The Oil Drum

Locations of concern include coastal waters such as those near Florida; the Outer Continental Shelf (OCS) (beyond state coastal areas); and the Arctic National Wildlife Refuge (ANWR).

The views in this article are my own, particularly the peak oil views. Many of the comments about technical issues are based on discussions with the American Petroleum Institute (API). I recently participated in an API bloggers conference phone call on the subject of "Exploration and Production." We talked about offshore drilling and ANWR. A listing of the people involved can be found here, and a transcript of the call can be found here.

I recently visited BP America's tight gas facility in Wamsutter, Wyoming on a trip paid for by the American Petroleum Institute. I was the only representative of internet media on the trip. The other reporters on the trip were from AP-Cheyenne, Casper Star-Tribune, and Natural Gas Weekly. On the trip, we spent a day and a half listening to presentations and touring facilities. We also stayed overnight at the facility BP built for visiting workers.

In this post, I will tell a little about what I learned. I will also look at prospects for the future -- both in terms of being able to expand operations and threats to maintaining current production levels.

US natural gas production has been flat for a number of years. We keep hearing that US production is expected to begin declining sometime in the next few years, but it doesn't seem to happen. While it is not obvious from most published data, the reason production remains level is because unconventional gas production has been rising at the same time that conventional production has been declining. In this post, I will look at unconventional natural gas, since it plays such a pivotal role.

I was invited to a blogger's conference call on April 1, hosted by the American Petroleum Institute (API). We were told that each blogger would be allowed to ask one question of Peter Robertson, Vice Chairman of the Board of Directors of Chevron Corporation. The material we were provided in advance was the written statement of Mr. Robertson, prepared for the House Select Committee on Energy Independence and Global Warming. It included a number of charts, including this one:

My question was, "How realistic is EIA's Chart 5 scenario? If you look at Chart 5, it looks like there is no need to conserve."

On Thursday, January 17, the American Petroleum Institute (API) hosted another Blogger Conference Call. The purpose of this call was to talk about 2008 US statistical data regarding oil supply, and various related issues. In this post, I provide insights from API's bloggers call. Since most of the numbers are fairly similar to EIA data, I also look at longer trends using EIA data.

1. API Statistical Report: In 2007, total domestic petroleum deliveries were flat--marking the third year in a row for which they experienced only minimal growth or outright decline.

On Wednesday, I participated in a bloggers conference call sponsored by the American Petroleum Institute (API). The main topic was the National Petroleum Council's report "Facing the Hard Truths about Energy". Participating in the call were

• Rod Nelson - senior VP for technology and strategy, Schlumberger Limited (for NPC)
• Tom R. Eizember - senior planning advisor, ExxonMobil Corporation (for NPC)
• John Felmy - chief economist, API
• Ron Planting - statistics manager, API
• Byron King- The Daily Reckoning
• Ed Morrissey - Captain's Quarters, Heading Right, and Blog Talk Radio
• "McQ" - The QandO Blog
• Gail Tverberg - TheOilDrum

In this article, I will discuss the NPC's report, based both on a review of the report and what I learned in the call. The conference call also included discussion of API's June 30, 2007 statistics for the US oil industry, but I will not discuss these, since they are similar to EIA's (high crude oil inventory, low gasoline inventory, etc.).

On May 16th, I participated in another conference call with the American Petroleum Institute. The subject was gas prices. Since I am probably not the best person to challenge the API on gas prices, I put out an invitation at The Oil Drum for others to join the call. (The reason I am not the best person to challenge them is (1) I understand why gas prices are rising; (2) I work in the industry; and (3) I think prices should be even higher to spur conservation efforts). So, joining me on the call were 2 of my colleagues from TOD - Alan Drake and Chris Miller (Dryki). I will pull out some excerpts of our questions, but you can read the entire transcript here. I am told that they had some recording difficulties, so there will be no audio posted.

I was planning on writing a little more on technology, or rather the lack of development thereof, but thought I would begin by commenting on the Tar Sands issue a little more. I noted that in Robert’s post on the API call where he began the discussion with the note about the rivers around Fort McMurray turning brown due to the tar sands residue. Well one of the wonders of today’s technology is that you can check.

I had posted about this before, but this time thought to use modern technology. If you go to Google Earth and type in “Fort McMurray” it will give you an overview of the town in Alberta, and the mines can be found just to the North of it. Please note that the river running through the town, from the mines, is blue. Now I don’t think that Google spends their time painting in rivers – so I guess it really is (Well it is really clear, but you get my point). As I noted at the time the brown color occurs as the water from the sand/bitumen separator carries the sand to the tailings pond. Because the clean sand is brown when wet the water looks brown, until the sand settles out in the pond. You can see that the sand then dries to a whiter color, and the contained water in the main body of the pond is also blue. (It was also blue when I saw it on my visit). Once the hole dug to remove the oil sand has been filled in, then the cover will be replaced and it will return to normal, except that the rivers and streams won’t have a tarry bottom any longer.

As I saw, when going out to dinner last Saturday night, we are now entering High School Prom Season as this year’s graduates prepare to move on to jobs and college. It is this generation that will see the unfolding energy crisis in all its facets. While in college they will likely see Peak Oil; while working Peak Natural Gas, and, before they retire, Peak Coal. Which means that between those about to retire and these kids lies the brain power that is going to have to solve the reality of finding alternate sources of fuel at World-scale volumes.

On April 18th, I participated in a conference call with the American Petroleum Institute. The topic of the call was Energy and the Environment. You can download a transcript here or the audio of the call here.

Here was a list of participants, pulled from the call transcript:

Jeff McIntire-Strasburg is from Treehugger and we just went through, briefly, a blog roll. We have on the call Robert Rapier from The Oil Drum and R-Squared; Hank Green of EcoGeek; Tom Fowler of NewsWatch: Energy which is Houston Chronicle; Marc Gunther, Fortune; Mark Gongloff of The Wall Street Journal Energy Roundup; and Carter Wood of ShopFloor.org.

I think they missed mentioning John Gartner from Wired.

Update: I am going to stop tabulating the votes at this point. Here were the top choices, in reverse-order of the number of points each received: 33, 13, 4, 3, 11, 12, 16, 31, 1, 7, 9, 23. I will start with Question 33, and work my way through the list as time allows.

I have pointed the API again to this thread, so they can get a handle on what people want to know. Here are some excerpts of the responses I got back:

Interesting questions all. Because we billed this as an “energy and the environment” conference call, we would, of course, prefer that the questions be relevant to the topic, primarily out of respect to those bloggers who signed on because of their interest in the environment and sustainability. There will be future calls during which other topics can be discussed.

I also asked whether or not questions about natural gas (#4) are appropriate for this particular call. The response I received back was:

API has a strong interest in natural gas. While we will leave it up to you to decide whether you should pose that question, I do want to reiterate what I said in my earlier email about sticking to the announced topic.

Given that, I will more or less play it by ear on some of these questions. If everyone else is asking purely environmental questions, I may hold off on certain questions until the next call. I do have a lot of questions that are purely environmental questions, and I will work my way through some of those at the top of the list. I will also do some rewording of some of the questions, as I agree that some are too vague and leave themselves open to a canned reply. I will follow-up on this as soon as they have the transcript online, which should be within a couple of days.

Thanks again to all who participated.