Stop the bluster about annexation of Canada. Almost no one on either side of the border supports this. Focus instead on strengthening strategic alliances – most notably with regard to energy supply.
Both the US and Canada are energy powerhouses. Both countries are also energy underachievers relative to their potential. The more efficiently our pipelines and transmission systems can be integrated, the better that potential can be realized and the more both countries can prosper.
See the attached energy trade map to get a better understanding of our integrated energy economies.
For the reasons set forth herein, the application of the California Coastal Commission for issuance of a preliminary injunction is granted. No bond is required. The Commission shall present a written order for entry by the court.
The roller coaster ride continues. Sable Offshore’s stock price plunged in response to the latest order.
The first step will be the publication of a request for information and Interest in the Federal Register. This notice will seek public input that will help inform BOEM’s assessment of geologic conditions, potential environmental and cultural impacts, and other uses of the area.
Impossible Metals has developed an autonomous underwater vehicle (AUV) for selective mineral harvesting. Their novel AUV uses advanced robotics, AI, and a buoyancy engine to hover above the seabed and minimize disruption to the habitat and native biodiversity. Impossible Metals believes this method will have the lowest environmental impact and cost among land and deep-sea mining approaches.
9 minute interview with the CEO of Impossible Metals:
Legal/regulatory: Although lease cancellation is not a reasonable option at this time, a pause for further review of the environmental and procedural issues is justified. During the previous Administration, the regulators seemed to function primarily as cheerleaders, as evidenced by the departures (examples here and here), the BOEM/NOAA strategy document, and the promotional tweets. Also, where is the long awaited report on the turbine blade failure? How do you proceed with development before that has been released for public review?
Norwegian govt intervention: Some would argue that Empire Wind was a bad investment by Equinor (2/3 govt owned) and it would have been better to take the losses and move on.
Trade unions: Concerns about the job losses are warranted, but the long term viability of the subsidy dependent offshore wind industry is in doubt, and important industries (e.g. fishing and tourism) may be negatively impacted. Other job losses could occur if offshore wind drives up electric prices and decreases grid reliability.
Pipeline deal: The regionally important Constitution natural gas pipeline is still very much in doubt despite reports of a deal with Governor Hochul. With or without her support, climate-ultras are driving NY/New England energy policy and will, at a minimum, stall this project. Fisheries Nation was particularly blunt in criticizing fishermen being “used as a poker chip” to gain tepid support for the pipeline project.
Following the reversal of the Empire Wind decision, Green Oceans, ACK for Whales, Long Island Commercial Fishing Association, Protect Our Westport Waters, Save Greater Dowses Beach, Save Right Whales Coalition, and the Wampanoag Tribe of Gay Head/Aquinnah petitioned Secretary Burgum to halt all wind construction in New England coastal waters and begin a “complete reevaluation” of their permits under applicable federal laws. In addition to right whale and tribal cultural resources concerns, the letter cited:
Part VIII, Offshore OIl and Gas Leasing, is a good read for those interested in OCS leasing policy. This cleverly crafted part of the bill specifies leasing schedules, streamlines the leasing process, and minimizes litigation risks. Highlights:
Minimum royalty rates return to 12.5% from 16.67% post-IRA. (This is good for small, shelf producers.) The maximum rate remains 18.75%.
Requires a Gulf of America lease sale by 8/15/2025, a sale by 3/15 and 8/15 in each of the following 14 years (2026-2039), and a sale by 3/15/2040. 80+ million acres must be offered at each sale unless that amount of acreage is no longer available for leasing.
The lease form, lease terms, economic conditions, and stipulations 4 through 10 must be the same as for Lease Sale 254 (3/18/2020). Stipulations 1-3 may be updated.
Requires seven 1+ million acre (if available) Cook Inlet lease sales from 2026 – 2032. Beginning in 2035, 90% of the revenues go to the State of Alaska.
The required lease sales may be in addition to the lease sales held under the 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program.
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
Previous EIS’s for the Gulf of Mexico shall satisfy the Secretary’s NEPA obligation.
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 Secretary may waive any requirement under the Outer Continental Shelf Lands Act that the Secretary determines would delay issuance of a lease.
A lease must be issued to the highest responsible qualified bidder not later than 90 days after the sale date.
The Secretary shall establish a process through which 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; and is unleased and available for leasing. If the Governor of a State nominates an area, the Secretary shall include the area in the next scheduled sale. (It appears that this provision applies only to the Gulf of America. Objective?)
G&G surveys must be approved within 30 days after a complete application is received.
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. (This protects lessees from pending litigation related to these leases).
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.
Their filing is attached. I found the following points to be particularly compelling:
p.3: “Despite no evidence that an Oil and Gas Program vessel has ever struck a Rice’s whale, the 2025 BiOp projects that Oil and Gas Program vessels will lethally strike numerous Rice’s whales over the term of the 2025 BiOp. On that basis alone, the Service found that the Oil and Gas Program will jeopardize the continued existence of the Rice’s whale, and developed a multi-step reasonable and prudent alternative which it asserts will reduce projected vessel strikes to zero.“
p. 4: “The Rice’s whale is a rarely found animal that the Service first identified as a new species (separate from the non-endangered Bryde’s whale) in 2021. 86 Fed. Reg. 47,022 (Aug. 23, 2021). There is no evidence that an Oil and Gas Program vessel has ever struck a Rice’s whale (or a Bryde’s whale) despite continued operation in the Gulf over many decades.”
p. 5: “The 2025 BiOp disregards the Bureaus’ logical, fact-based conclusion. Instead, the Service’s 2025 BiOp engages in speculation and guess-work to surmise that Oil and Gas Program vessels could be striking and killing Rice’s whales on a regular basis. The Service ignores the best available data (i.e., showing no recorded observations of an oil and gas vessel striking a Rice’s whale) and instead presumes that forceable and lethal collisions between oil and gas service vessels and 60,000-pound whales are regularly occurring but somehow going unnoticed by the vessels and their crews and that the carcasses silently disappear into the water, never to be seen again.“
Section 7(a)(4) of the Endangered Species Act (ESA) requires federal agencies to confer with NMFS on any action that is likely to jeopardize the continued existence of proposed species or result in the destruction or adverse modification of proposed critical habitat.
Section 7(b)(3) of the ESA requires that at the conclusion of consultation, NMFS provides an opinion stating whether the Federal agency’s action is likely to jeopardize ESA-listed species or destroy or adversely modify designated critical habitat.
p. 598: The proposed action is not likely to jeopardize the continued existence of sperm whale, Northwest Atlantic loggerhead sea turtle, Kemp’s ridley sea turtle, North Atlantic DPS green sea turtle, leatherback sea turtle, hawksbill sea turtle, or Gulf sturgeon.
The proposed action is not likely to destroy or adversely modify loggerhead or Gulf sturgeon designated critical habitat, or proposed critical habitat for green sea turtle North Atlantic DPS or Rice’s whale.
p. 599: The operation of oil and gas vessels in the Gulf of America, in an area where the endangered Rice’s whale occurs, is likely to jeopardize the continued existence of the whale due to the risk of vessel strike.
According to NMFS, the reasonable and prudent alternative (see below) reduces or avoids the primary threat to Rice’s whales, the risk of injurious and lethal vessel strike interaction.The impacts of other stressors are more limited in space and time, diffuse, or not likely to result in adverse effects to Rice’s whale.
The reasonable and prudent alternative (RPA) requires the following as it relates to vessel activity in the action area. More detail on p. 601:
Immediately begin to use technology to enable Rice’s whale vessel strike avoidance and monitoring of presence of Rice’s whale.
Establish an expert working group to support development and implementation of a Rice’s whale vessel strike avoidance technology plan (RW Tech Plan)
Improve understanding of Rice’s whale vessel strike risk associated with the proposed action
Develop a Rice’s whale vessel strike avoidance technology plan (RW Tech Plan)
Undertake independent peer review
Implement Rice’s whale vessel strike technology plan
Monitor Rice’s whales to ensure no likelihood of jeopardy during RPA implementation
Comment: Because the risk to the Rice’s whale in the central and northwestern GoA is highly speculative (see analysis by Darren Ireland), the RPA is arguably excessive. However, I like the RPA’s technological and management system focus.
Unsurprisingly, Earth Justice et al found the NMFS opinion inadequate and filed a suit (attached) in Maryland calling on the court to vacate the opinion and grant injunctive relief.
How can they sue in a Federal court in Maryland, far away from the Gulf? The venue was ostensibly chosen because NMFS headquarters are located in a Maryland suburb of DC. The Maryland court is also likely to favor the plaintiffs, which may have been a factor in the choice of venue. It’s a great country! 😉
John Smith’s excellent decommissioning presentation at the recent Western States Petroleum Assoc. luncheon in Santa Barbara is attached. John used an amended version of Bob Byrd’s OTC powerpoint, adding slides on the proposed California Marine Legacy Act amendments.
For those who have been following the Santa Ynez Unit story, Harmony, Heritage, and Hondo are the platforms in that unit. Platform Harmony, where production resumed on the date of John’s presentation (5/15), is in 1198′ of water and is one of the world’s largest offshore structures.
The Administration has not yet explained the decision to allow the Empire Wind project to go forward. I suspect the following points apply:
Attorneys advised, probably correctly, that the Administration would likely lose this case in the courts. Although the Secretary of the Interior has broad authority under OCSLA to suspend operations, he would need strong justification to do so indefinitely. Equinor has invested $billions in the project and their contractual rights would be difficult to abrogate.
Equinor is 2/3 owned by the Norwegian govt, which engaged in diplomacy on Equinor’s behalf. Jens Stoltenberg, former PM of Norway and NATO chief, commented on X: “I commend the Trump Administration for our great cooperation in reaching an energy deal that allows Equinor to resume construction of Empire Wind. This will benefit both our countries & deliver energy to thousands of US households.”
The project has strong support from trade unions.
NY Gov. Hochul appears to have relaxed her position on gas pipelines: “I also reaffirmed that New York will work with the Administration and private entities on new energy projects that meet the legal requirements under New York law.”
A post on X by Protect Our Coast NJ summarizes the position of project opponents: “There are no words. There was a shocking announcement last night that the federal government reversed course on the Empire Wind Project. We were stunned to see this news. We believe that offshore wind anywhere is a terrible idea. And this project off New York and New Jersey lies in an especially important area—from a national security, environmental and economic perspective. We supported the President’s policy against offshore wind development. And we celebrated Secretary Bergum’s decision to stop the Empire Wind project a few weeks ago. At the time, he said Equinor ‘rushed through by the prior administration without sufficient analysis or consultation among the relevant agencies as relates to the potential effects from the project.’ What changed in the past six weeks? Offshore wind is an extremely expensive, inefficient and unreliable source of power. It harms wildlife, including some of the most endangered mammals on planet Earth. We will fight to protect our coastal and marine ecosystems from the devastation brought by offshore wind construction and operations. We won’t stop until every scrap of steel is removed from the ocean. And we will work to ensure that government officials fully understand the ramifications to public safety, commerce and national defense Empire Wind represents.“
“There have been voices saying that Equinor has kind of been given an out here for a bad project,” Fløtre said. “It’s not a top project from a profitability perspective. At the same time, it’s so mature that I think Equinor still sees a lot of prestige in getting this done and have quite a lot of investments into it already.”
Bud's Offshore Energy (BOE) 