Per a related post, the full SpaceX lawsuit is attached. It’s mostly exhibits, so don’t be intimidated by the length.
This excerpt summarizes the case nicely:
“Rarely has a government agency made so clear that it was exceeding its authorized mandate to punish a company for the political views and statements of its largest shareholder and CEO. Second, the Commission is trying to unlawfully regulate space launch programs—which are critical to national security and other national policy objectives—at Vandenberg Space Force Base (the Base), a federal enclave and the world’s second busiest spaceport.”
Even Gov. Newsome sides with SpaceX saying “I’m with Elon.”
Will this case teach the Commission some humility? Probably not, but we shall see.
199 oil and gas leases were wrongfully acquired at Sales 257, 259, and 261 with the intent of developing these leases for carbon disposal purposes. Repsol was the sole bidder at Sale 261 for 36 nearshore Texas tracts in the Mustang Island and Matagorda Island areas (red blocks at the western end of the map above). Exxon acquired 163 nearshore Texas tracts (blue in map above) at Sales 257 (94) and 259 (69).
Despite false starts by Exxon and Repsol (see above summary), no carbon sequestration (disposal) leases may be issued or developed until implementing regulations have been promulgated. In that regard, no news is good news for those who are less than enamored with CO2 disposal in the Gulf of Mexico.
The implementing regulations will be controversial. Most operating companies prioritize GoM production over GoM disposal. Most environmental organizations are strongly opposed to CO2 disposal schemes that sustain fossil fuel production and benefit fossil fuel producers. Taxpayers are leery of subsidizing these projects and absorbing increased costs for energy and consumer goods.
The Administration is, of course, well aware of this opposition and will not be publishing implementing regulations prior to the election. The next Administration, regardless of the election outcome, will no doubt take a hard look at these issues before proposing regulations.
The few oil and gas producers that are rather cynically hoping to cash in on CO2 disposal in the GoM will therefore have to wait, perhaps for a long time.
New Bedford Light: The Rolldock Sun leaves New Bedford on Friday with two blades visible. Credit: Courtesy of West Island Weather
Per the New Bedford Light, the turbine blade delivery vessel Rolldock Sun was seen on Friday carrying at least two blades out of New Bedford. It was not headed for the Vineyard Wind site. According to vessel tracking websites, the Rolldock Sun was en route to the Port of Cherbourg, where GE Vernova has a blade manufacturing facility.
The most likely explanation for returning the blades to Cherbourg is that defects were detected or suspected. The blade that failed, reportedly as a result of a manufacturing issue, is probably not the only one that was defective.
The New Bedford Light asked GE Vernova, Vineyard Wind, and the Federal regulator BSEE why the blades were being transported to Cherbourg. They received the following responses (my comments in parentheses):
GE Vernova: “No comment on this matter.” (This is the worst possible response. In the absence of information, people are left to speculate. If there was no problem with the blades, why wouldn’t GE simply provide an explanation? Their non-response simply reinforces suspicions that the blades were defective. If that is the case, why not take credit for procedures that identified the suspect defects, albeit belatedly?
Vineyard Wind:“The weekend has gotten in the way of the information flow,” and they would share information should they hear anything. Another request for information was not answered as of noon Monday. (Not exactly confidence inspiring from the company whose blade failure littered beaches and the offshore environment. They are deservedly being watched, and need to be more transparent and responsive.)
BSEE:A BSEE spokesperson did not answer questions and said by email that the agency has no new information. (Disappointing, but not surprising.)
Rendering of Ocean City MD morning view per US Wind project plansubmitted to BOEMOcean City NJ offshore wind protest
To those of us from Philly, Ocean City is in New Jersey. To those living in the DMV, Ocean City is in Maryland. These popular beach resorts have distinct personalities, but both are heavily dependent on tourism. They are also aligned against offshore wind development.
On Aug. 5, Ocean City MD Mayor Rick Meehan said the town has hired a law firm, and will join several local co-plaintiffs in suing BOEM if it issues a federal permit to US Wind to construct the US Wind project offshore Maryland. Exactly one month later (9/5/2024), BOEM approved the project. (The 2 US Wind leases have been consolidated, and the project is now known as the Maryland Offshore Wind project).
Halting Atlantic wind projects has been a difficult proposition for local governments, tribes, and grass roots environmental groups given that the wind industry, State and Federal govt, and the large environmental NGOs have been firmly aligned against them. Indeed, the Federal govt considers wind developers to be their partners.
Disputes between State and local governments regarding offshore wind policy are becoming increasingly strident. Such disconnects are not common for offshore oil and gas given that State and local govts are typically aligned either for or against.
The growing level of discord is neither in the best interest of wind developers nor their opponents. Unfortunately, election year politics probably stand in the way of a pause in wind leasing that would facilitate open and unpressured collaboration with coastal residents, power customers, tribes, and fishing organizations on the best path forward.
Sable’s stock price soared after the company reached an agreement with Santa Barbara County that will allow them to comply with the California Fire Marshall’s requirement to install shutdown valves on the onshore pipeline that failed in 2015. That pipeline is necessary to transport production from the Santa Ynez Unit, which is currently operated by Sable.
The significance of a resumption of SYU production is illustrated in the chart below. The 3 SYU platforms accounted for more than 2/3 of Pacific OCS production before the Refugio pipeline spill in June 2015.
This agreement with the County is a major step forward, but there are still regulatory and legal hurdles to clear before production resumes.
In the SEC filing that announces the agreement with Santa Barbara County, Sable affirms their 2024 restart expectations. However, a resumption of production in 2024 is highly unlikely given the administrative challenges that remain. A restart in 2025 would be a major accomplishment and a very good outcome for Sable.
Pasted below is the full text of the SEC filing (emphasis added):
Santa Barbara County (the “County”), on August 30, 2024, acknowledged that the County does not have jurisdiction over Pacific Pipeline Company’s (“PPC”) installation of 16 new safety valves in the County along PPC’s Las Flores Pipeline System (the “Pipeline”) in accordance with Assembly Bill 864. The County’s acknowledgement was delivered in the form of a conditional settlement agreement dated August 30, 2024 (the “Safety Valve Settlement Agreement”) among the County, PPC and PPC’s parent company Sable Offshore Corp. (“Sable”), and a subsequent acknowledgement by the County’s planning and development staff.
The Safety Valve Settlement Agreement is predicated upon a prior settlement agreement between PPC’s predecessor in interest, Celeron Pipeline Company, and the County in a federal case styled Celeron Pipeline Company of California v. County of Santa Barbara (Case No. CV 87-02188), which was executed in 1988.
Pursuant to the Safety Valve Settlement Agreement, PPC agreed to the following additional surveillance and response enhancements in the County:
i. PPC will create a Santa Barbara County-based Surveillance and Response Team, trained in PPC’s Tactical Response Plan, which will be responsible for timely initial incident response and equipped with key resources to deploy in early containment, particularly for those regions of the Pipeline between Gaviota and Las Flores Canyon;
ii. PC will provide Santa Barbara first responders with additional training and equipment to assist in PPC’s incident response efforts; and
iii. PPC will undertake the following Pipeline system enhancements: (1) install and operate and maintain primary and secondary Operations Control Centers in Santa Barbara County, and (2) refurbish the Gaviota pump in its existing station.
PPC, Sable and the County have further agreed, in the Safety Valve Settlement Agreement, to file a stipulation to dismiss the pending lawsuit, Pacific Pipeline Company and Sable Offshore Corp. v. Santa Barbara County Planning Commission and Board of Supervisors (Case No. 2:23-cv-09218-DMG-MRW) within 15 days of final installation of all 16 underground safety valves in the County.
Sable affirms that initial restart of production from Sable’s Santa Ynez Unit is expected in fourth quarter 2024.
A new NOAA biological opinion finds that that pile-driving noise associated with the Vineyard Wind project is likely to adversely affect, but not likely to jeopardize, the continued existence of whales, fish or sea turtles listed under the Endangered Species Act (ESA).
This opinion was predictable. On the one hand, denying the adverse effects from extensive pile driving would have been unacceptable to NOAA scientists. On the other hand, a jeopardy finding would have been unacceptable to their political leadership.
If you are wondering how NOAA managed to thread that needle, you will have to wait until their report is publicly available. On Aug. 23, NOAA said the opinion would be available in their library in about 10 days, but the opinion has still not been posted. How do you announce such significant findings without, at the same time, releasing the report?
Understandably, the Nantucket environmental organization ACK for whales is not pleased with either NOAA’s announcement or their failure to release the report:
“We are disappointed NOAA announced the conclusions of its bi-op on the Vineyard Wind 1 construction without releasing the report or the data on which it relied,” ACK For Whales stated. “NOAA’s own data show that in 2023, there were 151 marine mammal strandings in Massachusetts alone with 75 occurring from Jun 2023 to Dec 2023, the months that pile driving was active. This compares to 77 strandings for all of 2015, before OSW activity started – essentially a 100 percent increase. Most of those strandings in 2023 (n=55) occurred from Oct to Dec when VW was racing to get foundations installed. Out of the 47 bases installed in 2023, 68 percent were installed in the last three months of the year.”
In January, BOE raised concerns about the collaborative BOEM-NOAA-wind industry strategy to protect the right whale. Per that strategy, BOEM and NOAA view themselves as partners with the wind industry. Is this biological opinion an example of NOAA working with their partners in accordance with their joint strategy? While regulator-industry collaboration is essential for effective offshore development, be it wind or oil and gas, regulators and operating companies have distinctly different missions and responsibilities, and should not be viewed as partners.
In response to a lawsuit filed by the Sierra Club et al, a Federal judge in Maryland vacated a 2020 biological opinion by the National Marine Fisheries Service (part of NOAA) that addressed risks to endangered species, most notably Rice’s whale, from oil and gas operations in the Gulf of Mexico. The decision by Federal Judge Deborah Boardman, who was appointed to her position in 2021, is attached.
Judge Boardman’s ruling is effective on Dec. 20, 2024. After that date, no new GoM leases may be issued and no new operating plans may be approved pending a new biological opinion. Existing GoM operations could also be affected. In other words, the ruling could have unprecedented effects on the OCS oil and gas program. (If you wonder how a Maryland judge can issue a ruling that could have major consequences for Louisiana and Texas, it is presumably because NOAA’s headquarters office is in Silver Spring, MD.)
The biological opinion process will likely be lengthy given the political considerations in an election year and the prospects for related litigation.
The judge’s ruling could also affect wind leasing in a manner that was perhaps unforeseen. Offshore wind leasing, which the plaintiffs strongly support despite the risks to the critically endangered North Atlantic Right Whale, could be delayed. Per a provision in the “Inflation Reduction Act,” no offshore wind leases may be issued after 12/20/2024, the one year anniversary of the last oil and gas lease sale (no. 261). Ironically, this is the same date as the effective date of the judge’s ruling.
The judge’s decision will likely further delay the next oil and gas lease sale (no. 262) well into 2025 or later, and extend the pause in issuing wind leases that begins on 12/20/2024. Perhaps with that in mind, BOEM has been forging ahead with wind auctions despite the troubling Vineyard Wind blade failure, economic challenges for the wind industry, and growing opposition from coastal residents. An editorial by the publisher of Nantucket Magazine expresses concerns that should not be overlooked in the rush to auction wind leases.
(More on a new biological opinion related to the Right Whale in a future post.)
API is challenging the Dept. of the Interior’s 5 year oil and gas leasing plan, which includes the fewest lease sales in program history. That challenge was filed on 12 February, 60 days after Secretary Haaland approved the 5 plan and the first day appeals could be filed pursuant to 43 U.S. Code § 1349.
18 weeks after the API suit was filed, the Supreme Court overturned the Chevron Doctrine. That doctrine (described above) instructed judges to defer to agency interpretations when the language in a law was unclear.
Extending the Secretary’s general safety and environmental authority for OCS operations to include global climate considerations is a stretch and the type of interpretive administrative decision that the Supreme Court struck down.
2 sentence summary: The well’s degraded 20″ structural casing could not support the hydraulic workover unit (HWU), which included an oversized BOP stack. The HWU began to sway and fell into the water with the victim attached by his fall protection to the top of the unit.
The full report is attached. The report is quite good, but something is seriously amiss when it takes 28 months to finalize a panel report. I suspect that the work of the panel and the regional reviewers was completed in a fraction of that time. Where are the bottlenecks?
As the above examples illustrate, turbine blade failures, like the Vineyard Wind incident near Nantucket, are not unique to GE Vernova. GE’s rivals, Siemens Gamesa and Vestas, have also experienced serious quality control issues.
Per ReviewEconomy (2023), “Unexpected and increasing wind turbine failure rates, largely in newer and bigger models, are savaging the profits of some of the world’s biggest manufacturers, as Siemens Gamesa, GE and Vestas report heavy repair and maintenance losses.”
In light of the manufacturing challenges, all 3 companies report increased emphasis on quality control. Why has quality control to date been inadequate and how will the past problems be corrected?
Has the wind industry’s sense of entitlement, as evidenced in their tax credit, rate increase, and departure expectations, affected their safety and quality culture? Has industry and governmental wind energy promotion rushed development and compromised design and fabrication decisions? It’s time for wind developers, manufacturers, and regulators to make sure their priorities are in order.
Bud's Offshore Energy (BOE) 