ExxonMobil Battles U.S. Over Gulf Oil Discovery
With the Gulf of Mexico slowly opening up once more to offshore exploration and production activity, companies like ExxonMobil have been quick to jump back in the drilling game. However, the U.S. Interior Department is being stricter than ever with permits, and according to them, ExxonMobil’s permit for its huge Julia oil field discovery—one of the largest fields found in the Gulf of Mexico in recent history—has expired.
The Julia field is believed to hold more than 700 million barrels of oil and gas equivalent. ExxonMobil announced the discovery, which lies roughly 250 miles southwest of New Orleans, in June. Exploiting the fields could yield billions of dollars for both ExxonMobil and in royalties paid to the U.S. government. In fact, a 1 billion barrel field could generate around $10.95 billion in government royalties.
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So why is the Interior Department reluctant to renew ExxonMobil’s permits, especially at a time when that kind of increased production could significantly reduce the United State’s oil shock? The Interior Department claims ExonMobil’s leases are expired and the company hasn’t met the requirements for an extension. "Our priority remains the safe development of the nation's offshore energy resources, which is why we continue to approve extensions that meet regulatory standards," says a spokeswoman for the Interior Department.
ExxonMobil spokesman Patrick McGinn claims that the government traditionally grants extensions as a matter of course. "You state your case and you got it." The government's refusal "was unexpected."
ExxonMobil and partner to the field Statoil have filed separate lawsuits in a Louisiana federal court to extend the leases. If the oil companies lose in court, the Julia field could fall into the hands of the federal government, ultimately delaying exploitation of the resources. ExxonMobil lost in an appeals process to the feds in May, citing the company’s lack of a specific plan to produce the oil.
While there’s no sense in playing favorites between the private and public sector, I would take it as a slap in the face to have invested millions into exploration activity to make one of the biggest oil and gas discoveries in recent history, only to have it ripped away by the regulators. It will be interesting to see how this case plays out as the U.S. economy continues to implode and a gigantic question mark still looms over oil markets.
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.