Headlamp – $124 MILLION IN BIDS IN LARGEST OFFSHORE LEASE SALE

Blue Bayou link between Texas and Louisiana. According to a recent report from the International Energy Agency (IEA), the United States is poised to play a major role in supplying oil demand growth around the globe. U.S. oil production growth is projected to meet more than half of global oil demand growth during the next five years. At a time of increasing international uncertainty, the United States’ growing energy production capabilities could not be more opportune. U.S. energy supplies, particularly oil and natural gas, can make a preeminent contribution to global energy security. At the same time, steady investments in our nation’s energy infrastructure are required to ensure that those resources are able to reach end markets safely and efficiently. Projects of this scale and the companies undertaking them rely on a consistent regulatory review process to maintain timely construction and operation schedules. So, when that process is upended, it harms not only U.S. companies but also their customers and consumers around the world. Recent developments regarding the Bayou Bridge Pipeline provide a case in point.

Who drew the lines for the Arctic? The exact origin of the expression “to draw a line in the sand” is unknown. Some say it stems from the invasion of Egypt in 168 BC by Antiochus IV Epiphanes of Syria whereas others argue that it is associated with the Battle of the Alamo. One of the most popular origin stories is that it is derived from John 8:6 in which Jesus draws a line on the ground while addressing those eager to stone a woman accused of adultery. That the expression moved from the more tangible “ground” in the Bible to the more ephemeral “sand” in current use, is perhaps fitting. While humans have a tendency to fix firm boundaries and expect no one to cross them, the historical record is testament to just how fickle and fleeting such lines in the sand can be. Inherently dynamic and temporally limited, the capricious nature of lines is noticeable in any discussion of the Arctic. As the circumpolar north has increasingly come to the fore of international relations, such discussions have taken many tones. Will conflict break out over unsettled boundaries? Will a revisionist power seek to change existing delimitations? While definitive answers to these questions are not found in the past, examining how we got to the present can provide insight into long-term trends.

From today’s Washington Examiner, Daily on Energy:

$124 MILLION IN BIDS IN LARGEST OFFSHORE LEASE SALE: The largest oil and natural gas lease sale in U.S. history brought in $124 million in bids, the Interior Department announced Wednesday. The sale, held Wednesday morning, covered all available unleased areas in federal waters in the Gulf of Mexico. The sale, held in New Orleans, offered 14,776 blocks covering 77 million acres off the coasts of Texas, Louisiana, Mississippi, Alabama and Florida. The Bureau of Ocean and Energy Management said the government received 159 bids from 33 companies. Bidders includes Chevron, Shell and BP.

‘Bellwether’ event:  Interior Secretary Ryan Zinke recently called the sale a “bellwether” for industry interest in the Gulf, as offshore is overshadowed by onshore opportunities from the shale revolution. Brazil and Mexico are also competing for business in their offshore areas. Oil and gas production in the Western and Central Gulf of Mexico, which accounts for almost all current U.S. offshore production, is expected to hit a record high in 2018, after suffering three years of losses. The Bureau of Ocean Energy Management estimates that offshore resources in the Gulf contain more than 48 billion barrels of oil and 141 trillion cubic feet of natural gas.

Sale part of old plan: The sale is part of the National Outer Continental Shelf Oil and Gas Leasing Program for 2017-2022, a five-year program whose terms were established by the Obama administration.

First Reads:

The Bayou Bridge Pipeline and the Global Energy Picture
Real Clear Energy, Guy Caruso, March 21, 2018

A Brief History of Lines in the Arctic
The Arctic Institute, Greg Sharp, March 20, 2018