David Kirkpatrick

April 13, 2009

Improving oil shale extraction

This new technology is big because the U.S. has three times Saudi petroleum reserves in oil shale. If we can economically tap this resource we become energy independent for the foreseeable future.

My original post from EnerMax:

Oil companies have a new tool for extracting oil-shale reserves that significantly lowers production costs. An advanced heater cable limits the need for expensive mining techniques, which excavate and heat formations to extract the oil.

The new technology is based around a ceramic-composite material that withstands both high temperatures and constant exposure to moisture. The material is used in extracting crude oil from shale by drilling deep boreholes, feeding cables of the material into the holes and heating the oil shale deep below the surface. This forces the oil into an extraction well where it is easily pumped to the surface.

A Colorado company, Composite Technology Development Inc. (CTD), has proven the material works for oil shale extraction. The Department of Energy supports the new technology and verified the positive test results of CTD’s cable.

Victor K. Der, the acting assistant U.S. energy secretary for fossil energy, says, “With DOE’s support over two phases of this project, CTD has demonstrated a way to tap into the western oil shale resources. With two-thirds of the world’s supply of oil shale in the United States, technologies such as this can go a long way toward bolstering the development of our domestic energy resources, creating jobs and supporting energy security.”

This technology is important to domestic energy production because oil shale deposits exceed Saudi Arabia’s oil reserves three times over and are comparable to Alberta’s oil sands. According to a 2008 report by the Utah Mining Association, the ability to efficiently extract crude from oil shale gives the U.S. the “potential to be completely energy self-sufficient, with no demands on external energy sources.”

Sources used in this post include Oil & Gas Journal, Technology Review and News Blaze.

March 11, 2009

OPEC’s production cuts — working?

Filed under: Business — Tags: , , , — David Kirkpatrick @ 2:08 pm

Maybe, maybe not. Oil was heading up, but took a hit today. I’m guessing OPEC has very little real teeth right now for whatever reason. If you believe some of the industry analysts, it looks like compliance within member nations of the cartel for the production cuts isn’t so great.

Here’s my latest post at EnerMax covering this very subject.

From the link:

One area of concern for OPEC, and of interest to petroleum sector analysts, is the level of compliance with the new, lower production quotas among OPEC nations. One analyst says, “OPEC is still having trouble meeting current quotas,” and that cheating remains a problem for OPEC. Qatar’s oil minister, Abdullah Bin Hamad al Attiyah, says he is satisfied with compliance describing the commitment among OPEC nations for the production cuts as, “very good.” This sentiment was echoed by Iran’s OPEC governor Mohammed Ali Khatibi who says, “Adherence is better than everybody expected, 80 percent, 90 percent.”

Khatibi adds, “Up to 2030, we have to build capacity for 45 million barrels a day, just for compensating the (natural) decline. In addition to that, we need to respond to future demand. The current price cannot encourage any investment, everybody expects a better price. The question is how we can achieve this.”

This confidence from OPEC members is not shared by petroleum industry analysts. One analyst says the rally in the price of oil and OPEC influence is “overdone.” The analyst continues, “OPEC is still having trouble meeting current quotas and cheating remains an issue.”

February 14, 2009

Halliburton settles bribery charge

Filed under: Business — Tags: , , , , , , — David Kirkpatrick @ 12:14 pm

KBR, back when it was still part of Halliburton, bribed Nigerian officials during the construction of a natural gas plant. Halliburton recently settled with the U.S. government in the case to the tune of almost $560M. It still faces charged in the EU and Africa.

Here’s an EnerMax post of mine from this week on the settlement:

Oil and gas services company, Halliburton, settled charges that one of its divisions engaged in bribing Nigerian officials. The settlement came to a $559 million payout to the Justice Department and the SEC. This figure is the largest paid by any U.S. company facing bribery charges.

The charges stemmed from the construction of a gas plant in Nigeria. The investigation began back in 2003 and the matter is still being pursued in Europe and Nigeria so Halliburton still faces potential additional fines and possible sanctions.

From the Wall Street Journal:

The U.S. government’s case received a boost in September when former Halliburton executive Albert J. “Jack” Stanley agreed to plead guilty to orchestrating $180 million in bribes to senior Nigerian officials. Mr. Cheney promoted Mr. Stanley to run KBR in 1998.The charges against Mr. Stanley relate to work done by former Halliburton unit Kellogg, Brown & Root, which was spun off in 2007 into a separate company, KBR Inc. Halliburton agreed to pay penalties stemming from the case even after KBR was independent.

It is unclear whether the proposed settlement will affect KBR’s ability to land future government contracts. A KBR spokeswoman said it would discuss the impact of the proposed settlement in February, when it files its earnings.

News of the large settlement comes on the heels of Halliburton reporting a 43 percent drop in fourth-quarter earnings. The settlement includes a payment of $382 million on behalf of KBR to the U.S. Justice Department and $177 million to the Securities and Exchange Commission.

The charges against KBR originated during the construction of a large liquefied natural gas plant near Port Harcourt on the Nigerian Coast. This project began in 1996 and ran through the mid-2000s. The gas plant was the largest industrial investment ever made in Africa at that time.

The previous U.S. record for a bribery investigation also involved the oil and gas industry. Oil-services firm Baker Hughes was fined $44 million in 2007 for improper payments in Kazakhstan.

February 11, 2009

Oil and gas windfall profit taxes might backfire

This study commissioned by the American Petroleum Institute sees problems with the idea of a windfall tax on the oil and gas industry. I’m all for seeking out and implementing alternative sources of energy.

I blog often on solar, wind and other alternative power breakthroughs, but at the same time I’m realistic. We need a strong domestic petroleum industry for many reasons. Not the least of which that is the way our nation is powered for the time being and no single alternative energy innovation, or wishful thinking, is going to change the fact.

Realistic thinking, many innovations and a nation running on all cylinders, so to speak, will make a difference in the long run. And like it or not, the oil and gas industry is integral to the effort.

From the link:

The imposition of new taxes on the oil and natural gas industry likely could kill hundreds of thousands of jobs, slow economic growth and make Americans more dependent on foreign sources of energy, according to a study released today.

The CRA International study, commissioned by the American Petroleum Institute, underscores how ill-advised tax policy would likely result in less domestic oil and natural gas production – which would likely undermine both the nation’s economic and energy security. While there is no specific windfall profits tax proposal being considered by the Congress, the CRA analysis focuses on the windfall profits tax to illustrate that a similar tax or combination of taxes could have negative consequences for the U.S. economy.

“U.S. dependence on foreign oil could be magnified over the next 20 years if the oil and gas companies face the prospect of higher taxes that reduce returns on new investments,” said W. David Montgomery, a vice president at CRA, who conducted the study. “Although this study has specifically assessed the impact of a proposed windfall profits tax, similar forms of increased taxation or other policies that reduce incentives for new investment would be expected to have similar negative consequences.”

The study also found that a windfall profits tax likely would:

  • Cause a net loss of up to 490,000 U.S. jobs by 2030. 

  • Reduce U.S. gross domestic product by roughly 1 percent, or $240 billion by 2030.  

  • Increase U.S. imports of crude oil by up to 18 percent in 2030 and reduce U.S. domestic production of crude oil by up to 26 percent in the same year. 




Update 2/17/09 — Here’s my EnerMax post on the study.

February 5, 2009

Oil and gas news from Davos

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 12:37 am

Here’s a blog post I did for EnerMax on an oil and gas investment report from the World Economic Forum in Davos. The consensus from industry leaders is the current low petroleum prices are affecting investment.

From the link:

The World Economic Forum in Davos hosted a presentation by leaders in the international oil sector. The consensus from energy leaders is the current price of a barrel of oil at around $40 is too low to prompt enough oil and gas investment for future demand. BP’s Tony Howard said a fair market price is somewhere between $60 and $80 per barrel of light, sweet crude.

Howard added the current low price of oil is due to little, or no, economic growth in most parts of the world and the subsequent short-term demand destruction. He said a higher market price for oil would help OPEC nations to balance their budgets and invest in oil to guarantee future supplies as demand ramps back up with a global economic recovery.

November 4, 2008

Price of oil vis-a-vis oil investment

Filed under: Business — Tags: , , , — David Kirkpatrick @ 5:48 pm

My latest oil and gas investment offering at EnerMax. Remember to hit this link for a lot of great blogging on the crude and dirty oil and gas industry news

October 16, 2008

EnerMax blogging

Filed under: Business, Media, Science, Technology — Tags: , , , , , — David Kirkpatrick @ 1:40 pm

I’ve started blogging at EnerMax on innovations and news in the oil and gas industry. You can find my first effort here. It covers the opening of Iraq’s petroleum fields to international oil and gas investment.

I do a lot of solar blogging here, mostly because I’m very interested in putting some panels on my sun-drenched roof, but I have a deep interest in all aspects of the energy and power generation industries. At EnerMax I’m part of a team so you might not be able to figure out which posts are mine, but do hit that site for my regular take on the oil and gas end of energy.