Guest “He fought the law and the law won,” by David Middleton
Days after climate talks, U.S. to hold huge crude oil sale in the Gulf of Mexico
By — Matthew Brown, Associated Press
By — Janet McConnaughey, Associated Press
Economy Nov 16, 2021 6:30 PM EST
NEW ORLEANS (AP) — The U.S. Interior Department on Wednesday will auction vast oil reserves in the Gulf of Mexico estimated to hold up to 1.1 billion barrels of crude, the first such sale under President Joe Biden and a harbinger of the challenges he faces to reach climate goals that depend on deep cuts in fossil fuel emissions.
The livestreamed sale will invite energy companies to bid on drilling leases across some 136,000 square miles (352,000 square kilometers) — about twice the area of Florida.
It will take years to develop the leases before companies start pumping crude. That means they could keep producing long past 2030, when scientists say the world needs to be well on the way to cutting greenhouse gas emissions to avoid catastrophic climate change.
The auction comes after a federal judge in a lawsuit brought by Republican states rejected a suspension of fossil fuel sales that Biden imposed when he first took office.
A couple of points:
- No “reserves” are being auctioned off.
- This bit is fracking hilarious:
That means they could keep producing long past 2030, when scientists say the world needs to be well on the way to cutting greenhouse gas emissions to avoid catastrophic climate change.
Larry the Cable Guy would say:
About 300 leases received bids, mostly deepwater tracts.
- Lease Sale Map – Bid Distribution (November 17, 2021): pdf file
- Active Leases and Bids Received Map (November 17, 2021): pdf file
- Blocks Receiving Bids (November 17, 2021)
Oddly enough, ExxonMobil submitted bids on 94 blocks on the shelf (shallow water). My hunch is that the ExxonMobil bids in the Brazos, Galveston and High Island areas are related to this…
ExxonMobil’s Oswald advocates for CCS hub in Houston
BY NANCY FORD NOVEMBER 16, 2021 10:52 AM
The necessity to reduce carbon emissions and arrest its deleterious impact on the health of the planet is one of the main drivers of the “energy transition.”
Energy transition is a term that is used differently by different people, said Eric Oswald, vice president of strategy development and advocacy for ExxonMobil’s Low Carbon Solutions business.
“A lot of markets are talking about greenhouse gas emissions,” Oswald noted. The Houston marketplace, he said, is “interested in greenhouse gas emissions, but we’re also interested in helping Houston win the energy transition.”
A Houston-based carbon capture and storage (CCS) hub would propel Houston to win that transition, he said.
The project envisions approximately 100 million metric tons of CO2 being captured per year, Oswald said. A project of that scale requires the cooperation and collaboration of industry, government and the at-large community.
The leases are in three clusters offshore of major concentrations of petrochemical plants and refineries. The High Island and Galveston clusters are along the boundary between Federal and Texas state waters. The Brazos cluster is a little farther offshore. All three clusters are well positioned to take advantage of massive Miocene saline aquifers with thick marine shale top seals. I wouldn’t be surprised if ExxonMobil lobbies the Federal government to convert these oil & gas leases into CCS concessions.
There’s something even more fracking hilarious in the AP article:
Environmental reviews of the Gulf of Mexico sale conducted under former President Donald Trump and affirmed under Biden reached an unlikely conclusion: Extracting and burning the fuel would result in fewer greenhouse gases than leaving it in the ground.
Similar claims in two other cases, in Alaska, were rejected by federal courts after challenges from environmentalists. Climate scientist Peter Erickson — whose work was cited by judges in one of the cases — said the Interior Department’s analysis had a glaring omission: They left out greenhouse gas increases in foreign countries that would result from having more Gulf oil on the market.
“The math is extremely simple on this kind of stuff,” said Erickson, a senior scientist with the Stockholm Environment Institute, a nonprofit research group headquartered in Sweden. “If new leases expand the global oil supply, that has a proportional effect on emissions from burning oil. Therefore, giving out these leases in the Gulf of Mexico would be increasing global emissions.”PBS
The original conclusion is correct. US Gulf of Mexico Deepwater oil production has a smaller “carbon footprint” per barrel of oil produced than all but one major oil producer/producing region.
Could restricting oil production in the US Gulf of Mexico lead to carbon leakage?
Federal actions have put the comparative emissions performance of the prolific US Gulf of Mexico under the spotlight
By Mark Oberstoetter, Head of Americas (non-L48) Upstream Research, and Mfon Usoro, Senior Research Analyst, US Gulf of Mexico Upstream
12 April 2021
As one of the few major oil producing areas under federal purview, the Gulf of Mexico appears to be a focal point of President Biden’s efforts to deliver swiftly on campaign promises. But while leasing bans and increasing royalties signal fast action on the energy transition, federal actions have consequences – and they can be global.
An important and unintended consequence of enacting more restrictive policies such as a lease ban or increase in royalty rate in the Gulf of Mexico is that it could give rise to carbon leakage to countries that export crude to US. Carbon leakage occurs when the greenhouse gas emissions from industrial production are transferred outside a regulated region to another area with weaker emissions constraints in place.
Despite the growth in domestic production, the US still imports six million barrels per day (b/d) of crude oil from foreign countries. If production from the Gulf of Mexico drops, that figure is likely to increase substantially. Overall emissions will then depend on regulations and controls in the countries from which that oil is imported. In essence, climate change is a global issue and removing or handicapping a low emitter hurts the collective global average.
How emissions-intensive is the US Gulf of Mexico?
US Gulf of Mexico deepwater emissions are less intensive than all but one importer: Saudi Arabia. And more than half of the area’s 2021 production will come from a public corporation with an existing net-zero pledge.
The world isn’t going to consume less oil if Biden successfully manages to reduce oil production from the Gulf of Mexico. It’s just going to consume more oil produced from other basins & plays. Over 2/3 of the bids are for deepwater blocks, with their very low “carbon footprint.” Most of the bids are near existing infrastructure and any discoveries will likely be subsea tiebacks to existing production facilities. If ExxonMobil is really serious about establishing a 100 MTPA CCS mega-facility in the Federal waters, offshore Texas… This lease sale might just be “carbon neutral”. 100 MTPA of CO2 sequestration would fully offset the Scope 1, 2 & 3 emissions from about 200 million barrels of oil per year, about 550,000 bbl/d, about 1/3 of the average total GOM production in 2020.
“The math is extremely simple on this kind of stuff,” said Erickson, a senior scientist with the Stockholm Environment Institute, a nonprofit research group headquartered in Sweden.PBS
The math is extremely simple. It’s so simple that Mr. Erickson has earned a Ron White Lifetime Achievement Award.
Regarding Biden’s losing battle with the law… I think this is a perfect spot for The Clash…