Feeds:
Posts
Comments

Archive for the ‘Regulation’ Category

“Offshore fracking”

Posted in California, energy policy, Offshore Energy - General, Regulation, tagged , , , , , , , , on August 18, 2026| Leave a Comment »

Despite favorable environmental reviews from both the Obama and Trump Administrations, the California Coastal Commission, empowered by the Courts, voted last week to prohibit the resumption of hydraulic well stimulation at DCOR’s Platform Gilda (map above).

Of course, as is always the case offshore California, the regulatory and legal battles will continue. The Secretary of Commerce may choose to overrule the CCC, in which case further litigation is certain.

This dispute comes at a time when the CCC, which operates with extraordinary autonomy, is undergoing a performance review by Commerce. Needless to say, the Commission and its supporters are not thrilled with the oversight.

In light of the spotlight on “offshore fracking,” I wanted to draw attention to a 2019 National Academies workshop that considered this very issue. I had the opportunity to participate in this workshop and was impressed by the input from industry and govt representatives.

Key points from the workshop:

  • If wells are not completed effectively, the value of drilling is negated, and it is impossible to deliver the oil or gas production needed to make the wells economically sustainable.
  • The frac pack (as is proposed for Platform Gilda) is one of the most commonly used completion techniques worldwide.
  • A gravel pack uses sieved sand as a filter to prevent formation sand from entering the wellbore, while the frac pack combines the gravel pack with hydraulic fracturing to create wide fractures filled with sieved sand that aid in connecting the reservoir to the wellbore.
  • Frac packs can create 50- to 250-foot fractures to stimulate production in a well.
  • Well stimulation offshore, which has been in practice for decades, has far less negative impact potential than well stimulation onshore.
  • Hydraulic fracturing minimizes the number of wells needed to develop a reservoir with the result being less environmental impact potential. This completion technique allows for the development of natural resources not previously considered commercially viable.
  • Offshore California, oil and gas formations typically have low permeability, and production is dependent on natural fractures. The objective is to enhance the flow of oil and gas from the tight matrix pores into the fractures.

The workshop graphic below highlights the differences in well stimulation risks onshore vs. offshore. The graphic is a bit unfair in that the onshore risks are being effectively mitigated. The main point is that much of the onshore risk potential doesn’t exist for offshore well stimulation.

Read Full Post »

Sale BBG3 – new life for old fields?

Posted in decommissioning, energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , , , on August 17, 2026| Leave a Comment »

Led by Arena’s 9 high bids, shelf operators made a strong showing at Sale BBG3. As illustrated below, the acquiring companies see good opportunities in or near old fields. The BBG3 leases are colored red.

Arena bid on MI 519, 528, and 529. MI 519 produced 152 bcf of gas and 336,536 bbls of condensate between 1988 and 2012..
Arena bid on EI 277, 280, and 281, blocks that produced 8.3 million bbls and 39.2 bcf between 1990 and 2016.
Since 1973, 24 million bbls and 53 bcf have been produced in EI 339 where Arena drilled 62 wells. They no doubt had good reasons for bidding on adjacent block EI 340.
3.2 million bbls and 18.7 bcf were produced in PL 25 between 1997 and 2016. 27 million bbls and 56.3 bcf were produced between 1955 and 2024 in ST 54. Arena bid on both blocks at Sale BBG3.
Renaissance bid on ST 314, which had minor production between 2015 and 2019. Renaissance acquired block 317 at Sale BBG2.
Renaissance bid on WD 133, where 12 million bbls of oil and 31 BCF were produced between 1966 and 2023. Five companies, including Arena, had drilled 63 wells on the block.

Listed in the table below are the shelf blocks receiving bids. According to Marine Minerals Administration (MMA) online data, wells have been drilled on all 12 blocks and production structures were installed on 7.

According to the online structures file, 5 platforms remain on 2 of the blocks. Production and quarters platforms installed by Exxon in 1982 and 1987 remain on ST 54 along with a caisson structure installed by Walter in 2007. Production platforms installed by GOM Shelf (1966) and Arena (2005) remain on WD 133.

Per the borehole file, 3 of the WD 133 wells have not been plugged. These wells were drilled by Arena and are on the F platform, which is one of the two WD 133 platforms that have not been decommissioned.

Also noteworthy, one well that bottoms on ST 314 has not been plugged. That well was drilled by Renaissance from ST 317, which was reacquired by Renaissance at Sale BBG2. The well ceased production in 2019, but the platform from which it was drilled remains in place on the reacquired lease.

Reuse options and decommissioning obligations for the remaining wells and platforms on leases reissued following BBG3 are no doubt topics for discussion between MMA and the operators.

Blockhigh bidderplatforms removedplatforms remainingwells drilled
on lease		completed/
unplugged wells
EI 277Arena20140
EI 280Arena1020
EI 281Arena2080
EI 340Arena0030
EI 389W&T0030
ST 54Arena53698
ST 314Renaissance0081
PL 25Arena50280
WD 133Renaissance12633
MI 519Arena2030
MI 528Arena0020
MI 529Arena0010

Read Full Post »

Legal Dispute Continues to Delay Decommissioning of California OCS Platforms Hogan and Houchin (OCS Lease P-0166) – article by John Smith

Posted in California, decommissioning, Offshore Energy - General, Regulation, tagged , , , , , on August 13, 2026| Leave a Comment »

Platform Houchin, Santa Barbara Channel

This article provides information on the history of OCS Lease P-0166 and updates the decommissioning status of California OCS Platforms Hogan and Houchin which are in federal waters offshore Santa Barbara County, California. Listed below are key events in the history of the OCS Lease P-0166. More details are provided in the attachment which was prepared by John Smith who before retiring from BOEM in 2017 was actively involved in the long-running supplemental bond dispute between MMS/BOEM and Signal Hill Services, Inc., which began shortly after MMS approved the assignment of OCS Lease (P-0166) held by Phillps Petroleum Corporation (now ConocoPhillips Corp.) and two other companies to Signal Hill Services Inc. (Signal) in 1991.

Year/MonthLease Activity
1967U.S. Bureau of Land Management grants OCS Lease P-0166 to Phillips Petroleum   Corp., Continental Oil Company, and Cities Service Company.
1967 – 1968Hogan and Houchin platforms are installed.
1967 – 2010 75 wells were drilled from the platforms, the majority in 1967-1968 and 1970s. 
February 1991MMS approves assignment of the lease to Signal.
September 2019Production is terminated at platforms.
October 2020Signal relinquishes the lease to BOEM.
November 2020BSEE orders ConocoPhillips Corp. (COP) and other predecessor lessees to decommission the Hogan and Houchin platforms.
January 2021COP and other predecessor lessees file an appeal with IBLA contesting BSEE/BOEM determination they held decommissioning obligations.
February 2021IBLA grants approval of Partial Stay Agreement between BSEE/BOEM and appellants to maintain and monitor the platforms. 
November 2024Signal files for bankruptcy under Chapter 7 of the U.S. Bankruptcy Code.
2021 – 2026Monitoring, maintenance and major refurbishment of the platforms are ongoing to support safety of offshore personnel involved in well plugging and abandonment operations.

Since OCS lease P-0166 was relinquished in 2020, removal of Hogan/Houchin platforms has been stalled by a prolonged dispute over decommissioning obligations between BSEE/BOEM and predecessor OCS lessees (ConocoPhillips Corp., OXY USA Inc., Devon Energy Resources Inc.). The IBLA case has now been ongoing for more than 5 years and has the potential to set a precedent based on the arguments of the appellants who assert: 

  1. They had no accrued decommissioning obligations at the time of the 1991 assignment of the lease because pursuant to their 1961 OCS lease agreement decommissioning obligations did not accrue until the lease was relinquished, which occurred in 2020 when Signal quitclaimed the lease to BOEM. 
  2. The OCS rules changes promulgated in 1997, which stated a lessee’s decommissioning obligation “accrues to the lessee when a well is drilled, the platform or other facility is installed, or the obstruction is created.” (30 CFR   250.110), cannot be applied retroactively.
  3. The 1961 OCS lease did not include a term by which the lessee agrees to be bound by “future” OCS regulations, which later became a standard provision in OCS lease agreements.  

The IBLA case is very concerning because there is currently no financial security available to cover the costs of decommissioning the Hogan and Houchin platforms which were very conservatively estimated by BSEE to total $85 million in 2020. If the IBLA or judicial courts eventually rule COP and former lease owners did not accrue decommissioning obligations, either in whole or in part, the federal government and American taxpayers will be responsible for covering the unfunded decommissioning obligations.

History of Pacific OCS Lease P-0166 and Hogan Houchin Status 080826.docxDownload

Read Full Post »

Informative production and sales update from Sable Offshore

Posted in California, energy policy, Offshore Energy - General, Regulation, tagged , , , , , , on August 11, 2026| Leave a Comment »

Excerpts from Sable’s quarterly report:

Production

  • An average of approximately 39 wells were online throughout the month of June 2026, representing a 50% increase over approximately 26 wells online on average in April 2026.
  • In July 2026, an average of approximately 47 wells at Platforms Harmony and Heritage were online, producing an average of approximately 721 gross barrels of oil per day per well. Sable expects to bring all 77 production wells on these two platforms online during the third quarter of 2026 and expects Platform Hondo to come online in September 2026.
  • Wireline campaign for Perforation Additions (“Perf Adds”) and producing well optimization at Platform Harmony commenced in August 2026.
  • Five completed Perf Adds forecasted to produce an incremental 600 estimated gross barrels of oil per day, each, are expected to come online at Platform Hondo along with the restart of the platform in September 2026.
  • An additional four Perf Adds at Platform Hondo forecasted to produce an incremental estimated 600 gross barrels of oil per day are planned for completion and to be brought online in early Q4 2026.

Sales

  • July 2026 preliminary oil sales estimate of approximately 38,000 gross barrels of oil per day. August 2026 oil sales average to date is approximately 42,000 gross barrels of oil per day through August 9th.
  • Due to the California regulatory environment, local refineries were not able to plan in advance for SYU first sales and ultimately were forced to displace various imported cargos in the second quarter. As a result, Sable incurred $18.5 million of non-recurring demurrage charges throughout the quarter, recognized in operational expenses.
  • The sudden supply influx of Pacific Outer Continental Shelf (“Pacific OCS”) crude has forced refiners to temporarily limit throughput of Pacific OCS crude and charge quality deducts for sulfur content and other items.
  • Starting in July 2026, Sable was temporarily constrained to a maximum of 40,000 average gross barrels of oil per day of oil sales throughput by downstream partners. We expect this short-term constraint to be alleviated starting in the back half of August.
  • California refineries are expected to adjust their crude oil supply slate starting in September 2026 to begin accepting more Pacific OCS barrels from the SYU and less imported barrels, alleviating the SYU throughput constraint altogether.
  • Sable is also in active negotiations to implement waterborne crude oil marketing solutions from existing marine terminals in the Los Angeles area in the near-term in order to improve marketing optionality.
  • Additionally, the pending acquisition of the Crimson Utilities (San Pablo Bay Pipeline) pipeline network by a third party could provide further relief and marketing optionality to California oil producers with access to the San Francisco refinery market once that pipeline potentially restarts operations.

A detailed regulatory and legal update can be found beginning on p. 13 of the Quarterly Report.

Read Full Post »

Proposed revisions to Artic drilling regulations are a positive step

Posted in Alaska, energy policy, Offshore Energy - General, Regulation, well control incidents, tagged , , , , , , , , on August 6, 2026| Leave a Comment »

The proposed revisions to the Arctic drilling regulations are a positive initiative that will improve the prospects for renewal of Beaufort and Chukchi Sea exploration.

In particular, removing the same-season-relief-well (SSRW) requirements in the current regulations is an essential regulatory action. The SSRW provision has the effect of precluding exploratory drilling while providing no added environmental protection and increasing operational risks. Given that there is at least a 50% chance that rig mobilization, relief well planning, drilling, repeated surveying, and plugging the flowing well would take more than the specified 45 days, a SSRW is not a legitimate well control option.

The preamble includes important questions for respondents. These questions are compiled beginning on p. 108 of the attachment. In particular, the comments on Subsea Isolation Devices (SSIDs) should be interesting. Given the required blowout preventer stack redundancy, it’s not clear to me that SSIDs would reduce blowout risk. They would however increase operational complexity.

For floating drilling operations in the Arctic and elsewhere, the focus needs to be on well design, integrity, and control.  Fortunately, by carefully verifying casing and cement integrity, ensuring complete barrier redundancy, and having standby capping and containment capability, the probability of a sustained oil blowout can be reduced to 10–6  or lower. 

Lastly for now, these regulations further demonstrate the importance of consolidating BOEM and BSEE in a single bureau.

Read Full Post »

Proposed revisions to Arctic Drilling regulations

Posted in Alaska, drilling, energy policy, Regulation, tagged , , , , , on August 5, 2026| Leave a Comment »

The proposed revisions to the Arctic drilling regulations have just been posted and are attached for your convenience.

From a risk management standpoint, the current Arctic drilling rule, particularly the same season relief well (SSRW) provisions, is arguably the worst in the history of the OCS program. Regardless of the prospects for Arctic exploration, offshore drilling is not feasible under the current regulations. Hopefully, this proposal represents a significant improvement. More to follow after the text has been reviewed.

2026-Arctic drillingDownload

Read Full Post »

“An Inconvenient Truth: Deep Sea Mining Will Likely Become the Lowest Impact Mining on the Planet”

Posted in deep sea mining, energy policy, Offshore Energy - General, Regulation, tagged , , , , , on August 4, 2026| Leave a Comment »

Interesting article by Amanda Van Dyke. Highly recommended.

There are 67 NGOs with observer status at the International Seabed Authority (ISA) as of March 2026, which explains why nothing gets done. More than thirty years after its creation, there is still no final Mining Code for nodule exploitation.

“Deep‑sea mining disturbs low‑productivity abyssal ecosystems and may have long‑lasting local effects on small communities of widely distibuted organisms reliant upon the nodules themselves, but avoids the deforestation, human displacement and occupational hazards of many terrestrial mines. The ethical question is whether it is better to concentrate impacts on a relatively small portion of the most common habitat on Earth, or to continue expanding high‑impact mining frontiers on land like tropical rainforests.“

“The job of a regulator is not to deliver closure for activists. It is to regulate access to resources designated as the “common heritage of mankind” in a way that balances environmental protection, equitable benefit sharing and global development needs. That will always involve trade‑offs.“

Read Full Post »

BP Atlantis in the news for major expansion; allegations from 17 years ago proved to be unjust

Posted in Gulf of Mexico, Offshore Energy - General, Regulation, tagged , , , , on July 31, 2026| 2 Comments »

Excerpts from BP press release:

Atlantis is located about 150 miles south of New Orleans and has been in production for nearly 20 years. The expansion project adds two new subsea water injection wells to help increase the pressure of targeted reservoirs, unlocking additional barrels and extending the producing life of one of bp’s flagship US offshore assets.

The project, which was delivered ahead of schedule and under budget, adds approximately 10,000 barrels of oil equivalent per day (boe/d) of gross peak annualized average production, with around 5,000 boe/d net to bp.

Some of you may remember the 2009 False Claims Act allegations by a former BP contractor claiming that BP did not properly maintain the engineer-approved “as built” drawings of systems and structures aboard the Atlantis facility. The contractor alleged that the absence of the documentation created increased safety risks for the facility and to its personnel.

Following the allegations, an industry source closely involved with the project (but not a BP employee) made the following comment to the BOE blog:

Atlantis was by far, in my opinion, the best of the bunch; proceeded as a normal construction project. The PMs were the best I’ve come across.

BOEMRE (the name of the offshore safety regulator at the time) conducted a comprehensive investigation of the matter. Director Michael Bromwich sumarized the findings:

“As the report makes clear, although we found significant problems with the way BP labeled and maintained its engineering drawings and related documents, we found the most serious allegations to be without merit, including the suggestion that a lack of adequate documentation created a serious safety risk on the Atlantic facility. We found no credible evidence to support that claim.”

The BOEMRE press release is attached. Link to the full investigation report.

In August 2014, a Federal court dismissed the False Claims Act lawsuit because the plaintiffs lacked evidence and standing.

press0304Download

Read Full Post »

Does the SCOTUS “Flowers Foods v. Brock” decision reinforce the DoJ opinion that Sable’s onshore pipeline segments are interstate?

Posted in California, Offshore Energy - General, pipelines, Regulation, tagged , , , , , , , on July 30, 2026| Leave a Comment »

A 7/28/2026 Dept. of Justice brief submitted to the Ninth Circuit Court of Appeals cites the 5/28/2026 Supreme Court decision in Flowers Foods Inc. v. Brock in asserting that Sable’s onshore pipeline segments are interstate and subject to Federal jurisdiction.

This filing is part of multi-faceted litigation involving Federal preemption, a 2020 Consent Decree, emergency special permits, and state environmental concerns. The Ninth Circuit is handling the expedited briefings and consolidation of petitions.

DoJ’s core argument is that Sable’s onshore segments do not interrupt the continuous “flow of commerce” from Outer Continental Shelf (OCS) offshore extraction → onshore processing → further transport to terminals (e.g., in Kern County). Thus, the system qualifies as interstate commerce subject to Federal (PHMSA) oversight rather than state regulation.

The Flowers Foods Inc. v. Brock case considered similar flow of commerce issues. The SCOTUS agreed with the Tenth Circuit that Brock delivery franchisees were engaged in interstate commerce even if they never cross State lines. The gist of the decision is as follows (emphasis added, full decision attached):

The Federal Arbitration Act (FAA) requires courts to enforce many private arbitration agreements, but it also provides that “nothing” in the law shall be used to compel arbitration in disputes involving the “contracts of employment” of any class of workers “engaged in . . . interstate commerce.” 9 U. S. C. §1. This case poses the question whether someone can qualify as a worker under the §1 exemption if he never crosses state lines and never interacts with vehicles that do. Flowers Foods, Inc., is a large producer of packaged baked goods with bakeries in 19 States. To get its products to market, the company depends in part on franchisees who buy the distribution rights to Flowers’s products in specific geographic territories. Angelo Brock is one such franchisee serving the Denver area; he picks up Flowers’s products from a warehouse in Colorado and delivers them to local stores, all without leaving the State. In 2022, Brock sued Flowers in federal district court alleging that the company had underpaid him and other distributors in violation of various federal and state laws. Flowers moved to compel arbitration, arguing that the FAA generally requires courts to stay or dismiss cases when the parties have agreed to resolve their disputes by arbitration and that Brock had signed a distribution agreement promising to arbitrate any disagreement. The district court denied Flowers’s motion, and the Tenth Circuit affirmed. Resting its decision on 9 U. S. C. §1, the Tenth Circuit reasoned that Brock belonged to a class of workers engaged in interstate commerce and thus the court lacked authority to compel arbitration.

We should soon find out what the Ninth Circuit thinks!

24-935_k53mDownload

Read Full Post »

NDAA authorizes Federal acquisition of Santa Ynez Pipeline System

Posted in California, energy policy, Offshore Energy - General, Regulation, tagged , , , , , on July 24, 2026| Leave a Comment »

The National Defense Authorization Act (NDAA), as passed by the House this week, includes an amendment (attached) authorizing the Federal govt to acquire all lands along the Santa Ynez Pipeline System route. Wesley Hunt (TX), who introduced the amendment, comments in the short video below. The Senate has yet to approve the bill.

Assuming Sable’s attorneys are able to continue navigating through the legal minefield, the success of the project will depend on the performance of Sable’s well operations and production teams, and the extent to which they have the authority and confidence to curtail operations when deemed necessary to protect workers and the environment. In that regard, MMA engineers and inspectors have an important role in identifying risks and assuring that they are mitigated.

Excerpt from the amendment:

SEC. 28ll. ACQUISITION OF EASEMENTS FOR DEFENSE FUEL SUPPLY INFRASTRUCTURE.
(a) AUTHORITY TO ACQUIRE.—The Secretary of Defense is authorized to acquire, by purchase, donation, exchange, or condemnation, on behalf of the United States, such permanent easements over all lands along the route of the Santa Ynez Pipeline System, including all lands owned or otherwise held by the State of California or any agency, department, or instrumentality thereof, as the Secretary of Defense determines necessary to ensure continuous pipeline transportation of crude oil from the Santa Ynez Unit to domestic refineries supplying Department of Defense installations in the State of California

hunt_041_1085_xml_final_07.17260717142703460Download

Read Full Post »

« Newer Posts - Older Posts »