Feeds:
Posts
Comments

Archive for the ‘Gulf of Mexico’ Category

4 House Democrats send letter to the President urging completion of the 5 Year leasing plan

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Uncategorized, tagged , , , , on May 6, 2022| Leave a Comment »

letter

One important action your administration can take to ensure American energy independence is to publish a new Five-Year Outer Continental Shelf Oil and Gas Leasing Plan (“Five-year Plan”) as required under the Outer Continental Shelf Lands Act of 1953. Finalizing the Five-year Plan, with frequent area-wide leases, would help bring millions of additional barrels of U.S. oil to market. According to a recent analysis by Energy and Industrial Advisory Partners, a further delay of federal offshore leasing could result in 500,000 fewer barrels of domestic oil produced per day, 60,000 lost jobs, and a $900 million per year decrease in federal conservation funding.
.

The four Democrats are Texas Representatives Vicente Gonzalez, Sylvia Garcia, Henry Cuellar and Lizzie Fletcher.

Meanwhile, the Senate approved language supporting the issuance of a new 5 Year Program ASAP. Four Democrats -Joe Manchin (D-WV), Kyrsten Sinema (D-AZ), John Hickenlooper (D-CO), and Mark Kelly (D-AZ) – voted for the measure.

When will we hear from the Department of the Interior on the status of the 5 Year Program? It has now been 532 days since the last US offshore lease sale.

Read Full Post »

Gulf of Mexico flaring data sets don’t match

Posted in climate, Gulf of Mexico, natural gas, Offshore Energy - General, tagged , , , , , , , , on May 5, 2022| Leave a Comment »

Given the importance of flaring and venting from both environmental and resource conservation standpoints, accurate and reliable data are necessary and should be readily available to the public. ONRR has advised me that they will begin posting flaring and venting data on their website within 2 months. This is a positive step. Currently, data from the 3 primary sources differ considerably.

Data Sources:

Comments:

  • The EIA (from BSEE) and ONRR flaring/venting numbers should be the same given that the ONRR data are reported in accordance with BSEE regulations, and BSEE is presumably providing ONRR data to EIA. This needs to be clarified.
  • The World Bank’s gas flaring estimates are based on observations from satellites. This explains their lower numbers given that vented gas would not be detected and some flares might be missed.
  • In a 1/2021 interview with World Oil, the exiting BSEE Director commented that the “industry has consistently achieved a ratio of less than 1.25% of flared, vented gas to produced gas.” However, based on EIA flaring and venting data (from BSEE per EIA) and EIA gas production data, the volume of gas flared/vented exceeded 1.25% of the gas produced from 2016-2020 and was as high as 1.8% in 2019. (See the chart below.) Even if the lower ONRR flaring/venting totals are used, those volumes exceeded 1.25% in 2019 (1.5%).
  • BSEE/ONRR should make more detailed flaring/venting data available so that the differences between facilities and sectors (e.g. deepwater vs. shelf) could be assessed. Efforts should also be made to post these data in a more timely manner. At this time, 2021 data are still not available.

Reports of interest:

  • Argonne report for BSEE (2017):
    • p. 17 – “The 2015 BSEE/BOEM study on reducing methane emissions observed that “while natural gas production has declined, …vented and flared gas volumes as a percentage of produced natural gas are increasing” and noted that additional investigation is needed to determine why.” This is consistent with my observations and is probably due in large part to the fact that most gas production is now from oil-wells (e.g. associated gas).
    • p. 24 – “Argonne estimates, in 2015, platform startups for deep-water floating structures accounted for roughly 15% of the total annual flaring volume on the OCS and an additional 20% of the annual total resulted from monthly spikes associated with compressor outage, pipeline maintenance, and well-unloading.”
  • Univ. of Michigan study (2020): “Large, older facilities situated in shallow waters tended to produce episodic, disproportionally high spikes of methane emissions. These facilities, which have more than seven platforms apiece, contribute to nearly 40% of emissions, yet consist of less than 1% of total platforms.” 

Read Full Post »

US oil and gas leasing policy: what the law says vs. the current reality

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on May 4, 2022| Leave a Comment »

OCS Lands Act, 43 U.S. Code § 1332 – Congressional declaration of policy

(3) the outer Continental Shelf is a vital national resource reserve held by the Federal Government for the public, which should be made available for expeditious and orderly development, subject to environmental safeguards, in a manner which is consistent with the maintenance of competition and other national needs;

Current reality:

  • International energy markets (and consumers) are under stress
  • US is withdrawing 1 million BOPD from the Strategic Petroleum Reserve
  • Very limited access to offshore land for oil and gas operations
  • 182 lease sales since 1954, but none since 2020
  • Gulf of Mexico operations history
    • 55,000 wells drilled
    • 23 billion bbls of oil produced
    • 192 trillion cu ft of gas produced
  • Gulf of Mexico – current status
    • Oil production remains relatively stable (1.7 million BOPD) owing to past deepwater discoveries
    • Drilling is at historic low levels – only 31 well starts YTD (5/4/2022), only 8 of which were deepwater exploratory wells
    • Current levels of production are not sustainable without new leases and increased exploration

https://budsoffshoreenergy.com/2022/02/28/us-offshore-leasing-time-for-action/

https://budsoffshoreenergy.com/2022/04/04/500-days/

Read Full Post »

EIA posts a surprising dip in Feb. Gulf of Mexico oil production

Posted in Gulf of Mexico, Offshore Energy - General, tagged , on April 29, 2022| Leave a Comment »

Read Full Post »

Reasonably balanced NYT article about why US production isn’t rising faster

Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged , , , , on April 29, 2022| Leave a Comment »

Why U.S. Oil Companies Aren’t Riding to Europe’s Rescue

This article is primarily about Texas shale oil production. Offshore production, particularly in deepwater areas, is much more capital intensive, requires longer lead times, is exclusively on government leases, and is highly regulated by multiple agencies. These factors weigh against quick responses to market conditions. A Bloomberg article about Shell’s Vito project provides a good offshore perspective.

Vito

Another important factor in the offshore sector is that the major oil and gas producers seem to be going through an identity crisis, torn between what they are and what they (aided by some loud and powerful voices) think they should be. The future of these companies is dependent on how they navigate through all of this. The need for oil and gas is clearly not going away (see EIA projection below). Who will provide the supply and where will it be produced?

Read Full Post »

What about offshore leasing?

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

The administration has taken steps toward a resumption of leasing on Federal onshore lands, which account for only 7% of domestically produced oil and 8% of our natural gas. While this is a positive step, our economy is largely being driven by production on private lands, absent which we would have a serious supply crunch. This new EIA graphic illustrates where the growth in natural gas production has been, and most of that growth has been on private land.

The growth in US oil production has been largely dependent on the Permian Basin:

Industry leaders have raised concerns about the extent to which Permian production can continue to grow and the country’s over-reliance on shale production.

There are no private offshore lands, and the future of US offshore production is almost entirely in the hands of the Federal government. It has now been 525 days since the last offshore lease sale. The Administration chose not to appeal the DC Federal Court decision vacating Sale 257, leaving that to the State of Louisiana and API (parties that actually support offshore oil and gas leasing).

It’s disappointing that the reasoning behind the judge’s Sale 257 decision has received so little attention, especially given that it hinged on BOEM not analyzing the benefit of high oil prices. (i.e. <leasing = <production = >prices = <intl consumption = < CO2) The decision was issued as Russian troops were amassing on the Ukraine border only 28 days before the invasion. Oil prices (WTI) had already reached $87/bbl and would soon spike to $120/bbl, so the decision embracing higher oil prices was (at best) bad timing. Keep in mind that this was not a matter of BOEM failing to consider GHG issues; BOEM had conducted those assessments. The judge’s decision was specific to BOEM not analyzing the GHG benefits of reduced foreign consumption as a result of the higher prices associated with reduced leasing.

Meanwhile, The 5 year program, without which offshore leasing cannot proceed, expires in June. Fellow Democrats Manchin and Kelly sent a letter to the President on 31 March urging the Administration to develop and implement a new 5 year program without delay. There is no online evidence of a response. Presumably, the 5 year program issue will be addressed in the bipartisan energy legislation that Senator Manchin is drafting.

Read Full Post »

Falls are NOT trivial

Posted in accidents, Gulf of Mexico, Offshore Energy - General, tagged , , , , on April 27, 2022| Leave a Comment »

Important BSEE safety alert – barricades and fall protection

hazardous grating

I never liked the label “slips, trips, and falls” because it trivializes serious safety incidents. Falls don’t get headlines, but they kill workers. In the 10 years prior to Macondo, falls were the leading cause of Gulf of Mexico fatalities. 17 workers died from fall incidents during that period. Related incidents associated with falling or moving equipment (15) and lifting operations (5) accounted for another 20 fatalities. There was only one fire related fatality.

Unfortunately, BSEE’s posted incident data are incomplete, so more detailed, company specific analysis is difficult. No incident summaries whatsoever are posted for 2001-2012 and 2021, and 2020 fatalities are only described as “occupational” or “non-occupational.”

BSEE does do a very good job with their safety alert program, and has repeatedly expressed concerns about chronic grating and fall issues. 2022 Safety Alerts 438 and 427, and 8 other BSEE alerts issued within the last 3 years (nos. 353, 365, 378, 389, 399, 409, 416, 423) addressed grating and falls. BSEE has also conducted blitz inspections to identify problem facilities, and the Coast Guard has repeatedly raised concerns about grating and fall protection.

Per BSEE Safety Alert 365, grating, open hole, and fall prevention safety measures were seriously deficient at many of the facilities visited during their blitz inspections in 2019. The prevention of fall incidents requires the full commitment of management. Some companies are clearly not making that commitment.

Read Full Post »

Macondo revisited, Part 6: the shameful prosecution of BP Well Site leaders Vidrine and Kaluza

Posted in accidents, drilling, Gulf of Mexico, Offshore Energy - General, well control incidents, tagged , , , , on April 25, 2022| 1 Comment »

[Disclosure: I assisted the legal team that defended Bob Kaluza. That said, I completely disagreed with the charges against him and Don Vidrine before my involvement in the case.]

Bob Kaluza (L) and Don Vidrine

Unsurprisingly, there was a lot of tough guy talk in Washington DC after the blowout:

“Our job is basically to keep the boot on the neck of British Petroleum” 

Ken Salazar, Secretary of the Interior

Weeks after the explosion, President Obama told NBC’s Matt Lauer he was trying to figure out “whose ass to kick.”

Texas Monthly

It was therefore predictable that the Department of Justice (DOJ) would choose to prosecute BP employees individually. There were BP managers who would have been good candidates, but instead DOJ chose to criminally prosecute the working stiffs – the two BP well site leaders on the rig. They were the lowest ranking BP employees associated with the incident. This was apparently acceptable to BP, since their plea agreement blamed Kaluza and Vidrine’s for their role in overseeing the negative pressure test (#blametheworker). Never mind that:

  • BP management was responsible for the well planning and shortcuts that were the root causes of the blowout (see the previous posts in this Macondo series).
  • the extent to which the negative pressure test was misconducted and misinterpreted was and remains a topic of dispute.
  • there were no regulations or standards requiring this test or explaining how it should be conducted, and BP’s internal guidance was woefully inadequate.
  • Bob Kaluza was a temporary replacement for the regular well site leader, had worked primarily onshore, and had never conducted or witnessed a negative pressure test.
  • Kaluza and Vidrine were themselves victims and were fortunate to have survived the incident.

Despite all of this, DOJ still chose to prosecute the two well site leaders. However, the weaknesses in the DOJ case became more obvious over time, and DOJ dropped all but a misdemeanor water pollution charge. Vidrine, who had health issues that were exacerbated by the case, accepted a plea deal. Kaluza was confident of his innocence and chose to make his case in court. His defense team was very strong, and the trial was essentially a walkover. After less than 2 hours of deliberation, the jury fully acquitted Bob Kaluza (2/25/2016). Sadly, Don Vidrine passed away the following year.

LInked is a very good Texas Monthly article about the case.

Read Full Post »

Macondo revisited, Part 5: Did the National Incident Command unnecessarily prolong the blowout?

Posted in accidents, Gulf of Mexico, well control incidents, tagged , , , , , on April 22, 2022| Leave a Comment »

Contrary to national and regional planning documents and the associated response exercises, Energy Secretary Chu, whose department had no jurisdiction over offshore oil and gas operations or the emergency response, assumed the leadership role on the well control aspects of the blowout. Secretary Chu is a Nobel prize winning physicist and had the President’s support to get involved with the response. Although he was not a drilling engineer or geologist, he soon became the dominant figure on well control decisions.

BP’s top kill operation (see diagram above) was intended to overcome and halt the flow of oil by pumping heavy mud into the well bore. Per an excellent paper by Dr. Mayank Tyagi and colleagues at LSU  (Analysis of Well Containment and Control Attempts in the Aftermath of the Deepwater Blowout in MC252), the operation was not successful because the pumping rate and mud weight did not generate sufficient pressure. 

Consistent with Dr. Tyagi’s analysis, the well would likely have been killed on 5/28/2010, shortening the blowout by 48 days, had Secretary Chu not stopped the top kill operation over the objections of BP engineers. While it was reasonable for the Secretary and his team to be concerned about possible casing leaks and the fracturing of subsurface formations, the subsequent (7/15/2010) closure of the capping stack demonstrated that the well had sufficient integrity to support the top kill operation. Questions about the aborted top kill effort and how that decision was made are therefore important and merit careful review. Did the Macondo well flow unnecessarily into the Gulf for an additional 48 days (5/28-7/15)? Did the National Incident Command facilitate or delay source control?

Keep in mind that the National Incident Command almost made a similar mistake in July. Even after the capping stack successfully shut-in the well on 7/15, Incident Commander Thad Allen (USCG) continued to call the closure of the capping stack a temporary test and threatened to require BP to resume flow from the well. We thus had a bizarre situation where the Federal Incident Commander was threatening to require the resumption of a blowout. Fortunately, informed input from experienced engineers prevailed. The well remained shut-in and the static well-kill operation was successful.

Read Full Post »

Macondo revisited, Part 4: What might have been

Posted in accidents, Gulf of Mexico, Offshore Energy - General, Regulation, well control incidents, tagged , , , , , , on April 21, 2022| Leave a Comment »

While the previously discussed planning, cementing, and well suspension issues allowed the well to flow, there were many other equipment, operational, and management deficiencies that elevated the incident to a disaster. Below are those that bother me the most:

  • Blowout Preventers
    • The Deepwater Horizon BOP stack had a single blind shear ram. Regardless of what the regulations allowed, you don’t drill a complex well like this without redundant shearing capability (and at the time of the blowout most deepwater drillers were using rigs with dual shear rams). All well control emergencies requiring the emergency disconnect sequence, deadman, and autoshear functions are dependent on effective shearing capability. You can have redundancy in every other BOP element, but without dual shear rams, you don’t have a redundant BOP system. Further, for full redundancy both shear rams should be capable of sealing the well bore after shearing. In that regard, the present regulations and the applicable standard (API S 53) require only one shear ram capable of sealing. They are thus deficient and should be updated.
    • The DWH BOP system did not have full bore shearing capability (available at the time) which may have sheared the deflected drill pipe.
    • The DWH BOP system was not properly maintained and recertified as required by regulation.
    • Transocean’s “condition based maintenance” was a euphenism for “fix it when it fails.” Perhaps worse, BP authorized the continuation of operations knowing that an annular preventer was leaking.
  • The initial flow from the well was directed to the mud-gas separator instead of being routed overboard via the diverter. Routing the flow to the diverter would have provided additional time for the crew to safely evacuate.
  • Gas detectors
    • Not all gas detectors were fully operational. As justification, Transocean’s report expressed concerns about alarm fatigue, a weak excuse. Alarm issues can be effectively managed without disabling the devices.
    • The gas detectors did not automatically shutdown the generators, the source of the initial explosion. This is somewhat understandable on a dynamically positioned rig that is dependent on power to maintain position. However, someone should have shut down the generators as soon as gas was detected.
  • Engine overspeed devices didn’t work, and apparently weren’t tested regularly. Had they worked, the engine room explosion may have been prevented.
  • The crew had time to activate the Emergency Disconnect Sequence, but did not.
    • Deficient training
    • Uncertain chain of command
    • Fear of repercussions?

Read Full Post »

« Newer Posts - Older Posts »