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Attached are my comments on BOEM’s proposed revisions to the decommissioning financial assurance regulations. These comments were submitted to Regulations.gov yesterday (3 days early 😀). Bud

Concluding Remarks

  1. MMA’s highest priority must be assuring that facilities are safely decommissioned without public funding. Supplemental financial assurance determinations and lease assignment approvals must be consistent with that priority.  
  2. Predecessor liability is an important financial assurance principle, but legal boundaries and administrative procedures must be clearly established. 
  3. Safety and compliance are inextricably related to financial performance, and must be considered in determining supplemental assurance requirements. 
  4. Using reserve estimates to reduce supplemental assurance exposes taxpayers to geologic and accounting risks. 
  5. Unacceptable public risks have resulted from financial assurance decisions intended to advance offshore wind development.

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The comment period for BOEM’s proposed revisions to decommissioning financial assurance requirements closes on Friday, May 8th.

John Smith’s comments have been officially submitted to Regulations.gov, and are attached for your convenience. Nice work by John.

My comments are being finalized and will be submitted and posted soon.

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From the Dept. of the Interior:

Why This Change Is Happening  

The transition reflects more than a decade of operational experience managing offshore resources. By consolidating the planning, permitting, inspection, and enforcement responsibilities currently divided between BOEM and BSEE, the Department aims to:  

  • Improve coordination and consistency  
  • Reduce duplication of efforts  
  • Strengthen oversight and environmental safeguards  
  • Modernize organizational structure  

All current regulatory responsibilities and protections will remain in place throughout the transition. There will be no disruption to permitting, environmental reviews, or enforcement activities.

What to Expect

  • Phased Transition: Internal alignment activities begin soon.
  • No Regulatory Rollbacks: Existing requirements remain in full effect.  
  • New Website and Branding: The Marine Minerals Administration’s full digital presence will launch in the coming months.  
  • This page will be updated regularly

previous posts on this merger

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Bluepoint Wind Lease 0537 owned by Global Infrastructure Partners, a part of BlackRock, and Ocean Wind (Engie, France and EDP Renewables, Portugal)
Golden State Wind Lease 0564 owned by Ocean Wind (Engie, France and EDP Renewables, Portugal) and the Canada Pension Plan Investment Board

The Dept. of the Interior (DOI) has announced wind lease buyback agreements with Bluepoint Wind and Golden State Wind.

These are mutually beneficial “Win-Win” agreements. Bluepoint and Golden State benefit by escaping bad business decisions:

  • Bluepoint massively overpaid ($765 million) for Atlantic lease 0537 during the brief irrational exuberance era of the offshore wind program. The intense bidding was driven by the lure of subsidies, guaranteed power sales, unprecedented Federal and State promotion, peak climate activism, inattention to mounting public opposition, and irrational expectations regarding the role of offshore wind in powering the economy.
  • The value of Atlantic wind leases declined by 99.4% between 2022 and 2024, and this was before the Presidential election!
  • The New Jersey Board of Public Utilities has moved to terminate a $1 billion agreement to develop infrastructure to bring power from offshore wind farms to the grid.
  • Golden State bid $150 million for a wind lease that will require floating turbines. The 50 MW Kincardine Offshore Windfarm, which is billed as the “world’s largest floating wind farm,” experienced a £30 million loss in 2023 following a £18 million loss in 2022. Another floating wind project, Hywind Scotland, had to be taken offline for 4 months for maintenance after less than 6 years of operation. BOEM was forced to “postpone” the Oregon wind sale given the absence of bidders.
  • Significant work had not yet begun on either the Bluepoint or Golden State projects.
  • Many in Morro Bay and elsewhere along the Central Coast of California are not pleased with the attempt to “industrialize the coast.” Opposition to offshore wind projects is now well established along the Atlantic Coast.
  • Even in Europe, the value of offshore wind leases has diminished. A Dec. 2024 Danish offering received no bids. See this explanation.
  • The companies get to invest their inflated wind dollars in profitable energy projects without penalty. What prudent executive wouldn’t jump at the deal?
  • Waiting for the next Administration is not likely to improve the fundamental economics of offshore wind development, and increased subsidies are not popular.
  • A pro-wind govt would facilitate permitting, but is unlikely to buyback existing leases.

The Administration also benefits:

  • Two more wind leases are off the books.
  • Removing one of three leases could significantly affect the economics of Central Coast (CA) wind development.
  • Agreements were necessary because it’s difficult to cancel leases, and compensation would be required. If settled in court, the compensation could easily exceed the lease purchase price.
  • The companies agreed not to pursue any new offshore wind projects in the United States.
  • The rebates will be invested in projects favored by the Administration.

Question: Are the partners and parent companies also precluded from investing in offshore wind projects or just the Bluepoint Wind and Golden State Wind entities? If BlackRock, EDP, and Engie can no longer make such investments, that is a big deal. This is especially true given the agreement with Total, Vineyard Wind’s problems, Orsted’s financial challenges, BP and Shell’s apparent exit from the US offshore wind market, and Equinor’s reduced renewable energy ambitions.

Finally, a December 7, 2022 release by the Canada Pension Plan Investment Board heralding the 50% partnership in Golden State Wind might be of interest to our Canadian readers. That bad investment can now be removed from the books.

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Dirk Kempthorne participating in Lease Sale 206 which garnered a record $3.7 billion in high bids!

I was saddened to learn about the passing of Dirk Kempthorne, Secretary of the Interior from 2006-2009. He was a supporter of responsible offshore oil and gas development, and oversaw six lease sales and the continued growth of the deepwater sector.

One of those lease sales generated a record $3.7 billion in high bids (photo above). Lars Herbst was the Minerals Management Service’s Regional Director at the time.

I had the pleasure of briefing the Secretary on a couple of occasions and found him to be very personable, attentive, and intelligent. My colleagues were similarly impressed.

The Secretary was also known to ride his motorcycle to the Interior building on occasion. He is pictured on his Harley below, but this photo was taken in Idaho, not Washington. 😀

The organizers of the 2007 IRF Offshore Safety Conference were most pleased when Secretary Kempthorne agreed to participate as a keynote speaker. Our many international guests were impressed by his remarks and his interaction with the conference delegates. His conference bio and those of the other speakers are attached.

RIP Mr. Secretary! You served the country well. Enjoy cruising on that big motorcycle in the sky!

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A New York Times article suggests that the consolidation of BOEM and BSEE into the Marine Minerals Administration will weaken environmental oversight. It will not. On the contrary, regulation is likely to be strengthened as resources shift from inter-bureau coordination and redundancy management to the primary safety and environmental protection missions.

I recommended a BOEM-BSEE merger in the comments I submitted to DOI last July. No doubt others have made similar recommendations. Nonetheless, I was surprised when the consolidation was announced and quickly expressed my support for the decision.

Given the challenges associated with Federal reorganizations, agency heads often opt for the status quo. I’m pleased that the current DOI leadership team, with whom I disagree on some issues, chose to merge the bureaus.

Quotes from the NYT article followed by my comments:

NYT: The Trump administration is creating a new office that critics say could weaken the environmental oversight of oil drilling and seabed mining in territorial waters.

Comment: The functional overlap and associated uncertainty that permeates the offshore regulatory regime is a weakness, not a strength. Virtually every element of the regulatory program requires coordination between the two bureaus. This includes plan and permit approvals, decommissioning and financial assurance, spill response plans, lease stipulations, assignments, pipeline regulation, environmental reviews, enforcement actions, and geologic data collection and review. Note the list of MOUs that are intended to coordinate BOEM and BSEE redundancy. The documents often do more to confuse than clarify. For example, see the MOU entitled “Environmental and NEPA.”

Multi-bureau organizational complexity is not in the best interest of safety and environmental protection. Overlapping responsibilities, coordination challenges, and “turf” issues distract the technical staff from their important risk management duties, the work they are good at and enjoy doing. BSEE and BOEM should be overseeing the offshore industry, not each other.

NYT: The new agency, the Marine Minerals Administration, will be formed by reunifying two offices that had been split up after the 2010 Deepwater Horizon oil spill in an effort to increase environmental oversight of the energy industry and prevent future oil disasters. After the split, the Interior Department’s oil-leasing activities were separated from environmental regulation and financial management. (emphasis added)

Comment: The assertion that the leasing and environmental regulation were separated is false. The leasing bureau (BOEM) was assigned lead responsibility for the review and approval of the fundamental operational planning documents – Exploration Plans, Development and Production Plans, and Development Operations Coordination Documents. This includes the environmental reviews pursuant to NEPA.

NYT: The move is “worrisome because it has the potential of bringing things back where they were, where there was this inherent conflict of interest between promotion of offshore oil and gas, and oversight safety,” according to Donald Boesch, emeritus professor at the University of Maryland Center for Environmental Science.

Comment: None of the investigations of Macondo provided evidence that conflicts of interest contributed to the blowout. On the contrary, the Chief Counsel for the National Commission on the BP Deepwater Horizon Oil Spill and Offshore Drilling, reported as follows (page 261):

In recent years various bodies have concluded that certain MMS offices and programs have violated ethical rules or guidelines. In the wake of the Deepwater Horizon disaster, some questioned whether ethical lapses played any role in causing the blowout. The Chief Counsel‘s team found no evidence of any such lapses.

Also, keep in mind that prior to the Macondo blowout, 25,000 wells had been drilled in US Federal waters over the previous 25 years without a single well control fatality, an offshore safety record that is unprecedented in the U.S. and internationally. 

For some reason, the NYT did not mention the offshore wind program. Perhaps the NYT should have looked at the relationship between the offshore wind industry and BOEM, most notably the decommissioning financial assurance and fabrication and installation report waivers.

NYT: The new bureau will also take on oversight of the Trump administration’s plans to lease waters in U.S. territories to deep-sea mining companies. The first of these sales, according to the spokeswoman for the Interior Department, are likely to happen next year.

Comment: DOI’s marine minerals program is decades old and is a priority for the current administration. Reorganization should not affect the MMA’s capability to oversee these activities.

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EIA estimates that China added an average of 1.1 million barrels per day of crude to their strategic inventories in 2025. Wow! If accurate, that’s a massive SPR operation – equivalent to storing ~60% of the total daily oil production in the Gulf of America or offshore Norway! See the video at the bottom of this post.

How much of that oil was imported from Iran?

Meanwhile, US weekly SPR withdrawals have exceeded 4 million barrels over the past two weeks. Presumably that pace will continue consistent with the DOE announcement.

dateUS SPR: bbls (1000s)
3/6415,422
3/13415,422
3/20415,442
3/27415,064
4/3413,325
4/10409,181
4/17405,045

The big picture – US SPR:

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California Superior Court Judge Donna Geck denies Sable’s motion to lift the preliminary injunction.

Judge Geck’s ruling

(1) For the reasons set forth herein, the motion of real parties in interest Sable Offshore Corp. and Pacific Pipeline Company to dissolve or modify the preliminary injunction issued in this case is denied.

(2) The application of petitioners for issuance of an order to show cause why real parties should not be found in contempt and to enter additional orders is continued to May 22, 2026.

 The Judge concluded:

  • The court is mindful that there are many moving judicial and administrative parts relating to the restart of the Las Flores Pipelines. (understatement of the year candidate? 😉)
  • Sable has not persuaded the court that the DPA (Defense Production Act) Order renders compliance with Federal Consent Decree unnecessary.
  • The Federal Consent Decree requires approvals from the OSFM (Office of the State Fire Marshal), which in turn must comply with state procedures in granting such approvals.
  • Sable has not met its burden to show that the preliminary injunction should be dissolved or modified. Sable’s motion will therefore be denied.

On May 22, Judge Geck will consider whether Sable should be held in contempt for not complying with the preliminary injunction.

If you haven’t been keeping up 😉:

  • Subsequent to Judge Geck’s preliminary injunction, the Pipeline and Hazardous Materials Safety Administration (PHMSA – a simpler agency name is long overdue!) asserted that the Las Flores Pipelines constitute an interstate pipeline subject to PHMSA’s exclusive jurisdiction.
  • PHMSA issued their own approvals and an emergency special permit.
  • The PHMSA approvals are the subject of proceedings in the Ninth Circuit Court of Appeals, which has not issued a final ruling.

Undaunted, Sable reports (4/20/2026):

  • The 40 wells currently online at Platform Harmony and Platform Heritage are producing an average of 750 gross barrels of oil per day per well. Once all 74 production wells on these two platforms are online, Sable expects the average production per well to be approximately 700 gross barrels of oil per day.
  • Sable expects Platform Hondo to come online in June 2026 with an estimated fully ramped production rate of approximately 10,000 gross barrels of oil per day.

Hence, Sable production is estimated to reach ~60,000 bopd in June, which is about 6 times total California OCS production prior to the Sable restart!

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The Constance Gee letter (pasted below) is entertaining no matter where you stand on the Vineyard Wind debacle. A couple of quotes 😉:

It’s been a mess from the beginning and in a mess it will end, but the current “he said she said” over who owes more millions to whom is especially trashy.

Poor Vineyard Wind doesn’t have a clue how to service and maintain the 62 turbines they’ve hammered into the seabed 15 miles off our coast, and they are upset that GE Renewables won’t hand over the troubleshooting manual.

The Vineyard Wind Court filing is accessible here.

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The Case for Reefing California Platforms by John Smith

Environmental groups like the Environmental Defense Center and Get Oil Out continue to oppose converting the jackets of California oil and gas platforms to artificial reefs despite scientific studies (Claisse et al. 2014) showing “oil and gas platforms off the coast of California have the highest secondary fish production per unit area of seafloor of any marine habitat that
has been studied.

Another important factor environmental groups and the 2023 BOEM Programmatic EIS for Decommissioning failed to consider and acknowledge is the huge amount of air emissions that would be released by world-class heavy lift vessels like the Thialf or Balder Semi-submersible Crane Vessels (SSCVs) that would be required to safely and efficiently remove the large federal OCS platforms like Harvest, Hermosa, and Hidalgo (HHH). The HHH platforms are in waters depths ranging from 430-675 feet and have combined deck and jacket weights ranging from 20,000 – 25,000 tons. In comparison, the wrought iron structure of the Eiffel Tower weighs about 8,000 tons.

The SSCVs and accompanying Anchor Handling Tugs (AHTs) used to remove the HHH platforms will likely to be mobilized from distant locations like the North Sea or Gulf of America where they typically operate. Because SSCVs like the Thialf and Balder are too large to enter the Panama Canal, this would involve a 20,000 nautical mile roundtrip voyage around the tip of South America.

Three to four campaigns, and separate SSCV and AHT mobilizations and demobilizations, are projected to be required to fully remove the HHH platforms because the challenging oceanographic conditions offshore Point Arguello restrict heavy lift operations to a 150-day period between May and October.

Four campaigns by the SSCV and AHT would consume about 300,000 metric tons (mt) of marine diesel oil and release approximately 470,000 mt of CO2 and 11,000 mt of NOX emissions. To put these numbers into context, 470,000 mt of CO2 and 11,000 mt of NOX are:

  • the amount of CO2 emissions released by providing electrical power to 97,600 homes annually (the city of Santa Barbara has about 38,000 housing units).
  • the amount of CO2 emissions released by burning 1.1 million barrels of oil.
  • the amount of CO2 emissions released by 102,000 gasoline burning cars annually.
  • the amount of NOX emissions released by four large oil or coal-fired power plants annually.
  • the total annual NOX emissions in Santa Barbara County.

And this is only the emissions released during mobilization and demobilization of the SSCV and AHT. If full removal is required, an additional 50 days of operational time by the SSCV and AHT is estimated to be required to remove the topside and jacket of each HHH platform. This could be reduced to about 15 days per platform if the jackets are converted to artificial reefs. Only one SSCV and AHT campaign may be required if the HHH jackets are reefed, compared to the four campaigns required for the full removal scenario. This would result in a 75 percent reduction in CO2 and NOX emissions.

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