Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged EIA short term forecast, gas production, Gulf of Mexico, longer term concerns, oil production on June 23, 2022| Leave a Comment »
The EIA forecast looks about right. Production from new projects should offset existing field declines and maintain relatively stable volumes over the next 2-3 years. In the intermediate and longer terms we have problems given the dearth of exploratory drilling and new discoveries, and the complete absence of leasing.
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, Alaska, DOI, Gulf of Mexico, Secretary Haaland on June 22, 2022| Leave a Comment »
For comparison, the previous six 5-Year Programs have included 10-12 GoM sales (11.3 average), 1-8 Alaska sales (4.3 ave.), 0-1 Atlantic sales (0.3 ave.), and no Pacific sales.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged offshore leasing, oil reserves, SPR on June 21, 2022| Leave a Comment »
Meanwhile, no new leases have been issued in Federal waters immediately offshore from the SPR sites (see map below) for 580 days, the longest leasing gap since 1958.
Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged Baker Hughes rig count, Gulf of Mexico on June 17, 2022| Leave a Comment »
Posted in energy policy, Offshore Energy - General, Regulation, tagged API, Exxon, letter to refiners, refiners response on June 17, 2022| Leave a Comment »
Good response from Exxon to the White House letter.
In the short term, the U.S. government could enact measures often used in emergencies following hurricanes or other supply disruptions — such as waivers of Jones Act provisions and some fuel specifications to increase supplies. Longer term, government can promote investment through clear and consistent policy that supports U.S. resource development, such as regular and predictable lease sales, as well as streamlined regulatory approval and support for infrastructure such as pipelines.
Exxon
Perhaps Exxon will return to the Gulf of Mexico if the Administration commits to regular and predictable oil and gas lease sales. The company hasn’t drilled a well in the Gulf since 2019.
The longer API letter comments on the fundamentals of refining markets and operations while also addressing the Administration’s “end fossil fuel rhetoric” and negative regulatory signals. Who would want to make major refinery investments under these circumstances?
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged flaring, flaring data, Gulf of Mexico, OIG report, reporting on June 16, 2022| Leave a Comment »
We determined that over approximately 5 years, the energy company’s venting and flaring activities exceeded regulatory limits without the required approvals, resulting in a loss of Federal mineral royalties and resources. More specifically, we identified approximately 229,066 MCF of vented and flared natural gas as suspicious or exceeding the allowable amount across four platforms in the Gulf of Mexico between January 2014 and April 2020. We presented our findings to ONRR, which assisted us in analyzing the energy company’s venting and flaring activities and determining the amount of lost Federal mineral royalties. Based on this analysis, ONRR submitted and secured a proof of claim in the amount of $712,857.82 for unpaid mineral royalties during the energy company’s bankruptcy proceeding.
OIG report 6/13/2022
Comments:
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged energy poverty, environmental justice, GHG emissions, Lease Sale 257, US energy policy on June 16, 2022| Leave a Comment »
The primary goal of energy policy should be ample, reliable supplies that are sufficient to ensure reasonable consumer prices. The “Backup Plan” (below) is only acceptable in cartoons.
From an offshore energy policy standpoint, remember this:
Gulf of Mexico Lease Sale 257 was vacated on 1/27/2022 because DC Federal Court Judge Contreras ruled that BOEM failed to consider the “positive” effect that higher prices would have on reducing foreign consumption and the associated GHG emissions. Apparently the Court failed to consider that higher oil and gas prices would:
The Administration chose not to appeal that decision, although API and the State of Louisiana have. It has now been 575 days since the last Federal offshore oil and gas lease sale.
Posted in drilling, Gulf of Mexico, Offshore Energy - General, tagged Baker Hughes rig count, Gulf of Mexico, offshore drilling on June 10, 2022| Leave a Comment »
Posted in climate, Offshore Energy - General, tagged 5 year leasing plan, Climate Office, offshore leasing on June 10, 2022| 1 Comment »
Several Democrats both in and out of the administration laid out their discontent with the office, led by National Climate Adviser Gina McCarthy, over its involvement in other agencies’ work, saying it slowed down several high-profile agenda items.
The Democrats said the office has gotten in the way of agency rulemakings. A Democratic Hill staffer told Zack the office edited and chose the day after Thanksgiving to release last year’s long-awaited Interior Department report on the federal oil and gas leasing program.
More on the leasing report cited in the above quote.
I guess we can assume that the Climate Office is currently reviewing the Proposed 5 Year Leasing Program that the Department of the Interior has promised to release by June 30. Is DOI subordinate to the Climate Office?
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged DOE, DOI, petroleum reserve, SPR on June 9, 2022| Leave a Comment »
SPR stocks are down 29% from the end of 2010 and 19% from the end of 2020. Continued declines of this magnitude would be a major concern. Should a major crisis arise, offshore production takes years to ramp up, especially given that the lease inventory is at historic low levels and exploration has thus been stymied. Shale producers can respond more quickly to market needs, but transportation bottlenecks, and staffing and equipment availability can limit near-term production growth.
As was noted here in April, the inconsistency of drawing heavily on the SPR while constraining leasing in the adjacent offshore waters is striking. Apparently, there is nothing to worry about because neither the Department of the Interior nor the Department of Energy home pages even mention the words oil or gas. This is pretty remarkable given their broad responsibilities for these vital resources, and the crippling effects of shortages and high prices.
Bud's Offshore Energy (BOE) 