Drumbeat: July 16, 2010
Posted by Leanan on July 16, 2010 - 10:15am
To fix most of the problems with the earliest offshore wells, you would probably have needed nothing more sophisticated than a snorkel – even the first platform to be established out of sight of land, off the coast of Louisiana in 1847, stood in just 16ft of water.
But the easy stuff has now been found, and the industry is being forced to explore ever-further frontiers. In 2002, less than one barrel of oil in 30 came from more than 1,000ft down; by 2012, it will be one in 10. Already, such deep-sea sources account for nearly three quarters of the Gulf of Mexico's oil.
BP's ill-fated well was far from the deepest in the Gulf: others reach down twice as far, to more than 10,000ft. Giant oil reservoirs have been found off Brazil under two and a half miles of shifting salt and sand and one and a half miles of water; more lie in deep water off west Africa. And a fifth of the remaining oil in British waters is as far down as in the Gulf, but under more treacherous seas.
NEW YORK (Reuters) - The number of rigs drilling for natural gas in the United States jumped 15 this week to a 17-month high of 979, according to a report on Friday by oil services firm Baker Hughes in Houston.
The gas-directed rig count is at its highest level since Feb. 20, 2009, when there were 1,018 gas rigs operating.
The cold wave in Argentina has killed at least five people, forced the closure of highways and left most of industry short of gas given the soaring residential consumption.
Proposed Senate legislation to limit greenhouse gases from power plants, refineries and factories would cut U.S. gross domestic product by $452 billion, or 0.2 percent, between 2013 and 2035, the Energy Information Administration said today.
Russian state-run Zarubezhneft and Serbian oil monopoly NIS, majority owned by Russia's Gazprom Neft, agreed today to jointly explore oilfields in northern Bosnia.
The government was tonight trying to fight off pressure from the European commission to ban drilling in the North Sea in the aftermath of BP's disastrous Gulf of Mexico oil spill.
Del. (Reuters) - Shareholders angry about BP Plc's battered stock price are heading to the courthouse in hopes of reclaiming some of their losses, but they face an uphill battle.
Since the Deepwater Horizon oil rig exploded in April, several BP shareholders have filed lawsuits accusing the company of breaking securities laws and hiding the risks of its drilling operations. The stakes are potentially huge, with the BP's market value down as much as $100 billion since the disaster.
The markets have come to that conclusion, but of course there are still uncertainties about the cost of all of this. One thing seems certain, though: if BP does survive, its corporate culture will never be the same again. Before the disaster, analysts say BP rewarded and promoted aggressive go-getters within the company -- risk-takers. Chris Skrbowski of Peak Oil Consulting says that will have to change.
NEW YORK (CNNMoney.com) -- Oil just stopped gushing out of the leak on the ocean floor Thursday, but its impact in Florida has only just begun to surface.
NEW ORLEANS — Surveys of coastal oyster grounds have discovered extensive deaths of the shellfish, further threatening an industry already in free-fall because of BP's oil spill in the Gulf of Mexico.
The deaths are blamed on the opening of release valves on the Mississippi River in an attempt to use fresh water to flush oil out to sea. Giant diversion structures at Caernarvon and Davis Pond have been running full-tilt since May 8 on the orders of Louisiana Gov. Bobby Jindal.
Before the BP accident in the Gulf of Mexico, America's worst offshore oil leak was the Exxon Valdez spill in Alaska. Twenty-one years later, the BBC's Rajesh Mirchandani went to a nearby fishing village to see how its people had recovered - and found not all of them had.
TEHRAN, Iran -- Iran's Oil Ministry says the powerful Revolutionary Guard's engineering arm, recently hit by U.N. sanctions, has partially withdrawn from developing the giant South Pars natural gas field.
The report on the ministry website Friday says Khatam al-Anbia and another Guard-linked firm, Sepanir, pulled out of implementing two phases of the South Pars project, which has 30 phases.
NEW YORK (CNNMoney.com) -- Tesla Motors will produce electric Rav4 crossover SUVs for Toyota Motor Co. beginning in 2012, the two companies announced Friday.
NEW YORK (CNNMoney.com) -- President Obama is once again stumping for stimulus at one of his favorite spots: a plant that makes batteries for electric cars.
The mining industry and those residents of the area who are eager for an influx of jobs see the plateau around Mount Taylor near the town of Grants in the northwest corner of New Mexico as an irresistible opportunity for economic gain.
"It's what we need, it's what's going to fuel the future," said Star Gonzales, director of the Grants chamber of commerce. "They will be good paying jobs."
But to local Native Americans whose ancestors lived in the area centuries before European settlement, Mount Taylor is a central part of their culture and religion.
Back in 2005, as a series of hurricanes had roared through the Gulf of Mexico, gasoline prices started to spike. The reason, at least in popular rumor, was damage to deepwater oil drilling rigs.
At one point that summer, as rumors flew, there was even a short period when the story was that there would be an actual fuel shortage, something we haven't seen in the United States since the 1970's.
Britain's premier scientific organisation has launched a two-year study into global population levels. A growing body of scientists believe the time has come for politicians to confront the problems posed by the future increase in human numbers.
The Royal Society has established a working group of leading experts to draw up a comprehensive set of recommendations on human population that could set the agenda for tackling the environmental stress caused by billions of extra people on the planet.
When a belief in the soon coming end of the world is one that drives your thinking on foreign policy and large scale ecological issues, then you have to step aside. It is not that your belief is wrong (though I certainly think it is) but rather that the nation as a whole does not hold your view points. The casual recklessness of someone who believes the world will end in the our lifetimes is too dangerous. To entrust such a person with the decision making power for a nation is to magnify this danger exponentially.
Today it seems too easy to name environmental hazards with potentially global implications. Climate change, finite fossil-fuel reserves and the risk of water scarcity quickly come to mind.
Now some scientists want concern for the world’s dwindling phosphorus (P) supply tacked onto that short list.
Americans drove more and used more energy in 2007, and increased spending to pay for it.
Energy expenditures nearly doubled between 2000 and 2007 to $4,093 per capita, up from $2,449, the U.S. Census Bureau said last week. Total energy consumption increased 2.6% over the same period, while total energy expenditures jumped 79% to more than $1.2 trillion.
Average per-person energy expenditures in 2007 ranged from $3,179 in Arizona to $9,191 in Alaska. Overall energy consumption increased the most in Hawaii and Nevada — increasing 24.4% and 23%, respectively, between 2000 and 2007. Maine saw the greatest decrease — 12.3% — over the same period.
The Recovery Act has provided billions of dollars in matching grants for clean energy programs. Despite this massive infusion of federal money, it is unlikely that these technologies will make a dent in Americans' fossil fuel consumption anytime soon.
Wind energy has sparked debate in Indiana over who should pay for what when it comes to renewable energy infrastructure. Wind farmers say they cannot afford to pay even 20 percent of the multibillion-dollar bill for new transmission lines, but Indiana residents don't way to pay a disproportionate fee, especially since the energy generated could be going to consumers in other states.
As part of his push for clean energy jobs, President Obama last week went solar, announcing almost $2 billion in funding for construction of some of the world's largest solar energy plants.
Nearly three months after oil from BP's Macondo well began to spill into the Gulf of Mexico, Americans' chronic animosity toward the oil industry is back with a vengeance. Hofmeister -- the retired president of Shell Oil Company, Royal Dutch Shell's U.S. subsidiary -- couldn't have foreseen this particular environmental catastrophe, of course. But the reaction of American citizens and public officials to the spill, particularly their crucifixion of BP CEO Tony Hayward, illustrates his central message: Americans have a deep-seated hatred and mistrust of the oil industry, and the industry itself has done little to improve its image. Nevertheless, the long-term energy challenges facing the United States, as Hofmeister ably and cogently explains, will require bridging this trust gap and radically altering the way that long-term energy policy and strategies are pursued in Washington.
Last night, the Asia Society celebrated the opening of a new photographic exhibition by David Breashears—“Rivers of Ice: Vanishing Glaciers in the Greater Himalaya”—by sticking five avuncular men on the middle of an oriental rug in the middle of a stage and having them amiably discuss the coming apocalypse.
“Most frozen things on earth are melting,” warned Bill McKibben, the environmental activist and writer. He may have been most optimistic of the panelists. Also the angriest, and the least resigned to the idea of our imminent demise.
WHATEVER one believes about global warming, there is no denying the fact that the earth's polar regions are undergoing dramatic change as a result of climate change. That has led some to suggest that the poles are the canary in the coal mine as far as climate is concerned.
Now, a breathtaking new exhibit at the Asia Society in New York suggests that the earth's Third Pole is sounding a similar alarm. David Breashears, a legendary mountaineer and cinematographer, and his team have travelled the high Himalayas on a peculiar quest the past few years. Armed with antique photographs of the world's highest peaks, shot by the first modern men to scale them—including such luminaries as Hillary himself—he has tried to duplicate those shots exactly.
The Ocean Energy Institute (OEI) is poised to launch into a corporate endeavor to replace oil and gas with renewable energy from the sea. OEI will host a public open house at its office in the Rockland Breakwater Marketplace building from 4:30 to 6:30 p.m. on Tuesday, July 20.
OEI was founded in 2007 by Matt Simmons, the international oil and energy development expert who became convinced that we had already tapped the majority of the world oil supply by 2005.
Crude oil is heading for a second weekly gain as advancing equity markets reinforced expectations that fuel demand will increase and the dollar weakened against the euro, making oil cheaper for European investors.
Reports from the International Energy Agency and the Organization of Petroleum Exporting Countries forecast that this year’s demand recovery will continue into 2011. Crude fell earlier today as manufacturing in New York and Pennsylvania dropped, part of a nationwide decline in factory production of 0.4 percent in June.
Crude oil may fall next week after government reports signaled that the U.S. economic recovery will slow, reducing fuel demand, a Bloomberg News survey showed.
Thirteen of 33 analysts, or 39 percent, forecast crude oil will decline through July 23. Twelve respondents, or 36 percent, predicted that futures will be little changed and eight saw an increase. Last week 53 percent of analysts forecast a rise.
The price of diesel in Abu Dhabi will tomorrow increase for the second time in three months.
...ADNOC said prices were being increased to offset losses from the high cost of producing the fuel.
The cost of living in the U.S., excluding food and energy prices, climbed in June more than forecast, easing concern that a slowdown in growth will spur deflation.
The so-called core rate of the consumer-price index increased 0.2 percent, the most since October and exceeding the 0.1 percent gain projected by the median forecast of economists surveyed by Bloomberg News, figures from the Labor Department showed today in Washington. Prices overall fell 0.1 percent, a third straight decrease and matching the median forecast.
Kazakhstan will start taxing oil exports at $20 a metric ton ($2.73 a barrel) in 30 days as it seeks to boost its share of the country’s oil wealth.
The largest oil producer in Central Asia won’t tax companies that operate under production-sharing agreements and have an exemption clause, according to a resolution published in the government’s official Kazakhstanskaya Pravda today. Others that are exempt from custom duties and don’t pay royalties are also excluded.
SENATE MAJORITY Leader Harry M. Reid (D-Nev.) intends to bring an energy bill to the Senate floor the week of July 26. It will feature four key elements -- a response to the Gulf of Mexico oil spill, promotion of energy efficiency, a boost for clean-energy production and a cap on carbon emissions from power plants. This is not ideal, but it would be a useful start.
The so-called Pickens Plan, a subsidy scheme that could cut total American oil imports by almost 10 per cent by targeting lorry fleets, will reach Congress for a vote this month, according to US Senate leaders.
Total SA, Europe’s third-largest oil company, must pay 6.2 million pounds ($9.5 million) in fines and legal costs for its part in a 2005 explosion at an oil storage depot outside of London.
Five companies must pay a total of 9.43 million pounds in fines and costs, Judge David Calvert-Smith said in the criminal case at St. Albans Crown Court, near London, today.
NEW ORLEANS, Louisiana (AFP) – BP halted the Gulf of Mexico leak for the first time in three months, raising hopes in the White House and among devastated coastal communities Friday of an end to the worst oil disaster in US history.
While President Barack Obama and BP warned against celebrating before tests are completed, news that all three valves on a giant cap had been shut was a ray of light for residents of the seaboard whose livelihoods have been ravaged.
NEW ORLEANS – Many Gulf Coast residents don't believe it. Some accuse BP of making it up. And even those convinced that the oil leak has finally been stopped are tempered in their relief, aware that their environmental nightmare is far from over.
For now, engineers and scientists are monitoring the cap for pressure changes around the clock. High pressure is good because it shows there's only a single leak. Low pressure, below 6,000 pounds per square inch or so, could mean more leaks farther down in the well.
BP Plc said the pressure in its Gulf of Mexico well is at 6,700 pounds per square inch and rising, with no sign of an oil leak.
LONDON (AFP) – BP is speeding up the sale of up to 20 billion dollars of assets in a bid to boost funds after the Gulf oil spill, the Financial Times reported Friday.
The company is finalising details of the sales, including the disposal of American assets to Apache Corporation worth up to 12 billion dollars, said the paper, citing people close to the situation.
BP Plc may saddle potential buyers of its assets with lawsuits as it tries to raise money to pay claims that could reach $100 billion from the Gulf of Mexico oil spill, lawyers and analysts said.
The disaster’s economic fallout has had a sneaky domino effect, touching the lives of everyone from the French Quarter shuckers who turn oyster-opening into theater to the Minnesota businessman who grinds the shells for chicken-feed supplement. Some victims were unaware that they were even tiles in the game, so removed were they from the damaged waters.
WASHINGTON (Reuters) – The U.S. Senate Foreign Relations Committee has scheduled a July 29 hearing into last year's release of a Libyan convicted for the 1988 bombing of an airliner over Lockerbie, Scotland, and related actions by BP.
The committee said on Thursday it will ask officials of BP Plc to testify after the UK-based oil giant acknowledged that it had lobbied the British government in 2007 to agree to transfer Libyan intelligence officer Abdel Basset al-Megrahi to Tripoli. The company said it was concerned that his continued imprisonment in Scotland could negatively affect an offshore oil drilling deal with Libya.
(Bloomberg) -- British Ambassador to the U.S. Nigel Sheinwald rejected suggestions that the release last year of Lockerbie bomber Abdel Basset Al-Megrahi and BP Plc’s commercial interests were linked.
TEHRAN, Iran – A Sunni insurgent group said it carried out a double suicide bombing against a Shiite mosque in southeast Iran to avenge the execution of its leader, as Iranian authorities Friday said the death toll rose to 27 people, including members of the elite Revolutionary Guard.
Porter sees no risk of bankruptcy or default with BP, the Macondo emerging as an enormously beneficial well, and more drilling there in the future because 1) there are no good replacements for oil and 2) "we can't live without oil from the Gulf."
One of my first essays with forecasts was in the Spring of 2004. In that piece, I had seven specific forecasts. What were they and how have those forecasts fared? Here they are along with my commentary (keep in mind that they were made March 2004).
BP intentionally misled the public and the U.S. government about the extent of the oil spill in the Gulf of Mexico to save their company and avoid criminal liability, said Matthew Simmons, an oil industry insider who has analyzed the industry for the past 40 years. They continue to do so, he said, risking not just the Gulf of Mexico ecosystem and economy, but threatening the health of those who will be exposed to the highly toxic oil in the coming months.
Let’s start at the beginning. About four years ago, BMW’s board of management sent some of the company’s leading pointy-heads off into a room with a clean sheet of paper. “Go and think about the future,” said the board and this rapidly assembled think tank called Project I went off and had profound thoughts every day.
They pondered population trends, global warming, peak oil – the works. Eventually they came back with the Megacity Vehicle, which is utterly and completely unlike anything BMW – or anyone else – is building today.
Freshwater supplies are strained in countries all over the world. But in a few places like Alaska, Greenland and Canada, there’s more than enough to go around. So why not ship water from where it’s plentiful to where it’s scarce?
GLACIER NATIONAL PARK, Mont. — Standing under a cloudless midsummer sky at the Many Glacier Hotel, ranger Bob Schuster gestures toward the saw-toothed southern horizon and holds up evidence of a changing climate in a place indigenous Blackfeet Indians dubbed the "backbone of the world." His repeat photographs show the rapid retreat of the 100-year-old park's iconic geological features, which have declined from about 150 at the end of the Little Ice Age in the mid-19th century to about two dozen today.
NEW YORK CITY—Here is how climate change could shut down a city: On the morning of August 8, 2007, a thunderstorm paralyzed the largest rail transit system in the U.S.—New York City's subway—during morning rush hour. Flash floods deposited more than 7,000 kilograms of dirt and debris on tracks that stretch more than 1,350 kilometers and carry 1.5 billion passengers annually. A December 1992 storm had a similar impact, including flooding portions of Lower Manhattan and the East River Drive.
The world is hotter than ever.See also: June 2010 Global State of the Climate – Supplemental Figures and Information
March, April, May and June set records, making 2010 the warmest year worldwide since record-keeping began in 1880, the National Oceanic and Atmospheric Administration says.
"It's part of an overall trend," says Jay Lawrimore, climate analysis chief at NOAA's National Climatic Data Center. "Global temperatures ... have been rising for the last 100-plus years. Much of the increase is due to increases in greenhouse gases."