Not only have no official findings been released, but there has been little new speculation since our June 2023 update. Given the political stakes, it is increasingly unlikely that the responsible parties will be identified.
Archive for the ‘Offshore Energy – General’ Category
One year ago tomorrow the Nord Stream pipelines were sabotaged
Posted in climate, energy policy, Offshore Energy - General, pipelines, Uncategorized, tagged Denmark, germany, Nord Stream, pipelines, sabotage, Sweden on September 25, 2023| Leave a Comment »
BOEM commits to complying with Sale 261 court order if last ditch appeal fails
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged BOEM, court order, Lease Sale 261 on September 23, 2023| Leave a Comment »
The Federal Government has joined the Sierra Club et al in appealing Judge Cain’s order on Sale 261. BOEM has nonetheless committed to complying with the order if the appeal fails (likely).
BOEM is taking steps to comply with an order issued on September 21, 2023, by the U.S. District Court for the Western District of Louisiana regarding Gulf of Mexico Outer Continental Shelf Oil and Gas Lease Sale 261.
Lease Sale 261 will be conducted on September 27, 2023. In accordance with the court’s order, BOEM will include lease blocks in Lease Sale 261 that were previously excluded due to concerns regarding potential impacts to the Rice’s whale distribution in the Gulf of Mexico.
BOEM is also extending the bid submission period to 3 p.m. CST on September 26, 2023.
BOEM
Noteworthy quotes from Judge Cain’s order on lease sale 261
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged BOEM, injunction, Judge Cain, Lease Sale 261, Louisiana, Rice's whale on September 22, 2023| Leave a Comment »
Quotes from the judge’s order (emphasis added):
The challenged lease term for the expanded Rice’s whale area only arose in a July 2023 district court filing and then appeared in the FNOS for Lease Sale 261 on August 25, 2023—one month before the statutory deadline for the sale. BOEM failed to follow its own procedures by making significant changes to the FNOS, thereby depriving both affected states and the public the opportunity for meaningful review and comment. The procedural error is particularly grave here, because of both the compressed timeline and BOEM’s inexplicable about-face on the scientific record it had previously developed. (p.19)
The challenged provisions inserted into these leases at the eleventh hour, and the acreage withdrawal, are based only on an unexplained change in position by BOEM on a single study a few months after that supplemental EIS. The process followed here looks more like a weaponization of the Endangered Species Act than the collaborative, reasoned approach prescribed by the applicable laws and regulations. (p.22).
According to an affidavit from Shell’s commercial manager, the new restrictions on vessel traffic apply to an area of the northern Gulf that separates Shell’s existing offshore leases from the onshore infrastructure that supports them. Shell Offshore Inc., No. 2:23-cv-1167, at doc. 4, att. 2, ¶¶ 23–27. (p. 23).
Given the shaky justification offered by BOEM, the court cannot find that the challenged provisions are so necessary that withholding them even on a preliminary basis will outweigh the risk of irreparable economic harm shown by plaintiffs. Additionally, “there is generally no public interest in the perpetuation of unlawful agency action.” (p. 26)
Lease Sale 261 update: DOI is enjoined from removing acreage and imposing Rice’s whale stipulation
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged API, Chevron, injunction, Lease Sale 261, Louisiana, Rice's whale on September 22, 2023| Leave a Comment »
For the reasons stated above, the court hereby ORDERS that the Motions for Preliminary Injunction be GRANTED. Accordingly, the government defendants are enjoined from implementing the acreage withdrawal and Stipulation 4(B)(4) as described in the Final Notice of Sale and Record of Decision for Lease Sale 261. Government defendants are ordered to proceed with Lease Sale 261, absent the challenged terms, by September 30, 2023.
Full docket: State of Louisiana v. Haaland (2:23-cv-01157)
Lease Sale 261: the clock is ticking
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged API, Gulf of Mexico, Lease Sale 261, Louisiana Federal Court, Rice's whale on September 22, 2023| Leave a Comment »
- Congress has mandated that the sale be held by the end of this month.
- BOEM announced a sale date of 9/27
- Louisiana, API, and Chevron have challenged provisions of the sale notice and filed a motion for a preliminary injunction to remove those provisions.
- Ten members of Congress have submitted an amicus brief in support of the motion for a preliminary injunction.
- Six NGOs are suing in DC Federal Court to stop the sale.
Mandates vs. energy realities
Posted in climate, energy policy, Offshore Energy - General, tagged natural gas, New York, offshore platforms, power plants, renewable energy, safety on September 19, 2023| Leave a Comment »
New York’s looming, self-imposed electric power crisis:
Something here does not remotely add up. If New York state succeeds by 2030 in closing its natural gas plants — the plants that account for 60% of the State’s generation capacity — that would bring our total installed capacity down from 37.5 GW to as little as 15 GW. But we need almost 60 GW to meet projected demand. And that’s 60 GW that can be called on any time as needed to meet peak usage. The 9 GW of projected offshore wind turbines wouldn’t make much of a dent even if they operated all the time and could be dispatched to meet peak demand, which they can’t. Instead, they will operate only about a third of the time, and at their own whim. At best they will provide about 3 GW on average, when what we need for this full electrification project is more like 45 GW of dispatchable power to add to our existing hydro and nuclear.
Manhattan Contrarian
Power generation realities:
- Assuming sufficient capacity, gas power plants respond to variable demand.
- Wind and solar power are intermittent, such that demand must respond to variable supply (not a prescription for economic growth).
- Power grids can function effectively with only natural gas, but not with only wind/solar.
- Integrated wind, solar, and gas systems can reduce, but not eliminate, demand for gas-generated power.
Offshore platforms: In some regions, there is a push to power platforms with renewable energy transported by electric cable. Currently, most platforms are efficiently powered by gas turbines which satisfy energy needs even when demand spikes during well operations like tripping out of the hole. The extent to which renewables can reliably support platform operations during these and other operations, when power interruptions are unacceptable from a safety standpoint, is a risk that must be assessed prior to committing to alternative energy sources.
The environmental benefits of powering platforms with renewable energy also have not been clearly documented. In most cases, offshore platforms produce sufficient gas to support their power demands. Should platforms be powered by imported electricity, gas that is not used for platform operations would presumably be marketed for consumption elsewhere or reinjected.
If the gas is marketed and consumed elsewhere, there is essentially no net (global) CO2 emissions reduction benefit. Gas that is reinjected is wasted unless there is an enhanced oil recovery benefit. So, the net environmental benefit from importing electric power seems questionable, and the operational risks could be significant.
Guyanese bidder in Guyana licensing round
Posted in Guyana, Offshore Energy - General, tagged Guyana, licensing round, OilNow, Sispro on September 18, 2023| Leave a Comment »
Good for Guyana and good for offshore energy!
In Guyana’s inaugural offshore licensing round, Sispro Inc. stands out as the only Guyanese company among the bidders. Located in South Cummingsburg, Georgetown, this indigenous start-up is a stand-out. So, who are the locals behind it?
Founded by four women – Dr. Melissa Varswyk, Abbigale Loncke-Watson, Dr. Ayodele Dalgety Dean, and Dee George, Sispro has leadership with diverse backgrounds in finance, health, education, energy, and human rights.
OilNow, Guyana
Interesting:
Out of the 14 bids made in Guyana’s inaugural offshore licensing round, Sispro was the only individual bidder, with others bidding as groups.
And it looks like they have assembled a capable, mostly Guyanese, team.
These Gulf of Mexico operators did not incur a single civil penalty payment from 2019-2022
Posted in Gulf of Mexico, Offshore Energy - General, Regulation, tagged Beacon, Cantium, civil penalties, Gulf of Mexico, Hess, Kosmos on September 14, 2023| Leave a Comment »
Impressively, 4 GoM operators with significant production and well activity did not incur a single civil penalty payment during the most recent 4 year period. Each of these operators also had low incident of noncompliance (INC) to inspection ratios. The companies are as follows:
| Operator | 2022 oil production (million bbls) | 2022 oil production rank | 2022 gas production (bcf) | No. of platforms | No. of well starts (2019-2022) |
| Hess | 21.6 | 7 | 46.5 | 3 | 5 |
| Kosmos | 8.5 | 14 | 7.8 | subsea tiebacks | 6 |
| Beacon | 7.2 | 15 | 12.2 | subsea tiebacks | 4 |
| Cantium | 4.7 | 19 | 6.1 | 86 | 37 |
- All of these companies deserve kudos.
- Cantium’s record is especially impressive given that most of their platforms were installed more than 40 years ago and some date back to the 1950s. They have also been a very active development well driller.
- Hess is the 7th biggest oil producer and 5th biggest gas producer in the GoM. Hess CEO John Hess made some encouraging comments (pasted below) about the deepwater GoM at a recent energy conference.
- While Kosmos and Beacon have somewhat lower violation and penalty exposure because their production is via subsea wells tied back to surface facilities operated by other companies, they are demonstrating that entrepreneurial deepwater independents can also be safety leaders.
“The Pickerel-1 prospect was our first (exploration well on the Mississippi Canyon 727) and we are delighted that it was an oil discovery. Black Pearl will be the next and that will hopefully be a tieback (to Tubular Bells with first oil expected mid-2024).
“Then we have a wildcat opportunity (the Vancouver exploration prospect) later in the year in the Green Canyon. With the other 80 exploratory blocks that we have in the Gulf, we will be actively drilling for the next several years,” Hess said.
OilNow
Civil penalties paid, 2019-2022, US OCS
Posted in Gulf of Mexico, Offshore Energy - General, Regulation, tagged 2019-2022, civil penalties, payments, violations on September 13, 2023| Leave a Comment »
- Per the previous civil penalties post
- Data are on a fiscal year basis (i.e. 2022 started on 10/1/2021 and ended on 9/30/2022)
- These data are only for civil penalties paid in that year. Data for civil penalties referrals are not publicly available.
- Nothing terribly surprising in the data. Fieldwood’s issues have been discussed at length.
- Note (last chart) the lag between the date violations were observed and the date penalties were paid. This lag is significant but understandable given due process considerations.
- Fastest payment: 6 months by Shell for an open hole that was not properly barricaded ($26,750 penalty, 2018).
- Slowest payment: 54 months by LLOG for failing to install and maintain equipment properly (three 2016 violations)
- Largest civil penalty paid: $512,900 by bp for a high-pressure gas release caused by the use of improper seals (May 8, 2018 violation).
- Smallest civil penalty paid: $16,300 by Arena for the release of 1000 psi gas on October 16, 2018
- The current maximum penalty amount is $52,646 per day, per violation.
- To learn more about the specific cases.
Comparing the operating restrictions for the Right whale (Atlantic wind) and Rice’s whale (Gulf of Mexico oil and gas)
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Offshore Wind, Regulation, tagged Atlantic wind, Gulf of Mexico oil and gas, Lease Sale 261, operating restrictions, Rice's whale, RIght Whale on September 11, 2023| 2 Comments »
Both species are endangered, but the operating restrictions differ significantly:
| North Atlantic wind leases: right whale restrictions | GoM Lease sale 261: Rice’s whale restrictions |
| No leasing prohibitions or turbine-free areas have been established despite concerns raised by NOAA (see attached letter) | All of the expanded Rice’s whale area is excluded from leasing (i.e. the entire area between the 100 and 400 m isobaths across the GoM) |
| seasonal 10 kt max speed for vessels > 65′ | year round 10 kt max for all vessels |
| vessel separation distance of 500 m for any sighted right whale or unidentified large marine mammal | separation distance of 500 m for any sighted Rice’s whale; if unsure, must assume whale is Rice’s |
| no visibility restrictions for vessel operations | vessels must avoid transit between dusk and dawn and other times of low visibility |
| no automatic identification system (AIS) requirements | vessels > 65′ must have AIS functioning at all times |
| no documentation requirements | must maintain records to document compliance |
Note (below) the proximity of existing and planned wind leases to moderate to high density RIght whale areas compared to the more speculative expanded Rice’s whale area in the central and western GoM that is predicted based on passive acoustic recordings.
Bud's Offshore Energy (BOE) 