Guest ROTFLMFAO in Houston by David Middleton

U.S. smart to delay expansion of offshore drilling [Editorial]
By The Houston Chronicle May 5, 2019

Drill baby, drill? Not so fast—and thank goodness.
The Trump Administration has put on hold indefinitely plans to vastly expand offshore drilling by opening up billions of acres of water for oil-and-gas leases in the eastern Gulf of Mexico, in two seas in the Arctic, off the southern coast of California and, for the first time, up and down the East Coast in the Atlantic Ocean. The pause is good news for the environment, of course, but it’s also a win for the rule of law and for democracy, too.

On a more parochial level, the news also ensures that for now the Gulf Coast near the Houston-Galveston region will retain its status as the primary nexus of activity for the industry. Given the synergies with the rest of the energy industry, that’s a good thing, too.

[…]

The Houston Carbuncle

On the “bright side,” The Carbuncle seems to finally recognize that the oil & gas industry is relatively important to the Houston economy. This was not the case five months ago.

Billions of acres?

The Bureau of Ocean Energy Management (BOEM, “Bow-em”) manages 1.7 billion acres on the outer continental shelf (OCS). 1.7 billion is about 300 million acres short of billions of acres. Less than 60 million acres in the Gulf of Mexico (GOM), leased between 1947 and 1982, are currently under lease or held by production. Most of what is currently available has been “turned over” more than twice. Of the 146 million currently unleased acres in the GOM, 90 million (60%) have never been leased (NBL). With almost the entire Western and Central GOM OCS covered with modern 3d seismic surveys and the most recent new play discoveries (Ultra-deepwater Lower Tertiary and Jurassic Norphlet) being fairly mature in terms of leasing, if not drilling and production, “NBL” is a pretty good indication that there isn’t an “ice cube’s chance in Hell” of there being any potential on those leases or they are “off limits” in the Eastern GOM.

Most of the Norphlet play and almost all of the Mesozoic potential is “off limits” in the Eastern Gulf of Mexico.

The map above is preliminary, after doing a little more “research,” I found that the Mobile Bay gas fields are about twice as large as depicted. The Norphlet play is fascinating and will be the subject of an upcoming post… It even involves climate change on a scale hitherto unimaginable (to paraphrase Doctor Strange… Oh, Avengers: Endgame – THE best movie ever made… even better than Ben-Hur).

Atlantic open “for the first time”?

I suppose it is accurate to say that it has never all been open in the same sale before. However, the North Atlantic, Mid-Atlantic, South Atlantic and Straits of Florida planning areas were periodically offered for leasing from 1959-1983 . Of course this was prior to 3d seismic surveys and when offshore drilling and production were at least a couple of technological generations behind where they are today.

“A win for the rule of law and for democracy, too”?

“A win for rule of law” remains to be seen. President Obama permanently removed much of offshore Alaska from leasing. President Trump reversed this executive order with another executive order. An Obama judge ruled that Obama’s executive order cannot legally be reversed. The courts will decide if the Outer Continental Shelf Lands Act (OCSLA) prohibits the undoing of prior executive orders. Assuming this winds up in the Supreme Court, there’s at least a 50-50 chance that the Obama judge’s ruling will be overturned. Whatever the outcome, the final decision will be a “win for the rule of law.” Rule of law is a procedure, not an outcome.

Assuming that The Carbuncle is referring to elections, the OCSLA is not subject to “democracy.” It’s a law passed by Congress, to be executed by the Executive Branch, which is run by the President. President Trump is the democratically elected president of these United States… We are united by something called the United States Constitution. Before anyone tries to argue that Mr. Trump was not democratically elected… I suggest they read the United States Constitution first.

“The Gulf Coast near the Houston-Galveston region will retain its status as the primary nexus of activity for the industry”?

While Houston is the global capital of the oil & gas industry, that “nexus” extends from Corpus Christi, Texas to Mobile Bay, Alabama. Port Fourchon, Louisiana might be almost as important as Galveston as an operational support facility.

That said, the preponderance of the BOEM’s estimated undiscovered offshore resource potential is in the Gulf of Mexico.

Even if everything was opened up tomorrow, the the global capital of the oil & gas industry would still be Houston and the nexus for offshore operations would still stretch from Corpus Christi, Texas to Mobile Bay, Alabama… and maybe on to Tampa, Florida.

Note to The Houston Carbuncle