Oil

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New USGS oil and gas assessment for Bakken and Three Forks formations boosts estimates of recoverable oil two-fold, natural gas three-fold

May 02, 2013

Map showing the Williston Basin Province, Bakken Total Petroleum System (TPS), and the Bakken Formation Assessment Units (AUs). Major structural features are also shown. Inset map shows location of the Bakken TPS (dark blue). Source: USGS. Click to enlarge.

The United States Geological Survey (USGS) released an updated oil and gas resource assessment for the Bakken Formation and a new assessment for the Three Forks Formation in North Dakota, South Dakota and Montana, resulting in a two-fold increase in the estimated technically recoverable oil, and a three-fold increase in estimated natural gas.

Technically recoverable resources are those producible using currently available technology and industry practices. USGS is the only provider of publicly available estimates of undiscovered technically recoverable oil and gas resources of the US onshore and state waters.

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Ceramatec licensing molten sodium technology for heavy oil upgrading; removing the need for diluent for bitumen

April 10, 2013

Flowchart of Molten Sodium Upgrading process. Source: Field Upgrading. Click to enlarge.

An innovative oil-upgrading technology that can increase the economics of unconventional petroleum resources has been developed under a US Department of Energy-funded project. The technology, developed by Ceramatec and managed by the Office of Fossil Energy’s National Energy Technology Laboratory (NETL), has been licensed to Western Hydrogen of Calgary for upgrading bitumen or heavy oil from Canada. A new company, Field Upgrading (Calgary, Alberta), has been formed dedicated to developing and commercializing the Molten Sodium Upgrading (MSU) technology.

The MSU process involves mixing elemental molten sodium and small quantities of hydrogen or methane to reduce significantly the levels of sulphur, metals, TAN (total acid number) and asphaltenes in heavy oil feedstocks, including oil sands bitumen. MSU also significantly increases the API gravity of the feedstocks while achieving a relatively higher yield compared to conventional upgrading technologies. In the case of oil sands bitumen, the API gravity is increased from 8 API to more than 20 API, eliminating the need for diluent for pipeline transportation.

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Major spill from the ExxonMobil Pegasus pipeline in Arkansas

March 31, 2013

Route of the Pegasus pipeline. Source: ExxonMobil. Click to enlarge.

A breach in ExxonMobil’s Pegasus crude oil pipeline occurred late Friday afternoon near Mayflower, AR (about 20 miles north northwest of Little Rock and at the southwestern end of the Lake Conway reservoir). The pipeline has been shut in and crews are working to contain the spill. The US Environmental Protection Agency (EPA) categorizes the incident as a “major spill”—i.e., greater than 250 barrels (10,500 gallons).

ExxonMobil said that it observed a few thousand barrels of oil in the area (approximately 84,000 gallons), but is staging a response for more than 10,000 barrels (420,000 gallons) to be conservative. The cause of the spill is under investigation.

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SDTC awards C$1.5M to support Molten Salt Catalyzed Gasification for hydrogen production; targeting reduced GHG footprint for oil sands synthetic crude

February 16, 2013

Flowchart of the MSG process. Source: Western Hydrogen. Click to enlarge.

A consortium led by Canada-based Western Hydrogen Ltd. will receive a $C1.5-million investment from Sustainable Development Technology Canada to support the development and commercialization of a new hydrogen manufacturing technology called Molten Salt Catalyzed Gasification (MSG), originally developed at the US Idaho National Laboratory (INL).

Hydrogen is necessary in the upgrading of oil sands bitumen into synthetic crude, but it is a costly and carbon-intensive part of the process, given current hydrogen production technologies. MSG converts natural gas into hydrogen with a 23% reduction in GHG emissions compared to steam methane reforming.

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Senators Sanders, Boxer propose legislation to institute GHG price on large stationary sources and remove support for fossil fuel industries

February 15, 2013

Sens. Bernie Sanders (I-Vt.) and Barbara Boxer (D-Calif.) introduced legislation that would set an escalating fee on greenhouse gas emissions from large stationary sources to fund investments in energy efficiency and sustainable energy technologies and also provide rebates to consumers to offset increases in energy prices. The legislation also proposes numerous actions against financing and support for fossil fuel industries.

The proposal was drafted as two measures, the Climate Protection Act—which sets the carbon price and finance programs for sustainable technologies—and the Sustainable Energy Act—which ends federal support for fossil fuel companies and research and extends tax incentives for renewables. Among the financing provisions of the legislation are:

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New petroleum refining lifecycle model finds the variability in GHG emissions from refining different crudes as significant as magnitude expected in upstream operations

December 09, 2012

Comparison of GHGenius, JACOBS, TIAX, and the new PRELIM gasoline greenhouse gas (GHG) estimates using base case estimates and variations from the scenario analysis. Credit: ACS, Abella and Bergerson. Click to enlarge.

Researchers at the University of Calgary (Canada) have developed the Petroleum Refinery Life-cycle Inventory Model (PRELIM). PRELIM uses a more comprehensive range of crude oil quality and refinery configurations than used in earlier models and can quantify energy use and greenhouse gas (GHG) emissions with detail and transparency the better to inform policy analysis, the duo suggests.

Using a scenario analysis to explore the implications of processing crudes of different qualities in different refinery configurations, and with a focus on oil sands products, they found differences of up to 14 g CO₂eq/MJ of crude, or up to 11 g CO₂eq/MJ of gasoline and 19 g CO₂eq/MJ of diesel (the margin of deviation in the emissions estimates is roughly 10%). Put another way, “the variability in GHG emissions in the refining stage that results from processing crudes of different qualities is as significant as the magnitude expected in upstream operations”, they found.

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USGS estimates nearly 39 billion barrels of oil undiscovered and technically recoverable in two Arctic petroleum provinces; 275 trillion feet of gas

November 28, 2012

Map of Arctic Alaska Province (outlined in black) showing boundaries of the platform and fold-and-thrust belt assessment units in red. Source: USGS. Click to enlarge.

The US Arctic Alaska Petroleum Province holds mean estimates of undiscovered, technically recoverable oil and gas resources of nearly 30 billion barrels of oil, about 179 trillion cubic feet of nonassociated gas, and 40 trillion cubic feet of associated gas, according to a new assessment published by the US Geological Survey (USGS).

The larger Amerasia Basin Petroleum Province, which extends north and east of the Arctic Alaska Province, holds an estimated risked, undiscovered, technically recoverable 9 billion barrels of oil, 29 trillion cubic feet of associated gas, and 27 trillion feet of nonassociated gas, according to another new assessment from the USGS.

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IEA WEO-2012 finds major shift in global energy balance but not onto a more sustainable path; identifies potential for transformative shift in global energy efficiency

November 12, 2012

The global energy map is changing significantly, according to the 2012 edition of the Internal Energy Agency’s (IEA) World Energy Outlook (WEO-2012). The IEA said these changes will recast expectations about the role of different countries, regions and fuels in the global energy system over the coming decades. The report also finds that by 2035 global energy savings could be equivalent to nearly 20% of global demand in 2010.

The WEO finds that the extraordinary growth in oil and natural gas output in the United States will mean a sea-change in global energy flows. In the New Policies Scenario, the WEO’s central scenario, the United States becomes a net exporter of natural gas by 2020 and is almost self-sufficient in energy, in net terms, by 2035. However, given the ongoing reliance on fossil fuels, the emissions in the New Policies Scenario correspond to a long-term average global temperature increase of 3.6 °C.

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Worldwatch: Fossil fuel subsidies continue to outweigh those for renewable energy; international pledges on reform unfulfilled

August 22, 2012

Estimated consumption subsidies, industrial and developing countries, fossil fuels and renewables. Source: Worldwatch. Click to enlarge.

Fossil fuel subsidies continue to far outweigh support for renewable energy, according to new research conducted for the Worldwatch Institute’s Vital Signs Online service. Although independent reporting on these subsidies has increased, global efforts to move forward with subsidy reform have been hindered by a variety of causes, leaving international pledges unfulfilled.

Total subsidies for renewable energy stood at $66 billion in 2010 (a 10% increase from the year before); the total value of global fossil fuel subsidies is estimated at between $775 billion and more than $1 trillion in 2012, Two thirds of the renewable energy subsidies went to renewable electricity resources and the remaining third to biofuels.

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Interior Secretary Salazar outlines proposed plan for additional development in the National Petroleum Reserve-Alaska

August 14, 2012

Map of preferred alternative. Download original pdf. Click to enlarge.

Secretary of the Interior Ken Salazar outlined a proposed plan that will allow for additional access for oil and gas development in the National Petroleum Reserve in Alaska (NPR-A) while also protecting wildlife and coastal resources.

The plan will be analyzed in detail and presented for public review as the preferred alternative for the NPR-A Integrated Activity Plan and Environmental Impact Statement (IAP/EIS) later this year.

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China’s CNOOC to acquire Canada-based Nexen for $15.1B; offshore oil and gas, oil sands, and shale gas

July 23, 2012

CNOOC Limited—China’s largest producer of offshore crude oil and natural gas and one of the largest independent oil and gas exploration and production companies in the world—is acquiring all of the Common Shares of Canada-based energy company Nexen Inc. for US$15.1 billion cash. The price represents a premium of 61% relative to the closing price of the Common Shares on the NYSE on 20 July 2012 and a premium of 66% relative to the volume-weighted average price of the Common Shares over the 20 trading days ending 20 July 2012. Nexen’s current debt of approximately US$4.3 billion will remain outstanding.

Nexen is focused on three core businesses: conventional offshore oil and gas; oil sands; and shale gas:

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MIT/UC Davis professors challenge claims that ethanol production decreased gasoline prices in 2010 and 2011

July 17, 2012

Knittel/Smith results for implied gasoline price effects from elimination of ethanol for 2010 using Du/Hayes model and pooled-sample estimates. Results from Du/Hayes are indicated by the large square. Source: Knittel and Smith (2012). Click to enlarge.

Two professors from MIT and UC Davis have released a paper challenging the recent claims by the Renewable Fuel Association (RFA) and US Secretary of Agriculture Vilsack that ethanol production decreased gasoline prices by $0.89 and $1.09 in 2010 and 2011, respectively.

Those estimates are based on a series of papers by University of Wisconsin and Iowa State University economists Xiaodong Du and Dermot Hayes, who used monthly regional data to estimate the relationship between ethanol production and the profit margin for oil refiners. The paper by Prof. Christopher Knittel at MIT and Assoc. Professor Aaron Smith at UC Davis tests the validity of the statistical work underlying the claims and concludes that the results are driven by implausible economic assumptions and “spurious” correlations—correlations that are the result of the fact that over the sample the ratio of gas prices to oil prices fell while, at the same time, ethanol production increased.

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Oil sands GHG lifecycle study using operating data finds lower emitting oil sands cases outperform higher emitting conventional crude cases; a call for more sophisticated tools and reporting

July 07, 2012

Well-to-wheel (WTW) greenhouse gas emissions for in situ SAGD and surface mining pathways generated employing GHOST/TIAX/ GHGenius combination and comparison with SAGD, mining and conventional crude oil literature pathways (all results are on a HHV basis). Xs show comparative results from literature. Credit: ACS, Bergerson et al. Click to enlarge.

A new well-to-wheel (WTW) lifecycle analysis (LCA) by a team from the University of Calgary and the University of Toronto of greenhouse gas (GHG) emissions from transportation fuels produced from Canadian oil sands finds that, on a WTW basis, lower emitting oil sands cases can outperform higher emitting conventional crude cases.

The LCA, reported in the ACS journal Environmental Science & Technology, is the first based on confidential operating data from oil sands projects, the authors said. The wide range of potential emissions intensities for both oil sands and conventional crudes suggests that treating all oil sands or all conventional crudes as having the same emissions may lead to unintended consequences, according to the team. In addition, they note, the emissions associated with all of the petroleum sources will continue to change over time (e.g., a transition to heavier conventional oil, technology improvements, deteriorating reservoir conditions as the oil sands resource is further developed).

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Harvard Kennedy School researcher forecasts sharp increase in world oil production capacity and risk of price collapse

June 27, 2012

World oil production capacity to 2020 (crude oil and NGLs, excluding biofuels). Source: Maugeri 2012. Click to enlarge.

Oil production capacity is surging in the United States and several other countries at such a fast pace that global oil output capacity could grow by nearly 20% from the current 93 million barrels per day to 110.6 mbpd by 2020, according to a new study by a researcher at the Harvard Kennedy School. Such an increase in capacity could prompt a plunge or even a collapse in oil prices, he suggests.

The findings by Leonardo Maugeri, a former senior executive vice president of the oil company Eni, and now a fellow in the Geopolitics of Energy Project in the Kennedy School’s Belfer Center for Science and International Affairs, are based on an original field-by-field analysis of the world’s major oil formations and exploration projects.

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RAND reports suggest US DoD use less petroleum fuel to deal with high prices, not count on alternatives

June 20, 2012

According to three new reports on “Promoting International Energy Security” issued by the RAND Corporation, because the energy purchases made by the US Department of Defense are not large enough to influence world oil prices—despite DoD requiring considerable amounts of fuel to function—cutting fuel use is the only effective choice to reduce what the Pentagon spends on petroleum fuels.

From a cost perspective, the potential of alternative fuels is of limited, if any value, according to the lead report written by James Bartis, a RAND senior policy researcher. However, the US military can play an important role in promoting stability in major oil producing regions and by helping protect the flow of energy through major transit corridors and on the high seas, the reports suggest.

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NRC report concludes hydraulic fracturing poses low risk for causing earthquakes, but risks are higher for wastewater injection wells; CCS impact undetermined

June 17, 2012

Schematic diagram of a shale gas well following hydraulic fracture treatment, with the relative depths of local water wells shown for scale. Formation depths and horizontal well length varies; numbers shown are approximate length and depth averages in North America. The upper right inset shows the fractures (yellow) created during hydraulic fracture treatment in stages. Source: NAS, adapted from Southwestern Energy Click to enlarge.

Earthquakes attributable to human activities are called “induced seismic events” or “induced earthquakes.” Hydraulic fracturing has a low risk for inducing earthquakes that can be felt by people, but underground injection of wastewater produced by hydraulic fracturing and other energy technologies has a higher risk of causing such earthquakes, according to a new report from the National Research Council.

In addition, carbon capture and storage may have the potential for inducing seismic events, because significant volumes of fluids are injected underground over long periods of time. However, insufficient information exists to understand the potential of carbon capture and storage to cause earthquakes, because no large-scale projects are as yet in operation. The committee that wrote the report said continued research will be needed to examine the potential for induced seismicity in large-scale carbon capture and storage projects.

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BP Statistical Review finds global oil share down for 12th year in a row, coal share up to highest level since 1969; renewables at 2%

June 13, 2012

World primary energy consumption grew by 2.5% in 2011, close to the historical average. Oil remains the world’s leading fuel, but its 33.1% share of consumption is the lowest on record. Coal’s market share of 30.3% was the highest since 1969. Source: BP. Click to enlarge.

Global energy consumption grew by 2.5% in 2011, broadly in line with the historical average but well below the 5.1% seen in 2010, according to the newly released BP Statistical Review of World Energy, 2012. Emerging economies accounted for all of the net growth, with OECD demand falling for the third time in the last four years, led by a sharp decline in Japan. China alone accounted for 71% of energy consumption growth.

The averages hide a mixed picture by fuel, however. Oil demand grew by less than 1%—the slowest rate amongst fossil fuels—while gas grew by 2.2%, and coal was the only fossil fuel with above average annual consumption growth at 5.4% globally, and 8.4% in the emerging economies.

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Chevron commences operations on drillship with capacity for dual gradient drilling in deepwater Gulf of Mexico

May 07, 2012

Comparison between conventional and DGD configurations. Source: Pacific Drilling. Click to enlarge.

The Pacific Santa Ana, a deepwater drillship built to Chevron’s specifications, has arrived in the Gulf of Mexico to work for Chevron under a five-year contract with a subsidiary of Pacific Drilling S.A. Pacific Santa Ana is the first drillship designed with the capacity to perform dual gradient drilling (DGD). The ship is a Samsung 12000 design capable of operating in 12,000 ft (3,658 m) water depth and is equipped for 40,000 ft (12,192 m) drilling depth.

Unlike conventional deepwater drilling, which uses a single drilling fluid weight in the borehole, dual gradient drilling employs two weights of drilling fluid—one above the seabed, another below. This allows drillers to more closely match the pressures presented by nature and effectively eliminates water depth as a consideration in well design. DGD also allows drillers to more quickly detect and appropriately react to downhole pressure changes, which can enhance the safety and efficiency of deepwater drilling operations.

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