Posted in energy policy, Offshore Wind, tagged BOEM, Gov. Kotek, Gov. Mills, Gulf of Maine, NEFSA, Oregon wind sale, wind sale on October 11, 2024| Leave a Comment »
The New England Fishermen’s Stewardship Association (NEFSA) is sending the attached letter to Maine Gov. Janet Mills along with a petition with over 2,500 signatures urging her to halt the development of offshore wind farms in the Gulf of Maine.
A Gulf of Maine wind lease sale is scheduled for Oct. 29.
The NEFSA cites the 9/27 letter from Oregon Governor Kotek that resulted in cancellation of the Oregon wind sale that had been scheduled for Oct. 15.
Posted in CCS, climate, energy policy, Gulf of Mexico, Regulation, tagged BOEM, carbon disposal, CCS regulations, Exxon, Gulf of Mexico, opposition to CCS, Repsol on October 10, 2024| Leave a Comment »
Despite false starts by Exxon and Repsol (see above summary), no carbon sequestration (disposal) leases may be issued or developed until implementing regulations have been promulgated. In that regard, no news is good news for those who are less than enamored with CO2 disposal in the Gulf of Mexico.
The implementing regulations will be controversial. Most operating companies prioritize GoM production over GoM disposal. Most environmental organizations are strongly opposed to CO2 disposal schemes that sustain fossil fuel production and benefit fossil fuel producers. Taxpayers are leery of subsidizing these projects and absorbing increased costs for energy and consumer goods.
The Administration is, of course, well aware of this opposition and will not be publishing implementing regulations prior to the election. The next Administration, regardless of the election outcome, will no doubt take a hard look at these issues before proposing regulations.
The few oil and gas producers that are rather cynically hoping to cash in on CO2 disposal in the GoM will therefore have to wait, perhaps for a long time.
Posted in energy policy, Offshore Energy - General, Offshore Wind, tagged Aquinnah Wampanoag, BOEM, Brad Kneaper, Confederated Tribes, Deb Haaland, lawsuit, offshore wind sale, Oregon, wind leasing deadline on September 23, 2024| Leave a Comment »
The Confederated Tribes of the Coos, Lower Umpqua and Siuslaw Indians (“Tribe”) filed a lawsuit against BOEM in Oregon Federal District Court. The lawsuit (attached) challenges BOEM’s cursory environmental review for the development of private offshore wind energy facilities in two areas off the Oregon Coast near Coos Bay and Brookings.
“The Tribe has consistently urged that BOEM delay moving forward with wind energy development until a better understanding is made of the impacts to fish, wildlife, the marine environment, and cultural resources important to the Tribe,” said Tribal Council Chair Brad Kneaper. “No one, including BOEM has an understanding on how wind development will impact the fragile marine environment. BOEM developed an environmental assessment document that narrowly focused on the impacts of the lease sale and completely turned a blind eye to the inevitable impacts that construction and operation of these private energy facilities will have on Coastal resources, the Tribe, and other residents.”
“The timeframe for wind development appears to be driven by politics, rather than what is best for Coastal residents and the environmental,” said Chair Kneaper.
This suit and the Aquinnah Wampanoag tribe’s call for a moratorium on offshore wind development have to be uncomfortable for Secretary of the Interior Deb Haaland given her Native American heritage.
BOEM’s front-loaded 5 year wind leasing plan (graphic below) may have been influenced by (1) the possibility that the upcoming elections could affect offshore wind policy, and (2) the legislative prohibition on issuing wind leases after 12/20/2024 unless an oil and gas lease sale is held prior to that date.
Given that the next oil and gas lease sale will be in 2025 or later, BOEM was perhaps motivated to hold wind sales prior to the 12/20/2024 deadline (with a bit of a buffer to issue the lease documents). Indeed, the wind leasing plan proposed 4 sales between August and October of 2024 and only a single 2025 sale. That 2025 wind sale is in the Gulf of Mexico, where industry interest in wind leases is, at best, tepid.
Posted in decommissioning, Gulf of Mexico, Offshore Energy - General, tagged BOEM, BSEE, Cox bankruptcy, Cox Operating, decommissioning, INCs, Natural Resources Worldwide, violations, W&T offshore, Whitney Oil and Gas on September 18, 2024| Leave a Comment »
The previously discussed sale of Cox assets in 6 GoM fields to W&T was completed in January for $72 million, $16.5 million less than the proposed price. W&T, an established GoM operator, believes they can increase the pre-bankruptcy production (8300 boepd) through workovers, recompletions, and facility repairs.
The extent to which W&T is assuming decommissioning liability for the Cox assets is unclear to this observer. Decommissioning information from W&T’s SEC filing is pasted at the end of this post.
In February, Cox won court approval to sell “about a dozen oil fields to Natural Resources Worldwide LLC for about $20 million following a bankruptcy court auction.” This sale is more concerning given that the purchaser has no operating history in the GoM, and scant information about the company can be found online. Perhaps they are affiliated with Natural Resources Partners L.P., an energy investment firm which “owns mineral interests and other rights that are leased to companies engaged in the extraction of minerals,” but “does not mine, drill, or produce minerals, has no operations, and conducts business solely in an office environment.”
Per BOEM data, Cox filed requests to assign a number of leases to Natural Resources Worldwide (NRW) in May, but those requests have yet to be approved. Hopefully, BOEM is taking a hard look at these requests and their obligations following the court auction. Decommissioning liabilities should be their number one concern. (Note: NRW was just listed as the operator of the former Cox platform at EI 361, so presumably at least some of those assignments have now been approved.)
According to BOEM’s platform data base, Cox and affiliates Energy XXI and EPL still operate 243 platforms, down from 435 in June 2023. Also per the data base, the Cox companies have not removed any platforms during 2023 or 2024 YTD, so the reduction in platforms is presumably the result of the W&T transaction. Most of the remaining Cox platforms are old – 16 of their 77 major platforms were installed in the 1950s!
Meanwhile, Cox and affiliates continue to be the GoM violations leader by far with 549 incidents of non-compliance (INCs) in 2024 YTD, 45% of the GoM total for all operators. No other company has more than 100 INCs (although Whitney Oil and Gas has a disappointing 93 INCs, including 33 facility shut-ins on only 65 inspections!)
| operator | platforms/ major platforms | warning INCs | component shut-in INCs | facility shut-in INCs |
| Cox | 209/69 | 407 | 44 | 4 |
| Energy XXI | 19/7 | 73 | 1 | 2 |
| EPL | 5/1 | 16 | 1 | 1 |
| Total Cox | 233/77 | 496 | 46 | 7 |
| Total GoM | 1519/736 | 831 | 317 | 68 |
From W&T’s quarterly SEC filing:
Contingent Decommissioning Obligations
The Company may be subject to retained liabilities with respect to certain divested property interests by operation of law. Certain counterparties in past divestiture transactions or third parties in existing leases that have filed for bankruptcy protection or undergone associated reorganizations may not be able to perform required abandonment obligations. Due to operation of law, the Company may be required to assume decommissioning obligations for those interests. The Company may be held jointly and severally liable for the decommissioning of various facilities and related wells. The Company no longer owns these assets, nor are they related to current operations.
During the three months ended March 31, 2024, the Company incurred $2.6 million in costs related to these decommissioning obligations and reassessed the existing decommissioning obligations, recording an additional $5.3 million. As of March 31, 2024, the remaining loss contingency recorded related to the anticipated decommissioning obligations was $20.8 million.
Although it is reasonably possible that the Company could receive state or federal decommissioning orders in the future or be notified of defaulting third parties in existing leases, the Company cannot predict with certainty, if, how or when such orders or notices will be resolved or estimate a possible loss or range of loss that may result from such orders. However, the Company could incur judgments, enter into settlements or revise the Company’s opinion regarding the outcome of certain notices or matters, and such developments could have a material adverse effect on the Company’s results of operations in the period in which the amounts are accrued and the Company’s cash flows in the period in which the amounts are paid. To the extent that the Company does incur costs associated with these properties in future periods, the Company intends to seek contribution from other parties that owned an interest in the facilities.
Posted in decommissioning, energy policy, Offshore Energy - General, Offshore Wind, tagged BOEM, BSEE, Cox bankruptcy, decommissioning, financial assurance, Platforms Hogan and Houchin, Plug Offshore Wells Act, Vineyard Wind on September 17, 2024| Leave a Comment »
I’m not typically aligned with the sponsors of the attached “Plug Offshore Wells Act,” but the call for transparency is understandable given that taxpayer funds are, for the first time, being used to decommission offshore platforms in the Matagorda Island area of the Gulf of Mexico, massive liabilities associated with the Cox bankruptcy loom, and the Hogan and Houchin saga drags on without resolution.
The bill would require an annual report on well, platform, and pipeline decommissioning including applications, deadlines, and enforcement actions. BSEE does have a good facility infrastructure page for the GoM, but much of the information called for in H.R. 9168 is not publicly available.
Improved oversight of decommissioning requirements for offshore wind projects should also be considered in light of the precedent setting waiver granted to Vineyard Wind and BOEM’s “modernization rule” that relaxes financial assurance requirements for wind development.
Posted in energy policy, Offshore Energy - General, Offshore Wind, tagged assignments, BOEM, Ocean Wind leases, Orsted, selling leases, suspension of operations on September 12, 2024| Leave a Comment »
A media report informs that, as expected, Orsted is marketing the suspended Ocean Wind 1 and 2 leases. BOEM should deny any request to assign these leases. Here’s why:
Suspensions of Operations are for the purpose of providing additional time, where necessary, for diligent operators to meet development milestones and initiate energy production. They are not for the purpose of waiting for improved economic conditions or providing time to sell your leases.
Any request by Orsted to assign these leases should be denied. If BOEM wants to reissue the leases, they may do so at a future sale in accordance with their regulations at 30 CFR Part 285.
Posted in energy policy, Offshore Energy - General, Offshore Wind, Regulation, tagged Ack for Whales, biological opinion, BOEM, NOAA, Rice's whale, RIght Whale, Vineyard Wind on September 5, 2024| Leave a Comment »
A new NOAA biological opinion finds that that pile-driving noise associated with the Vineyard Wind project is likely to adversely affect, but not likely to jeopardize, the continued existence of whales, fish or sea turtles listed under the Endangered Species Act (ESA).
This opinion was predictable. On the one hand, denying the adverse effects from extensive pile driving would have been unacceptable to NOAA scientists. On the other hand, a jeopardy finding would have been unacceptable to their political leadership.
If you are wondering how NOAA managed to thread that needle, you will have to wait until their report is publicly available. On Aug. 23, NOAA said the opinion would be available in their library in about 10 days, but the opinion has still not been posted. How do you announce such significant findings without, at the same time, releasing the report?
Understandably, the Nantucket environmental organization ACK for whales is not pleased with either NOAA’s announcement or their failure to release the report:
“We are disappointed NOAA announced the conclusions of its bi-op on the Vineyard Wind 1 construction without releasing the report or the data on which it relied,” ACK For Whales stated. “NOAA’s own data show that in 2023, there were 151 marine mammal strandings in Massachusetts alone with 75 occurring from Jun 2023 to Dec 2023, the months that pile driving was active. This compares to 77 strandings for all of 2015, before OSW activity started – essentially a 100 percent increase. Most of those strandings in 2023 (n=55) occurred from Oct to Dec when VW was racing to get foundations installed. Out of the 47 bases installed in 2023, 68 percent were installed in the last three months of the year.”
In January, BOE raised concerns about the collaborative BOEM-NOAA-wind industry strategy to protect the right whale. Per that strategy, BOEM and NOAA view themselves as partners with the wind industry. Is this biological opinion an example of NOAA working with their partners in accordance with their joint strategy? While regulator-industry collaboration is essential for effective offshore development, be it wind or oil and gas, regulators and operating companies have distinctly different missions and responsibilities, and should not be viewed as partners.
The sharp contrasts between the operating restrictions for the right whale (Atlantic wind) and the Rice’s whale (Gulf of Mexico oil and gas) demonstrate the inconsistencies in ESA regulation. Are major energy companies partners when developing wind projects and adversaries when producing oil and gas?
Lastly, a letter from NOAA’s Lead Biologist that is attached to that post further points to a disconnect between scientific concerns and wind energy regulatory policy, and is thus germane to this discussion.
Posted in energy policy, Offshore Wind, tagged BOEM, BSEE, Cape May County, New Jersey Board of Public Utilities, Ocean Wind leases, Orsted, suspension of operations on August 28, 2024| Leave a Comment »
Posted in accidents, energy policy, Offshore Energy - General, Offshore Wind, tagged BOEM, BSEE, Macondo blowout, regulatory fragmentation, turbine blade failure, Vineyard Wind on August 14, 2024| 2 Comments »
From the Nantucket Current:
Additionally, ultimate authority over the wind farm remained unclear, with various federal agencies claiming responsibility over different portions of the permitting, licensing, review, and operation of the wind farm.
“Sometimes I have a hard time figuring out, who do we talk to? Who is going to keep us safe? Who is the responsible boss here? Who is going to make the hard decision?” Select Board member Matt Fee asked.
As previously discussed, regulatory fragmentation is a safety and environmental risk factor.
Causes of regulatory fragmentation:
The Dept. of the Interior’s division of responsibilities for offshore wind, which was finalized in January 2023, inexplicably assigns review and approval of Construction and Operations Plans to the Bureau of Ocean Energy Management (i.e. the land manager, lessor, and wind energy promoter) rather than the Bureau of Safety and Environmental Enforcement (i.e. the principal regulator of the activities described in those plans).
More significantly, the offshore wind responsibilities of the 2 bureaus are so intertwined (as is also the case for offshore oil and gas), that attempts to separate the functions have, at a minimum, created inefficiencies and increased regulatory and operational costs.
FTR, the idea that having the BOEM and BSEE functions combined in a single bureau, as was the case with the predecessor bureau (MMS), had anything to do with the Macondo blowout is a complete fallacy. Regarding the accusations that were made toward MMS, the Chief Counsel for the national commission that investigated the tragic incident found no evidence that ethical lapses on the part of MMS employees played any role in causing the blowout.
There were important regulatory changes made after the Macondo blowout. These included capping stack requirements, mandatory safety management systems, and updated rules and standards for cementing/zonal isolation and blowout preventer systems. None of these improvements were precipitated by or dependent on the division of MMS into two bureaus.
Posted in accidents, energy policy, Offshore Wind, Regulation, tagged BOEM, GE Vernova, Norway, Offshore Wind, quality control, safety culture, Siemens Gamesa, turbine blade failure, Vestas, Vineyard Wind on August 8, 2024| 1 Comment »
As the above examples illustrate, turbine blade failures, like the Vineyard Wind incident near Nantucket, are not unique to GE Vernova. GE’s rivals, Siemens Gamesa and Vestas, have also experienced serious quality control issues.
Per ReviewEconomy (2023), “Unexpected and increasing wind turbine failure rates, largely in newer and bigger models, are savaging the profits of some of the world’s biggest manufacturers, as Siemens Gamesa, GE and Vestas report heavy repair and maintenance losses.”
All 3 manufacturers will be providing turbines for US Atlantic wind development. The table below lists the manufacturers for active projects with approved Records of Decision (RODs).
In light of the manufacturing challenges, all 3 companies report increased emphasis on quality control. Why has quality control to date been inadequate and how will the past problems be corrected?
Has the wind industry’s sense of entitlement, as evidenced in their tax credit, rate increase, and departure expectations, affected their safety and quality culture? Has industry and governmental wind energy promotion rushed development and compromised design and fabrication decisions? It’s time for wind developers, manufacturers, and regulators to make sure their priorities are in order.
| project | turbine towers | manufacturer |
| Coastal VA Offshore Wind | 202 | Siemens Gamesa |
| Revolution Wind | 100 | Siemens Gamesa |
| Sunrise Wind | 94 | Siemens Gamesa |
| Atlantic Shores South | 200 | Vestas |
| Ocean Wind 1 | 98 | GE Vernova |
| Vineyard Wind 1 | 100 | GE Vernova |
| Empire Wind 1 & 2 | 147 | Vestas |
| New England Wind (phases 1&2) | 150 | Vestas |
Bud's Offshore Energy (BOE) 