Jan 10, 2014 Energy Talks
The BP well blowout, fire, explosion and platform collapse, and the ensuing crude oil leak are without doubt the result of human failings. Underestimating the quality of the reservoir is one reason, perhaps some engineering choices and safety oversights, inadequate equipment, testing that didn’t work out in the real world and all the rest only show that human planning can come up short.
Now that its over this writer can recoil from the anger felt as the catastrophe unfolded. Yes, the well getting away is cause No. 1 – something that has happened before and will happen again – hopefully with more and more infrequency. The lessons keep coming – from drilling into the earth since Drake’s day; the pressures down there can surprise you.
But the sorrow of the lives lost was quickly overcome by the shear idiocy of the media and political response. There has been essentially no worthy information making the mainstream press or incorporated into political activity. The reverse is the fact – misinformation is rampant and the consequences, not counting the loss of life itself is simply incredible.
The President’s behavior has been an utter failure – doing far more damage than the oil itself. The offshore drilling ban is keeping 50,000 jobs without paychecks topping $2 billion in payroll losses alone, not counting the effect throughout the local economy in the situation where the major economic engine, tourism, disappeared. The President’s action wasn’t just foolish, but cruelly focused on a few innocents, thoughtless and without any kind of leadership or sense of responsibility to the local area or the nation as a whole. The reaction actually fed the media hysteria – a fault beyond forgiving in a leader. No gulf beach trips and minigolf photoshoots will take away the realization the President is out of his league.
In the meantime property values are gong to be hit with incomes going down. From Texas to Florida the tourism business is in shambles and may take years to recover.
There are many reports that no one is buying Gulf seafood, even in areas unaffected by the spill. Gulf Coast shrimpers and fishermen are in a tough spot: On the one hand, as more areas of the Gulf are declared safe, they presumably won’t be able to collect compensation from BP or the government and will have to get back to work; on the other hand, no one’s buying their catch. Given the public fear of toxins in food, this problem could last a long time. But this writer is buying – Gulf seafood – if you can find it, hasn’t been so reasonably priced in decades.
For the future perhaps the most important lesson is the current administration can’t be trusted to act in the national interest. Bans, moratoriums and other fear based knee-jerk reactions have spoiled regulatory certainty, which will exact a huge cost from oil firms, their shareholders, management and employees and in particular we consumers. Some insider reports suggest that oil assets in the Gulf are already being disposed of at fire-sale prices. Fear leading fear, just what an economic recovery can not stand.
The most damning realization is the most liberal administration in American history is composed of people who lack the reflexive skepticism that intelligence and science apply to the mainstream media and those left-wing blogs. Spend some time following the reporting and blogging on Deepwater Horizon, and you come to realize that the administration’s behavior in the crisis likely wasn’t based on a cynical progressive master plan. The administration was overwhelmed by sheer emotional panic about the magnitude of the potential disaster it faced as outlined by its most loyal supporters. Embarrassing to thoughtful knowledgeable citizens.
Here is why. What President Obama called the “worst environmental disaster America has ever faced” – the oil has pretty much already disappeared into the environment. The disaster was a man made broad-based failure on the part of the media, the science establishment, and the federal bureaucracy. With the nation and its leaders looking for facts, information was replaced with a massive plume of apocalyptic disinformation and threats of losing a significant part of the coastline to the goo.
While the leaking oil was terrible in many resects the magnitude was vastly over wrought. In June a slick computer-modeled animated video showed a gigantic part of the spill making its way around the southern tip of Florida and up the East Coast. Oil covered everything from the Gulf to the Grand Banks. The New York Daily News said, “BP Oil Slick Could Hit East Coast In Weeks: Government Scientists.” CBS, MSNBC and many others followed on. The video was a huge YouTube hit. It was one of history’s most successful news frauds from the National Center for Atmospheric Research – paid for by taxpayers. Then the National Oceanographic and Atmospheric Administration (NOAA) disavowed the scenario. Too late, who ever hears about the recantations when the media screws up?
Watson Technical Consulting of Savannah, Ga. a firm specializing in computer modeling of the effects of hurricanes, seismic events, geophysical hazards, and weapons of mass destruction asserts the simulation was bogus from the very beginning, because it ignored important conditions in the Gulf. Furthermore, says Chuck Watson, the media never took account of how diluted the oil would be once it got around Florida, through the Gulf Stream and finally got to the Atlantic: The bulk of the theoretically massive spill the video shows amounts to roughly a quart of oil per square mile. Watson claims flat-out that NOAA was “gold digging” for grants as there’s probably more federal research money floating around the Gulf than there is oil. “There is a feeding frenzy with people trying to get funding for their specialty,” he said. Never let a disaster go wasted or some such cleverness from the administration – does that sound like people that can be trusted?
The coffin for this writer was the “Giant Plumes” of oil. Here the lying got very creative and flunked high school general science class. Halfway into May coming up with oil on the surface was getting problematic so some marine researchers were drafted to provide the answer. Water tests were showing oil in small quantities under the water’s surface from wave action, but how much no one could say nor, obviously, was there any peer reviewed literature to check on the known facts.
Media reports implied and even tried to assert that “enormous oil plumes” were waiting, like nuclear submarines, to rise and attack unsuspecting beaches and wetlands. The New York Times summed up the media consensus on May 15: “Scientists are finding enormous oil plumes in the deep waters of the Gulf of Mexico, including one as large as 10 miles long, 3 miles wide, and 300 feet thick in spots. The discovery is fresh evidence that the leak from the broken undersea well could be substantially worse than estimates that the government and BP have given.” The article quoted Samantha Joye, a marine-sciences professor at the University of Georgia, as saying that this oil was mixed with water in the consistency of “thin salad dressing.” Except there weren’t any plumes at all, let alone any ‘salad dressing’ type stuff.
By the end of May NOAA, where some grownups still have responsibility, released a study finding weak concentrations of oil in the area surrounding the Deepwater Horizon site at only 0.5 parts per million, maximum. The median was a little over 0.2 parts per million.
Again as the “giant” spill that threatened the East Coast, that’s barely above the threshold of detection. By late July and early August, BP, the Federal Government, and some independent researchers were saying they couldn’t find any plumes at all. “We’re finding hydrocarbons around the well, but as we move away from the well, they move to almost background traces in the water column,” said Admiral Thad Allen, the administration’s point man on the spill. By then some 75 percent of the oil released is gone – and that’s based on new estimates that put the spill rate at the high end of earlier projections.
The giant-plume threat was greatly overstated by scientists and further blown out of proportion by the media. This writer believes those ‘scientists’ are not scientists at all. As everyone who passed high school general science knows, oil is lighter than water and rises above it in all known situations on this planet. The idea of underwater plumes defies everything that we know about the physical laws on earth. It’s been a great source of irritation and anger for weeks. It’s a very good thing the notion is so incredibly dumb that its funny – but watching people report it is to see a stunning display of ignorance. Are there no fact checkers left in the mass media?
The Gulf of Mexico and some of the coast of California are warm ecological systems where oil seeps are part of the food chain. The leak was a bonanza for oil eating bacteria and the bacteria bonanza will work its way up the food chain with its abundance. While the leak was perhaps a four-fold increase in the annual oil supply to the Gulf, the natural ecosystem adjusted quite well and as seen decades ago in the Mexican leak – it’s a very short-term matter. Truly it’s a disaster not to be left unused – by bacteria.
Dispersants turn thick, ugly slicks into widely distributed droplets, minimizing damage to beaches and sensitive wetlands. When slicks are broken up the light oil parts evaporate, and the bacteria more easily eat the heavier parts. Corexit is thought to be the major dispersant used in the treatment – something you shouldn’t spray directly on coral, marshlands or other living things as it’s a detergent like chemical. Corexit has made lots of disinformation news too, even being a subject for a Congressional hearing. But the EPA who recently started proceedings to make milk spills hazardous material type events has approved Corexit in supervised use. In a reality check using dispersants is to break up oil before it gets to shore, piles up and gets out of the water – where the oil breakdown slows down and gets quite messy for wildlife and the flora. It’s a very good thing the EPA kept its act together and the disbursements flowing – an issue of debate that did have some suspense.
Finally, this writer has a question for everyone – where is the link to the reputable gulf shrimp supplier – I’d like a five gallon bucket full, packed in dry ice for a 3 day UPS ground trip. A shrimp feast might make the anger recede a little more.
In closing, people lost their lives and condolences are due their families and herewith are heartfelt given. Jobs are lost, suffering and troubles are mounting, so this writer is speaking out for you and will be your customer again.
The disaster isn’t about oil anymore, it’s the impact of media and politics – something that should and could be fixed in just a few words by just one man. Do you think it will happen?
Here is the original: New Energy and Fuel
With the BP gulf floor oil leak making the news – all bad even if they get it stopped, some good news is worthwhile. Especially when the Obama tribe has frozen the major U.S. controlled North American resources of oil development for political appeasement to ‘do something.” Meanwhile the Bakken formation in the north of the U.S. and southern Canada is growing production and growing in importance. Crescent Point Energy of Canada has tested their Bakken wells with fracturing and water floods tripling the recovery making the estimate move up to recovering 30% of the oil in place.
It’s worthy news. This writer hasn’t addressed the BP gulf floor leak – you’ve noticed, and maybe won’t at all. It’s simply a media frenzy and political positioning structure while the people and environment take the hit. Blaming and leveling responsibility takes precedence over imparting resources, something the big oil industry has to do alone while coping with the public relations cost of stupid media and useless political power. Enough for now – but that’s an idea of why the post hasn’t been written.
Scott Saxberg, chief executive of Crescent Point Energy Corp. told the company’s annual general meeting the application of water flooding, along with infill drilling, could allow the company to more than double reserves within five years.
In an interview, Saxberg said two years of tests at an initial pilot project in the Bakken – and more recent results from a second test – show that injecting water into formations being tapped by nearby horizontal wells with multiple fracture stimulations can help boost recovery from about 10 per cent to 30 per cent of oil in place.
For Crescent that would mean, “These mainly untapped resource pools provide Crescent Point with over 5,000 drilling locations and the potential to add over 500 million barrels of reserves, which could potentially double our current net asset value,” Saxberg said.
Saxberg explains, “We’ve seen very strong results. What it’s done in the pilot over the past two years is give us flat production. Without it, it’s 10 per cent, and with infill drilling you might get to 20 per cent. And then with water flood it’s 30 per cent. That’s huge.”
It’s because normally, after an initial “flush” of production in the first year, Bakken oil output drops off by about 70 per cent.
But Analyst Kyle Preston of Canaccord Adams cautioned that Crescent Point’s water flood strategy is promising, but not necessarily proven in all areas of the Bakken saying, “This water flood technology is not really new. What’s new here is applying the water flood to a tight rock reservoir which, to my understanding, hasn’t been done very successfully in the past.” Preston points out PetroBakken, the second-largest player in the Bakken, doesn’t believe in water flooding.
Here’s a look at how Canada treats new resource development. Trent Stangl, Crescent Point’s vice-president of investor relations, explained the company’s strategy is to let a central well produce for about a year to take advantage of Saskatchewan’s royalty holiday on new horizontal wells before converting it into an injector well. Then forcing water into the well builds pressure underground to push more oil out of surrounding wells, a technique commonly used in conventional oil fields.
Saxberg adds, the company is also experimenting with cemented liners on the horizontal part of the wells instead of steel pipe, allowing adjustments in the number of fractures as the well ages. He added the company is pleased to hear about the Alberta government’s new royalty incentive plans, including lower royalties for deep wells and horizontal wells, but he has no immediate plans to spend money in Alberta.
We’ll see how long that lasts in Alberta. One nation’s dumb move can be another’s windfall. As the U.S. administration plays media politics and undermines the national economy the neighbors, bless ‘em, can make good use of the capital. And why not? Our Canadian neighbors can use the capital, jobs and economic growth as well or better than anyone else.
The only concern then is, can the Canadian effort stay profitable at lower oil prices? With the Athabasca oil sands under political assault the Alberta and Saskatchewan provinces need a fall back. The irresponsible and capricious political neighbor brings risks, as the U.S. economic recovery isn’t driving lots of oil consumption.
Crescent Point plans four more pilot projects throughout the Bakken field over the next year. With U.S. offshore drilling at a standstill, the capital going inert, worker layoffs imminent, and a sure increase impact on the world price of oil, the BP leak looks to grow far beyond a single company’s disaster and ecological calamity.
Irresponsible and capricious political conduct might be media savy – but the impact will be long and costly for consumers the world over. But hey, only about 75% of American’s are catching on – throwing in with BP to get the oil escaping contained, stopped and the ecology and economy protected, sustained and supported could have been the job. But leftism doesn’t even think to cooperate with business. Leftism needs commercial disasters to participate in the economy. Commercial disaster gone far enough is an ‘opportunity’ to bail something out and take over making the capital, jobs and eventually, the management their own.
The Bakken oil field and the Canadian firms leading the technology are refreshing in the current U.S. situation. Thanks neighbors, we wish you well. Thanks to the Calgary Herald for kicking up the story. Americans need a little good oil news about now.
Here is the original post: New Energy and Fuel