Daily Archives: July 18, 2017

A federal court on Friday rejected the Trump administration's effort to dismiss a lawsuit challenging the approval of fracking in federal waters off California.

The suitfiled by the Center for Biological Diversity and Wishtoyo Foundationnotes that the government violated the National Environmental Policy Act and Endangered Species Act by failing to carefully study offshore fracking's risks before allowing this dangerous oil-extraction practice. The suit points to offshore fracking pollution's threats to the marine environment, public health, imperiled wildlife and sacred Chumash cultural resources and places.

"This is a big victory in the fight to protect California's coast from offshore fracking's toxic chemicals," said Kristen Monsell, a Center for Biological Diversity attorney. "We're glad the court rejected the Trump administration's baseless attempt to dismiss efforts to force a hard look at offshore fracking's risks. The law clearly requires the feds to carefully study and reduce threats from offshore fracking, not blow them off so oil companies can keep using this hazardous process in fragile coastal environments."

The Trump administration argued that the approval of offshore fracking and acidizing at all active oil and gas leases in the Pacific Ocean was not a final agency action reviewable by the court. In rejecting these arguments, the court noted that federal defendants' challenged decision allowed the use of offshore fracking and acidizing "without restriction" at all active leases in the Pacific Ocean.

Oil platforms in the Santa Barbara Channel have federal permission to annually dump up to nine billion gallons of produced waterincluding fracking chemicalsinto the ocean. At least 10 fracking chemicals used in offshore fracking in California could kill or harm a broad variety of marine species, including sea otters and fish, Center for Biological Diversity scientists have found. The California Council on Science and Technology has identified some common fracking chemicals to be among the most toxic in the world to marine animals.

The court also rejected the Trump administration's attempt to dismiss a similar lawsuit filed by the state of California. The state's case also argues that the approval of offshore fracking without carefully studying the risks violates the National Environmental Policy Act, and that federal officials violated the Coastal Zone Management Act by failing to determine if offshore fracking is consistent with California's coastal management program before allowing the practice.

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Big Victory in Fight to Protect California's Coast From Offshore ... - EcoWatch

Sign made for Brunswick County Commissioner Pat Sykes at rally against offshore drilling (Photo: Hannah Patrick/WWAY)

BRUNSWICK COUNTY, NC (WWAY) Dozens rallied in Sunset Beach today against offshore drilling, seismic testing, and GenX.

Brunswick County is one of only two counties in the state that has passed resolutions supporting offshore drilling.

Representative Deb Butler was one of several guest speakers who addressed a very large crowd at Sunday Beach Town Park this morning about offshore drilling.

When big oil threatens to blast the floor of our ocean, Butler said. We are going to stand again together and say no.

Butler also addressed GenX concerns.

As DuPont and Chemours are filling the Cape Fear River with GenX, what do we say? No, Butler said.

Franklin Oldham said he drove to the rally from Wilmington to make sure his voice was heard.

The GenX scare, seismic blasting, offshore drilling, these are things that affect everybody, Oldham said.

Sunset Beach Councilman Rich Cerrato said offshore drilling is an economic risk.

One spill in any Brunswick County pristine beach will destroy this county and economy, Cerrato said. People will not visit. We will lose revenues. I do not understand why our county commissioners in Brunswick County do not understand this business logic.

Cerrato told the crowd Brunswick County is one of only two counties that has previously passed resolutions supporting offshore drilling.

This is embarrassing, Cerrato said.

Dwight Willis shared that frustration by reading a statement to the crowd from Brunswick County Commissioner Pat Sykes in a StarNews article over the weekend.

It might not even happen here, Sykes said in an article in the StarNews. I just dont see causing a stir when theres nothing there. I just am not one to get involved unless I need to. Its not an issue for the county at this point.

Willis then encouraged the crowd to e-mail Sykes with this message.

Stir it Pat! Willis said.

Cerrato hopes the county commissioners can come together with a new resolution.

Dont kick the can down the road, Cerrato said. Pass a resolution and vote against offshore drilling.

Butler said it needs to happen before it gets to the state.

Im sure its going to work its way to the state house, Butler said. Im not optimistic when it gets there. Thats why I think we need to combat it on the local level.

We reached out to Commissioner Sykes for a response. We are still waiting to hear back.

Original post:

Dozens rally against offshore drilling, call on new county resolution - WWAY NewsChannel 3

At the end of June, the Department of the Interior announced plans to develop a new five-year National Offshore Oil and Gas Leasing Program on the Outer Continental Shelf (OCS).

The current five-year plan was finalized just last year by the Obama administration and was the result of years of negotiations, environmental impact research and public comments. But the Trump administration has other plans for Americas energy initiatives and announced their intentions when President Trump signed an executive order on April 28 requesting an offshore American energy strategy.

Secretary of the Interior Ryan Zinke hinted at the administrations intentions:

Developing a new National Offshore Oil and Gas Leasing Program that respects environmental and economic sensitivities but still allows us to responsibly develop our resources is critical to reaching President Trumps goal of American energy dominance. Offering more areas for energy exploration and responsible development was a cornerstone of the Presidents campaign and this action is the first step in making good on that promise for offshore oil and gas.

While the announcement merely begins the 45-day open comment period, that is the first step to the Trump administration being able to rework a new five-year offshore drilling program. Details are scarce on the specifics of an intended plan, but Acting Assistant Secretary Kate MacGregor noted that 94-percent of the OCS is off-limits to drilling, and it seems that the Trump administration would like to change that.

We spoke with the Surfrider Foundations environmental director, Pete Stauffer, to get a sense of how this future offshore drilling program could affect our coasts, beaches and oceans.

What currently is Americas offshore drilling policy? Currently the Atlantic coast and Pacific coast are protected from offshore drilling within the federal governments five-year plan.

The current plan was finalized last year after years of environmental review and millions of comments submitted by citizens. So the Trump administration this year has said they want to revise that plan and they are interested in expanding offshore oil and gas drilling into new areas.

What are some of those new potential areas for offshore drilling? Theyre looking at the Atlantic, the Pacific, the Arctic. This will be a multi-year process, and in the coming months we will see a more specific proposal of exactly where theyre looking.

At this stage, theyve cast a very wide net and are essentially saying that theyre open to everywhere, particularly the Atlantic, Pacific and Arctic. All three of those are battleground regions.

What are some of the risks of offshore drilling? There are major environmental impacts throughout every phase of the offshore drilling process. That starts with seismic testing, which is looking for oil and gas reserves.

Oil and gas companies use these loud sound blast explosions that are really damaging to marine life to identify oil and gas deposits. That is likely to move forward off the Atlantic in the coming months.

A second type of impact is the industrialization of the shoreline. The infrastructure, the refineries and the pipeline can really change the character of a coastal community. Major impacts to water quality and air quality, and then, of course, oil spills.

For every major oil spill that gets headlines, you have hundreds of smaller spills that are under-reported and cause serious impact.

For people that visit the coast, those that surf, those that swim, all of this will affect you.

With our dependence on oil, doesnt oil drilling have to happen somewhere? Theres two things I would say to that. What is not even clear is if there is a strong demand for or need for offshore drilling, because its safer and cheaper to do so on land. The second point is Surfrider and many other groups and people believe we need to shift to renewable sources of energy.

If you look at the Atlantic coast, the amount of oil that is there is actually relatively small, something like an eight-month supply of oil. Its not a sustainable or renewable source of energy.

What about the economics of it? Dont drilling advocates say it creates jobs? Drilling advocates often bring up that its economic development with jobs, but for coastal communities, their economy is much more dependent on tourism, recreation and fisheries many times over.

Thats why weve seen an incredible response on the Atlantic, with over 125 local governments passing resolutions against drilling, tens of thousands of businesses saying, We dont want this; it threatens our economy. This is not just an environmental issue; its an economic one as well.

Obviously Surfrider works on a lot of issues, [but] there havent been many issues that have galvanized our chapters and also communities, businesses, elected officials of both parties just saying that it doesnt make sense.

It will be a multi-year process; its going to be a battle for sure. And ultimately we need to reduce our oil consumption and switch to clean energy.

You can find out more about offshore drilling from Surfrider. And if you want to leave a public comment for the Department of the Interior, head to regulations.gov and search BOEM-2017-0050.

More about oceans from GrindTV

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How the newly proposed offshore drilling program could affect your coast - GrindTV

Image: Jack-up Rig.

Investment Thesis:

One important element for a robust and sustaining recovery in the offshore drilling industry is a fast rig attrition without the shadow of a doubt. The over-capacity is as important as the price of oil, in my opinion. In short, the industry is suffering a lingering rig over-capacity, which slows down the prospect of a recovery and keeps the day rates at an unsettling low level. However, while the low day rate could be seen as a negative, conversely, it can also offer the incentive necessary to produce more tendering opportunities by lowering the cost of drilling on a per barrel basis.

This article analyzes how fast is the rig attrition really going, by showing its progression for the first six months of 2017.

Note: I used data from infieldRigs

Data Analysis:

In general the drilling rigs are comprised of four classes:

Warning: I will study the three first classes and leave the Tenders which doesn't represent an important class, in my opinion.

1 - Let see how fast is the rig count going down?

Since January, the offshore industry scrapped or canceled:

Obviously, the attrition rate of the floater, is much higher than the attrition rate of the jack-up, due mainly to the cost of stacking. Cold stacking a Jack-up costs only couple $K. However, 43 rigs have been scrapped or canceled during the first half of 2017.

We have now 934 rigs in total with 421 rigs operating.

2 - Let's look now at the status per class.

Conclusion:

Utilization is apparently too low, averaging 45.07%. An acceptable use of a minimum of 50+% requires that the industry scraps more or cancel more under-construction rigs. This is what we call over-capacity.

To be able to meet a more balanced fleet status based on a 50% utilization, as of today, we can estimate quickly how many rigs need to be scrapped:

A total of 92 rigs should be retired or canceled before the market can start to balance again, in my opinion. This situation is not homogeneous throughout the three classes and the semi-submersible class needs more attention.

However, while the jack-up class seems more balanced than the floaters' classes, it is paramount to look at the "under-construction" situation as well, especially the delivery expected or delivery potential.

For example, it is highly unlikely that Paragon offshore (OTCPK:PGNPQ) will take delivery of the Prospector 6, Prospector 7 and Prospector 8 Jack-ups while they are still listed as "under-construction".

The same situation for Seadrill (SDRL) who has about 7 jack-ups under-construction. These rigs will be "re-organized" with the new restructuring plan.

The same thinking applied for the floaters as well. Most of the rigs under-construction have been already delayed for two years or more and, in some special cases, may never be built and likely to be canceled.

Everyone here knows about Sete Brazil, which on April 2016 filed for bankruptcy protection, as its only client Petrobras failed to book a big enough drilling rig order, cutting the initial plan for 28 rigs down to ten, last year.

Finally, one interesting segment is the "cold stacked" rigs.

These rigs are likely to be held for sale and scrapped later, especially in this difficult contracting environment with dismal day rates. To be able to bring back a cold stacked rig to life again, the offshore driller will have to spend a very large amount -- between $50 million to $100 million -- which cannot be recouped with a midterm contract at low day rate. In fact, we can consider the "cold stacked" rigs as "to be scrapped soon". The cold stacking process is a slow death sentence, period.

For example, Paragon Offshore still struggling in bankruptcy protection owns 40 rigs. However, if we look closer, we can see that PGNPQ lists 13 jack-ups and 4 drillships as "cold stacked". The drillships have been delivered in 1975-1978 and are over 40 years old. Thus, 17 obsolete rigs that will be sold and scrapped very soon.

We can also look at Transocean (RIG) and its 50 rig fleet with about 23 floaters classified as "cold stacked". The majority of these rigs is practically obsolete and will be sold for scrap sooner or later.

The actual over-capacity is not really here anymore. It is just an over-capacity "on paper" and the fleet worldwide is more balanced than it looks, and we could argue that the re-balancing is, in fact, not far from happening. The Industry needs more contracting activity, period.

Important note: Do not forget to follow me on the offshore drilling industry. Thank you for your support.

Disclosure: I am/we are long RIG.

I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: I day trade SDRL and trade RIG on special occasions.

Editor's Note: This article covers one or more stocks trading at less than $1 per share and/or with less than a $100 million market cap. Please be aware of the risks associated with these stocks.

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Offshore Drilling - Rig Attrition Analysis: Trend And Outlook - Seeking Alpha

It certainly looks and feels and sounds as though we might be close to reaching a summertime peak for fishing here in South Jersey.

We are hearing about sometimes plentiful smaller fish such as kingfish, particularly in the surf.

Summer flounder are thick in the back bays and inlets, and more have been reported on the inshore reefs and lumps. Sea bass are inhabiting inshore and offshore wrecks and reefs.

The latest version of tautog season opened Monday. We have weakfish, striped bass and bluefish mixing it up with triggerfish, porgy and, just recently, croaker.

Offshore yellowfin and bluefin tuna have been solid, and mahi and wahoo are appearing to make the longer runs more valuable.

Spanish mackerel have appeared. White marlin and, also just recently, blue marlin have been reported.

Oh, yeah, were also hearing about catch-and-release only brown sharks and sand tiger sharks along the beaches, mainly at night, and the lingering mako in the deep.

It is very interesting right now.

The water temperatures have jumped up to a more summerlike 70 degrees from the frigid lower 60s and even upper 50s of last week or so. That looks to have instigated some new activity.

Linda Davoli, of Brigantine, temporarily has given up surf fishing off her home turf. The former champion surfer has been riding waves between flounder trips in Absecon Inlet and inshore at what she described as her end-of-August lump off Brigantine.

She said she caught flounder Saturday after the winds died and the greenheads drove her out of the back bays including 22- and 23- inch keepers hooked up by a friend.

Summer flounder are thick in some of the back bays, and kingfish are spreading out along the

She bagged a trip Sunday because of what she saw was a zoo, with heavy boat traffic in Absecon Inlet, but was headed out Monday.

Now, it is a normal flounder season, she said.

Davoli said she shared her cache of 30 or so minnows for bait, splitting them with another captain.

Another example of flounder taking up residence in the ocean is at Townends Inlet reef. Tim Davis said from Morans Dockside in Avalon that s where a pal of his, Jon Werley, had his limit of three keepers of 24, 23 and 21 inches long.

Flounder are without a doubt hanging in the back bays and inlets. Saturdays 24th Duke of Fluke proved that, just as it seems to do every year. The contest was organized out of Sterling Harbor Marina in Wildwood.

Wayne Reichle on Feast or Famine won for the heaviest single flounder at 6.36. Michael Bascome on Size Matters was next at 5.79, and Mike Messina on Wendy 7 was third at 5.28.

The heaviest five was 23.03 pounds and went to Christopher Voss on She Gave In. John Peterson on Unreel had 20.89, and Ross Dickinson on U10 had 18.12 total.

Joe Muravsky was the kayak division champ with a single-heaviest 4.2, while Brad Hamilton came in at 3.81, and John Karler at 3.79.

Dana Townsend took the Duchess Award with a 3.5-pound flounder. Mike Schaeffer won the bluefish division at 3.96 pounds, and Clint Clement had a 3.06 sea bass.

The contest attracted 87 boats and 47 kayaks and was topped off by the usual awards bash, complete with a live band.

Mike ONeill runs the charter/open boat Stray Cat from Seaview Harbor in Great Egg Inlet.

Ever since Jaws, those looking to spot sharks would look for the ominous shark fin, made f

He has been trolling about 15 miles off and picking off 2-pound bluefish that are out there in large schools with mahi. A nice bonus developed in the past week or so: They have been enticing Spanish mackerel and getting the occasional cobia on No. 3 Clark Spoons.

John Sowerby is the captain of the Hooked Up II party boat that docks at South Jersey Marina in Cape May.

His most recent journey to the blue water resulted in what he termed excellent yellowfin tuna in the 40- to 60-pound class on a daytime chunk and jig. He said they had tuna under the boat throughout the day.

Yellowfin tuna have been reported more inshore at the Hot Dog on the troll and at Massey on the chunk, plus offshore at Spencer, Lindenkohl and Wilmington canyons, along with a few blue marlin and some makos.

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Mike Shepherd is the retired sports editor of The Press. His column appears in the Tuesday and Saturday print editions and online.

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Variety of catches keeps improving inshore and offshore: Shep on Fishing - Press of Atlantic City