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Energy

Energy Companies May Be On Cusp Of Uncorking Next Massive Oil, Gas Boon

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From the Daily Caller News Foundation

By David Blackmon

 

These companies, all run by smart business people, continue to invest many billions of capital dollars in these risky, long-term projects even as “experts” like the bureaucrats at the International Energy Agency (IEA) continue to predict demand for crude oil is about to peak in the next few years.

Constantly advancing technology has always been the driver behind the advance of the oil-and-gas industry since the first successful U.S. well was drilled by Edwin Drake near Titusville, Pennsylvania, in 1859. The Drake well was drilled to a then unheard-of depth of 69 feet using the most primitive equipment imaginable.

This week, 165 years later, U.S. oil giant Chevron announced it had achieved first production in its Anchor field in the Gulf of Mexico. At its shallow depth, underground pressure in the Drake well would have been negligible, just enough to force the oil up out of the ground. The Anchor semi-submersible floating production unit (FPU) that was started up by Chevron this week enables the capture of massive volumes of oil and natural gas from underground formations up to 34,000 feet below sea level at pressures up to 20,000 pounds per square inch.

“The Anchor project represents a breakthrough for the energy industry,” said Nigel Hearne, executive vice president, Chevron Oil, Products & Gas. “Application of this industry-first deepwater technology allows us to unlock previously difficult-to-access resources and will enable similar deepwater high-pressure developments for the industry.”

Chevron says seven deepwater wells will be tied into the Anchor FPU, which has the capacity to capture, process and transport as much as 75,000 barrels of oil and 28 million cubic feet of natural gas every day. The company estimates reserves in the field of 440 million barrels of oil equivalent with current technology. But, again, the technology deployed by the industry advances every day, meaning a far bigger amount of oil and gas will ultimately be recovered over the coming years.

Other major oil companies, like BP, are also beginning to deploy similar high-pressure technology that they and analysts believe will help them tap into billions of new barrels known to exist in deep, high-pressure formations in various parts of the world. Globally, BP says it believes deployment of advanced technology could help it access up to 10 billion barrels of known high pressure reserves.

Reuters quotes Wood Mackenzie principal analyst Mfon Usoro as saying the new high pressure technologies could enable companies like BP and Chevron to unlock as much as 2 billion barrels of known reserves in the Gulf of Mexico alone. “The industry has done their bit to safely deliver the barrels, with the new technology,” she said, adding: “These ultra-high-pressure fields are going to be a big driver for production growth in the Gulf of Mexico.”

On the same day Chevron made its announcement, Chinese national oil company CNOOC  announced the completion of what it believes is the largest offshore platform on Earth, the Marjan facility. The giant platform, which serves similar functionality as the Anchor FPO, will now be shipped 6,400 nautical miles to the Persian Gulf, where it will facilitate the full development of Saudi Arabia’s deepwater Marjan Field.

It is important to keep in mind that the mounting of these massive offshore facilities and drilling of the deepwater wells are all long-term, multi-billion-dollar projects. These are facilities designed to handle the production from these deepwater fields for decades, not just a few years until the vaunted energy transition takes away all the demand for the commodities being produced.

In addition to the projects in the Gulf of Mexico and Persian Gulf, all the companies mentioned here are involved in aggressive efforts to discover and produce oil and gas in deepwater regions around the world. CNOOC, for example, is a 20% owner in the prolific Stabroek block development offshore of Guyana operated by ExxonMobil. Chevron stands to become a 30% owner in that same development via its proposed buyout of Houston-based Hess Corp.

These companies, all run by smart business people, continue to invest many billions of capital dollars in these risky, long-term projects even as “experts” like the bureaucrats at the International Energy Agency (IEA) continue to predict demand for crude oil is about to peak in the next few years. Meanwhile, OPEC says it believes demand for crude will keep rising through at least 2045, perhaps longer.

Someone will be right, and someone will be wrong. Regardless, we can rest assured that advancing technology in the industry itself will ensure there will be no shortage of supply.

David Blackmon is an energy writer and consultant based in Texas. He spent 40 years in the oil and gas business, where he specialized in public policy and communications.

Featured image credit:  (Screen Capture/PBS NewsHour)

Daily Caller

East Anglia educated environmental scholar says it’s time to “Scrap Green Energy Handouts Once And For All”

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From the Daily Caller News Foundation 

By Vijay Jayaraj

Vijay Jayaraj is a Research Associate at the CO2 Coalition, Arlington, Virginia. He holds a master’s degree in environmental sciences from the University of East Anglia, U.K.

As the presidential election nears, it is reasonable to ask why the United States continues to give away billions to “avert” a fabricated climate crisis to countries that have little interest in participating in the charade beyond accepting handouts.

The United States has been a significant contributor to global climate initiatives, most notably through its involvement in the Paris Agreement.

At the 15th U.N. Climate Conference in 2009, rich countries pledged to provide $100 billion a year in climate finance by 2020 to assist developing nations fight climate change. This target was said to have been achieved for the first time in 2022, according to the Organization for Economic Cooperation and Development.

Having the world’s largest economy, the United States was expected to support a large portion of the Green Climate Fund  (GCF), which resulted in a promise of $1 billion.

GCF claims to be the “world’s largest dedicated climate fund” with a portfolio valued at $12 billion, or $45 billion when co-financing of projects is included. According to the GCF website, the fund delivers “transformative climate action in 140 countries” to keep “average global temperature rise well below 2 degrees Celsius.”

To which one might respond: Poppycock! No “climate action” will have a significant effect on temperatures, and the 2 degrees cited hardly matter environmentally in any case. Climate policies “will have a trivial effect on temperature but disastrous effects on people worldwide,” concludes a recent paper by Prof. Richard Lindzen of the Massachusetts Institute of Technology and Prof. William Happer of Princeton University.

Besides, contrary to doomsday predictions, the Earth is flourishing in many ways. Global poverty has decreased  dramatically over the past few decades, and agricultural yields have increased significantly partly, because of higher levels of atmospheric CO2. Natural disasters — often cited as evidence of climate change — are causing fewer deaths than ever before, despite population growth and development along coastlines and other vulnerable areas.

The outrage of having taxpayer money poured down the climate rat hole is compounded by the fact that recipients of GCF grants include China and India, the world’s largest emitters of greenhouse gases that are rapidly expanding consumption of fossil fuels. Meanwhile, the bone-headed policy of the United States is to reduce the use of these affordable and abundant fuels to the detriment of household budgets, business profitability, electric grid reliability and national security.

So, instead of pouring billions into international climate projects, the United States should prioritize its own energy security. This means developing its oil, coal and natural gas and strengthening partnerships with reliable allies like Canada.

The United States’ vast reserves of natural gas have been made available through advanced extraction technologies such as hydraulic fracturing and horizontal drilling, making the country one of the world’s leading producers. This abundance can ensure a reliable and cost-effective energy supply for other nations and reduce U.S. dependency on foreign sources, enhancing national security.

The intermittent nature of wind and solar power — both GCF darlings — necessitates backup power sources or massive battery storage systems that come with their own environmental and economic costs. The materials needed for batteries, for instance, are often mined in regions with poor environmental records or by using child labor.

By contrast, modern fossil fuel extraction in the United States and Canada is subject to some of the strictest environmental regulations in the world. Ironically, by outsourcing energy production to less regulated countries in the name of “going green,” the United States causes more environmental harm globally.

Russia’s invasion of Ukraine and the subsequent energy crisis in Europe starkly illustrated the dangers of energy dependence. European countries, having underinvested in fossil-fuel infrastructure and a reliance on Russian gas, found themselves in a precarious position.

This example alone is enough for the United States to reset its priorities. Promotion of failed and mostly unwanted “green” policies should be replaced with aggressive development of fossil fuel resources, as well as nuclear power and building robust energy partnerships with allies.

Vijay Jayaraj is a Research Associate at the CO2 Coalition, Arlington, Virginia. He holds a master’s degree in environmental sciences from the University of East Anglia, U.K.

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Daily Caller

Biden-Harris Admin’s Multi-Billion Dollar Electric School Bus Program Is A Huge Gift To China, House Report Finds

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From the Daily Caller News Foundation 

By Owen Klinsky

The Biden-Harris administration’s $5 billion Clean School Bus Program uses nearly 400% more taxpayer dollars per school bus and benefits the Chinese Communist Party (CCP), a House report revealed Tuesday.

The 51-page report from the House Committee on Energy and Commerce found promoting electric school buses and other electric vehicles (EVs) enriches the CCP as the EV supply chain is roughly 90% dependent on China, raising both national security and human rights concerns. It also highlighted immense expenses for taxpayers, with the average electric school bus under the first iteration of the Clean School Bus Program — the first of three iterations — costing $381,191, nearly four times that of a typical full-sized diesel school bus.

“It is clear the $5 billion Clean School Bus Program is overall a failure and, in many cases, a waste of Americans’ hard-earned taxpayer dollars,” Republican Congresswoman Cathy McMorris Rodgers, who chairs the House Committee on Energy and Commerce, said in a statement regarding the report’s findings. “The program, led by the radical Biden-Harris EPA [Environmental Protection Agency], props up a market that relies heavily upon a supply chain dominated by the Chinese Communist Party.”

Funded by the 2021 Bipartisan Infrastructure Law, the Clean School Bus Program provided the Biden-Harris EPA with funds over five years to “replace existing school buses with zero-emission and clean school buses.”

China currently accounts for approximately two-thirds of global EV battery cell production, while the U.S. manufactured just 7% as of 2022, raising national security concerns as the U.S. would likely have to depend on Chinese EV technology for its electric school buses, according to the report. Furthermore, the government-subsidized purchases of electric school buses under the Clean School Bus Program incentivize pre-existing human rights abuses in the EV supply, including the use of Uyghur forced labor in China’s Xinjiang region.

The report also identified limited range as an issue, with standard electric school buses from leading manufacturer BlueBird able to travel just 120 miles on a single charge, while some propane models can travel 400 miles before needing to refuel. The range problem can also be exacerbated by cold and warm weather conditions, with a study from the National Renewable Energy Laboratory finding electric transit buses lose roughly a third of their range at 25 degrees Fahrenheit compared to ideal conditions.

Electric school buses also increase the risk of fraud due to a lack of documentation requirements for contractors, with the EPA relying solely on self-certified applications and estimates created by applicants, according to the report. A separate July report from a Maryland county’s Office of the Inspector General resulted in millions of dollars in “wasteful spending.”

“The EPA launched the Clean School Bus program without sufficient safeguards and considerations for practical hurdles applicants may face. For example, the EPA did not require documentation for some of the required application information and allowed contractors enthused at the opportunity to receive federal funding to apply on behalf of unknowing school districts, some of which eventually withdraw from the program,” the report states. “The EPA failed to account for the considerable electric infrastructure upgrades that electrifying a school bus fleet could require, potentially leading to delays for schools in utilizing their new buses.”

The White House did not immediately respond to a request for comment.

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