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Per PHMSA:

  • At approximately 02:30 PDT (05:30 Eastern Daylight Time (EDT)) on October 2, 2021, Beta Offshore’s control room personnel received a low-pressure alarm on the San Pedro Bay Pipeline, indicating a possible failure.
  • Beta Offshore reported the San Pedro Bay Pipeline was shut down at approximately 06:01 PDT (09:01 EDT) on October 2, 2021—over three hours later.

Comment: Very interesting finding. Good to learn that the pipeline pressures were being monitored. Need to see the pressure history for the pipeline and hear from the crew before reaching any conclusions regarding the conduct of the operator.

Also note that PHMSA is estimating that the spill volume was 700 barrels, far less than the 3000+ bbl maximum estimate. Further, a footnote in the PHMSA letter reports an updated company estimate of 588 barrels. I’m assuming that the refined estimate was based on meter differentials. These lower estimates are more in line with the oil recover data that have been provided and the visual images of the slick.

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The evidence to date indicates that the leak was detected by visual observation of the oil slick. There are some reports that the slick and associated smell were evident on Friday night (10/1). The pipeline operator Amplify issued a statement advising that they first observed an oil sheen on Saturday morning (10/2), which is when the response was initiated. Nothing in Amplify’s statement suggests that a drop in pipeline pressure or a reduction in the flow rate at the onshore terminal was observed.

So, what do the regulations require with regard to leak detection? It depends whether the pipeline is regulated by the Department of Transportation (DOT) or the Department of the Interior (DOI/BSEE). This is how DOI authority is delineated:

DOI pipelines include:
(1) Producer-operated pipelines extending upstream (generally seaward) from each point on the OCS at which operating responsibility transfers from a producing operator to a transporting operator;
(2) Producer-operated pipelines extending upstream (generally seaward) of the last valve (including associated safety equipment) on the last production facility on the OCS that do not connect to a transporter-operated pipeline on the OCS before crossing into State waters;
(3) Producer-operated pipelines connecting production facilities on the OCS;
(4) Transporter-operated pipelines that DOI and DOT have agreed are to be regulated as DOI pipelines; and
(5) All OCS pipelines not subject to regulation under 49 CFR parts 192 and 195.

Unless provision (4) applies, the Elly to shore pipeline is either a producer or transporter-operated pipeline (depending on how the Amplify’s San Pedro Bay Pipeline Co. is classified) that falls under DOT jurisdiction. DOT leak detection requirements (49 CFR 195.134) are new as of 10/1/2019 and do not take effect until 10/1/2024. Unless DOI or similar leak detection requirements are being applied (by agreement, condition of approval, or some other administrative means), there are no such requirements for this pipeline.

Assuming the protection specified below for DOI pipelines is being required, why wasn’t the leak detected and production shut-in. This will be determined during the investigation, but the most probable explanation is that the pressure sensor was set too low, perhaps because the pipeline’s operating range is broad. With regard to a volumetric comparison system (250.1004 (5)), I don’t get the sense that such a capability was in place. If it was, the operator should be able to provide a good estimate of the amount of oil that was spilled (i.e. Elly output – onshore input – any oil recovered from the line after the leak was detected).

§ 250.1004 Safety equipment requirements for DOI pipelines.

(3) Departing pipelines receiving production from production facilities shall be protected by high- and low-pressure sensors (PSHL) to directly or indirectly shut in all production facilities. The PSHL shall be set not to exceed 15 percent above and below the normal operating pressure range. However, high pilots shall not be set above the pipeline’s MAOP.

(5) The Regional Supervisor may require that oil pipelines be equipped with a metering system to provide a continuous volumetric comparison between the input to the line at the structure(s) and the deliveries onshore. The system shall include an alarm system and shall be of adequate sensitivity to detect variations between input and discharge volumes. In lieu of the foregoing, a system capable of detecting leaks in the pipeline may be substituted with the approval of the Regional Supervisor.

One would hope that this major spill will lead to an independent review of the regulatory regime for offshore pipelines. Consideration should be given to designating a single regulator that is responsible and accountable for offshore pipeline safety (a joint authority approach might also merit consideration) and developing a single set of clear and consistent regulations.

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Per the latest update from the Unified Command, a total of only 75 barrels of oil have been recovered (up from 29 bbls reported on Sunday). The 75 bbls no doubt includes some water. It’s unclear as to why so little oil has been recovered (unfavorable offshore conditions? response focused on the shoreline?). Perhaps the volume of oil spilled was less than the 3000 barrel estimate. A few hundred barrels of oil can generate a very large slick.

As BOE and others have suggested, the most likely cause of the spill was a ship’s anchor. SkyTruth’s review of satellite data points to that possibility.

SkyTruth image

The Orange County District attorney seems unhappy with the possibility that (1) the pipeline was struck by an anchor and (2) the leak was in Federal waters:

The Orange County district attorney, Todd Spitzer, said he has investigators looking into whether he can bring state charges for the spill. Spitzer said his jurisdiction ends 3 miles offshore.

Spitzer also said Amplify’s divers should not be allowed near the pipeline without an independent authority alongside them.

AP article

The DA’s insistence that independent divers accompany the company’s divers may be a first in the history of the US offshore program. Isn’t video documentation sufficient? Diving is not risk free.

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EIA just released the July data, and GoM oil production averaged 1.845 million BOPD, which was consistent with expectations. 2021 production through July was relatively stable averaging from 1.762 to 1.845 million BOPD. This will, of course, change dramatically when the August data are released, and even more so for September. Most production was shut-in for Ida beginning on 8/28 and some production has not yet been restored. Per BSEE’s final update (9/23), about 300,000 BOPD remained shut-in.

The EIA data are plotted below:

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BSEE data

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BSEE Data

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BOEM just released their update of Gulf of Mexico OCS oil and gas reserves as of 12/31/2019. Oil reserves increased by 35.2% as a result of 6 new fields being added.

The reserve additions are necessary and welcome given the high depletion rates from 2002 to 2018 when reserves (plotted above) declined steeply while production rates held steady or increased. The concerns about the sustainability of current GoM production rates, as expressed in our 7/26/2021 post, remain given the historically low levels of exploratory drilling. For the reasons presented in that post, our view is that the importance of GoM production will increase, not decrease, over the next decade.

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BSEE data

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As expected given the magnitude and track of Ida, the necessary inspections, and the onshore damage, most GoM production remains shut-in. (BSEE data)

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