Court Gives Fisheries Agency More Time to do New Marine Life Study for GOM

Crude oil production in the offshore Gulf of Mexico (GOM) increased by more than 50% from 2013 to 2019, an extraordinary period of growth supported by new discoveries, new offshore platforms and new subsea tiebacks. Then, battered by Covid and major hurricanes, GOM output stumbled in 2020 and 2021, twice falling to less than 1.1 MMb/d, barely half the all-time mark of 2.04 MMb/d achieved in August 2019. More recently, production in the Gulf has been rebounding. But despite these gains — and a relatively mild 2023 hurricane season in the central and western Gulf — the region faces new challenges, including federal leasing delays, a significant oil spill, and an endangered species of sea giants known as Rice’s whales. 

Production bottlenecks and global energy security concerns stemming from the Ukraine war have flipped the script on various aspects of the U.S. energy markets. One of them is the softening of Wall Street and regulatory resistance to investment in new hydrocarbon infrastructure. That’s been particularly good news for the swarm of LNG export projects looking to move forward. It’s also improved somewhat the prospects for the embattled Mountain Valley Pipeline (MVP), the last major greenfield project for moving natural gas out of the Northeast from the Appalachian Basin. A court vacated three of the project’s key federal authorizations earlier this year, but the project recently got a greenlight when the Federal Regulatory Energy Commission (FERC) approved MVP’s amendment certificate application. Equitrans Midstream said last week that it would pursue new permits and target in-service in the second half of 2023. But the prospect of more legal challenges looms, and the question is, will it get across the finish line before severe constraints arise? In today’s RBN blog, we provide an update on the Appalachian gas market.

Russia’s invasion of Ukraine and Europe’s subsequent pivot away from Russian natural gas caused a huge resurgence in interest in U.S. LNG. That led to nearly 60 MMtpa (7.9 Bcf/d) of new U.S. LNG capacity reaching a final investment decision (FID) in 2022-23. But regulatory delays at the Federal Energy Regulatory Commission (FERC), the Biden administration’s pause on non-free-trade-agreement (non-FTA) export licenses, and legal challenges to the FERC approval process have essentially halted LNG development in the U.S. There are several LNG projects with enough commercial momentum to move forward that are stuck in regulatory or legal limbo, but even projects that have reached FID are not safe from legal challenges. In today’s RBN blog, we conclude our series on LNG delays by looking at recent court rulings and other regulatory issues and their impact on U.S. LNG development.