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Archive for the ‘energy policy’ Category

Seymour Hersh: “The Cover-Up” (Nord Stream followup)

Posted in energy policy, pipelines, Uncategorized, tagged , , on March 22, 2023| Leave a Comment »

From Hersh’s substack:

The agency did its job and, with the help of German intelligence, concocted and planted stories about an ad hoc “off the books” operation that had led to the destruction of the pipelines. The scam had two elements: a March 7 report in the New York Times citing an anonymous American official claiming that “[n]ew intelligence…suggests” that “a pro-Ukrainian group” may have been involved in the pipeline’s destruction; and a report the same day in Der Zeit, Germany’s most widely read weekly newspaper, stating that German investigative officials had tracked down a chartered luxury sailing yacht that was known to have set off on September 6 from the German port at Rostock past Bornholm island off the coast of Denmark. 

“It was a total fabrication by American intelligence that was passed along to the Germans, and aimed at discrediting your story,” I (Hersh) was told by a source within the American intelligence community.

The comments following the “SHEERPOST” re-posting of the Hersh update piece are also interesting.

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Another prominent petroleum geologist sees high Atlantic resource potential

Posted in energy policy, Offshore Energy - General, tagged , , on March 22, 2023| Leave a Comment »

Last week, my colleague Keith Meekins attended a presentation by petroleum geologist Samuel Epstein. Like the late Paul Post, a leading expert on the petroleum geology of the Atlantic OCS, Epstein believes the US Atlantic has major resource potential. Per Epstein:

Untested ultra-deep potential hydrocarbon resources are located in the BOEM play area 8, termed the BCT Structural Belt Jurassic-Cretaceous Interior Shelf. Thus, significantly more risked recoverable reserves, due to 1) Two salt ridges penetrating Middle Jurassic age sediments identified in seismic records located to the north of the Schlee Dome, analogous to the ultra-deep salt related Norphlet Formation, offshore Gulf of Mexico and the onshore East Texas, Pearsall Field and 2) stratigraphic plays including below a 60 m thick and 7500 km square evaporitic feature in Early Jurassic rocks flanking the Schlee Dome.

Looking more broadly at Atlantic resource potential, Paul Post had estimated that the US Atlantic could contain 21.4 billion BOE with the major caveat that the presence of a working petroleum system was required and that could only be determined through drilling. Per Paul:

The US Atlantic stands out. It has not been explored in paleo deep- and  ultra-deepwater using exploration concepts proven successful in similar settings.

Paul Post slide

Also, see “Opportunity Lost“

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No love for shelf producers?

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on March 20, 2023| Leave a Comment »

The terms for congressionally mandated Gulf of Mexico Sale 261 have been proposed. As is also the case for Sale 259, the royalty for leases in <200 m or water is 50% higher than for prior sales. This is partly because of the royalty floor (16 2/3%) established in the Inflation Reduction Act, and partly because the Dept. of the Interior opted for the highest royalty allowed (18 3/4%). The royalty for shelf leases is thus the same as for deepwater leases with much greater production potential.

Rental terms for leases in <200 meters of water are higher and more punitive (for delayed development) than for previous sales and for deepwater leases.

Minimum bid requirements are unchanged from sales 256 and 257, and are higher for deepwater leases ($25/acre for <400m and $100/acre for >400m).

Bottom line: While the terms for deepwater leases are unchanged from Sales 256 and 257, that is far from the case for shelf leases where royalty rates were increased by 50% and rentals were increased by 43% for all lease years.

SaleDate% royalty
(<200m)		year 1-5/6/7/8+ rentals
($/acre, <200m)		year 8+ rentals for
leases in 400m+ ($/acre)
25611/18/202012.57/14/21/2816
25711/17/202112.57/14/21/2816
2593/29/202318.7510/20/30/4022
2619/27/202318.7510/20/30/4022

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Are the Netherlands Senate elections a positive sign for more rational energy policy?

Posted in climate, energy policy, Uncategorized, tagged , , , on March 19, 2023| Leave a Comment »

The BBB or BoerBurgerBeweging (Farmer-Citizen Movement) party won 17 seats in the Senate, more than any other party.

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EIA Energy Outlook 2023

Posted in energy, energy policy, natural gas, tagged , , , on March 17, 2023| Leave a Comment »

Yesterday, Lars Herbst attended the EIA’s Annual Energy Outlook presentation. The slides are attached.

Below is a custom chart from the EIA data tables. While EIA predicts growth in renewable generating capacity, US oil and gas production are nonetheless projected to increase slightly through 2050.

aeo2023_release_presentation-1Download

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The sad state of the US OCS oil and gas leasing program

Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on March 16, 2023| 1 Comment »

Of the 1.7 billion acres of Federal land on the US Outer Continental Shelf, only about 73 million acres in the Gulf of Mexico and 1 million acres in the Cook Inlet may be offered for oil and gas leasing. Official or de facto exclusions prohibit leasing in the entire US Atlantic, the entire US Pacific, all Alaska areas except the Cook Inlet, and most of the Eastern Gulf of Mexico. No other coastal nation has restricted access to oil and gas resources to this extent.

As demonstrated in recent sales, many of the tracts being offered have little or no production potential. Only 308 tracts (1.7 million acres) received bids in GoM Sale 257. 94 of the high bids were for sequestration purposes and were arguably invalid. Sale 258 in the Cook Inlet only received a single bid.

The number of active leases, currently 2153, has been at a historically low level for the past 2 years. Only 0.7% of our OCS is leased and thus open to exploration. 26% (552) of these leases are already producing, leaving a historically low number of nonproducing leases.

Oil is where you find it, not where you wish it was or want it to be. Denying access to all but a small portion of the OCS limits exploration strategies and prevents publicly owned resources from supporting our economy in the manner intended by the OCS Lands Act.

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Bye bye Beaufort. So many memories😢

Posted in Alaska, energy policy, tagged , , , , , , , , on March 15, 2023| Leave a Comment »

The shrinking of the OCS oil and gas program continues. In an attempt to placate opponents of the Willow project, the President has removed the entire Beaufort Sea from oil and gas leasing consideration. Unsurprisingly, the opponents of Willow are no less irate.

Under the authority granted to me in section 12(a) of the Outer Continental Shelf Lands Act, 43 U.S.C. 1341(a), I hereby withdraw from disposition by oil or gas leasing for a time period without specific expiration the areas designated by the Bureau of Ocean Energy Management as the Beaufort Planning Area of the Outer Continental Shelf that have not previously been withdrawn.  

White House directive

The 5 Hilcorp leases identified above (Northstar and Liberty projects) are all that remains of the once promising Beaufort Sea planning area.
The Kulluk, pictured above, was a unique conical shaped and ice strengthened drilling vessel that operated in the US and Canadian Beaufort from 1983-1993.
BP’s Mukluk well being drilled from an artificial island in the US Beaufort Sea in 1983. The $120 million exploratory well was the most expensive in history, but did not find commercial quantities of hydrocarbons.

Historical background

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WP: “Why Big Oil is less worried about Biden phasing out fossil fuels”

Posted in climate, energy policy, Offshore Energy - General, tagged , , on March 11, 2023| Leave a Comment »

HOUSTON — Oil and gas industry leaders say they’ve seen a big shift in tone from the Biden administration over the past year, helping to smooth over one of the president’s rockiest relationships.

Washington Post

Perhaps the Washington Post reporter is correct, but the “big shift in tone” is not apparent in the offshore sector. The only lease sales have been mandated by Congress, the 5 year plan is still 9 months from completion, the lease sale terms have been less than favorable, and language in the draft 5 year plan does in fact express the intent to phase out oil and gas.

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Rystad Energy: Offshore is back!

Posted in energy policy, Gulf of Mexico, Guyana, Norway, Offshore Energy - General, UK, tagged , , , , , , on March 10, 2023| Leave a Comment »

The offshore oil and gas (O&G) sector is set for the highest growth in a decade in the next two years, with $214 billion of new project investments lined up. Rystad Energy research shows that annual greenfield capital expenditure (capex) broke the $100 billion threshold in 2022 and will break it again in 2023 – the first breach for two straight years since 2012 and 2013.

Offshore activity is expected to account for 68% of all sanctioned conventional hydrocarbons in 2023 and 2024, up from 40% between 2015-2018.

Rystad

Comments:

  • Middle East investment continues to be strong
  • Good for South America thanks to Brazil (16 new FPSOs by the end of the decade) and the Guyana success story.
  • Strong forecast for Norway and the UK boosts Europe.
  • North America could do far better with less obstructive access policies.

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Senator Manchin on the delayed 5 Year Leasing Plan

Posted in climate, energy policy, Offshore Energy - General, tagged , , , on March 9, 2023| Leave a Comment »

Washington, DC — Today, U.S. Senator Joe Manchin (D-WV), Chairman of the Senate Energy and Natural Resources Committee, released the following statement on the Department of the Interior’s (DOI) unprecedented delay in releasing a five-year leasing plan. 

“Monday night, the Department of the Interior made it painfully clear – again – that they are putting their radical climate agenda ahead of our nation’s energy security, and they are willing to go to great lengths to do it. The earliest that Interior will release a legally required program for 2023-2028 offshore oil and gas leasing will be the end of this year. That’s 18 months late. This is the first time in our nation’s history that we haven’t had a 5-year leasing program released before the old plan expired. Every other Administration, Democrat and Republican, has managed to follow the law in a timely fashion.

“Let me be clear – this is not optional. The Outer Continental Shelf Lands Act mandates that the Secretary of the Interior “shall prepare” this program to “best meet national energy needs.”

“What is even more terrifying is that on top of this disturbing timeline, Interior refuses to confirm if they intend to actually include any lease sales in the final plan, which is an issue I sounded the alarm about when Secretary Haaland appeared before the Senate Energy and Natural Resource Committee on May 19, 2022. I will remind the Administration that the Inflation Reduction Act also prevents them from issuing any leases for renewables, like offshore wind or onshore solar unless there are first reasonable lease sales for oil and gas that actually result in leases being awarded. And I will hold their feet to the fire on this.” 

Senator Manchin

Plain English; no need for interpretation 😉

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