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Archive for the ‘energy policy’ Category

Bad litigation, worse timing. China and Russia’s most effective allies?

Posted in climate, energy policy, Russia, Uncategorized, tagged , , , on March 15, 2022| Leave a Comment »

This is what major oil companies are up against. Meanwhile China expands coal production and consumption without having to worry about groups like this.

ClientEarth, a Shell shareholder, notified the energy major on Monday that it would commence legal proceedings against the company’s 13 executive and non-executive directors for what it said was the board’s failure to adopt a strategy that “truly aligns” with the 2015 Paris climate agreement. The not-for-profit group, which has a strong record of winning climate-related cases, wrote to Shell in advance of petitioning the High Court of England and Wales for permission to bring the claim.

Financial Times

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Why we are concerned about declining offshore exploration

Posted in Offshore Energy - General, energy policy, Russia, tagged , , , , , , , on March 11, 2022| Leave a Comment »

Consistent with our concerns about the lack of investment in offshore exploration and production, Aramco CEO Amin Nasser made this comment at CERAWeek in Houston:

“Today, we only have 2% of effective spare capacity, which is an imbalance,” Nasser said. “You need a resilient and strong spare capacity to make sure that you can absorb any supply shocks. Look at what’s happening. Before the Ukraine crisis, the spare capacity was declining fast.”

Oxy CEO Vicki Hollub’s comments further justify our concerns about US over-reliance on shale production. She noted these impediments to production growth in the Permian Basin, the world’s largest shale basin:

  • Severe supply-chain constraints 
  • Labor shortages
  • Few already drilled wells ready to be completed
  • Rig shortages

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Build the EastMed Gas Pipeline!

Posted in energy policy, gas, Offshore Energy - General, pipelines, tagged , , , on March 9, 2022| Leave a Comment »

Leviathan platform, offshore Israel

Gas reserves in the Eastern Mediterranean Basin are enormous:

Now the U.S. Geological Survey estimates that as much as 122 trillion cubic feet of gas and 1.7 billion barrels of oil lie in the eastern Mediterranean basin. That amount of gas is equivalent to about 76 years of gas consumption in the European Union.

Forbes

Another US energy/foreign policy blunder?

Last January, the US informed Israel, Greece and Cyprus that they no longer supported the proposed EastMed natural-gas pipeline from Israel to Europe citing the need to “(allow) for future exports of electricity produced by renewable energy sources, benefiting nations in the region.”

Jerusalem Post

It’s time to move forward with this strategically important energy project. Chevron is now the main player in the Eastern Mediterranean after their 2020 acquisition of Noble Energy.

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Disappointing delay in Canada’s decision on the Bay du Nord project

Posted in Canada, energy policy, Offshore Energy - General, tagged , , , on March 8, 2022| Leave a Comment »

Equinor images

A decision on the proposed Bay du Nord oil project off the coast of Newfoundland will be delayed by another 40 days, according to Federal Environment Minister Steven Guilbeault.

Ottawa’s decision for the project was set for Sunday, but was originally scheduled for Dec. 6. The 40-day delay means a decision could come by April 13.

The project has reportedly caused a division within Prime Minister Justin Trudeau’s cabinet, according to Radio-Canada, which reported in February that several Liberal ministers from Ontario, Quebec and British Columbia want to reject Bay du Nord. 

CBC

The delays in Ottawa are disappointing for the following reasons:

  1. Recent polling indicates very strong support among Newfoundlanders for offshore oil and gas operations and the Bay du Nord project. Newfoundland Premier Andrew Fury fully supports the project.
  2. The Impact Assessment Agency of Canada concluded that “the Bay du Nord Development Project is not likely to cause significant adverse environmental effects, taking into account the implementation of mitigation measures.”
  3. Equinor is a responsible offshore operator with a strong track record in Norway and elsewhere.
  4. The importance of “free world” oil and gas production has never been more obvious. That will continue to be the case for the life of this project and beyond.
  5. The project would generate $3.5 billion in revenues to the Government of Newfoundland and Labrador and provide estimated in-province employment of 22.3 million-person hours for the life-of-field.

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As oil prices soar along with energy security concerns….

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Uncategorized, tagged , , , , on March 7, 2022| 2 Comments »

Remember that only 5 weeks ago Judge Contreras (DC Federal Court) vacated OCS Lease Sale 257 because  BOEM didn’t analyze the benefits of higher oil and gas prices (as a result of lower US offshore production) in reducing international consumption and GHG emissions. The about that!

Lease Sale 257 wouldn’t have helped get us through this crisis, but would have most definitely reduced our vulnerability to future crises.

473 days since the last US offshore oil and gas lease sale.

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Our mothers were conservation leaders

Posted in climate, energy policy, Uncategorized, tagged , on March 7, 2022| Leave a Comment »

My mother was a hard-working Quaker farm girl who hung the wash outside until her final days and otherwise conserved energy in a manner that was consistent with her values – thrift, simplicity, and love of fresh air. While there are still many common sense conservationists, professional alarmists have gained control of environmental messaging and dominate fundraising. It may be time for the environmental community to reassess its direction.

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Disappointing NYT headline

Posted in energy policy, Guyana, Offshore Energy - General, Russia, tagged , , , , on March 4, 2022| 1 Comment »

U.S. Oil Industry Uses Ukraine Invasion to Push for More Drilling at Home

New York Times

Actually, it’s a case of the Ukraine invasion demonstrating the obvious – domestic production is critical to our economy and energy security. Europe and the US have had a wake-up call and responsible leaders now recognize the importance of secure supplies and the need to halt purchases from a tyrant.

The oil industry is doing just fine with $100+ per barrel oil. They will produce oil and gas where the opportunities present themselves: Guyana, Mexico, North Sea, Africa, Brazil, Canada, private lands in supportive US states, and elsewhere. The folly is US policy that unreasonably restricts exploration on Federal lands, including the Outer Continental Shelf. These restrictions penalize the owners of those lands, the people of the United States, not the oil industry and certainly not the Russian tyrant.

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Offshore leasing Catch 22

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

“The absolute earliest a new Lease Sale 257 could occur is July 2, which is after the expiration of the current five year program,” Interior said in a 28 February court filing (opting not to appeal the DC court decision invalidating the lease sale).

Argus

So, a new lease sale cannot occur until after the five year program expires and no sale may be held. Brilliant, Joseph Heller would be proud. It’s a good thing oil and gas supplies are plentiful and secure, and that prices are cheap.

Remember, the judge’s decision invalidating Sale 257 was that BOEM didn’t analyze the benefits of higher oil and gas prices (as a result of lower offshore production) in reducing international consumption and GHG emissions.

US offshore leasing – time for action

Previous posts on Sale 257.

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Half-step by Exxon?

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

BP, Equinor, and Shell are exiting Russia, but Exxon’s response seems to be something less. Per Upstream:

US supermajor ExxonMobil is scaling back its operations on its flagship offshore development project in Russia’s Sakhalin Island region in response to the fallout from the crisis in Ukraine, according to the Sakhalin Online news website.

A consortium source cited by the Russian website claimed that foreign managers have been told to leave the project for an initial period of one month.

Upstream

Exxon accepted the political risks associated with lucrative Russian production, and they now have a massive moral and public relations dilemma. Will they try to wait this crisis out or take more permanent actions?

It would be nice to see Exxon return to the Gulf of Mexico where they haven’t drilled a well since 2019. Currently, Exxon’s primary interest in the Gulf is for carbon sequestration purposes. Perhaps they can focus more on the Gulf’s still promising production potential and less on its potential as a disposal site.

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US offshore leasing – time for action

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

Since well before the Putin crisis, this independent blog has been expressing concerns about sustaining US offshore oil and gas production without new leases and increased exploration (more here). Now that concerns about domestic production and energy security are heightened (understatement of the year!), let’s review where the leasing program stands:

  • 466 days have elapsed since the last oil and gas lease sale (Nov. 19, 2020), with no future sales in sight.
  • There had been 182 sales in the previous 66 years of the US offshore oil and gas program, an average of 2.76 per year. Never before (since 1953) has a year transpired without a lease sale.
  • Currently, there are only 2016 active US OCS leases and 506 producing leases, the fewest in at least 40 years (recent history charted below).
  • Despite favorable geology beneath the deepwater Gulf of Mexico and advanced exploration and well completion technology, US offshore oil production (1.713 million bopd per the latest EIA data – Dec. 2021) is down 16% from the August 2019 peak of 2.044 million BOPD. Gulf oil production is thus the lowest since 2018 (except during hurricane shutdowns).
  • New projects and higher ultimate recoveries from producing reservoirs could increase total offshore production by 10-20% over the next few years, but sharp declines will follow without new leases and increased exploration.

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