Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Would be more accurate to put the blame on financial speculation related to technology rather than the technology itself, c.f. https://en.m.wikipedia.org/wiki/Panic_of_1873 . There were many other things going on in the period which also contributed which didn't have much to do with technology unless you're including weapons.
My impression is that most Canadians who aren't in the oil biz think they can get all of their energy from windmills and solar panels. And given that many of those in the oil biz will soon be moving south, there will only be a bunch of knuckleheads left to fully turn Canada into Greece.
My neighbors (native Albertans) think steam injection is the same as hydraulic fracturing so naturally they're against it.
Oil Patch Braces for Exploration Chill After Canada's Election
http://www.rigzone.com/news/article.asp?hpf=1&a_id=140927&utm_source=DailyNewsletter&utm_medium=email&utm_term=2015-10-05&utm_content=&utm_campaign=feature_4
I've been part of the process twice and both times I've seen detritus survive and good people be swept away. In both cases personal rapport between the sedimentary types and their controlling powers, who tend to have superficial knowledge of capability and performance, was the factor in survival. CHK was pervaded by people with very modest capability (and that is being very euphemistic) from the senior VP level on down. As an example, I was at a company party for interns at which a senior VP put his arm around an attractive female intern and said "so honey, are you the entertainment for tonight?". Somehow that guy kept his job for almost 2 more yrs yet 4 layers of people (including at least 3 witnesses) under him were whacked in 2013. They did have the occasional very smart person but none of the smart people I knew had much control.
They finally laid off the most incompetent "scientist" I've ever worked with so they are apparently finally getting serious.
Guess so. Not critical to your original post; I was just confused because I wasn't aware of an XOM refinery in northern Calif and I'd witnessed 2 explosions at the CVX refinery in Richmond.
The Richmond refinery that had explosion problems was Chevron's. The soon to be former Exxon refinery is in Torrence.
Going out on a limb would be a T shaped recovery.
I have a feeling that it will b more like a U shaped recovery.
"environmental groups who ask if a body supported by fossil fuel companies can offer objective guidance on global warming"
I'm guessing that the writer of that statement doesn't recognize the irony.
Yuppers. It hits my family from 2 sides. I'm in the oil biz and one of my brothers works for CAT.
I think all of the cutting that's happened and that's about to happen will ultimately contribute to sky-rocketing energy, metals and materials prices so on that front I agree w u but the folks in the upper floors seem to think that won't happen for at least 2 yrs.
CAT cutting 5k jobs by end of yr and possibly 10k thru 2018.
Becoming a common theme that commodity related companies expect continued wallowing for years to come. So much for blaming everything on W
I would only argue that the word verge should be substituted with 'is in'.
Announcements will likely not be formal until Q1 but the cuts r really happening now. I know of 2 facilities in my company, including my own, that r being closed and I have word from a very high source in a major oil producer that they will soon be whacking many people. Even France isn't being spared.
Indeed. Yet another platitude to establish her bona fides to the far left.
However, the XL would be helpful to both Bakken and Canadian producers by reducing the discounts for those oils. Of course, eliminating the export barrier would also help.
BTW the industry is girding for another round of big layoffs and shutdowns.
"I distinctly recall winners and losers being picked by the government during the 2008 financial crises. Dilma's 8% popularity and the backlash against corruption could turn out to be a positive. "
While the 1st sentence did happen, and is still happening, in the U.S, your postulate in the 2nd sentence is likely optimistic. I think the masses in Brazil are angry, not out of principle, but because the politicians are skimming from the pot that the masses see as theirs. I doubt if the wealth transfer mentality will change after dilma is gone or after commodities prices recover.
Brazil is nowhere close to being a free market and even before the commodities collapse it was a difficult country to do business in because of over-regulation on how non-Brazilian companies could operate.
It's a bit of a twist on SLB's tendency to buyout join venture companies.
I wouldn't be surprised if there was a lot of tire kicking starting about 1 yr ago but Cameron has trimmed several bits over the past several yrs so I think Cameron was probably making itself more attractive to a buyout in general rather than spalling off the turbine business as part of a specific agreement with SLB.
"ii) why is bigger necessarily better?"
U obviously aren't a company man ;^)
I c this acquisition as a move against GE as much as HAL/BHI but that's my speculation rather than anything I've heard thru vines
Plausible, yes, but I have a feeling they will create an eco-system that they will regret.
More smoke and mirrors from Barry. Mexico has 6 tiny to small refineries. I doubt that light crude from the US will go straight to aging refineries. My bet is that it will be used as diluent for their heavy crudes.
Not that I don't share the animosity toward the EPA but I'd bet that most of the orange hue is due to iron-hydroxide particles/floc and thus the low pHs in the river now.
I wouldn't be shocked if they eventually spin the iron as 'fertilizer'. ;^)
That's a bit too obscure a question. I was referring primarily to Iceland in my 1st paragraph. I should've included hydroelectric along with coal, nat gas and nuclear. Most of iceland's and new Zealand's electrical generation comes from hydro
https://en.m.wikipedia.org/wiki/Geothermal_power_in_Iceland
Ever is a long time. Nuclear, coal, and natural gas are generally far cheaper than hot water or steam supplied from geothermal wells - even for small volcanic islands far from natural gas sources . Of course, if the interest is 'energy independence', then geothermal is what small volcanic islands have (New Zealand might be an exception).
I haven't paid much attention to the geothermal industry for many yrs. there were several small companies drilling fairly shallow, moderately high temperature wells in Nevada within the past 10 yrs. I'm assuming there are recharge or reservoir problems.
Geothermal wells with bottom hole temperature in the neighborhood of 350 C were being drilled in the Salton Sea CA field in the late 1960s and early 1970s (depths around 5000 ft). So the drilling technology existed then and those were before the oil embargoes so I doubt that they were entirely funded thru subsidies.
I suspect that the biggest problems in high temperature water fields are maintaining consistent flow and corrosion rather than drilling. Steam fields such as the Geysers, CA field are much better but they have 'draw down' problems that are somewhat similar to shale gas fields.
New Zealand and the Phillipines were probably the most aggressive countries in geothermal power development but that was in the 1970s to 1980s and those efforts seem to have withered and those countries have refocused their efforts toward developing more conventional domestic energy resources. California has abundant geothermal resources but that industry seems to be on subsistence level support even though the state is obviously gangrenous when it comes to non-carbon based power resources. Those should serve as indicators.
The hyper sciences stuff is BS. I looked over their patent. For drilling wells, it's a joke. She'll may get some benefit out of the technology but it won't be for creating wells.
OB,
Thx for the kind words. I’m confident that nowlurking is some sort of reservoir or petroleum engineer rather than being a google warrior. But it’s clear from statements like “tar chemistry is simple” that he doesn’t know squat about chemistry. Even though he pointed out, rightfully, that the fundamental problem is viscosity (heat is just a convenient way of lowering that viscosity) he doesn’t seem to know that viscosity is related to the chemistry of the material - not to mention that there is a little bit of thermodynamics involved in the whole heat transfer process (that is sarcasm for those that might interpret 'little bit' too literally). This sort of glossing over fundamentals seems to be fairly common amongst petroleum engineers.
I’m not an engineer so I talked about the thing I know. I’m an expert in aqueous chemistry and thermodynamics and I know more about hydrocarbon chemistry than the vast majority of chemical engineers (I don’t need to name-drop because I have my own publication record).
The original point of Dew’s post was that SAGD costs are higher than expected and I know from my exposure to SAGD steam plant engineers and their reservoir brethren that part of the reason for unexpectedly high costs is because they don’t fully grasp the chemistry of what they’re working with (e.g. ‘tar chemistry is simple’). I have no idea how common this is across the SAGD universe, but I’ve encountered more than 1 batch of engineers and materials scientists from more than 1 company who fall into the pot so it isn’t rare.
If asphaltenes (a common compound in bitumen) are simple then, I’d like to know: 1. Why scientists and chemical engineers publish 100s of papers on them every year yet nobody can define an asphaltene with any greater precision than: it’s pentane or heptane insoluble? and 2. Why are SAGD pilot plants being designed with the principle point being to remove asphaltenes? If the aqueous chemistry is simple or irrelevant, then why are chemical engineers surprised when they find organo-aluminum scales in their heat exchangers (to be fair, I was also surprised) and that 50% of the 10 wt% of dissolved material in their boiler feed tank water is organic salts (derived from interaction of the steam with the bitumen)?
Shutting down and replacing steam plant parts because of plugging or corrosion is not cheap (see links below for numbers). Many chemical and petroleum engineers model hydrocarbons and aqueous liquids and steam as separate systems without any reactive interaction (i.e. exchange of chemical species between the hydrocarbon and H2O-rich liquid and gas). These folks are frequently followers of axioms like “tar chemistry is simple” (in reservoir simulation it’s a practical need to ignore reaction chemistry but many modelers don’t understand the distinction).
A simple scholar.google search of things such as: SAGD AND chemistry or “aquathermolysis” will produce 1000s of recent academic papers and patents dealing with chemical aspects of SAGD. Even the inventor of SAGD was working on (non-reactive) chemical effects on SAGD processes up until 2004 (the year before he died). People don’t do those things if there is not a significant market.
Oil Sands Supply Costs and Development Projects
http://www.ceri.ca/images/stories/CERI_Millington_Global_Energy_Dec_2014_FINAL.pdf
SAGD development costs (slide 20): natural gas cost 2013 $CAD/bbl = 4.3; Fixed capital (initial and sustaining) = 18.9; operating working capital = 0.4; other operating costs (incl. electricity) 14.6. A chunk of the fixed capital and total operating costs deal with chemical treatment of water and bitumen. Unlike bitumen and water chemistry, boilers are pretty simple unless the water is full of stuff other than water. Anybody who took even a cursory look at the steam plant layout would see terms like ‘lime’, ‘emulsion’, … and the many engineering units which performed the operations.
http://www.capp.ca/publications-and-statistics/statistics/statistical-handbook
Statistical Handbook for Canada’s Upstream Petroleum Industry
July 2015
Alberta Oil Sands Bitumen Valuation Methodology
http://www.capp.ca/publications-and-statistics/publications/261786
Note that I do substantiate my points rather than ‘guessing’ or making false attributions. The linked documents might be useful for things other than nailing down production statistics and costs, e.g. they note some substantial advantages to rail transport. Rail transport of heavy oil would not have the same hazards as Bakken oil and a huge amount of money would be saved on not importing diluent.
Regards
Charlie
"none of the university programs developed SAGD"
Exactly where did I state or imply that university programs developed SAGD. A common thread in this dialogue has been that your reading comprehension and understanding of the English language seems to be poor.
Going back aways is hardly a technical qualification.
Natco no longer exists and the company I work for is >10x larger than Cameron.
As for:"There just isn't much room for incremental value added to further R&D in the chemistry of thermal oil recovery..."
I'm sure people once had similar thoughts about geomechanics and natural gas production.
In addition, people don't come to my company and me because they have problems that are "managed well". Quite the converse.
And it's funny that u cited Larry Lake. If u go to his UTexas website and look at his recent publications, you'll note that he's been working on the sorts of problems I outlined. Obviously, he doesn't think the problems are all managed sufficiently.
I get paid to work on the problems I outlined. Apparently, the companies u mentioned agree with me.
I did not imply that chemistry was the only problem but costs associated with chemistry are substantial. You will have a hard time explaining all the surface hardware if the problem is just about injecting steam.
In order to get heat into the reservoir there must be a source of water and that water is not obtained as pure H2O. Dirty water must have all the dissolved and suspended stuff removed before it goes into a boiler. Some other things may be added to prevent corrosion or scaling from solutes that the cleaning process failed to remove. Those additives may decompose in the steam and now there is steam plus other volatile compounds (things like ammonia). The steam with other stuff then gets injected and the heat from the steam is transferred to the bitumen as well as the sediment that hosts the bitumen (and possibly pore brine). The bitumen, sediment and pore brine are NOT inert to the steam and other stuff in it.
The bitumen and sediment are at about 30 C prior to steam injection and they've been stewing at that temperature for a few million years. Bacteria have used some of the oil as food and in the process they produce things like carboxylic acids and disulfides which may behave poorly upon steam injection. Biochemistry.
When steam is injected that multi-million year old karma is disturbed. I call that karma 'equilibrium'. It involves chemistry. The system now tries to achieve a new karma. Those changes involve changes in density and chemical composition. More chemistry. Organic sulfides may decompose and produce H2S and thiols. Those are expensive substances to deal with when they come out of the wells. Some of the thiols and other sulfides stay dissolved in the oil. Those must be removed and they end up as giant yellow mountains. Both processes involve chemistry.
Interactions between the steam, stuff in the steam, rock, and oil may lead to polymerization reactions which cause deleterious changes in viscosity or precipitation of asphaltenes which clog up pore throats. The carboxylic acids may make soaps or emulsions which can create production and processing problems. More chemistry.
Those same interactions also dissolve compounds from the rock and oil which partition into the aqueous liquid which condenses from the steam. When that condensed water, which is still toasty, is produced it can corrode the metal bits of the well and and surface plumbing or it may precipitate in those pipes and heat exchangers. All chemical problems.
Since water can be scarce and its use is highly regulated, the oil company tries to reuse the produced water but since it now contains a lot of stuff besides H2O, that extra stuff has to be removed before it goes back to the boilers. Lots of emulsion and surface chemistry as well as removing dissolved silica, and organic- and inorganic-salts.
In addition, there are suspended sediments in the oil and water that need to be removed and those sediments can be loaded with toxic, to both humans and refineries, transition metals that came from the non-inert oil interacting with the steam. More chemistry.
If you don't want to believe me, even though this is my profession, you can take a look at these:
http://sagd.wikispaces.com/Fouling+Concerns+in+SAGD
http://www.huskyenergy.com/downloads/InvestorRelations/Presentations/Oil-Sands-Water-De-Oiling-2011.pdf
http://www.nalco.com/documents/Published-Articles/R-1014_-_Scale_and_Deposit_Formation_in_SAGD_Facilities.pdf
There is a hell of a lot more than just worrying about getting steam into the reservoir.
I suggest u re-examine ALL of the words in both the WSJ article as well as what I wrote. The WSJ article was NOT about observation well spending. That was example of an attempt to cut costs and costs related to SAGD PROJECTS was the subject. The projects encompass much more than the wells.
While you may think there is nothing mysterious about the chemistry involved, there are many unresolved problems related to the chemistry. Those problems are also part of the costs and in many cases those problems should've been anticipated. I did give some examples.
I did not mention butane so I don't know why u mention it. Your comments refer only to the subsurface and demonstrate my point: many engineers neglect important problems that fall outside their realm of knowledge and, sad to say, many chemical engineers don't know much about chemistry (that is far from being universally true which is why I used 'many').
The steam doesn't appear magically in the reservoir and when it is reproduced it is far from being pure H2O. It isn't even pure H2O when it goes into the reservoir. There are consequences to both that go far beyond killing the occasional duck (although, that has also had significant repercussions). And even if we ignore what happens with the H2O, the bitumen has its own peculiar chemical attributes that require considerations that are not necessary for many other oils. For example, Oklahoma doesn't have mountains of sulfur bricks accumulating nor do oils from OK tend to have crap loads of vanadium and nickel which tend to crap up refinery units and thus cause large discounts on price.
I love working on heavy oil projects solely because heavy oils have really interesting chemistry (it's certainly not the weather) but those 'features' that make it interesting to me also make its economics difficult. However, some of those economic problems could have been reduced if folks had spent some more $ on the front side rather than band-aiding problems after the fact.
I tend to agree with Dew's caption. The general concept is simple but seems that dealing with the chemistry is much more complicated than folks anticipated. I don't think the chemistry is particularly complicated but it doesn't seem to have been thoughtfully considered in many cases. There's a word or two for that... Folks in the oil industry are fond of reinventing wheels that have been addressed long ago in other energy sectors.
I've had a lot more exposure to these folks recently. Don't know whether that's becuz our sales folk are scouring thru the weeds or the sagd folks are looking for free wisdom but it's become clear that a lot of money has gone into designing production and processing facilities without thorough consideration of the chemistry involved. The example given about not using temperature sensors is a typical example although I've heard of worse. Some of the problems can't be dumped entirely on the CEs and MEs working for the producers, e.g. water treatment requirements thrown in after facilities already in place, but in general I can't say I'm impressed with the intellectual capabilities of some of the folks calling the shots. One guy was a recent PhD who apparently learned how to use HYSIS as part of his degree program but has no practical knowledge of the materials that are used in drilling a well or the stuff that comes out of a well. I won't go into greater detail regarding his errant guidance on surface facility design but it was embarrassing and expensive.
"The seven biggest oil price declines over the past 30 years..."
That is a truly depressing frequency.
WJS story "Cheap oil should fuel US economy"
Story includes:
"There were a seasonally adjusted 193,300 oil-and-gas extraction jobs in the U.S. last month, according to the Labor Department, down from 201,200 at the end last year."
Considering that SLB alone has reduced headcount by at least 20k in the last 6 months with most of those jobs in the U.S., I question the veracity and classification schemes of the US Labor Dept.
While those prices look reasonable, I think Andrew Gould will be laughing on the beach of whatever island he decides to buy for his retirement home.
"What is disappointing for me is that scientific fraud/misconduct seems to be so prevalent in the US when I expect it to be more common in places like china as per the discussion of chinese stock mkt lack of transparency. "
What makes you think it isn't. Data can only be evaluated if they are available. You might consider that unknown data do not preclude a phenomenon.
Your claim that "The B-1 bomber (so called Reagan bomber) has never been deployed in any conflict. " is false.
I work with an Iranian who returned from Iran recently and he also remarked about how hopeful and enthusiastic the Iranian citizenry is for an agreement. They see it as a path to a significant increase in standard of living. I don't see the agreement happening nor the hoped for relief with regard to comfort. I don't think the mullahs will be happy with a large and comfortable middle class.