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Carbon Capture, EOR Projects Make Coal ‘Cleaner’

July 22nd, 2014 vaddison Posted in Uncategorized | Comments Off

As one of the top contributors to energy-related CO2 emissions, coal has been both a reliable power source and a target for reduced consumption as countries across the globe work to combat air pollution.

But huge steps are being made toward cleaning its dirty image. The term “clean coal” remains an oxymoron, for the most part; however, carbon capture-EOR projects—like the one being built by NRG Energy and JX Nippon Oil & Gas Exploration’s Petra Nova Holdings—could go a long way in making the term a reality by preventing most of the power plant CO2 from entering the atmosphere, instead delivering it via pipeline to oil fields for EOR projects.

“Using proven technology, the [Petra Nova] project will be a commercial-scale carbon capture system that captures 90% of the carbon dioxide [CO2] in the processed flue gas from an existing unit at the WA Parish power plant in Fort Bend County, southwest of Houston,” according to a Business Wire news release. Construction on the project has started, and when complete, “the project is expected to be the world’s largest post-combustion carbon capture facility on an existing coal plant.”

The captured CO2, anticipated to be about 1.6 million tons annually, will be compressed and delivered via a 132-km (82-mile) pipeline to the West Ranch oil field, which is co-owned by Petro Nova (NRG, 50% interest; and JX Nippon, 50% interest) and Hilcorp Energy.

“EOR is expected to boost oil production at the field from around 500 [bbl/d] to approximately 15,000 [bbl/d],” the release said. “The West Ranch oil field is currently estimated to hold approximately 60 [MMbbl] of oil recoverable from EOR operations.”

Technology and processes developed by Mitsubishi Heavy Industries and Kansai Electric Power Co. are making the project, which was also a recipient of a U.S. Department of Energy’s (DOE) Clean Coal Power Initiative Program grant, possible. The release stated that the process will use the KM-CDR Process and proprietary KS-1 high-performance solvent for CO2 absorption and desorption.

The project is one of several that illustrate how technology is making coal cleaner.

Another project is already making an impact.

Air Products and Chemicals Inc. has captured more than 1 million metric tons of CO2 at its facility in Port Arthur, Texas, according to the DOE. The company is using a technology called vacuum swing adsorption, enabling it to capture more than 90% of the CO2 from onsite steam methane reformers (SMR).

“Vacuum swing adsorption works by feeding the SMR product gas—a synthesis gas consisting predominantly of hydrogen and CO2 —into ‘adsorber vessels’ where the CO2 adheres to a solid sorbent while the remainder of the stream, primarily hydrogen, passes through the vessels,” according to an article posted June 27 on the DOE’s website. The hydrogen is purified for use in an adjacent refinery, while the CO2 is removed from the solid sorbent through a number of pressure adjustments inside the vessels.

Like the Petra Nova project, this one also pipes gas to an oil field for EOR—the West Hastings Field in southeast Texas. The DOE said the field could produce between 60 MMbbl and 90 MMbbl more of oil with the CO2 injection.

“This process is a promising approach that, if retrofitted to every steam methane reforming facility in the U.S., could reduce our CO2 emissions by about 56 million metric tons a year,” the DOE said.

Now, that would be a huge transformation indeed.

So far, the DOE said its projects have already captured and stored nearly 7.5 million metric tons of CO2 emissions. That, according to the agency, is the equivalent of removing more than 1.5 million vehicles from roads for a year.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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‘Good Neighbor’ Standards Are Worth Following

July 15th, 2014 vaddison Posted in Uncategorized | Comments Off

When oil and gas operations move into communities where they have not been present, it is crucial that relationships involve clear two-way communication, transparency and quick response to ease and eliminate concerns.

This should actually happen in all places where the oil and gas industry operates, regardless of how long oil and gas companies’ operations have been present.

Time has shown that any skimping in this regard can lead to misinformation being distributed, tarnished images, developmental hurdles or possibly squashed projects. This is why the initiative undertaken by the American Petroleum Institute (API) to create what it calls “good neighbor” standards for oil and natural gas developers can prove to be an effective tool in improving industry’s relationship with the public.

API’s guidelines, released last week, are geared toward areas where there are horizontal drilling and hydraulic fracturing operations. The guidelines offer ways for companies to help local residents prepare for what is to come during exploration, minimize interruptions in the community and manage resources, according to the news release announcing the standards.

“From entry through exploration and operation to eventual exiting, fostering broad stakeholder involvement through every phase of project development has become good industry practice. Operators should explain their activities, in a reasonable time frame, to community stakeholders and then identify, understand, listen and respond to legitimate issues and concerns,” the guidelines said. “Identifying and engaging the right stakeholders at the right time in an appropriate way allows for two-way communication to occur. Involving stakeholders in managing the potential impact on their community helps establish trust and build mutually beneficial relationships. While a balanced resolution between industry and stakeholders is ideal, some issues can present unique challenges.”

Recommendations, designed to fit the different stages of a typical oil and gas project’s life cycle, include activities such as:

 Entry. Selecting professional standards for landmen and ethical code of conduct protocols; identifying and engaging stakeholders on communication strategies; conveying key company messages on safety, environment and health practices; building a timeline for when to release information to the public; and developing information packets to distribute at community engagements;

 Exploration. Determining the best media and technology vehicles for community access to the company; assessing opportunities for workforce development with key community stakeholders; offering and providing access to a community feedback mechanism; and engaging in dialogue to address issues, challenges and opportunities;

 Development. Providing project updates by engaging emergency services and first responders; informing the community on potential economic impacts; seeking collaborations with local universities; and managing and promoting best practices;

 Operations/production. Addressing community concerns; developing and implementing an ongoing strategy to engage local government officials; and maintaining open communication; and

 Exit. Decreasing surface footprint; conducting community meetings during decommissioning; and soliciting key community leaders and other stakeholders for input on exit strategy.

These were just a few of several recommendations, or considerations, given for each phase.

“America’s energy revolution is creating millions of jobs and reenergizing communities from coast to coast,” API Director of Standards David Miller said in the release. “The energy revolution is now occurring in areas of the country where oil and natural gas exploration doesn’t have the same history as Texas or Oklahoma. API’s community engagement guidelines will serve as a gold standard for good neighbor policies that address community concerns, enhance the long-term benefits of local development, and ensure a two-way conversation regarding mutual goals for community growth.”

The guidelines are available for free via the API’s website. Hopefully, they will be put to use with good results for all.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Production, Sales From Federal Land Need Improvement

July 8th, 2014 vaddison Posted in Uncategorized | Comments Off

Unconventional shale plays across the U.S. continue to bask in the spotlight, pushing the nation’s oil and gas production levels to new highs.

Unfortunately, production and sales from federal and Indian lands are contributing little to the big picture.

In a continuing trend, sales of fossil fuels from production on federal and Indian lands fell by 7% in 2013 compared to the previous fiscal year, according to a report released recently by the U.S. Energy Information Administration (EIA). The amount dropped from 17,230 trillion Btu in fiscal year 2012 to 15,942 trillion Btu in fiscal year 2013.

The drop came despite what could be called a dismal increase of only 1% in sales of crude oil from federal lands. The EIA reported that sales of crude oil increased to 606 MMbbl last fiscal year, led by production from the federal Gulf of Mexico and Wyoming. Combined, these two areas accounted for 73% of all fossil fuels produced on federal and Indian lands in fiscal year 2013. The areas were followed by New Mexico, Colorado and Utah.

However, the lackluster gain was wiped away when declining coal, natural gas and natural gas plant liquids (NGPL) were added to the mix. Here is how sales fared for fiscal year 2013 compared to the previous fiscal year, according to the EIA’s report.

• Natural gas: dropped 10% to 109 Bcm (3,843 Bcf), with offshore and onshore sales decreasing at 13% and 8%, respectively. Production dropped two percentage points to 16%;

• NGPL: dropped 13% to 103 MMbbl, following a downward trend that emerged after the fiscal year 2010 peak. Onshore production volumes plummeted 21%, while offshore volumes were “virtually unchanged;” and

• Coal sales: dropped by 9% to 401 million short tons. Contributing most to the decline was Wyoming production.

In all, “sales of fossil fuels from federal and Indian lands accounted for about 26% of total fossil fuel sales volumes in the United States in 2013,” the EIA said in the report. “Since FY 2003, sales of fossil fuels produced on federal and Indian lands have fallen 21%, driven by declines in natural gas production and coal production. From FY 2003 to FY 2013, total U.S. fossil fuel production increased by 14%, with a 34% increase in production from nonfederal, non-Indian lands offsetting the decline from federal and Indian lands.”

More than 90% by some estimates of the domestic oil and gas production growth in the U.S. is happening on private or state lands, according to a blog post on the White House’s website. In the post, many of the industry’s strides were touted as was the president’s “all-of-the-above” energy strategy and a shorter processing time for onshore drilling permits (down from an average of 228 days in 2012 to an average of 194 days in 2013).

But it’s time for the feds to contribute a bit more to turn some of these declining federal production and sales stats into positives.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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New Center Focuses On Cyber Security

July 1st, 2014 vaddison Posted in Uncategorized | Comments Off

A new center has formed to provide a spot for oil and gas companies to share intelligence about cyber threats, incidents and ways the industry can protect itself against such attacks taking aim at U.S. energy networks.

The formation of the Oil and Natural Gas Information Sharing and Analysis Center (ONG-ISAC) is a much-needed one, considering the growing threat cyber attacks are posing to the industry. More than half of the 200 incidents that the Industrial Control Systems Cyber Emergency Response Team responded to in the first half of fiscal year 2013 were from the energy sector, according to the center’s website.

The industry-owned and -operated center, based in Washington D.C., allows anonymous submissions and authenticated information sharing as well as protection from the Freedom of Information Act disclosure and anti-trust violations in its effort to protect the operations of critical infrastructure. In addition to information sharing via a secure web port and automated sharing of threat indicators, the center’s members receive near real-time urgent or elevated cyber threat alerts, access to security analyst experts and coordinated industry-wide response to computer-based attacks, according to the center’s website.

Not only will members of the center work together to find threats and areas of vulnerability, they also will work with other centers, vendors and the U.S. government. Its information-sharing process, which is kept confidential given the need for highly secure environments when tackling cyber threats, has a four-color coded traffic light protocol that specifies who is allowed to receive certain information.

The American Petroleum Institute (API) helped form the center, which aims to attract not only upstream companies, but also midstream and downstream companies as well as industry groups and service and supply companies catering to the oil and natural gas sector. Annual membership fees vary based on annual corporate revenue and range from $2,000 for revenues of less than $250 million to $50,000 for those with revenues equal to or greater than $10 billion.

“Computer-based attacks are one of the fastest-growing threats to American businesses and infrastructure,” API Vice President Kyle Isakower said in a prepared statement. “The center builds on existing programs to help companies quickly identify and respond to threats against energy production and distribution systems such as refineries and pipelines and stay connected with law enforcement agencies.”

The effort is a step in the right direction. When it comes to guarding against cyber attacks, information sharing is critical, and having a team of experts keeping tabs on possible threats is extremely valuable, especially for companies that don’t have immediate access to such resources. In addition, businesses can learn from one another and devise best practices and strategies to follow.

Hopefully, this initiative will prove to be an effective tool to thwart cyber attacks.

Including the ONG-ISAC, there are 17 total ISACs, according to the National Council of ISACs. Other industries represented include the defense, emergency services, electricity, finance, information technology, maritime, communications, health, nuclear energy, public transit, real estate, research and education, supply chain, surface transportation, and water sectors. An ISAC also exists for local, state, tribal and territorial governments.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Research Efforts Get $100 Million Boost

June 24th, 2014 vaddison Posted in Uncategorized | Comments Off

Innovative technology, specifically the combination of horizontal drilling and hydraulic fracturing, is what led to the shale revolution unfolding across North America. But a steady flow of new technology and techniques involving seismic, drilling and subsea applications to name a few have led to enhanced operations.

Technological advances are still needed to confront a myriad of challenges—such as reducing or eliminating carbon emissions or figuring out ways to boost recovery from shale wells—as the industry works to meet the world’s growing energy needs. Lots of brainpower will need to be harnessed to tackle these and other challenges. That is why funding research remains critically important.

The U.S. Department of Energy (DOE) recently announced the awarding of $100 million for Energy Frontier Research Centers (EFRCs). The awards represented the second tranche of funding for EFRCs.

“We are mobilizing some of our most talented scientists to join forces and pursue the discoveries and breakthroughs that will lay the foundation for our nation’s energy future,” U.S. Energy Secretary Ernest Moniz said in a prepared statement when the awards were announced. “The funding we’re announcing today will help fuel scientific and technological innovation.”

In all, 32 projects were selected from more than 200 proposals. Of those awarded funds, 10 are new projects and the rest are funding renewals, according to a DOE news release. The award amounts range from $2 million to $4 million per year for each center for up to four fiscal years.

“The centers selected for the second round of funding will help lay the scientific groundwork for fundamental advances in solar energy, electrical energy storage, carbon capture and sequestration, materials and chemistry by design, biosciences, and extreme environments,” the release said.

The centers are tackling an array of projects. Here’s a look at a few of the projects.

• The University of California-Berkeley and the Center for Gas Separations Relevant to Clean Energy Technologies are looking to “create new synthesis strategies, combined with novel characterization and computational methods, for tailoring materials for the efficient separation of gases, such as natural gas, hydrocarbons and carbon dioxide;”

• The University of Illinois at Urbana-Champaign and the Center for Geologic Storage of CO2 aim to “discover new basic science solutions that address uncertainties in current technology at field carbon dioxide storage demonstration projects;”

• Montana State University and the Center for Biological Electron Transfer and Catalysis are investigating “the mechanisms and structural basis controlling electron transfer in model enzymes to develop modular biochemical conversions for the production of hydrocarbon and hydrogen biofuels;” and

• The University of Texas at Austin and the Center for Frontiers of Subsurface Energy Security are working to “understand and control emergent behavior arising from coupled physics and chemistry in heterogeneous geomaterials, particularly during the time and length scales for geologic carbon dioxide storage.”

In the four years that the EFRCs have been around, they have created about 5,400 scientific publications and hundreds of inventions, according to the DOE. It’ll be interesting to learn about the findings of efforts currently underway. Research being conducted today could lead to breakthroughs that can transform the energy industry and how operations are conducted not only domestically but also abroad.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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US Oil Exports Hit 15-Year High

June 17th, 2014 vaddison Posted in Uncategorized | Comments Off

The U.S. has marked another milestone: Crude export levels reached a 15-year high. The accomplishment was announced this week by the U.S. Energy Information Administration (EIA).

Having surpassed 200,000 bbl/d in five of the past six months, the U.S. reached a new high in April when it exported 268,000 bbl/d, the EIA said in a report. Most of the exports—nearly 75%— departed from the Houston-Galveston area. The region’s exports, which averaged 134,000 bbl/d for first-quarter 2014, have skyrocketed with a 283% increase over last year’s record high of 35,000 bbl/d. Besides the Houston-Galveston area, oil was loaded for export in Port Arthur, Texas, and New Orleans.

While exports from the Gulf Coast region dominated, exports from the East Coast dropped slightly compared to last year. EIA figures showed East Coast exports averaged about 30,000 bbl/d in first-quarter 2014, with exports spread evenly among the Port of New York and Portland, Maine.

Just about all of the crude oil has gone to Canada.

So what’s behind the surge in exports? Rising crude oil production, which has set its own record as output from shale plays—led by the Eagle Ford and Bakken formations—surges. Crude oil production was 8.2 MMbbl/d in March, according to the EIA. An earlier report showed that annual crude oil production has steadily risen. Output averaged 7.5 MMbbl/d in 2013, which was 967,000 bbl/d higher than the 2012 average.

Crude export levels could reach greater heights, but a law forbidding crude exports is blocking the way. Exceptions to the law made way for these record-setting exports.

“To export crude oil from the United States, a company must obtain a license from the Bureau of Industry and Security (BIS) of the U.S. Department of Commerce,” the EIA explained in the report.
Exports, including those from Alaska’s Cook Inlet and those to Canada, are generally approved under export licensing requirements.

Also usually getting the green light are exports in connection with the refining or exchange of strategic petroleum reserve oil, exports of foreign-origin crude and California heavy crude up to an average of 25,000 bbl/d, foreign-origin crude exports, and exports that are consistent with international energy supply agreements as well as temporary exports or exchanges, the EIA said.

The report came as some continue to push for federal authorities to lift the oil export ban, while others argue against the move. Keeping resources at home could provide some economic security.

But the list of benefits to removing the ban sounds enticing. A summary of the possible impacts of U.S. crude oils by ICF International and EnSys Energy states that an expansion of crude exports could result in between $15 billion and $70 billion of additional crude oil E&P investment between 2015 and 2020, GDP could grow by an estimated $38 billion by 2020, and up to 300,000 more jobs could be created.

Moreover, lifting the restrictions could narrow the U.S. trade deficit by $22 billion in 2020 due to increased global oil trade. Perhaps of more interest to the typical American is the possibility for a drop in gasoline prices.

“The greatest potential annual decline is 3.8 cents per gallon in 2017. These price decreases for gasoline, heating oil and diesel could save American consumers up to $5.8 billion per year, on average, over the 2015 to 2035 period,” the two groups said. Now that has the potential to get more people behind the movement to lift the ban.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Industry Cries Foul Over ‘Threatened’ Fowl

June 10th, 2014 vaddison Posted in Uncategorized | Comments Off

Add the lesser prairie chicken to the list of possible threats to oil and gas development.

The U.S. Fish and Wildlife Service (FWS) added the chicken, described as a medium-sized grayish brown grouse, to the list of threatened species in March, saying the species is likely to become endangered. The move came despite progress made as part a 2013-developed conservation plan, in which about 160 energy companies among others are participating. The goal is to increase the population to about 67,000.

The move by the federal government has the Permian Basin Petroleum Association (PBPA) and four New Mexico counties crying foul. PBPA announced June 10 that a lawsuit was filed against FWS and the U.S. Department of the Interior. They allege the federal government violated the Administrative Procedure Act and failed “to fairly consider the expected benefits of conservation efforts already undertaken on millions of acres across five states to improve habitat for and diminish threats to the chicken.”

The chickens, with their colorful plumes and stout builds, reside in many places but are known residents of Colorado, Kansas, New Mexico, Oklahoma and Texas. The species has been in trouble for the past 15 years, according to the FWS, as its population has declined mainly due to a habitat loss of about 84%. Its population is said to have plummeted 50% to a record low of 17,616 birds in 2013, compared to 2012.

However, the PBPA said the FWS’ best current estimate is more than 34,000 in the five states.

As part of the conservation plan, PBPA said companies must pay enrollment fees, follow practices intended to minimize impacts and pay for unavoidable damages and habitat restoration. If the latest counts are accurate, then it appears that the plan is working. Why was there a need to classify the chicken as threatened?

In the March 27 news release, FWS said listing the species as threatened with a special rule under section 4(d) of the Endangered Species Act limits regulatory impacts on landowners and businesses from this listing.

“The lesser prairie-chicken is in dire straits,” FWS Director Dan Ashe said in a press release. “Our determination that it warrants listing as a threatened species with a special rule acknowledges the unprecedented partnership efforts and leadership of the five range states for management of the species. Working through the WAFWA range-wide conservation plan, the states remain in the driver’s seat for managing the species—more than has ever been done before—and participating landowners and developers are not impacted with additional regulatory requirements.”

FWS said it was under a court-ordered deadline to make a listing determination on the species by March 31.

However, “The federal government’s listing decision further burdens not only the region’s oil and gas industry, but also ranchers, wind farmers and landowners,” Ben Shepperd, president of the Permian Basin Petroleum Association, said in a press release. “The public and private sectors had already designed and undertaken sensible conservation efforts that protect both the lesser prairie chicken and vital regional industries and landowners. These efforts were working before the Obama Administration imposed unnecessary new regulations on the region.”

A Q&A section on the FWS website stated “landowners and companies enrolled in the WAFWA range-wide plan can continue to manage their land or continue oil and gas operations and will not be subject to additional restrictions or required to undertake additional actions as a result of the lesser prairie chicken being listed, as long as they continue to conduct their activities pursuant to the range-wide plan or the LPCI.”

The federal government is frequently accused of imposing unwarranted regulations. Sometimes the so-called unnecessary regulations are indeed necessary. But that doesn’t appear to be the case in this instance. The plan seems to be working. Perhaps the feds needed the designation to ensure participants continue to abide by the plan.

It’ll be interesting to see how this one pans out in court. If anyone is interested in following the case, it is before the U.S. District Court for the Western District of Texas, Midland-Odessa Division and the case number is 7:14-cv-00050, according to a news release.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Cow Gets Blamed For Condensate Spill

June 3rd, 2014 vaddison Posted in Uncategorized | Comments Off

Onshore operators have something to address if their oil patches have livestock, especially livestock in need of scratching posts.

A cow with an itch or curiosity might be to blame for the spill of natural gas condensate near Sully Creek, a tributary of the Little Missouri River in western North Dakota. The North Dakota Environmental Health Department said that a valve on a storage tank at a site owned by Oneok was accidentally opened May 27. The department suspects a cow rubbed against the valve, causing the release of about 20 bbl of natural gas condensate.

“Booms have been put in place as a precaution. Cleanup of the area has begun,” a press release on the department’s website said.

Add this to the list of unusual tasks energy companies have to prepare before: the potential of roaming bovine—and possibly other animals—using oilfield equipment as scratching posts. Thankfully, this one appears easier to remedy than more prominent onshore challenges such as increasing recovery rates or appeasing hydraulic fracturing critics.

The incident appears to be rare, but North Dakota State Environmental Health Chief Dave Glatt said this isn’t the first time it has happened. A cow was to blame for a similar spill that happened a few years ago. In an Associated Press report, Glatt said energy companies have been told about securing the valves in the past and are being warned again.

“They need to make sure their valves are locked,” Glatt said in the article. “They should kind of already know that because it can create issues for them.” In the latest incident, Glatt said the cow had an itch that needed scratching or was curious. “They just get rubbing along those valves, and they open up. Sometimes they need to scratch their backs, and they open those valves.”

He added that cows are also known to have a taste for petroleum products, saying, “Sometimes they can be the dumbest animals in the world, and sometimes you kind of wonder.”

It also kind of makes one wonder about the potential for greater damage. Oneok has reportedly locked the tank valve to prevent any future mishaps. This incident should serve as a warning call to others to take similar steps or take time to make sure such valves are still secure—or even better, give the cows more suitable scratching posts or something safer to engage curiosity. Perhaps a few fence posts with stiff brushes or curry combs attached would suffice.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Anti-Arctic Drilling Protests Return

May 28th, 2014 vaddison Posted in Uncategorized | Comments Off

Greenpeace is at it again.

But this time, the activists aren’t being hosed with water in freezing temperatures or handcuffed and towed off to jail on piracy charges.

The activists, who oppose drilling in the Arctic, boarded the Transocean Spitsbergen drilling rig May 27 while the rig was en route to the Barents Sea’s Hoop Area, where Statoil has plans to drill three wells on the Apollo, Atlantis and Mercury prospects from late May to September. While the company has been cleared to start drilling on the Apollo prospect, the Norwegian Ministry of Climate and Environment has halted any drilling into oil-bearing layers until Greenpeace’s concerns are addressed.

“Several activists are now suspended by ropes underneath the rig, above the open sea and above the thrusters that must be kept running at all times to keep the rig in position,” Statoil said in a news release about the incident. “The weather is cold in the area, with temperatures around zero degrees Celsius. If the demonstrators were to fall down, their life and health would be at serious risk. Some of the activists are also carrying heavy equipment that could lead to drowning.”

But Greenpeace is holding firm on its position in hopes that its actions will lead Statoil to ditch its arctic drilling plans, something that seems to be unlikely. The latest act is one of several carried out by activists. As companies have stepped up plans to drill in the Arctic, Greenpeace has stepped up protests.

Jason Schwartz writes on the Greenpeace Blog that a group of 15 people is occupying the rig offshore Norway. The protest was one of two carried out this week. The other involved 30 activists occupying the Gazprom-contracted GSP Saturn in a Dutch port. The rig is heading to the Pechora Sea. After occupying the rig for five hours, the activists were removed with some being detained. All have since been released, according to the blog post. But the other group remained on the Transocean-operated rig.

“We’ll only leave the rig voluntarily after Statoil has promised it won’t drill,” Greenpeace program manager for Norway Truls Gulowsen said in a Bloomberg article. “This area is too vulnerable, and an oil spill would drift in the wrong direction, so we can’t allow drilling.”

Statoil said it has had a dialogue with Greenpeace, informing it about the company’s exploration plans and emergency response setup. Moreover, the company said Greenpeace members have been given the opportunity to voice their opinions and ask questions. Although Statoil “respects the right for legal protests and believes it is important with a democratic debate on the oil and industry,” the company said when the activists “use this form of protest we believe they act irresponsibly and illegally.”

That is the truth. Statoil has already expressed a willingness to communicate with Greenpeace. And the fact that Norwegian officials are listening, too, even forbidding drilling into oil layers, shows that Greenpeace has captured their attention. Endangering lives, including their own, is not helping the activists’ cause.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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Energy Booms Could Further Lower Unemployment Rates

May 20th, 2014 vaddison Posted in Uncategorized | Comments Off

More positive news about the Houston jobs scene arrived this month when the area’s unemployment rate fell below 5% for the first time since May 2008. This came in addition to news that further job growth could be on the horizon with more energy-spawned trade and investment.

A report released this month by the Greater Houston Partnership and HSBC Group states that energy reform opening Mexico to foreign investment as well as investment in LNG export terminals and chemical plants along the Gulf Coast are expected to create thousands of jobs in the Houston region.

The Energy Capital of the World already has bucked national unemployment trends, which also have shown signs of improvement dropping recently from 6.7% to 6.3 % in April. For the Houston area, the unemployment rate dropped from 5.2% in March 2014 to 4.6% in April 2014. A year ago, the rate was 5.9%. The energy industry has no doubt played a significant role as oil and gas E&P keeps workers busy.

Texas Workforce Commission Chairman Andres Alcantar called April a robust month. “With all 11 major industries adding jobs over the year, I encourage job seekers to visit Workforce Solutions offices around the state and seize the opportunities created by Texas employers,” he said.

The recently released report forecast even more jobs for the Houston area, driven by abundant shale oil and gas supplies along with what is expected to be a need for expertise and services as Mexico reaches beyond its borders to develop its hydrocarbon resources.

“The current expansion along the ship channel and the door to Mexico that will soon open for companies wishing to explore there will have a significant impact on Houston’s growth. The full potential is unknown, but the increase in shipments of commodities, equipment and services will be measured in the billions,” the report said. “This could add more than 55,000 jobs to the region’s economy.”

Using the Regional Input-Output Modeling System to predict the impact exports could have on the Houston region, the report unveiled some impressive numbers if assumptions hold true:

• Assuming the more than $40 million worth of planned chemical plant expansions in the region lead to a 15% increase in exports, this would equate to an additional $2.5 billion in exports, supporting an additional 23,787 jobs. Currently, Houston exports $16.8 billion in chemicals via the Houston-Galveston Customs District;

• Assuming Mexico will need lots of oilfield equipment, a 15% increase in exports would equate to an additional $2.8 billion in equipment exports, supporting an additional 28,574 jobs;

• Assuming Mexico will also need more pipelines to transport products to refineries and processing facilities, a 15% increase in annual exports would equate to an additional $390 million in exports, supporting an additional 2,824 jobs, the report said. Presently, Houston exports $2.6 billion in iron and steel products.

The model used to calculate the numbers utilizes a method for determining multiplier effects.

“For instance, in Houston’s case, the model would measure how an increase in the manufacturing of drilling rigs would require inputs from steel manufacturers, cable makers, diesel engine firms, paint suppliers and so forth,” the report explained. “The model also estimates the impact on consumer-oriented firms, like grocers, doctors and dry cleaners that are supported by the workers receiving paychecks in primary industries. In economics parlance, these are referred to as employment, output and earnings multipliers.”

No one knows how much exports will actually increase at this point, and unforeseen changes or events could alter the outlook. But if plans progress as hoped, the future looks promising indeed.

Contact the author, Velda Addison, at vaddison@hartenergy.com.

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