Archive for the ‘offshore’ Category

The National Academies have released Oil in the Sea IV, which updates estimates of oil entering North American seas. This is the third update since the publication of Oil in the Sea in 1985.

The updated inputs and seeps summary tables are pasted below. Some comments:

  • The Oil in the Sea reports are important in that they provide perspective on natural inputs and those associated with man’s activities. The estimates generate informed discussion about the relative significance of the various inputs.
  • The estimate for land-based sources, which far outweigh all other sources, increased dramatically from the previous report.
  • The oil seepage estimate was reduced by 37.5%, owing to methodology.
  • The difference between the itemized seepage total in Table 3.2 (109,000 mta) and the seepage total in Table 3.1 (100,000 mta) is not explained.
  • The authors assume zero oil seepage in the entire US and Canadian Atlantic, and Arctic offshore. This is highly unlikely given the widespread presence of methane seeps in the Atlantic, the numerous oil seeps identified offshore Labrador, and the MMS/BOEM report on Arctic seepage.
  • The estimate for platform spills (excluding Macondo and the MC-20 seepage) was significantly and inexplicably increased from the previous report, and is well above what BSEE data indicate for that period. No data or justification are provided.
  • The statement (p. 58) that “spills occurred more frequently in offshore waters than nearshore waters” is puzzling and unsubstantiated.

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I’m sharing this photo of the masterpiece Rig at Sunset. Next year, BOE will explore the painting’s symbolism and cultural significance.

May the glow of Rig at Sunset guide, comfort, and inspire you in 2022! 😃

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The vessel was conducting research for a proposed offshore wind project. The Coast Guard rescued the 2 crew members, one of whom tragically died. Why has the Coast Guard still not issued an investigation report more than 13 years after the incident? An inquiry was sent to the Coast Guard but no response has been received.

There are serious questions regarding the positioning of a liftboat in the Mid-Atlantic for several months beginning in March when major storms are likely. There are also important questions about the liftboat’s failure mechanisms, the operator’s authority to be conducting this research, and the actions that were taken in preparation for storm conditions.

One worker died and another was seriously endangered. 13 years after the incident, we are still wondering what happened and why.

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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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This comment by the late John Borne, an outstanding USGS and MMS engineer/philosopher, reflects on the persistent vessel allision incidents over the years. The reporting of these incidents was spotty, but some could not be denied. Pictured below is the State Command arriving in Morgan City (~1973?) topped by a platform deck. Fortunately, the platform was unmanned and there were no injuries to vessel personnel. You could say this was the first floating production platform 😃

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The troubled past of Platforms Hogan and Houchin extends into California State waters. In the 1990’s, Signal Hill and affiliates launched plans to drill directionally from Hogan into adjacent State leases 4000, 7911, and 3133 (see map above). These plans were dubious from the outset given MMS (Federal regulator) concerns about Hogan’s structural integrity. The planning process was never successfully concluded and the 3 State leases were terminated in 2019. For full details see this California State Lands Commission report:

In a related action, the State is suing Signal Hill for unpaid rentals on the pipeline lease that carried production from Hogan to shore. The amount due is approximately $287,000.

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Map from Weather.com

In light of the projected storm track for Ida, forecasting uncertainty, and the need to err on the side of caution in making evacuation and shut-in decisions, particularly for deepwater facilities, look for at least 75% of Gulf of Mexico oil production (approximately 1.3 million BOPD) to be shut-in temporarily.

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A recent Washington Post (WP) article, based in part on a March 2021 General Accountability Office (GAO) report, raises interesting pipeline decommissioning issues, but might benefit from some additional context, which I have attempted to provide below:

  • Decommissioning liability issues are not simply a matter of “companies trying to get out of that obligation.” Much of the complexity is associated with decades-long chains of lease ownership and the respective responsibilities of prior lessees. Pertinent questions include the following:
    • If a company sold a lease decades ago and there have since been multiple owners, to what extent is the original owner still liable for decommissioning lease facilities? (Note that guidance from the Federal government has not been entirely consistent over the decades.)
    • If current leaseholders fail to fulfill their obligations, who is next in line and why?
    • To what extent are prior lessees liable for wells and structures constructed subsequent to their ownership?
    • Knowing that decommissioning costs can vary significantly, what amounts of security should be required? How should these funds be protected or managed? Should an assigning company also collect funds to protect their interest?
    • How do inconsistent Federal policies and financial assurance requirements, and improper practices by subsequent owners, affect the liability of prior lessees? In that regard, the case of Platforms Hogan and Houchin in the Pacific OCS Region is interesting and pertinent.
  • Per the WP, “Federal regulations require the removal of offshore pipelines once they are decommissioned, but the rules are rarely enforced.” This statement is doubly incorrect.
    • 30 CFR § 250.1750 provides for decommissioning pipelines in place when the Regional Supervisor (BSEE) determines that the pipeline does not constitute a hazard (obstruction) to navigation and commercial fishing operations, unduly interfere with other uses of the OCS, or have adverse environmental effects. The consensus opinion of the regulators’ engineers and scientists has been that the safety and environmental risks associated with pipeline removal were significantly greater than those for decommissioning in place in accordance with the procedures specified in 250.1751.
    • The comment about enforcement is unfounded. BSEE and its predecessors have strictly enforced decommissioning requirements despite the challenges related to inconsistent policy direction, industry downturns, and hurricane damage. BSEE has an effective program to ensure that idle wells are plugged and platforms are removed in a timely manner. For this reason, 3315 platforms have been removed since 2001; 1933 since 2010. Only about 1800 platforms remain. This very significant loss of habitat is a concern to fishing organizations, another factor that complicates decommissioning policy.
  • In situ decommissioning of buried or trenched offshore pipelines is the standard throughout the world. The seafloor disturbance and safety risks associated with the removal of such pipelines are universally viewed as unwarranted. The pipeline decommissioning procedures followed elsewhere are similar to those described in 30 CFR 250.1751. In the Gulf of Mexico, pipelines installed in less that 200′ of water are typically buried (30 CFR 250.1003) to minimize interference with commercial fishing and other activities.
  • The decommissioning of wind turbines, which are typically more densely located and closer to shore, and their attendant power cables and substructures, will also be challenging. In their 9/16/2019 Congressional testimony, the Responsible Offshore Development Alliance expressed concern about the practice of leaving structural foundations when turbines are abandoned.

In remarks to the WP, Syed Khalil, a coastal restoration geologist for the State of Louisiana, commented that they have enough sand to meet their short term needs, but future needs were a major concern. The Gulf of Mexico Offshore Sand Management Working Group would seem to be the best mechanism for timely action and a workable, long-term action plan. The minutes of their meetings are quite instructive. Rulemaking is not a solution unless the parties want to tie their fate to both the 25 year pipeline rule rewrite (draft published in 2007, another draft coming? final?) and the contentious and similarly interminable financial assurance rule.

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A previous BOE post estimated that current stabilized GoM oil production rates were 1.7 – 1.8 million BOPD. EIA recently announced that May production was 1.791 million BOPD, which is consistent with our estimate. Per the chart below, GoM production was essentially unchanged from the beginning of the year despite a 37% increase in the price of oil (WTI) from 1 January to 31 May. This suggests that stabilized GoM production may have peaked pending first oil from several new projects.

Key production questions:

  • Will new production from Mad Dog 2, Vito, PowerNap, Thunder Horse South 2, and the recently sanctioned Whale project offset high depletion rates elsewhere in the deepwater GoM?
  • Looking further ahead, is deepwater GoM production sustainable without increased drilling activity? Per BSEE data, only 33 deepwater wells were started in 2021 YTD, just 18 of which are classified as exploratory. Drilling is thus at historic low levels. For reference, there were 477 wells started in 2001, 149 of which were exploratory. This level of activity facilitated a 30% growth in oil production, peaking at 2 million BOPD in 2019.

Regardless of one’s views on the urgency and timing of the “energy transition,” is there any doubt that oil and gas will continue to be important to our economy and security for years to come? If not, should deepwater GoM production, with its relatively low carbon intensity, be a core element of our energy strategy? To better understand the trade-offs, I suggest that BOEM’s Environmental Studies Program conduct a peer reviewed assessment of the carbon intensity of domestic and international supply alternatives. Product transportation considerations should be included in this assessment.

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