Stale Thoughts and Broken Links

Old entries from my weblog on geophysics and the energy industry.


Time for some OTC press events. This first one isn't from OTC, but it's worth mentioning: Dick Cheney, is tipping his hand on his energy policy report, which is not due until the end of May --

Associated Press: Cheney Pushes for Energy Development.

"[Cheney] said that conservation, while perhaps `a sign of personal virtue,' does not make for sound or comprehensive policy."

On to OTC --

Oil & Gas Journal: Simmons tells OTC world needs $5 trillion in energy investments.

"Matthew Simmons, president of Simmons & Co. International, told an Offshore Technology Conference luncheon Monday ... `The world is out of spare tanker capacity, spare refinery capacity, and spare pipeline capacity.'"

Reuters: Oil industry seeks lifting of offshore moratorium.

Reuters: Oil firms urged to fund whale-friendly seismic study.

"In offshore oil and gas exploration sound waves are produced by air guns that can create noise levels of over 230 decibels, [Jack Caldwell, vice-president of Integrated Geoscience, Core Laboratories Inc., Houston,] said. That compares with noise levels of about 170 decibels generated by a rock band.

Oil & Gas Journal: Seismic's effect on marine mammals grows as issue, OTC told.

"Current options to mitigate the effects are seasonal or geographic restrictions on marine seismic acquisitions, slow start procedures, monitoring of mammals for information purposes, and maintaining safety zones of 500-2,500 ft."

Oil & Gas Journal: OTC panel concerned about slow pace of safety, environmental standards.

"[Neil Reeve with Shell Global Solutions International] noted an example of a service company that was not very involved in the standardization process until one standard had made 40% of their inventory out of spec; the company shortly afterward became involved in the standardization process, he said."


A prep piece for the OTC this week. Long and all over the offshore E&P map.

Houston Chronicle: Offshore technology finds deepwater oil; getting it to shore a problem.

"While drillers are talking about going into waters 10,000 feet deep, production is limited to about half that depth. The current record for producing oil and gas in the Gulf is 5,300 feet, held by Shell at its Mensa field."

"A senior scientist with Geco-Prakla will describe industry efforts to produce whale-friendly seismic noise. There is considerable worry by environmentalists that noise in the oceans, including that produced by the seismic equipment used to look for oil and gas, affects whales. The U.S. Marine Mammal Protection Act is scheduled for renewal this year."

> I think I'm going to skip OTC this year. Too much work to do.

Houston Chronicle: Top of the Anadarko Tower.

"Last week the "topping out" ceremony of the 30-story Anadarko Tower was held to recognize that the skeleton of the building is complete. The tower, by far the tallest building in The Woodlands, will be complete in 2002. The skyline of downtown Houston, located 27 miles away, is visible from the top of the Anadarko structure."


Houston Chronicle: Many are shunning jobs in Oil Patch.

"`There aren't a lot of 20-somethings running around the halls,' [says William L. Transier, executive vice president and chief financial officer of Ocean Energy in Houston]."

Oil & Gas Journal: Floater market to grow to $42.5 billion by 2005, say analysts.

"Westwood said that despite the pall cast over the floater market by the sinking of Petrobras's P-36 semisubmersible on Roncador, `the alternative of fixed platforms has also been the subject of tragic events....'"


Wall Street Journal (subscription): Shell Boosts Hostile Bid for Barrett After Shareholders Reject Tender Offer.


Oil & Gas Journal: BP has deepwater Gulf of Mexico discovery near Troika field [Green Canyon Block 243].

Oil Online: Oil production rises to record levels in U.S. Gulf.

"An estimated 522 million barrels of oil was to have been produced in calendar year 2000, up about 5.5 percent over the previous year.... Natural gas production in the Gulf continued its decline for the third straight year..."

> Note that the rise is entirely due to deep water production.

> Gene Sparkman has more to say on this subject in this month's Leading Edge. It's only a one-page article, but it's a *really big* download. (4 Mbytes! Who's running the SEG web site?)

> BTW, I occupied an office next to Gene for four years at HARC.

Leading Edge: The future of oil has a "deep color.".

"Figure 1, an illustration from the book [The Color of Oil by Ronald Oligney and Michael Economides], shows U.S. Lower 48 oil production peaking in the late 1960s and continuing on a steady decline after that. The decline in U.S. domestic production was delayed some-what when the lower 48 production was supplemented by the inclusion of Alaska oil into the totals. This total also has peaked and is on a downward trend.... New large reservoirs must still be found to impact the trend. [Oligney and Economides] have used Figure 2 in other presentations to provide an Alaskan North Slope type scenario that could reverse this downward trend. The deepwater region in the Gulf of Mexico and other parts of the world is demonstrating that it can be the site of new large reservoirs."

> Although I agree with the overall premise here, I have to point out that Figure 2 represents some serious wishful thinking.

This next piece is a pretty good general-interest article on deep-water blowouts. It is also an example of consortium work between the national labs, energy companies, and energy service companies -- the work politicians refer to as "corporate welfare."

Oil and Gas Online: New seismic source technologies for safer and less costly deepwater exploration.

"The INEEL-led research team has developed new seismic source technologies -- devices used to create shock waves that travel below the drill bit through the ground. Drillers then record the resulting acoustic data to gain insight into the location of high- and low-pressure areas before they drill." [Umm -- I think that should say "as they drill."]

"The research team set out to build better seismic sources after a workshop in 1997 ... found that the biggest technical hurdle to drilling safely in deep water is the inability to accurately sense the pressure levels in marine sediments before drilling."

Houston Chronicle: Marathon leaving USX.

"Marathon's oil and gas exploration business employs about 2,870 people worldwide, 815 in Houston. Marathon Ashland Petroleum, in which Marathon holds a 62 percent interest, employs 6,185 workers, 80 in Houston."


Oil & Gas Journal: ExxonMobil says savings from merger more than double forecasts.

"[Lee Raymond] expects ExxonMobil's capital investment to increase by 15-20% in 2001 and another 10% next year. Most of ExxonMobil's increased investment is in the upstream segment.... ExxonMobil's capital investments to increase production are likely to total $100 billion for the decade."

"ExxonMobil has 39 major upstream projects under way to develop more than 5.1 billion net boe of resources. An additional 49 projects are in the early planning stage with the potential to develop up to an additional 9 billion net boe."

> I remember a few months ago saying something like "Big Oil is a myth." I was wrong.

Oil & Gas Journal: US officials hopeful for full federal oil and gas R&D funding.

"Strong support in Congress and within industry may help restore funding to oil and gas research programs that the US Department of Energy's budget proposal would cut, administration and industry officials said Monday."


If you are interested, I've updated the event list on my work page for May. These are mostly geophysical meetings of interest to me.

Associated Press: Fear of future bust has oil industry pros seeking other work.

"The total number of U.S. jobs in oil and gas extraction, which includes drilling crews, was 324,000 last month. Seasonally adjusted, that's the highest level since November 1998, but considerably lower than January 1991, when the figure stood at 403,000, according to the federal Department of Labor."

Reuters: Schlumberger earnings soar as recovery broadens.

Associated Press: New seismic technology could enrich discoveries.

> What a terrible article! I have no idea what they're talking about.

> A guess from Don Dean at Veritas DGC --

"I believe that Vecta is doing 3D 3Component it must be something incorporating measured shear info."

> Whatever it is, it apparently came out of a UT research consortium, so it must be legit. <grin>

Paradigm Geophysical and Petrophysical Consulting Inc. Form Service Cooperation Agreement.


Oil and Gas Online: Cheney sees no quick fixes for US energy policy.

"According to Cheney, the US will need at least 65, maybe up to 90 new power plants every year for the next 2 decades to keep up with a growing economy. And some of those plants should be nuclear-powered, if the US `is truly serious' about reducing greenhouse gas emissions."

Bloomberg Business News: Exxon still opposes regulations on greenhouse gas emissions.

Reuters: Exxon Mobil plans publicity blitz amid boycott calls.

> I find quite bizarre the effort Exxon Mobil dedicates to cultivating its image as an environmental miscreant. While the rest of the majors are spending huge advertising budgets on promoting their green credentials, Exxon Mobil appears to be enjoying its continuous bad publicity.

> I'll give them credit for consistency. But I'll bet PR people at BP and Shell and everywhere else get pissed whenever Lee Raymond talks. I don't think most people differentiate one oil company from another. Every time Raymond shoots off his mouth, he drags the whole industry through the mud.

Competitor news:

Oil and Gas Online: Geostatistics module released for Stratamodel.


WSJ (subscription): Dangerous Waters: How Much Arsenic Does It Take to Kill?.

> This front-page feature starts by taking some (well-deserved) shots at the Bush administration, then piles on anecdotes of unethical industry science by former ARCO employees and consultants! In fact, they even make explicit comparisons to tobacco industry "scientific studies."

> ARCO's involvement in arsenic research was motivated by its mining interests in Montana.


USA Today: Interior rebuffs Jeb Bush on energy.

"President Bush's Interior secretary has rebuffed a personal appeal from the president's younger brother and decided to move forward with plans to auction 6 million acres of oil-and-gas-rich seabed in the Gulf of Mexico."

Oil Online: Fugro acquires two survey companies.


Oil & Gas Journal: Capital markets favorable for oil and gas companies.

Science News: Oceans of Electricity. New technologies convert the motion of waves into watts.

"Fortunately, wave-power developers say, many solutions to the problems [of building and operating wave-power plants] already exist, thanks to the offshore oil and gas industry. The fossil-fuel industry has developed better ways to anchor equipment, more durable and corrosion-resistant materials, and improved cables for carrying electric current underwater. For instance, electrical connectors that are easily mated and unmated underwater are proving vital to modular wave-energy designs."

> I wonder what ever happened to OTEC -- Ocean Thermal Energy Conversion?

Oil & Gas Journal: Environmental group says US rivers threatened by drilling.

"[The conservation group American Rivers said,] `This relatively new form of energy development [coalbed methane] uses many shallow wells to tap natural gas deposits along coal aquifers, and discharges large quantities of poor quality water before the methane can be extracted.'"


Oil Online: Western Gulf lease sale scheduled Aug. 22.


WSJ (subscription): Unocal Hopes Exploration Push Will Help It Out of the Doldrums. High Oil, Gas Prices Fail to Draw Investors, So New CEO Turns to Drilling New Wells.

"... the company plans to drill about 20 deep-water wells this year as part of a $1.6 billion capital program, focusing in part on offshore oil basins such as the Gulf of Mexico and off the coast of West Africa. The wells are risky and expensive, but the payoffs are potentially huge. Unocal's capital spending for 2000 was $1.4 billion."


LA Times: Global Warming Is Man-Made, Studies Suggest.

"The studies also suggest that even if the emission of greenhouse gases were stopped immediately, pollutants already in the atmosphere would double the warming seen in the oceans within two to four decades.

"`We're at the very bottom of a sharply accelerating curve,' Barnett said."


I was talking to geophysicist Dan Huston on the phone yesterday. During our conversation, he mentioned Fred Hoyles's suggestion from 1981 that global warming is good because it might stave off a coming ice age.

Fred Hoyle, you may recall, is the famous astrophysicist who proposed the steady state theory in the 1940's as an alternative to the big bang. Steady state was an intriguing hypothesis at the time, but subsequent observations resolved the contest firmly in favor of the big bang.

To this day, however, Holye refuses to acknowledge that the evidence has declared his theory the loser. Just last year he published a new book, reviewed here, which attempted to revive the debate. (The Physics Today review notes some of the deciding evidence that Hoyle conveniently ignores.)

Anyway, we need gadflies like Hoyle. By challenging the conventional wisdom, they keep the science sharp. But when they're totally crocked, we shouldn't be afraid to say so.

By the way, Dan and Holly Huston have a web page for their geophysical consulting business. They do contract interpretation projects. Dan mentioned that he's willing to get paid in overrides on the prospects they generate. That takes a lot of confidence -- but so does being a contract interpreter.

Oil & Gas Journal: IEA revises world oil demand figures downward.

WSJ (subscription): OPEC Fails to Follow Pledge To Scale Back Oil Production.

"Meanwhile, world output of crude oil rose 890,000 barrels a day to 78.21 million barrels a day. More than half of that increase, or about 530,000 barrels, came from Iraq, OPEC's 11th member, which doesn't take part in the group's quota system because its exports are regulated by the United Nations. That pushed OPEC's output, including Iraq, up 410,000 barrels a day to 28.51 million barrels a day.

"Most of the remaining oil-output increase in March came from the U.S., where production rose 320,000 barrels to 8.26 million barrels a day."

This is a much better write-up than yesterday's O&GJ story --

Houston Chronicle: Energy status `critical,' panel says.

"The report also noted that if `light trucks,' a category that includes sport utility vehicles and minivans, were required to meet the same fuel efficiency standards as cars, the United States would save 910,000 barrels of oil a day."

Oil & Gas Journal: Mitchell exploits synergies of gas processing, E&P businesses.

"E&P companies handle only about 20% of US gas gathering and processing today, compared with 80% in the early 1980s...."

Houston Chronicle: Grant Geophysical chooses chairman.

"Grant acquires, processes and markets seismic data, employing about 900 people worldwide."

Oil Online: GeoQuest acquires Baker Jardine.


The art of stating the obvious -

Oil & Gas Journal: Task force sees hard energy policy choices for US.

"It said one of the tradeoffs is, `Whether Americans are willing to compromise their hunger for cheap energy to achieve their increasing demand for cleaner energy and a cleaner environment?'"

> And they needed an "independent task force" to come up with this stuff?


I screwed up when I missed this one last month. A crucially important study was published in Nature linking greenhouse gases with global warming --

Reuters: Increase in Greenhouse Gases Seen From Space.

"New sets of data taken 27 years apart from two satellites orbiting the Earth have now provided the first observational evidence from space of a rise in greenhouse gases.

"`We've seen greenhouse gas increases that we can link to a change in outgoing long-wave radiation, which is believed to force the climate response,' said Dr. Helen Brindley, an atmospheric physicist at Imperial College in London."

> This is direct observational evidence, people. Incontrovertible. There are more greenhouse gases in the atmosphere, and they are blocking the re-radiation of heat into space.

> Other studies have previously tied down that human activity produces most of the greenhouse gases.


Oil & Gas Journal: DOE would cut oil and gas research, pending energy strategy plan.

"Research for oil and gas falls by 50% from $112 million in 2001 to 51.5 million in fiscal year 2002. Items targeted for elimination include:

  • National Laboratory/Industry Oil & Gas Partnership Program ...

  • Secondary Gas Recovery Program ...

  • Natural gas upgrading and coal mine methane recovery ...

  • Ultraclean fuels R&D...."

> I worked on projects under that first item off-and-on over a five year period.

Oil & Gas Journal: Analyst: Expect high energy prices.

"`The bottom line is $5/Mcf gas, $30/bbl oil and $50 Mw-hr power are here to stay longer term.'"

Oil & Gas Journal: US MMS issues notices for lease sales.

"The US Minerals Management Service has issued proposed notices of sale for Western Gulf of Mexico Lease Sale 180 and Central Gulf of Mexico Sale Part 2, scheduled concurrently for Aug. 22."


WSJ (subscription required): Linux, Maverick of Computing, Gains Respectability With Firms.

"Royal Dutch/Shell Group and Amerada Hess Corp. are using Linux-based supercomputers to sift through seismic data, hunting for undersea oil."

"IBM's support helped persuade Shell scientists to consider Linux when Shell decided to upgrade a new generation of computers for its seismic-analysis work. `It's really a serious operating system,' says Jack Buur, principal research physicist for Shell in Rijswijk, the Netherlands."

Cool story about the ANWR --

Associated Press: Yield of single well drilled in Arctic refuge remains mystery.


Oil & Gas Journal: Greenpeace activists board second UK North Sea drill rig.

"Supported by the Greenpeace vessel MV Greenpeace, three climbers have set up camp on one of the rig's legs in a bell-shape survival pod, while two others abseiled down the rig to paint `Oil Kills' on one of the rig's legs."

> I wonder how much fuel the MV Greenpeace burned on this graffiti mission? These guys aren't just morons -- they're hypocrites.

> Or maybe when they're on-shore, they all ride hydrogen powered scooters!

Oil & Gas Journal: Potential gas panel sees 63-year supply for US.

"The American Gas Association said the size of the resource base is immaterial unless producers are given access to the supplies and pipelines can be built to deliver them."


Oil & Gas Journal: Interior Sec. Gale Norton sees bleak US energy picture.

"`The reality is that our domestic production is declining. We now produce nearly 40% less oil than we did in 1970. Unless policies are changed, production will continue to decline. The projection is just over 5 million b/d by 2020, down from a high of 9.4 million b/d 30 years ago.'"

> Welcome to the law of diminishing returns! Opening new areas to domestic exploration -- which I support -- might slow the decline, but it won't stop it. It's inevitable. That's why they call them *non-renewable* energy sources.

Reuters: UN Expert: Climate Change Skeptics a Tiny Minority.

"John Houghton, a British expert who co-chairs an IPCC panel investigating climate change, said his work involved between 600 and 700 scientists writing and reviewing 5,000 papers. `That's a very large body of scientists,' he said."


Oil & Gas Journal: Breaux urges industry to improve pitch for public lands exploration.

"Sen. John Breaux (D-La.) said more offshore areas might be opened to exploration `if we can explain to these guys that industry has learned from past mistakes ... that some of this drilling is 20 miles offshore where you can't see it.'"

Oil & Gas Journal: Anadarko Petroleum: The hunt is on.


Wall Street Journal (subscription): Energy Concerns Recruit M.B.A.s.

"Peter Veruki, executive director of career planning and admissions at Rice University, adds that some of these companies aren't even positioning themselves as `energy companies,' but instead are emphasizing their technology, broadband, risk-management and trading areas. He says they are taking this approach because `they don't want to hire traditional energy people.'"

> That's why they need to pay top dollar to buy smaller companies with oil and gas reserves.

One more lease sale wrap-up:

Oil Online: Oilmen offer $505.4 million in high bids for Gulf leases.

Press release: Paradigm Geophysical Acquires GeoScene Product Suite. Enhances the Company's Geological Analysis Solutions

> Never heard of these guys before; shows how in-the-know I am.

Earthquake in Seattle: Earthquake As Artist.


Oil Online: CIT forecasts positive outlook for oilfield services.

Oil & Gas Journal: Independents pleased with Gulf of Mexico sale tracts.

"Anadarko spokeswoman Teresa Wong said, `Subsalt is a specialty of ours, and that is why we got some of the blocks.'"

Oil and Gas Online: New land recording system released.


Houston Chronicle: Natural gas exploration not producing enough to maintain supply.

Walter Kessinger

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