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Posts Tagged ‘California’

Despite scientific support, California’s “rigs to reefs” program has made little progress. Comments in yesterday’s LA Times article help explain why:

Fed by concerns from some environmental advocates and a skepticism about the motives of California’s billion-dollar oil industry, the Rigs to Reefs program that passed in 2010 was so complicated by political compromise that the permitting process became almost unworkable, (State Sen.) Hertzberg said.

Not a single oil company has applied in the history of the program, according to the State Lands Commission, which has jurisdiction over state waters.

LA Times

“Oil companies want a clear path to compliance,” he said. “They’re operating in many cases at a loss, but it’s cheaper to operate at a loss than it is to face millions for decommissioning.”

Gary Brown, Orange County Coastkeeper

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Veteran marine science advocate Jerry Schubel, former president of Long Beach’s Aquarium of the Pacific, is among those pushing for offshore oil platforms to be transformed for new ocean uses. He points out that the underwater portion of the structures already are a boon to marine life.

“They have enormous value as ecosystems because of the life that has grown on and around them,” he said.

He points out that other states have rigs-to-reefs programs — and California does as well, though it needs funding before it can function. Once the ball gets rolling, oil companies could be tapped to cover costs with fees drawn from the money they would save by not having to haul dismantled rigs ashore. Schubel estimated that turning platforms into reefs could cut decommissioning costs in half.

But Schubel says artificial reefs should be just the beginning. How about fish farms? Research labs? Windmills? Hotels for divers?

“The uses,” he said, “are limited only by our imagination.”

Orange County Register

Well said Dr. Schubel! For a full list of alternative uses for offshore platforms see the official Rigs-to-Reefs+++ page.

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Never Let a Good Crisis Go to Waste - FocusCFO

A group of environmental organizations demanded Wednesday that the Biden administration suspend and cancel oil and gas leases in federal waters off the California coast after a recent crude oil spill.

NBC LA

While not the disaster that some had predicted, this spill is another setback for California offshore production. However, cancellation of the remaining producing leases would be a very difficult and costly proposition for the Federal government. At this time, the Beta Unit operator appears to be minimally responsible for the spill, so what would be the basis for cancelling those leases? Cancelling other producible leases would be even more problematic.

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The piece small challenge
Platform Harmony Jacket

For those interested in California offshore decommissioning, attached is an excellent update presented at a 2020 forum by my former colleague John Smith.

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The troubled past of Platforms Hogan and Houchin extends into California State waters. In the 1990’s, Signal Hill and affiliates launched plans to drill directionally from Hogan into adjacent State leases 4000, 7911, and 3133 (see map above). These plans were dubious from the outset given MMS (Federal regulator) concerns about Hogan’s structural integrity. The planning process was never successfully concluded and the 3 State leases were terminated in 2019. For full details see this California State Lands Commission report:

In a related action, the State is suing Signal Hill for unpaid rentals on the pipeline lease that carried production from Hogan to shore. The amount due is approximately $287,000.

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Good find by Cheryl Anderson:

Platform Hogan, Santa Barbara Channel

A Marine with the 11th Marine Expeditionary Unit’s maritime raid force searches the oil platform Hogan for threats during an exercise July 10. The MRF, along with a section of the unit’s aviation combat element, Marine Medium Helicopter Squadron 268 (Reinforced), and command element, are taking part in a large-scale exercise with ocean and urban-based scenarios.

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canoe caulked with asphaltum from natural seeps

The first consumers of petroleum used oil that seeped to the surface naturally.  Native Americans in California used petroleum seepage to caulk their canoes.  Marco Polo witnessed oil being recovered from seeps in 1264 in Baku (then part of Persia).

Drake Well, 1859, Titusville, PA

Natural seeps helped Colonel Drake target the first commercial oil well in the U.S. (Titusville, PA, 1859).  The amount of oil that seeps to the earth’s surface is surprisingly high.  In fact, a Norwegian Petroleum Directorate article on natural seeps estimates that “at least 1/3 of all oil formed below ground escapes to the surface as seepage.”

Natural seepage has increasingly factored into the offshore drilling debate.  The MMS Oil Spill Fact Sheet notes that “natural seeps introduce 150 times more oil into U.S. marine waters than do OCS oil and gas activities.” These data are intended to provide context, not to downplay the significance of drilling and production spills.  A large spill is an undesirable event at the location where it occurs,  regardless of how the spill’s volume compares with  regional, national, or international seepage totals.

Natural Seeps, Coal Oil Point

A California advocacy group, Stop Oil Seeps, has taken the “seep argument” a step farther by promoting  offshore production as a means of reducing natural seepage and the associated air and water pollution.

While SOS’s position is interesting and perhaps justified for areas like Coal Oil Point (Santa Barbara Channel),  not all production prevents or reduces seepage.  Offshore oil and gas seepage results when hydrocarbon-bearing formations are exposed to the sea floor either directly or via fractured or permeable overlying sediments.  Where such conditions do not exist, oil and gas production will not reduce seepage.  SOS’s enthusiastic support for California offshore production is refreshing, but advocates should exercise caution in making claims regarding seepage reduction.  Prospects for seepage reduction from offshore production range from highly likely (Platform Holly and Coal Oil Point) to highly unlikely (deep formations protected with impermeable cap rock).

While we applaud their enthusiastic support for offshore production, the SOS plan raises a number of questions:

  1. Is SOS suggesting that offshore production only be allowed if such production will reduce seepage?
  2. How much can offshore production reduce overall seepage in the region?  Is it cost-effective and feasible to achieve significant, long-term reductions in seepage that has existed for thousands of years?
  3. If the objective is to produce oil and gas, and generate the associated revenues, why not say that straight away?  Why is seep reduction necessary to justify responsible offshore production?
  4. Since the resources of the OCS are owned by all Americans, how does California justify “negotiating to retain the full fees and royalties for federal OCS leases and production revenue.”  Should Louisiana, Texas, Alaska, and other states also receive all fees and royalties for production from Federal waters?  Should these payments be retroactive?  Should states also receive all royalties and fees for wind and hydrokinetic energy produced in Federal waters?

While Platform Holly may be a negative spillage facility  (i.e. Holly’s seep reduction may significantly exceed the platform’s production spillage), this type of seepage reduction has not been demonstrated at other platforms.  Decisions on offshore exploration and development should be driven by the economic, energy security, and environmental benefits.  To the extent that production reduces natural seepage, all the better.  However, seepage reduction is not a primary reason for producing offshore oil and gas.

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The case for increasing production offshore California is relatively straightforward:

  1. The oil is there and production could be increased relatively quickly.
  2. Because of existing infrastructure and advances in extended reach drilling technology, additional offshore facility needs would be minimal.
  3. The safety and environmental record, while not perfect, has been exceptional.  (Opponents and supporters of California offshore production should fully agree on one point: We must never forget the 1969 blowout, and must challenge operating practices that make these type of incidents possible.)
  4. An effective regulatory regime is in place.
  5. Both the State and Federal governments need the revenue.
  6. Importing 50+% of our petroleum is detrimental to our economy and has significant national security implications.
  7. 25 years of offshore leasing moratoria demonstrated that you don’t reduce domestic consumption by restricting domestic production.
  8. Because of common infrastructure and support service needs, offshore oil and gas operations are complementary to (and may accelerate) wind and hydrokinetic energy development.

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