The main effect of the EPA ruling (attached) appears to be that permit appeals will be submitted to EPA rather than the State of Maryland.
Posted in Offshore Wind | Tagged EPA, Maryland, PSD permit, US Wind | Leave a Comment »
Why has the BSEE investigation report still not been issued?
Construction on the Vineyard Wind project continues yet important questions about quality control, regulatory departures, debris recovery, and environmental impacts remain.
Given the investigation’s significance, not only for Vineyard Wind, but for other offshore wind projects planned or under construction, how is the delay in issuing the report acceptable?
Keep in mind that the lengthy and complex National Commission, BOEMRE, Chief Counsel, and NAE reports on the Macondo blowout were published 6 to to 17 months after the well was shut-in.
Posted in accidents, Offshore Wind | Tagged anniversary, blade failure, BSEE, debris, departures, environmental assessment, investigation report, quality control, Vineyard Wind | Leave a Comment »
Tariffs and their uncertainty “will certainly decrease expected investment activity in the energy sector,” says the new report. More than $50 billion of offshore investment this year has been deferred “with operators looking to wait out current market uncertainty before making significant final investment decisions,” Rystad notes.
Rystad estimates that tariffs will increase costs for offshore oil and gas projects by 8% year-over-year and 12% for onshore. “Most steel and raw material exposed cost categories are feeling the majority of the impact from tariffs and thus will take the biggest hit.”
The Tax Foundation and Wood Mackenzie have offered similar opinions.
Comment: At a glance, the number of 2025 well starts in the GOA appears to be down (more on this at a later date). While there are many factors affecting drilling decisions, lower oil prices and higher costs associated with tariffs are not compatible with a “drill baby drill” philosophy.
Posted in drilling, energy policy, Offshore Energy - General | Tagged drill baby drill, oil and gas drilling, Rystad, tariffs | Leave a Comment »
The full report is attached.
Not at all shocking:
The public is most interested in the cost and reliability of the energy they use and the convenience and comfort of their energy-using products. They are unwilling to sacrifice much at all financially to address climate change or significantly change their consumer behavior.
Posted in climate, energy policy | Tagged AEi, climate, energy cost, energy reliability, voters energy priorities | Leave a Comment »
The proposed rule is attached. Important points:
How can the US issue mining licenses in international waters (controversial)?
“The International Seabed Authority (ISA) regulates deep seabed mining in areas beyond national jurisdiction for countries that are parties to the United Nations Convention on the Law of the Sea (UNCLOS). The United States is a non-party to UNCLOS. Under U.S. law, NOAA may issue licenses and permits to U.S. citizens in areas beyond national jurisdiction under the Deep Seabed Hard Mineral Resources Act (DSHMRA).“
Main objective of the proposed rule (paraphrased):
The deepsea mining industry has gained experience from site specific exploration activities. As a result, later entrants may be able to capitalize on the information gained by previous explorers and lessen the need for further exploration of previously explored areas. In such cases there may be a need for a consolidated licensing process in which permit applicants could meet exploration license requirements to establish priority of right, and permit requirements, simultaneously.
Comment: The proposed rule seems reasonable in that qualified companies that gather the necessary site information would have the right (after NOAA review and approval) to collect the minerals. This would align deepsea mining more closely with offshore oil and gas in that companies acquiring licenses would be able to proceed to production after regulatory approvals.
Posted in deep sea mining, energy policy | Tagged consolidated licensing, deepsea mining, DSHMRA, NOAA, UNCLOS | Leave a Comment »
See the differences in the OCS oil and gas provisions in the House and Senate versions.
We preferred the House version, but the Senate Parliamentarian killed the provisions that reduced the risk of litigation and processing delays.
Whether justified or not, the royalty rate is now capped at 1/6 and a 10-year deepwater lease term is locked in.
The favorable terms and assurance of regular GOA lease sales put the ball squarely in industry’s court. We are looking for a good showing at Sale 262, including some new bidders and the return of some prominent companies.
Posted in energy policy, Offshore Energy - General, Regulation | Tagged Big Beautiful Bill, energy policy, Gulf of America, lease sale 262 | Leave a Comment »
Eye catching sentences in the news release and Proposed Notice of Sale:
“Leases awarded through Lease Sale 262 will be for oil and gas exploration and development only.” (News Release)
“Leases issued as a result of GOA Lease Sale 262 are expressly limited to oil and gas exploration and development.” (p. 16 of the Sale Notice)
Comment: Why would BOEM stipulate, for the first time ever, that an Oil and Gas Lease Sale is only for oil and gas exploration and development? Perhaps because, at the last 3 sales, 2 companies wrongfully acquired oil and leases for carbon disposal purposes. Those leases will likely expire at the end of their primary term, and the lessees will have nothing to show for their investment.
Other items of interest:
“Congress may enact legislation through reconciliation efforts sometime after publication of this Proposed NOS“
Comment: The Offshore Oil and Gas Leasing provisions in the “Big Beautiful Bill” make OCS leases more attractive in that they minimize sale uncertainty and return royalty rates to pre-IRA levels.
Proposed Primary Terms
Comment: Time for an update. The drilling requirements for a primary term extension should be the same for leases in 0-400 m as for those in 400-800 m. The requirement for an ultra-deep subsurface well is selectively punitive to shelf operations. These operations, although typically less lucrative, are important to the Gulf’s infrastructure.
Restricted Joint Bidders
On April 29, 2025, BOEM published the most recent List of Restricted Joint Bidders in the Federal Register (90 FR 17832). Potential bidders are advised to refer to the Federal Register prior to bidding for the most current list at the time of the lease sale. Please refer to the joint bidding provisions at 30 CFR 556.511-556.515
Comment: It’s past time for Congress to do away with the joint bidding restriction.
Comment: No surprises in the Lease Stipulations. Can BOEM finally drop the Law of the Seas stipulation (No. 6)?
Conclusion: There are no excuses for not participating in this sale!
Posted in energy policy, Gulf of Mexico, Offshore Energy - General | Tagged Big Beautiful Bill, carbon disposal, drilling requirements, joint bidding restrictions, lease stipulations, OCS Sale 262, oil and gas only, Sale Notice, UNCLOS | Leave a Comment »
Big Beautiful Bill: significant differences between the House and Senate offshore leasing provisions
The differences between the House and Senate versions of the Big Beautiful Bill are summarized in the table below. (See the previous post on the House version.)
The Senate bill includes royalty and lease terms that favor deepwater lessees, but excludes the provisions in the House bill that streamline the leasing process and minimize litigation risks. At least some of those House provisions were rejected by the Senate Parliamentarian.
The House will vote on the version that passes the Senate. So the Senate version is more likely to be enacted.
| House | Senate | Comment |
| royalty: 12.5% to 18.75% | royalty: 12.5% to 16 2/3% | Lowering the royalty cap to 1/6 (16 2/3%) unduly limits the Secretary’s discretion and may reduce revenues without significantly increasing production. |
| 2 GOA sales/yr over next 15 yrs. | same as House | Would have liked the opportunity for consideration of very limited Atlantic leasing or stratigraphic test drilling, but that is not politically feasible at this time. |
| use Sale 254 form and stips 4-10, may update stips 1-3 | sale 254 lease form and stips 4-9, may update stips 1-3 and 10 | The minor difference favors the Senate version. Stip 10 pertains to restrictions due to Rights-of-Use and Easement for Floating Production Facilities, and needs to be updated with each sale |
| mandates 10 year lease term for water depths >800 m | Although a 10 year term for deepwater leases is generally prudent, the Secretary should be able to choose a shorter term if concerns about timely exploration and diligent development arise (more likely given the increase in leases that could be issued as a result of the 2 sales/yr mandate). | |
| requires approval of subsurface commingling unless there is “conclusive evidence” of safety or ultimate recovery issues | Although BSEE’s policy change on downhole commingling was warranted, the legislative change removes essentially all discretion by mandating approval unless there is “conclusive evidence” to the contrary. Conclusive evidence is dependent on production history, at which point it may be too late. | |
| Adherence with the Biological Opinion shall satisfy the Secretary’s obligations under the Endangered Species Act of 1973 and the Marine Mammal Protection Act of 1972 | This provision reduces govt/lessee litigation risks | |
| Previous EIS’s for the Gulf of Mexico shall satisfy the Secretary’s NEPA obligation. | Rejected by the Senate Parliamentarian. | |
| Consistency determinations prepared by BOEM for Lease Sale 261 for the States of Texas, Louisiana, Mississippi, Alabama, and Florida will satisfy the Secretary’s CZMA obligations. | The States or Parliamentarian may not have been comfortable with this provision which simplifies plan approval processes. | |
| The Secretary may waive any requirement under the Outer Continental Shelf Lands Act that the Secretary determines would delay issuance of a lease. | Rejected by the Senate Parliamentarian? | |
| A lease must be issued to the highest responsible qualified bidder not later than 90 days after the sale date. | Rejected by the Senate Parliamentarian. | |
| A Governor may nominate for leasing under a lease sale held under this section an area of the OCS that is adjacent to the waters of the State | Never understood the need for this provision. | |
| G&G surveys must be approved within 30 days after a complete application is received. | Not feasible in some cases given endangered species concerns. | |
| A lease awarded under Lease Sale 259 or Lease Sale 261 shall not be set aside, vacated, enjoined, suspended, or cancelled except in accordance with section 5 the Outer Continental Shelf Lands Act (43 U.S.C. 1334). Also, new terms or conditions may not be added to these leases. | Reduces litigation risks. | |
| Any action to approve, require modification of, or disapprove any exploration plan, development and production plan, bidding procedure, lease sale, lease issuance, or permit or authorization related to oil and gas exploration, development, or production, or any inaction resulting in the failure to hold a lease sale shall be subject to judicial review only in a United States court of appeals for a circuit in which an affected State is located. | This provision significantly reduces litigation risks. Rejected by Parliamentarian? | |
| 6+ Cook Inlet sales over next 10 yrs. | 6+ Cook Inlet sales over the next 7 years | |
| 90% of Cook Inlet revenues to the State of Alaska. | 70% of Cook Inlet revenues to the State of Alaska. | The percentages are high, but the revenues are likely to be low. |
Posted in Alaska, energy policy, Gulf of Mexico, Offshore Energy - General | Tagged Big Beautiful Bill, differences, lease terms, offshore leasing, Parliamentarian, royalty rate, Senate vs. House | 1 Comment »
Sharing pictures from John Smith’s excellent decommissioning presentation at the Western States Petroleum Assoc. luncheon in Santa Barbara in May. You can view or download the presentation here.
Posted in California, decommissioning, Offshore Energy - General, rigs-to-reefs | Tagged decommissioning, Santa Barbara blowout, rigs to reefs, John Smith, reefing | Leave a Comment »
Today’s Supreme Court decision limits the power of federal district judges to issue universal injunctions. I wonder if this decision restricts courts in DC and Maryland from ruling on oil and gas operations in the Gulf of America? Perhaps not, because those decisions are linked to Federal agencies in the DC area even though the activity is in the Gulf.
Posted in energy policy, Gulf of Mexico, Offshore Energy - General | Tagged applicability to DC court decisions on the Gulf of America, restricts Federal district courts, SCOTUS, universal injunctions | 1 Comment »
Bud's Offshore Energy (BOE) 