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Archive for the ‘energy policy’ Category

Kudos to BSEE on the refurbishment of the Ohmsett spill response research facility

Posted in energy policy, Offshore Energy - General, oil spill response, tagged , , , , , on July 13, 2022| Leave a Comment »

My involvement with Ohmsett dates back to the 1970s when EPA operated the facility and I was on the Ohmsett Interagency Technical Committee. The facility fell into disrepair in the late 1980s. Thanks largely to the vision and initiative of my Minerals Management Service (MMS) colleague Ed Tennyson and the enactment of the Oil Pollution Act of 1990, the MMS began restoring the facility in 1990 and resumed testing activities in 1992. Senator Frank Lautenberg (NJ) and a host of dignitaries participated in the grand reopening event.

The facility has lived up to the hype and the current BSEE leadership team seems committed to continuing the testing and innovation. For more information about testing at Ohmsett, including renewable energy concepts, check their website. For an excellent summary of Ohmsett activities from 1992-97, see this paper.

Among the many companies to test equipment at Ohmsett is one that was partially owned by actor Kevin Costner. See the article and photo below. If you build it (and maintain it), they will come!

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US offshore sector “leads” worldwide decline in oil reserves

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Uncategorized, tagged , , , on July 12, 2022| Leave a Comment »

Per Rystad’s independent and highly regarded global energy assessment:

“The (worldwide) drop in reserves is driven by the 30 billion barrels of oil produced last year, plus a significant reduction in undiscovered resources, to the tune of 120 billion barrels. The US offshore sector has contributed the largest total to that drop, where 20 billion barrels of oil will remain in the ground, largely thanks to leasing bans on federal land.“

The decline in reserves should come as no surprise to those who follow the US offshore sector. Note the sharp decline in exploratory drilling in the (updated chart below) and the calls for action on this blog a year ago and more recently.

The OCS oil and gas program requires a sustained, consistent commitment by government and industry. Such a consistent commitment, even though required by legislation, is difficult to achieve in our political system, .

The proposed 5-year leasing plan portends further declines in the OCS program. Those who are celebating the progam’s downfall may not be so smug 5-10 years from now.

The commitment by the oil and gas industry has also been uneven and in some cases disappointing. BOE continues to be troubled by the reduction in exploration by some companies and the decision by others, including leading US companies with a long history of Gulf of Mexico operations, to exit the US offshore sector completely (see the chart below). The exploration decline began before the leasing shutdown (now 600 days in duration). Inconsistent signals from the Federal government and corporate directors, market considerations, and competing investment opportunities are major factors, but there are no doubt other considerations. Constructive dialogue to address these issues is badly needed.

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600 Days…

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , on July 11, 2022| Leave a Comment »

… since the last US offshore oil and gas lease sale. As a result…

  • the number of active leases has fallen below 2000 (1987 as of July 1, 2022) for the first time in at least 40 years
  • 99.4% of the US OCS is closed to exploration
  • exploration opportunities continue to dwindle negatively affecting reserves (more on this in an upcoming post)

Of the 1.7 billion acres on the US OCS, 10.6 million are currently open to exploration and development.

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April GoM production, BOEM’s production forecast, and the proposed OCS leasing program

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on July 7, 2022| Leave a Comment »

April production increased from March by 72,000 BOPD to 1.763 million BOPD. The increase is associated, at least in part, with Murphy’s King’s Quay field which began producing in early April. 2022 GoM production remains below the levels reached in the first 7 months (pre-Hurricane Ida) of 2021, and is well below BOEM’s forecasted 2022 production rate of 1892 MBOPD. Perhaps BOEM was assuming earlier startup dates for other projects that will begin production later this year or next year. The 2022 YTD dip in production points to the importance of sustained exploration and development.

BOEM’s short-term production forecast is considerably more optimistic than EIA’s. This optimistic forecast, along with unrealistic expectations regarding the “energy transition” are reasons for proposing so few lease sales in the new 5 year leasing program. The logic for this minimalist leasing program seems to be that future production is neither necessary nor desirable. Indeed the program implies that the long-term nature of offshore production is a liability and is justification for limiting OCS oil and gas leasing:

“BOEM’s short-term (20-year) production forecast for existing leases shows steady growth from 2022 through 2024 and declining thereafter (see Section 5.2.1). The long-term nature of OCS oil and gas development, such that production on a lease can continue for decades makes consideration of future climate pathways relevant to the Secretary’s determinations with respect to how the OCS leasing program best meets the Nation’s energy needs.“

5 Year Leasing Program, p.3

Basing leasing decisions on “future climate pathways” would seem to be a considerable stretch of the Secretary’s authority under the OCS Lands Act and may be inconsistent with the recent SCOTUS decision in West Virginia vs. EPA. A strategic shutdown of the offshore oil and gas program would dramatically increase energy supply and security risks going forward, and should be authorized by Congress.

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Norwegian offshore workers strike

Posted in energy policy, Norway, Offshore Energy - General, tagged , , on July 5, 2022| Leave a Comment »

“Norwegian offshore oil and gas workers went on strike Tuesday. The stoppage could reduce the country’s gas output by almost a quarter and intensify supply chain shortages due to Russian gas boycotts by EU nations.” 

dw.com

I couldn’t find any data on the typical length of these strikes, but my recollection is that they are usually rather brief.

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EIA: Fossil fuel sources accounted for 79% of U.S. consumption of primary energy in 2021

Posted in climate, energy policy, Offshore Energy - General, tagged , , , , , on July 5, 2022| Leave a Comment »

EIA

Yet the proposed 5 Year OCS leasing program (p. 3) tells us that long term offshore production is not needed because the IEA’s “roadmap to net-zero emissions by 2050 for the global energy sector would require no new investment in fossil fuel supply projects (IEA 2021).”

Does the IEA dictate US energy policy? Dan Yergin has a far better grasp on the realities of energy consumption and transitions.

“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.“

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Proposed 5-Year OCS Leasing Program issued

Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on July 2, 2022| Leave a Comment »

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The June 30, 2022 deadline for releasing the Proposed OCS Leasing Program has been missed without explanation

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , on July 1, 2022| Leave a Comment »

WASHINGTON (May 19, 2022) — During testimony before the U.S Senate Committee on Energy and Natural Resources today, Secretary of the Interior Deb Haaland confirmed that, despite delays in implementation from the previous Administration, the Interior Department will release the Proposed Program – the next step in the five-year offshore energy planning process – by June 30, 2022, which is the expiration of the current program. A Proposed Program is not a decision to issue specific leases or to authorize any drilling or development.

DOI

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SCOTUS: West Virginia 6, EPA 3. These statements should resonate with regulators and industry.

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , on June 30, 2022| Leave a Comment »

When Congress seems slow to solve problems, it may be only natural that those in the Executive Branch might seek to take matters into their own hands. But the Constitution does not authorize agencies to use pen-and-phone regulations as substitutes for laws passed by the people’s representatives.

Justice Gorsuch in concurrence

Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible “solution to the crisis of the day.” New York v. United States, 505 U. S. 144, 187 (1992). But it is not plausible that Congress gave EPA the authority to adopt on its own such a regulatory scheme in Section 111(d). A decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body.

Justice Roberts for the majority

At first glance, the SCOTUS decision would seem to affect the regulation of GHG emissions on the OCS and possibly the Lease Sale 257 decision (now being appeal), which was based on BOEM’s failure to estimate the effect of reduced OCS production on GHG emissions outside the US.

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EIA GoM forecast points to the importance of new production

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , on June 30, 2022| Leave a Comment »

Leasing shutdowns have consequences. See the IER article, and the post below regarding the importance of new production, which is dependent on consistent leasing and exploration programs. Will the proposed leasing plan be issued today as promised?

“According to EIA, declining production from existing Gulf of Mexico fields will largely offset the increases in oil production from the new fields, with natural gas production in the Gulf of Mexico continuing its three-year decline. During 2021, 15 percent of U.S. oil production and 2 percent of U.S. natural gas production was produced in the Gulf of Mexico.”

IER

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