Last week, an improvised explosive device was discovered attached to an Oklahoma natural gas pipeline. The FBI and local authorities worked quickly to remove and safely diffuse the bomb, as well as arrest a suspect in the incident.
While much of the country was satisfied knowing that the suspect was apprehended, the oil and gas industry and midstream sector in particular remain vigilant in keeping energy infrastructure safe in the US -- and this attempted bombing is an example of that.
PennEnergy.com was able to get some insight from former CIA officer Fred Enochs, now a partner in Washington, DC-based TD International, a strategic advisory firm. Working in Houston, Enochs specializes in domestic and international energy, finance and commodity trading with a focus on government policy issues and project due diligence.
Enochs contends that the US has ample safety measures in place to ensure security for its pipelines and energy infrastructure.
"Following 9/11, energy infrastructure, including midstream assets, underwent a very thorough review and assessment process which encompassed extensive safety and security risk reviews," Enochs said. "These reviews determined the appropriate measures and response procedures based upon the overall threat, vulnerabilities and consequences."
Because of the amount of pipelines -- thousands of miles -- physically paroling the systems would prove impossible, but high-tech solutions have provided the next best thing. A combination of electronic and control room monitoring, redundancy and response measures help to keep pipelines across the US safe.
"For instance, a typical pipeline is supervised 24 hours a day by control room technicians using systems such as SCADA and checked regularly by field staff," Enochs said. "Of course their main focus is keeping the pipeline in operating order, but security measures are also built into this protocol."
"The risk assessment process also allows operators to focus their security and safety efforts, using tools like surveillance systems and actual manual checks, on the most critical areas of the pipelines thus ensuring the best use of resources," he added.
Enochs contends that our pipelines do not require any increased safety measures such as those enacted, somewhat successfully, in other regions of the world, because of the stable infrastructure in the US today.
Areas in South America, the Middle East and West Africa have a different risk profile than the US, because of increased poverty and greater threat of terrorism, as well as military strife, Enochs stated.
"For instance, in Columbia the FARC was a guerrilla terrorist group which tried in the past to harm the government by damaging pipelines in order to disrupt the nation's energy supply; while in the Nigeria Delta today you have various groups competing for political and economic power using pipelines and the country's energy infrastructure as a weapon in their arsenal," Enochs said.
The US has appropriate security measures and responses in place according to its risk assessment, he explained.
"It's about protecting the areas that have the most overall risk, which is a function of determining the threat probability, the consequence of a successful attack and your vulnerability to that attack," Enochs said. "The risk assessment methodology that has been applied allows these operators to make the best use of the resources that are available and ensures that the most critical areas are properly protected."
While suspenseful, the Oklahoma pipeline attempted bombing proves his midstream safety assessment. The bomb was quickly discovered, removed and diffused, and the man suspected of planting the device has been arrested.
Rest assured: They're on it.
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, August 17, 2011
Thursday, August 11, 2011
Oil prices have fallen, but will they stay low?
Oil prices fell dramatically this week from the mid-$90s to $75 a barrel on worries that the global economy is headed for a double-dip recession.
With some positive jobs numbers, West Texas crude prices rose above $84 a barrel on the New York Mercantile Exchange Thursday. Brent crude in London has seen a similar drop and slight recovery, trading at more than $106 a barrel.
While the price of oil increased, investors are wary demand may drop if the economy is headed for a downfall. Stock markets also fell drastically, leaving many worried about the future.
While multiple economic data combine to affect the price of oil, including jobs, home sales, purchasing, imports and inventories, the most-recent drop was pinned on the reduction in the United States' credit rating.
While OPEC has dropped demand looking forward, which casts out any suspicion that the oil cartel might up production, many analysts see the current drop in oil prices as temporary – and $100 oil a long-lasting reality.
Oil Demand to Increase Worldwide
The fact of the matter is that demand and consumption in the United States is going to become less of a price driver – or at least not the biggest factor to be considered.
The US has held the spot as the world's largest oil consumer for some time, but the growing and industrializing massive populations of China and India will soon take the spotlight for demand.
Additionally, demand continues to rise despite spikes in oil prices in countries where oil subsidies exist, including many Latin American, Middle Eastern and Asian countries. Meaning, consumers that pull back on demand when prices at the pump escalate are outnumbered by those who do not see an increase.
As markets continue to absorb these fundamental changes, the market will see less volatility based on US consumption changes due to the price at the pump, summer driving season or even risk from hurricanes.
Emerging Oil Resources for a Growing Demand in the US
Nonetheless, the appetite for oil in the US continues to grow, and emerging reserves in new regions could soon prove major sources of future energy in the nation. Namely, the development of shale oil resources in the US is growing drastically in the Eagle Ford and Bakken Shale, and new liquids-rich shale plays are being aggressively sought.
Additionally, the development of Canada's vast oil sands resources could prove a major source of future oil for years to come. Currently, the US government is working to approve the development of a major pipeline that could increase imports of oil sands into the US.
Finally, the burgeoning oil resources offshore Brazil will likely supplement the demand in the US. Multiple basins in the pre- and post-salt reservoirs offshore Brazil are proving high productivity; and Petrobras (NYSE:PBR) and others are leading the way in developing these resources.
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.
With some positive jobs numbers, West Texas crude prices rose above $84 a barrel on the New York Mercantile Exchange Thursday. Brent crude in London has seen a similar drop and slight recovery, trading at more than $106 a barrel.
While the price of oil increased, investors are wary demand may drop if the economy is headed for a downfall. Stock markets also fell drastically, leaving many worried about the future.
While multiple economic data combine to affect the price of oil, including jobs, home sales, purchasing, imports and inventories, the most-recent drop was pinned on the reduction in the United States' credit rating.
While OPEC has dropped demand looking forward, which casts out any suspicion that the oil cartel might up production, many analysts see the current drop in oil prices as temporary – and $100 oil a long-lasting reality.
Oil Demand to Increase Worldwide
The fact of the matter is that demand and consumption in the United States is going to become less of a price driver – or at least not the biggest factor to be considered.
The US has held the spot as the world's largest oil consumer for some time, but the growing and industrializing massive populations of China and India will soon take the spotlight for demand.
Additionally, demand continues to rise despite spikes in oil prices in countries where oil subsidies exist, including many Latin American, Middle Eastern and Asian countries. Meaning, consumers that pull back on demand when prices at the pump escalate are outnumbered by those who do not see an increase.
As markets continue to absorb these fundamental changes, the market will see less volatility based on US consumption changes due to the price at the pump, summer driving season or even risk from hurricanes.
Emerging Oil Resources for a Growing Demand in the US
Nonetheless, the appetite for oil in the US continues to grow, and emerging reserves in new regions could soon prove major sources of future energy in the nation. Namely, the development of shale oil resources in the US is growing drastically in the Eagle Ford and Bakken Shale, and new liquids-rich shale plays are being aggressively sought.
Additionally, the development of Canada's vast oil sands resources could prove a major source of future oil for years to come. Currently, the US government is working to approve the development of a major pipeline that could increase imports of oil sands into the US.
Finally, the burgeoning oil resources offshore Brazil will likely supplement the demand in the US. Multiple basins in the pre- and post-salt reservoirs offshore Brazil are proving high productivity; and Petrobras (NYSE:PBR) and others are leading the way in developing these resources.
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 4, 2011
Devon Energy pioneers shale drilling and production
US independent Devon Energy Corp. (NYSE:DVN) has earned the distinction as the first company to combine horizontal drilling and hydraulic fracturing to produce hydrocarbons trapped in shale plays.
Prior to the 2001, this had never been done, and oil and gas in shale rock was considered uneconomic.
Announced in 2001 and completed in 2002, Devon bought junior oil and gas company Mitchell Energy. Mitchell held acreage in the Barnett Shale, and had been drilling vertical wells and hydraulically fracturing them to produce natural gas from the formation.
The Barnett Shale is located just above the Ellenberger aquifer, which if penetrated will ruin the well. In the Central Texas counties of Denton, Wise and Tarrant, the Barnett Shale is insulated from the aquifer by the Viola limestone.
After several unsuccessful tries in areas not protected by the limestone, Mitchell was drilling wells in the areas that posed no threat of water infiltrating the shale because of the Viola; but Devon had much more acreage -- about 300,000 acres beyond the limestone. That meant that the majority of Devon's acreage could not be produced with vertical wells.
"We realized that if we could drill horizontally across the non-core area of the Barnett, than we could use the bottom half of the formation as the barrier, protecting us from the Ellenberger aquifer," revealed Devon spokesperson Chip Minty.
That realization is what drove Devon to experiment with the combination of horizontal drilling and hydraulic fracturing in shale plays. While both practices were well-established technologies, no companies had ever used them together in shale.
While the first two wells drilling and completed this way were disappointing, the third was encouraging.
"What we found was these horizontal wells would produce three times more gas as a vertical one, and they only cost twice as much," Minty said.
What Devon started tinkering with in 2002 has become an industry-wide practice for developing shale, unconventional and tight gas formations in North America. Now many companies are starting to use horizontal drilling and hydraulic fracturing in other parts of the world, including China, Poland and Argentina.
"This company has a history of innovation and perseverance," Minty continued. "Devon pioneered production of natural gas from deep coal seams in northwestern New Mexico in the late 1980s and early '90s."
At its operations in the Fruitland coal formation in the San Juan Basin of New Mexico, Devon was one of the first companies in the US to economically produce natural gas from coal.
Applying its expertise to various shale plays across North America, Devon currently employs 72 rigs in North America. Devon is active in the Barnett Shale of Central Texas, Cana Woodford Shale in Western Oklahoma, Arkoma Woodford Shale in Southeastern Oklahoma, Haynesville Shale in East Texas, the Permian Basin in West Texas and Southeast New Mexico, Horn River Shale in British Columbia Canada, Utica Shale in Ohio and Michigan, and Tuscaloosa Shale in Louisiana. The company is also pursuing exploration and production drilling in oil sands and unconventional plays in Alberta.
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.
Prior to the 2001, this had never been done, and oil and gas in shale rock was considered uneconomic.
Announced in 2001 and completed in 2002, Devon bought junior oil and gas company Mitchell Energy. Mitchell held acreage in the Barnett Shale, and had been drilling vertical wells and hydraulically fracturing them to produce natural gas from the formation.
The Barnett Shale is located just above the Ellenberger aquifer, which if penetrated will ruin the well. In the Central Texas counties of Denton, Wise and Tarrant, the Barnett Shale is insulated from the aquifer by the Viola limestone.
After several unsuccessful tries in areas not protected by the limestone, Mitchell was drilling wells in the areas that posed no threat of water infiltrating the shale because of the Viola; but Devon had much more acreage -- about 300,000 acres beyond the limestone. That meant that the majority of Devon's acreage could not be produced with vertical wells.
"We realized that if we could drill horizontally across the non-core area of the Barnett, than we could use the bottom half of the formation as the barrier, protecting us from the Ellenberger aquifer," revealed Devon spokesperson Chip Minty.
That realization is what drove Devon to experiment with the combination of horizontal drilling and hydraulic fracturing in shale plays. While both practices were well-established technologies, no companies had ever used them together in shale.
While the first two wells drilling and completed this way were disappointing, the third was encouraging.
"What we found was these horizontal wells would produce three times more gas as a vertical one, and they only cost twice as much," Minty said.
What Devon started tinkering with in 2002 has become an industry-wide practice for developing shale, unconventional and tight gas formations in North America. Now many companies are starting to use horizontal drilling and hydraulic fracturing in other parts of the world, including China, Poland and Argentina.
"This company has a history of innovation and perseverance," Minty continued. "Devon pioneered production of natural gas from deep coal seams in northwestern New Mexico in the late 1980s and early '90s."
At its operations in the Fruitland coal formation in the San Juan Basin of New Mexico, Devon was one of the first companies in the US to economically produce natural gas from coal.
Applying its expertise to various shale plays across North America, Devon currently employs 72 rigs in North America. Devon is active in the Barnett Shale of Central Texas, Cana Woodford Shale in Western Oklahoma, Arkoma Woodford Shale in Southeastern Oklahoma, Haynesville Shale in East Texas, the Permian Basin in West Texas and Southeast New Mexico, Horn River Shale in British Columbia Canada, Utica Shale in Ohio and Michigan, and Tuscaloosa Shale in Louisiana. The company is also pursuing exploration and production drilling in oil sands and unconventional plays in Alberta.
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 28, 2011
North Dakota oil production skyrockets on Bakken Shale drilling and development
Currently the fourth-largest oil producer in the United States, North Dakota is only surpassed by Texas, Alaska and California – nonetheless, mounting oil production from North Dakota's prolific Bakken Shale may soon change that.
The US Energy Information Administration recently focused on the recent upward trend oil production from North Dakota in its report entitled, "Rising North Dakota Oil Production: Recent Trends and Future Prospects."
Since 2005, oil production in North Dakota has tripled to an average of 307,000 barrels of oil a day in 2010 – a number that is likely to jump again in 2011. In January 2011, oil production in the state reached an average of 341,000 barrels of oil a day, and in February, North Dakota's oil production averaged 360,000 barrels of oil a day, showing a definite trend upward.
By using horizontal drilling and hydraulic fracturing in the Bakken Shale formation, operators in North Dakota have increased Bakken oil production from less than 3,000 barrels of oil a day in 2005 to more than 230,000 barrels of oil a day in 2010.
Drilling in the state has certainly increased, as well. According to the most-recent report from Baker Hughes, North Dakota currently has 158 rotary drilling rigs active in the state – all of which are drilling for oil. At the same time in 2005, there were only 22 rigs drilling.
Additionally, the rate of production growth in North Dakota far out-paces any other state in the Union. Over the last five years, oil production growth has increased some 40 percent in North Dakota, in comparison to less than a 4 percent increase in Texas and dwindling oil production rates in California and Alaska.
The EIA expects oil production from North Dakota to continue climbing, as elevated oil prices support further development of the Bakken Shale and underlying Sanish Three Forks formation.
Furthermore, the 2008 USGS assessment of the Bakken formation estimated some 3 to 4.3 billion barrels of recoverable oil, a significant increase from previous estimates. (The USGS plans to start a new assessment of the Bakken in October 2011.)
Recently, the North Dakota Department of Mineral Resources projected that production from the Bakken formation could possibly double, jumping to as high as 700,000 barrels of oil a day in the next four to seven years.
Increased oil production in the state is prompting investment in pipelines and infrastructure to transport the crude to eager US markets. In addition to a number of pipeline expansion and construction projects, some companies are resorting to railroads to deliver oil production from the state.
A mega-solution, TransCanada is hoping to start its Keystone XL Pipeline in 2013, but the construction project, which will span two countries and myriad states, is still undergoing the approval process with the US government (although the House voted to expedite the Obama Administration’s decision on the pipeline just this week).
Also facing processing and transport constraints, North Dakota's natural gas production has grown as associated production to the oil.
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 US Energy Information Administration recently focused on the recent upward trend oil production from North Dakota in its report entitled, "Rising North Dakota Oil Production: Recent Trends and Future Prospects."
Since 2005, oil production in North Dakota has tripled to an average of 307,000 barrels of oil a day in 2010 – a number that is likely to jump again in 2011. In January 2011, oil production in the state reached an average of 341,000 barrels of oil a day, and in February, North Dakota's oil production averaged 360,000 barrels of oil a day, showing a definite trend upward.
By using horizontal drilling and hydraulic fracturing in the Bakken Shale formation, operators in North Dakota have increased Bakken oil production from less than 3,000 barrels of oil a day in 2005 to more than 230,000 barrels of oil a day in 2010.
Drilling in the state has certainly increased, as well. According to the most-recent report from Baker Hughes, North Dakota currently has 158 rotary drilling rigs active in the state – all of which are drilling for oil. At the same time in 2005, there were only 22 rigs drilling.
Additionally, the rate of production growth in North Dakota far out-paces any other state in the Union. Over the last five years, oil production growth has increased some 40 percent in North Dakota, in comparison to less than a 4 percent increase in Texas and dwindling oil production rates in California and Alaska.
The EIA expects oil production from North Dakota to continue climbing, as elevated oil prices support further development of the Bakken Shale and underlying Sanish Three Forks formation.
Furthermore, the 2008 USGS assessment of the Bakken formation estimated some 3 to 4.3 billion barrels of recoverable oil, a significant increase from previous estimates. (The USGS plans to start a new assessment of the Bakken in October 2011.)
Recently, the North Dakota Department of Mineral Resources projected that production from the Bakken formation could possibly double, jumping to as high as 700,000 barrels of oil a day in the next four to seven years.
Increased oil production in the state is prompting investment in pipelines and infrastructure to transport the crude to eager US markets. In addition to a number of pipeline expansion and construction projects, some companies are resorting to railroads to deliver oil production from the state.
A mega-solution, TransCanada is hoping to start its Keystone XL Pipeline in 2013, but the construction project, which will span two countries and myriad states, is still undergoing the approval process with the US government (although the House voted to expedite the Obama Administration’s decision on the pipeline just this week).
Also facing processing and transport constraints, North Dakota's natural gas production has grown as associated production to the oil.
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 21, 2011
New Lucius development shows gaining strength of the US Gulf
This week, US independent Anadarko Petroleum (NYSE:APC), super-major ExxonMobil (NYSE:XOM) and other project partners signed a unitization for the Lucius oil and gas field in the ultra-deepwaters of the US Gulf of Mexico.
Discovered in 2009, the Lucius oil and gas field spans Keathley Canyon Blocks 874, 875, 918 and 919, which had different project partners and differing operators, requiring a new break-down to move forward.
Following the unitization, Anadarko will serve as the operator of the Lucius field with 35 percent interest. Lucius partners include ExxonMobil with 15 percent, Plains Exploration and Production Company (NYSE:PXP) with 23.3 percent, Apache (NYSE:APA) with 11.7 percent, Petrobras (NYSE:PBR) with 9.6 percent and Eni (NYSE:E) with 5.4 percent interest.
The unitization moves the project one step closer to a project sanction on the development of the field, which is now expected for later this year -- a major vote of confidence for oil and gas operations in the US Gulf.
Development plans for Lucius call for a truss spar capable of processing more than 80,000 barrels of oil and 450 million cubic feet of natural gas a day.
Additionally, the Lucius project partners have signed an agreement with the partners on the Hadrian South field, to process the natural gas of the nearby field through the Lucius production facility -- making Lucius a production hub in the ultra-deepwaters of the Keathley Canyon.
Following the Deepwater Horizon accident and Macondo oil spill, and the subsequent permitting delays for drilling and development as regulators reorganized operations and requirements, the Lucius field development is the third major project to be announced for the US Gulf of Mexico.
Chevron's (NYSE:CVX) $7.5 billion Jack-St. Malo and $4 billion Big Foot developments have gotten the ball rolling on contract awards for oilfield service companies in the Gulf of Mexico. Additionally, deepwater drilling permits have been issued, and offshore men and women are getting back to work.
With the Lucius project sanctioning imminent, major projects are picking back up in the Gulf, showing operators are eager to continue working in the waters offshore the 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.
Discovered in 2009, the Lucius oil and gas field spans Keathley Canyon Blocks 874, 875, 918 and 919, which had different project partners and differing operators, requiring a new break-down to move forward.
Following the unitization, Anadarko will serve as the operator of the Lucius field with 35 percent interest. Lucius partners include ExxonMobil with 15 percent, Plains Exploration and Production Company (NYSE:PXP) with 23.3 percent, Apache (NYSE:APA) with 11.7 percent, Petrobras (NYSE:PBR) with 9.6 percent and Eni (NYSE:E) with 5.4 percent interest.
The unitization moves the project one step closer to a project sanction on the development of the field, which is now expected for later this year -- a major vote of confidence for oil and gas operations in the US Gulf.
Development plans for Lucius call for a truss spar capable of processing more than 80,000 barrels of oil and 450 million cubic feet of natural gas a day.
Additionally, the Lucius project partners have signed an agreement with the partners on the Hadrian South field, to process the natural gas of the nearby field through the Lucius production facility -- making Lucius a production hub in the ultra-deepwaters of the Keathley Canyon.
Following the Deepwater Horizon accident and Macondo oil spill, and the subsequent permitting delays for drilling and development as regulators reorganized operations and requirements, the Lucius field development is the third major project to be announced for the US Gulf of Mexico.
Chevron's (NYSE:CVX) $7.5 billion Jack-St. Malo and $4 billion Big Foot developments have gotten the ball rolling on contract awards for oilfield service companies in the Gulf of Mexico. Additionally, deepwater drilling permits have been issued, and offshore men and women are getting back to work.
With the Lucius project sanctioning imminent, major projects are picking back up in the Gulf, showing operators are eager to continue working in the waters offshore the 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, July 14, 2011
International shale race takes off
While shale gas production in the US reached 4.87 trillion cubic feet in 2010, shale drilling and production is slow-going in other countries.
Nonetheless, the EIA recently released a report covering 48 shale gas basins in 32 countries, asserting that shale gas is a global phenomenon with 6,662 trillion cubic feet of unconventional resources worldwide.
With the news this week that Chevron has hired oilfield services firm Halliburton for drilling services on its Polska shale project in Poland, the international shale race heated up a bit.
International countries around the world are eager to tap into shale reserves, using techniques and technologies, namely horizontal drilling and multi-stage fracturing, perfected in the unconventional formations of the US and Canada.
Both India and China are making strides to begin drilling shale. National oil company CNPC joined forces with super-major Shell to develop a well manufacturing company to focus on shale gas and CBM drilling and development. Additionally, India is drilling its first shale gas wells, as well as awarding shale gas blocks for development.
In South America, shale drilling in Argentina is also picking up through efforts in the Neuquen Basin.
While France has recently banned the use of hydraulic fracturing for oil and gas resources in the country, Toreador Resources, an active shale explorer in France, stresses that it can develop its Paris Basin resources without the technology.
The Ukraine claims to hold the world's largest shale reserves, with the Ministry of Environment and Natural Resources in the country calling for international investors to study its shale gas deposits.
The drilling and development of shale resources across the globe may prove the perfect solution to growing demand for energy outpacing current production levels.
................................................
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.
Nonetheless, the EIA recently released a report covering 48 shale gas basins in 32 countries, asserting that shale gas is a global phenomenon with 6,662 trillion cubic feet of unconventional resources worldwide.
With the news this week that Chevron has hired oilfield services firm Halliburton for drilling services on its Polska shale project in Poland, the international shale race heated up a bit.
International countries around the world are eager to tap into shale reserves, using techniques and technologies, namely horizontal drilling and multi-stage fracturing, perfected in the unconventional formations of the US and Canada.
Both India and China are making strides to begin drilling shale. National oil company CNPC joined forces with super-major Shell to develop a well manufacturing company to focus on shale gas and CBM drilling and development. Additionally, India is drilling its first shale gas wells, as well as awarding shale gas blocks for development.
In South America, shale drilling in Argentina is also picking up through efforts in the Neuquen Basin.
While France has recently banned the use of hydraulic fracturing for oil and gas resources in the country, Toreador Resources, an active shale explorer in France, stresses that it can develop its Paris Basin resources without the technology.
The Ukraine claims to hold the world's largest shale reserves, with the Ministry of Environment and Natural Resources in the country calling for international investors to study its shale gas deposits.
The drilling and development of shale resources across the globe may prove the perfect solution to growing demand for energy outpacing current production levels.
................................................
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 7, 2011
Alaska bids to increase oil production
Oil and gas are abundant in Alaska. Despite the harsh weather, the most northern state of the US is home to somewhat easily produced hydrocarbons, as well as a strong network of pipelines to connect that production to US markets.
Nonetheless, production in Alaska has been waning. Just this year, the LNG liquefaction and export terminal located on Alaska's Kenai Peninsula closed after 40 years of production -- and delays in obtaining drilling permits turn off operators. (After dropping its plans for drilling this year, Shell is working to drill in the Beaufort and Chukchi Seas offshore Alaska in 2012.)
To top it off, North Dakota's Bakken Shale is ramping up production at record rates, with more and more rigs drilling and infrastructure projects being awarded left and right. In fact, recent data revealed that oil production in North Dakota may well outpace Alaska by 2017.
This is despite the fact that a recent study found that Alaska's Outer Continental Shelf could produce 10 billion barrels of oil and 15 trillion cubic feet of gas.
Working for Change
To change the tide, Alaska's officials have been on the offensive, trying to boost oil and gas production in the state through oil-friendly initiatives and supportive legislation.
Drawing the line in 2010, the State of Alaska filed a lawsuit against the Secretary of the Interior to overturn the federal moratorium on offshore drilling in Alaska's Outer Continental Shelf.
Recently, Alaska Senator Lisa Murkowski introduced legislation to improve permitting offshore Alaska, recognizing that the "endless regulatory loop" is costing the state jobs and production.
"We have companies that have spent more than five years and billions of dollars attempting to conduct offshore exploration and production in Alaska, but have been unable to secure the necessary permits from EPA," Murkowski said. "It's clear that this process is not just overly costly and time-consuming, but simply does not work."
In April 2011, Alaska Governor Sean Parnell called on President Barack Obama to support the state's goal to increase the flow of oil through the Trans Alaska Pipeline System (TAPS) to 1 million barrels per day in the next 10 years.
Last week, Gov. Parnell and Natural Resources Commissioner Dan Sullivan revealed that Alaska plans to sell nearly 15 million acres of state-owned land and waters in October. The acreage up for grabs includes 2 million acres in the Beaufort Sea, 5.1 million acres on the North Slope and 7.6 million acres in the North Slope foothills -- and could hold up to 6 billion barrels of oil and 45 trillion cubic feet of natural gas.
"Releasing 30 million barrels of oil from the Strategic Petroleum Reserve is bad policy," Gov. Parnell said. "This decision only provides the nation with 30 days of additional oil supply. It will have no long term impact. The real Strategic Petroleum Reserve is Alaska, which has the potential to provide more than 30 billion barrels of oil over three decades. Developing Alaska's vast hydrocarbon resources will supply the nation with billions of barrels of domestic crude. It will provide tens of thousands of high paying jobs and it will generate hundreds of billions of dollars in revenue for the federal government. The right policy call for the nation is to develop Alaska's resources."
................................................................
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.
Nonetheless, production in Alaska has been waning. Just this year, the LNG liquefaction and export terminal located on Alaska's Kenai Peninsula closed after 40 years of production -- and delays in obtaining drilling permits turn off operators. (After dropping its plans for drilling this year, Shell is working to drill in the Beaufort and Chukchi Seas offshore Alaska in 2012.)
To top it off, North Dakota's Bakken Shale is ramping up production at record rates, with more and more rigs drilling and infrastructure projects being awarded left and right. In fact, recent data revealed that oil production in North Dakota may well outpace Alaska by 2017.
This is despite the fact that a recent study found that Alaska's Outer Continental Shelf could produce 10 billion barrels of oil and 15 trillion cubic feet of gas.
Working for Change
To change the tide, Alaska's officials have been on the offensive, trying to boost oil and gas production in the state through oil-friendly initiatives and supportive legislation.
Drawing the line in 2010, the State of Alaska filed a lawsuit against the Secretary of the Interior to overturn the federal moratorium on offshore drilling in Alaska's Outer Continental Shelf.
Recently, Alaska Senator Lisa Murkowski introduced legislation to improve permitting offshore Alaska, recognizing that the "endless regulatory loop" is costing the state jobs and production.
"We have companies that have spent more than five years and billions of dollars attempting to conduct offshore exploration and production in Alaska, but have been unable to secure the necessary permits from EPA," Murkowski said. "It's clear that this process is not just overly costly and time-consuming, but simply does not work."
In April 2011, Alaska Governor Sean Parnell called on President Barack Obama to support the state's goal to increase the flow of oil through the Trans Alaska Pipeline System (TAPS) to 1 million barrels per day in the next 10 years.
Last week, Gov. Parnell and Natural Resources Commissioner Dan Sullivan revealed that Alaska plans to sell nearly 15 million acres of state-owned land and waters in October. The acreage up for grabs includes 2 million acres in the Beaufort Sea, 5.1 million acres on the North Slope and 7.6 million acres in the North Slope foothills -- and could hold up to 6 billion barrels of oil and 45 trillion cubic feet of natural gas.
"Releasing 30 million barrels of oil from the Strategic Petroleum Reserve is bad policy," Gov. Parnell said. "This decision only provides the nation with 30 days of additional oil supply. It will have no long term impact. The real Strategic Petroleum Reserve is Alaska, which has the potential to provide more than 30 billion barrels of oil over three decades. Developing Alaska's vast hydrocarbon resources will supply the nation with billions of barrels of domestic crude. It will provide tens of thousands of high paying jobs and it will generate hundreds of billions of dollars in revenue for the federal government. The right policy call for the nation is to develop Alaska's resources."
................................................................
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.
Subscribe to:
Comments (Atom)
Posts
