Feeds:
Posts
Comments

Archive for the ‘Gulf of Mexico’ Category

Yesterday, BSEE issued investigation reports for 2 of the fatal 2020 incidents. Both of these incidents involved falls, a chronic and preventable cause of offshore worker casualties. Not enough industry and trade association attention is given to such incidents, which have been trivialized in the past by categorizing them as “slips, trips, and falls.” The reports are linked below:

The reports describe how the incidents occurred and what we can do better to prevent similar events in the future. Despite the advance in safety management programs over the past 30 years, there has been no discernible improvement in preventing these incidents. We need to rethink training programs, planning, and methods. Deadly falls are not inevitable.

Read Full Post »

Last month (12/2021), BSEE finally posted the 2020 incident statistics. Unfortunately, no details or incident summaries are provided for the 6 fatalities. The fatalities are simply classified as “occupational” (4) or “non-occupational” (2). As a result, we still know very little about these fatal incidents 13 – 24 months after they occurred.

The BSEE spreadsheet advises that 3 of the 4 “non-occupational” fatalities are being investigated, but the reports are still “pending.” Why the long delay? The National Commission, BOEMRE-CG, and NAE investigations of the Macondo tragedy were completed (and reports published) in less time.

No explanation is provided as to why the 4th occupational fatality is not being investigated.

Also, investigations of the preparedness and response aspects of the 2 non-occupational fatalities would have been beneficial. What was the cause of death? What medical screening procedures were in place? What treatment capabilities were available at the facility? How much time was required to transport the workers to hospitals? These are important considerations for the offshore community.

Below is a summary of the publicly available information for the 6 fatalities:

  • 1/14/2020: A worker died on a Diamond drillship on a lease (Mississippi Canyon 822) operated by BP. According to BSEE this was a non-occupational fatality. Per the listing of investigations, no investigation was conducted.
  • 5/16/2020: A worker died on a Fieldwood platform (Ewing Bank 826 A). Per BSEE, this was an occupational fatality and the investigation is still pending. There were no media reports or company announcements.
  • 6/2/2020: A worker died on the Valaris DS-18 drillship working for EnVen Energy at Green Canyon 767. Per BSEE, this was a non-occupational fatality and no investigation was conducted.
  • 6/20/2020: A worker died on at the Green Canyon 18 A platform operated by Talos. Per BSEE, this was an occupational fatality but no investigation is indicated for this incident. No media reports or company announcements could be found.
  • 8/23/2020: A worker died on the Pacific Khamsin drillship working for Total at Garden Banks 1003. A month later, at an Investors’ Day presentation, Total announced that the incident occurred while the crew was preparing to move the rig to avoid Tropical Storm Laura. Total’s statement included this defensive statement: “This is a routine operation that was executed with no time pressure as the rig disconnection had been decided well in advance.” Per Total, the findings of their investigation were shared with the regulators in Sept. 2020, but BSEE advises that their investigation is still pending.
  • 12/2/2020: A worker died on DCOR’s Platform Gilda in the Santa Barbara Channel offshore California. The BSEE investigations update provides no information on the status of the investigation. Per local media, 3 men fell from the platform and others jumped into the water to assist. No information is provided on the reason why the 3 men fell.

The number of US OCS fatalities remains unacceptably high, and timely data sharing and investigations are needed to better assess causes and trends. In that regard, this recommendation from the 2016 National Academies report entitled “Strengthening the Safety Culture of the Offshore Oil and Gas Industry” merits further industry/government attention and action:

Recommendation 4.2.2: Because accident, incident, and inspection data all are needed to identify and understand safety risks and corrective actions, the committee recommends full transparency such that regulators make all these data readily available to the public in a timely way, taking into consideration applicable confidentiality requirements.

Read Full Post »

Declines in drilling activity and discoveries suggest that higher real oil prices are on the horizon. We may be fortunate enough to escape significant price hikes and supply disruptions over the next couple of years, but they are coming.

Rystad’s not-so-cheery pre-Christmas press release reported that, on a volume basis, 2021 oil and gas discoveries had sunk to the lowest level in 75 years.

20211220 OG global discoveries PR chart.png
Rystad Energy

US offshore trends are even more troubling. Per BOEM’s database, no deepwater fields were discovered in 2021 and there were only 2 discoveries in the past 3 years (see chart below). HartEnergy reports 5 announced discoveries in 2021, none of which has been determined by BOEM to be commercially producible. Regardless of the status of those 2021 determinations, recent discoveries have not been sufficient to reach and sustain GoM production volumes at the 2019 peak (August) of 2.044 million BOPD. 2019 was the first year since 1982 without a confirmed deepwater discovery and the trend (below) is not encouraging. Schlumberger data through 2016 indicated GoM depletion rates greater than 20%, and the subsequent low discovery rates do not bode well for future production trends.

from BOEM data

You can’t make discoveries without drilling and only 9 companies drilled deepwater GoM exploratory wells in 2021 (34 wells total). With the Pacific in decommissioning mode, the Atlantic and Eastern GoM off-limits, limited options offshore Alaska, and the decline of the GoM shelf, the deepwater GoM is the only important US offshore production option. The exploration numbers below are therefore concerning.

The shale revolution made the US a net oil exporter, but skepticism about shale production forecasts suggests the need for other supply sources. Given the shale uncertainty and the unrealistic expectations regarding the energy transition, greater US dependence on imported oil is on the horizon. This bodes well for OPEC, but not so well for US and international consumers.

Meanwhile, the US Dept. of Energy shows no evidence of concern about oil and gas production. Although oil and gas account for about 70% of our energy consumption, there has been no mention of either on the DOE homepage for months. DOE does express a strong interest in “energy justice.” Perhaps they can explain how increased imports and higher energy prices benefit the poor. They should also explain how oil imports are environmentally and economically superior to domestic oil and gas production, when the reality is exactly the opposite.

Read Full Post »

EIA data

October production rebounded to 1.744 million BOPD from the 2021 low of 1.064 million BOPD in September (Hurricane Ida). November and December production should exceed 1.8 million BOPD.

Read Full Post »

Quite a bit per the GAO, and their report only deals with DOE management of demonstration projects. The Infrastructure Bill authorizes $2.5 billion for commercial projects (and much more for other CCS purposes).

DOE provided nearly $684 million to eight coal projects, resulting in one operational facility. Three projects were withdrawn—two prior to receiving funding—and one was built and entered operations, but halted operations in 2020 due to changing economic conditions. DOE terminated funding agreements with the other four projects prior to construction.

DOE provided approximately $438 million to three projects designed to capture and store carbon from industrial facilities, two of which were constructed and entered operations. The third project was withdrawn when the facility onto which the project was to be incorporated was canceled.

GAO

So DOE’s actual success ratio was 0.182 (2 for 11) – not very compelling.

With regard to proposals for offshore carbon sequestration, who will be liable for future cost overruns, operating losses, infrastructure failures including pipeline and well leaks, and decommissioning costs? Who ensures that there will never be any leakage from CO2 disposal reservoirs? Does all of this fall on the Federal government?

Corporations that want to engage in carbon sequestration for commercial or other purposes should fund the projects with their own revenues or fees charged to the companies whose emissions they are collecting. The Outer Continental Shelf is publicly owned and those wishing to dispose of substances should pay a usage fee, be responsible for all costs, and be liable for pollution and damages.

Read Full Post »

Taylor Energy’s Mississippi Canyon Block 20 “A” platform was destroyed by a massive mudslide during Hurricane Ivan in 2004 (see illustrations below). Per Naval Research Laboratory sensors, “Ivan the Terrible” generated freak waves as high as 91 feet, and NRL computer models suggest that wave heights may have exceeded 130 feet. The changes in pressure resulting from the motion of the huge waves triggered the flow of the unstable Mississippi delta sediments. The platform was swept 500 feet downslope and the wells were severed and buried under a deep layer of sediment. That was essentially the end for Taylor Energy, as the company would spend the next 17 years locating and plugging wells, decommissioning piping, collecting seepage, and mitigating pollution. Since 2008, when Taylor sold its remaining oil and gas assets, the company has been solely engaged in the MC-20 response.

Illustration of the collapsed well jacket and damaged pipes from Taylor Energy’s Mississippi Canyon 20 Platform in the Gulf of Mexico.
NOAA illustration

Last week, Taylor and the Justice Department signed a consent degree that transfers the company’s remaining assets and control of the decommissioning trust fund to the Federal government. Questions remain as to whether the platform and wells could have been better designed to withstand the mudslide (note that the platform was installed and operated by BP prior to being sold to Taylor), and whether more should have been done to mitigate the seepage. Taylor does a good job of making its case at their response website.

Few offshore operators would argue that what happened to Taylor couldn’t happen to them. That would be brash and foolish. Hopefully, the companies that remain have absorbed the lessons of MC-20 and are applying them to their operations and management programs.

Read Full Post »

An old offshore platform in the U.S. Gulf of Mexico is set to be converted into a working fish farm, creating a blueprint for future aquaculture re-use projects and providing repurposing options for old oil and gas assets.

offshore-energy.biz
Creating blueprint for reusing old oil & gas assets in Gulf of Mexico
Station Padre

Congratulations to the Gulf Offshore Research Institute (GORI) and Innovasea on their plans to transform an offshore Texas gas platform into a working fish farm.

For the complete list of alternative uses for offshore oil and gas platforms, see our Rigs-to-Reefs+++ page.

Read Full Post »

Carbon capture and storage
NPD

Several actors have approached the ministry with a desire to be allocated two specific areas for storage of CO 2 . One area in the North Sea and one in the Barents Sea were therefore announced on 10 September in accordance with the storage regulations.

By the application deadline of 9 December, the ministry had received applications from five companies. The Ministry will process the received applications and allocate area in accordance with the storage regulations during the first half of 2022.

Ministry of Petroleum and Energy, Norway

Contrast the situation in Norway with Exxon’s apparent attempt to acquire 94 Gulf of Mexico leases at Oil and Gas Lease Sale 257 solely for CCS purposes. BOEM’s Notice of Sale made no mention of CCS, and there had been no environmental or economic assessment of CCS activity.

And how much will the public pay for grand CCS ventures that (although interim measures) will take years to initiate, add new safety and environmental risks, and may never achieve their objectives? The public burden will no doubt include direct subsidies, tax credits, increased petrochemical prices, and the erosion of purchasing power associated with the resulting inflation pressures.

More on Sale 257 and the CCS bidding.

Read Full Post »

Offshore gas production (see chart below) has declined for the past 20 years and now accounts for only 4% of total US gas production, down from 20% in 2005 and 25% in the 1990s. Associated gas production (oil-well gas) has remained relatively constant owing to the strength in deepwater GoM oil production. 73% of 2020 gas production was from deepwater wells, and was mostly oil-well gas. Associated gas production surpassed nonassociated gas production (gas-well gas) in 2016 and the latter has continued to decline.

The case for natural gas has been well documented (see the EQT letter linked below). Recent natural gas advocacy has emphasized the carbon/GHG advantages given that methane (CH4) is essentially a hydrogen transporter that emits far less CO2 than other fossil fuels when burned. However, natural gas’s other important air quality advantages – low NOx. SO2, and particulate emissions – have greater local significance from a human health standpoint. Those who have ridden a bike behind a natural gas powered bus have no doubt experienced the natural gas advantage firsthand. These buses are literally a breath of fresh air!

Other environmental advantages of offshore natural gas, particularly nonassociated gas, receive less attention but are nonetheless significant. Advantages of nonassociated offshore gas include the following:

  • Fewer wells required than for shale gas
  • No risk of fresh water contamination
  • Platforms provide beneficial reef effects
  • Minimal space preemption and land disturbance relative to onshore gas production and wind/solar operations
  • Low facility density and navigation risks relative to wind operations;
  • Lower elevation and fewer view-shed, aesthetic, and aviation issues than for wind
  • Minimal avian risks relative to on- and offshore wind operations
  • Minimal spill risk relative to oil and associated gas production
  • Significantly less flaring than for oil well gas. While the overall % of US offshore gas production that is flared is low (approx. 1.0 -1.5% from 2016-2020 per EIA data), the % of gas-well gas that is flared has historically been less than 0.5%.

Low natural gas prices and competition from nimble and efficient shale operations have constrained offshore gas exploration. Ultradeep (subsurface) drilling has shown promise from a gas resource perspective but has proven to be expensive and operationally challenging. Some independent producers are still acquiring gas prone shelf tracts and that needs to be encouraged. Consideration should be given to incentives such as making nonassociated gas production royalty free. That would certainly seem preferable to subsidizing complex, expensive, and uncertain carbon disposal operations on offshore leases.

Read Full Post »

What, if anything, will the Judge say about the leases that are intended to be carbon sequestration sites? How can BOEM sell OCS leases for purposes that were neither announced nor environmentally assessed? What do EarthJustice and the other plaintiffs think about the sequestration bids given that the environmental community is split on CCS?

Who is going to pay the enormous cost of sequestration on the Outer Continental Shelf – platforms, wells, pipelines, processing equipment, maintenance, monitoring, decommissioning, and more? The Federal government (i.e. taxpayers) features large in this grand scheme, and will no doubt be assuming most of the economic and performance risks. And all of these costs are for disposal purposes, not for offshore energy production of any kind.

Together with the bipartisan infrastructure bill enacted in November, which included more than $12 billion in funding for carbon capture and carbon removal technologies, the Build Back Better legislation would hand fossil fuel companies nearly every item on their carbon capture wishlist.

Inside Climate News

The reality of offshore CCS is not anywhere near as simple as portrayed in the slick graphic below:

houston ccs hub
ExxonMobil

Read Full Post »

« Newer Posts - Older Posts »