What’s next for Sable Offshore?
Archive for the ‘Regulation’ Category
SB 237 passes easily
Posted in California, energy policy, Offshore Energy - General, Regulation, tagged passes easily, Sable Offshore, Santa Ynez Unit, SB 237 on September 14, 2025| Leave a Comment »
Will California Assembly Bill 1448 doom Sable and the Santa Ynez Unit?
Posted in California, energy policy, Offshore Energy - General, pipelines, Regulation, tagged AB 1448, California, California Coastal Commission, production restart, Sable Offshore, Santa Ynez Unit on September 12, 2025| Leave a Comment »
John Smith has highlighted the attached bill that could, if passed, further derail Sable’s plans to restart Santa Ynez Unit (SYU) production.
This provision appears to target Sable:
Section 3(b)(2): Repair, reactivation, and maintenance of an oil and gas facility facility, including an oil pipeline, that has been idled, inactive, or out of service for five years or more shall be considered a new or expanded development requiring a new coastal development permit consistent with this section.
The legislation would be effective on 1/1/2026 so perhaps Sable will already be producing. Sable may also explore the jurisdictional and interstate commerce issues touched on in this post.
This LA Times update adds to the confusion as to the implications for Sable.
Sable shares take another hit on news of Newsom’s intent to impose new pipeline restrictions.
Posted in California, Offshore Energy - General, pipelines, Regulation, tagged California Fire Marshall, DOT, Gov. Newsom, PHMSA, pipeline, Sable Offshore, Santa Ynez Unit, State legislation on September 10, 2025| Leave a Comment »
Sables’ share price sank on Tuesday following reports from Bloomberg and others that Governor Newsom is proposing new restrictions on California’s offshore oil industry. With Sable Offshore as a primary target, stricter requirements for restarting inactive intrastate oil pipelines would be imposed. •
This could trigger yet another legal battle or increase the complexity of those that are ongoing. The onshore pipeline, now owned by Sable Offshore, was originally classified as an interstate pipeline under Federal jurisdiction. However, following the 2015 Refugio oil spill, it was reclassified as an intrastate pipeline via a 2016 letter of understanding signed by representatives of the Federal Office of Pipeline Safety (DOT-PHMSA) and the Office of the State Fire Marshal (pertinent text pasted below).
Given that the Sable pipeline will carry OCS production, it would seem to fundamentally be an interstate line (Federal jurisdiction), as it was when owned by Plains. Could DOT reverse the 2016 letter agreement? That is conjecture for the attorneys and courts to consider.
Meanwhile, below is an upbeat Sable video on the pipeline!
Comments on BSEE’s downhole commingling rule
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, tagged Big Beautiful Bill, BSEE, downhole commingling, final rule, safety, ultimate resource recovery, well completion on September 9, 2025| Leave a Comment »
The attached comments were submitted to Regulations.gov on 9/8/2025.
Legislatively dictating downhole commingling approvals, as per Section 50102 of the One Big Beautiful Bill, is a reckless precedent from both technical and regulatory policy standpoints.
This type of legislative maneuver compromises the integrity of the OCS oil and gas program and the companies that participate in it. Shaving the maximum royalty rate was one thing; mandating well completion approvals is quite something else. Disappointing. ☹
RIP John Borne – outstanding engineer and offshore safety leader!
Posted in Gulf of Mexico, Offshore Energy - General, Regulation, Uncategorized, tagged Houma, Jack Leezy, Jodie Connor, John Borne, Ken Arnold, Lars Herbst, Minerals Management Service, offshore safety, Regulation, RIP, USGS on September 8, 2025| 2 Comments »
John Borne was an exceptional engineer and offshore safety leader in our OCS oil and gas program during the US Geological Survey (Conservation Div.) and Minerals Management Service (MMS) eras.
Some thoughts on John’s leadership followed by tributes from distinguished colleagues:
- John’s Houma District office was a model for the rest of the OCS program. Houma was the program’s busiest district in terms of operational activity, and the most effective in meeting permitting, inspection, and investigation targets.
- The few serious accidents that occurred in the District were carefully investigated and the findings were shared in a timely manner with the goal of preventing their recurrence. If John signed a report, you knew it was complete and accurate.
- John was knowledgeable about the complex offshore oil and gas operations he regulated, and was an outstanding teacher and mentor.
- John treated all companies the same from the super-majors to the small independents – no biases, no favors, and no ethics issues.
- John expected companies to fully comply with the regulations. Any departures had to be clearly in the best interest of safety and the environment.
From Ken Arnold (ex-Shell engr, Paragon Engineering President, NAE): As part of the Shell Training program in 1964 I was assigned to trail John in East Bay for a week. One night I was talking to another trainee on a logging barge tied up to a posted barge rig in SP Blk 24. John was also on the barge. Without warning the barge started pulling away from the rig. The three of us jumped from the barge to the rig but I slipped and fell in the canal. I don’t think I was in the water long enough to get wet, when John and a rig hand fished me out. Unfortunately my glasses fell off and were in the mud. John got a scissors device and retrieved my glasses in a matter of minutes.
I greatly appreciated my week with John. What he took the time to teach me about field work was critical to my subsequent successful career in Shell and in Paragon. He was a gentleman and a first class teacher. I was lucky to have known him.
Jodie Connor (founder and retired President of J. Connor Consulting): John was an excellent representative of the MMS, always fair in his decision-making and approvals. I endearingly called him “By the Book Borne”. He enforced the regulations as they were written, which was fair to all operators. Always kind and willing to explain MMS policies.
Lars Herbst (retired MMS/BSEE Regional Director, Gulf of Mexico): What a legend at MMS! A testament to his leadership are the number of Regional leaders that came out of Houma District. Just to name a few: Mike Saucier, Bryan Domangue, Troy Trosclair, and even Jack Leezy! That work ethic that John instilled has continued even to the next generation of leadership! I was fortunate that John let me act as Drilling Engineer when Saucier went hunting each December. My career at MMS was never the same after that opportunity!
Jack Leezy: (President, Avenger Consulting, retired MMS): John served in the Marine Corp during the Korean war. Upon discharge from the Marine Corp John attend the University of Lafayette and earned a BS degree in Petroleum Engineering. John started his oilfield career when he went to work for Shell Oil in 1960 until 1970 as a Petroleum Engineer.
John joined U.S.G.S. In 1970 as a Petroleum Engineer in the Lafayette District. John accepted a promotion in 1972 in the Regional office and was selected as the first District Supervisor in the newly formed Houma District office in October1974. John remained as the District Supervisor until his retirement in 1995. John was instrumental in developing Bureau policies of which some are still in place as of today. John served on countless MMS and industry committees alike during his career. John was looked upon as professional and highly respected by MMS and industry alike. He performed is duties in such a way that even if you may not have liked his decision, you respected it. John’s demeanor never changed as he never lost his composure and worked evenly though all the trials and tribulations during his career at MMS. John even won MMS’s Engineer of the Year award. I owe a lot to John in helping me form my career at MMS as I tried to handle my supervisory duties in the same manner in which John did.
RIP John. You were a superstar! As an engineer, regulator, leader, teacher, and colleague, no one did it better!
Are New England Wind 1 and 2 COP approvals next on the chopping block? It appears so.
Posted in energy policy, Offshore Wind, Regulation, tagged BOEM, BSEE, COP, New England Wind, Vineyard Wind on September 4, 2025| Leave a Comment »
See below. BOEM is reconsidering its approval of the Construction and Operations Plan (COP) for New England Wind 1 and 2. The operator, Avangrid (Spain), is also a partner in the troubled Vineyard Wind project.
If you are keeping score, the approval of these COPs is being reconsidered:
- Maryland Wind
- SouthCoast Wind
- New England Wind 1 and 2
Other projects: Work has been stopped on the Revolution Wind project. Work was previously halted on the Vineyard Wind and Empire Wind projects, but has been allowed to resume. BSEE has still not published its report on the Vineyard Wind turbine blade failure that occurred on 7/13/2024. Other projects have been suspended by the owners at their own initiative (e.g. Atlantic Shores South, Gulf of Maine, Starboard Wind, Vineyard Wind 2, Beacon Wind). Meanwhile, litigation abounds!
Coastal Virginia Offshore Wind is the project with the most assured long-term future.
Court filing points to likely reversal of SouthCoast Wind COP approval (ala Maryland Wind)
Posted in Offshore Wind, Regulation, energy policy, tagged Nantucket, SouthCoast Wind, US Dept. of the Interior, COP, Ocean Wind, EDP Renewables, ENGIE on September 2, 2025| Leave a Comment »
The Construction and Operations Plan (COP) for the SouthCoast Wind project was approved during the last week of the Biden Administration. That approval has been challenged by the Town and County of Nantucket. Ocean Wind, a joint venture of EDP Renewables (Portugal) and ENGIE (France), is the leaseholder.
As is the case for Maryland Wind, a court filing (attached) indicates that DOI is reconsidering the approval of the SouthCoast Wind COP. Construction has not begun on this project.
A further deferral of Federal Defendants’ responsive pleading deadline in this case is needed because Interior intends to reconsider its COP approval and will therefore be moving for a voluntary remand of that agency action by September 18, 2025.
Mini-surge in June Gulf of America production
Posted in Gulf of Mexico, hurricanes, Offshore Energy - General, Regulation, tagged deepwater development, Gulf of America production, highest since 10/2023, hurricane preparedness, Ivan, June production, Katrina, Rita on September 2, 2025| Leave a Comment »
The average oil production rate for the Gulf OCS was 1.915 million bopd in June, the highest rate since Oct. 2023 and thus the highest in the history of the Gulf of America 😉.
As forecasted, deepwater projects are ramping up, and modest production growth should continue over the near to intermediate term.
At the end of this month, when the July production figures are released, we should get a better sense of the temporary reduction in production caused by zinc contamination in the Mars pipeline system.
Natural gas production, which is now primarily from oil wells (i.e. associated gas) and is thus more closely linked to oil production rates, increased by >10% in June to over 60 bcf. As was the case for oil, gas production was the highest since Oct. 2023.
It is now peak hurricane season, so the eyes of production forecasters are focused on the tropics. Few need to be reminded about what happened 20 years ago when Hurricanes Katrina and Rita roared through the Gulf, preceded by Hurricane Ivan “The Terrible” one year earlier. Those 3 hurricanes triggered major improvements in hurricane preparedness, particularly with regard to stationkeeping capabilities.
The BSEE downhole commingling rule should be published for public review and comment
Posted in Gulf of Mexico, Offshore Energy - General, Regulation, tagged Administrative Procedures Act, BSEE, downhole commingling, Gulf of America, OBBB, offshore safety, Paleogene fields, public review, ultimate resource recovery on August 29, 2025| Leave a Comment »
The “One Big Beautiful Bill Act of 2025” (OBBB), Public Law 119-21, which was signed into law on July 4, 2025, includes a significant offshore production directive (section 50102) that has received little public attention:
“The Secretary of the Interior shall approve a request of an operator to commingle oil or gas production from multiple reservoirs within a single wellbore completed on the outer Continental Shelf in the Gulf of America Region unless the Secretary of the Interior determines that conclusive evidence establishes that the commingling—(1) could not be conducted by the operator in a safe manner; or (2) would result in an ultimate recovery from the applicable reservoirs to be reduced in comparison to the expected recovery of those reservoirs if they had not been commingled.”
This is, to the best of my knowledge, the first time in the history of the OCS oil and gas program that Congress has directed the safety regulator to approve well completion practices that could increase safety, environmental, and resource conservation risks.
Rather than calling for the operator to demonstrate that a downhole commingling plan is safe and optimizes resource recovery, the plan must be approved unless BSEE proves conclusively that the operation could not be conducted safely or that resource recovery would be reduced. This is the antithesis of the operator responsibility doctrine, a fundamental principle of the OCS regulatory program, and safety management principles that call for the operator to demonstrate that safety, environmental, and resource conservation risks have been effectively addressed.
Only 40 days after the OBBB was signed, BSEE published a direct final rule implementing the downhole commingling directive. This is warp speed for promulgating a Federal regulation! In keeping with the rush to finalize the rule, the preamble asserts that “notice and comment are unnecessary because this rule is noncontroversial; of a minor, technical nature; and is unlikely to receive any significant adverse comments.”
I intend to submit comments prior to the Sept. 12 deadline. These comments will assert that the rule does not qualify for an exemption from the Administrative Procedures Act’s public review and comment requirement. I will also recommend that BSEE consider hosting a public forum during the comment period to present their research on downhole commingling and discuss the risk mitigations.
Below are some of the issues/questions that should be considered during the public comment period:
- BSEE’s own fact sheet acknowledges the well-known pressure differential, crossflow, and fluid compatibility risks associated with downhole commingling. The public should have the opportunity to provide input on the extent to which “intelligent completions” and other production technology are effective in mitigating these risks.
- The industry-funded Univ. of Texas (UT) study, which led to a relaxation of downhole commingling restrictions, was specific to the “unique Paleogene Gulf of Mexico fields.” Does BSEE have evidence that supports the applicability of the study to other fields?
- The authors of the UT study acknowledged that their findings were based on a “simple but reasonable geological base case model.” They also acknowledged the need for “a more comprehensive study using advanced geological models to explore additional geological features.” What are BSEE’s plans for additional research?
- Should an independent assessment of Gulf of America downhole commingling safety and resource recovery risks be conducted before finalizing a rule that essentially mandates approval of all applications?
- BSEE’s April 2025 policy change raised the allowable pressure differential for commingling production in Paleogene (Wilcox) reservoirs from 200 psi to 1500 psi. Unlike the policy update, the new rule includes no boundaries whatsoever.
- What criteria will BSEE use in determining that there is “conclusive evidence” that a commingling request would be unsafe or would reduce ultimate resource recovery? Will BSEE disapprove any requests outside the parameters in the current policy guidance or subsequent updates?
There are many more issues that remain to be discussed, which is why the downhole commingling rule should be published in draft form, with a comment period of at least 90 days.
‘Piper Alpha disaster was the best and worst day of my life’ – Ed Punchard
Posted in accidents, Offshore Energy - General, Regulation, UK, tagged best and worst day, BSEE, downhole commingling, Lord Cullen, Piper Alpha, safety case on August 25, 2025| Leave a Comment »
JL Daeschler shared a London Sunday Times piece about the Piper Alpha fire that killed 167 workers, the worst tragedy in the history of the offshore industry. We were troubled by the headline, because it seems inconceivable that any UK offshore worker could call July 6, 1988, the best day of their life. However, Punchard helped a number of workers escape the fire, so his mixed message is somewhat understandable.
Lord Cullen’s comprehensive inquiry into the Piper Alpha tragedy challenged traditional thinking about regulation and how safety objectives could best be achieved, and was perhaps the most important report in the history of offshore oil and gas operations. That report and the US regulatory response to the tragedy are discussed in this post.
BSEE’s new downhole commingling rule, which responds to a Congressional mandate, is contrary to Cullen’s Safety Case principles in that it puts the burden of proof on the regulator to conclusively demonstrate that a potentially hazardous operation is unsafe. This is exactly the opposite of the approach recommended by Cullen. It’s also the first time in the history of the OCS program that Congress has dictated approval of complex downhole operations. More on this in a later post.
Bud's Offshore Energy (BOE) 