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Archive for the ‘Gulf of Mexico’ Category

Their filing is attached. I found the following points to be particularly compelling:

p.3: “Despite no evidence that an Oil and Gas Program vessel has ever struck a Rice’s whale, the 2025 BiOp projects that Oil and Gas Program vessels will lethally strike numerous Rice’s whales over the term of the 2025 BiOp. On that basis alone, the Service found that the Oil and Gas Program will jeopardize the continued existence of the Rice’s whale, and developed a multi-step reasonable and prudent alternative which it asserts will reduce projected vessel strikes to zero.

p. 4: “The Rice’s whale is a rarely found animal that the Service first identified as a new species (separate from the non-endangered Bryde’s whale) in 2021. 86 Fed. Reg. 47,022 (Aug. 23, 2021). There is no evidence that an Oil and Gas Program vessel has ever struck a Rice’s whale (or a Bryde’s whale) despite continued operation in the Gulf over many decades.”

p. 5: “The 2025 BiOp disregards the Bureaus’ logical, fact-based conclusion. Instead, the Service’s 2025 BiOp engages in speculation and guess-work to surmise that Oil and Gas Program vessels could be striking and killing Rice’s whales on a regular basis. The Service ignores the best available data (i.e., showing no recorded observations of an oil and gas vessel striking a Rice’s whale) and instead presumes that forceable and lethal collisions between oil and gas service vessels and 60,000-pound whales are regularly occurring but somehow going unnoticed by the vessels and their crews and that the carcasses silently disappear into the water, never to be seen again.

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National Marine Fisheries Service (NMFS) biological opinion dated 5/20/2025

Background:

  • Section 7(a)(4) of the Endangered Species Act (ESA) requires federal agencies to confer with NMFS on any action that is likely to jeopardize the continued existence of proposed species or result in the destruction or adverse modification of proposed critical habitat.
  • Section 7(b)(3) of the ESA requires that at the conclusion of consultation, NMFS provides an opinion stating whether the Federal agency’s action is likely to jeopardize ESA-listed species or destroy or adversely modify designated critical habitat.
  • Last year, the U.S. District Court for the District of Maryland vacated the NMFS 2020 Biological Opinion for Gulf of Mexico Oil and Gas activities effective May 21, 2025, so failure to complete the opinion by that date would have jeopardized oil and gas operations in the Gulf.

Key points in the biological opinion:

  • p. 598: The proposed action is not likely to jeopardize the continued existence of sperm whale, Northwest Atlantic loggerhead sea turtle, Kemp’s ridley sea turtle, North Atlantic DPS green sea turtle, leatherback sea turtle, hawksbill sea turtle, or Gulf sturgeon.
  • The proposed action is not likely to destroy or adversely modify loggerhead or Gulf sturgeon designated critical habitat, or proposed critical habitat for green sea turtle North Atlantic DPS or Rice’s whale.
  • p. 599: The operation of oil and gas vessels in the Gulf of America, in an area where the endangered Rice’s whale occurs, is likely to jeopardize the continued existence of the whale due to the risk of vessel strike.

According to NMFS, the reasonable and prudent alternative (see below) reduces or avoids the primary threat to Rice’s whales, the risk of injurious and lethal vessel strike interaction. The impacts of other stressors are more limited in space and time, diffuse, or not likely to result in adverse effects to Rice’s whale.

The reasonable and prudent alternative (RPA) requires the following as it relates to vessel activity in the action area. More detail on p. 601:

  1. Immediately begin to use technology to enable Rice’s whale vessel strike avoidance and monitoring of presence of Rice’s whale.
  2. Establish an expert working group to support development and implementation of a Rice’s whale vessel strike avoidance technology plan (RW Tech Plan)
  3. Improve understanding of Rice’s whale vessel strike risk associated with the proposed action
  4. Develop a Rice’s whale vessel strike avoidance technology plan (RW Tech Plan)
  5. Undertake independent peer review
  6. Implement Rice’s whale vessel strike technology plan
  7. Monitor Rice’s whales to ensure no likelihood of jeopardy during RPA implementation

Comment: Because the risk to the Rice’s whale in the central and northwestern GoA is highly speculative (see analysis by Darren Ireland), the RPA is arguably excessive. However, I like the RPA’s technological and management system focus.

Unsurprisingly, Earth Justice et al found the NMFS opinion inadequate and filed a suit (attached) in Maryland calling on the court to vacate the opinion and grant injunctive relief.

How can they sue in a Federal court in Maryland, far away from the Gulf? The venue was ostensibly chosen because NMFS headquarters are located in a Maryland suburb of DC. The Maryland court is also likely to favor the plaintiffs, which may have been a factor in the choice of venue. It’s a great country! 😉

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Coast Guard photo. Thanks to Lars Herbst for bringing this incident to my attention.

In what the Coast Guard is describing as an “uncontrolled discharge” (euphemism for blowout), an 82-year-old oil well has been spewing oil, gas, and water into the coastal marshes of southern Plaquemines Parish, Louisiana, for more than a week.

In hopes of future production, prior and current owners had elected not to permanently plug the well, apparently with the State’s acquiescence.

The well is currently operated by an affiliate of Spectrum Energy. Typical of these situations, the previous owner, Whitney Oil and Gas, was in bankruptcy.

The Coast Guard has taken over the response and has accessed the Oil Spill Liability Trust Fund.

We don’t need relaxed decommissioning and financial assurance requirements. We need a cooperative Federal, State, and industry effort to ensure that wells are plugged in a timely manner and that financial assurance is provided to protect the public interest.

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  • 2024/25 monthly average: 1767 bopd
  • 2024/25 monthly average minus hurricane reduced month (SEPT 2024): 1782 bopd
  • FEB 2025 ave. production: 1755 bopd

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BP dropped the regrettable Beyond Petroleum campaign and has now cut their renewable energy investments to focus on oil and gas production. They are doing quite well in the Gulf of America where they are the no. 2 oil and gas producer.

The leading Gulf of America oil and gas producer, Shell, has also slowed its renewable investments and is no longer participating in any US offshore wind projects.

Only Equinor (formerly Statoil), which is 2/3 Norwegian government owned, remains committed to renewable projects, much to the chagrin of some private investors. Equinor’s Empire Wind misadventure may be matched in the Pacific where their floating wind project offshore California is a long way from reality.

Farther in the past, there were noteworthy failures (below) like Mobil’s acquisition of Montgomery Ward, Exxon’s investment in Reliance Electric, and Gulf’s real estate ventures.

Finally, don’t expect the carbon sequestration boom that some are forecasting. As wind investors have discovered, industries dependent on mandates and subsidies are risky.

Not much unites climate activists and skeptics, but they are largely aligned in their opposition to carbon sequestration (euphemism for disposal), as are fiscal conservatives. The word chutzpah comes to mind when companies seek public funds to dispose of emissions associated with the combustion of their products.

And how are those 199 wrongfully acquired carbon sequestration leases in the Gulf working out (graphic below)? Barring some legislative sleight of hand, those leases are worthless.

199 oil and gas leases were wrongfully acquired at Sales 257, 259, and 261 with the intent of developing these leases for carbon disposal purposes. Repsol was the sole bidder at Sale 261 for 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).

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fig. 1, UT study: analyzed deepwater Paleogene fields, stratigraphic column (MMS map 😉)

BSEE’s decision to revise downhole commingling policy by increasing the allowable pressure differential between reservoirs is sound and supported by an impressive University of Texas (UT) Petroleum Engineering study. Although the announcement hype is a bit much, this is the way regulation is supposed to work.

The main benefit of commingling (vs. sequential production) is the accelerated return on investment, which is fine as long as other risks are not introduced and ultimate oil recovery is not sacrificed. The UT study of Paleogene (Wilcox) reservoirs found that downhole commingling actually maximizes per-well oil production compared to sequential schemes. Over 30 and 50 years, commingling yields 61% and 21% more oil respectively.

The UT study analyzed 3 cases with 19 variables (Table 2 in their report). The reservoir pressure differentials were 500, 1000, and 1500 psi. Interestingly, pressure differential had essentially no impact on cumulative production in either the commingled or sequential scenarios.

Figure 13. Cumulative production over 50 years for commingled (left) and sequential (right) production scheme. The most significant variables are shown in the first four pairs of plots. The last pair of plots shows the least important parameter which is pressure difference between reservoir units.

Also note that (fig. 13):

  • As the upper reservoir thickness increases to 1000 ft (high case), total production increases by 41% for the commingled production scheme and 26% for the sequential production scheme.
  • The second most important field feature is upper reservoir facies proportion for both production schemes. A higher sand proportion in the reservoir results in higher production.

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I am again sharing this touching tribute to the 11 men who lost their lives on the Deepwater Horizon on April 20, 2010. The video is introduced by country singer Trace Atkins, a former Gulf of Mexico rig worker. The video and Trace’s song serve as a memorial to the 11 Deepwater Horizon workers and others who have died exploring for and producing oil and gas around the world. Please take a moment to watch.

Deepwater Horizon Memorial, New Orleans

Macondo revisited series:

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“The Bureau of Ocean Energy Management’s analysis reveals an additional 1.30 billion barrels of oil equivalent since 2021, bringing the total reserve estimate to 7.04 billion barrels of oil equivalent. This includes 5.77 billion barrels of oil and 7.15 trillion cubic feet of natural gas—a 22.6% increase in remaining recoverable reserves.” 

YearNumber of fieldsOriginal ReservesHistorical Cumulative ProductionReserves
Oil BbblGas TcfBOE BbblOil BbblGas TcfBOE BbblOil BbblGas TcfBOE Bbbl
19752556.6159.917.33.8227.28.662.7932.78.61
19804358.0488.923.94.9948.713.663.0540.210.20
198557510.63116.731.46.5871.119.234.0545.612.16
199078210.64129.933.88.1193.824.802.5336.18.95
199589912.01144.937.89.68117.430.572.3327.57.22
20001,05014.93167.344.711.93142.737.323.0024.67.38
20051,19619.80181.852.214.61163.943.775.1917.98.38
20101,28221.50191.155.517.11179.349.014.3911.86.49
20151,31223.06193.857.619.58186.552.783.487.34.78
20161,31523.73194.658.420.16187.553.583.576.84.79
20171,31924.65195.259.720.78188.954.213.876.35.00
20181,31924.86195.559.721.42189.855.213.445.74.45
20191,32526.77197.061.822.12190.956.094.656.15.74
20231,33630.43201.266.224.66194.059.195.777.27.04
Oil and gas reserves and cumulative production at end of year, 1975-2023, Gulf of America, Outer Continental Shelf and Slope. “Oil” includes crude oil and condensate; “gas” includes associated and non-associated gas. Reserves estimated as of December 31 each year.

This increase in reserves will not please those responsible for the current 5 Year Oil and Gas Leasing Plan. They told us that we don’t need more OCS lease sales and that our biggest concern is producing too much oil and gas for too long!

Page 6 of the Leasing Plan:

The long-term nature of OCS oil and gas development, such that production on a lease may not begin for a decade or more after lease issuance and can continue for decades, makes consideration of net-zero pathways relevant to the Secretary’s determinations on how the National OCS Program best meets the Nation’s energy needs.

Energy experts like Dan Yergin and Vicki Hollub have a much different view. Per Hollub:

Crude reserves are being found and developed at a much slower pace than they’ve been in the past. Specifically, she said the world has only newly identified less than half the amount of crude it’s consumed over the course of the past 10 years. Given the current trends, this means demand will exceed supply before the end of 2025.

A bit off-topic, but Jeff Walker, a former colleague and the MMS Regional Supervisor in Alaska, had the best quip about reserve numbers. In explaining an operator’s revised reserve numbers for a producing unit which had leases with different royalty rates, Jeff noted that “oil always migrates to the lower royalty leases.”😉

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China National Offshore Oil Corp. (CNOOC) has surrendered its 21% interest in the Appomattox (Mississippi Canyon 391, 392, and 393) project and its 25% stake in Stampede (Green Canyon 468, 511, and 512). Those ownership positions were acquired in CNOOC’s takeover of Calgary-based Nexen in 2013.

CNOOC had been quite positive about the prospects for Appomattox and Stampede, which are producing at higher than expected rates. However, because of sanctions concerns, an exit from operations in the US, Canada, and the UK had been under consideration for at least 2 years.

CNOOC’s shares of Appomattox and Stampede were acquired by INEOS Energy, a UK company.

The transaction is also discussed in CNOOC’s 2024 Annual Report (p.19).

Stampede TLP

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BSEE incident investigations are another window into OCS safety performance.

Panel reports are published for the most significant OCS incidents (e.g. fatalities, serious injuries, significant pollution). Unfortunately, these reports have been unacceptably delayed in recent years. Status reports are not provided leaving the public in the dark as to what is being investigated and why.

The more common investigations, conducted by BSEE’s district offices, are timely and informative. The Districts typically investigate lost time (>72 hours) injuries, crane and lifting equipment incidents, small fires, pollution events, property damage > $25k, gas releases, and other incidents requiring workers to muster for possible evacuation.

The number of District investigations in 2024 declined significantly to 31, one-third fewer than the average of 46.25 for the past 4 years.

Violations were not identified for 2/3 of the incidents.

A complete list of the 2024 District investigations follows. Hyperlinks are provided for those who want to review the reports.

DateOperatorTimeViolation(s)Area/BlockAccident Type
12-25-2024bp1330noGC 584lifting, LTA
11-24-2024Anadarko1710noVK 915Muster, gas release
11-15-2024Anadarko837noGB 668Muster
11-10-2024Murphy145noGC 432LTA
10-12-2024LLOG540yesAC 337LTA – Lifting
10-03-2024Shell900noAC 857Fire, > $25K damage
09-27-2024LLOG200noAC 337LTA, Crane
09-21-2024Talos1630noSM 160LTA
08-11-2024Gulf Offshore1910yesVR 170Fire, Explosion, >$25k, Muster, LTA
07-20-2024Talos2200noSS 224DLTA
07-11-2024Manta Ray730noHI A 5LTA
07-08-2024Cantium1908yesST 23CCLifting
06-05-2024Kosmos1538noMC 727Muster, > $25K
05-31-2024MC Offshore100yesGC 52Crane, > $25K
05-02-2024Murphy1620noGC 478Crane; > $25K
04-24-2024Murphy815noGC 389LTA
04-04-2024Renaissance2230yesVR 369 ALTA
03-28-2024BOE2200yesWR 51LTA
03-20-2024Talos700yesGB 506LTA
03-19-2024Chevron1330noMC 607Lifting, <$25k
03-13-2024Walter2010noSS 189Crane
03-07-2024LLOG1500yesKC 785LTA, lifting
03-05-2024Shell415yesMC 391Pollution, >$25k
02-25-2024Talos930yesSM 130 BCrane,> $25K
02-21-2024W&T1319noHI A 379BFire
02-16-2024Chevron1335noWR 29LTA, Crane
02-13-2024Shell2035noMC 899LTA
02-07-2024Williams855noGA A 244JPLTA
01-29-2024Cantium1900noST 23 CCFire,>$25K
01-18-2024Murphy1303noGC 478Lifting, > $25k
01-16-2024Arena252noSM 128 BFire, > $25K

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