These oil and gas leases may not be repurposed for sequestration or other purposes unless an alternate use RUE is issued competitively in accordance with 30 CFR § 585.1007.
So what’s next for these 94 leases, 31% of the entire sale?
Kudos to ONRR for posting complete flaring and venting data for all oil and gas operations on US Federal and Indian lands. These data, which distinguish between oil-well gas and gas-well gas, are included in the large “Production Disposition by Month” file that can be downloaded here.
Where is the leadership? Offshore decommissioning costs should never fall on the taxpayer. See the attached notice (excerpt below) and a previous post on this topic.
BSEE intends to execute a multi-award IDIQ Quantity Contract inclusive of a Base Year and Four (4) Option Years; however, the government reserves the right to award the IDIQ contract to a single firm. Time & Material, Labor Hour, and/or firm-fixed price task orders will be awarded for Decommissioning Services necessary to take nine (9) orphaned facilities, located in the OCS of the Gulf of Mexico, to the point of Temporary Abandonment (TA). The estimated decommissioning cost for temporary abandonment is $10,000,000 to $20,000,000.
The 23 platforms in Federal waters offshore California are from 33 to 55 years old. Most are no longer producing and 8 are on terminated leases. Some of the platforms are massive structures in water depths up to 1200′ (list of platforms and map below).
BOEM’s draft programmatic EIS evaluates 4 decommissioning alternatives, none of which appear to be workable for a combination of economic, environmental, and legal reasons:
Alternatives 2 and 3 evaluate prudent and environmentally responsible partial removal options. Unfortunately, partial removal and reefing are not feasible under the California Resources Legacy Act (AB 2503). This legislation holds the donating company perpetually liable for any damages associated with the reef structure. While not assuming any liability, the State nonetheless collects 80% of the savings (reefing vs. complete removal). As a result, it’s no surprise that no company has applied to participate in the State’s program.
Alternative 4 calls for leaving platforms and pipelines in place after emptying tanks and flushing pipelines. This “no action” baseline alternative violates the lease agreement and 30 CFR 250.1725, and would only be permissible if an alternate use was approved for the platforms per 30 CFR Part 585.
The EIS, with minimal discussion and no supporting data, rules out alternate uses at any of the 23 platforms. This exclusion would seem to be premature given the win-win-win opportunities for industry, government (Federal, State, and local), and academia. These include deferred decommissioning liabilities, a wide range of research opportunities, security and defense applications, weather observation and climate studies, maritime communications support, education programs, marine seismicity studies, and hydrokinetic energy projects. With proper maintenance, platforms can continue to provide social benefits long after all wells are plugged and production equipment is removed. However, once removed, replacement costs would be prohibitive.
Lastly, the EIS avoids the thorny financial responsibility issues that will complicate decommissioning decisions. Note the questions raised in the “troubling case of platforms Hogan and Houchin.”
Those wishing to comment on the draft EIS should follow the posted instructions.
As of 10/14/2022, the SPR inventory was 405.1 million barrels.
President Biden will announce on Wednesday that he is releasing 15 million more barrels of fuel from the Strategic Petroleum Reserve, a move aimed at easing gas prices three weeks before voters anxious over rising costs head to the polls as Democrats have been battered by GOP attacks on the economy.
The administration is also expected to release further details on timing for refilling the stockpile, reflecting its desire to combat rising pump prices while also supporting domestic drillers with future demand for their oil, they said.
Comments on BSEE’s proposed revisions to the Well Control Rule are due in 27 days (by Nov. 14). Given the fundamental importance of well control to offshore safety and pollution prevention, all interested parties are encouraged to comment. Although some of the proposed revisions are rather nuanced, the document is neither long nor complex.
My completely independent comments are being drafted and will be posted here after they have been submitted to Regulations.gov.
My comments will explain why the proposal may reduce the rigor of the BOP system performance standard and will address a related shear ram issue. The comments will also discuss the management of BOP equipment failure and other safety data, the use of independent third parties and standards development organizations, dual shear rams on surface BOP stacks, ROV intervention capabilities, and BOP test data reporting and management.
Two supporters of Just Stop Oil have thrown soup over Vincent Van Gogh’s Sunflowers, as actions in the capital roll into the 14th day. They are demanding that the UK government halts all new oil and gas projects.
The need for alternate energy/use legislation was obvious to Minerals Management Service (predecessor of BSEE and BOEM) personnel decades ago given the growing interest in renewable energy projects and the reuse of offshore platforms. Twenty years ago, MMS staff took the initiative to draft alternate use amendments to the OCS Lands Act that MMS Director Johnnie Burton and the congressional liaison office worked closely with Congresswoman Barbara Cubin of Wyoming to gain support for the amendments and they were adopted as part of the Energy Policy Act of 2005
Attached below are the talking points used by MMS in briefing congressional staff and other agencies. These talking points were spot-on and have endured the test of time.
Bud's Offshore Energy (BOE) 
Comments on BSEE’s proposed Well Control Rule are due by Nov. 14
October 18, 2022 by offshoreenergy
Comments on BSEE’s proposed revisions to the Well Control Rule are due in 27 days (by Nov. 14). Given the fundamental importance of well control to offshore safety and pollution prevention, all interested parties are encouraged to comment. Although some of the proposed revisions are rather nuanced, the document is neither long nor complex.
My completely independent comments are being drafted and will be posted here after they have been submitted to Regulations.gov.
My comments will explain why the proposal may reduce the rigor of the BOP system performance standard and will address a related shear ram issue. The comments will also discuss the management of BOP equipment failure and other safety data, the use of independent third parties and standards development organizations, dual shear rams on surface BOP stacks, ROV intervention capabilities, and BOP test data reporting and management.
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