 2023| Leave a Comment »
New York’s looming, self-imposed electric power crisis:
Something here does not remotely add up. If New York state succeeds by 2030 in closing its natural gas plants — the plants that account for 60% of the State’s generation capacity — that would bring our total installed capacity down from 37.5 GW to as little as 15 GW. But we need almost 60 GW to meet projected demand. And that’s 60 GW that can be called on any time as needed to meet peak usage. The 9 GW of projected offshore wind turbines wouldn’t make much of a dent even if they operated all the time and could be dispatched to meet peak demand, which they can’t. Instead, they will operate only about a third of the time, and at their own whim. At best they will provide about 3 GW on average, when what we need for this full electrification project is more like 45 GW of dispatchable power to add to our existing hydro and nuclear. Â
Manhattan Contrarian
Power generation realities:
Offshore platforms: In some regions, there is a push to power platforms with renewable energy transported by electric cable. Currently, most platforms are efficiently powered by gas turbines which satisfy energy needs even when demand spikes during well operations like tripping out of the hole. The extent to which renewables can reliably support platform operations during these and other operations, when power interruptions are unacceptable from a safety standpoint, is a risk that must be assessed prior to committing to alternative energy sources.
The environmental benefits of powering platforms with renewable energy also have not been clearly documented. In most cases, offshore platforms produce sufficient gas to support their power demands. Should platforms be powered by imported electricity, gas that is not used for platform operations would presumably be marketed for consumption elsewhere or reinjected.
If the gas is marketed and consumed elsewhere, there is essentially no net (global) CO2 emissions reduction benefit. Gas that is reinjected is wasted unless there is an enhanced oil recovery benefit. So, the net environmental benefit from importing electric power seems questionable, and the operational risks could be significant.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Offshore Wind, Regulation, tagged Atlantic wind, Gulf of Mexico oil and gas, Lease Sale 261, operating restrictions, Rice's whale, RIght Whale on September 11, 2023| 2 Comments »
Both species are endangered, but the operating restrictions differ significantly:
| North Atlantic wind leases: right whale restrictions | GoM Lease sale 261: Rice’s whale restrictions |
| No leasing prohibitions or turbine-free areas have been established despite concerns raised by NOAA (see attached letter) | All of the expanded Rice’s whale area is excluded from leasing (i.e. the entire area between the 100 and 400 m isobaths across the GoM) |
| seasonal 10 kt max speed for vessels > 65′ | year round 10 kt max for all vessels |
| vessel separation distance of 500 m for any sighted right whale or unidentified large marine mammal | separation distance of 500 m for any sighted Rice’s whale; if unsure, must assume whale is Rice’s |
| no visibility restrictions for vessel operations | vessels must avoid transit between dusk and dawn and other times of low visibility |
| no automatic identification system (AIS) requirements | vessels > 65′ must have AIS functioning at all times |
| no documentation requirements | must maintain records to document compliance |
Note (below) the proximity of existing and planned wind leases to moderate to high density RIght whale areas compared to the more speculative expanded Rice’s whale area in the central and western GoM that is predicted based on passive acoustic recordings.
Posted in energy policy, Offshore Energy - General, Regulation, tagged BSEE, civil penalties, George Miller, Minerals Management Service, OCS Lands Act, offshore safety on September 7, 2023| Leave a Comment »
The civil penalties provision in the 1978 OCS Lands Act (OCSLA) Amendments was flawed in that it stipulated that operators must be given time to take corrective action before a civil penalty could be assessed. The “time to take corrective action” requirement was confirmed by a 1983 Federal Court decision in Louisiana:
The Court agrees with Chevron’s construction of Section 24(b) and holds that civil penalties may only be imposed under Section 24(b) for violations which continue after the violator has been notified of the breach and has failed to correct it within a reasonable period allowed. This conclusion is based primarily upon a careful review of the pertinent statute. The first sentence sets forth the conditions of liability:
If any person fails to comply with any [provision of the Act] after notice of such failure and expiration of any reasonable period allowed for corrective action, such person shall be liable for a civil penalty of not more than $10,000 for each day of the continuance of such failure.
The court decision gutted the Minerals Management Service (MMS) civil penalties program. Civil penalties could no longer be assessed until the operators had been given time to correct their violations, even those that endangered workers and the environment.
Ironically, Congressman George Miller (D-CA), an ardent opponent of the offshore oil and gas program, proved to be an important MMS ally by adding language to the Oil Pollution Act of 1990 that amended the OCSLA civil penalties provision. The first draft of that language expanded the civil penalties authority to include violations that may constitute a threat of serious, irreparable, or immediate harm or damage to life, property, or the environment.
We were able to revise that draft by adding the words “or constituted” after “constitute” to cover situations where the threat was no longer present. For example, if an inspector found that a well had been drilled without required elements of the well control system in place, the threat may no longer be present at the time the violation was detected but it certainly was when the well was drilled.
The revived MMS civil penalties program was fair and effective, and BSEE seems to be administering the program in a similar manner. Civil penalties data for the past 4 years will be posted next week.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged Gulf of Mexico, Lease Sale 261, litigation on September 5, 2023| Leave a Comment »
The plaintiffs assert “insufficient and arbitrary environmental analyses, in violation of the National Environmental Policy Act (NEPA) and the Administrative Procedure Act (APA).” The court filing is attached.
For those who missed it, supporters of the lease sale have challenged some of the provisions.
All of this will have to be resolved in the next 3 weeks, as the congressionally mandated sale, scheduled for 27 September, (presumably) cannot be postponed.
Posted in climate, energy policy, Offshore Wind, tagged Beacon Wind, bp, Empire Wind, Equinor, rate increase on September 5, 2023| Leave a Comment »
In the wake of the disappointing Gulf of Mexico wind sale and Orsted’s recent financial announcement, Equinor and bp have requested a massive increase in the price of electricity to be generated at Empire Wind 1, Empire Wind 2, and Beacon Wind (see map above).
According to the New York State Energy Research and Development Authority, this would result in an average 54% price hike across their portfolio. The strike prices would rise from $118.38 to $159.64/MWh for Empire Wind 1, from $107.50 to $177.84/MWh for Empire Wind 2, and from $118.00 to $190.82/MWh for Beacon Wind.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged API, BOEM, Chevron, injunction, Lease Sale 261, Louisiana, Rice's whale on August 31, 2023| Leave a Comment »
The court filing is attached. See the previous post on this matter.
This Court should grant Plaintiffs—the State of Louisiana, the American Petroleum Institute (“API”), and Chevron U.S.A. Inc. (“Chevron”)—a preliminary injunction and prevent those unlawful provisions from permanently disrupting the result of the fast-approaching lease sale (which Congress has directed must occur by September 30, and which cannot be delayed without causing Plaintiffs even more serious injury).
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged API, BOEM, Chevron, Lease Sale 261, Louisiana, Rice's whale on August 26, 2023| Leave a Comment »
See the attached document.
From a regulatory policy standpoint, this appears to be a strong filing. Operationally, the most important points pertain to the costly and premature Rice’s whale restrictions first discussed on this blog.
Most notably, the plaintiffs seek (p.39):
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged BOEM, Gulf of Mexico, Lease Sale 261, NOAA, Rice's whale, Senator Manchin on August 25, 2023| Leave a Comment »
In addition to the lease stipulation, the entire expanded Brice’s whale area has been excluded from the lease sale. Senator Manchin strongly criticized that decision:
Let me be clear, the exclusion of more than 6 million productive acres from the upcoming offshore oil and gas lease sale in the Gulf of Mexico based on a settlement reached in the name of protecting Rice’s whale while conveniently only targeting oil and gas is yet another example of this Administration’s intentional undermining of the strong energy security provisions in the Inflation Reduction Act.
Senator Manchin
Bud's Offshore Energy (BOE) 