Brought to You by www.SEPP.org The Science and Environmental Policy Project
By Ken Haapala, President
Heartland Energy Conference: Among the many excellent presentation at the 2018 America First Energy Conference held by The Heartland Institute, perhaps the most revealing was by Joe Leimkuhler, Vice President for Drilling for the company LLOG, L.L.C. He explained how the production has been changing over the past ten years and what is happening in the Gulf of Mexico, where extent of resources has been a mystery for years. As explained by Leimkuhler, several myths are prevenient about the oil industry, in general. These myths include:
· Oil is fungible, a commodity that is interchangeable.
· The US can achieve complete oil independence.
· There is an established physical limit to oil resources
Types of oil are identified American Petroleum Institute gravity, degrees (APIº). If it is greater than 10 it is lighter than water, if less than 10 it sinks. Those with APIº greater than 40, and have high yields in butane, propane, and low octane gasoline and are closer to natural gas liquids, condensate, than conventual oil. They do not need conventional “cracking.” Oils obtained by on-shore hydraulic fracturing (fracking) are typically very light (have very short CH chains). The light products of these oils are very desirable for other uses, but are unsuitable for jet engines, diesel, etc., unless they are blended with heavier oils. Also, light oils are more difficult to transport; for example, wrecks where tanker cars burst into flames when being transported by rail from the Bakken oil fields in North Dakota.
Lower API Crudes (20 to 30) have heavier yield at the middle and top-of-bottom of the of the distillation column, more octane and longer chain hydrocarbons, yielding more diesel and more jet fuel. One can see how the crude mix affects oil prices by noting the trends in low octane gasoline compared with high octane gasoline and diesel. For example, according to the Energy Information Administration, the August 6 U.S. retail price for regular was $2.852 per gallon, the price for premium (higher octane) $3.435 and the price for ultra-low sulfur diesel was $3.223. As more oil from fracking enters the mix, the spread between low octane gasoline and high-octane gasoline & diesel increases. Before the light oils from fracking entered the market, lighter oils were considered more valuable than heavier oils.
The idea of complete oil independence is not practical. Many of the Gulf Coast refineries are set up to blend heavy crude oil from Venezuela with lighter crude oil from the US and Africa. Now that the oil industry in Venezuela is disintegrating from government mis-management, the refineries will need heavier crude oil from Canada, or elsewhere, to produce products such as diesel and jet fuel. Further, the political unrest in Libya and Algeria is removing their “sweet” oil from refineries, which is heavier than oil from fracking, and can be matched with South Louisiana “sweet” from the Gulf of Mexico. North America independence and / or BTU independence are very possible.
As news of new deep-water oil finds demonstrate, we simply do not know of any physical limits to oil resources, at this time. Leimkuhler’s discussion of what is being found in the Gulf of Mexico was particularly interesting.
Essentially the Gulf of Mexico is an inland sea fed by the Mississippi and the Rio Grande Rivers for millions of years. Also, about 100 million years ago the relatively shallow Western Interior Seaway divided North America. Later, plate tectonics uplifted the area draining the seaway into the Gulf and the waters off Alaska.
In recent years, deep-water off-shore production from the Gulf of Mexico has dominated US oil production from its waters. However, most of the region is dominated by thousands of feet of salt, which has been deformed by thousands of feet of sediments. Historically, seismic information stopped at the top of the salt. With recent advances in technology, oil companies are beginning to “see” what is below the salt, revealing extensive resources in oil and gas. The costs of exploration and drilling are high, with long lead times needed. Based on explanations by Leimkuhler, well productivity is high. With changes in efficiency and associated costs, he states that Deepwater drilling and completion costs are down considerably, indicating break-even points between $50 to $60 per barrel. The world has changed, considerably.
The big unknown is rash government regulation. The resources are limited only if imagination and innovation stop or if government regulations prevent action. Regulations are needed for clarity and safety, not to prevent innovation.
The entire operation is expensive, requiring years of commitment. The drilling may start at 10,000 feet (3000 meters) below the surface, with the intended target 35,000 feet (11000 meters) below the surface. Using simple conversations for water pressure alone, not including rock, this would mean drilling operations at pressures ranging from 300 to 1100 atmospheres.
Leimkuhler brought up the problem with drilling in Alaska, and the efforts to stop the Trans Alaska Pipeline System. The current flow of about 500,000 barrels per day (bpd) is about 25% of the peak in 1988 of 2.1 million bpd. If the flow rate drops below 350,000 bpd, there will not be enough heat in the system to keep it flowing. It will freeze, requiring its destruction as required in its permit. The Bureaucratic Scientists of the last administration claimed that the resources in Alaska are very limited. But exploration by Chevron is demonstrating they are wrong. See links under Challenging the Orthodoxy and https://www.eia.gov/dnav/pet/pet_pri_gnd_a_epmr_pte_dpgal_w.htm
Quote of the Week: “The greatest challenge facing mankind is the challenge of distinguishing reality from fantasy, truth from propaganda. Perceiving the truth has always been a challenge to mankind, but in the information age (or as I think of it, the disinformation age) it takes on a special urgency and importance. – Michael Crichton [H/t Tim Ball]
Fredrick Seitz Memorial Award: During the Heartland Conference, Ken Haapala presented the Fredrick Seitz Memorial Award to Roy Spencer for Exceptional Courage in the Quest for Knowledge. When Roy Spencer and John Christy published the method for calculating temperature trends for the bulk atmosphere from satellite data, they were first honored then shunned. The data, hard evidence, do not support the assertions in the Charney Report, the IPCC, the US Global Change Research Program, etc., that greenhouse gases are causing a dangerous warming of the atmosphere.
Before Roy’s talk at the conference, a reporter for Reuters asked him: what will he discuss? Spencer suggested the reporter attend to find out. The journalist did not attend the talk but reported on the contents of the talk anyway. See links under Challenging the Orthodoxy and Communicating Better to the Public – Make things up.
Mid-20 Century Warming? In a post in “American Thinker,” SEPP Chairman Emeritus Fred Singer challenges the generally accepted warming from about 1940 to 1978, prior to the collection of data on atmospheric temperature trends from satellites. The warming may have been from a shift in the Pacific Oscillation in the mid-1970s, thus naturally caused and unrelated to carbon dioxide or other human influence. See Article #1.
Farewell Arctic Ice – Hello Wildfires: Over the past several years, the general press was loaded with stories about the traumatic effects from the summertime decline in Arctic ice. This year the ice is not declining as expected, so the general press has shifted to unprecedented warming or, in the US, wildfires. California had a wet winter leading to a green spring. Unless there is a concentrated effort to cut the spring vegetation, it will lead to summer fires. Of course, those who object to cutting lush spring growth are claiming the summer fires are caused by global warming. See links to Changing Weather and Communicating Better to the Public – Exaggerate, or be Vague?
Enemy of the Greens? Last week’s TWTW discussed a digital special edition of the New York Times Magazine titled “Losing Earth: The Decade We Almost Stopped Climate Change.” The report went into great deal on the personalities involved but failed to produce any hard evidence supporting its claims of dire warming from greenhouse gases. By not taking actions “to save the planet” we face a catastrophic future.
Amusingly, some Greens are attacking the New York Times for this publication because it reveals that Exxon was not covering up secret research, the basis for litigation against oil companies by municipalities and Rhode Island. According to the Greens, an article without evidence is undermining litigation without evidence – a substantial issue? See links under Problems in the Orthodoxy.
Hothouse Summer? Roy Spencer, who is an advisor for Midwest agriculture interests, stated that the US Department of Agriculture, which advises US agriculture interests, has predicted record corn yields and soybean production in the US this year.
Apparently, corn, soybeans, and wheat do not believe of their eminent demise in hothouse earth. See links under Agriculture Issues & Fear of Famine
Storage is Needed? In a surprising article, anti-CO2 James Temple, the senior editor for the MIT Technology Review, calculates the costs of providing back-up to California going to solar and wind. An advocate of alternative energy, Temple authored articles such as “Climate change could drive tens of thousands of additional suicides in North America.”
Now, he realizes that batteries are not a cheap back-up? Is seizing Baja Mexico for pumped storage the alternative? See links in Problems in the Orthodoxy.
Methane Penalties: Southern California Gas Co. agreed to pay $120 million in civil penalties and for programs to mitigate methane emissions for the October 2015 leak at the Aliso Canyon natural-gas storage field northwest of Los Angeles. The civil penalties are justifiable, but the mitigation programs are questionable.
“The company said its mitigation programs would capture methane from dairy farms and waste for use in transportation.” Also, the article reporting the fine claimed that methane is “one of the most potent heat-trapping gases responsible for climate change.”
As demonstrated by laboratory tests, methane is not “one of the most potent heat-trapping gases.” Water vapor is far more effective. Given the lack of understanding of the effects of methane prompts the question: does anyone in California recognize which end of the cow to mitigate? See Article # 2 and links under Below the Bottom Line.
Additions and Corrections: Last week’s TWTW may have given the incorrect impression that Galileo invented the telescope. He did not, and it is not clear who did. Apparently, it was a Dutch inventor, and Galileo, upon reading about it, developed his own telescope and was the first to record the movement of the planets, changes in the sun, and the movement of the moons of Jupiter. It was the movement of the moons around Jupiter that may have convinced Galileo that Copernicus was right in that the planets move around the sun.
“That is the total number of dead animals with visible oil collected by the US Fish and Wildlife Service along the Gulf Coast for the year following the Gulf spill (as of April 14, 2011). This does not mean that the animals died from the oil. For example, autopsies of sea turtles indicated that some, at least, died of suffocation, most likely while trapped in the nets of fishing trawlers. What the administration called the nation’s worst ecological disaster has been something less than that, at least for major species of animals.”
We are now seeing reports that the naturally occurring red tide off Florida is killing dozens of mammals, (manatees and dolphins). sea turtles, and countless fish, crabs, etc. The red tide may be influenced by human activities such as sewage and agriculture run-off. But the current reports give some dimension to what the previous administration called the “nation’s worst ecological disaster” and to those who will object to oil exploration in the Gulf of Mexico, invoking the BP blowout. BPs actions prior to the blow-out were inexcusable, but not the nation’s worst ecological disaster. See links under Other News that May Be of Interest and the April 23, 2011 TWTW.
1. A carbon tax: A useless solution to a nonexistent problem
By S. Fred Singer, American Thinker, Aug 9, 2018
The Chairman Emeritus of SEPP writes:
”Mr. Fred Krupp is president of the Environmental Defense Fund (EDF). He claims that “capitalism will solve the climate problem” (op-ed, WSJ, July 22, 2018). EDF pays him the princely sum of about $350,000 USD. Evidently, his duties include spreading the idea that EDF, an aggressive environmental non-profit, is “pro-market.”
“Krupp asserts that the climate warmed in the final two decades of the 20th century, thus following the 1988 predictions of Dr. James Hansen, former head of NASA-GISS (Goddard Institute for Space Studies), notorious for his violent opposition to emission of CO2.
“But Krupp is quite wrong, and so are the predictions of Dr. Hansen. There is no warming at all after about 1940, ’til the El Niño event of 1998 (which had nothing to do with CO2). Therefore, there is no climate problem to be ‘solved.’
“It turns out that the warming reported by surface weather stations is fake – it is entirely an instrumental artifact, caused by drastic changes after 1980 in the way in which (surface) temperatures were measured – as discussed in detail in a research paper by noted meteorologist Dr. Joseph D’Aleo.
“Krupp further asserts that satellites show atmospheric warming. Wrong again! Prof. John Christy has shown that neither satellites nor balloon-borne radiosondes exhibit warming in the final decades of the 20th century – nor does any other data source.
“A carbon tax?
“Krupp espouses ‘market-based mechanisms.’ All of this sounds persuasive until you discover that he really wants a carbon tax – the wrong remedy, especially for a nonexistent climate problem.”
2. Southern California Gas Agrees to Settlement for 2015 Methane Leak
Utility to pay $120 million in civil settlement for gas leak that drove thousands of families from their Los Angeles homes
By Timothy Puko, WSJ, Aug 8, 2018
SUMMARY: The journalist writes:
A California utility has agreed to a $120 million civil settlement for a massive gas leak that drove thousands of families from their Los Angeles homes.
Southern California Gas Co. will pay civil penalties and for programs to mitigate methane emissions for the October 2015 leak at the Aliso Canyon natural-gas storage field northwest of Los Angeles. The company has already pleaded no contest to criminal charges for the leak, which released 109,000 metric tons of methane near the community of Porter Ranch, according to state air officials. The new settlement requires the company to mitigate the effects of that methane, authorities and the company announced Wednesday.
‘There is no excuse for what happened,’ California Attorney General Xavier Becerra said in a statement. ‘This leak undermined our crucial work to reduce greenhouse gas emissions and protect our people and the environment.’
The company said its mitigation programs would capture methane from dairy farms and waste for use in transportation. The settlement money will also pay for a long-term health study on the effects of the leak, and the settlement requires the company to take several other steps to improve safety and publicly monitor methane levels around the facility.
The Aliso Canyon underground site is the fifth-largest such gas-storage facility in the U.S. and is essential to the region’s power industry. It gushed methane—one of the most potent heat-trapping gases responsible for climate change—for 15 weeks, leading California to declare a state of emergency while locals reported headaches, nosebleeds, rashes and other woes. It eventually led to a federal review that called for a sweeping safety overhaul of more than 400 underground natural-gas storage fields.”
If approved by the Los Angeles Superior Court, the settlement will resolve all claims by several governments, but not personal-injury lawsuits from thousands of citizens, or what may be uncovered in ongoing investigations.
“‘SoCalGas is delivering on our commitment to the Governor and the people of California to fully mitigate the methane emissions from the leak at our Aliso Canyon facility,’ said Bret Lane, president and chief operating officer for the company, in a statement. ‘The settlement will also help California meet its ambitious climate goals.’”