The last twelve months have seen a dramatic shift in the Gulf of Mexico (GoM) Energy market. A year or so back O&G lease areas were prohibited on federal lands (and waters), it was unclear if and when wind power would be considered along the southern coast and acquiring offshore CCS real estate was an unknown. As of today, it is likely three O&G lease sales will be held over the next 12-18 months, offshore wind lease areas are expected to be auctioned in Q1 / Q2 of 2023 and areas of State and Federal waters have been leased with the intended purpose of disposing of carbon. Quite the turnaround.
Looking beyond the GoM to the market as a whole the ‘Inflation Reduction Act’, passed in August of this year, is amongst other things, a thumb on the scale of the US Energy market, encouraging the adoption of CCUS and the development of decarbonisation and renewable technologies. The bill was eventually passed on the proviso that O&G leasing was resumed on Federal lands. Around the same time the State of West Virginia successfully sued the EPA (Environmental Protection Agency) preventing the body from regulating CO2 emissions under the Clean Air Act. At a federal level we are therefore left with carrots for Energy Transition (CCUS tax credit of $85, $bn in funding for Hydrogen production, etc) and no sight of any sticks (no price on carbon in the form of tax or Cap and Trade scheme). A different landscape than Europe.
What does this all mean for the Houston energy market? Lots of opportunity! As an Energy consultancy we want to engage the market, share our lessons learnt across the energy spectrum and build a new bright future for the GOM. Our team of 17 in Houston is supported by the depth and breadth of our global team.
The Geohazard team – acquired through Ocean Geo Solutions – has seen oil and gas site characterisation opportunities grow in Brazil and Guyana, and work returning in the GoM. The team has just commenced a large scope processing data and interpretating sites in the Mexican GoM. The team has also been working on assessing seismic data for geohazards for CCS developments. We are also growing the offshore wind work in collaboration with our Boston team. Lisa Hill is relocating at the end of this month to join the Northeast office to continue to grow this flow of work with several promising proposals already tendered.
Jill Watson, who joined earlier this year, brings a wealth of experience in onshore pipeline integrity and probabilistic risk modelling to Xodus. Alongside Mike Hardy who has a great deal of Systems Engineering experience and the XAMIN platform we are also pursuing a digital offering that differentiates us from others and provides us with a diversified revenue stream.
Finally, we are collaborating with the University of Houston as part of the Project Showcase consortium on a levelized cost of hydrogen study (LCOH), bringing in the extensive experience of delivering hydrogen projects in other territories. The pilot project for Texas State Waters is examining the reuse of existing infrastructure in the Gulf of Mexico and will see us create a cost of hydrogen map that will allow the consortium to compare areas and demonstrate the viability of green hydrogen as part of the future energy mix.
The future looks bright in Houston.
