My family has worked for Saudi Aramco, a national petroleum and natural gas company based in Dhahran, Saudi Arabia for the past 16 years. In my time living in Saudi, I have experienced first hand the way in which the Kingdom uses/wastes their resources, providing oil to their citizens at a cheaper price than water, and subsidizing electricity to their populations. However with the decline in the price of crude (lost 67% of value since September 2014), the growing domestic oil demand of 7% per year, and the state of the environment, Saudi Arabia is in an awkward geopolitical situation, and is in need of comprehensive economic reform. Continue reading →
On his second weekday in office, President Trump filed an executive order to reopen construction of the Dakota Access Pipeline, a project that was formerly blocked by the Obama administration after months of protests by Native American activists. The 1,172 mile-long pipeline is slated to run through four states, from the Bakken oil fields of North Dakota through Illinois, and transport around half a million (470,000) barrels of crude oil per day.
Originally planned for delivery by January 1st of this year, the project was stalled after widespread protests led by Native American activists which gained international attention. In the early stages of planning, the pipeline was proposed to run through Bismarck, North Dakota, but was rerouted to run adjacent to the Standing Rock Reservation, after concerns from Bismarck residents. Members of the Standing Rock Sioux oppose the project as they argue it threatens environmental safety and indigenous sovereignty, as the pipeline is slated to run only a mile from their tribal borders. Continue reading →
At the University of Texas they found Rock Salts to be more permeable than originally expected. It was known that salt generally blocks fluid at a shallow depth. This feature of salt allows reservoirs to form. However, scientist had contemplated that salt may be permeable at a greater depth. When setting out to conduct experiments University of Texas, professors originally thought that Rock Salt would be used as a hydrocarbon seal for the oil industry. Since salt generally blocks fluid at a shallow depth and allows it to flow at a greater depth. It was quickly confirmed that salt becomes permeable at a greater depth. The real surprise came in that the fluids were sometimes able to flow through the salt at a shallow depth. The findings could have important implications for nuclear waste storage. Previous work on the permeability of salts has focused on the cracks formed by the nuclear waste itself. The findings from the study show that undisturbed rock salt can be permeable as well and it is permeable because of deformation. Continue reading →
While the United States publicly seeks to shift its energy usage to greener sources, a recent New Orleans federal auction—and the protests created in response—demonstrate that the United States is far from over its oil addiction. CNN’s John D. Sutter details the scene at an auction at New Orleans’ Superdome, where environmental protesters objected to the government’s lease of federal property in the Gulf of Mexico for fossil fuel development. Continue reading →
The insurance journal is doing a three part series regarding the current state of hydraulic fracking. In this first article they describe how due to the improvements in fracking technology, companies are able to revisit previously fractured wells and reach further oil. However, the risks involved with wells that are completed using hydraulic fracturing are significantly higher and different than conventional wells.
As companies revisit these old wells it reminds us of the age and risks of these wells. Oil and gas wells do not have an infinite life span. A well can blowout at any phase of its life whether producing, shut-in, or plugged and abandoned wells. With older wells that stretch back to 1859, the casing and cementing deteriorate with time and the risk of a blowout significantly increases. Re-fracturing these wells with new technologies is similar to a kid playing with fire. Everything is fine until a blowout occurs and pollutes a whole community’s groundwater and air. We saw this happen in the Gulf of Mexico in 2010 and later Los Angeles in 2015. (Insurance Journal)
Again, the likelihood of a blowout increases with these older wells being revisited which create a problem with insurance cost. Companies look to dodge paying higher insurance cost but what is most important in this process is that companies should be pressed to ensure that the proper casing is applied to the older wells when fractured again. (Insurance Journal)
In previous post I have discussed how the people lose in terms of royalties as land is handed back and forth within companies. The people lose big when land is handed back and forth and companies are not pressed to ensure the highest quality casing is implemented as new companies reopen wells.
A well drilled in one policy period, where coverage for the well completion was paid for, may not be completed via fracking until several years later, and possibly with a different carrier. Fracking risks have evolved to the point where the idea of creating a separate insurance coverage for hydraulic fracking and separating it from drilling exposures has come up and must be applied. (Insurance Journal)
As argued in the article written by Western Priorities, raising taxes on oil and gas companies can provide amazing benefits for the American people. Already tax revenue from oil and gas companies is the United States second largest source of tax revenue behind the IRS. (Western Alliance) However, we should increase that revenue because of our soaring national debt. Continue reading →
The Keystone Pipeline System is a three phase oil pipeline running through Canada and the United States. Phase I, the Keystone Pipeline, delivers oil from Hardisty, Alberta (in Canada) to Steele City, Nebraska, and eventually Roxana and Patoka, Illinois. Phase II, the Keystone-Cushing extension, runs from Steele City to Cushing, Oklahoma. The Gulf Coast Extension, Phase III, delivers oil from Cushing to Port Arthur, Texas. The Keystone XL Pipeline is the proposed fourth phase, improving on Phase I, with a shorter route and a larger-diameter pipe, but was rejected largely due to environmental concerns, such as fracking [http://cleantechnica.com/2016/02/15/keystone-xl-pipeline-meet-oklahoma-earthquakes/]. Last month, reports surfaced of the Keystone XL Pipeline project possibly being resurrected, which is making people think about those same fracking concerns, specifically earthquakes in Oklahoma. Continue reading →
Just how devastating are the potential effects of both global warming and peak oil on global trade? Fred Curtis, professor of economics and environmental studies at Drew University, explains that the effects are potentially disastrous. Curtis points out the four main characteristics of climate change are capable of undermining global trade: increased temperature, rising sea levels, increased precipitation, and increased hurricane severity. Curtis also explores how peak oil will play a role in global trade. Peak oil, a point at which maximum oil output is reached, will result in an increased gap between oil demand and oil supply leading to increased oil prices. Increased gas prices lead to less cost-effective shipping, and therefore, discouraged international trade. Curtis concludes that current climate change policy is too insignificant and will be unable to mitigate the effects of decreased international trade. Continue reading →
If by some miracle we as humanity collectively decide to reduce our greenhouse gas emissions enough to keep the planet from heating up by more than 2 ºC, there are going to be lots of fossil fuels left in the ground. Where will they be? For sure, there will be a good deal left: a third of remaining oil reserves, half of natural gas reserves, and over 80% of known coal reserves will still be unused by 2050. These reserves are defined as the sources that could be economically recovered today and that can be assigned a probability of production. For starters, McGlade and Ekins (2015) think that all fossil fuels in the Arctic, and all oil that could obtained by unconventional methods (such as hydraulic fracturing) ought to be left in place. They then look at all known reserves and partition them by cost of production, reasoning that the least expensive will be mined first. And they point out that, given the amount of reserves, the chances of us not using them is stark. Still, they are able to model the probable trajectory of temperatures using a mix of the available fuel sources. As the bottom line, it is abundantly clear that if we were once in fear of running out of fossil fuels, a more pressing current concern is that we might not. Continue reading →
In a Master’s thesis from the University of Texas at Austin, Jon Paul Pierre presents an interesting analysis of the effects of development (which includes a good deal of horizontal drilling and hydraulic fracturing) in the Eagle Ford Shale play in South Texas, where more than 5,000 wells have been drilled since 2008. What he sets out to do is assess the spatial fragmentation of the landscape from the construction of drilling pads, roads, pipelines, and other infrastructure. He used 2012 aerial photography with a 1-m resolution obtained from the National Agricultural Imagery Program (NAIP), and over laid on that the locations of well pads, pipelines, and other infrastructure, then used Geographical Information System (GIS) tools to characterize the types of areas being disturbed. Continue reading →