David Kirkpatrick

July 9, 2010

BP’s epic fail …

Filed under: Business, Science, Technology — Tags: , , , , , — David Kirkpatrick @ 1:17 pm

illustrated.

(Hit the link for an interactive graphic, or head here for the PDF breakdown.)

June 8, 2010

Anger and ideas for Deepwater Horizon spill

British Petroleum is about to get nailed six ways to Monday by what is safe to assume to be a multi-agency federal offensive. BP is taking a well-deserved public relations hit, and the Obama administration is taking it on the chin as well, because fair, or not, that’s the way these things play out politically.

This quote from the president should have BP quaking:

President Barack Obama said he wanted to know “whose ass to kick” over the Gulf of Mexico oil spill, adding to the pressure on energy giant BP Plc as it sought to capture more of the leak from its gushing well.

In an interview with NBC News’ “Today” aired on Tuesday, Obama also said that if BP Chief Executive Tony Hayward worked for him, he would have fired him by now over his response to the 50-day-old spill, the worst environmental disaster in U.S. history. It was triggered by an April 20 well blowout and rig explosion that killed 11 workers.

BP can’t say they aren’t being offered any solutions, but to be fair there’s no way to reasonably vet even a fraction of these 35,000-and-counting ideas for even a modicum of feasibility.

From the link in the previous graf:

BP has received almost 35,000 ideas in just over a month on how best to clean up the millions of gallons of oil from the biggest spill in U.S. history. So far, only four have made it into testing.

And:

If the ideas—which range from soaking up oil with human hair to enlisting oil-eating microbes—are seen as practical and don’t overlap with proposals already being explored, they’re sent to smaller teams of engineers to see if they can be applied, MacEwen said. About 800 proposals have made it to this stage, with just one-half of 1 percent of those in testing, he said. Most are duplicative or infeasible, MacEwen said.

May 27, 2010

Deepwater Horizon clearinghouse

If you’re looking for information on what is an absolute Gulf of Mexico ecological disaster from BP’s Deepwater Horizon offshore oil well, hit this link for very thorough coverage from a news source with something of a dog in this fight — the Houston Chronicle.

May 10, 2010

Deepwater Horizon blowout caused by methane bubble

Doesn’t mitigate the extent of this disaster, but it is good to at least have an idea about what caused the blowout in the first place.

From the link:

The deadly blowout of an oil rig in the Gulf of Mexico was triggered by a bubble of methane gas that escaped from the well and shot up the drill column, expanding quickly as it burst through several seals and barriers before exploding, according to interviews with rig workers conducted during BP’s internal investigation.

While the cause of the explosion is still under investigation, the sequence of events described in the interviews provides the most detailed account of the April 20 blast that killed 11 workers and touched off the underwater gusher that has poured more than 3 million gallons of crude into the Gulf.

Also from the link, sounds like a very frightening few moments on the rig:

As the bubble rose up the drill column from the high-pressure environs of the deep to the less pressurized shallows, it intensified and grew, breaking through various safety barriers, Bea said.

“A small bubble becomes a really big bubble,” Bea said. “So the expanding bubble becomes like a cannon shooting the gas into your face.”

Up on the rig, the first thing workers noticed was the sea water in the drill column suddenly shooting back at them, rocketing 240 feet in the air, he said. Then, gas surfaced. Then oil.

“What we had learned when I worked as a drill rig laborer was swoosh, boom, run,” Bea said. “The swoosh is the gas, boom is the explosion and run is what you better be doing.”

The gas flooded into an adjoining room with exposed ignition sources, he said.

“That’s where the first explosion happened,” said Bea, who worked for Shell Oil in the 1960s during the last big northern  oil well blowout. “The mud room was next to the quarters where the party was. Then there was a series of explosions that subsequently ignited the oil that was coming from below.

May 4, 2010

Deepwater Horizons’ troubles were predicted

Not the blowout itself — those just happen to oil rigs and can’t be avoided — but the failure of the blowout preventer (BOP). BOPs are the primary, and clearly just about the only, defense the oil and gas industry has against blowouts in deepwater wells.

From the link:

While the Deepwater Horizon leaks’ depth is unprecedented, it was not unanticipated. A report by engineering consulting firm URS Corp. in 2002 concluded that “Technologies used in shallow waters are no longer adequate for water depths over 1,000 meters. As a result, the environmental consequences of some of the newer deepwater technologies are not well understood.”

In 2005 petroleum engineering researchers from Texas A&M University suggested that drilling in the “dangerous and unknown” ultra-deep environment required new blowout control measures: “While drilling as a whole may be advancing to keep up with these environments, some parts lag behind. An area that has seen this stagnation and resulting call for change has been blowout control.”

An analysis of incidents in the Gulf of Mexico by the Texas A&M researchers showed that offshore blowouts had continued at “a fairly stable rate” since 1960 despite the use of BOPs. Regulators require inspection of BOPs every 14 days. BP says it inspected the Deepwater Horizon’s 10 days before last month’s blowout.

Hit this link for satellite images of the slick from April 29, 2010.

Here is leaked oil heading toward the coastline of Louisiana:

[picapp align=”none” wrap=”false” link=”term=deepwater+horizon&iid=8667038″ src=”6/c/1/c/Massive_Oil_Slick_f0cd.jpg?adImageId=12748687&imageId=8667038″ width=”500″ height=”333″ /]

May 1, 2010

Two recent images of the oil spill in the Gulf of Mexico

Very frightening. I feel for the folks in New Orleans (one of my favorite cities). From what I’ve read the air is already becoming too noxious to comfortably breathe and it’s only going to get worse over the next month (the current estimate to stop the flow of petroleum into the Gulf.)

satellite image of gulf oil spill

satellite image of gulf oil spill

Also from the link:

On April 29, the MODIS image on the Terra satellite captured a wide-view natural-color image of the oil slick (outlined in white) just off the Louisiana coast. The oil slick appears as dull gray interlocking comma shapes, one opaque and the other nearly transparent. Sunglint — the mirror-like reflection of the sun off the water — enhances the oil slick’s visibility. The northwestern tip of the oil slick almost touches the Mississippi Delta. Credit: NASA/Earth Observatory/Jesse Allen, using data provided courtesy of the University of Wisconsin’s Space Science and Engineering Center MODIS Direct Broadcast system.

Be sure to hit the link for larger version of these satellite images and for more information.

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.

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.

December 18, 2008

Oil hits $36 a barrel

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 3:58 pm

Yowzaa — I blogged about how the OPEC daily reduction did nothing to drive crude prices earlier today — but this is just wild. Very wild.

Light, sweet crude went sub-$40 today. OPEC truly has no teeth right now in this economic climate.

From the second link:

U.S. crude prices dropped more than 9 percent to $36 a barrel on Thursday as slumping demand and swelling U.S. inventories offset OPEC’s record supply cut agreement.

The Organization of the Petroleum Exporting Countries on Wednesday agreed to cut output by 2.2 million barrels per day from January to counter oil’s collapse from record highs above $147 a barrel in July.

“Following OPEC’s announcement to cut so aggressively, market participants are (assessing) the degree of this move as being indicative of just how weak demand is globally for crude oil,” said Chris Jarvis, senior analyst at Caprock Risk Management.

OPEC cut has no immediate effect on price of crude

Filed under: Business — Tags: , , , , — David Kirkpatrick @ 1:07 pm

As expected OPEC drastically cut daily production of oil by two million barrels — a historically large cut. The stated goal was ostensibly to stabilize supply with sinking demand. Of course the actual reason is to give the price a little kick in the rear and try to get it up over $75 a barrel.

So far — albeit on a very, very limited time frame — the gambit is a failure. We shall see how it shakes out over the next few months. I’m thinking the world’s financial situation is so crazy and uncertain this cut may have absolutely no effect aside from taking a little unbought crude off the daily table.

From the second link:

Light, sweet crude for February delivery, fell $1.07 to $43.54 barrel on the New York Mercantile Exchange. The January contract, which closes on Friday, fell $1.42 to $38.64 after dropping as low as $37.68, levels last seen in the summer of 2004.

There is no demand for oil right now, said analyst Peter Beutel of Cameron Hanover.

Higher prices for the February contract suggest that oil brokers and traders believe OPEC’s unprecedented 2.2 million-barrel daily production cut, announced Wednesday, will tighten supply. The Organization of Petroleum Exporting Countries had already taken 2 million barrels of oil out of production, bringing total cuts to more than 4 million barrels per day.

Also from the link:

Oil prices have tumbled 73 percent since July. What started as a crisis in the U.S. subprime mortgage sector last year has mushroomed into a recession in most developed countries and a sharp downturn in emerging nations.

Actions by OPEC and tumbling fuel prices have failed to stimulate demand.

“OPEC is virtually powerless right now,” said Jim Ritterbusch, president of Ritterbusch and Association. “They’ll simply have to be patient and wait for some semblance of demand improvement.”

Beutel said it could be several more months before there is a response to lower prices.

December 17, 2008

OPEC announces deep crude production cut

Filed under: Business — Tags: , , , — David Kirkpatrick @ 12:16 pm

As has been expected.

From the link:

OPEC oil ministers met on Wednesday to remove a record 2 million barrels per day from oil markets in a race to balance supply with the world’s rapidly crumbling demand for fuel.

The 12 members of the Organization of the Petroleum Exporting Countries were also aiming to build a floor under prices that have dropped more than $100 from a July peak above $147 a barrel.

As the ministers convened a meeting which was expected to proceed smoothly, oil was trading just above $44 a barrel.

Saudi Arabia, the world’s biggest oil exporter, has led by example — reducing supplies to customers even before a cut has been agreed to help push prices back toward the $75 level Saudi King Abdullah has identified as “fair.”

Ali al-Naimi, the kingdom’s oil minister, was first to publicly call for curbs of 2 million bpd ahead of the meeting.

“The purpose of the cut is to bring the market into balance and avoid the gyrations of the price,” he said. “The cut may lead to higher prices or may not.”

Others in the group that pumps more than a third of the world’s oil said at least two million barrels needed to go from daily output to prevent a massive build in inventories.

I like how OPEC tries to sugar-coat the message as though this isn’t purely a move to boost prices. The sooner we can unyoke heavy dependence on these fickle sheiks and banana republic dictators, the better.

December 16, 2008

Oil heading back toward $50 per barrel …

Filed under: Business — Tags: , , , — David Kirkpatrick @ 11:26 am

… on news OPEC is expected to announce a production cut.

From the link:

Light, sweet crude for January delivery was up $3.24 to $49.52 a barrel in electronic trading on the New York Mercantile Exchange by mid-afternoon in Europe. The contract briefly reached $50.05 before falling back. On Friday, it fell $1.70 to settle at $46.28.

In London, January Brent crude gained $3.40 to $49.81 on the ICE Futures exchange.

The Organization of Petroleum Exporting Countries, which accounts for 40 percent of global supply, has signaled it plans to announce a substantial reduction of output quotas at its meeting Wednesday in Algeria.

“The extent of such cuts is still unclear and this uncertainty has been a source of continuing volatility in futures markets,” said a report by analysts at KBC Market Services in Great Britain.

Kuwaiti oil minister Mohammed al-Eleim said Monday that OPEC was “undoubtedly inclined” to cut production. But he added that any decision would balance the need for a cut with its impact on the ailing world economy and producer nations’ need for revenue to fund development projects.

In other oil and gas news, here’s a report on Iraq’s petroleum industry and a recent expo held to promote that rebuilding effort.

December 4, 2008

Crude below $44

Filed under: Business — Tags: , , , — David Kirkpatrick @ 2:36 pm

Oil is at its lowest point in four years. I’ve blogged before a relative of mine with a vested interest in, and knowledge of, the petro industry is predicting a floor in the $20s. I read today that Merrill Lynch agrees with my relative.

From the link:

Oil fell more than 6 percent on Thursday to its lowest level in nearly four years in response to further bleak economic data that could spell a deeper decline in global energy demand.

The number of U.S. workers on jobless rolls hit a 26-year high last month, the government said, while another report showed U.S. factory orders fell sharply for the third month in a row.

U.S. light crude dropped $2.86 to $43.93 a barrel by 1:13 p.m. EST after slipping as low as $43.77 — the lowest since January 2005. London Brent crude fell $2.87 to $42.57.

Oil prices have dropped more than $100 a barrel from record highs over $147 in July, as the global credit crunch has eaten into demand in large consumer nations.