Equinor’s Empire Wind project had been challenged by New Jersey congressmen and questioned by Norwegian investors. I suspect that Equinor saw the writing on the wall.
Posts Tagged ‘Equinor’
Secretary Burgum directs BOEM to order Empire Wind to cease construction
Posted in energy policy, Offshore Wind, tagged BOEM, Congressman Chris Smith, Congressman Van Drew, Empire Wind, Equinor, Secretary Burgum on April 16, 2025| Leave a Comment »
Equinor’s Empire Wind 1 project questioned by US congressman and Norwegian investors
Posted in Norway, Offshore Energy - General, Offshore Wind, tagged Congressman Chris Smith, Empire Wind, Equinor, poor return, Secretary Burgum, wind investments on April 4, 2025| Leave a Comment »
A letter from Congressman Chris Smith (NJ) to Sec. Burgum is attached. Excerpt:
I am writing to advise you that Equinor, a Norwegian Energy multinational is planning to move forward with construction of its Empire Wind 1 project off the coast of New Jersey and New York as early as this April.
This is an alarming development and should not be allowed before the comprehensive review of offshore wind ordered by President Trump’s January 20th executive order is completed. The executive order states that the assessment is needed to review the many shortcomings of the Federal wind leasing process including, “potential inadequacies in various environmental reviews required by the National Environmental Policy Act.”
Meanwhile, Norwegian investors have expressed dissatisfaction with Equinor’s renewable energy ventures. This Norwegian article raises concerns about Empire Wind 1, saying the project “could become a new industrial scandal.”
Based on the respective financial performance of oil producers, I think it’s fair to say that investors aren’t attracted to those companies because of their wind projects.
The Rosebank and Jackdaw saga (UK) and OCS Sale 257 (US)
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, UK, tagged Equinor, Jackdaw field, OCS Sale 257, Rosebank field, Shell, UK offshore oil and gas on February 12, 2025| 2 Comments »
The recent Rosebank and Jackdaw decision in the UK is similar to the OCS Sale 257 fiasco in the US. In both cases, the court ruled that downstream GHG emissions weren’t adequately considered in the environmental reviews.
In the case of the Rosebank and Jackdaw fields, Lord Ericht ruled that the environmental assessment must take into account the climate effect of downstream emissions resulting from the consumption of oil and gas produced at those fields.
The Sale 257 decision was even more extreme in that Judge Contreras ruled that BOEM failed to consider the “positive” effect that higher prices (which might result from lower US offshore production) would have in reducing worldwide demand and the associated GHG emissions.
Regardless of one’s opinion on the extent to which GHGs affect the climate, halting UK and US projects will have virtually no effect on international oil and gas demand. That demand will be satisfied by other suppliers who will reap the economic benefits.
The Sale 257 decision was overturned by legislative action.
Presumably, revised environmental assessments, will allow the previously approved UK projects, for which some facilities have already been constructed and installed, to go forward. The UK government has been considering how to calculate downstream emissions. The model will no doubt yield outcomes that are highly uncertain.
In the meantime, the UK sector of the North Sea, unlike its Norwegian counterpart, continues to flounder.
Wisdom from the Scotsman regarding UK offshore production:
“We need more of it because even the most ardent supporters of renewable energy, the most vocal proponents of net zero, quietly admit oil and, especially, gas will be needed for a couple of decades at least. That obvious truth, that inarguable necessity, is not, apparently, enough for ministers to encourage UK production, however, or temper their rhetoric around renewables.“
“Allowing our rigs and refineries to power down and relying on other countries to keep the lights on still seems a little, well, counter-intuitive. We will import oil and gas but not produce it while happily exporting contracts, skills and jobs overseas? The practical impact of Labour’s refusal to grant new exploration licences in the North Sea might remain unclear but the message it sent was absolutely crystal.“
Another loss of power to the Johan Sverdrup field heightens concerns about Norway’s electrification policy
Posted in accidents, energy policy, Norway, Offshore Energy - General, tagged Equinor, Johan Sverdrup, Norway, platform electrification, power outage on February 6, 2025| Leave a Comment »
On Tuesday, Equinor halted all production from the Johan Sverdrup field, western Europe’s biggest producer. An outage in the offshore power system has been cited as the cause.
A Jan. 26, 2022 BOE post questioned Norway’s electrification policy for offshore platforms. Another post discussed a loss of power to the Sverdrup field only 10 weeks ago.
In addition to the production losses, these incidents increase safety risks and onshore electricity prices with no net environmental benefit.
Hopefully, the investigation reports will be posted so that the lessons learned can be shared.
Another major setback for offshore wind as Shell exits the Atlantic Shores project
Posted in energy policy, Offshore Wind, tagged Atlantic Shores project, Equinor, irrational exuberance, Shell withdraw, US offshore wind on January 31, 2025| Leave a Comment »
The irrational exuberance that peaked at the Feb. 2022 New York Bight Wind Sale already seems like a distant memory.
In their quarterly earnings report released on Jan. 30, Shell disclosed a $996 million impairment associated with their withdraw from the controversial Atlantic Shores wind project offshore New Jersey.
Shell is no longer a participant in any US offshore wind projects. This leaves Equinor (2/3 Norwegian govt ownership) as the only major oil company pursuing US offshore wind development.
Those Atlantic states that have linked their economic future to offshore wind better be reassessing their energy strategy.
Equinor taking heat from Norwegian investors
Posted in climate, Norway, Offshore Energy - General, Offshore Wind, tagged Empire Wind, Equinor, green agenda, Norway, Offshore Wind, Orsted on January 22, 2025| Leave a Comment »
Equinor’s investment in Orsted and their Empire Wind project in the US Atlantic are featured in this DN article (translated to English). Excerpts follow:
Equinor’s investment of over 26 billion kroner in the Danish wind power company Ørsted has so far been a financial disaster – and now it’s going from bad to worse.
“We are very negative about the whole green initiative, as the return on the investments they make is far too low. When they also buy minority stakes in other green companies that we cannot count on, such as Ørsted, it means that we would rather own other oil companies.” Gaute Eie, Eika Kapitalforvaltning
The market has long been concerned that Equinor will throw money at renewable projects with low or no profitability.
In a recent note, Pareto analysts Tom Erik Kristiansen and Olav Haugerud point out that the Ørsted writedown does not bode well for Equinor’s own US projects either. They foresee a writedown of up to $1.1 billion, given that Equinor faces the same type of challenges as Ørsted.
Eie believes there is no reason why Equinor in particular should have a green initiative:
Aker BP is not doing green, Vår Energi is not doing green, and all the big oil companies are going back on this. Then we’ll see if Equinor has the guts to buy even more Ørsted shares, because now it’s 35 percent cheaper. If they do, we’ll have even fewer Equinor shares.
Sissener believes Equinor should rather focus on dividends and concentrate on oil and gas projects.
– We generally stay away from companies where the state is a major owner, because there you have to be so politically correct all the time. What we need are shareholder-friendly board representatives who know how to run a business and maintain control. In a broader perspective, this helps to destroy trust in Norwegian business.
As Norway considers cutting the cord to Europe, is transmitting electric power to offshore platforms good public policy?
Posted in climate, energy policy, Norway, Offshore Energy - General, UK, tagged Culzean field, electrification policy, Equinor, Johan Sverdrup, Norway, NPD, power from shore, power prices, Terja Aasland, Total on January 6, 2025| Leave a Comment »
“It’s an absolutely sh*t situation,” said Norway’s energy minister Terje Aasland reacting to electricity prices in the country that are six times that of the EU average.
The two ruling parties in Norway want to cut the two power inter-connectors that link the country with Denmark when they come up for renewal in 2026. The smaller coalition party, the Center Party, wants to revisit similar energy links with the UK and Europe.
A related matter is Norway’s push to power offshore platforms with electricity from shore. This policy makes neither economic nor environmental sense, and introduces new safety and operational risks.
This BOE post cites the obvious (per NPD): “The power from shore projects will lead to an increase in electricity prices in Norway.” The post also presents seven other reasons why powering those facilities from shore is not a good idea.
Meanwhile, Total’s plan to partially power the Culzean field (UK) with a floating turbine is similarly irrational. The scheme adds costs and risks with no apparent benefit.
Loss of power to Johan Sverdrup field raises further questions about Norway’s push to electrify offshore facilities
Posted in accidents, climate, Norway, Offshore Energy - General, tagged CO2, electrification policy, Equinor, gas turbines, Johan Sverdrup, Norway, power outage on November 20, 2024| Leave a Comment »
Production from Equinor’s important Johan Sverdrup field, which accounts for 755,000 bopd (36% of Norway’s oil production), was shut-in on Monday as a result of a power outage. Production was in the process of being restored on Tuesday.
According to Equinor, the outage was caused by overheating at an electric converter station onshore.
A 2022 BOE post questioned Norway’s push to power offshore platforms with electricity transmitted from shore. This incident reinforces those concerns. Summary:
- Most offshore platforms produce sufficient gas to support their power demands
- Assuming gas that is not used to power a platform is marketed and consumed elsewhere, the net (global) reduction in CO2 emissions from electrifying offshore platforms is negligible. (Perhaps there is actually a small increase in net emissions given the power required to transport the gas to markets and the emissions associated with onshore power generation).
- Offshore power demands are highly variable, especially when drilling operations are being conducted.
- Gas turbines are reliable, and capable of responding to variable power demand. Excess generation capacity is typically provided.
- Power from shore increases the cost of platform operations and could decrease ultimate recovery of oil and gas resources.
- Per NPD, electrification of the shelf will increase electricity prices for onshore consumers and increase the need for onshore facility investment.
- Gas turbines or diesel generators are still necessary to satisfy emergency power needs at the platforms.
- Long power cables are vulnerable to damage (accidental or intentional), as are onshore power stations.
I hope the investigation of this incident considers some of these broader electrification policy issues.
Hywind turbine maintenance completed; Equinor declares victory. California time frame?
Posted in California, Norway, Offshore Wind, UK, tagged California, Equinor, floating turbines, Hywind, North Sea, Norway, Scotland on October 22, 2024| Leave a Comment »
Equinor reports that all 5 Hywind turbines have been returned to service after being towed to Norway as part of a 4-month maintenance campaign.
Even though the turbines had only been in operation since 2017, Equinor puts a positive spin on the 4-month maintenance outage, declaring total victory:
“The successful completion of the maintenance campaign on Hywind Scotland is a testament to the collaborative efforts of our teams and partners. As the world’s first floating offshore wind farm, Hywind Scotland has demonstrated the immense potential of floating wind. Through this maintenance campaign, we’ve gained valuable insights that will help us refine maintenance practices and optimise this technology for the future. By sharing our learnings, we aim to contribute to the growth and development of the floating wind industry.”
Some of the folks in Scotland have a different take as evidenced in this video:
Meanwhile, the turbines planned for offshore Central California will also have to be towed to shore for major maintenance. Nearby harbor areas like Morro Bay (pictured below) would be overwhelmed by the large structures and the maintenance and repair operations. Central Coast residents are not enamored with “another attempt to industrialize the coast.” Towing the towers to LA/Long Beach, albeit rather distant from the leases, would seem to be the preferred option for such work.
Looking forward, the first power generation from floating wind turbines on the Central Coast is forecast for 2034. Betters may want to take the over!
Equinor buys 9.8% of Orsted – good counter cyclical investment or irrational pursuit of renewables goal
Posted in climate, energy policy, Norway, Offshore Wind, Uncategorized, tagged acquisition, Equinor, Norway, Offshore Wind, Orsted, renewable energy targets on October 7, 2024| Leave a Comment »
Equinor, which is 2/3 owned by the Norwegian government, has purchased a nearly 10% stake in offshore wind giant Orsted (50.1% Danish govt ownership).
With bp and Shell reducing their wind energy investments, Equinor’s Orsted acquisition is a contrarian move. Equinor is also the only major oil company that is still in the market for new US offshore wind leases.
While the Orsted acquisition does not appear to have been directed by the Norwegian government, the State’s 2/3 ownership of the company no doubt influences renewable energy targets and broader corporate strategy.
The initial market reaction to the Orsted purchase was negative (see chart below). On a day when most oil companies’ share prices rose in response to the jump in oil prices, Equinor shares opened sharply lower.
Bud's Offshore Energy (BOE) 