The attached BSEE document provides guidance for determining pollution inspection frequencies for unmanned facilities. Thoughts:
Reasonable risk-based approach
A minimum of bi-weekly visual and physical inspections for low risk platforms producing dry gas
Any platform with significant oil production and storage, and no real time monitoring system, will have to be visually inspected at least every 3 days (daily if other risk factors apply) and boarded weekly
Any platform that had spillage totaling > 1 bbl in the past 2 years will have to be visually inspected every other day and boarded weekly.
Provides for the application of technology (cameras, drones, innovative monitoring systems) to reduce inspection frequencies.
“On Sept. 16, 2024, a routine helicopter approach at an offshore facility nearly resulted in a serious accident due to a failure to follow proper helideck procedures. Before landing, the helicopter pilot visually confirmed that a nearby crane was securely stowed and stationary (Figure 1). However, as the helicopter neared the helideck, the crane operator unexpectedly raised the crane boom, bringing it alarmingly close to the landing area as the helicopter was 10 feet from touchdown. The pilots swiftly executed a go-around maneuver, successfully avoiding a collision and ensuring the safety of the crew and passengers onboard.”
BSEE: Vineyard Wind is still prohibited from installing blades, producing power or conducting any activity on the damaged A-38 turbine.
GE: We are “really now getting to a point of shifting back to execution out at sea.” (Not at all what BSEE said.)
BSEE: BSEE may permit other specific activities after a risk analysis has been performed and mitigations adopted.
GE: We were “granted approval to return to installing new blades on turbines at the project once stringent safety and operational conditions are met.” (Positive spin of the BSEE statement implying that approval is assured.)
BSEE:Root cause analysis of the blade failure has not yet been provided to BSEE.
GE: “We have finalized root cause analysis and confirm the blade at issue at Vineyard Wind was caused by a manufacturing deviation from our factory in Canada.” (Then why doesn’t BSEE have the analysis? Is the Canadian plant being scapegoated?)
BSEE:No timetable for completion of BSEE investigation (This could present a dilemma for BSEE. How do you allow the resumption of blade installation and power generation before the investigation has been completed? Will the report be held until the Harris or Trump administration gives the go-ahead?)
The attached letter was obtained by the Nantucket Current through a FOIA request. Key points:
Vineyard Wind power generation and blade installation suspension order remains in effect.
Vineyard Wind directed to conduct a site-specific study that evaluates the environmental harm and other potential damage from the blade failure, and to identify potential mitigation measures.
Vineyard Wind was required to submit a plan for the study by Oct. 11. It’s not clear whether the plan was submitted.
The study must include a mass balance of unrecovered debris material based on the weight of debris recovered and the weight of the subsea debris retrieved.
Comments:
The study requirement is appropriate given the significance of the blade incident and the implications for offshore wind development.
Why was a FOIA request needed to learn about the study requirement?
A helideck incident killed 4 workers in 2022. Why are we still waiting for the final NTSB report?
The most recent Coast Guard – BSEE MOA for fixed platforms added to helideck regulatory uncertainty by assigning decks and fuel handling to BSEE and railings and perimeter netting to the Coast Guard. How does that make sense?
As is the case with all safety regulations, a systems based approach is needed.
Despite the muddled regulatory regime, BSEE is showing strong leadership in addressing helideck safety.
The broader issue of regulatory fragmentation is an important risk factor that needs to be addressed.
David Scarborough, Island Operating Co., was one of the 4 workers who died in the 2022 crashat a West Delta 106 platform.
New Bedford Light: The Rolldock Sun leaves New Bedford on Friday with two blades visible. Credit: Courtesy of West Island Weather
Per the New Bedford Light, the turbine blade delivery vessel Rolldock Sun was seen on Friday carrying at least two blades out of New Bedford. It was not headed for the Vineyard Wind site. According to vessel tracking websites, the Rolldock Sun was en route to the Port of Cherbourg, where GE Vernova has a blade manufacturing facility.
The most likely explanation for returning the blades to Cherbourg is that defects were detected or suspected. The blade that failed, reportedly as a result of a manufacturing issue, is probably not the only one that was defective.
The New Bedford Light asked GE Vernova, Vineyard Wind, and the Federal regulator BSEE why the blades were being transported to Cherbourg. They received the following responses (my comments in parentheses):
GE Vernova: “No comment on this matter.” (This is the worst possible response. In the absence of information, people are left to speculate. If there was no problem with the blades, why wouldn’t GE simply provide an explanation? Their non-response simply reinforces suspicions that the blades were defective. If that is the case, why not take credit for procedures that identified the suspect defects, albeit belatedly?
Vineyard Wind:“The weekend has gotten in the way of the information flow,” and they would share information should they hear anything. Another request for information was not answered as of noon Monday. (Not exactly confidence inspiring from the company whose blade failure littered beaches and the offshore environment. They are deservedly being watched, and need to be more transparent and responsive.)
BSEE:A BSEE spokesperson did not answer questions and said by email that the agency has no new information. (Disappointing, but not surprising.)
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
INCs are for 2024 as of 9/17/2024. A major platform has at least 6 well completions or more than 2 pieces of production equipment.
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.
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.
Chevron slide: Advances in seismic imaging help characterize deepwater development opportunities
A new JPT article features comments from BOE contributor Lars Herbst on advances in HPHT technology, control systems, sensors and transmitters, and automation that are facilitating the next era of deepwater development.
Well capping technology, which provides a tertiary well control capability, is an essential element of post-Macondo exploration and development. Lars points to the importance of BSEE’s unannounced drill program to verify that capping stacks can be transported and installed in a timely manner. Chevron expresses pride in leading a team that deployed and installed a capping stack in 6,200 feet of water in a drill monitored by BSEE. During that drill, a remotely operated vehicle (ROV) closed 10 valves to shut in a simulated well.
Exxon’s Jayme Meier aptly characterizes the challenge and excitement of deepwater development:
“You are floating on a surface, and you have to be able to pinpoint exactly where you’re going to land subsea hardware, exactly where you’re going to moor an FPSO and hit target boxes that are a few feet by a few feet, and they’re 6,000 ft below you,” she said. “It is the most exciting thing that I’ve ever been involved in. And it involves technology, technical know-how, and an ability to really plan the base plan and the contingency plan.”
Advances in deepwater technology are indeed impressive, but continuous improvement must always be the objective. In that regard, Lars rightfully emphasizes the importance of sustaining research through the industry’s up and down cycles.
WASHINGTON — The Department of the Interior today announced that Bureau of Safety and Environmental Enforcement (BSEE) Director Kevin M. Sligh will depart his position effective September 6, after serving in the role for the past two and a half years. Kathryn (Kati) E. Kovacs, who serves as Deputy Assistant Secretary for Land and Minerals Management, will assume leadership of the bureau.
A cornerstone of Director Sligh’s tenure was a focus on the enhancement of BSEE’s emergency response capabilities. This included the first capping stack exercises in a decade, critical high-stakes operations designed to demonstrate the bureau’s readiness to rapidly seal off uncontrolled well blowouts on the Outer Continental Shelf (OCS). In addition, BSEE implemented improvements to its capabilities at its National Oil Spill Response Research and Renewable Energy Test Facility (Ohmsett), where new technologies and training are helping the United States and the international community better plan for and respond to oil spills and advance new renewable energy science and technologies. These efforts were essential in testing and proving BSEE’s ability to manage potential offshore incidents effectively, ensuring that the bureau and industry responders are equipped to act swiftly and efficiently if needed.
In her current role, Kovacs has had oversight over BSEE, focusing on their regulatory agenda. Thanks to both Kovacs’ and Sligh’s leadership during the Biden-Harris administration, the Department made significant progress in expanding its oversight of renewable energy sources, including the enactment of a final rule that transferred safety and environmental compliance responsibilities for offshore renewable energy from the Bureau of Ocean Energy Management (BOEM) to BSEE. The rule recognized that the scopes of the bureaus’ roles and responsibilities had matured since they were created more than a decade ago following the Deepwater Horizon tragedy and supports the Department’s commitment to independent regulatory oversight and enforcement in the renewable energy program.
Prior to joining the Department in April 2022, Kovacs was a professor of law at Rutgers University. Kovacs’ public service career also includes 12 years in the Department of Justice’s Environment and Natural Resources Division, Appellate Section and service as a senior advisor to the director of the Bureau of Land Management in 2016. Kovacs also served in the Baltimore City Law Department as an attorney and clerked for former Chief Judge of the Maryland Court of Appeals Robert C. Murphy. She is a graduate of Yale University and the Georgetown University Law Center.
Interestingly, on 18 Sept., Ms. Kovacs will be making a presentation at the Case Western Reserve School of Law entitled Regulating Energy and Land Management at the Department of the Interior. There is no charge to register.
Bud's Offshore Energy (BOE) 