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Archive for the ‘energy policy’ Category

Despite big push from government, the offshore wind program struggles

Posted in energy policy, Offshore Energy - General, Offshore Wind, Uncategorized, tagged , , on January 2, 2023| Leave a Comment »

“Mom” (US govt) strongly and openly favors one child (offshore wind) over the other (offshore oil and gas). As a result, beneficial family synergy is not realized, and neither “child” reaches her full potential.

The wind program was intended to complement the oil and gas program, not replace it.

These articles highlight some of the challenges facing offshore wind:

  • WSJ: Soaring Costs Threaten U.S. Offshore-Wind Buildout
  • Bloomberg: US Ignored Own Scientists’ Warning in Backing Atlantic Wind Farm
  • NJ.com: Offshore wind is on N.J.’s horizon but activists worry of impact to whales, economy, the view

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Happy New Year! Join the BOE Band in 2023!

Posted in energy policy, Offshore Energy - General, Uncategorized, tagged , , , , on December 31, 2022| Leave a Comment »

photo courtesy of Lars Herbst

BOE an independent, unsponsored blog that is dedicated to offshore safety, pollution prevention, energy production, effective regulation, and responsible energy policy. If you would like to submit a post, leave a comment to that effect at any time.

Happy New Year! Bud

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Was this our Christmas present?

Posted in energy policy, tagged , , on December 29, 2022| Leave a Comment »

More “free” oil was withdrawn from the SPR, which has sunk to the lowest level (375.1 million bbls) since Christmas 1983. More rational oil and gas leasing policies would have been a far better gift, particularly for our children and grandchildren.

The “pilot” refill program is scheduled to begin in February. We’ll see how that goes.

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Gulf of Mexico incidents and violations leader wants to develop a carbon sequestration hub

Posted in accidents, CCS, decommissioning, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , on December 28, 2022| Leave a Comment »

Carbon-Zero US LLC of Dallas (a Cox Oil affiliate) has applied for up to $12 million in U.S. Department of Energy funds to develop a pilot sequestration hub in offshore storage fields about 20 miles from Grand Isle, according to officials from Cox Operating LLC, the Dallas operator that owns some of the storage fields.

Cox Operating LLC will “repurpose facilities and equipment” for the carbon storage project, according to a news release.

The Advocate

Should this company be authorized to repurpose Gulf of Mexico facilities for carbon sequestration?

  • Per BSEE Incident of Non-Compliance (INC) data for 2022, Cox had more component shut-in INCs (132) than any other company. Cox was second to the Fieldwood companies in the number of warning and facility shut-in INCs, and in the total number of INCs. 48% of the Cox INCs required either a component or facility shut-in.
  • Cox had an INC/facility-inspection ratio of 0.77, nearly 50% higher than the GoM average of 0.53.
  • Per the posted BSEE district investigation reports for 2022, Cox was responsible for 9 of the 30 incidents that were significant enough to require investigation. That is more than twice as many as any other company (next highest was 4).
  • The incidents included 3 serious injuries, 2 fires, a large gas leak, and oil spills of 114, 129, and 660 gallons. Per the posted reports, only one other company had an oil spill of >1 bbl. (Note: Only spills of > 1 bbl are routinely investigated by BSEE. One bbl = 42 gallons.)
  • While INCs were issued for only 3 of the 9 Cox incidents, a review of the reports suggests that INCs should have been issued for at least 4 of the other incidents.
  • Cox operates 375 platforms with installation dates as early as 1949. 134 of their platforms are > 50 years old. Only 66 were installed in the last 20 years and only 6 in the last 10 years (most recent December 2014). How will the carbon sequestration plans affect their massive decommissioning obligations?
  • Many of the Cox platforms were assigned by predecessor lessees. Those predecessors can only be held responsible for the decommissioning of facilities they installed, not for more recent wells or platforms and not for facilities that are repurposed for carbon sequestration.

Other more generic issues should be addressed before DOE awards funds for offshore sequestration projects.

Also, as noted in the discussion of Exxon’s 94 Sale 257 oil and gas leases, a competitively issued alternate use RUE is required (30 CFR § 585.1007) before sequestration operations may be conducted on an oil and gas lease.

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Forbes 2022 In Review: The Year The Energy Transition Went Off The Rails

Posted in energy, energy policy, tagged , , , on December 27, 2022| Leave a Comment »

Nothing new or surprising, but an interesting read nonetheless.

All you need to know about how the vaunted ‘energy transition’ is going as 2022 comes to its merciful close is to read the headline of a Reuters story published last week: “Global coal consumption to reach all-time high this year – IEA”.

That isn’t how the narrative surrounding the energy transition assumed this would all be going in the year 2022. Certainly, it isn’t how IEA head Fatih Birol has wanted it to go, given his insistence that “more wind and solar” is the answer to seemingly every energy-related question.

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On 12/16/2022, the SPR fell to 378.6 million bbls, the lowest volume since 1983. This is the same day DOE announced the pilot replacement program.

Posted in energy policy, tagged , , on December 21, 2022| Leave a Comment »

In October, the President announced a plan to replenish the SPR using updated authorities that allow for fixed-price purchases of crude oil. Relative to conventional purchase contracts that expose producers to volatile crude prices, this new approach, when used at scale, can give producers the assurance to make investments today, knowing that the price they receive when they sell to the SPR will be locked in place. Today’s notice will pilot this new approach by starting with a purchase of up to 3 million barrels of crude oil.  

DOE

Note that these pilot deliveries will not begin until Feb. 2023 and will total < 3 million barrels. The reserve is 349 million bbls below capacity, and 216 million bbls have been withdrawn this year.

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If you like high energy prices, shortages, supply disruptions, and endless litigation …

Posted in energy policy, tagged , , , , , , , on December 19, 2022| Leave a Comment »

… this New York state legislation is perfect.

NY State Senate Bill S9612 (proposed)

§ 328-a provides that no fossil fuel industry member, as that term is defined in the bill, shall knowingly or recklessly create or contribute to a condition that endangers the safety or health of the public by
extracting, storing, transporting, refining, importing, reporting, producing, manufacturing, distributing. compounding, marketing, or sale of a "qualified product".

328-b declares that a violation of the new article that results in any harm shall be deemed climate negligence regardless of when the underlying conduct occurred.

328-c prohibits governmental enforcement. (i.e. prohibits govt intervention on behalf of the accused company)

328-d provides that any person, firm, corporation, or association that has been damaged as a result of a fossil fuel industry member's acts or omissions in violation of this article shall be entitled to bring an
action for recovery of damages.

This non-attorney suspects that the legislation might conflict with the Commerce Clause of the US Constitution (Article 1, Section 8, Clause 3), which gives Congress the power “to regulate commerce with foreign nations, and among the several states, and with the Indian tribes.” New York produces little oil, gas, or coal, so the legislation would largely affect operations that are conducted in other states, on Federal lands, or in foreign countries.

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MEP Mick Wallace on Nord Stream sabotage

Posted in climate, energy policy, pipelines, tagged , on December 17, 2022| Leave a Comment »

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SPR decline continues; 382.271 million bbls in reserve as of 12/9/2022

Posted in energy policy, tagged , on December 16, 2022| Leave a Comment »

  • down another 4.7 million bbs from the previous week (12/2/2022)
  • lowest reserve volume since 1/6/1984
  • 212 million bbls withdrawn this year
  • EIA data

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HSBC will no longer finance new oil and gas field projects

Posted in climate, energy policy, UK, Uncategorized, tagged , , on December 14, 2022| Leave a Comment »

This rather arrogant and condescending policy makes neither good business sense nor good social sense (unless you support energy poverty), but I’m sure the executive team is proud. That said, they do seem to have left themselves with a fair amount of wiggle room.

In line with the policy, we will no longer provide new lending or capital markets finance for the specific purpose of projects pertaining to new oil and gas fields and related infrastructure when the primary use is in conjunction with new fields.

We will continue to provide finance or advisory services to energy sector clients at the corporate level, where clients’ transition plans are consistent with our 2030 portfolio-level targets and net zero by 2050 commitment.

HSBC

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