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

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6 minute read

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)

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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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Energy

US LNG uncertainty is a reminder of lost Canadian opportunities

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From Resource Works 

Canada has missed opportunities to supply Europe with LNG due to political missteps and regulatory barriers, despite having the resources and potential.

For almost three years now, Europe has not been able to figure out how it will replace the cheap, plentiful supply of Russian gas it once enjoyed. Since Russia invaded Ukraine, the EU member states have made drastic moves to curtail their reliance on Russian energy, specifically Russian gas.

In an ideal world, the diversification of the EU’s energy supply would have been Canada’s golden opportunity to use its vast LNG capabilities to fill the gap.

Canada has all the right resources at its disposal to become one of the EU’s premier energy sources, with enormous natural gas reserves lying in the ground and shores upon three of the world’s four oceans. The problem is that Canada lacks both the right infrastructure and the necessary political will to get it built.

The fact that Canada is not a favored supplier of LNG to Europe is the consequence of political missteps and a lack of vision at the highest levels of government. It was reported by the Financial Times that outgoing United States President Joe Biden’s freeze on new LNG export permits and clashes with activists have created uncertainty over future supply growth.

Missteps and onerous regulatory barriers have kept Canada shackled and unable to reach its full potential, leaving us on the sidelines as other countries take the place that should have been Canada’s as an energy supplier for the democratic world.

To this day, European leaders like Greek Prime Minister Kyriakos Mitsotakis, German Chancellor Olaf Scholz, and Polish President Andrzej Duda have indicated their openness to adding Canadian LNG to their domestic supply.

However, no plans for supplying Canadian LNG to Europe have come to fruition. The absence of any commitment from the federal government to take those possibilities seriously is the result of decisions that now look like major mistakes in hindsight.

Two of these are cancelled energy projects on the Atlantic coast: the Energy East oil pipeline and the proposed expansion of an LNG terminal in New Brunswick.

Canada’s Pacific coast is now a hub of LNG development, with three planned facilities well underway, and there are hungry markets in Asia ready to receive their products. It is a shame that the Atlantic coast is being left behind during Canada’s burgeoning LNG renaissance. The economic situation in the Maritimes has long been challenging, leading to emigration to the Western provinces and stagnation back at home.

LNG projects in British Columbia have proven to be job machines and drivers of economic revitalization in formerly impoverished regions that were gutted when fishing, mining, and forestry went downhill in the 1980s.

The potential to both help Atlantic Canada level back up economically while becoming the bridge for energy exports to Europe was halted by the cancellation of the Energy East pipeline and a proposed LNG terminal in Saint John, New Brunswick.

Proposed by TransCanada (since renamed to TC Energy) to the National Energy Board in 2014, Energy East would have been a 4,600-kilometer pipeline with the capacity to transport over a million barrels of crude oil from Alberta to refineries in New Brunswick and Quebec. While it is true that Europe is more interested in LNG than crude oil, the completion of one great project encourages more and could have gotten the ball rolling on further energy infrastructure.

Had Energy East been constructed, it would have served as a symbol to investors and energy industry players that Canada was serious about west-to-east projects. Unfortunately, in 2017, TransCanada withdrew from the project due to regulatory disagreements and uncertainty.

In 2019, the federal government passed Bill C-69, AKA the “no more pipelines” law, leading to even more complex and restrictive regulations for new energy projects. When there should have been momentum on energy infrastructure building, there came only more cascading bad news.

proposed expansion of Repsol’s LNG terminal in Saint John, New Brunswick, another potential gateway for Canadian energy to get through to Europe, was abandoned due to the projected high costs and poor business case.

The idea of LNG on the East Coast making for a poor business case has been repeated by the federal government many times. However, in documents accessed by The Logic, it was revealed that Global Affairs Canada has, in fact, stated the opposite, and that there was great potential to increase rail and pipeline networks on the Atlantic.

Furthermore, Canada is capable of shipping LNG from the Western provinces to the East Coast because of our access to the vast pipeline networks of the United States.

As a result of these regrettable decisions, Canadians can only watch as lost opportunities to provide LNG to the democratic world are filled by other countries. Every downturn or disruption in the energy exports of other countries is a sore reminder of Canada’s lost opportunities.

Canada needs more vision, certainty, and drive when it comes to building the future of Canadian energy. In the words of Newfoundland and Labrador Premier Andrew Furey, “We will be all in on oil and gas for decades and decades to come…because the world needs us to be.”

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