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Archive for the ‘Offshore Energy – General’ Category

On Friday (10/3/2025), Judge Cain found that President Biden exceeded his authority under Section 12(a) of the Outer Continental Shelf Lands Act (OCSLA) by attempting to permanently withdraw large areas of the OCS from future oil and gas leasing. The Biden withdrawals, executed in his final days in office (by autopen?), resulted in the largest ever permanent ban on offshore oil and gas leasing in the US, and to the best of my knowledge, anywhere in the world (see link for details on the ban).

Although President Trump rescinded Biden’s action via executive order on January 21, 2025, the court proceeded with the case, acknowledging the high likelihood of similar actions in the future.

Judge Cain concluded that Biden departed from historical executive practice and exceeded statutory limits under OCSLA Section 12(a), which allows the president to “withdraw from disposition any of the unleased lands of the outer Continental Shelf,” but does not explicitly authorize permanent or irrevocable bans.

The judge emphasized that prior withdrawals were typically temporary or modifiable, and attempts to make them permanent encroached on congressional powers.

Judge Cain extended the ruling to Obama’s extensive end-of-term withdrawals in 2016, finding them similarly unlawful for intending permanence.

The ruling reinforces that OCSLA withdrawals must be revocable by future presidents, limiting executive power to bind successors on public lands disposition. The ruling should prevent future reliance on leasing bans.

Judge Cain’s decision is important because leasing bans should be carefully considered and should not be executed casually at the end of a term for purely political purposes. 

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Salamanca FPU (Repsol photo)

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.

platformoperatorwater depth (ft)first production
AppomattoxShell7400May 2019
King’s QuayMurphy3725April 2022
VitoShell4050Feb 2023
Argosbp4440April 2023
AnchorChevron4600Aug 2024
WhaleShell8600Jan 2025
ShenandoahBeacon5840July 2025
SalamancaLLOG6405Sept 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.)

With bp’s commitment to Tiber, 3 new high-pressure projects, ala Chevron’s Anchor, are in the pipeline:

platformoperatorwater depth (ft)discovery datefirst production
Kaskidabp600020062029
SpartaShell470020122028
Tiberbp413020092030
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.

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Thumbs up to Santa Ynez Unit production from Phil Mickelson!

Phil also believes SYU production would reduce natural seepage:UCSB and State Lands Commission studies (Quigley, Luyendyk, Hornafius, Peltonen, and others) have shown that when oil production is active, reservoir pressure is reduced and natural seepage declines by up to 50%. That means: •Cleaner beaches (less tar and oil) •Cleaner ocean surface (fewer sheens) •Healthier marine life with reduced chronic stress

Note that those studies are specific to Platform Holly and the Coal Oil Point area. To the best of my knowledge, no studies have associated SYU production with a reduction in natural seepage.

From a related 2010 BOE post entitled “Slick Talk About Seeps” (note that production at Platform Holly has since been terminated):

While Platform Holly may be a negative spillage facility (i.e. Holly’s seep reduction may significantly exceed the platform’s production spillage), this type of seepage reduction has not been demonstrated at other platforms.  Decisions on offshore exploration and development should be driven by the economic, energy security, and environmental benefits.  To the extent that production reduces natural seepage, all the better.  However, seepage reduction is not a primary reason for producing offshore oil and gas.

Thoughts on Sable’s production options:

Option 1 (use of existing onshore infrastructure) is preferable from cost, air emissions, spill risk, State and local revenue, and regional energy supply standpoints. This is the only option that makes sense despite the enormous permitting challenges.

Option 2 (floating processing facility and tankers) would literally be an “in your face” act of defiance given the coastal visibility of the offshore facilities. Supporters of this option should be aware that there was no Coastal Zone Management Act when Exxon produced from Platform Hondo (the only SYU platform at the time) to the Offshore Storage and Treatment (OS&T) vessel in the 1980s. An EIS would not favor this option, and the California Coastal Commission would surely rule that this option was inconsistent with their CZM plan. The Secretary of Commerce could overrule the Commission’s decision, but legal objections to the override would seem to have a good chance of success.

The only reasonable path forward is to do the right thing and continue to pursue the State pipeline/onshore approvals. Although these approvals are substantively warranted, more litigation is probably inevitable. It will be far better to defend a good project (option 1) than a contrived workaround (option 2).

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In mid-July, zinc, presumably from a zinc bromide fluid used in completing a Chevron well, contaminated oil production destined for an Exxon refinery via Shell’s Mars Pipeline System. Total Gulf of America production was stable in July, so it appears that the contamination issue was quickly resolved.

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.

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Those of us who were involved with OCS oil and gas operations in the 1970s remember the heated battles between Exxon and Santa Barbara County that led to the installation of the infamous Offshore Storage & Treatment (OS&T) facility in Federal waters. This was the first floating production, storage, and offloading facility (FPSO) in US waters by 3 decades!

In light of Sable’s difficult (bordering on impossible) onshore permitting challenges, the company resurrected the OS&T option in a recent presentation to investors (pertinent slide pasted above). The extent to which this is purely a tactical maneuver remains to be seen, but this option would be very difficult to execute, even with a supportive Federal regulatory environment.

Stay tuned!

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Earlier this week a tree service company was removing some large branches in our backyard. The 2 young workers stopped the job before they finished. They knocked on our door and told me that their foreman was off and they were uncomfortable tackling a large, high branch without him and a crane operator. They would come back with a full crew.

I congratulated them and told them they did exactly the right thing. I told them I was involved with offshore safety and many serious incidents would have been prevented if workers, with their employers encouragement, had been more assertive in stopping work. Developing that type of culture takes time and requires strong leadership and consistent, unambiguous messaging. Leadership matters, both at the site and in the office!

The Macondo well is a worst case example on many fronts, including the reluctance or inability of management and workers to stop taking actions that increased well control risks. Given the narrow pore pressure/fracture gradient, the prudent decision would have been to set a cement plug in the open hole and carefully assess next steps. However, delays and cost overruns were the overriding concerns, and well construction continued despite the long list of issues described here. Sadly, we know how that worked out.

Even after the well started to flow, the crew had time to actuate the emergency disconnect sequence and avert disaster. However, some combination of deficient training, uncertain authority, and fear of repercussions prevented that from happening.

Be it a small tree service company or a major oil company, safety culture development is a journey that has no end point and requires continuous leadership from everyone in the organization.

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Attached is the Dept. of the Interior’s Semiannual Regulatory Agenda (9/22/2025). BSEE and BOEM decommissioning rules are excerpted below.

Of particular concern is the revised BOEM regulation (107) that “would reduce the amount of supplemental financial assurance required from oil gas, and sulfur lessees operating on the OCS.” See our previous post on this regulatory action. Note that a proposed rule is expected to be published by year end.

  1. REVISIONS TO DECOMMISSIONING REQUIREMENTS ON THE OCS [1014–AA53]
    Legal Authority: Outer Continental Shelf Lands Act, 43 U.S.C. 1331 to 1356a
    Abstract: This proposed rule would address issues relating to (1) idle iron by adding a definition of this term to clarify that it applies to idle wells and structures on active leases; (2) abandonment in place of subsea infrastructure by adding regulations addressing when BSEE may approve decommissioning-in-place instead of removal of certain subsea equipment; and (3) other operational considerations.
    Timetable:
    NPRM ……………… 07/00/26
    NPRM Comment Period End: 10/00/26
  1. RISK MANAGEMENT AND FINANCIAL ASSURANCE FOR OUTER CONTINENTAL SHELF LEASE AND
    GRANT OBLIGATIONS [1010–AE26]
    Legal Authority: 43 U.S.C. 1331, OCS Lands Act; E.O. 14154, Unleashing American Energy
    Abstract: This proposed rule would rescind BOEM’s final rule ‘‘Risk Management and Financial Assurance for OCS Lease and Grant Obligations.’’ The proposed rule would revise the criteria for determining whether oil, gas, and sulfur lessees, right-of-use and easement grant holders, and pipeline right-of-way grant holders are required to provide financial assurance above the current minimum bonding levels to ensure compliance with their Outer Continental Shelf (OCS) Lands Act obligations. This rule, if finalized, would reduce the amount of supplemental financial assurance required from oil gas, and sulfur lessees operating on the OCS and would support the goals of E.O. 14154; Timetable: NPRM ……………… 01/00/26

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The International Regulators’ Forum Offshore Safety Conference, Oct. 9-10 in St. John’s Newfoundland, has an impressive agenda focusing on safety through innovation. Among the topics that caught my eye:

  • Human Factors & AI
  • Managing New Tech with Old Regulations
  • Regulatory Sandboxes: Capture vs. Collaboration
  • How can AI and emerging technologies be used in risk management trending and operations?
  • Why are we not learning from accidents?
  • Breakthroughs in investigation techniques and sharing

The first IRF Conference was held 20 years ago in London followed by the 2007 conference at the Trump International Resort in Miami (little did we know 😀). More historical background.

The informed, diverse viewpoints about managing and regulating offshore operations sets these conferences apart from your typical professional events. The 2025 conference is highly recommended for those interested in offshore operations, risk mitigation, and regulatory policy.

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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.

commentersummary/link
anonymousI 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
Our Children’s Trust…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…
E.P. DanenbergerSee BOE post
anonymousI 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 FosterRegulations 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?
APISupports direct final rule
bp AmericaSupports direct final rule

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:

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