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Archive for the ‘Gulf of Mexico’ Category

SCOTUS Chevron deference decision could factor large in the 5 Year Leasing Plan litigation

Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , on August 13, 2024| Leave a Comment »

API is challenging the Dept. of the Interior’s 5 year oil and gas leasing plan, which includes the fewest lease sales in program history. That challenge was filed on 12 February, 60 days after Secretary Haaland approved the 5 plan and the first day appeals could be filed pursuant to 43 U.S. Code § 1349.

18 weeks after the API suit was filed, the Supreme Court overturned the Chevron Doctrine. That doctrine (described above) instructed judges to defer to agency interpretations when the language in a law was unclear.

Interior’s 5 year OCS oil and gas leasing plan provides for the fewest (3) lease sales in history and may not have included a single sale were it not for legislation prohibiting the issuance of offshore wind leases unless an offshore oil and gas lease sale was held during the prior year.

This unprecedented oil and leasing decision was based on “the need to confront the climate crisis through reducing greenhouse gas emissions” and on achieving “net zero pathways.” Neither of those objectives is articulated in the OCS Lands Act or other governing legislation.

Extending the Secretary’s general safety and environmental authority for OCS operations to include global climate considerations is a stretch and the type of interpretive administrative decision that the Supreme Court struck down.

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Riser leak in TX State waters has been patched

Posted in decommissioning, Gulf of Mexico, Offshore Energy - General, oil spill response, pipelines, tagged , , , , , on August 7, 2024| Leave a Comment »

According to the Texas General Lands Office, which provided the above photos, a patch has been applied to the leaking pipeline riser on an abandoned platform in High Island Block 98-L. The gas condensate spray has been stopped.

Crews from the U.S. Coast Guard, Texas General Land Office, and the Texas Railroad Commission monitored the operation. It’s unclear who the responsible party is and who funded and performed the work.

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May GoM production dips further. Two million bopd fading in the rear view mirror.

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , on August 1, 2024| 1 Comment »

May Gulf of Mexico production fell 55,000 bopd from April. BOEM’s 2024 production forecast of 2.013 million bopd will likely be more than 200,000 bopd too high. Their forecast of >2 million bopd through 2027 is increasingly doubtful. Leasing policies intended to prevent production from rising too high do not bode well for the longer term.

The dearth of deepwater discoveries over the past 6 years (chart below derived from BOEM data) should be a major concern to those engaged in energy policy. Technical innovation has facilitated simpler, safer, and greener deepwater development. However, most of those discoveries were made 7-15 years ago.

The decline in discoveries is no surprise given the decline in deepwater exploratory drilling documented by Lars Herbst in Dec. 2022. That trend continues, and the BSEE data summarized below indicate that deepwater exploratory drilling has remained at historically low levels.

Onshore oil and gas production, mostly from private lands, has responded to growing US demand, but the offshore sector could be contributing more and offers some important advantages:

The Deepwater Advantage: fewer facilities + fewer wells + high production rates + efficient power generation + advanced processing + restricted flaring + pipeline transportation = fewer environmental impacts and low GHG intensity production

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Gulf of Mexico wind: Undaunted by leasing failures, BOEM presses on

Posted in energy policy, Gulf of Mexico, Offshore Wind, tagged , , , , , , , , on July 29, 2024| Leave a Comment »

Hercate lease request – C & D. Wind areas that were considered for 2nd GoM sale – I, J, & K. Active RWE lease – blue.

GoM wind leasing update:

  • BOEM’s highly promoted 2023 GoM wind sale was a bust. The sole bidder, the German company RWE, acquired a single lease.
  • BOEM’s second GoM wind sale failed to get off the ground. Because only one company expressed interest in participating, that sale has been cancelled.
  • BOEM is now surveying interest in other GoM areas as a result of an unsolicited lease request from Hercate Energy.  
  • If BOEM does not receive competing indications of interest, they may (and probably will) issue a noncompetitive lease to Hecate.
  • BOEM calls Hercate an “industry leader.” However, per their website, Hecate is mainly a solar energy company with only 2 wind projects. Both of those wind projects are onshore (Kentucky), and are “in development” (i.e. not yet operating). Hercate is no doubt a fine company, but have they demonstrated the technical expertise and financial strength needed for offshore wind development?

BOEM’s aggressive wind leasing policy stands in stark contrast to their current oil and gas policy. Not a single oil and gas sale will be held in 2024. Were it not for a provision in the “Inflation Reduction Act,” the last 3 GoM sales (257, 259, and 261) would probably not have occurred.

The new 5 year oil and gas leasing plan confirms that the Dept. of the Interior (DOI) has no intention of fulfilling their statutory oil and gas leasing mandate. In announcing the new 5 year plan, DOI boasted that the plan includes the fewest sales (3) of any plan in the history of the program. DOI strongly implied that the only reason those 3 sales were included was to sustain the wind program.,

When we drafted the OCSLA amendments that authorize offshore wind leasing, we envisioned complementary and synergistic programs, not a dogmatic pro-wind bias. As experts like Daniel Yergin have repeatedly warned, the notion that wind energy can eliminate the need for oil and gas is pure folly.

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Should wind leasing and development be paused until the Vineyard Wind investigation is completed?

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Offshore Wind, Regulation, tagged , , , , , on July 23, 2024| 1 Comment »

The Vineyard Wind turbine incident, which littered Nantucket beaches, has also tarnished the US offshore wind program. BSEE has prudently halted Vineyard Wind operations and construction pending an investigation into the blade failure.

Offshore wind development is structure rich, so public confidence in the design of turbines and support platforms is critical. BOEM lists 37 active wind leases on the US OCS. Most of these leases have not yet reached the construction phase. A hold on the approval of any Construction and Operations Plans would seem to be appropriate pending completion of the Vineyard Wind investigations.

Per the leasing schedule below, BOEM intends to hold 4 wind sales during the remainder of 2024, all within a 3 month period. Only 1 sale is scheduled for each of the following 2 years. Deferring the 2024 sales until the investigations are complete would assist potential lessees by ensuring that the issues of concern were fully understood.

Unfortunately, BOEM’s failure to conduct a 2024 oil and gas lease sale has boxed in the wind program. The Inflation Reduction Act prohibits BOEM from issuing wind leases unless an oil and gas sale has been held within the previous year. Lease Sale 261 was held on 12/20/23 meaning that no wind leases may be issued after 12/20/24. BOEM has compressed the wind leasing schedule, presumably to beat the legislative deadline. It would have been better for both the oil and gas and the wind programs if at least one oil and gas sale had been held in 2024 as has been customary since the 1950s.

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Messy situation at “abandoned” platform in TX State waters

Posted in decommissioning, Gulf of Mexico, Offshore Energy - General, oil spill response, tagged , , , , , , on July 20, 2024| Leave a Comment »

Pictures from Click2Houston:

This is yet another example of the importance of proper well plugging, platform removal, and decommissioning financial assurance. It’s noteworthy that Texas is among the states suing to block BOEM’s financial assurance rule for Federal waters. A serious collaborative Federal, State, and industry effort to address decommissioning issues is long, long overdue.

Key points from the Facebook post by State Representative Terri Leo Wilson (full post pasted below):

  • 8 miles offshore Galveston County (TX State waters extend 3 marine leagues/9 nautical miles/10.35 statue miles offshore)
  • flowline riser leaking natural gas and condensate (badly corroded platform)
  • no recoverable oil
  • abandoned platform
  • additional research is needed to fully determine ownership of the leak source (???)

HIGH ISLAND BLOCK 98-L INCIDENT :

The Texas General Land Office (GLO) is sharing the following information:

On Sunday, July 14, 2024, at 8:00 pm, the Oil Spill La Porte Office Response Officer received notification of a natural gas/oil discharge off the coast of Crystal Beach, Galveston County. The spill was reported to be from a platform in High Island Block 98-L, about eight miles offshore in the Gulf of Mexico. Oil Spill personnel traveled via response boat to investigate on Monday morning and determined the discharge to be from a flowline riser leaking natural gas and condensate. Although the leak can be seen from the water, no recoverable oil was visible. The platform is abandoned, as defined by the Texas Railroad Commission, placing it within the Railroad Commission’s statutory authority for administration. The wells are not covered as part of the GLO’s current well plugging MOU with the Railroad Commission. The platform and associated wells are documented in the Oil Spill program’s abandoned well listings.

On Wednesday, July 17, La Porte office staff, with US Coast Guard and Railroad Commission personnel, inspected the platform area again. The leak is still present but has not increased. Railroad Commission staff stated that additional research is needed to fully determine ownership of the leak source.

The Coast Guard reports receiving a call from Channel 2-KPRC (NBC) in Houston regarding the leak and also seeing social media posts by a local area fishing group.

At this time: No injuries reported, No impact to commerce, No impact to wildlife.

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Why have the evacuation and production shut-in data for Hurricane Beryl not been posted?

Posted in Gulf of Mexico, hurricanes, Offshore Energy - General, Regulation, tagged , , , , on July 8, 2024| Leave a Comment »

For decades, Gulf of Mexico operators have reported facility evacuation and production curtailment data to MMS/BSEE as tropical storms or hurricanes approached. Requirements for this reporting are found in the regulations (30 CFR 250.192(a)) supplemented by NTL 20I5-G02.

Operators must submit reports by 11:00 a.m. (CT) daily throughout the period of evacuation and shut-in with the understanding that BSEE will post the compiled data by 1 pm CT. This reporting has been diligently accomplished for decades and MMS/BSEE posted the data each day, including weekends and holidays, without fail. Everyone in industry and government understood the importance of safely evacuating personnel, shutting down production, and ensuring that these hurricane data were made available to the public each day. (All of the daily updates for 2011 onward can be found here.)

On Wednesday, July 3, Shell informed the media that they had begun evacuating non-essential personnel and shutting-in production at certain facilities. Both Shell and Chevron issued general statements on the status of their operations on Thursday, July 4. Both companies no doubt submitted the required reports to BSEE, as did other companies with operations near the projected path of the storm.

BSEE failed to post any evacuation and shut-in data on any date from July 3 through today (July 8).

Beryl missed the heart of the Gulf of Mexico basin, but Shell and other companies with facilities in the more westerly areas evacuated personnel and curtailed production. BSEE’s unprecedented failure to post this information needs to be addressed before more significant storms threaten offshore personnel and production in the Gulf.

Shell evacuated non-essential personnel and shut-in production at Perdido (pictured)

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Independents’ Day 😀

Posted in Gulf of Mexico, Offshore Energy - General, tagged , , , , , , , , , , on July 3, 2024| Leave a Comment »

Winterfell from the water surface (5400′ water depth). The field is produced with subsea wells tied back to Oxy’s Heidelberg platform, which is 13 miles away. Deepwater development is characterized by high energy density and low facility density.

Beacon Offshore Energy (BOE, but not this blog 😉) and its partners, all independent producers, have initiated production at the Winterfell project in the Green Canyon area of the Gulf of Mexico. The 3 initial wells are expected to produce 20,000 bbls of oil equivalent (again BOE 😉) per day. The Winterfell partners are:

  • Beacon Offshore Energy, operator
  • Kosmos Energy
  • Westlawn Americas Offshore
  • Red Willow Offshore
  • Alta Mar Energy
  • CSL Exploration

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Judge Cain suspends the LNG export ban. Expanding gas markets is important to OCS producers.

Posted in energy policy, Gulf of Mexico, natural gas, Offshore Energy - General, tagged , , , , on July 3, 2024| Leave a Comment »

On July 1, U.S. Federal Judge James Cain Jr. (Western District of Louisiana) issued a preliminary injunction suspending DOE’s LNG exports “pause.” The judge’s full ruling is attached.

Judge Cain: “It appears that the DOE’s decision to halt the permit approval process for entities to export LNG to non-FTA countries is completely without reason or logic and is perhaps the epiphany of ideocracy.”

Nothing subtle about that comment 😉

Despite the court order, the Administration seems intent on keeping the “pause” in place. Per White House spokesperson Angelo Fernández Hernández, “We remain committed to informing our decisions with the best available economic and environmental analysis, underpinned by sound science.” ????

Nearly 80% of current OCS gas production is from deepwater leases. This production is primarily associated (oil-well) gas that operators are rightfully required to market for resource conservation and environmental reasons. Expanding LNG marketing opportunities could thus improve the economics of deepwater development.

The other 20% of OCS gas production is largely from gas-well (non-associated) gas produced by independent companies that continue to operate in the shallower waters on the shelf. LNG sales could improve the challenging economics for these producers and increase the ultimate recovery of shelf resources.

No.72-PIOrderDownload

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Is 1.8 million BOPD the current GoM oil production baseline?

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , , on July 1, 2024| Leave a Comment »

EIA has released the April oil production data. The Federal waters of the Gulf of Mexico produced 1.831 million BOPD in April, which is essentially level with corrected March production (1.817 million).

GoM production fell more than 12% from nearly 2 million BOPD in September 2023 to 1.743 million BOPD in January 2024 before climbing back to 1.8 million BOPD over the past 3 months (see chart below). What’s up?

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