Tyler Priest, the leading historian on US offshore oil and gas operations, has published another gem. His book, Offshore Oildom, is a fascinating account of the history of the technologically innovative and economically important, yet highly controversial, OCS Oil and Gas program. His bookis highly recommended.
Consider this recommendation by Daniel Yergin:
“Tyler Priest, a preeminent historian of energy and the environment, explores how a single well drilled off a pier near Santa Barbara in 1898 gave rise to a major American industry—offshore oil and gas. In spirited prose, Priest demonstrates how this U.S. industry was created not only by innovation, creative engineering, and complex execution; it was also the result of fierce political battles.” ~Daniel Yergin, Pulitzer Prize–winning author of The Prize: The Epic Quest for Oil, Money, and Power and The New Map: Energy, Climate, and the Clash of Nations
Gas production, which is now overwhelmingly from oil wells, also ticked up. However, gas production remains at historically low levels. (See charts below.)
Time to take another look at ultradeep shelf gas? More on this in a later post.
A leaked Dept. of the Interior (DOI) document will likely have little in common with the Draft Proposed Program (DPP, step 2 above). The DPP decisions will be made by the President, not by DOI staffers or managers.
According to media reports, the leaked document includes lease sales offshore New England, the Carolina’s and California. Unless the President revokes his own 2020 withdrawals, the Carolina’s are off-limits until 2032. Ditto for the Eastern Gulf within 125 miles from Florida. (See the map below.)
Including North Atlantic and offshore California in the DPP would unleash a firestorm of opposition. In the case of the North Atlantic, the acreage may not be sufficiently prospective to justify the fight.
To the extent that marine sanctuary determinations do not preclude California offshore leasing, the litigation and legislative battles probably would. In the unlikely event that a sale could be held, who would bid? Who wants to be the next Sable?
The Beaufort Sea is the most likely frontier area to be included in the DPP given plans to open ANWR, operational history, resource potential, and State support.
Assuming the South Atlantic withdrawal could be partially lifted, a small, targeted lease sale would be of great interest to petroleum geologists and could have significant economic and national security implications. The late Paul Post, the foremost expert on the petroleum geology of the US Atlantic, saw great potential in the paleo deep- and ultra-deepwater areas. He advocated exploration concepts proven successful in analogous West African and South American settings where massive discoveries have been made. Samuel Epstein, another prominent petroleum geologist, also believes the deepwater Atlantic has great resource potential.
Finally, the extent of the Florida buffer needs to be considered given the high resource potential of the Eastern Gulf. Be it 75, 100, or 125 miles, leasing beyond that buffer should be a priority.
Good: OCS oil and gas permitting and inspections appear not to be significantly affected by the govt shutdown to-date. 14 planning documents were approved on Oct. 21, and 37 drilling permits have been approved in Oct. (through 10/21).
Bad: This level of effort is not sustainable given limits on offsetting funds from fees, rentals, etc.
Ugly: The personnel who are performing these duties are not being paid during the shutdown. The longer the shutdown drags on, the greater the hardship on those individuals and their families. Shameful!
Warren Buffett’s proposal would stop deficit spending and address the root cause of shutdowns:
Buffett: “I could end the deficit in five minutes. You just pass a law that says that any time there’s a deficit of more than three percent of GDP, all sitting members of Congress are ineligible for re-election.“
Unsurprisingly, the carbon capture and sequestration (CCS) hype is fading fast. No other carbon strategy is so strongly opposed by both climate change activists and skeptics.
Support for CCS seems to be limited to those seeking to profit from subsidies, mandates, and disposal fees. In 2022, Exxon projected a $4 trillion CCS market by 2050. Pipe dream?
“Highlights” of the Gulf of America OCS carbon disposal era:
amended the OCS Lands act to authorize “the injection of a carbon dioxide stream to sub-seabed geologic formations for the purpose of long-term carbon sequestration.”
exempted CO2 injection from the restrictions on ocean dumping by stipulating that such injection “shall not be considered to be material (as defined in section 3 of the Marine Protection, Research, and Sanctuaries Act of 1972.” Without this exemption, CO2 streams would clearly be “material,” as defined in 33 U.S.C. 1402, and would be subject to the stringent requirements of that act.
directed that “not later than 1 year after the date of enactment of this Act, the Secretary of the Interior shall promulgate regulations to carry out the amendments made by this section.” (This deadline is long past, which is not uncommon for such legislative directives.)
11/17/2021: Not coincidentally, two days after the enactment of this legislation, Exxon was the sole bidder on 94 nearshore tracts with very limited oil and gas production potential. This was an oil and gas lease sale and there were no provisions for carbon sequestration leasing. Nonetheless, Exxon was awarded leases for all 94 tracts. As a result of litigation delaying the issuance of Sale 257 leases until Oct.1, 2022, those 5 year leases will expire in 2027.
3/29/23: Exxon bid at Sale 259 on 69 nearshore tracts with little oil and gas potential. Once again, this was strictly an oil and gas lease sale and Exxon’s CCS intentions were clear. Nonetheless, the leases were awarded.
6/25/2025: For the first time ever, the Federal government felt compelled to stipulate the obvious (proposed lease sale notice for OCS Sale 262) – that an Oil and Gas Lease Sale is only for oil and gas exploration and development.
Gulf of America lease map: 199 oil and gas leases were wrongfully acquired for carbon disposal purposes. At Sale 261, Repsol acquired 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon had acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).
Even those of us who are supporters of responsible offshore oil and gas production find it a bit unsavory that some companies are looking to cash in on (and virtue signal about) carbon collection and disposal at the public’s expense. Perhaps companies that believe oil and gas consumption is harmful to society should be seeking to reduce production rather than engaging in enterprises intended to sustain it.
Every deepwater platform installed since Feb. 2018, when Chevron installed its Big Foot tension leg platform (TLP), has been a Floating Production Unit (aka FPU or production semisubmersible). During that period, no new SPARs, FPSOs, or TLPs were installed.
The list (below) of these simpler, safer, greener FPUs has grown by two with the initiation of production at Shenandoah and Salamanca. Note the water depth range from 3725 to 8600 ft.
platform
operator
water depth (ft)
first production
Appomattox
Shell
7400
May 2019
King’s Quay
Murphy
3725
April 2022
Vito
Shell
4050
Feb 2023
Argos
bp
4440
April 2023
Anchor
Chevron
4600
Aug 2024
Whale
Shell
8600
Jan 2025
Shenandoah
Beacon
5840
July 2025
Salamanca
LLOG
6405
Sept 2025
The efficiencies achieved with the simpler platform designs combined with the high pressure (>15,000 psi) technology developed over the past 2 decades is facilitatihg production from the highly prospective Paleogene (Wilcox) deepwater fans. (For those interested in learning more about the geology, see the excellent presentation by Dr. Mike Sweet, Univ. of Texas, that is embedded in this post.)
All of the operators note the cost-saving similarities in their FPU designs. For example, Vito and Whale are very much the same despite the 4550′ difference in water depth.
Meanwhile, two new floating production units, Beacon’s Shenandoah and LLOG’s Salamanca are now on line. More on this and bp’s Tiber announcement in an upcoming post.
NOAA is touting marine aquaculture and has published Programmatic Environmental Impact Statements for Aquaculture Opportunity Areas (AOAs) in the Gulf of America and offshore Southern California. This is a positive step.
While the focus of these EIS documents is on distinct AOAs separated from oil and gas facilities, NOAA might also have discussed the potential for synergy with existing platforms. The reef effect of platforms can be sustained and new fishery ventures supported by converting older platforms to aquaculture facilities (Rigs-to-Roe/Redfish/Rockfish) rather than decommissioning them.
According to a paper published in 2014 by marine ecologist Dr. Jeremy Claisse of Cal Poly Pomona, the oil and gas platforms off the coast of California are the most productive marine habitats per unit area in the world. “Even the least productive platform was more productive than Chesapeake Bay or a coral reef in Moorea,” said Dr. Love. (Milt Love, UCSB biologist)
The table below captures the shorter public comments and provides links to the longer ones. They are listed in the order they were posted on Regulations.gov.
commenter
summary/link
anonymous
I recommend under no circumstance that we allow the onsite worker to approve the commingling of bore holes because there is extreme significant safety and environmental hazards that exist. The best alternative is to have an environmental engineer and environmental scientist approve any commingling
…your regulatory proposal is inconsistent with the federal law, the best available science on protecting the health and lives of children, and the legal mandate that agency decision-making does not deprive children of their fundamental constitutional rights…
I support updating the regulations to align with the One Big Beautiful Bill Act, but I encourage BSEE to ensure that safety standards and environmental protections remain the highest priority in all commingling approvals. Clear guidance for industry compliance and transparent public reporting would also strengthen confidence in this rule.
Ananda Foster
Regulations need to catch up with technology and we have not had a chance to do that yet. If you allow them on throttle access, they will destroy it. We all rely on the ocean, how can you do this to your own constituents?
Legislatively dictating well construction, completion, or operational approvals is a redline for me, and I continue to strongly believe the downhole commingling rule should be published as a draft for public review and comment.
The only industry comments are from API and bp America. Both support the direct final rule, and I respect their position. My main quarrel is with the legislative action that put us in this position.
I have had many disagreements with API members over the years, but the dialogue has always been professional. Technical and policy disagreements are healthy for the OCS program, and I will continue to raise potential issues and concerns on this blog.
With regard to bp, I have been impressed by their commitment to the Gulf of America, as summarized in this excerpt from their comments:
Bud's Offshore Energy (BOE) 