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.
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)
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.
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.
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.
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.
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.
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.
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
Water depth: 2500 m (Mexico’s first ultra-deepwater project)
Distance from US maritime border: 30 km
Distance offshore: 180 km
Reserves: 324.7 million BOE proved, 478.7 million BOE probable
Production: Floating Production Unit with an oil production capacity of 100,000 B/D connected to an FSO vessel with a capacity of 950,000 bbl. Gas not used to power FPU will be reinjected
