FEBRUARY 2008
The oil and gas industry generally has accepted a policy of sustainable energy that makes use of all available energy resources. However, John Westwood, managing director of UK consultancy Douglas-Westwood Ltd, said the oil and gas industry already is competing with the wind industry for materials and personnel for offshore operations, primarily overseas. Some $16 billion is expected to be spent on installation of 4.5 GW of new wind-power capacity in Europe over the next five years, up from 1.1 GW today. The UK will be the biggest market, with 2.4 GW of new capacity forecast in 2012. “Serious amounts of steel are heading offshore,” said Westwood. “Offshore wind and oil and gas are competing for the same resources and with onshore wind power.”
Efforts to bring some humanity into Russia’s treatment of former OAO Yukos officials may be bearing some fruit. While the fate of former Yukos Chief Executive Mikhail Khordorkovsky remains ambiguous, some gains apparently have been made for former Yukos Executive Vice-President Vasily Aleksanyan. Moscow’s Simonovsky Court on Feb. 6 ruled to hospitalize Aleksanyan and suspend his trial. The court handed down the ruling based on a document provided Feb. 5 by the Matrosskaya Tishina detention facility’s administration, which said that Aleksanyan had cancer and needed treatment. The editorial notes that Putin, by contrast, has used the law as “a club” to bludgeon opponents. It had been reported that Moscow courts were refusing medical treatment to Aleksanian, who is on trial for money laundering and has late-stage AIDS. The Philadelphia Inquirer reported that the Russian aim was to force Aleksanian “to testify against imprisoned oil tycoon Mikial Khodorkovsky.” Not least, the paper noted the especially cruel point that “without the treatment, Aleksanian will die.” The Inquirer said, “It is almost impossible to believe this case is going on in the 21st century, in a country whose president hobnobs with European and American leaders.”
Light sweet crude: $91.13/bbl
Natural gas: $7.99/MMbtu
FEBRUARY 2012
The Eagle Ford shale play in South Texas has attracted more than 3,100 permitted locations since Petrohawk Energy Corp revealed the first discovery in October 2008, the Texas Railroad Commission reports. Ninety percent of the Eagle Ford drilling permits approved by the commission since 2007 were issued in 2011. There were 368 Eagle Ford producing oil leases in 2011 compared with 72 in 2010 and 40 in 2009, and there were 550 Eagle Ford producing gas wells in 2011 compared with 158 in 2010 and 67 in 2009, the TRC said.
Lease production reports indicate that the Eagle Ford formation produced about 1,000 bbl of oil or less per year in 2004-07 from vertical wells before the horizontal drilling frenzy began. The Eagle Ford produced 83,744 bbl of condensate in 2008, 839,490 bbl in 2009, 7.1 million bbl in 2010, and 16.8 million bbl in January-October 2011. It produced 103,802 bbl of crude oil in 2008, 308,139 bbl in 2009, 4.3 million bbl in 2010, and 13.8 million bbl in January-October 2011. Gas production grew from 1 bcf in 2008 to 19 bcf in 2009, 110 bcf in 2010, and 212 bcf in January-October 2011. EOG Resources Inc, Houston, said in December 2011, it is the largest oil producer in the Eagle Ford, with output as of Sept. 30, 2011, of 53,000 b/d of oil equivalent, 78 percent oil.
Chesapeake Energy Corp. announces plans to cut its operated dry gas drilling rig count to 24 rigs, a decline of 50 rigs from its 2011 average operated dry gas rig count, citing "the lowest natural gas prices in the past 10 years." The drilling reductions will be made in US unconventional gas plays.
Separately, Simmons & Co International forecasts that gas supply will exceed demand by 1.2 bcfd this year, leading to full storage in October and curtailments being required to balance the market. Working gas storage capacity in the US is estimated to be 4,150 bcf. At year-end 2011, gas in storage was 3,472 bcf. The Oklahoma City independent plans to reduce its operated dry gas drilling activity by 50 percent from current levels by the second quarter. Chesapeake anticipates its lowest level of dry gas drilling capital expenditures since 2005. Specifically, during the second quarter, Chesapeake plans to have reduced its drilling activity in both the Haynesville and Barnett shales to six operated rigs each and to 12 operated rigs in the dry gas area of the Marcellus shale in northeastern Pennsylvania.
Light sweet crude: $99.44/bbl | Natural gas: $2.62/ MMbtu | US active rig count: 2,006
FEBRUARY 2016
Oklahoma Corporation Commission Chairman Robert Anthony noticed one difference immediately at the Natural Gas Committee's session on hydraulic fracturing at the National Association of Regulatory Utility Commissioners 2016 winter meeting from one at the NARUC winter meeting six years earlier. Close to 400 people attended the 2010 discussion, which required a much larger room, he told the 10 state utility commissioners and 40 audience members on Feb. 16 in Washington, DC. Anthony said the proceedings were much livelier in 2010, adding, "We've all learned a lot since then."
Earlier that day, however, two environmental groups, the Sierra Club and Public Justice, filed what they called a "fracking lawsuit" against three independent producers in US District Court for Western Oklahoma in response to increased Sooner State seismic activity. Another speaker insisted that quakes associated with well completions are extremely rare. "There have been fewer than 10 in the US," said Richard J. Simmers, who leads the oil and gas division in Ohio's Department of Natural Resources. "Oklahoma may have its faults, but they're all geologic," Anthony observed as the session concluded. "My state issued its strongest directive yet today to cut back on oil and gas disposal well volumes near those faults. In an order covering 5,281 square miles and 245 disposal wells going into the Arbuckle formation, the OCC's oil and gas division will require operators to reduce wastewater disposal volumes by more than 500,000 b/d, or about 40 percent.
Global energy demand between 2014 and 2035 is expected to rise 34 percent, an average of 1.4 percent per year, with fossil fuels remaining "the dominant form of energy over the period," according to the 2016 edition of the BP Energy Outlook. Despite the rapid growth of other energy sources, the firm projects that fossil fuels will fulfill 60 percent of the expected demand increase and account for almost 80 percent of the world's total energy supplies in 2035.
Demand for natural gas will increase the fastest among the fossil fuels, rising 1.8 percent per year while oil demand will rise steadily at 0.9 percent per year, although its share of the energy mix continues to decline, the outlook indicates. Global shale gas production is projected to increase at 5.6 percent per year, with the share of shale gas in total gas production rising to 25 percent by 2035 from 10 percent in 2014. US shale, tight oil elsewhere, Brazilian deepwater, Canadian oil sands, and biofuels together will rise by 16 million b/d, accounting for about half of non-OPEC production in 2035. OPEC is likely to act to maintain its market share of 40 percent, lifting output by 7 million b/d to 44 million b/d by 2035, BP says. By 2035, coal's share in the energy mix is expected at an all-time low, with gas replacing it as the second-largest fuel source. Non-fossil fuels are projected to grow even faster than anticipated in last year's outlook. Renewables, including biofuels, are projected to grow at 6.6 percent per year, with their share in the energy mix up to 9 percent by 2035 from 3 percent currently.
Light sweet crude: $28.15/bbl | Natural gas: $2.05/ MMbtu | US active rig count: 1,889
THE REST OF THE YARN
This month ... The story of “The Man Who Was Texas” comes to a close.
McCarthy could not bring himself to attend the big Irish wake on June 9, 1986, the night the Shamrock closed, nor could he attend the auction in which 35,000 bits of his memories, hundreds of Shamrock towels and robes, and thousands of pieces of Shamrock dinnerware went to the highest bidder. One man bought one of the bars and opened it as the Shamrock Café in a Houston strip mall.
McCarthy’s kidneys gave out a month later. Doctors wheeled him out of surgery at St. Luke’s Episcopal Hospital and Faustine placed him in a nursing home. He lingered for nearly a year, finally dying a day after his 81st birthday on December 26, 1988. The newspapers hailed him as a “Texas giant” even as they tried to explain to younger readers who he had been. A thousand people attended his memorial service, where a bar singer from the Shamrock’s glory days led renditions of “You’ll Never Walk Alone” and “Londonderry Air.” They buried him in Houston’s Glenwood Cemetery, steps from the grave of Howard Hughes. “He was a tough man, and the drinking and fight stories are true enough, but he wasn’t anything like that character in Giant,” one old friend told a reporter. “He was a man, and he took a good deal of pride in that fact. I don’t think there’s ever been anyone like him, before or since.”
HISTORY QUIZ
In 1950, I mortgaged my 1949 Ford to bankroll my first oil company, a forerunner of one of the
most diversified energy companies of its day. A “distinguished student” graduate of Texas A&M, a fighter pilot in World War II, often unpredictable, and never one to back down from a controversy, I once famously declared to the press at a news conference that “you only get one kiss at this pig.” Who am I, and what was the name of my first oil company?
If you would like to participate in this month’s quiz, e-mail your answer to contest@spe.org by noon, February 15.
The winner, who will be chosen randomly from all correct answers, will receive a $50 gift card to a nice restaurant (courtesy of the ProTechnics Division of Core Laboratories).
ANSWER TO JANUARY’S QUIZ
The theory of exploration geophysics was based on the seismograph, originally invented to record earthquakes. A more practical application was made during World War I by the German Army, in which they placed portable seismographs along the battlefront to triangulate vibrations from Allied artillery pieces, thus revealing the exact locations of Allied guns for targeting retaliatory rounds.
Congratulations to December’s winner, Darrell Knight with Goodrich Petroleum.