I sat in on a webinar held by The Energy Collective this week. A climate change specialist with Shell spoke, as well as an energy analyst. Among other things, they stressed the importance of the energy community as a whole to develop a successful Carbon Capture Storage (CCS) program -- for power generation, as well as downstream initiatives.
CCS helps to reduce emissions of CO2 and greenhouse gases by trapping them and injecting them into the earth. An improved and functioning CCS technology will allow the US and other countries to meet their greenhouse gas emission targets -- while still producing enough energy to meet a growing demand.
US Energy Secretary Steven Chu this week described the success of clean energy in China and other countries a "Sputnik Moment" for the US.
"When it comes to innovation, Americans don't take a back seat to anyone - and we certainly won't start now," said Secretary Chu. "From wind power to nuclear reactors to high speed rail, China and other countries are moving aggressively to capture the lead. Given that challenge, and given the enormous economic opportunities in clean energy, it's time for America to do what we do best: innovate. As President Obama has said, we should not, cannot, and will not play for second place."
CCS Programs in North America
There are a number of CCS programs currently under way, and the industry's best and brightest are certainly on the case. Its truly becoming an energy industry-wide effort.
The US Department of Energy has committed $1 billion to support the FutureGen 2.0 CCS project, using the oxy-coal combustion technology developed by Babcok and Wilcox and Air Liquide. The project will test the CCS technology at a power plant in Illinois.
While many think of coal-fired power and its efforts to become clean coal through developing CCS, the petroleum industry is also involved.
Shell just filed for regulatory approval for its Quest Carbon Capture and Storage project in Alberta, Canada, to serve its Athabasca Oil Sands Project there. Quest will be the first application of CCS in the oil sands, and the technology will likely serve as a catalyst for future applications in the petroleum realm.
In the future, CCS will likely help to reduce emissions from all downstream efforts, including refineries, in addition to natural gas-fired power plants and clean coal power generation installations.
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Phaedra
Friend Troy is the content director for PennEnergy.com, an all-energy website that
provides oil and gas, power and infrastructure news, analysis, reports and more.
Sign up for a free
daily enewsletter today.
Thursday, December 2, 2010
Thursday, November 11, 2010
US to export LNG to China: Cheniere seals a deal with ENN Energy for Sabine Pass LNG
It's official. The US is set to become an LNG exporter.
Cheniere Energy Partners (NYSE:CQP) reported a deal with Chinese energy firm ENN Energy for 1.5 million tonnes per annum of bi-directional LNG from the Sabine Pass LNG terminal in Louisiana. The MOU covers a 20-year agreement for the supply of LNG to ENN, should regulatory approvals proceed as planned.
Cheniere is working to jump regulatory hurdles to transform its Sabine Pass LNG recieving terminal into a liquefaction export terminal. The Sabine Pass project will incorporate up to four LNG trains with a capacity of 0.7 Bcf/d of natural gas and an average liquefaction processing capacity of 3.5 mtpa.
The company foresees LNG export as early as 2015.
"We are excited to participate in supplying natural gas to China, and we believe that ENN is a successful model for developing diverse solutions to serve its fast growing energy markets," said Charif Souki, chairman and CEO of Cheniere Partners. "ENN Energy Trading is an ideal customer that is expanding its natural gas distribution network and seeking new sources of natural gas supply in order to increase its customer connections and increase its sales volumes."
I'm sure US natural gas producers are excited about the agreement, as well.
This means that the glut of natural gas in the North American market has someplace to go, and an increasing demand to meet -- China.
With the development of the vast shale plays across the US, the amount of natural gas in the market has skyrocketed, and the price of natural gas has dropped.
"We believe current market fundamentals have created an opportunity for the U.S. to offer natural gas to global markets at competitive prices. The U.S. is experiencing an increase in natural gas production, primarily driven by unconventional gas plays, while natural gas demand in the U.S. continues to lag behind market projections. Due to the depth of the markets in South Louisiana with an abundance of supply and existing pipeline infrastructure, we can provide an additional outlet for U.S. natural gas production while offering a low cost source of supply for global buyers seeking alternatives to oil-indexed contracts," said Souki.
What does this mean for the US? Should this deal (and others) go through, the US is poised to become a major exporter of LNG -- which should prove a strong catalyst for increasing prices.
.........................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Cheniere Energy Partners (NYSE:CQP) reported a deal with Chinese energy firm ENN Energy for 1.5 million tonnes per annum of bi-directional LNG from the Sabine Pass LNG terminal in Louisiana. The MOU covers a 20-year agreement for the supply of LNG to ENN, should regulatory approvals proceed as planned.
Cheniere is working to jump regulatory hurdles to transform its Sabine Pass LNG recieving terminal into a liquefaction export terminal. The Sabine Pass project will incorporate up to four LNG trains with a capacity of 0.7 Bcf/d of natural gas and an average liquefaction processing capacity of 3.5 mtpa.
The company foresees LNG export as early as 2015.
"We are excited to participate in supplying natural gas to China, and we believe that ENN is a successful model for developing diverse solutions to serve its fast growing energy markets," said Charif Souki, chairman and CEO of Cheniere Partners. "ENN Energy Trading is an ideal customer that is expanding its natural gas distribution network and seeking new sources of natural gas supply in order to increase its customer connections and increase its sales volumes."
I'm sure US natural gas producers are excited about the agreement, as well.
This means that the glut of natural gas in the North American market has someplace to go, and an increasing demand to meet -- China.
With the development of the vast shale plays across the US, the amount of natural gas in the market has skyrocketed, and the price of natural gas has dropped.
"We believe current market fundamentals have created an opportunity for the U.S. to offer natural gas to global markets at competitive prices. The U.S. is experiencing an increase in natural gas production, primarily driven by unconventional gas plays, while natural gas demand in the U.S. continues to lag behind market projections. Due to the depth of the markets in South Louisiana with an abundance of supply and existing pipeline infrastructure, we can provide an additional outlet for U.S. natural gas production while offering a low cost source of supply for global buyers seeking alternatives to oil-indexed contracts," said Souki.
What does this mean for the US? Should this deal (and others) go through, the US is poised to become a major exporter of LNG -- which should prove a strong catalyst for increasing prices.
.........................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Thursday, November 4, 2010
Is the Wolfberry the next Eagle Ford?
Shale is hot. People are interested; production and drilling are up. I attended the Unconventional Gas show in Fort Worth a couple of weeks ago, and people are certainly interested -- in US shale, as well as shale potential in Europe and China and beyond.
The first to really take off were Haynesville and Marcellus. Then more dry-gas shales came on the scene. Now, liquids-rich or oil-laden formations, such as Eagle Ford and Bakken, are garnering all the attention of both investors and producers.
Billions of dollars have been spent on acquiring acreage and interest, as well as forming JVs. The number of land rigs has picked up across the nation, spurred by -- you guessed it -- shale exploration and developments. Additionally, pipeline, refinery and gas processing facility construction is on the rise.
Not just oil and natural gas are flowing, money is too.
Enter the Wolfberry and Wolfcamp plays.
Now, as an oil and gas writer, my ears perk when any shale or unconventional play is mentioned. In addition, this particular play is located in my father's home county -- I can't help but notice that.
I first read about it when El Paso Corp. revealed in late September that it was adding more than 120,000 acres in West Texas to its leasehold. I know Crockett County, and it is natural gas country, but this release stated that it was in the emerging Wolfcamp oil shale play.
What? How had I never heard about this? I did a little back-digging on the PennEnergy site, and lo and behold: there have been a couple of smaller stories about the Wolfcamp -- and it's supposed to be liquids- and/or oil-rich.
Then, I noticed a couple more stories about the Wolfberry trend. LINN Energy spent $352.2 million acquiring natural gas acreage in the Wolfberry trend, with notes of oil.
My curiosity is piqued, and I've been asking everyone who will listen in the oil patch whether or not they know anything about it. What's the word?
Enter a very nice oil patch pal I fortuitously sat next to on the plane from Tulsa to Houston. He was investigating the Wolfberry, as well. Imagine that! He had a meeting the next week with someone in West Texas, and he'd share his insight.
Here it is:
Presently, there are about 260 rigs working the Wolfberry formation in West Texas. Not quite shale, Wolfberry is a tight formation that's being drilled vertically. "The same fracturing techniques apply; therefore this formation previously unproductive to drill becomes viable, considering each well produces 200 - 800 BPD Oil and 0.2 to 1.0 MMSCFD rich natural gas, making it very attractive."
Is the Wolfberry the next Eagle Ford? What's the difference between the Wolfberry and the Wolfcamp? I'm searching, asking, begging. Do you know? Please share.
.........................................................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
The first to really take off were Haynesville and Marcellus. Then more dry-gas shales came on the scene. Now, liquids-rich or oil-laden formations, such as Eagle Ford and Bakken, are garnering all the attention of both investors and producers.
Billions of dollars have been spent on acquiring acreage and interest, as well as forming JVs. The number of land rigs has picked up across the nation, spurred by -- you guessed it -- shale exploration and developments. Additionally, pipeline, refinery and gas processing facility construction is on the rise.
Not just oil and natural gas are flowing, money is too.
Enter the Wolfberry and Wolfcamp plays.
Now, as an oil and gas writer, my ears perk when any shale or unconventional play is mentioned. In addition, this particular play is located in my father's home county -- I can't help but notice that.
I first read about it when El Paso Corp. revealed in late September that it was adding more than 120,000 acres in West Texas to its leasehold. I know Crockett County, and it is natural gas country, but this release stated that it was in the emerging Wolfcamp oil shale play.
What? How had I never heard about this? I did a little back-digging on the PennEnergy site, and lo and behold: there have been a couple of smaller stories about the Wolfcamp -- and it's supposed to be liquids- and/or oil-rich.
Then, I noticed a couple more stories about the Wolfberry trend. LINN Energy spent $352.2 million acquiring natural gas acreage in the Wolfberry trend, with notes of oil.
My curiosity is piqued, and I've been asking everyone who will listen in the oil patch whether or not they know anything about it. What's the word?
Enter a very nice oil patch pal I fortuitously sat next to on the plane from Tulsa to Houston. He was investigating the Wolfberry, as well. Imagine that! He had a meeting the next week with someone in West Texas, and he'd share his insight.
Here it is:
Presently, there are about 260 rigs working the Wolfberry formation in West Texas. Not quite shale, Wolfberry is a tight formation that's being drilled vertically. "The same fracturing techniques apply; therefore this formation previously unproductive to drill becomes viable, considering each well produces 200 - 800 BPD Oil and 0.2 to 1.0 MMSCFD rich natural gas, making it very attractive."
Is the Wolfberry the next Eagle Ford? What's the difference between the Wolfberry and the Wolfcamp? I'm searching, asking, begging. Do you know? Please share.
.........................................................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Thursday, October 21, 2010
Confidence Vote: Chevron sanctions ultra-deepwater Jack-St. Malo development in the US GOM
Despite the drilling moratorium, despite the permitting delays, despite all the problems that we're experiencing in getting our offshore oil and gas professionals back to work -- Chevron delivered a major vote of confidence for offshore oil and gas in the US Gulf of Mexico.
Today, US super-major Chevron (NYSE:CVX) sanctioned the $7.5 billion development of its Jack-St. Malo ultra-deepwater fields in the Lower Tertiary. A major project moving forward for the US GOM, the integrated development will include three subsea centers tied to a massive semisubmersible production hub with the capacity to production 170,000 barrels of oil and 42.5 million cubic feet of natural gas a day.
Already, Mustang has been contracted to provide FEED and then detailed design of the topsides for the development. Also, Cameron won a $230 million contract to provide subsea equipment for the development.
There are billions of dollars of contracts yet to be awarded.
The oil and gas community is confident that it can move forward with deepwater offshore operations safely. Thank you, Chevron -- and partners. Thank you for believing in the US Gulf of Mexico, and thank you for bringing sorely needed jobs back to the Gulf Coast.
Hopefully, this development will help to encourage others to commit to the US GOM and move forward with more drilling, developments and contracts.
Today, US super-major Chevron (NYSE:CVX) sanctioned the $7.5 billion development of its Jack-St. Malo ultra-deepwater fields in the Lower Tertiary. A major project moving forward for the US GOM, the integrated development will include three subsea centers tied to a massive semisubmersible production hub with the capacity to production 170,000 barrels of oil and 42.5 million cubic feet of natural gas a day.
Already, Mustang has been contracted to provide FEED and then detailed design of the topsides for the development. Also, Cameron won a $230 million contract to provide subsea equipment for the development.
There are billions of dollars of contracts yet to be awarded.
The oil and gas community is confident that it can move forward with deepwater offshore operations safely. Thank you, Chevron -- and partners. Thank you for believing in the US Gulf of Mexico, and thank you for bringing sorely needed jobs back to the Gulf Coast.
Hopefully, this development will help to encourage others to commit to the US GOM and move forward with more drilling, developments and contracts.
Thursday, October 14, 2010
International players grab more shale acreage, as US fails to see its natural gas potential
The race is on. The first shale formations to really take off were the Marcellus and Haynesville, as well as the Fayetteville and Barnett. Now, liquids-rich shale and unconventional reservoirs are all the rage, with billions going to joint ventures, acreage acquisitions and drill carries in the Eagle Ford and Bakken. Niobrara is also popular, and others are gaining steam.
Just this week, Chinese major CNOOC agreed to pay US producer Chesapeake $1.1 billion to gain interest in its Eagle Ford shale acreage in South Texas, as well as an additional $1.1 billion in a drilling carry. Additionally, Norwegian company Statoil and Canadian major Talisman joined forces in another billion-dollar Eagle Ford shale acquisition.
All the while, T. Boone Pickens and others like the American Gas Association are pushing for a shift to using the cleaner-burning fuel for everything from power generation to natural gas-fueled truck fleets.
According to a report from Pickens, the US imported 60 percent of its oil, or 346 million barrels, in September 2010, spending some $26 billion on the crude imports.
Switching from foreign oil to other energy sources isn't as easy as fueling our cars with something other than gasoline. Our dependence on foreign oil largely is built on our dependence on refined products and petrochemicals, but we can start to make a shift -- to at least using domestic crude and that from our friendly neighbor Canada, which is swimming in oil sands.
While wind and solar and geothermal energy sources continue to grow, unconventional natural gas and shale is abundant in the US -- and the opportunities for change and energy independence are right in front of us.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Just this week, Chinese major CNOOC agreed to pay US producer Chesapeake $1.1 billion to gain interest in its Eagle Ford shale acreage in South Texas, as well as an additional $1.1 billion in a drilling carry. Additionally, Norwegian company Statoil and Canadian major Talisman joined forces in another billion-dollar Eagle Ford shale acquisition.
All the while, T. Boone Pickens and others like the American Gas Association are pushing for a shift to using the cleaner-burning fuel for everything from power generation to natural gas-fueled truck fleets.
According to a report from Pickens, the US imported 60 percent of its oil, or 346 million barrels, in September 2010, spending some $26 billion on the crude imports.
Switching from foreign oil to other energy sources isn't as easy as fueling our cars with something other than gasoline. Our dependence on foreign oil largely is built on our dependence on refined products and petrochemicals, but we can start to make a shift -- to at least using domestic crude and that from our friendly neighbor Canada, which is swimming in oil sands.
While wind and solar and geothermal energy sources continue to grow, unconventional natural gas and shale is abundant in the US -- and the opportunities for change and energy independence are right in front of us.
.......................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Thursday, October 7, 2010
Integrated Energy: Retail electricity provider Direct Energy buys Canadian natural gas field
As the editor of PennEnergy, a complete energy news, information, jobs and research portal, it's always nice to see a story that spans the petroleum/power industries, and this is a great example of an energy company integrating operations to save on costs.
Earlier this month, retail electricity provider Direct Energy closed a $367.5 million purchase of a producing natural gas field in Canada. Previously owned and operated by Suncor, the Wildcat Hills natural gas field consists of 97 producing wells, as well as 42,000 acres of undeveloped land.
With current production at 80 MMcf/d and reserves estimated at 241 Bcf of gas equivalent, the Wildcat Hills field along with earlier upstream assets will supply 35 percent of Direct Energy's load required by its North American retail natural gas customers.
Rather than pay another company, Direct Energy is going to produce, process and transport its own natural gas to supply to its customers.
Additionally, the company is on the search for more natural gas fields to acquire.
"Direct Energy intends to continue investigating opportunities for upstream investments in natural gas, including shale, and power generation assets in North America," said Badar Kan, president of Direct Energy Upstream & Trading. "In today's low natural gas price environment, well-capitalized companies, like ours, are in a strong position to acquire value-producing assets which is consistent with our strategy for greater integration and growth."
Direct Energy Upstream & Trading oversees natural gas production, power generation, wind power purchase agreements, midstream gas storage and transportation, commodity procurement and proprietary trading. The company currently owns and operate 4,550 natural gas wells in Alberta and three gas-fired power plants.
A subsidiary of Centrica, Direct Energy (LON:CNA) provides energy to more than 6 million customers.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Earlier this month, retail electricity provider Direct Energy closed a $367.5 million purchase of a producing natural gas field in Canada. Previously owned and operated by Suncor, the Wildcat Hills natural gas field consists of 97 producing wells, as well as 42,000 acres of undeveloped land.
With current production at 80 MMcf/d and reserves estimated at 241 Bcf of gas equivalent, the Wildcat Hills field along with earlier upstream assets will supply 35 percent of Direct Energy's load required by its North American retail natural gas customers.
Rather than pay another company, Direct Energy is going to produce, process and transport its own natural gas to supply to its customers.
Additionally, the company is on the search for more natural gas fields to acquire.
"Direct Energy intends to continue investigating opportunities for upstream investments in natural gas, including shale, and power generation assets in North America," said Badar Kan, president of Direct Energy Upstream & Trading. "In today's low natural gas price environment, well-capitalized companies, like ours, are in a strong position to acquire value-producing assets which is consistent with our strategy for greater integration and growth."
Direct Energy Upstream & Trading oversees natural gas production, power generation, wind power purchase agreements, midstream gas storage and transportation, commodity procurement and proprietary trading. The company currently owns and operate 4,550 natural gas wells in Alberta and three gas-fired power plants.
A subsidiary of Centrica, Direct Energy (LON:CNA) provides energy to more than 6 million customers.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Thursday, September 30, 2010
US shale may save us all
US shale resources are exciting. My friends and colleagues can attest, I get overly excited about the potential of US shale.
Marcellus, Haynesville, Barnett, Fayetteville, Woodford, Utica, Eagle Ford, Bakken -- they are on the tip of my tongue and the forefront of my mind (and those of investors).
US shale gas resources are huge! Trillions and trillions of cubic feet of natural gas -- right under our feet. That means energy independence. That means jobs right here in the US, lots and lots of jobs related to drilling, producing, transporting, processing and exporting domestic natural gas. That means billions of dollars to help our economy and bolster local, state and federal government. That mean gas-generated power plants galore.
While prices for natural gas aren't the best on the Henry Hub today, companies are still investing in US shale and in natural gas in general. (Think of the billions of dollars being invested in Western Australia's massive LNG projects, like Gorgon, Wheatstone, Bonaparte, Ichthys and Gladstone.) To me, that says, they know something laymen don't. (After all, they've got analysts and economists and mathematicians and industry experts ... who study these things for a living.)
In fact, Wood Mackenzie just reported that in the first half of 2010 alone US shale gas M&A expenditures reached $21 billion. That's a lot of money to change hands, and they predict that the mergers and acquisitions market will continue its hot streak.
Translation: Natural gas is going to pay off, and prices are going to climb.
Ol' T. Boone Pickens is on to something, and natural gas-fueled cars may be just around the corner if he has anything to do with it.
In fact the US may very well become the largest exporter of clean energy because of our natural gas resources. Three LNG import terminals have started the ball rolling on switching to being export terminals, and pipelines have begun the process of both building and becoming bi-directional.
Natural gas is clean-burning. It's domestic, and it's plentiful. Jump on the natural gas/shale bandwagon with me. It's taking off around the corner!
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Marcellus, Haynesville, Barnett, Fayetteville, Woodford, Utica, Eagle Ford, Bakken -- they are on the tip of my tongue and the forefront of my mind (and those of investors).
US shale gas resources are huge! Trillions and trillions of cubic feet of natural gas -- right under our feet. That means energy independence. That means jobs right here in the US, lots and lots of jobs related to drilling, producing, transporting, processing and exporting domestic natural gas. That means billions of dollars to help our economy and bolster local, state and federal government. That mean gas-generated power plants galore.
While prices for natural gas aren't the best on the Henry Hub today, companies are still investing in US shale and in natural gas in general. (Think of the billions of dollars being invested in Western Australia's massive LNG projects, like Gorgon, Wheatstone, Bonaparte, Ichthys and Gladstone.) To me, that says, they know something laymen don't. (After all, they've got analysts and economists and mathematicians and industry experts ... who study these things for a living.)
In fact, Wood Mackenzie just reported that in the first half of 2010 alone US shale gas M&A expenditures reached $21 billion. That's a lot of money to change hands, and they predict that the mergers and acquisitions market will continue its hot streak.
Translation: Natural gas is going to pay off, and prices are going to climb.
Ol' T. Boone Pickens is on to something, and natural gas-fueled cars may be just around the corner if he has anything to do with it.
In fact the US may very well become the largest exporter of clean energy because of our natural gas resources. Three LNG import terminals have started the ball rolling on switching to being export terminals, and pipelines have begun the process of both building and becoming bi-directional.
Natural gas is clean-burning. It's domestic, and it's plentiful. Jump on the natural gas/shale bandwagon with me. It's taking off around the corner!
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Tuesday, September 21, 2010
Is it brainwashing or ignorance? Activists gain glory, but miss the point
Really? Greenpeace has stopped offshore drilling again. This time, two activists have climbed the anchor chain of the Stena Carron drillship, which was bound to drill for Chevron offshore the Shetland Islands.
The environmentalist group claims that they are protesting, asking North Sea governments to stop deepwater drilling, spewing fear propaganda to scare the public into thinking that the BP disaster in the Gulf of Mexico could happen anywhere.
First off: The BP disaster is just that -- a disaster. No one meant for the well well blow-out, 11 people to lose their lives, the rig to sink or the well to spill oil and gas into the waters of the Gulf of Mexico. It was an accident, and companies and regulatory agencies across the globe are trying to learn from the events surrounding the Macondo well and enact change and safety measures to ensure it doesn't happen again.
While the activists may be acting with good intentions, their actions are pretty misguided. To think that the world can stop its reliance on petroleum products today is very simple-minded.
In fact, the photo of the two activists "training" for the action shows the likely numerous petroleum products required to safely achieve their mission, including an inflatable sea vessel, plastic safety helmets and various nylon ropes.
One of the activists said, "Instead of drilling for the last drops in places like this, the oil companies should be developing the clean energy technologies we need to fight climate change and reduce our dependence on oil."
The oil and gas industry is doing just that. Oil and gas companies are at the forefront of investments into green energy; they are aware of peak oil and not only ensuring energy for the future, but I'm sure ensuring a future for their companies.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
The environmentalist group claims that they are protesting, asking North Sea governments to stop deepwater drilling, spewing fear propaganda to scare the public into thinking that the BP disaster in the Gulf of Mexico could happen anywhere.
First off: The BP disaster is just that -- a disaster. No one meant for the well well blow-out, 11 people to lose their lives, the rig to sink or the well to spill oil and gas into the waters of the Gulf of Mexico. It was an accident, and companies and regulatory agencies across the globe are trying to learn from the events surrounding the Macondo well and enact change and safety measures to ensure it doesn't happen again.
While the activists may be acting with good intentions, their actions are pretty misguided. To think that the world can stop its reliance on petroleum products today is very simple-minded.
In fact, the photo of the two activists "training" for the action shows the likely numerous petroleum products required to safely achieve their mission, including an inflatable sea vessel, plastic safety helmets and various nylon ropes.
One of the activists said, "Instead of drilling for the last drops in places like this, the oil companies should be developing the clean energy technologies we need to fight climate change and reduce our dependence on oil."
The oil and gas industry is doing just that. Oil and gas companies are at the forefront of investments into green energy; they are aware of peak oil and not only ensuring energy for the future, but I'm sure ensuring a future for their companies.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Friday, September 3, 2010
Scare tactics and misinformation
Death and destruction -- and fear -- sells. It sells magazines and movies and news.
Because of this, our news sources have become sensationalistic. I catch news trailers that are downright scary. "Is poison lurking in your fridge? Tune in tonight."
Yikes! What if I eat it before the 10 p.m. news program starts?
The same thing has happened with media coverage of our petroleum industry. Scare tactics make for devoted listeners/watchers/readers -- but really, are we posting the news or misinforming (and scaring) our public?
Take yesterday's accident offshore Louisiana. I got word in the morning that an oil rig had exploded, ala Deepwater Horizon; and my heart sank.
No! Please don't say it's true -- I thought of our already embattled offshore industry, laid off because of the moratorium, still mourning the losses of the Deepwater Horizon crew. I thought of the book-throwing environmentalists who use fear and misinformation to enact change. I thought of the drilling moratorium, the Rally for Jobs campaign by the API, the Save US Jobs campaign by the AEA, the National Taxpayers Union's campaign to support domestic energy companies.
I can't tell a lie -- I also thought about my job as a petroleum writer.
Initial media reports coming out of the major sources were scary, really very frightening.
When I got wind of the story, there was no official report, so I dug a little, just as a good journalist should. I called multiple offices in the US Coast Guard until I found the right one. I asked my source there what was going on.
Thinking back, he never said "rig." He called the facility the "Vermillion 380," which I automatically connected as a block, not a rig. I asked him about it, but he wasn't sure. (Mind you, this was VERY early on...)
Right off, I knew the initial reports were wrong, and I posted what I knew about the accident, facility and company.
I called Mariner. I called the BOEM. I checked websites and waited for more information. I updated my site when I found out more.
I breathed a sigh of relief when I learned that all offshore personnel were rescued and safe. I breathed another sigh of relief when I learned that there was no oil leaking into the Gulf.
I hoped that our media would quickly change it's tune -- stop connecting the Vermillion 380 accident with the Deepwater Horizon accident. Stop scaring our public into believing that offshore drilling is unsafe.
Yes, everyone wants to know that our waters are safe, but misinforming the public to win more readers or viewers is just wrong.
Even last night, when I watched the news about the Mariner accident, journalists continued to call the production platform a rig ... which is the word used to describe a drilling rig. "Rig" is not used in the industry to denote production facilities, and production facilities, for the most part, do not drill (although some do house drilling equipment or they may host a drilling rig via cantilever).
This morning, I was saddened by a statement released by the United Steelworkers supporting the fed's moratorium on drilling, connecting the Vermillion 380 production platform accident to a need to increase safety in offshore drilling.
Now, should our industry always strive to increase safety, protect the environment and strengthen ethics? Yes. HSES is such an important part of our industry, and it should and will remain so.
And I agree, our authorities really should make sure that our practices are safe. But are they doing that, or are they saving face? What's taking so long, and why have only four drilling permits been issued in the last four months (even in shallow waters)?
While images of a smoking production platform keeps people on the channel, what the media is not doing is informing its audience about the amount of petroleum the US consumes, how much we import, where we import it from, and what we'll have to do to support our society in the future -- and how much that will cost -- should oil and natural gas exploration and production in the Gulf of Mexico get shut down.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Because of this, our news sources have become sensationalistic. I catch news trailers that are downright scary. "Is poison lurking in your fridge? Tune in tonight."
Yikes! What if I eat it before the 10 p.m. news program starts?
The same thing has happened with media coverage of our petroleum industry. Scare tactics make for devoted listeners/watchers/readers -- but really, are we posting the news or misinforming (and scaring) our public?
Take yesterday's accident offshore Louisiana. I got word in the morning that an oil rig had exploded, ala Deepwater Horizon; and my heart sank.
No! Please don't say it's true -- I thought of our already embattled offshore industry, laid off because of the moratorium, still mourning the losses of the Deepwater Horizon crew. I thought of the book-throwing environmentalists who use fear and misinformation to enact change. I thought of the drilling moratorium, the Rally for Jobs campaign by the API, the Save US Jobs campaign by the AEA, the National Taxpayers Union's campaign to support domestic energy companies.
I can't tell a lie -- I also thought about my job as a petroleum writer.
Initial media reports coming out of the major sources were scary, really very frightening.
When I got wind of the story, there was no official report, so I dug a little, just as a good journalist should. I called multiple offices in the US Coast Guard until I found the right one. I asked my source there what was going on.
Thinking back, he never said "rig." He called the facility the "Vermillion 380," which I automatically connected as a block, not a rig. I asked him about it, but he wasn't sure. (Mind you, this was VERY early on...)
Right off, I knew the initial reports were wrong, and I posted what I knew about the accident, facility and company.
I called Mariner. I called the BOEM. I checked websites and waited for more information. I updated my site when I found out more.
I breathed a sigh of relief when I learned that all offshore personnel were rescued and safe. I breathed another sigh of relief when I learned that there was no oil leaking into the Gulf.
I hoped that our media would quickly change it's tune -- stop connecting the Vermillion 380 accident with the Deepwater Horizon accident. Stop scaring our public into believing that offshore drilling is unsafe.
Yes, everyone wants to know that our waters are safe, but misinforming the public to win more readers or viewers is just wrong.
Even last night, when I watched the news about the Mariner accident, journalists continued to call the production platform a rig ... which is the word used to describe a drilling rig. "Rig" is not used in the industry to denote production facilities, and production facilities, for the most part, do not drill (although some do house drilling equipment or they may host a drilling rig via cantilever).
This morning, I was saddened by a statement released by the United Steelworkers supporting the fed's moratorium on drilling, connecting the Vermillion 380 production platform accident to a need to increase safety in offshore drilling.
Now, should our industry always strive to increase safety, protect the environment and strengthen ethics? Yes. HSES is such an important part of our industry, and it should and will remain so.
And I agree, our authorities really should make sure that our practices are safe. But are they doing that, or are they saving face? What's taking so long, and why have only four drilling permits been issued in the last four months (even in shallow waters)?
While images of a smoking production platform keeps people on the channel, what the media is not doing is informing its audience about the amount of petroleum the US consumes, how much we import, where we import it from, and what we'll have to do to support our society in the future -- and how much that will cost -- should oil and natural gas exploration and production in the Gulf of Mexico get shut down.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Thursday, August 19, 2010
Shale exploration and development heats up US onshore job market
While the drilling moratorium has hit the US petroleum industry hard, especially when you think about the thousands of oil and gas professionals who have been shelved during this tumultuous time. Fortunately, the shale exploration and development is booming across the US, and the job market is just as hot.
I've always heard that when one door closes, another opens -- and true to form with regard to the petroleum industry, shale has blown open all sorts of employment and economic doors.
Although geologists have known that the US sat atop various shale plays for decades, extracting these hydrocarbons has historically proven extremely difficult. Shale is by definition trapped in finely grained sedimentary rock, which has until recently stumped both the exploration and production side things.
With myriad improvements in technologies, the oil and gas industry has recently been able to tap these domestic resources. Improvements in horizontal and direction drilling, as well as developments in hydraulic fracturing have enabled operators to ramp up onshore oil and gas production through these shale plays.
With the number of rigs soaring in multiple states due to shale drilling, field development and even pipeline construction has soared in recent months due to increased activity in the US shale plays. And increased activity in the shale plays equals more jobs for US oil and gas professionals.
The Marcellus Shale play in Pennsylvania alone is adding tens of thousands of jobs to the state, and there are so many oilfield workers tapped for North Dakota's Bakken Shale play that housing has become an issue. Furthermore, these jobs extend beyond the petroleum industry. Increase revenue, royalties and leasing payments, as well and indirect employment is also boosted by this petroleum rush.
In fact, states across the nation are seeing economic spikes from shale activities.
"The game-changing development of natural gas supplies in shale regions has great potential to improve the economic well-being of communities across the United States, while providing access to a clean domestic energy source,” said Regina Hopper, America’s Natural Gas Alliance (ANGA) president and CEO.
Interested in finding a job in the shale industry? Visit PennEnergyJOBS to find your next career.
I've always heard that when one door closes, another opens -- and true to form with regard to the petroleum industry, shale has blown open all sorts of employment and economic doors.
Although geologists have known that the US sat atop various shale plays for decades, extracting these hydrocarbons has historically proven extremely difficult. Shale is by definition trapped in finely grained sedimentary rock, which has until recently stumped both the exploration and production side things.
With myriad improvements in technologies, the oil and gas industry has recently been able to tap these domestic resources. Improvements in horizontal and direction drilling, as well as developments in hydraulic fracturing have enabled operators to ramp up onshore oil and gas production through these shale plays.
With the number of rigs soaring in multiple states due to shale drilling, field development and even pipeline construction has soared in recent months due to increased activity in the US shale plays. And increased activity in the shale plays equals more jobs for US oil and gas professionals.
The Marcellus Shale play in Pennsylvania alone is adding tens of thousands of jobs to the state, and there are so many oilfield workers tapped for North Dakota's Bakken Shale play that housing has become an issue. Furthermore, these jobs extend beyond the petroleum industry. Increase revenue, royalties and leasing payments, as well and indirect employment is also boosted by this petroleum rush.
In fact, states across the nation are seeing economic spikes from shale activities.
"The game-changing development of natural gas supplies in shale regions has great potential to improve the economic well-being of communities across the United States, while providing access to a clean domestic energy source,” said Regina Hopper, America’s Natural Gas Alliance (ANGA) president and CEO.
Interested in finding a job in the shale industry? Visit PennEnergyJOBS to find your next career.
Thursday, August 5, 2010
HSES efforts pick up in the energy industry -- Good news will prevail
It's a common knowledge in the news industry: Death and destruction sells newspapers, multiplies page views, nabs viewers. As a regular writer for the web, my analytical tools further confirm that bad news is good news for page views.
Akin to rubber-necking, people just like to watch a ship sinking... whether it's gossiping about the latest Hollywood doomed marriage or a tragic accident, it's human nature to converge on the scene.
We've certainly seen this phenomenon demonstrated in the oil and gas industry as of late. The world can't get enough about the oil spill in the Gulf, and subsequent oil leaks in the shallow waters offshore Louisiana, at a port in China and from a pipeline in Michigan have certainly gotten the attention of many a PennEnergy reader.
The excitement of hurricane season can sometimes land more eyes than an oil and gas discovery. (And as I wrote yesterday, this season is forecast to be an "extremely active" one.)
While HSES (Health Safety Environment and Security) opportunities abound, recent accidents have solidified the industry's commitment to safety and the environment.
I recently spoke with a woman whose husband works as an HSE consultant. She said he's swamped with jobs right now. As soon as he gets home from a gig, he's flying out again -- all over the world. After the Macondo oil spill, companies are eager to double- and triple-check their facilities and HSES practices, and his consultancy has seen the jump in clients because of it.
Dedicated preventative and proactive health and safety efforts will help to ensure these types of accidents never occur again.
A four-company consortium consisting of ConocoPhillips, ExxonMobil, Shell and Chevron recently pledged $1 billion to develop and maintain a deepwater oil spill containment system that can be deployed within hours should any other accident occur in the US Gulf of Mexico.
And good news is around the corner with the recent accidents. China is working to clean the spill at its Dalian port, and Enbridge Energy Partners has cleaned a substantial amount of the oil that spilled from its Lakehead system in Michigan.
Wild Well Control managed to wrangle and cap the new oil spill in the Gulf of Mexico more than a week before the well was supposed to be capped.
Oil and gas operators and offshore drilling contractors have been diligent in shutting-in production that may be in the path of a storm, as well as quickly working to evacuate offshore staff should a hurricane threaten to travel near facilities.
In the deepwaters of the GOM, not only has BP commenced the static kill procedure, pumping concrete into the Macondo well, but the US government reported that nearly three-fourths of the oil that spilled from the deepwater accident has been cleaned, contained or dispersed.
Akin to rubber-necking, people just like to watch a ship sinking... whether it's gossiping about the latest Hollywood doomed marriage or a tragic accident, it's human nature to converge on the scene.
We've certainly seen this phenomenon demonstrated in the oil and gas industry as of late. The world can't get enough about the oil spill in the Gulf, and subsequent oil leaks in the shallow waters offshore Louisiana, at a port in China and from a pipeline in Michigan have certainly gotten the attention of many a PennEnergy reader.
The excitement of hurricane season can sometimes land more eyes than an oil and gas discovery. (And as I wrote yesterday, this season is forecast to be an "extremely active" one.)
While HSES (Health Safety Environment and Security) opportunities abound, recent accidents have solidified the industry's commitment to safety and the environment.
I recently spoke with a woman whose husband works as an HSE consultant. She said he's swamped with jobs right now. As soon as he gets home from a gig, he's flying out again -- all over the world. After the Macondo oil spill, companies are eager to double- and triple-check their facilities and HSES practices, and his consultancy has seen the jump in clients because of it.
Dedicated preventative and proactive health and safety efforts will help to ensure these types of accidents never occur again.
A four-company consortium consisting of ConocoPhillips, ExxonMobil, Shell and Chevron recently pledged $1 billion to develop and maintain a deepwater oil spill containment system that can be deployed within hours should any other accident occur in the US Gulf of Mexico.
And good news is around the corner with the recent accidents. China is working to clean the spill at its Dalian port, and Enbridge Energy Partners has cleaned a substantial amount of the oil that spilled from its Lakehead system in Michigan.
Wild Well Control managed to wrangle and cap the new oil spill in the Gulf of Mexico more than a week before the well was supposed to be capped.
Oil and gas operators and offshore drilling contractors have been diligent in shutting-in production that may be in the path of a storm, as well as quickly working to evacuate offshore staff should a hurricane threaten to travel near facilities.
In the deepwaters of the GOM, not only has BP commenced the static kill procedure, pumping concrete into the Macondo well, but the US government reported that nearly three-fourths of the oil that spilled from the deepwater accident has been cleaned, contained or dispersed.
Thursday, July 22, 2010
Steady crude prices support new exploration and production ventures
Although not as high as it once reached, the price of crude has been steadily trading in the mid-$70 range for about a year now, supporting new exploration and production investments worldwide.
When a barrel of crude hit $100 and above, that price helped to support more expensive exploration and development projects, including oil sands, ultra-deepwater, EOR and unconventional plays. When companies are making more money, they can spend more money; and budgets reflect this.
But when the price of oil plummeted, so did investments in new or technologically advanced projects. Companies worldwide contracted, delaying projects and laying off employees.
While the market has not fully recovered, the steady price of oil in the $75/barrel range certainly helps encourage development dollars to be spent. OPEC has kept production curtailed effectively to support a more manageable (than $30/barrel or $50/barrel) price for a barrel of crude.
As the ramp-up begins, we see major acquisitions and industry moves taking place across the board. Oil services companies are merging (, major producers are acquiring interest in new projects, and the employee marketplace is heating up.
Hot opportunities for both companies and investors have very clearly emerged. Major dollars are being spent in the US onshore shale plays, and the Canadian oil sands market is certainly heating up.
Major international companies, such as India's Reliance, Royal Dutch Shell and Norway's Statoil have committed billions of dollars to shale in the US. Experts have predicted that the massive natural gas resources of the shale plays in the US may very well turn the typically regional commodity into a global one, like oil is today.
China's Synopec recently agreed to pay $4.65 billion to acquire a stake in ConocoPhillips Syncrude development in Canada, while French major Total is spending $1.1 billion to acquire a slice of Canadian oil sands. At the close of 2009, South Korea's KNOC agreed to pay $3.9 billion for Canada's Harvest Energy.
Additionally, new oil provinces are garnering attention, with companies turning toward the Atlantic Margin for exploration opportunities. The first drilling offshore Greenland in more than a decade is currently under way, with Cairn Energy spudding its first well offshore Greenland earlier this month.
Also, exploration offshore the Falkland Islands has gotten the attention of many, with the first two wells in this South Atlantic region discovering hydrocarbons. Desire Petroleum found gas at its Liz prospect, and Rockhopper Exploration discovered oil at Sea Lion. Presently, Rockhopper is readying to spud another well, this time in the Ernest prospect; and Falklands Oil & Gas (LON:FOGL) is looking, along with its partner BHP Billliton, to hire a deepwater rig to drill in the area.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
When a barrel of crude hit $100 and above, that price helped to support more expensive exploration and development projects, including oil sands, ultra-deepwater, EOR and unconventional plays. When companies are making more money, they can spend more money; and budgets reflect this.
But when the price of oil plummeted, so did investments in new or technologically advanced projects. Companies worldwide contracted, delaying projects and laying off employees.
While the market has not fully recovered, the steady price of oil in the $75/barrel range certainly helps encourage development dollars to be spent. OPEC has kept production curtailed effectively to support a more manageable (than $30/barrel or $50/barrel) price for a barrel of crude.
As the ramp-up begins, we see major acquisitions and industry moves taking place across the board. Oil services companies are merging (, major producers are acquiring interest in new projects, and the employee marketplace is heating up.
Hot opportunities for both companies and investors have very clearly emerged. Major dollars are being spent in the US onshore shale plays, and the Canadian oil sands market is certainly heating up.
Major international companies, such as India's Reliance, Royal Dutch Shell and Norway's Statoil have committed billions of dollars to shale in the US. Experts have predicted that the massive natural gas resources of the shale plays in the US may very well turn the typically regional commodity into a global one, like oil is today.
China's Synopec recently agreed to pay $4.65 billion to acquire a stake in ConocoPhillips Syncrude development in Canada, while French major Total is spending $1.1 billion to acquire a slice of Canadian oil sands. At the close of 2009, South Korea's KNOC agreed to pay $3.9 billion for Canada's Harvest Energy.
Additionally, new oil provinces are garnering attention, with companies turning toward the Atlantic Margin for exploration opportunities. The first drilling offshore Greenland in more than a decade is currently under way, with Cairn Energy spudding its first well offshore Greenland earlier this month.
Also, exploration offshore the Falkland Islands has gotten the attention of many, with the first two wells in this South Atlantic region discovering hydrocarbons. Desire Petroleum found gas at its Liz prospect, and Rockhopper Exploration discovered oil at Sea Lion. Presently, Rockhopper is readying to spud another well, this time in the Ernest prospect; and Falklands Oil & Gas (LON:FOGL) is looking, along with its partner BHP Billliton, to hire a deepwater rig to drill in the area.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Thursday, July 15, 2010
If the legal system, industry and Americans are against deepwater drilling suspensions, who is for them?
I'm not one to talk politics, truly. I vote, and I am very proud to be an American and profoundly grateful to our men and women who have served our country in war and peace, as soldiers and government officials. Difficult decisions are being made every day about the future of our country, and I have always had trust that those decisions were being made with the utmost consideration and using every resource available.
That does not seem to be the case when we consider our energy sector. I am flabbergasted that the DOI and BOEM have instituted another deepwater drilling moratorium, after two courts threw out the first one.
I am concerned that a course of action has been plotted, and no considerations are being made along the way.
I am completely supportive of green energy. Bring on the wind, waves and sun! But I am also aware the our country's infrastructure, utilities and transmission lines are not currently able to support such a change. Additionally, coal and oil both support so much of our current economy, it is unreasonable to force a switch when the country cannot support it.
On that note, on June 30, the DOI declared a deepwater drilling moratorium. After collecting and canvassing some of the leading experts in the field, Interior Secretary Salazar went against their esteemed opinions and shut down deepwater drilling in the waters offshore the US.
This has so many more ramifications than the 33 drilling rigs that were operating in the US Gulf of Mexico. The drilling moratorium severely affects so many coastal communities and economies, families' livelihoods dependent on the petroleum industry in the Gulf.
Additionally, it discourages any future investments in the US oil and gas sector by companies, because the government does not support it. In other words, companies will choose to spend their exploration and development budgets in countries that are more supportive of petroleum developments.
(This can very clearly be seen in the first two deepwater offshore rigs being moved from US waters to Egypt and West Africa.)
Calling the moratorium a 'second manmade disaster,' Louisiana's Governor Jindal has come out loudly against the drilling shut-down, as well as other government representatives from the Gulf Coast.
Furthermore, two courts threw-out the drilling moratorium.
Yet, Salazar and his staff re-instituted it, this time under the nomenclature of a "drilling suspension" that focuses on the BOPs rather than the water depth. The placement of the BOPs on the ocean floor or on floating facilities is largely determined by water depth, and the staff at the DOI should be completely aware of that.
As the chairman of the NOIA said, "If it looks like a moratorium, acts like a moratorium, and the effect is the same as a moratorium, it is a moratorium."
Even the American public, which is watching the oil spill in the Gulf of Mexico unfold with a very heavy heart, is against the deepwater drilling suspensions.
According to a report from Bloomberg, 73 percent of Americans say the ban is unnecessary, calling the oil spill a "freak accident." While 44 percent of the American public thinks BP is to blame for the oil spill, another 19 percent think the cause of the accident should be pinned on lax federal regulations and oversight.
What does this say?
The US government is going against industry experts, the legal system and everyday Americans by declaring another drilling ban.
Furthermore, is this ban somehow a way to point the blame in another direction -- away from the now-defunct MMS, as well as the powers that run it?
That does not seem to be the case when we consider our energy sector. I am flabbergasted that the DOI and BOEM have instituted another deepwater drilling moratorium, after two courts threw out the first one.
I am concerned that a course of action has been plotted, and no considerations are being made along the way.
I am completely supportive of green energy. Bring on the wind, waves and sun! But I am also aware the our country's infrastructure, utilities and transmission lines are not currently able to support such a change. Additionally, coal and oil both support so much of our current economy, it is unreasonable to force a switch when the country cannot support it.
On that note, on June 30, the DOI declared a deepwater drilling moratorium. After collecting and canvassing some of the leading experts in the field, Interior Secretary Salazar went against their esteemed opinions and shut down deepwater drilling in the waters offshore the US.
This has so many more ramifications than the 33 drilling rigs that were operating in the US Gulf of Mexico. The drilling moratorium severely affects so many coastal communities and economies, families' livelihoods dependent on the petroleum industry in the Gulf.
Additionally, it discourages any future investments in the US oil and gas sector by companies, because the government does not support it. In other words, companies will choose to spend their exploration and development budgets in countries that are more supportive of petroleum developments.
(This can very clearly be seen in the first two deepwater offshore rigs being moved from US waters to Egypt and West Africa.)
Calling the moratorium a 'second manmade disaster,' Louisiana's Governor Jindal has come out loudly against the drilling shut-down, as well as other government representatives from the Gulf Coast.
Furthermore, two courts threw-out the drilling moratorium.
Yet, Salazar and his staff re-instituted it, this time under the nomenclature of a "drilling suspension" that focuses on the BOPs rather than the water depth. The placement of the BOPs on the ocean floor or on floating facilities is largely determined by water depth, and the staff at the DOI should be completely aware of that.
As the chairman of the NOIA said, "If it looks like a moratorium, acts like a moratorium, and the effect is the same as a moratorium, it is a moratorium."
Even the American public, which is watching the oil spill in the Gulf of Mexico unfold with a very heavy heart, is against the deepwater drilling suspensions.
According to a report from Bloomberg, 73 percent of Americans say the ban is unnecessary, calling the oil spill a "freak accident." While 44 percent of the American public thinks BP is to blame for the oil spill, another 19 percent think the cause of the accident should be pinned on lax federal regulations and oversight.
What does this say?
The US government is going against industry experts, the legal system and everyday Americans by declaring another drilling ban.
Furthermore, is this ban somehow a way to point the blame in another direction -- away from the now-defunct MMS, as well as the powers that run it?
Thursday, July 8, 2010
Weather delays offshore operations, strains onshore expectations
Major advancements in technologies have allowed the oil, gas and renewable energy sectors to expand offshore, but good ol' Mother Nature continues to keep the industry grounded.
Serious weather not only affects offshore drilling and installations, but it also can shut-in production and affect refineries and transmission. Power lines are regularly snapped from serious storms, and an unbelievable heat wave has ramped up temperatures and strained the power grid in the northeastern US.
The 2010 Atlantic hurricane season is heating up with the first two storms rolling through the Gulf of Mexico. Hurricane Alex hit last week as a Category 2, and a tropical depression is now threatening to become Tropical Storm Bonnie.
These storms have shut-in production and stalled efforts at the blown-out Macondo well.
While we usually look to the Gulf of Mexico to produce hurricanes this time of year, adverse weather has been tearing through another part of the world, as well.
Investors and industry insiders who have been eagerly awaiting the results of the Falkland Oil & Gas Limited (LON:FOGL) drilling at the Toroa prospect in the South Atlantic will have to wait some more.
While results from the well were expected this week, adverse weather has delayed the drilling operations on the Toroa F61/5-1 exploration well. Expected to take 35 days, the exploration well was spud on May 31.
Targeting a total depth of 2,700 meters, FOGL reported that drilling is not yet complete because of adverse weather and "minor operational issues."
Stay tuned to PennEnergy and its daily Global Offshore Weather Reports powered by ImpactWeather to learn the latest information about weather systems worldwide.
Serious weather not only affects offshore drilling and installations, but it also can shut-in production and affect refineries and transmission. Power lines are regularly snapped from serious storms, and an unbelievable heat wave has ramped up temperatures and strained the power grid in the northeastern US.
The 2010 Atlantic hurricane season is heating up with the first two storms rolling through the Gulf of Mexico. Hurricane Alex hit last week as a Category 2, and a tropical depression is now threatening to become Tropical Storm Bonnie.
These storms have shut-in production and stalled efforts at the blown-out Macondo well.
While we usually look to the Gulf of Mexico to produce hurricanes this time of year, adverse weather has been tearing through another part of the world, as well.
Investors and industry insiders who have been eagerly awaiting the results of the Falkland Oil & Gas Limited (LON:FOGL) drilling at the Toroa prospect in the South Atlantic will have to wait some more.
While results from the well were expected this week, adverse weather has delayed the drilling operations on the Toroa F61/5-1 exploration well. Expected to take 35 days, the exploration well was spud on May 31.
Targeting a total depth of 2,700 meters, FOGL reported that drilling is not yet complete because of adverse weather and "minor operational issues."
Stay tuned to PennEnergy and its daily Global Offshore Weather Reports powered by ImpactWeather to learn the latest information about weather systems worldwide.
Thursday, July 1, 2010
Petroleum industry steps-up as 2010 Atlantic hurricane season kicks off
I can't help it: Hurricanes are exciting. I have lived on the US Gulf Coast my whole life -- from South Texas to New Orleans to Houston. I know that hurricanes can cause major damage; I've lived through them.
Nonetheless, just as the wind picks up outside my door, my sense of excitement has been lifted with the first major storm of the hurricane season.
Making landfall in northern Mexico as a Category 2 storm Wednesday night, Hurricane Alex raged through the Gulf Mexico, leaving little damage to offshore oil and gas installations in the US Gulf in its wake-- a testament to the safety and improved design measures enacted over the last several years by the petroleum industry.
Kicking HSE efforts into high gear, multiple oil and gas companies evacuated offshore production platforms, while drilling companies brought staff to safety onshore. Additionally, the BOE reported that more than a quarter of the oil production and nearly 15 percent of the natural gas production was shut-in in preparation for the storm passing.
In less than 24 hours, oil companies have already started assessing their facilities, restaffing offshore platforms and moving toward restarting production. In its efforts to step up safety and oversight, the BOE plans to inspect all facilities in the path of the storm.
Even the oil spill measures far east of the storm were affected by adverse weather, high waves and strong winds. While oil spill containment efforts plowed on in the face of the severe weather, oil spill clean-up processes were curtailed. Oil skimmers and controlled burns were halted, and onshore clean-up efforts were stymied by the weather -- although they are expected to ramp back up with the storm's passage.
One down, 22 to go. The 2010 Atlantic hurricane season is expected to be "extremely active," with up to 23 named storms, 14 hurricanes and seven major hurricanes (Category 3, 4 or 5) predicted.
I hope and pray in the face of all the negative press surrounding the offshore petroleum industry in the US Gulf, that the operators, service companies and drillers escape this hurricane season without major damages -- not only for the companies' sakes, but also for the country's sake.
The industry may not be able to withstand another blow to oil and gas exploration and production in the US Gulf. With opportunities abounding abroad, my fingers are crossed hoping that companies continue their efforts in the waters of the Gulf of Mexico.
Nonetheless, just as the wind picks up outside my door, my sense of excitement has been lifted with the first major storm of the hurricane season.
Making landfall in northern Mexico as a Category 2 storm Wednesday night, Hurricane Alex raged through the Gulf Mexico, leaving little damage to offshore oil and gas installations in the US Gulf in its wake-- a testament to the safety and improved design measures enacted over the last several years by the petroleum industry.
Kicking HSE efforts into high gear, multiple oil and gas companies evacuated offshore production platforms, while drilling companies brought staff to safety onshore. Additionally, the BOE reported that more than a quarter of the oil production and nearly 15 percent of the natural gas production was shut-in in preparation for the storm passing.
In less than 24 hours, oil companies have already started assessing their facilities, restaffing offshore platforms and moving toward restarting production. In its efforts to step up safety and oversight, the BOE plans to inspect all facilities in the path of the storm.
Even the oil spill measures far east of the storm were affected by adverse weather, high waves and strong winds. While oil spill containment efforts plowed on in the face of the severe weather, oil spill clean-up processes were curtailed. Oil skimmers and controlled burns were halted, and onshore clean-up efforts were stymied by the weather -- although they are expected to ramp back up with the storm's passage.
One down, 22 to go. The 2010 Atlantic hurricane season is expected to be "extremely active," with up to 23 named storms, 14 hurricanes and seven major hurricanes (Category 3, 4 or 5) predicted.
I hope and pray in the face of all the negative press surrounding the offshore petroleum industry in the US Gulf, that the operators, service companies and drillers escape this hurricane season without major damages -- not only for the companies' sakes, but also for the country's sake.
The industry may not be able to withstand another blow to oil and gas exploration and production in the US Gulf. With opportunities abounding abroad, my fingers are crossed hoping that companies continue their efforts in the waters of the Gulf of Mexico.
Thursday, June 24, 2010
US shale plays take center stage
Despite all the negative news coming out of the Gulf of Mexico, US onshore is seeing a revival of activity centered around the massive natural gas assets contained in the many shale plays across the nation.
In fact, America's Natural Gas Alliance just reported that the shale plays make the US the largest producer of clean energy in the world. Furthermore, a study by Penn State University found that the Marcellus Shale alone is injecting billions of dollars into the economy and providing tens of thousands of jobs.
In reviewing traffic and trends on the energy website I manage PennEnergy, shale stories consistently rank as the biggest drivers of page views. In addition, shale deals have earned the biggest dollar amounts for contracts and JVs -- a new trend. For the past couple of years, offshore -- and namely deepwater -- has typically seen the most activity.
Although I don't think the change can be solely pinned on the Deepwater Horizon incident and subsequent deepwater drilling moratorium, certainly it helped.
When Anadarko announced last week that it was going to have to force majeure three of its four ultra-deepwater drilling rigs contracted in the Gulf of Mexico, the company said that it would refocus that exploratory budget onshore the US, specifically on its Marcellus, Haynesville and Eagle Ford shale plays.
"Although our Gulf of Mexico drilling activity has been suspended due to the moratorium, we are evaluating opportunities to reallocate some of the 2010 capital from the Gulf to other areas of our global portfolio, including our numerous onshore liquids-rich opportunities, and we remain committed to our worldwide exploration, appraisal and development programs," said Jim Hackett, Anadarko chairman and CEO.
Just today, India's Reliance Industries committed $1.15 billion in a joint venture agreement with Pioneer Natural Resources to enter into its Eagle Ford Shale acreage in South Texas. This is the second major investment the Indian major has made in the last few months. In April, Reliance paid $1.7 billion to form a JV with Atlas Resources on its Marcellus Shale properties.
The work the US shale plays offer has been bulking up jobs and company backlogs for months. In addition to a growing number of onshore rigs working in the US, pipeline construction contracts abound.
Also, Cheniere has decided to add liquefaction capabilities to its LNG terminal at Sabine Pass in Louisiana. The company has contracted Bechtel for the design and construction of the liquefaction facilities to be able to export excess natural gas produced by the prolific shale plays.
In fact, America's Natural Gas Alliance just reported that the shale plays make the US the largest producer of clean energy in the world. Furthermore, a study by Penn State University found that the Marcellus Shale alone is injecting billions of dollars into the economy and providing tens of thousands of jobs.
In reviewing traffic and trends on the energy website I manage PennEnergy, shale stories consistently rank as the biggest drivers of page views. In addition, shale deals have earned the biggest dollar amounts for contracts and JVs -- a new trend. For the past couple of years, offshore -- and namely deepwater -- has typically seen the most activity.
Although I don't think the change can be solely pinned on the Deepwater Horizon incident and subsequent deepwater drilling moratorium, certainly it helped.
When Anadarko announced last week that it was going to have to force majeure three of its four ultra-deepwater drilling rigs contracted in the Gulf of Mexico, the company said that it would refocus that exploratory budget onshore the US, specifically on its Marcellus, Haynesville and Eagle Ford shale plays.
"Although our Gulf of Mexico drilling activity has been suspended due to the moratorium, we are evaluating opportunities to reallocate some of the 2010 capital from the Gulf to other areas of our global portfolio, including our numerous onshore liquids-rich opportunities, and we remain committed to our worldwide exploration, appraisal and development programs," said Jim Hackett, Anadarko chairman and CEO.
Just today, India's Reliance Industries committed $1.15 billion in a joint venture agreement with Pioneer Natural Resources to enter into its Eagle Ford Shale acreage in South Texas. This is the second major investment the Indian major has made in the last few months. In April, Reliance paid $1.7 billion to form a JV with Atlas Resources on its Marcellus Shale properties.
The work the US shale plays offer has been bulking up jobs and company backlogs for months. In addition to a growing number of onshore rigs working in the US, pipeline construction contracts abound.
Also, Cheniere has decided to add liquefaction capabilities to its LNG terminal at Sabine Pass in Louisiana. The company has contracted Bechtel for the design and construction of the liquefaction facilities to be able to export excess natural gas produced by the prolific shale plays.
Tuesday, June 15, 2010
Hot Topic: Falkland Island Offshore Drilling
In addition to the strife built up by Argentina before drilling ever started, the Falkland Islands are a hot topic for petroleum experts and investors, alike.
While Argentinian President Cristina Fernandez may have been trying to stop exploration offshore the Falkland Islands in the South Atlantic Ocean, she really just turned up the volume on the buzz that was already humming about this new exploration areas. And to top it off, she wasn't successful at stopping the drilling rig and supplies from getting offshore the Falklands.
Now, Desire Petroleum, Rockhopper Exploration and Falklands Oil & Gas Limited (FOGL) are drilling successfully offshore the Falkland Islands. Desire reported gas after drilling its exploration well at the Liz prospect, and Rockhopper has confirmed oil at the Sea Lion prospect.
Now FOGL is drilling its first well in the South Atlantic with Australian major BHP Billiton, targeting the Toroa prospect. The oil and gas community, as well as investors in the know, are eagerly awaiting the results of this well -- hoping that the Falkland Islands and the South Atlantic prove an altogether new oil and gas region.
In fact, Desire Petroleum has already tagged Rachel, Ninky and Anna prospects as similar to the Sea Lion discovery -- with plans to drill Rachel next.
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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
While Argentinian President Cristina Fernandez may have been trying to stop exploration offshore the Falkland Islands in the South Atlantic Ocean, she really just turned up the volume on the buzz that was already humming about this new exploration areas. And to top it off, she wasn't successful at stopping the drilling rig and supplies from getting offshore the Falklands.
Now, Desire Petroleum, Rockhopper Exploration and Falklands Oil & Gas Limited (FOGL) are drilling successfully offshore the Falkland Islands. Desire reported gas after drilling its exploration well at the Liz prospect, and Rockhopper has confirmed oil at the Sea Lion prospect.
Now FOGL is drilling its first well in the South Atlantic with Australian major BHP Billiton, targeting the Toroa prospect. The oil and gas community, as well as investors in the know, are eagerly awaiting the results of this well -- hoping that the Falkland Islands and the South Atlantic prove an altogether new oil and gas region.
In fact, Desire Petroleum has already tagged Rachel, Ninky and Anna prospects as similar to the Sea Lion discovery -- with plans to drill Rachel next.
...........................................................
Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.
Wednesday, June 9, 2010
How will BP overcome hurricane threats?
It's official, the 2010 Atlantic Hurricane Season has begun, and it's expected to be a big one. Experts predict that the Gulf of Mexico could be hit with a record number of storms this year.
In addition to threatening offshore facilities, subsea pipelines and coastal refineries with huge winds and waves, this year's hurricane season could pose a real threat to the ongoing oil spill containment efforts in the Gulf of Mexico.
Not only would an oncoming hurricane stop the oil spill clean-up efforts at sea and onshore, a hurricane would most likely threaten the oil spill containment successes we have seen in the last week with the LMRP oil spill cap.
The LMRP oil spill cap involved severing the damaged drilling riser from the top of the BOP and placing a cap on the cut, connected to a new riser. This new riser transports the oil and natural gas that is spilling from the Macondo well to the Discoverer Enterprise drillship 5,000 feet above.
Today, James Watson, US Coast Guard Rear Admiral and federal on-scene coordinator of the oil spill response gave BP a 72-hour deadline to submit contingency plans should a hurricane threaten or vessels/facilities fail.
Should the Discoverer Enterprise fail, another rig can be on site to pick up the slack; additionally, BP has a number of coals in the fire in efforts to enhance its current oil spill containment efforts.
Nonetheless, the oil and natural gas that is spilling from the Macondo well needs to be collected by a facility on the water's surface. If a vessel is located in the direct path of a hurricane, it would have to move out of the way. Thus, disconnecting from the Macondo well and again spilling the hydrocarbons into the water.
Or would it? Would BP be able to acquire an FPSO to retrieve the captured oil and gas, offload it, and face a hurricane?
In general, FPSOs are popular both because pipelines are not needed because the vessels can offload to tankers, and because the FPSOs can unhook and travel out of the way of threatening storms. FPSOs have been widely used in Asia Pacific, where typhoons actively threaten offshore oil and gas production.
Here, hydrocarbon flow is shut-in via a valve on the BOP, but as we all know, the shut-off valve on the Macondo BOP is not operable.
I'm interested to see what BP comes up with ... stay posted.
In addition to threatening offshore facilities, subsea pipelines and coastal refineries with huge winds and waves, this year's hurricane season could pose a real threat to the ongoing oil spill containment efforts in the Gulf of Mexico.
Not only would an oncoming hurricane stop the oil spill clean-up efforts at sea and onshore, a hurricane would most likely threaten the oil spill containment successes we have seen in the last week with the LMRP oil spill cap.
The LMRP oil spill cap involved severing the damaged drilling riser from the top of the BOP and placing a cap on the cut, connected to a new riser. This new riser transports the oil and natural gas that is spilling from the Macondo well to the Discoverer Enterprise drillship 5,000 feet above.
Today, James Watson, US Coast Guard Rear Admiral and federal on-scene coordinator of the oil spill response gave BP a 72-hour deadline to submit contingency plans should a hurricane threaten or vessels/facilities fail.
Should the Discoverer Enterprise fail, another rig can be on site to pick up the slack; additionally, BP has a number of coals in the fire in efforts to enhance its current oil spill containment efforts.
Nonetheless, the oil and natural gas that is spilling from the Macondo well needs to be collected by a facility on the water's surface. If a vessel is located in the direct path of a hurricane, it would have to move out of the way. Thus, disconnecting from the Macondo well and again spilling the hydrocarbons into the water.
Or would it? Would BP be able to acquire an FPSO to retrieve the captured oil and gas, offload it, and face a hurricane?
In general, FPSOs are popular both because pipelines are not needed because the vessels can offload to tankers, and because the FPSOs can unhook and travel out of the way of threatening storms. FPSOs have been widely used in Asia Pacific, where typhoons actively threaten offshore oil and gas production.
Here, hydrocarbon flow is shut-in via a valve on the BOP, but as we all know, the shut-off valve on the Macondo BOP is not operable.
I'm interested to see what BP comes up with ... stay posted.
Thursday, April 15, 2010
Identifying A&D trends in the oil and gas industry
Today, Apache announced that the company signed a merger agreement to purchase Mariner Energy for $2.7 billion in an effort to gain its deepwater Gulf of Mexico assets.
See the full story in today's coverage of Apache's purchase of Mariner Energy on PennEnergy.
Yes, Mariner produces some 63,000 boe/d and holds 181 million boe in proven reserves. Also, the company boasts just under 100 deepwater GOM blocks with seven discoveries currently under development and 50-plus prospects.
Nonetheless, this along with other recent company acquisitions and land grabs, including the $1.05 billion Apache plunked down to snag Devon Energy's Gulf of Mexico assets (story appeared April 12), begs me to ask:
Is the merger and acquisition trend that, yes, usually occurs during this part of the business cycle (a.k.a. when prices are low, but prospects of recovery are high), being augmented by a changed attitude in the US administration?
In other words, has our current administration's wishy-washy, uninformed attitude about this nation's natural resources and our dependence on foreign countries for oil, tainted the next two years of MMS lease sales?
Most that follow the Minerals Management Services' Gulf of Mexico lease sales know that investments in our waters has dwindled in the last couple of years. (And oil and gas royalties collected from onshore and offshore leases are one of the nation's biggest non-tax revenue generators.)
One reason for the loss in eye-popping investments in the waters of the US Gulf of Mexico could very likely be the uncertainty in oil and natural gas prices has kept producers from investing in new ventures. As stock prices have dropped across the board, companies have retreated inward, focused on the properties that were already in the works, whose budgets were already approved before the drop in the price of oil
Yes. But I wonder, is there something else at play?
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