IADC CONNECTION • WIRELINES
Lease Sale 261 held after multiple delays, draws more than $382 million in high bids
The US Bureau of Ocean Energy
Management (BOEM) held the Gulf
of Mexico (GOM) Lease Sale 261 on 20
December. The sale generated $382,168,507
in high bids for 311 tracts covering 1.7 mil-
lion acres in federal waters. A total of 26
companies participated in the lease sale,
submitting 352 bids totaling $441,896,332.
Under a ruling from the US Court of
Appeals for the Fifth Circuit, the BOEM
included lease blocks previously exclud-
ed due to potential impacts to the Rice’s
whale population from oil and gas activi-
ties in the GOM. Lease Sale 261 offered
13,482 unleased blocks on 72.7 million
acres in the Gulf’s Western, Central and
Eastern Planning Areas.
The sale had originally been sched-
uled for 27 September, then again for 8
November, in response to judicial orders.
In a statement issued on 20 December,
API VP of Upstream Policy Holly Hopkins
said, "Despite policy headwinds, this sale
generated the highest bid amount in near-
ly a decade, demonstrating that our indus-
try is working to meet growing demand
and investing in the nation’s long-term
energy security."
NSTA awards 27 licenses for North Sea E&P in latest round
North Sea UK production received a
boost on 30 October with the award of
27 new licenses from the UK North Sea
Transition Authority (NSTA) in areas that
have the potential to go into production
more quickly than others. Additionally,
six more blocks, which were also ready
to be offered, have been merged into five
existing licenses.
The 33rd Oil and Gas Licensing Round
was launched on 7 October 2022 with 931
blocks and part-blocks. In total, NSTA
received 115 applications from 76 compa-
nies for 258 blocks/part-blocks when the
application window closed on 12 January
2023. This was the highest participation
since the 29th Round in 2016-2017.
All blocks that were awarded
have been through the initial Habitat
Regulation Assessment (HRA) and do not
require further assessment.
There are currently 284 offshore fields
in production in the UK North Sea and
an estimated 5.25 billion BOE in total
projected production to 2050. Oil and
gas currently contribute approximate-
ly three-quarters of the UK's domestic
energy needs. Further, the UK oil and gas
industry supports approximately 200,000
jobs and contributes £16 billion to the
economy each year.
A recommendation for the remaining
203 blocks will be made once the HRA
process has been completed.
BSEE issues energy infrastructure decom decision
In December, the US Bureau of Safety
Impact Statement (PEIS) process for Oil
and Environmental Enforcement (BSEE)
and Gas Decommissioning Activities on
published a Record of Decision (ROD)
the Pacific OCS. The final PEIS was pub-
for the decommissioning of offshore
lished on 27 October 2023 and recom-
energy infrastructure on the Pacific
mended the selection of the alternative
Outer Continental Shelf (OCS). The deci-
of complete removal of all oil and gas
sion provides a systemic pathway for
equipment and facilities on the Pacific
the removal of obsolete offshore oil and
OCS. Twenty-three California oil and gas
gas infrastructure following site-spe-
platforms, all installed between the late
cific environmental assessments and
1960s and 1990, are subject to eventual
approved decommissioning plans.
decommissioning. The ROD will guide BSEE on all
The decision also documents that
future decommissioning applications to
prior to decommissioning, a facility
remove oil and gas platforms, associated
must undergo a National Environmental
pipelines and other facilities offshore
Policy Act review that will assess a vari-
Southern California. It is the culmina-
ety of potential environmental impacts
tion of the Programmatic Environmental
from infrastructure removal.
44 She also added, "Although today’s con-
gressionally mandated lease sale is a posi-
tive step after multiple delays, the lack
of any offshore sales in the year ahead is
a prime example of the administration’s
failure to implement a long-term energy
strategy. We urge the administration to
reconsider its shortsighted approach and
plan today for tomorrow’s energy demand.”
In December, the Biden administration
issued its final five-year offshore leasing
program. However, 2024 is expected to be
the first year since 1966 without an off-
shore lease sale.
US EPA proposes rule
to establish fee on methane
emissions in oil and gas
On 12 January, the US Environmental
Protection Agency (EPA) announced a
proposed rule that would assess a charge
on emitters of waste methane from the
oil and gas sector that exceed emissions
intensity levels set by the US Congress.
The Inflation Reduction Act established
a Waste Emissions Charge for methane
from certain oil and gas facilities that
report emissions of more than 25,000 met-
ric tons of CO 2 equivalent per year to the
Greenhouse Gas Reporting Program. As
directed by Congress, the Waste Emissions
Charge starts at $900 per metric ton of
wasteful emissions in 2024, increasing
to $1,200 for 2025 and $1,500 for 2026 and
beyond. It only applies to emissions that
exceed the statutorily specified levels.
The EPA’s proposed rule addresses
details regarding how the charge will be
implemented, including the calculation of
the charge and how exemptions from the
charge will be applied. Facilities in com-
pliance with the recently finalized Clean
Air Act standards for oil and gas opera-
tions would be exempt from the charge
after certain criteria set by Congress are
met. JAN UARY/FEB RUARY 2024 • D R I LLI N G CO N T R ACTO R
Scan me to read the EPA's
Fact Sheet on the Waste
Emissions Charge.
bit.ly/47UCkTT