Tag Archives: oil

Peak Oil and the Alternatives

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The term “Peak Oil” refers to a global situation where the extraction of oil becomes more difficult and expensive due to dwindling oil reserves. Should the warnings of peak oil be true, the cost of everything from travel to plastic-based household items would increase dramatically. According to peak oil experts, the apex of available oil reserves has already been passed and the ramifications of peak oil will start being felt by consumers across the globe. While some of that pain has been delayed due to recessions and slower growth in the world’s large economies, these experts expect that economic recovery will spur greater demand from an increasing number of people. This, combined with decreasing supplies of the resource in demand will result in a spiral of increasing prices.

Peak oil is not a new concept, with the peak in U.S. production in 1970 predicted by M. King Hubbard in 1956. At the time, the U.S. was the world’s largest oil producer and the declining production ignited oil exploration and production across the globe, particularly the Middle East and Mexico. The two largest oil fields in the world, Ghawar in Saudi Arabia and Cantarell in Mexico were brought on line in relatively quick order.

Peak oil has largely been dismissed by global governments and OPEC but there is persuasive evidence that that these two fields and others ranked in top ten of the world’s largest oil reserves are producing ever decreasing amounts of petroleum. The decreased production at these fields is also important due to the fact that they produced the cleanest and highest quality oil. Cantarell peaked in 2004 with production dropping drastically ever since. Saudi Arabia does not share data on field production but computer models and overall production levels indicate that the Ghawar Field, which is the world’s largest, peaked in early 2006.

Peak oil continues to be hotly debated but if production levels at these two fields are any indication, the issue cannot be ignored and concentrated efforts must be made to conserve the oil that is left and develop alternatives to fossil fuel.
Increasing miles per gallon and other conservation efforts are gaining traction and are finding their way into mainstream thinking. Alternative energy production, particularly wind and solar, are making inroads as well but their production as a percentage of whole remains in the 1% to 2% area. On a level playing field these two alternatives are still not competitive with power generated by fossil fuel, which is still relatively cheap. These alternatives will become more competitive as technological advances decrease costs but the biggest trigger will probably arrive in the form of skyrocketing energy prices as demand increases.

News by Anthony Ricigliano

Permanent Damage in the Gulf?

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The twin disasters of the April 20th explosion and fire on the Deepwater Horizon drilling rig, which killed 11, continue to generate coverage and worries over the long term effects of the blown-out well and the massive oil on the Gulf Coast.

Here are some facts and observations on the spill, the blow-out, and long term ramifications:

  • BP’s original estimates were that oil was pouring out of the well at a rate of 210,000 gallons per day. After challenges by scientists and environmental groups, BP now admits that the spill rate is much higher.
  • Even if BP’s original numbers were correct, an estimated 6 million gallons has leaked so far. That amount is half of the amount spilled by the Exxon Valdez in 1989.
  • BP’s tab for the spill so far stands at $700 million, a number virtually guaranteed to go up.
  • The spill has tainted 150 miles of coastline stretching from Dauphin Island, Alabama to Grande Isle, Louisiana. Oil has penetrated more than 12 miles into Louisiana's sensitive wetlands.
  • The sticky and gooey oil from the spill poses such a cleanup challenge that it may never be removed. While some aggressive cleanup tactics have been proposed such as flooding or setting fire to the wetlands, the long term damage of those actions could outweigh the effects of the spill. Many experts are now resigned to the fact that the best course could be to stand by while the sludge is broken down naturally over a period of years.
  • Expect a bull market for congressional hearings as politicians use the disaster to curry favor with voters in this election year.
  • We can also expect multiple commissions to investigate the spill for the same reasons as the congressional hearings.
  • The loop current, which moves in a clockwise direction, could eventually take the spill to the Florida Keys. In its present position, the current isn’t a threat but a slight change in its trajectory could change all that.
  • BP’s best shot at plugging the blow-out at present is an operation called “top kill”. The planned procedure would shoot in heavy mud to slow the gushing oil followed by cement to seal the pipe.

The sheer force of the blow-out and the depth of the well-head at 5,000 feet have prevented efforts to cap the well until now. Still, one would think that strategies for capping blow-outs would be thought out prior to drilling. That is obviously not the case here, much to the detriment of everything in the oil spill’s path.

By Anthony Ricigliano

Will BP’s Seal Stick?

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By Anthony Ricigliano: After having held gushing oil in place since the middle of July, crews from BP are carefully drilling a secondary relief well which, when completed, will deliver a permanent plug into the oil well that has become the biggest oil spill in U.S. history. The drilling of the last phase of the relief well must be done with extreme caution to ensure that it intersects the broken well line. It is hoped that the relief well can reinforce the initial cap and provide a permanent solution by pumping more mud and cement into the well.

With the oil stopped since July 15th, all eyes will be on the "bottom kill" operation which is designed to both permanently seal the well and allow for options on reopening it in the future. Prior to the temporary seal going in, oil flowed out of the broken well for almost three months after Deepwater Horizon rig, which BP had leased, exploded on April 20. The explosion killed 11 employees on the platform and released over 200 million gallons of oil into the Gulf. Investigations are ongoing as whether BP cut corners in their operations in order to save money in the days preceding the blowout.

The first test after the connection of the relief well will be to see if pressure gradually builds up at the point of the seal. The lines which have been releasing oil and gas to surface ships to minimize pressure on the cap would be closed to see if pressure builds naturally within the well.  Increasing pressure would indicate that the two and a half miles of casing which lines the well bore is intact which could lead to an oil capture scheme with surface ships capturing oil from the well. Estimates are that four ships could capture up to 60,000 barrels a day. If pressure does not build in the well it would indicate that the casing is damaged and testing would be halted. The relief lines which have been shut would reopen and testing of the casing would commence.

The operation to finally seal the well should provide relief to the cleanup efforts, but for many the damage has already been done. With the Fall shrimping season set to open on August 16th, many of the fishing grounds will remain closed as federal authorities monitor toxin levels in shrimp, crabs, and other seafood. The reminder of these closures was evident as the pre-season “Blessing of the Boats” ceremonies saw barbequed sausage, chicken, and other items on the menu but no sign of the shrimp and crab dishes that are the traditional fare for the celebrations.

There hasn’t been much talk about future plans for the well but it seems unlikely that it will remain closed permanently. While establishing another rig may be extremely unpopular with residents around the Gulf, the sheer volume of oil in the well and BP’s desire to recoup some of the $6.1 billion in costs related to the blowout make it likely that surface ships will eventually be replaced by another platform along the lines of Deepwater Horizon. One certainty in that situation is that it will be closely watched with highest safety standards possible. BP owes nothing less than that to everyone and everything that has been affected by this ecological disaster.

Author Anthony Ricigliano – Articles and News by Anthony Ricigliano