One important action your administration can take to ensure American energy independence is to publish a new Five-Year Outer Continental Shelf Oil and Gas Leasing Plan (“Five-year Plan”) as required under the Outer Continental Shelf Lands Act of 1953. Finalizing the Five-year Plan, with frequent area-wide leases, would help bring millions of additional barrels of U.S. oil to market. According to a recent analysis by Energy and Industrial Advisory Partners, a further delay of federal offshore leasing could result in 500,000 fewer barrels of domestic oil produced per day, 60,000 lost jobs, and a $900 million per year decrease in federal conservation funding. .
The four Democrats are Texas Representatives Vicente Gonzalez, Sylvia Garcia, Henry Cuellar and Lizzie Fletcher.
Meanwhile, the Senate approved language supporting the issuance of a new 5 Year Program ASAP. Four Democrats -Joe Manchin (D-WV), Kyrsten Sinema (D-AZ), John Hickenlooper (D-CO), and Mark Kelly (D-AZ) – voted for the measure.
This is a great Gary Brookins cartoon from March 2006 that has been featured in some of my presentations. We now have only one month until the official start of the 2022 Atlantic hurricane season so my post is a bit late! However, the season peaks in mid-September, so you could also argue that I’m posting this too early!
The offshore world lost an outstanding petroleum geologist when my friend and former colleague Paul Post passed away last week. His detailed obituary is linked.
Paul was the world’s leading authority on the oil and gas resource potential of the US Atlantic. He was also a gifted speaker who was skilled at presenting technical data to lay audiences. As Paul explained it, the US Atlantic has not been explored in paleo deep- and ultra-deepwater areas using exploration concepts proven successful in analogous West African and South American settings where massive discoveries have been made.
Paul estimated that the US Atlantic could contain 21.4 billion BOE with the major caveat that the presence of a working petroleum system was required and that could only be determined through drilling. At this point, the probability of major discoveries was thus modest, but the resource potential (should discoveries be made) was massive.
Unfortunately, Paul’s theories may never be tested. Prior to the 2020 elections, our self-described “energy dominance”President cynically withdrew the prospective Mid and South Atlantic areas through 2032. He had already withdrawn the highly prospective Eastern Gulf of Mexico in response to Florida political interests (even though the best EGOM prospects are more than 100 miles from Florida’s coast). Our current energy deficit President seems content to not hold any offshore lease sales while drawing down our strategic reserves.
Oh well, it was a great privilege to have known Paul and worked with such a dedicated professional. I’ll close with a couple of his favorite quotes:
“Uncertainty is an essential and nonnegotiable part of a forecast.”
Nate Silver, The Signal and the Noise
“The time to hesitate is through.”
Jim Morrison, Poet, Songwriter, and Lead Singer of The Doors
… to be able to speak openly and candidly about issues that have been an important part of my professional life for 50 years. Thankful for our First Amendment rights; they must be protected.
Whether you represent Big Oil, Big Gas, Big Wind, Big Green, Big Climate, Big Stick (regulators 😀), Big Swamp (Washington DC friends 😉), or none of the above, thank you for visiting this modest, independent, and rather obscure blog.
Over the next couple of weeks, I will be posting about an interesting study that links compliance and safety, some unpublished thoughts on the Macondo blowout 12 years later, and comments on the industry push for carbon sequestration in the Gulf of Mexico (sorry advocates, I’m not a fan).
Regardless of your faith, nationality, political views, or thoughts about world events and offshore energy, I hope you have the opportunity to spend time with friends and family this weekend.
This WSJ report, if accurate, reflects the mindset that you can increase oil production on demand when absolutely necessary, and avoid committing to longer term oil and gas supplies. The goal of such thinking is to address supply crises without alienating the uncompromising climate ultras. You suspend lease sales, deny new pipelines, and demonize oil and gas and the people who produce it. When supplies tighten and prices spike, you tap the strategic reserve, appeal to OPEC, talk to Venezuela and Iran, and ask Canada to ship more oil in rail cars or trucks (but no new pipelines please!). .
Below is a pie chart constructed using data from a 2018 DOT report to Congress. For logistical and economic reasons, pipelines are overwhelmingly the crude oil transport method of choice. Rail cars and trucks are called on where there are no pipeline options.
Looking at the systems, one would assume that pipelines have safety and environmental advantages. Loading and unloading hundreds of tanks would seem to be inviting spills, although most would presumably be small. The DOT data bear this out. On a volume transported basis, spill incidents occurred nearly 15 times more frequently for rail cars and trucks than they did for pipelines.
For pipeline(s), an incident occurred approximately once every 720 million gallons of crude oil shipped. For rail, an incident occurred approximately once every 50 million gallons of crude oil shipped. For truck(s), an incident occurred approximately once every 55 million gallons of crude oil shipped.
Looking at the percentage spilled, pipelines also had a significant (7.6 times) advantage over rail, but only a slight advantage over trucks.
Volume of Crude Oil Shipped and Spilled by Pipeline, Rail, and Truck, 2007-2016
Pipeline
volume shipped (k gal)
1,298,630,088
volume spilled (k gal)
13,161
% spilled
0.0010%
Rail
volume shipped (k gal)
23,052,960
volume spilled (k gal)
1,751
% spilled
0.0076%
Truck
volume shipped (k gal)
47,894,868
volume spilled (k gal)
521
% spilled
0.0011%
Because fatalities or hospitalizations were extremely rare, DOT chose not to normalize those data. There were a total of 3 fatalities associated with both pipeline and truck shipments. While no fatalities were associated with rail shipments, DOT noted that 47 deaths resulted from a crude oil derailment in Lac Megantic, Quebec in 2013. BOE further reminds readers that this train was transporting Bakken crude from North Dakota to a refinery in St. John, New Brunswick.
The bottom line is that you have to plan ahead to satisfy future supply needs. This is particularly true for the offshore sector where the lead times are longer, but the production volumes relative to the number of wells and facilities are higher (a good thing). The need for oil and gas is not going away, nor are threats to energy security. There are plenty of people in the U.S. Department of the Interior who understand this. Empower them to safely expedite leasing, exploration, and development!
ClientEarth, a Shell shareholder, notified the energy major on Monday that it would commence legal proceedings against the company’s 13 executive and non-executive directors for what it said was the board’s failure to adopt a strategy that “truly aligns” with the 2015 Paris climate agreement. The not-for-profit group, which has a strong record of winning climate-related cases, wrote to Shell in advance of petitioning the High Court of England and Wales for permission to bring the claim.
Wind and solar energy are likely to continue growing in importance over the next several decades, but massive space requirements and intermittency may prevent these energy sources from ever being dominant. On the other hand, geothermal power could prove to be the ultimate energy solution if we can effectively drill deep beneath the surface and tap into superheated rock.
Quaise Energy, headed by ex-Schlumberger/MIT engineer Carlos Araque, is developing a radical new approach to ultra-deep drilling. Quaise will use conventional rotary drilling technology to reach basement formations before switching to high-power millimeter waves that vaporize boreholes through rock and provide access to deep geothermal heat. Quaise’s timeline calls for operation of their first full-scale hybrid drilling rig in 2024 and their first super-hot geothermal system in 2028. Those interested in energy solutions should follow their progress.
Bud's Offshore Energy (BOE) 