January 09, 2024
What constitutes a “proven technology” with “predictable income” to the Biden administration? Apparently, it isn’t the oil and gas industry that has been powering the world, raising standards of living, and making entire nations wealthy for well over a century. On the other hand, the first-ever North American ocean wind turbine installation – unpopular with people who will have to look at it and part of a flailing, not-ready-for-primetime industry – is a sure thing to the Department of the Interior.
Per a recent report, on June 15, 2021, Interior’s Bureau of Ocean Energy Management (BOEM) waived the customary financial assurance for decommissioning on the lease of the Vineyard Wind project off the coast of Massachusetts. Decommissioning fees are typically required for every energy lease Interior grants so that if a project fails and the lessee goes bankrupt, taxpayers aren’t stuck with cleanup costs. Vineyard first asked for a deferment in 2017 and was denied by the Trump administration, but the Biden BOEM informed Vineyard the fee was deferred for 15 years into its 20-year lease. Why?
Well, the financial assurance fees were “unnecessarily burdensome for lessees because, at that point, they have not begun receiving project income.” Besides, Vineyard used “proven wind turbine technology,” and “guaranteed electricity sales prices that, coupled with the consistent supply of wind energy, ensure a predictable income over the life of the Project.”
But a June 2023 Barrons report said of wind energy, “Financially, the industry is teetering, with a parade of companies planning to renegotiate or pull out of contracts, jeopardizing plans for projects that were expected to provide electricity for millions of homes.” What’s more, “At least eight multinational companies in three states have quietly started to back out of wind contracts, or ask to renegotiate deals in ways that will pass more costs to consumers.”
That includes Ørsted, the world’s largest offshore wind developer, which recently pulled out of two wind projects off the New Jersey coast. Its stock price was down some 50% in 2023, and the company had “$4 billion in write-downs,” according to Barrons.
As for that “proven technology,” Siemens Energy shares fell almost 40% in one day in June 2023 because of serious turbine failures – failures that “might be a symptom of a wider issue for the industry,” according to CNBC.
BOEM, it seems, was overoptimistic about Vineyard Wind. Or they just wanted to give a plucky young upstart a hand. Or they were recklessly pursuing an environmental agenda, whatever the consequences for taxpayers. The evidence points to that last option. One need only look at how BOEM has wielded federal bonding against traditional oil and gas developers.
On June 29, 2023, BOEM published a proposal to amend bonding requirements. As the Daily Caller has explained, “The old bonding rules established supplemental bonding prices for lessees based on the net worth of that lessee, among other factors … the June 2023 proposal from BOEM would shift that calculus away from net worth and instead focus on the lessee’s credit rating.”
That shift would impact the 76% of the oil and gas developers working in the Gulf of Mexico that don’t happen to be publicly traded oil giants. Politico’s E&E News says it “would also protect some of the biggest drillers in the country from cleaning up abandoned wells when smaller firms go bust.” In many cases, the Chevrons and Shells did the initial drilling and then sold their lease rights to smaller companies. Under the proposal, these small companies would incur $9 billion in insurance costs that even the surety industry itself claims would not be financially viable. BOEM wants to finalize the new rules by April.
According to agency documents FGI obtained through the Freedom of Information Act, one of the reasons the BOEM proposal falls so heavily on small independent companies is because Big Oil had a seat at the table when BOEM was dreaming it up. BOEM met with The American Petroleum Institute and major oil companies about changing the surety requirements mainly in 2021. That was the same year BOEM gave Vineyard its sweetheart deal. Meanwhile, as gas prices skyrocketed, President Biden demonized those same energy giants.
Perhaps in the hope the crocodile would eat the biggest bites last, the huge oil companies fed their smaller competitors to the Biden Administration and its appetite for shutting down domestic fossil fuel production where and when it can. The proposal would drive many companies out of the market of completely under. The administration wins. The president’s allies on the left win. Big Oil wins. And Vineyard Wind must be laughing all the way to the bank.
If hypocrisy were combustible, we’d be paying $1 per gallon at the pump.
Peter McGinnis is with the Functional Government Initiative.
This article was originally published by RealClearEnergy and made available via RealClearWire.
A major Arctic air attack is beginning in the Midwest.
It isn’t doing England any favours.
This is just my 2nd winter here, so I don’t know what is “normal” but it suddenly became much colder in the the southeast corner of Nevada a week ago, or a little more than a week ago (about 3500 feet altitude)..
An interesting presentation of the behind-the-scenes conduct of Federal Agencies. Why isn’t the bonding requirement based only on the accumulating reclamation cost? Virtually any energy (or mining, or fossil fuel, or construction on Public Lands) project advances in steps, until finished. The reclamation Bond for the operating project may start to include mitigation costs due to toxic event risks, but basically is the cost to remove and restore. Having the Government give favors to developments that they think enhance their political status is a form of corruption. Who voted for that?
“If hypocrisy were combustible, we’d be paying $1 per gallon at the pump.”
And over here we’d be paying at least 20 quid for it. Still, I got a little unexpected help from the US SEC, yesterday. That’s far more than my government has done for me.
Today’s giggle, or what the Grauniad calls news is…
“Factchecked: the UK government’s claims about North Sea oil and gas
“the Guardian factchecks some of those claims”
https://www.theguardian.com/environment/2024/jan/08/factchecked-the-uk-governments-claims-about-north-sea-oil-and-gas
Now, that is funny when you read garbage like this…
“‘Astounding’ ocean temperatures in 2023 intensified extreme weather, data shows”
https://www.theguardian.com/environment/2024/jan/11/ocean-warming-temperatures-2023-extreme-weather-data
What data?
new data
the data showed
University of St Thomas in Minnesota, part of the team that produced the new data.
These figures are based on data from the Institute of Atmospheric Physics at the Chinese Academy of Sciences. A separate dataset from the US National Oceanic and Atmospheric Administration found a similar increase and identical trend over time.
Clear as mud as usual. And just to spook the average climate angst ridden reader…
“In 2023, an additional 15 zettajoules of heat was taken up by the oceans, compared with 2022.”
Seemingly big numbers always appear to work on the feeble minded.
There was one comment in the article, that was 100% right. It won’t bring bills down!
Since when in the UK, did anything really ever get cheaper?
Rip off Britannia rules the cash registers.
ding dong.
Actually that’s not right. Gas will back out expensive LNG imports, and be cheaper.
Theory and practice do not always go hand-in-hand.
You may be correct in that but will those reductions be passed onto the customers, or result in larger profits for the energy companies? One of the problems is that the UK is simply too small for a true competitive energy market.
The UK is plenty large enough for a competitive market. However, it’s the regulator OFGEM doing the bidding of politicians (Ed Miliband’s price cap, enacted by OFGEM and the Tories) that controls the pricing these days. We have a nationalised market with dictated prices and quotas in place of the competition that previously existed and worked well to drive down prices and promote North Sea supply. Nevertheless, where the quota system for domestic production can be circumvented the economic benefits apply, even if diluted a little for consumers.
You’re right, it’s not data, 15 zettajoules is simply a numerical way of saying “really, really big”.
. . . when, in reality, compared to the “total heat content” of Earth’s oceans it is actually really, really small.
It is estimated that the average temperature of all the seawater in the world’s oceans is about 4 °C.
(ref: https://www.quora.com/What-is-the-average-temperature-of-all-the-water-in-the-oceans )
Scientists calculate that the total mass of the oceans on Earth is 1.35 x 10^18 metric tons, or 1.35 x 10^21 kg.
(ref: https://phys.org/news/2014-12-percent-earth.html )
Typical seawater with a salinity of 35 parts per thousand has a freezing point of around -1.8° C. The latent heat of fusion of seawater is about 3.3*10^5 J/kg. The specific heat of seawater is about 3850 J/(kg-C).
Thus, the total “heat content” represented by the world’s liquid seawater being 5.8 °C above solid ice is Q = m*(h-subf + Cp*dT) = 1.35*10^21 * (3.3*10^5 + (3850 * 5.8)) = 4.8*10^26 Joules = 4.8*10^5 zetajoules.
Therefore, the stated additional ocean heat uptake of 15 zetajoules for 2023 compared to 2022 actually represents a percentage change of only about 0.003% . . . yes, just 3 thousandths of one percent!
And that’s why the media tell you the increase in ocean TEMPERATURES in the ENERGY units of zetajoules – micro-fractions of a degree aren’t going to scare anyone into going communist.
Confuse them even more by converting the zettajoules to Dekatherms or Nanojoules even Petaelectron volts. If that doesn’t scare people nothing will 🙂
Yes, but the propaganda press doesn’t do common math conversions.
They prefer to measure energy in units like “Hiroshimas” to alarm the public.
The Guardian is I assume repeating the claims made by ECIU, recently run by former BBC correspondent Richard Black who is besties with Harrabin. They presume to know what quality of oil will be found in unexplored acrage – or at least implicitly they do. They know nothing of the economics, or even of the law. AFAIK all UKCS oil and gas is supposed to be landed in the UK unless there is a specific exemption granted by the government. Once landed, it is possible to export it again, but this may involve double handling and extra costs. Direct export by shuttle tanker (which can be approved by government) is necessarily restricted to nearby refineries, and not the world market. If the oil is of suitable quality UK refineries will buy it and cut back on long haul imports (now the US is the biggest supplier). Otherwise the oil will be sold elsewhere, but it will improve the balance of payments, offsetting import costs, and government tax revenues (now running at 75%).
Gas will go by pipeline to the UK, and it will back out the need for imported gas, which comes in high cost LNG. The more LNG we need the further it has to come and the higher the price we must pay: we have been importing regularly from as far away as Peru, the wrong side of the Panama canal.
The ECIU, Guardian and politicians all fact checked….
Balance of payments, local jobs, and increasing the local economy are the biggest reasons to encourage the development of any resource, no matter how small.
Governments are always subsidizing one stupid thing or another – how about they just get out of the way of the people who know how to create wealth?
quote:”Decommissioning fees are typically required for every energy lease Interior grants so that if a project fails and the lessee goes bankrupt, taxpayers aren’t stuck with cleanup costs
It’s OK, it’s sorted and, for Planet Earth (the watery bit where fishes live) really is a fantastically good thing.
Remove the tasty/juicy/toxic bits then just let the things sink.
And off the scale good if you imagine Carbon Capture is a good idea.
It would be significantly better being captured on Dry Land by a tree, but we gotta start somewhere.
youtube of sinking tramcars
I recall a figure from way back when concerning Titanic.
It was that (100 yrs after the old tub sank) that it was still releasing 6 Tonnes per day of ‘water soluble Iron’ into the water
iow: Rust
And fishes loved it.
It seemed a lot to me – do we know how much Iron was in the hapless lump to start with?
btw: That dissolving Iron would wipe out any imagined issues about Ocean Acidation also
“Remove the tasty/juicy/toxic bits”
And pop them in the post….
The best fishing in the Gulf of Mexico is located at the active oil rigs and at the decommissioned rigs that have been dropped to the sea floor to create “artificial reefs”.
https://fishingbooker.com/blog/oil-rig-fishing-gulf-of-mexico/
As far as I can tell, activist “environmentalists” know almost nothing about the actual environment!
Activist ‘environmentalists’ have a fantasy idea of ‘nature’ and the environment completely at odds with reality. Most probably live in large cities and towns with no concept of what the world is actually like beyond their bubble, except for the occasional car trip with the windows up and the a/c on or a holiday, flying to a distant destination. To them nature is something you look at through a window not something you live in.
It goes at least back to ancient Greek worship of “the mother” and has been little or not at all updated since then.
If they worshipped or even just cared for their mothers they wouldn’t be the sorry masses of unthinking emotional idiots that they are. Most of them must realize their mother’s tried and failed to abort them.
STORY TIP:
Wimbledon: Electric double-decker bus catches fire during rush hour – BBC News
That’s a new one. Once buses used to breakdown occasionally, now they automatically self-destruct.
Transport: Impossible.
“This bus will self-destruct in five seconds.”
I’m surprised the BBC published it.
Maybe they’ll blame the oil-based tires or plastics for sustaining the fire and neglect to mention what started the fire?
Or maybe they’ve started to wise-up to what’s really bad for the environment.
Did they do a follow up of how long the fire burned and continued to disrupt transportation in the area?
Update:
https://www.bbc.co.uk/news/uk-england-london-67944657
Roads still closed
I’m sure that if they can’t blame an ICE vehicle for the fire then the blame will be placed firmly on ‘faulty’ batteries, possibly ‘cheap, imported faulty batteries’ – the buck will be passed, bullet’s dodged, all blame well and truly avoided.
This is not hypocrisy.
GRIFT. THEFT. Criminality.
It is now up to $32 Trillion or so in the USA
probably $50 trillion globally
Notice
Yeah apparently our green grifters couldn’t compete with yours-
US-owned electric car charging network pulls the plug on Australia – Drive
No economic case for EV chargers so naturally they have to go where the best slushfunds are.
Surely OZ should demand that they ALL be removed, at the installer’s cost? Otherwise, they will cause continuing-frustration to all those virtue-signaling Aussie EV-drivers!
Remember….Joey Biden has a dark side….in fact his only side. You would not want Joey as your Uber driver but there he is….due to vote manipulation…creating a dictatorship.
An interview with John Abraham, the St. Thomas Univ. professor involved in the ocean heating study. He points out that he’s installed solar panels at his home in south Minneapolis, latitude: 44°58′47″ N, with a pay back of seven years. No figures are given on the depreciation in effectiveness or value of the panels. He doesn’t mention if his home is connected to the existing power grid and what percentage of the time on a day-to-day year around basis his home is drawing power from the grid or supplying it in the opposite direction. Interestingly, his home is very nearly as far from the ocean as it’s possible to be in North America.
Today mixed sun and clouds, 10 hours, 48 minutes of visible light.
On another website he claims to have spent no money on gas or electric services in years. That means for sure he has no gas service since if there’s a meter installed there’s a bill for access even if no gas is used. No idea what his relationship with the power company might be.
He has to be connected to the grid to have such a short payback period – his neighbours are paying for it!
Currently here, it might be possible to make the meter needle jiggle for around 9 hours per day.
How’s that possible? Are you talking about your location, or the one in Minneapolis, latitude at almost 45°? I’m at 43 and with sunrise at 7:49 and sunset at 5:04pm -that’s 9:15hrs of POSSIBLE sun, from extreme low to extreme low in the sky, and not taking into consideration any weather.
Actually lets look it up… same sunrise, sunset at 4:51pm so a few minutes worse than me here in Southern Ontario.
Solar is OK and sometimes a PITA in garden lamps – but definitely not a grid solution.
“he’s installed solar panels at his home in south Minneapolis”
Latitude unimportant!
“Mother’s terror as fire sparked by solar panels destroys council home”https://www.independent.co.uk/news/uk/home-news/solar-panel-fire-explosion-council-house-b2405282.html
When the authorities ‘own’ the premises they decide on its maintenance and any upgrades. After all, social housing is the easy bit. The private sector, not so. That will require costs, regulations, nudges and other behaviour controls.
Bird chopper fires are discussed often here, but fires caused by solar panels attached to buildings are rarely mentioned. A search indicates they happen quite often.
Green “energy” means gold for builders and insurance companies, I guess.
Nothing “green” ever works properly.
So, the evidence is Department of the Interior’s Bureau of Ocean Energy
ManagementMismanagement is committing fiscal misfeasance and malfeasance of office . . . in the end, what does it really matter?If BOEM misdirects or completely wastes several hundred billion of taxpayer dollars, this administration and Congress (as well as the next, and then next, etc) will just say “Ooops” and tack those wasted dollars onto the Federal debt as it is kicked down the road.
The BOEM, responding to the grumbling of the offshore turbine contractors, wants to shrink their exposure to restoration after failure because no one knows how much that would cost. They know that it’s bigly expensive, or impossible in some cases, to install stable bases to offshore turbines. The same is true of removing them.
the going narrative contains some precious and deeply embedded fallacies
I was in various code enforcement jobs for 24 years at the City of Las Vegas. Every notice I ever sent of handed to anyone had MY NAME and often my signature on it.
As a Plans Examiner there were times that supervision DIRECTED a plan be approved. In that case I would note the on the plan that it was approved at the direction of XXX and a complete review was not conducted, and followed up with an email noting the same and referencing the time and date of the meeting where I was directed to do the same. I DID NOT sign my name. Supervision/management NEVER responded to those emails, I guess thinking of “plausible deniability”. I usually added a note for the inspector regarding the incomplete nature of the review.
As a field inspector there were several instances when a supervisor would arrive on a site after a complaint by a contractor and demand I approve an inspection. In those cases, I would make the supervisor sign the inspection form marked approved. The code violations were still noted on the form and that form scanned. Yes, I was well loved by supervision and management. Funny thing: In a monthly department meeting after one such dustup, the Building Official stated outright that if an inspector was uneasy approving an inspection as directed by supervision, the supervisor needed to sign it, and to quote what he said to them: “that is what I pay you for”.
NOW if I had MY way, every determination or direction by members of the deep state would require someone, of the permanent employees, to sign their name to each line, paragraph and/or page of every regulation promulgated signifying that individuals belief that their written words met the scope and requirements of enabling legislation. No political appointees would ever be allowed to sign such acknowledgement and upper management would only be allowed to sign on to what they themselves had created and written.
All records of the electronic documents used to create the regulations or “determinations” would be required to be kept for 50 years from the time such work was published. The Metadata kept would need to include the computer used, who was signed on to the computer, and all sharing of the documents by email or on a shared common drive so WHO did WHAT would be easily tracked, and then those promulgating “unauthorized by legislation” actions could be summarily fired by the POTUS, immediately upon an investigation showing such actions not provided by legislation, and after termination, get back all wages and benefits accrued while doing their activist activities.
In other words, the EPA staff promulgating regulations just days after a court ruling said they could not regulate those things as recently discussed here at WUWT, would have them fired by the First new conservative POTUS.
As it is, the liberal deep state has cover.
Leave it to the @ssh@ts to try to get the money back from the political appointees whose direction they followed while violating the law.
You deserve a commendation for pointing out how a process is actually supposed to work and how responsibility is avoided. Most people don’t think about it but in a bureaucracy there’s no place for anonymity. A decision is always made by a specific person or persons.
Reminds me of a proposal, I think that I read from Dr. Jerry Pournelle, that every piece of legislation requiring funding include citation of the part of the constitution that authorized it.
There’s an awful lot of real lawyers on this site to correct me, but
IMO, if the principle was extended to its rightful conclusion, it would apply to federal agencies and their regulations and additionally cite their congressional charter, with an expiration date unless ratified by the full congress. In the latter case, if unratified by congress by “dead letter,” rulings on the regulation before the expiration date would be vacated and reversed, with penalties paid out from the agency budget. If congress did act to vote down the regulation, the no vote would automatically require congressional reauthorization of the agency’s charter and budget.
Bottom line though, I don’t see how it is constitutional that the U.S. Federal government can own property at all, or that it can override or block exploitation of resources that are authorized by the State governments or by citizen property owners as authorized by state law. If “big oil” was actually harmed by short supply, seems like a state AG or two might be suing the Fed already, and the fact that they’re not speaks volumes.
It may be a mistake to brand such crony corporatism as liberal, or attribute it to either political party.
Great reporter Robert Bryce (https://robertbryce.substack.com) is publicizing the case where Interior Department and Oklahoma state authorities overrode Osage nation sovereignity to put up wind turbines on tribal owned land against tribal permission. I’m cheering on the Osage in hopes that they prevail in future damage cases against both State and Federal governments and atainst individual officials.
US/UK 66,000 MW OF OFFSHORE WIND BY 2030; AN EXPENSIVE FANTASY
https://www.windtaskforce.org/profiles/blogs/biden-30-000-mw-of-offshore-wind-systems-by-2030-a-total-fantasy
EXCERPT
Offshore Wind Electricity Production and Cost
Electricity production about 30,000 MW x 8766 h/y x 0.40, lifetime capacity factor = 105,192,000 MWh, or 105.2 TWh. The production would be about 100 x 105.2/4000 = 2.63% of the annual electricity loaded onto US grids.
Electricity Cost, c/kWh: Assume a $550 million, 100 MW project consists of foundations, wind turbines, cabling to shore, and installation, at $5,500/kW.
Production 100 MW x 8766 h/y x 0.40, CF = 350,640,000 kWh/y
Amortize bank loan for $385 million, 70% of project, at 6.5%/y for 20 y, 9.824 c/kWh.
Owner return on $165 million, 30% of project, at 10%/y for 20 y, 5.449 c/kWh
Offshore O&M, about 30 miles out to sea, 8 c/kWh.
Supply chain and ocean transport, 3 c/kWh
All other items, 4 c/kWh
Total cost 9.824 + 5.449 + 8 + 3 + 4 = 30.273 c/kWh
Less 50% subsidies (ITC, 5-y depreciation, interest deduction on borrowed funds) 15.137 c/kWh
Owner sells to utility at 15.137 c/kWh; developers in NY state, etc., want much more. See Above.
Not included: At a future 30% wind/solar on the grid,
Cost of onshore grid expansion/reinforcement, about 2 c/kWh
Cost of a fleet of plants for counteracting/balancing, 24/7/365, about 2.0 c/kWh
In the UK, in 2020, it was 1.9 c/kWh at 28% wind/solar loaded onto the grid
Cost of curtailments, 2.0 c/kWh
Cost of decommissioning, i.e., disassembly at sea, reprocessing and storing at hazardous waste sites
New York State had signed contracts with EU big wind companies for four offshore wind projects
Sometime later, the companies were trying to coerce an additional $25.35 billion (per Wind Watch) from New York ratepayers and taxpayers over at least 20 years, because they had bid at lower prices than they should have.
New York State denied the request on October 12, 2023; “a deal is a deal”, said the Commissioner
Owners want a return on investment of at least 10%/y, if bank loans for risky projects are 6.5%/y, and project cost inflation and uncertainties are high
The about 3.5% is a minimum for all the years of hassles of designing, building, erecting, and paperwork of a project
The project prices, with no subsidies, would be about two times the agreed contract price, paid by Utilities to owners. That means, the effect of subsidies reduced the contract price by 50%.
All contractors had bid too low. When they realized there would be huge losses, they asked for higher contract prices.
It looks like the contract prices will need to be at least $150/MWh, for contractors to make money.
Those contract prices would be at least 60% higher than in 2021
Oersted, Denmark, Sunrise wind, contract price $110.37/MWh, contractor needs $139.99/MWh, a 27% increase
Equinor, Norway, Empire 1 wind, contract price $118.38/MWh, contractor needs $159.64/MWh, a 35% increase
Equinor, Norway, Empire 2 wind, contract price $107.50/MWh, contractor needs $177.84/MWh, a 66% increase
Equinor, Norway, Beacon Wind, contract price $118.00/MWh, contractor needs $190.82/MWh, a 62% increase
https://www.windtaskforce.org/profiles/blogs/liars-lies-exposed-as-wind-electricity-price-increases-by-66-wake
NOTE: Empire Wind 2, 1260 MW, near Long- Island, was cancelled.
https://www.reuters.com/business/energy/equinor-bp-cancel-contract-sell-offshore-wind-power-new-york-2024-01-03/
“ with the consistent supply of wind energy ”
Get data for 10 years and calculate a 182 day moving average. The days
without sufficient wind to move turbine blades will hid in the murk.
Look folks, a consistent supply of wind energy!
Biden isn’t in the business of picking winners. Quite the opposite – because failures are where the big bucks are and no accountability is required. If American voters want to go broke as fast as possible they need only keep voting for social/economic saboteurs like Biden and just get it over with.
What should be understood is that Biden isn’t really doing anything. The man is a shell who can’t find on or off a speaking platform without help nevermind grasp the complexities of energy systems. Some 30 year old woke staffer shoves a pie e of paper under his nose, he asks Jill if it’s OK to sign it, she says yes dear, he signs it and the dirty, stupid deed is done.
We need to get the government out of the energy production business, they have no business being involved for the simple reason that they have to drag politics into every matter. And they don’t know squat.
The profitability of wind is proven. Without government intervention, they will fail; but as long as liberals are in charge, they can ensure the operators of baseline income. That is much more stable than oil or gas, whose income is dependent on the variable supply and demand markets.