WASHINGTON (May 19, 2022) — During testimony before the U.S Senate Committee on Energy and Natural Resources today, Secretary of the Interior Deb Haaland confirmed that, despite delays in implementation from the previous Administration, the Interior Department will release the Proposed Program – the next step in the five-year offshore energy planning process – by June 30, 2022, which is the expiration of the current program. A Proposed Program is not a decision to issue specific leases or to authorize any drilling or development.
DOI
Posts Tagged ‘offshore oil and gas’
The June 30, 2022 deadline for releasing the Proposed OCS Leasing Program has been missed without explanation
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged 5 year leasing plan, DOI, offshore oil and gas on July 1, 2022| Leave a Comment »
Will the Manchin – Schumer talks lead to a timely resumption of offshore oil and gas leasing?
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged leasing, Manchin, offshore oil and gas, Schumer on May 27, 2022| Leave a Comment »
There won’t be a deal without significant energy production provisions and Manchin is on the record regarding the need for action on offshore oil and gas leasing. We’ll see what happens.
500 days
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, Regulation, Russia, tagged 500 days since the last offshore lease sale, Lease Sale 257, offshore oil and gas, Senator Kelly, Senator Manchin on April 4, 2022| Leave a Comment »
500 days (and counting) since the last US offshore oil and gas lease sale. Abbreviated chronology:
- 11/18/2020 – BOEM holds Gulf of Mexico oil and gas lease sale 256 (listing of all offshore oil and gas leases sales); WTI = $41.64/bbl
- 1/27/2021 – President Biden issues EO 14008 which pauses all oil and gas leasing on Federal lands, onshore and offshore; WTI = $52.81/bbl
- 6/15/2021 – Federal court in the Western District of Louisiana issues a preliminary injunction blocking the administration’s leasing moratorium
- 7/1/2021: WTI price reaches 75.23/bbl
- 8/11/2021 – White House urges OPEC to increase oil production.
- 8/16/2021 – The administration appeals the Louisiana Federal court injunction that blocked the leasing pause
- 8/31/2021 – BOEM issues Record of Decision (ROD) to proceed with Sale 257 Concurrently, a suit is filed in DC Federal Court to block the sale. WTI= $68.43/bbl
- 9/30/2021 – BOEM announces Lease Sale 257 as necessary to comply with the order of the Louisiana Federal Court. DOI will “continue its comprehensive review of the deficiencies associated with its offshore and onshore oil and gas leasing programs.”
- Oct/Nov 2021 – Media coverage sensationalizes Sale 257, a typical GoM lease sale, by focusing on the sale area, of which the area receiving bids is just a small fraction.
- 11/15/2021 – Press Secretary Psaki: “We believe the (Louisiana court) decision is wrong, and the Justice Department is appealing it. So it’s in the courts; it’s in a legal process. We’re required to comply with the injunction. It’s a legal case and legal process, but it’s important for advocates and other people out there who are following this to understand that it’s not aligned with our view, the President’s policies, or the executive order that he signed.” WTI = $80.85/bbl
- 11/17/2021: Sale 257 bids opened and announced despite pending litigation. In a surprising twist, Exxon was the sole bidder on 94 carbon sequestration tracts offshore Texas. Neither the Notice of Sale nor the environmental review announced or assessed carbon sequestration operations in Federal offshore waters. BOEM/DOI have not commented publicly on the CCS bidding.
- 11/26/2021: DOI issues report on the Federal Oil and Gas Leasing Program. With regard to the offshore program, the report is rather moderate in tone and no new deficiencies are identified.
- 1/27/2022: Judge Contreras, DC Federal Court, vacates Sale 257. The Judge agreed with the plaintiffs’ assertion that BOEM failed to consider the effect that reduced production (and thus higher prices) would have on foreign consumption and the associated GHG emissions. The judge not only decided in favor of the plaintiffs, but ruled that BOEM’s omission was so serious that the lease sale had to be vacated. The judge reached this decision even though (1) the five year leasing plan expires in June leaving the timing of any future sale very much in doubt and (2) all of the sale 257 bids, which are based on proprietary assessments, are now public information, thus compromising the integrity of the leasing process at the next sale (if and when that occurs). WTI= $87.61/bbl
- 2/8/2022: API and the State of Louisiana appeal the Sale 257 decision.
- 2/24/2022: Russia invades Ukraine
- 2/28/2022: The Administration announces that it will not appeal the Sale 257 decision. WTI = $96.13
- 3/8/2022: WTI peaks at $123.70/bbl
- 3/30/2022: EIAP Report for API and NOIA estimates economic impacts from leasing program delays noting: In most cases, additional leases are required to produce an existing field fully or to underpin the economics of processing and transportation infrastructure. It is thus important for the industry to have continued opportunities to secure leases through a predictable leasing program. (US lease blocks are too small for optimal development in deepwater and frontier areas, increasing the importance of regular lease sales.)
- 3/31/2022: President Biden directs the release of 1 million bbls/day from the Strategic Petroleum Reserve for 6 months, lowering oil prices.
- 3/31/2022: Senators Manchin (D-WV) and Kelly (D-AZ) urge President BIden to develop and implement the new 5 year leasing plan without delay.
- 4/2/2022: 500 days since the last lease sale. WTI = $99.27
SPR Withdrawal and the US offshore oil and gas program
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, tagged Gulf of Mexico, offshore oil and gas, SPR release on April 1, 2022| Leave a Comment »
In addition to the obvious concerns about depleting the strategic petroleum reserve, further mortgaging our economic future, and increasing national security risks, the directive to withdrawal 1 million BOPD from the Strategic Petroleum Reserve for 6 months raises a few comments specific to US offshore production:
- The 1 million BOPD withdrawal is equivalent to ~60% of the daily production from the entire Gulf of Mexico offshore sector. How will this massive 6-month withdrawal will effect regional markets and logistics?
- Will the Dept. of Energy have to assess the GHG effects associated with their withdrawal of oil from the SPR? More specifically, will DOE be required to assess the increase in GHG emissions as a result of the increased foreign oil consumption that will result from the reduction in oil prices? This is what Judge Contreras ordered BOEM to do when he vacated Gulf of Mexico sale 257.
- If it’s okay to produce and consume oil from the SPR facilities (mapped below), why is new leasing and exploration being constrained in the adjacent Gulf of Mexico?
As oil prices soar along with energy security concerns….
Posted in climate, energy policy, Gulf of Mexico, Offshore Energy - General, Uncategorized, tagged energy security, Gulf of Mexico, Lease Sale 257, offshore oil and gas, oil prices on March 7, 2022| 2 Comments »
Remember that only 5 weeks ago Judge Contreras (DC Federal Court) vacated OCS Lease Sale 257 because BOEM didn’t analyze the benefits of higher oil and gas prices (as a result of lower US offshore production) in reducing international consumption and GHG emissions. The about that!
Lease Sale 257 wouldn’t have helped get us through this crisis, but would have most definitely reduced our vulnerability to future crises.
US offshore leasing – time for action
Posted in energy policy, Gulf of Mexico, Offshore Energy - General, tagged energy security, Gulf of Mexico, leasing, offshore oil and gas, Putin on February 28, 2022| Leave a Comment »
Since well before the Putin crisis, this independent blog has been expressing concerns about sustaining US offshore oil and gas production without new leases and increased exploration (more here). Now that concerns about domestic production and energy security are heightened (understatement of the year!), let’s review where the leasing program stands:
- 466 days have elapsed since the last oil and gas lease sale (Nov. 19, 2020), with no future sales in sight.
- There had been 182 sales in the previous 66 years of the US offshore oil and gas program, an average of 2.76 per year. Never before (since 1953) has a year transpired without a lease sale.
- Currently, there are only 2016 active US OCS leases and 506 producing leases, the fewest in at least 40 years (recent history charted below).
- Despite favorable geology beneath the deepwater Gulf of Mexico and advanced exploration and well completion technology, US offshore oil production (1.713 million bopd per the latest EIA data – Dec. 2021) is down 16% from the August 2019 peak of 2.044 million BOPD. Gulf oil production is thus the lowest since 2018 (except during hurricane shutdowns).
- New projects and higher ultimate recoveries from producing reservoirs could increase total offshore production by 10-20% over the next few years, but sharp declines will follow without new leases and increased exploration.
Distant relatives?
Posted in energy policy, Norway, Offshore Energy - General, tagged Deb Haaland, Erling Haaland, Norway, NPD, offshore energy, offshore oil and gas on January 17, 2022| Leave a Comment »
As a result of her mother’s heritage, Deb Haaland is the first Native American to serve as a US cabinet secretary. However, her father, a decorated Marine Corps officer was a Norwegian American. She thus has the same surname as Erling Braut Haaland, the star striker for Norway and BVB Dortmund in the German Bundesliga.
Although most Americans cannot name the Secretary of the Interior (James Watt was an exception thanks to his attempt to ban the Beach Boys from the 4th of July concert in Washington😃), Deb Haaland is probably slightly better known in the US than Erling Haaland. However, thanks to the popularity of football/fussball/futbol/soccer, Erling is much better known internationally.
What does this have to do with offshore energy? Well Norway, which just announced record oil and gas revenues, has managed to sustain leasing, exploration, and production throughout the pandemic without compromising safety and environmental objectives. They also wisely eased the petroleum tax burden during the pandemic with favorable results.
The temporary change in the petroleum tax has most likely led to an increase in project activity. The projects would most likely have been carried out even without the tax package, but some of them would have been postponed.
NPD
Regardless of her heritage and any connections she might have with Norway, this would be a good time for Secretary Haaland to put the MOU between the Dept. of the Interior and the Ministry of Petroleum and Energy (Norway) to good use by learning more about resource management on the Norwegian continental shelf and discussing how to best sustain US offshore production.
Norwegian Elections: Major shift in offshore oil policy seems unlikely
Posted in energy policy, Norway, Offshore Energy - General, tagged elections, energy policy, Jonas Gahr Stoere, Norway, offshore oil and gas on September 15, 2021| Leave a Comment »
While Conservative Party leader Erna Solberg will no longer be Prime Minister, her likely replacement, Labor leader Jonas Gahr Støre, seems to be a moderate on energy issues:
“I believe that calling time on our oil and gas industry is the wrong industrial policy and the wrong climate policy,” Stoere told reporters.
KFGO
Monday’s result means Labour neither needs the Marxist Red Party nor the anti-oil Green Party to rule, thus lessening the pressure for big shifts.
“Labour will not make any dramatic changes to the oil industry,” said Teodor Sveen-Nilsen, an energy analyst at Sparebank 1 Markets.
EuroNews
“The floggings will continue until morale improves.”
Posted in drilling, Offshore Energy - General, Regulation, tagged BOEMRE, Gulf of Mexico, inspections, macondo, MMS, offshore oil and gas, safety on July 26, 2011| 1 Comment »
Much ado about nothing courtesy of the Associated Press:
Copies of the forms submitted by more than 100 inspectors, engineers and permit reviewers in five Gulf coast offices were obtained by the AP under the Freedom of Information Act. Personal information, such as the names of the employees, their friends and their family members, was blacked out to protect privacy. But the companies with ties to government workers were disclosed, and they represent a who’s who of the offshore oil and gas industry, from majors like Chevron, Shell and BP to smaller companies such as W&T Offshore Inc., Ankor Energy LLC and Hilcorp Energy Co.
So yesterday we linked an article about proposed legislation that would, among other things, require that offshore inspectors have “at least three years experience in the oil and natural gas field.” Today, we read contradictory (and silly) comments like the one below in the AP piece that criticize such experience. How would you like to be an oil and gas inspector or prospective offshore regulator?
“It’s nearly impossible to determine where the oil industry ends and the government’s regulatory agency begins,” said Scott Amey of the Project on Government Oversight, after reviewing AP’s data. “These new instances indicate that BOEMRE staff are connected to individuals and oil companies, which raises concerns about lax oversight and the integrity of the agency. Without enhanced enforcement authority and independent oversight of these potential conflicts, I’m uncertain that BOEMRE can assure the public that it is truly watchdogging the offshore oil industry.”
Give these people a break. I have seen absolutely no evidence that improper government-industry relationships or compromised inspections had anything to do with the Macondo blowout or any other recent incident. Inspection and engineering personnel are under continuous scrutiny well beyond what most employees would accept, and recuse themselves from assignments if there could be even a perception of a conflict of interest.
The US offshore program, and every other safety regulator, needs people who understand the operations and technology that they regulate. These regulators need to communicate regularly with industry personnel on operational and regulatory issues. Too little interaction with their professional peers is a greater danger than too much. You don’t advance safety technology and procedures, and resolve concerns, without communication.
DOI offshore personnel have had and will continue to have more than enough oversight; time to move on to another cause.
Inspection fees debate still lacks substance
Posted in Uncategorized, tagged accidents, budget, drilling, inspection fees, offshore oil and gas, oil spill, safety on July 20, 2011| Leave a Comment »
from Platts Oilgram News:
Representatives Ed Markey of Massachusetts and Rush Holt of New Jersey introduced the so-called No Free Inspections for Oil Companies Act (H.R. 2566) July 15, in reaction to House Republicans’ proposal for funding the Bureau of Ocean Energy Management, Regulation and Enforcement. About $35 million short of the Obama administration’s request, the GOP’s $154 million budget rejected new and more expensive fees on offshore operators. The administration wanted to ratchet up industry fees to $65 million a year, from $10 million, to pay for a tougher inspections regime.
The annual inspection fees debate, a budget season ritual for 20+ years, has picked up intensity and financial significance in the post-Macondo spotlight. However, discussions about regulatory philosophy and the fundamental program decisions that dictate inspection strategy are still absent. Safety and pollution prevention are the goals, not inspections. While inspections are an essential part of any safety regime, they are just one component of a comprehensive regulatory program. More inspections would not have prevented Macondo. Better standards, training, technology, and attention to prior incidents (most notably Montara) may have.
