BOEM’s land rush approach to offshore wind leasing will add up to 1086 turbine towers and 28 offshore substations (OSSs) in the Atlantic just from active projects with approved Records of Decision (RODs). (See the table below.) Another 17 active Atlantic commercial projects have yet to reach the ROD stage. Those projects should increase the total number of structures to >3000. Five more Atlantic wind lease sales are scheduled.
project
turbine towers
offshore substations
Coastal VA Offshore Wind
202
3
Revolution Wind
100
2
Sunrise Wind
94
1
Atlantic Shores South
200
up to 10
Ocean Wind 1
98
up to 3
Vineyard Wind 1
100
2
Empire Wind 1 & 2
147
2
New England Wind (phases 1&2)
150
5
Per the Construction and Operations Plan (COP) for Vineyard Wind, the topsides for a conventional electrical service platform (ESP) (also known as an offshore substation or OSS) are 45 x 70 x 38 m, which is larger in surface area than a typical 6-pile oil and gas platform (~30 x 30 m), and is comparable in size to a large jackup drilling rig.
The Atlantic Shores plan calls for 10 small, 5 medium, or 4 large OSSs. (Uncertainty regarding the number and types of structures seems rather common in wind COPs.) The large OSSs have topsides that are 90 m by 50 m and rise to 63 m above MLLW. These are large offshore structures whether for wind or oil and gas.
Per BOEM, the “Rule to Streamline and Modernize Offshore Renewable Energy Development” is intended to “make offshore renewable energy development more efficient, [and] save billions of dollars. Unfortunately, the savings associated with relaxed financial assurance requirements translates to increased risk for power customers and taxpayers.
BOEM signaled their intentions on offshore wind (OSW) decommissioning three years ago when they granted a precedent setting financial assurance waiver to Vineyard Wind. Despite compelling concerns raised by commenters, the “streamlining” regulations codified this decision.
No one knows what the financial future will be for wind projects and the responsible companies. Financial assurance should therefore be established when the structures are installed, not years into the future as allowed by the revised regulations. What leverage will BOEM have then?
Nordsee One substation, Germany. Rystad Energy projects 137 new power substations offshore continental Europe this decade, requiring $20 billion in total investment.
For decades, Gulf of Mexico operators have reported facility evacuation and production curtailment data to MMS/BSEE as tropical storms or hurricanes approached. Requirements for this reporting are found in the regulations (30 CFR 250.192(a)) supplemented by NTL 20I5-G02.
Operators must submit reports by 11:00 a.m. (CT) daily throughout the period of evacuation and shut-in with the understanding that BSEE will post the compiled data by 1 pm CT. This reporting has been diligently accomplished for decades and MMS/BSEE posted the data each day, including weekends and holidays, without fail. Everyone in industry and government understood the importance of safely evacuating personnel, shutting down production, and ensuring that these hurricane data were made available to the public each day. (All of the daily updates for 2011 onward can be found here.)
On Wednesday, July 3, Shell informed the media that they had begun evacuating non-essential personnel and shutting-in production at certain facilities. Both Shell and Chevron issued general statements on the status of their operations on Thursday, July 4. Both companies no doubt submitted the required reports to BSEE, as did other companies with operations near the projected path of the storm.
BSEE failed to post any evacuation and shut-in data on any date from July 3 through today (July 8).
Beryl missed the heart of the Gulf of Mexico basin, but Shell and other companies with facilities in the more westerly areas evacuated personnel and curtailed production. BSEE’s unprecedented failure to post this information needs to be addressed before more significant storms threaten offshore personnel and production in the Gulf.
Shell evacuated non-essential personnel and shut-in production at Perdido (pictured)
Danish Tax Minister Jeppe Bruus boasts that other countries will be inspired by the world’s first tax on livestock emissions. Are you inspired?
Not at all inspiring was Denmark’s weak-kneed response to the sabotage of the Nord Stream pipelines near the Danish island of Bornholm. After 17 months of investigation, Denmark meekly declined to pursue criminal charges or even to release a report on their findings. How does the “world’s climate leader” simply shrug its shoulders after investigating a massive methane release in their waters?
A recent professional paper concludes that 478,000 tons of methane were released to the atmosphere as a result of the Nord Stream sabotage, making this “the world’s largest natural gas leak.” The Nord Stream sabotage thus released 3.6 times the amount of methane (133,000 tons) contributed by Danish livestock in an entire year. The total amount of methane released by the Nord Stream pipelines is also 2.5 times the entire amount attributed by EPA to all Gulf of Mexico producers in 2020.
Winterfell from the water surface (5400′ water depth). The field is produced with subsea wells tied back to Oxy’s Heidelberg platform, which is 13 miles away. Deepwater development is characterized by high energy density and low facility density.
Beacon Offshore Energy (BOE, but not this blog 😉) and its partners, all independent producers, have initiated production at the Winterfell project in the Green Canyon area of the Gulf of Mexico. The 3 initial wells are expected to produce 20,000 bbls of oil equivalent (again BOE 😉) per day. The Winterfell partners are:
On July 1, U.S. Federal Judge James Cain Jr. (Western District of Louisiana) issued a preliminary injunction suspending DOE’s LNG exports “pause.” The judge’s full ruling is attached.
Judge Cain: “It appears that the DOE’s decision to halt the permit approval process for entities to export LNG to non-FTA countries is completely without reason or logic and is perhaps the epiphany of ideocracy.”
Nothing subtle about that comment 😉
Despite the court order, the Administration seems intent on keeping the “pause” in place. Per White House spokesperson Angelo Fernández Hernández, “We remain committed to informing our decisions with the best available economic and environmental analysis, underpinned by sound science.” ????
Nearly 80% of current OCS gas production is from deepwater leases. This production is primarily associated (oil-well) gas that operators are rightfully required to market for resource conservation and environmental reasons. Expanding LNG marketing opportunities could thus improve the economics of deepwater development.
The other 20% of OCS gas production is largely from gas-well (non-associated) gas produced by independent companies that continue to operate in the shallower waters on the shelf. LNG sales could improve the challenging economics for these producers and increase the ultimate recovery of shelf resources.
Followers of the US OCS oil and gas program have observed some impressive chutzpah over the years, but a new law suit challenging the extension of Santa Ynez Unit leases raises the bar.
Groups that helped block every attempt to resume production in the Santa Ynez Unit are now suing to terminate the leases for non-production.Brilliant!🥇
“Without these extensions, each of the leases would have expired and ExxonMobil would have been required to permanently cease its oil and gas operations, plug its wells, and decommission its other infrastructure.”See the full text of the law suit.
EIA has released the April oil production data. The Federal waters of the Gulf of Mexico produced 1.831 million BOPD in April, which is essentially level with corrected March production (1.817 million).
GoM production fell more than 12% from nearly 2 million BOPD in September 2023 to 1.743 million BOPD in January 2024 before climbing back to 1.8 million BOPD over the past 3 months (see chart below). What’s up?
The mysterious Main Pass Oil Gathering (MPOG) system shutdown in November 2023 no doubt contributed to the decline, but that system was reported to be fully online in April. Based on the GoM data, the MPOG shutdown may have reduced production by 50-80,000 BOPD. That would account for less than half of the GoM decline since Sept 2023.
We may learn more about the MPOG shut-in volumes when the NTSB investigation report is published. (Don’t expect a report soon. The NTSB report on the Huntington Beach pipeline spill took nearly 2 years to complete. The final NTSB report on the deadly December 2022 GoM helicopter crash has still not been issued.)
In 2022, EIA projected that additional GoM capacity would offset production declines, but would not sustain crude oil production at levels of 2.0 million BOPD. That forecast has proven to be accurate.
Bottom line: 1.8 million BOPD does in fact appear to be the current GoM production baseline. The GoM is thus significantly under-performing BOEM forecasts. This should be a concern to those who support responsible OCS production.
In a major decision, the Supreme Court overturned the Chevron doctrine, which for four decades led judges to defer to how federal agencies interpreted a law when its language wasn’t clear. In a later post, we will speculate on how this ruling could affect the offshore regulatory program.
One of the most important principles in administrative law, the “Chevron deference” was coined after a landmark case,Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc., 468 U.S. 837 (1984). The Chevron deference is referring to the doctrine of judicial deference given to administrative actions. In Chevron, the Supreme Court set forth a legal test as to when the court should defer to the agency’s answer or interpretation, holding that such judicial deference is appropriate where the agency’s answer was not unreasonable, so long as Congress had not spoken directly to the precise issue at question.
Bud's Offshore Energy (BOE) 