May 17, 2020

Offshore Drilling Safety Rules Finalized

energy digital
offshore drilling
offshore drilling safety
Admin
2 min
800px-Deepwater_Horizon_offshore_drilling_unit_on_fire_2010.jpg
The Obama administration has issued a final rule on offshore drilling safety that will cost the industry $130.7 million a year for additional inspecti...

 

The Obama administration has issued a final rule on offshore drilling safety that will cost the industry $130.7 million a year for additional inspections, testing and equipment designed to prevent another blowout like BP's 2010 Gulf of Mexico disaster.

Compared to the interim rule, the final one clarifies requirements in well-control barriers and the installation of mechanical barriers; defines testing requirements for cement; and extends requirements for blowout preventers to well-completions and decommissioning operations. It also saves the industry nearly $50 million compared to the interim rule from a reduced estimate for the length of time required for underwater testing.

As companies expand to drill sites at ever deeper levels in the gulf and move into the Arctic, environmentalists say the rules are not tough enough. Washington-based environmental group Oceana criticized the rule for failing to improve the interim one, which displace “lax inspections and laughably low fines,” according to Jacqueline Savits, the group's senior campaign director.

The new rule “is stronger than the interim rule but not strong enough,” David Pettit, senior attorney at the New York- based Natural Resources Defense Council, said in an e-mail to Bloomberg. “It should require real-world testing of the response time for containment of a wild well.”

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It requires a professional engineer to verify the safety of the well's casing and cementing, used to prevent uncontrolled leaks, which must then be certified by an independent third party.

Since BP's oil spill in the gulf, drillers have also added safety equipment and created systems to collect oil spilled under water. In light of the new rule, Shell has delayed drilling in the Beaufort and Chukchi seas off the coast of Alaska to review the requirements.

 

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Jul 26, 2021

Ofwat allows retailers to raise prices from April

Ofwat
Utilities
water
prices
Dominic Ellis
3 min
Ofwat confirms levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue

Retailers can recover a portion of excess bad debt by temporarily increasing prices from April 2022, according to an Ofwat statement.

The regulator confirmed its view that levels of bad debt costs across the business retail market are exceeding 2% of non-household revenue, thereby allowing "a temporary increase" in the maximum prices. Adjustments to price caps will apply for a minimum of two years to reduce the step changes in price that customers might experience.

Measures introduced since March 2020 to contain the spread of Covid-19 could lead to retailers facing higher levels of customer bad debt. Retailers’ abilities to respond to this are expected to be constrained by Ofwat strengthening protections for non-household customers during Covid-19 and the presence of price caps.  

In April last year, Ofwat committed to provide additional regulatory protection if bad debt costs across the market exceeded 2% of non-household revenue. 

Georgina Mills, Business Retail Market Director at Ofwat said: “These decisions aim to protect the interests of non-household customers in the short and longer term, including from the risk of systemic Retailer failure as the business retail market continues to feel the impacts of COVID-19. By implementing market-wide adjustments to price caps, we aim to minimise any additional costs for customers in the shorter term by promoting efficiency and supporting competition.”  

There are also three areas where Ofwat has not reached definitive conclusions and is seeking further evidence and views from stakeholders:   

  1. Pooling excess bad debt costs – Ofwat proposes that the recovery of excess bad debt costs is pooled across all non-household customers, via a uniform uplift to price caps. 
  2. Keeping open the option of not pursuing a true up – For example if outturn bad debt costs are not materially higher than the 2% threshold. 
  3. Undertaking the true up – If a 'true up' is required, Ofwat has set out how it expects this to work in practice. 

Further consultation on the proposed adjustments to REC price caps can be expected by December.

Anita Dougall, CEO and Founding Partner at Sagacity, said Ofwat’s decision comes hot on the heels of Ofgem’s price cap rise in April.

"While it’s great that regulators are helping the industry deal with bad debt in the wake of the pandemic, raising prices only treats the symptoms. Instead, water companies should head upstream, using customer data to identify and rectify the causes of bad debt, stop it at source and help prevent it from occurring in the first place," she said.

"While recouping costs is a must, water companies shouldn’t just rely on the regulator. Data can help companies segment customers, identify and assist customers that are struggling financially, avoiding penalising the entire customer in tackling the cause of the issue."

United Utilities picks up pipeline award

A race-against-time plumbing job to connect four huge water pipes into the large Haweswater Aqueduct in Cumbria saw United Utilities awarded Utility Project of the Year by Pipeline Industries Guild.

The Hallbank project, near Kendal, was completed within a tight eight-day deadline, in a storm and during the second COVID lockdown last November – and with three hours to spare. Principal construction manager John Dawson said the project helped boost the resilience of water supplies across the North West.

“I think what made us stand out was the scale, the use of future technology and the fact that we were really just one team, working collaboratively for a common goal," he said.

Camus Energy secures $16m funding

Camus Energy, which provides advanced grid management technology, has secured $16 million in a Series A round, led by Park West Asset Management and joined by Congruent VenturesWave Capital and other investors, including an investor-owned utility. Camus will leverage the operating capital to expand its grid management software platform to meet growing demand from utilities across North America.

As local utilities look to save money and increase their use of clean energy by tapping into low-cost and low-carbon local resources, Camus' grid management platform provides connectivity between the utility's operations team, its grid-connected equipment and customer devices.

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