Wirelines

IADC highlights inadequacies, detrimental impacts of 2024-2029 leasing program

The US Department of the Interior (DOI) released a disappointing proposal on 29 September for its 2024-2029 National Outer Continental Shelf Oil and Gas Leasing Program, with a maximum of only three oil and gas lease sales – the fewest in history – in the Gulf of Mexico in 2025, 2027 and 2029. Further, no oil and gas lease sales are scheduled for the Atlantic, Pacific and Alaskan waters.

Three is the minimum number allowed under the terms of the Inflation Reduction Act. Further, the areas considered for leasing have been significantly narrowed from the previous Administration’s original proposal of 47 lease sales.

In a statement, IADC expressed its disappointment and concerns with the lease program, noting that it shows a “disconcerting lack of commitment to US energy production and an impractical disregard for the global surge in energy demand.”

The proposed program also exacerbates industry uncertainty, which will ultimately affect the economy. “The severe restrictions and limitations this new program places upon the US oil and gas industry are negligent and extreme,” IADC President Jason McFarland commented in the statement. “Energy security and economic stability will be markedly diminished by the DOI’s actions. Despite these challenges, IADC remains committed to fostering intentional and pragmatic solutions that address the world’s escalating energy needs.”

GOM vessel restrictions would impair production, jobs

Restrictions recently proposed by the National Marine Fisheries Service (NMFS) on oil and natural gas vessels operating in the US Gulf of Mexico (GOM) could lead to a significant decline in energy production in the GOM by 2040, according to new industry analysis.

If the vessel restrictions are implemented:

• Average oil and natural gas production is projected to decline to just under 2 million bbl/day of oil equivalent, a 24% reduction from projected levels, between 2023-2040. 
• Average oil and natural gas industry employment supported by GOM activities is projected to fall by 13% to just under 310,000 jobs nationally.
• Industry investment in the GOM is expected to decline by 14% from 2023-2040. In 2024 alone, industry investment in the region could decline by approximately $6.8 billion, a 19% reduction.
• Government revenue from oil and natural gas production is projected to fall by 22% to $5.7 billion annually.

The findings were submitted by the American Petroleum Institute, EnerGeo Alliance, Independent Association of America and National Ocean Industries Association in response to the NMFS’ proposal restricting the transit of oil and gas vessels in certain parts of the GOM.

Click here to read the report on GOM vessel restrictions. 

UK NSTA issues consultation on emissions reduction plan

The UK North Sea Transition Authority (NSTA) is soliciting comments on its proposed requirements for oil and gas operators to reduce emissions. The draft plan covers four areas:

• Investment and efficiency – including the need for investment in and implementation of emissions reduction action plans at new and existing facilities;
• Platform electrification and low-carbon power – including the need to electrify existing and new platforms, and how to assess electrification and low-carbon power systems; 
• Inventory – including details on setting cessation of production dates; and
• Flaring and venting – including the need to deliver continuous improvement in flaring and venting reductions.

The draft plan lays out requirements and potential consequences for failure to comply. For example, the proposed requirements around platform electrification specify dates for new fields to come online electrification-ready and then be electrified. The NSTA recently sent letters to operators warning that production consent could be withheld if fields are not electrification-ready.

The consultation period began in early October and will run until 30 November.

Click here to access the NSTA’s consultation document. 

Industry groups propose solutions to improve GHG rule

The American Petroleum Institute (API) is urging the Biden administration to revise the proposed Subpart W greenhouse gas (GHG) reporting rule to “reflect the progress industry has made to reduce emissions,” it said in a statement. The rule should increase transparency and accuracy of reporting, and incentivize innovations in the use of empirical data and cost-effective methane detection technologies, API said.

In comments submitted to the US Environmental Protection Agency (EPA) on the proposed rule, API joined with the American Exploration & Production Council, Independent Petroleum Associ-ation of America, Petroleum Alliance of Oklahoma and American Fuel and Petrochemical Manufacturers in expressing concern that the rule could create undue cost burdens and create regulatory incoherence with related efforts to reduce methane emissions. 

Proposed solutions include allowing for the optional use of measured data in addition to EPA- or company-developed emission factors; maintaining consistency with other EPA emissions rulemakings to avoid conflicting requirements; and offering more feasible alternatives for sources when proposed changes would impose high burdens.