China had shown its commitment to developing clean energy through its strong support for an international alternative energy program, the head of the program's China office said Wednesday.

Japan's Panasonic Corp plans to buy out subsidiaries Sanyo Electric and Panasonic Electric Works for up to 818.4 billion yen to strengthen its push into greener businesses.

In this Feb. 7, 1969, file photo, workmen using pitchforks, rakes and shovels attempt to clean up oil-soaked straw from the beach at Santa Barbara Harbor, Calif.

Canadian researchers hope to stem the global IT industry's rampant output of greenhouse gas emissions by perfecting a way to host the Internet's content purely on green power.

Plans for a massive expansion of clean energy in California are being jeopardized by federal foot-dragging, according to state officials who say that more than 20 nearly shovel-ready solar and wind projects are being held up by the U.S. Department of Energy.

Matt Simmons, author of Twilight in the Desert, has long been one of the most famous and influential voices on the subject of peak oil. After the release of his book, Simmons rose to fame as Saudi Arabian oil production declined and global oil prices skyrocketed.

However, Simmons has lately been making hyperbolic claims related to the deepwater spill in the Gulf of Mexico. Based on the scenarios Simmons has outlined, he argues for responses such as using a nuclear explosion to seal the well and evacuating 20 million people from the Gulf Coast. Extraordinary responses such as these would impact a great many people, so The Oil Drum staff felt that a critical look at some of Simmons? claims was in order.

Note: This essay is a compilation of work from multiple Oil Drum staff members, particularly JoulesBurn, aeberman, Euan Mearns, and Robert Rapier.

1. The real leak is seven miles away.

Simmons first suggested this in an interview with MSNBC?s Dylan Ratigan on May 26th, 2010. In response to a question about a second leak, Simmons replied that there was reportedly a lot of oil six miles away, and said ?I think that?s where the wellhead is.? He also mentioned that he had been telling government officials that. In a later interview on June 7, 2010, Simmons made the following claim:

I would think by the end of the week we will discover that we have an open hole with no casing in it which [inaudible] about seven miles away from where BP had been trying to fix these little tiny leaks in the drilling riser. I bet we'll find the drilling riser is still connected to the rig bore, and so they've done everything wrong.

Source: May 26th on MSNBC, June 7 on MSNBC

Response

Simmons apparently came to this conclusion because the leak from the end of the severed riser seemed to him too small to account for the large and growing oil slick on the surface of the Gulf of Mexico. This, coupled with reports that a NOAA ship, the Thomas Jefferson, identified possible oil plumes beneath the waters 5-10 miles away, led him to conclude that this new location was where the real spill, and the original well, lie. That BP and the US Coast Guard continued to maintain that the blowout preventer (BOP) was still intact atop the original wellbore, and then proceeded to stem the flow of oil with a series of efforts, suggested to him a massive coverup.

Although it is difficult to prove that a ruse this elaborate has not been staged on the seafloor, there is clear evidence that the assemblage of ships involved in the spill response has been positioned around the Macondo-252 well location specified in the original well plan submitted to the Minerals Management Service (MMS) by BP. DigitalGlobe, a satellite imagery provider for Google Earth, has made available georeferenced photographs taken on May 24, when oil collection operations were underway. Using data from the above sources, the pictures below can be constructed showing the positions of interest on the BP well plan and the satellite image.

Figure 1. Satellite photograph (DigitalGlobe) showing relief well rigs and oil containment ships operating on May 24, 2010. Location of MC-252 well on photo ascertained using coordinates from DigitalGlobe measurements and the Macondo well plan and drilling authorization submitted to MMS by BP.

Figure 2. Map from BP well plan with ship positions (as per DigitalGlobe measurements) indicated. Well "A" is consistent with the Macondo drilling authorization.

If you go to the MMS Gulf of Mexico Region web site, you can find information showing that the original well and the relief well are in the locations where activity has recently been taking place, by looking up information using 'Fast Facts', 'Application for Permit to Drill' (APD), 'Bottom Lease', and 'G32306'. A reader made this screenshot showing the coordinates of the wells and sidetracks planned. Coordinates for blowout well match well "A" on the initial Macondo well plan.

Finally, it can be shown that the burning rig was located where the MC-252 well plan indicated (and where the relief well rigs, etc. have been operating).

Figure 3. Satellite photo taken while the Transocean Deepwater Horizon was on fire, geo-referenced using Google Earth. MC-252 location from the Macondo well plan. 7 mile horizontal line added (to left of well) for distance reference. (click on image for larger version)

The alleged relocation of the BOP and riser several miles from an explosively uncased well, besides being inconsistent with well documented coordinates for the well, presents several logistical problems. Foremost, the BOP was initially still attached to part of the riser. Thus, this ungainly pair would have to been launched from the well several miles until it lodged in the mud on the Gulf floor, in the correct orientation. If the riser was still attached to the Deepwater Horizon, as Simmons also suggested, this stretches credulity even further.

In short, there is no evidence that the well recently capped by BP is not the original Macondo well, or that the original well is still flowing with no casing.

2. Oil is flowing at 120,000 barrels/day

Simmons has stated on a number of occasions that he estimates that oil from the blowout is flowing into the Gulf of Mexico at a rate of 100,000 to 150,000 barrels per day. From a talk at Camden, New Jersey on July 15th:

Simmons described the real blowout as an open hole gushing 120,000 barrels of toxic crude every day below the surface of the Gulf six or seven miles away from the riser. And BP is ignoring it, he said.

"What you are seeing on television, what BP is saying about relief wells . . . that's a total ruse," said Simmons.

Source: Simmons' Take on the Oil Spill in the Gulf

Response

This figure appears to be a guess based on an estimated reservoir pressure of 40-50 thousand psi, which itself is a guess based on the intensity of the surface fire before the rig sank.

Oil Drum contributor Arthur Berman (aeberman) has compiled data from the MMS that summarizes all Outer Continental Shelf (OCS) well maximum flow rates. The spreadsheet can be accessed here. The data show that the average well in the OCS had a maximum flow rate of 11,800 barrels per day (bpd) and the maximum flow of any well was 46,500 bpd. Thus, the flow rates Simmons postulates are far beyond any well seen to date in the OCS.

It should be noted, though, that the flow in these wells is typically constrained so as to prevent damage to the wellbore. Indeed, the flow from MC-252 (the one seen on the ROV videos) is likely constrained within the BOP and possibly in the wellbore. Given this, it is possible that an uncased well (if it existed) would support this high flow rate if the reservoir pressure was as high as Simmons suggests. However, Macondo reservoir pressures of 40-50 thousand pounds per square inch are not supported by any data.

Source: June 7 on MSNBC

3. The real spill has caused a lake of oil larger than Washington state.

In the talk at Camden, New Jersey, Simmons claimed that BP was intentionally misleading the public and the government about the extent of the spill and that it would take a heavy toll in human lives:

That submerged lake of oil has grown larger than the size of Washington state and is approximately 500 feet thick, according to Simmons' estimate.

"It's thick oil, flowing like lava . . . covering a large part of the Gulf of Mexico and taking the oxygen out," said Simmons. When it mixes with the upper layer, the toxicity will be released, and when it comes ashore Simmons predicts it will take a heavy toll in human lives.

Response

The area of Washington state is 71,303 square miles. If the lake is 500 feet thick, this would imply 177 trillion barrels of oil in the lake, vs. 2-4 trillion barrels estimated total reserves plus production to date for the world.

Also, claims of a quantity of oil this large are not consistent with Simmons' claim of 120,000 barrels/day from the "real" well bore. For example, at this flow rate for 90 days, a spill the size of WA would only be 10 microns thick (.01 mm).

Finally, the lake of oil defies the laws of physics by staying on the sea floor and not rising to the surface of the Gulf of Mexico, because most of this type of oil is lighter than water, so would be expected to rise.

4. Methane is lethal and toxic.

In an interview on NPR on July 15th, Simmons made the following claims:

It?s this toxic waste and crude and it?s releasing methane gases that are absolutely lethal which is why all the fish and dolphins and sharks and whales are dying. And workers too, which is why so many have gotten sick, or maybe really sick.

?The health problems are so serious,? Simmons said. ?When you inhale methane you just die.?

Source: They?re still lying about the oil disaster

Response

There are many natural sources of methane in the environment, including belching cattle and decomposing organic matter?. Many of us use natural gas - mostly methane - to heat our homes. All of us inhale methane every day. While methane is clearly flammable and it is a potent greenhouse gas, it is completely non-toxic. Methane, like the nitrogen that makes up 78% of the earth?s atmosphere, is a simple asphyxiant. What that means is that it could kill you by displacing oxygen, but methane itself is non-toxic (unlike carbon monoxide, for example).

In the same interview, Simmons discussed the toxicity of hydrogen sulfide gas, which is often present in petroleum reservoirs (although not significantly in Macondo). He noted that low-level concentrations can be fatal, and that workers are trained to put gas masks on quickly if monitors detect its presence. He then states that methane is more toxic than hydrogen sulfide. As per above, this is completely erroneous; hydrogen sulfide is highly toxic while methane is non-toxic.

Reference: Material Data Safety Sheet for Methane

5. Use of a small bore nuclear device is the ?only option? to stop the flow of oil.

In an interview on Bloomberg Television on July 21st, Simmons repeated his accusation that BP was lying about the extent of the disaster, and called it "the biggest environmental cover-up ever." He further stated that "we have killed the Gulf of Mexico", that clean-up costs, if clean-up were even feasible, would top $1 trillion, and that "if they (BP) told the truth, they would all go to jail."

Simmons had stated previously that a small nuclear device was the only option to seal the leak. In this interview, one of the reporters indicated that reports were coming in that the oil was no longer leaking and asked if that gave Simmons hope. Simmons replied:

?No, because that?s not the gusher. That was a little bit of condensation that would have ended anyways. There?s no way to fix the gusher because there?s no casing left in the hole other than doing a small diameter nuclear bomb...It's the only way. With no casing left in the hole, the odds of the relief well working are zero."

Source: July 21, Bloomberg TV

Response

It is certainly surprising that the guy worried about toxic methane clouds isn't worried about a nuclear explosion in the Gulf of Mexico. But Simmons is not only advocating this position as "the only solution", he is telling government officials that this is the course of action that should be pursued.

The basis for his position is built upon his notion that there is a massive open hole spewing oil into the Gulf of Mexico miles from where BP is pulling off a massive scam. Per Point 1 there is no evidence to support the existence of this hole that Simmons believes will take a nuclear explosion to cap.

As previously discussed here at TOD, the Soviets did in fact use nukes successfully for gas well fires. The differences between the situations then and now were 1). The leaks were onshore; 2). The leaks were gas; 3). These were actual leaks that needed to be sealed that had resisted other efforts.

Given that there is no evidence of this massive gusher -- and even if it did exist, the idea of using a nuclear explosion at those depths and under those conditions is fraught with uncertainties -- this is not a reasonable option for dealing with the spill. Further, evidence continues to mount that the leak has been slowed or perhaps stopped.

Conclusion

Those who suggest that Simmons might be right, based on some new information that arises or some misinformation supplied by BP, should identify which parts of his story are right: the gravity-defying lake of oil? Flying BOPs? Methane death clouds?

In addition, for those who ask the question "what if Simmons is right?", the answer would be that all textbooks on basic physics, chemistry, and toxicology would have to be rewritten to handle the discrepancies between what is currently believed vs. what Simmons suggests has occurred.

In conclusion, the claims made by Simmons and documented in this essay are not credible. Some - such as the idea that methane is toxic - are factual errors. Other claims, such as an open gusher that BP is covering up, defy logic. How Simmons will respond if no evidence of his claims emerges remains to be seen.

Admiral Allen held a press conference in the Gulf region (rather than recent ones held in Washington), in which he noted that the news of the rapid disappearance of the oil already emitted by the Deepwater well is raising questions as to how long to retain the different parts of the fleet assembled to deal with it. Well pressure continues to slowly build, and there are no signs that the well integrity has been breached. The problem of the skimmer fleet, and the distributed lengths of boom are non-trivial. Should a hurricane appear then the oil-contaminated boom segments can become polluting sources themselves if they are carried inland. And so they must be collected, cleaned and stored, if there is no longer a need. (Or if they are too contaminated they may need to be disposed of as hazardous waste).

The Admiral also discussed the continuing developments with both the top static kill, (waiting on the cementing of the relief well) and the progress of the relief well itself. The packer sealing the well has been released and recovered, and the well is now being cleaned, before operations restart.

They removed the subsea containment device—which they call a packer—that was put in to protect the well while they evacuated the site before of the severe weather.

After that (was) done, they will run another drill string clear to the bottom of the relief well, and then they're going to flush the entire wellbore out to make sure there's no particles or anything—sediment from the formation. When that is done, they will be ready then to put the casing pipe in. The casing pipe is the last structural member that will go into the relief well and cement that in place.

Once that is done, that will be the cue to start the static or the top kill we've talked about, which will happen next week. Following that—then we'll be in a position, once the cement dries, to go ahead and drill into the annulus and begin the bottom kill sequence of events as I've briefed before.

Note that once the relief well (RW) is cased and cemented, then it is not necessary to have the cement harden before doing the static kill, though it will be necessary for the relief well operation to complete.

In the latter case, since the cemented casing will act as a springboard to allow the drill to advance the last one hundred feet to meet the 7-inch casing of the original well, accuracy in positioning is still critical to success. The RW is planned to run alongside the original well, slowly chewing through the original cement annulus and finding out whether that is the source of the oil, or whether its integrity is still sound. (And with lots of opinions there is yet little real data on which to give a definitive answer.)

In regard to the static kill, he answered a question on the chances of success by noting

One of the things that, as you know, has been a subject of a lot of controversy or discussion, I would say—maybe not controversy, but discussion, spirited discussion among the science team, BP engineers, and so forth—is why the pressure was so low when we capped the well itself, down in the 6,000 range.

The competing theories from that are we have depletion in the reservoir that caused the pressure to be lower or there could potentially be a leak down there.

One of the things we're going to find out when we start to put the mud in for the static kill—if there's a precipitous drop in pressure, we'll know we have a well integrity issue at that point. If there is not, and we fill that well with mud right away, and it holds pressure, I think we'll know a lot more about the condition of the well.

One of the big concerns with injecting fluid into the well lies with the strength of the rocks in the bottom of the existing well. There is some concern that if the mud injected into the well is too heavy, then it can raise the pressure in the bottom of the hole to the point that the surrounding rock fractures. At this point the build-up of pressure in the well is relieved, as the fluid can now flow into the crack generated (and there is the precipitate drop in pressure that the Admiral refers to). That (because the rest of the well is lined with a cement and steel jacket or casing) is most likely to occur in the lowest section of the well, where it was not lined with both steel and cement, but rather a full-well-length steel tube (the production casing) was cemented into place, with cement only at the bottom of the well. Further the oil bearing rock tends to be weaker than the rest.

It is thus down around the zone of the producing rock that this fracture and leakage – the loss in well integrity – is likely to occur. And it is that zone that will be penetrated by the relief well. Thus if there are problems that arise during the static kill from the top of the well, then they will likely be remediated by the following arrival of the relief well in the critical region.

Now I think there may be another complexity (and in reality there are many in this process) and that relates to the possible injection of cement at the end of the static kill as a way of sealing the well. My concern is that while the static kill will displace oil and gas in the well by pushing them back into the formation, from which they earlier escaped, that is not true with the mud. The oil and gas, having flowed out of the rock with the differential pressure having the well pressure lower, can flow back, when the well pressure is higher. Mud on the other hand, bear in mind, is designed in part to line the well and provide an impermeable liner to the well during drilling. Thus to inject cement with the intent of driving some of the mud that the cement displaces into the formation may require higher pressures that with the oil and gas. This may, in turn, bring the well pressure above that at which the formation fractures. It is for reasons such as this that I expect the process to be carried out somewhat slowly, and in stages, rather than as a sudden “magical” flourish to end the crisis.

Hagens: U.S. addicted to energy, debt

In spite of what you might have heard, the planet may never run out of oil.

Fat lot of good that'll do when it takes a barrel's worth of energy to get a barrel of oil out of the ground.

And we've long since used all of the easy-to-extract oil, says Nate Hagens, speaking Tuesday night at Kansas Wesleyan University on how communities can learn to adapt to declining resources, energy included.

Hagens is a former vice president for both Lehman Bros. and Salomon Bros. investment firms but quit that career several years ago and last week completed his Ph.D. in natural resources studies at the University of Vermont.

Until recently, he was also editor of theoildrum.com, a website dealing with global energy supply.

Hagen pulls from those areas, and others, such as evolutionary biology, to explain why America and other developed nations are addicted to both energy and debt, and how those addictions work against our long-term good.

John Michael Greer: The cybernetics of black knights

Let?s start with a few basics. Information is the third element of the triad of fundamental principles that flow through whole systems of every kind, and thus need to be understood to build viable appropriate tech systems. We have at least one huge advantage in understanding information that people a century ago didn?t have: a science of information flow in whole systems, variously called cybernetics and systems theory, that was one of the great intellectual adventures of the twentieth century and deserves much more attention than most people give it these days.

Unfortunately we also have at least one huge disadvantage in understanding information that people a century ago didn?t have, either. The practical achievements of cybernetics, especially but not only in the field of computer science, have given rise to attitudes toward information in popular culture that impose bizarre distortions on the way most people nowadays approach the subject. You can see these attitudes in an extreme form in the notion, common in some avant-garde circles, that since the amount of information available to industrial civilization is supposedly increasing at an exponential rate, and exponential curves approach infinity asymptotically in a finite time, then at some point not too far in the future, industrial humanity will know everything and achieve something like omnipotence.

Richard Heinberg: Beyond the limits to growth

In any case, the underlying premise of the book is irrefutable:

At some point in time, humanity?s ever-increasing resource consumption will meet the very real limits of a planet with finite natural resources. We the co-authors of The Post Carbon Reader believe that this time has come.

Spill marks turning point for offshore oil, not demise

With the Macondo well corked for now and perhaps days away from a permanent seal, the momentum for offshore work may be returning.

Companies are starting to adapt to the new shallow-water rules, with Houston's Apache obtaining a new drilling permit this month.

And four oil majors have banded together to create an oil spill response company that aims to address the industry shortcomings that were brought to light by the Macondo spill.

"Painfully, we learned how significantly the actions of one company could influence a huge swath of the Gulf Coast economy," said Dan Pickering, head of research at the energy investment firm Tudor Pickering Holt & Co.

Anger over the spill hasn't translated into legislative gains for fossil fuel foes.

Oil Industry Rethinks Cost, Risk Of Drilling In U.S.

The BP spill in the Gulf of Mexico is bound to have repercussions for the oil industry and America's energy future, but experts say it could be a while before they are all sorted out ? and the final consequences could prove surprising.

The Risks of Deep Water Drilling

The Deepwater Horizon disaster serves as a tragic reminder of oil?s shortcomings.

In particular, it shows how the industry is trying to operate in very tricky conditions when it comes to deep water drilling. As oil executives say, at such depths, the seabed is as remote as the moon. And it has the added threat of much higher pressures.

Yet for all the hazards, production won?t move back towards shore anytime soon.

Shell could pursue BP for gulf damages

Shell today refused to rule out pursuing damages claims against BP and other companies involved in the Gulf of Mexico disaster.

The company took a $56m (£36m) hit after it was forced to stand down seven rigs and platforms because of the moratorium on drilling in the US imposed in the wake of the disaster.

Why Robert Dudley's BP Could Be Even Riskier

The embattled oil giant's first American CEO embraces a high-risk survival plan.

Florida bets on Feinberg

DESTIN, Fla. (CNNMoney.com) -- Business owners in Florida believe Kenneth Feinberg will manage the $20 billion oil spill claims fund fairly and efficiently, but because of the complicated nature of their claims, they're anxious about how much they'll get paid.

On the 100th day since the oil started spewing, Feinberg spoke to a jam packed crowd of business owners and industry leaders in Destin, Fla.

Mexico's exploratory drilling at record low

Mexico's state-owned Pemex has this year drilled the fewest wells in search of new crude and natural gas reservoirs since 2001, raising doubts over its drive to sustain production as major fields age.

Nigeria oil reserves drop by 4.79%

Crude reserves in Nigeria have dropped by 4.79% to 31.81 billion barrels over the past year because companies refuse to undertake exploration, a senior industry official said.

Michigan oil cleanup 'inadequate': governor

Michigan Gov. Jennifer Granholm says the cleanup so far has been "wholly inadequate" and warns of a tragedy if the oil reaches Lake Michigan ? and local residents are also expressing concern.

Greenpeace protest against Enbridge pipeline ends with four arrests

Four Greenpeace activists have been charged after protesters occupied the downtown Vancouver office of Enbridge and demanded the company halt plans to build a pipeline from Alberta to B.C.

Canadian oil sands profits jump amid green battle

CALGARY, Alberta (Reuters) - Two of Canada's biggest oil sands companies posted higher profits on Thursday on strengthening oil prices, as controversy builds over the environmental costs of tapping North America's biggest crude reserves.

Alberta gas shortage spreads to B.C.

A gasoline shortage at some Shell stations has spread from Alberta to southeastern B.C.

Shell said it doesn't know how many service stations have run dry, nor how long it will take to get fuel to them.

Mexico's Pemex posts Q2 20.1 bln peso loss on FX

(Reuters) - Mexico's state oil monopoly Pemex posted a quarterly loss on Wednesday, hit by foreign exchange losses on its U.S. dollar-denominated debt and domestic price controls for fuel sales.

Shipping goods from Asia more costly

The cost of shipping consumer goods from Asia to Canada is surging, with another price increase kicking in Sunday, as freight forwarders face a shortage of containers this summer and fall.

?This is traditionally the peak season for imports coming from China to Canada,? said Perry Lo, president of Canaan Transport Group Inc., a freight forwarding firm based in Mississauga, Ont. ?And now we face a huge price hike.?

TransCanada profit down, hurt by nuclear business

CALGARY, Alberta (Reuters) - Pipeline and power company TransCanada Corp reported a 9.2 percent drop in quarterly profit on Thursday, hit by hedging losses as well as lower power prices and higher costs at its partly owned Ontario nuclear plants.

Is Outgoing Colombian President Riling Venezuela?

In Sunday's bombastic speech, Chavez told his countrymen war was imminent ? and that it was the Yankee empire orchestrating the coming bloodbath. If an attack came, Chavez said, he would shut off the oil spigot to the United States ? even if that meant Venezuelans would be forced to eat rocks.

This has been a regular threat over the years, and it plays well to Chavez's most radical followers.

But Chavez's latest diatribe comes at a particularly delicate time. Last week, in a special emergency session of the Organization of American States, the Colombian ambassador to that body, Luis Alfonso Hoyos, detailed how Venezuela allegedly aided and abetted Marxist rebels who have been fighting Colombia since the 1960s.

The black gold paradox

BANGLADESH that has been facing severe energy crunch, continues still to be indecisive about the use of one of the cheapest energy source, coal. Despite having a substantial reserve of the mineral, successive governments have failed to finalise a coal policy determining the methods of its extraction. The draft coal policy has been revised again and again in the light of recommendations of the experts but the final policy resolving the contentious issues involving the method/s of mining is yet to emerge.

The dispute over methods of mining in a country where coal mines are located in heavily populated areas is nothing surprising. The old method of coal mining, making tunnels underground, does not cause any major displacement of population or destroy forests and other infrastructures. But very marginal exploitation of coal reserves, estimated at 20 per cent of the entire reserve, is considered to be uneconomic. The other method, the open-pit mining ensures the full exploitation of the reserve. But it entails an enormous sacrifice in terms of loss of land and property and damage to environment, flora and fauna.

Front Yard Wind Power Plan Irks SF Neighbors

"I am pro wind and pro solar but I don't think this kind of thing belongs in a dense urban setting. I don't," said neighbor Lucile Taber. "If it were to fall it would fall directly to the home over there, another concern is the noise, there is flicker problems with it."

Hawaii utility proposes electric car charging deal

Hawaiian Electric Co. is proposing a plan to make it cheaper for early adopters of electric vehicles to charge up.

Palm oil giant accused of rainforest destruction caught ?red-handed?

A major supplier of palm oil and pulp (paper) to multinationals, including food giant Cargill, has been caught clearing orang-utan habitats and carbon-rich peatlands.

Alaska Airlines cuts emissions with smoother landings

Smoother airplane landings are not only easier on passengers but also on the environment as they reduce greenhouse gas emissions, according to new test results by Alaska Airlines.

The Seductions Of Clicking: How The Internet Can Make It Harder To Act

Our online networks build on what sociologist Mark Granovetter called "the strength of weak ties." Older forms of community built on distinct local networks where people knew each other face-to-face, but where reaching out beyond those they saw day-to-day was harder. Our new tools make it easy to maintain far looser networks that we can continue to easily nurture. As Gideon Rosenblatt of the environmental group Groundwire points out, "these networks of weak ties can be put into action on a moment's notice, enabling online social change efforts to go viral at a speed and on a scale never previously possible." We take for granted our ability to link overlapping circles of friends and acquaintances in a manner until recently inconceivable.

Iran?s top oil customer buys less

China?s imports of Iranian crude oil fell by almost a third in the first half of the year, new figures showed this week.

Volumes have decreased just as new US and European sanctions threaten to disrupt energy ties between the two countries, experts say.

Iran shipped just over 9 million barrels of oil to China to the end of last month, making it China?s third-largest crude supplier, according to fresh Chinese customs data. That was down from 13.1 million barrels in the first half of last year, even as Chinese imports from Angola, Saudi Arabia and other major exporters rose significantly.

Oil Declines on Rising U.S. Crude Inventories as OPEC Production Increase

Crude oil dropped for a third day in New York on speculation the economic recovery is not proceeding fast enough to rein in excessive fuel supplies.

The Organization of Petroleum Exporting Countries? oil output increased for the third time in four months in July, led by gains in Iraq, a Bloomberg News survey showed. Futures yesterday declined to a one-week low after U.S. crude imports jumped to the highest level in almost four years, leading to an unexpected increase in commercially held inventories.

OPEC meets only half July oil output curbs -survey

LONDON (Reuters) - OPEC is meeting only half its promised cuts in oil supply this month thanks to a big jump in exports from Nigeria and despite a smaller decline in production in Angola, a Reuters survey showed on Thursday.

Supply from the 11 members of the Organization of the Petroleum Exporting Countries with output targets, all except Iraq, has averaged 26.95 million barrels per day (bpd) this month, up from 26.75 million bpd in June, according to the survey of oil firms, OPEC officials and analysts.

Asia-Pacific crude-Sept Tapis climbs on gas oil strength

(Reuters) - Prices of Malaysian Tapis crude climbed on Thursday reflecting market-wide support for distillate-rich grades in Asia-Pacific.

Exxon Mobil's earnings more than double

NEW YORK ? Exxon Mobil Corp. said Thursday its second quarter income nearly doubled to $7.56 billion as oil prices increased from last year.

It's Exxon's highest quarterly profit since the $7.82 billion earned in the last three months of 2008. But it's still well below the record-setting third-quarter profit of that year, when Exxon earned $14.83 billion after oil prices spiked to near $150 per barrel in the summer.

Shell defends deep-water drilling as profits soar

Royal Dutch Shell posted soaring profits on Thursday and defended deep-water oil production, saying it has an "important role" to play despite the US Gulf of Mexico disaster that rocked rival BP.

The Anglo-Dutch oil giant reported a 15-percent jump in net profit to 4.39 billion US dollars (3.38 billion euros) in the second quarter, as it slashed costs and raised output.

Its performance contrasts markedly with that of embattled BP, which on Tuesday posted a second-quarter loss of 16.9 billion US dollars in the wake of the devastating Gulf of Mexico oil spill.

Natural-Gas Squeeze Prompts Switch of Fuel in Middle East

Persian Gulf petrochemical producers are turning to naphtha as a feedstock for the first time amid growing power-plant demand for natural gas.

Abu Dhabi plans to build the Middle East?s first plant that will only use naphtha to make plastics. Saudi Arabia may develop similar units as part of two refinery ventures, according to state-run Saudi Aramco, France?s Total SA and Sumitomo Chemical Co. of Japan, the partners in the projects.

While naphtha, a product of refining crude oil, is used to make petrochemicals around the world, countries in the Middle East have traditionally preferred cheaper home-produced natural gas. Now, new power plants are competing for those gas supplies, stoking demand for alternatives. That?s being exacerbated as the United Arab Emirates and Saudi Arabia expand petrochemicals production to cut dependence on crude exports.

Mystery of Japanese tanker damage probed

An investigation has been launched into the unexplained damage suffered by a Japanese oil tanker in the Strait of Hormuz near Oman.

The M Star was damaged on Wednesday while travelling from Qatar to Japan.

Port officials in Fujairah in the United Arab Emirates say the ship was involved in a collision. However, the boat's owners Mitsui OSK believe their vessel may have been attacked.

Early reports that the ship was struck by a freak wave have been dismissed.

North China gas well fire burning for nearly week: Xinhua

BEIJING (Reuters) ? A natural gas well operated by Shaanxi Yanchang Petroleum Group has been burning for nearly a week since drilling in the well caused gas to leak out and explode, Xinhua reported on Thursday.

No casualties have been reported. Villagers near the well were evacuated shortly after the accident, Xinhua cited a local county official as saying.

Crews work to cap new La. oil leak near Gulf

NEW ORLEANS ? Oil, natural gas and water are still spewing from an abandoned well hit by a barge on a Louisiana waterway near the Gulf of Mexico.

Coast Guard Capt. John Arenstam says a wild well company is working on a plan to shut down the well, which is north of Barataria Bay and has been leaking since early Tuesday.

BP aims for quick well kill

HOUSTON/MIAMI (Reuters) ? BP may permanently shut the well that caused the worst off-shore oil spill in U.S. history as early as Monday, the company said as speculation grew over assets it might sell to cover mounting costs.

Incoming BP chief executive, Bob Dudley, said on Wednesday the company would stay involved with the cleanup process in the Gulf of Mexico long after the leaking well was plugged and expressed optimism the damaged environment would recover.

"It is possible that as early as Monday or Tuesday this well might be killed," Dudley said on National Public Radio.

BP's Dudley Targets Riskiest Deepwater Drilling After $32 Billion Blowout

Robert Dudley, the man charged with rebuilding the reputation of BP Plc after the disastrous oil spill in the Gulf of Mexico, will slim the company to its core strength: the high-risk, high-return search for oil and gas in demanding environments.

That suggests Dudley, who becomes the first American chief executive officer of the British oil giant on Oct. 1, will follow the same strategy that led to the Gulf spill and turned outgoing CEO Tony Hayward into a pariah, Bloomberg Businessweek reports in its Aug. 2 issue.

HSBC tapped to sell BP's stake in Vietnam gas project

HONG KONG/LONDON (Reuters) ? BP has tapped HSBC to sell its stake in the Nam Con Son gas project in Vietnam, as it scrambles to hive off $30 billion of assets to pay for the clean-up of the worst oil spill in U.S. history, three sources said.

The British oil giant, which is on a campaign to sell a host of assets from Pakistan to Egypt, said last week it is seeking a buyer for its stake in the Nam Con Son gas project offshore southern Ho Chi Minh City, worth $966 million by one estimate.

BP May Sell Venezuela Oil Stakes to Russian TNK-BP Venture

BP Plc has told Venezuela?s state oil company it?s interested in selling stakes in three projects to its Russian venture, TNK-BP Holding, Petroleos de Venezuela SA Vice President Eulogio del Pino said.

Barring BP From Drilling Would Cost Jobs in U.S., Company Tells Congress

BP Plc objected to proposed legislation that would bar the oil company from operating new drilling leases in U.S. waters, saying it could trigger job losses and threaten the nation?s energy security.

A provision of the House bill may have a ?drastic impact,? David Nagel, executive vice president of BP America, said in a July 28 letter to Democratic Speaker Nancy Pelosi of California and Republican Minority Leader John Boehner of Ohio.

First lawsuits linked to Gulf spill go to court

WASHINGTON (AFP) ? The first lawsuits linked to the Gulf of Mexico oil spill go to court Thursday, as BP prepared -- after months of trying -- to permanently seal its ruptured well.

As the Gulf of Mexico disaster this week reached the 100-day mark with hopes high that the endgame may be under way, families of those killed in the rig explosion that sparked the disaster, and fishermen who lost their livelihoods because of it, were to face BP in court for the first time.

BP Said Negligence May Be Found in Cause of Oil Spill, Texas Letter Shows

A BP Plc lawyer said evidence would show that an April explosion and oil spill in the Gulf of Mexico were the result of gross negligence, Texas officials said in a letter that didn?t say who committed the alleged negligence.

Governor Rick Perry and Attorney General Greg Abbott said in the July 22 letter that BP didn?t attempt to take advantage of a cap on damages under the Oil Pollution Act because gross negligence would make that irrelevant. The letter was addressed to Doug Suttles, chief operating officer for exploration and production, and Jack Lynch, a general counsel.

News Cycle Turns in BP?s Favor

The answer is boringly simple?BP capped the well, oil stopped flowing into the Gulf, beaches and fisheries reopened, the TV cameras moved on to the next sensation and the doom mongers that didn?t have the sense to pack up and leave too were left looking a little silly. Indeed, Matt Simmons retired as Chairman Emeritus of Simmons & Co.

Just as new shoots of grass are sprouting on once-oiled marshes, the facts are beginning to thrive now that the flood of hype has receded.

Gulf spill raises long-term beach safety questions

MIAMI (Reuters) ? It could be years before some Gulf of Mexico beaches recover fully from BP Plc's massive oil spill and are declared free of toxic pollutants, including heavy metals, that can make people sick, a leading environmental advocacy group said on Wednesday.

Feds, farmers create habitats for migrating birds

MAMOU, La. ? Water gurgling from a well is flooding Craig Gautreaux's rice and crawfish fields, turning the farm into a wetland for migratory birds whose usual Gulf of Mexico wintering grounds are threatened by the oil spill.

Across eight states, farmers such as Gautreaux are inundating fallow fields to provide an alternative for some of the tens of millions of ducks, geese and shorebirds that are beginning to make their way south on a flyway that stretches as far north as Alaska and Iceland.

BP Disaster Regnites California?s Anti-Drilling Fervor

What a difference an oil spill makes. Californians, whose dislike of offshore drilling dates back to the Santa Barbara spill of 1969, had begun to see virtue in new sources of oil as gasoline prices soared in 2008, polls showed.

That year, for the first time since 2000, when the first poll of the state?s environmental attitudes was taken by the Public Policy Institute of California, a majority ? albeit a bare one, 51 percent ? was willing to allow more drilling off the California coast. The majority was about the same in 2009, and opposition dwindled to 43 percent.

The latest poll, however, shows the opposition snapping back after the offshore oil disaster in the Gulf of Mexico. In the institute?s survey this month of 2,502 Californians, 57 percent opposed new offshore drilling; the proportion supporting drilling dropped to 36 percent, down 15 percentage points from 2009 levels.

Analysis: BP spill seeps into Norway's Arctic drilling debate

(Reuters) - Norway's decades-old political consensus on offshore drilling is under attack in the wake of the BP oil spill, just as it covets new riches in the Arctic.

The powerful oil industry says it needs to tap resources off the Arctic archipelagoes of Lofoten and Vesteraalen and in a huge, recently demarcated Barents Sea border region with Russia to continue Norway's oil boom amid dwindling North Sea output.

But, emboldened by the Gulf of Mexico well blowout, Norwegian environmentalists seek to grab the upper hand in a battle they feel they have long been loosing.

Senate energy bill draws widespread criticism

WASHINGTON (Reuters) ? Republicans and some moderate Democrats in the Senate on Wednesday began picking apart a new energy bill that they complained goes too far in holding oil companies responsible for accidents like the massive Gulf of Mexico spill.

"I think people who are very serious about responding to the spill in the Gulf should be offended by what has been presented" this week by Senate Democratic Leader Harry Reid, said Republican Senator Lisa Murkowski.

Local food trend helps more folks eat fresh fruits, veggies

The "local" movement ? buying and eating food produced locally rather than shipped from thousands of miles away ? has been gaining steam with the steady growth of farmers markets and a phenomenon called community-supported agriculture. CSA members purchase shares of a farmer's crop for the season. The government doesn't track the numbers, but Local Harvest, a nationwide directory of small farms, farmers markets and other local food sources, estimates that tens of thousands of American families belong to CSAs, and supply trails demand. The number registered with Local Harvest alone indicates how quickly CSAs have multiplied over the past decade: The directory's listing has increased from 374 farms in 2000 to 3,660 today.

BANGLADESH: Spreading the floating farms? tradition

CHANDRA (IRIN) - As swollen monsoon rivers and rising sea levels threaten to engulf more land across Bangladesh, NGOs are training thousands of farmers in traditional soil-less farming on water.

Transition model making headway in North County

Tina Clark, one of 21 trainers for Transition United States, spoke on July 7 about the Transition model, which is used around the world to help communities prepare for the social and economic changes that will occur as global oil supplies and other natural resources decline in the next century.

Clark told the group of 31 who attended the meeting about how each of us in our own way can help our communities prepare for a world without many of the luxuries that cheaply produced oil makes possible and at the same time replace them with meaningful alternatives.

A Push for Action on Renewables

With a cap on carbon dioxide an apparent nonstarter in the Senate these days, some clean energy and climate advocates have shifted their sights to a scaled-back but still ambitious goal: passage of a national renewable electricity standard.

Such a law would require utility companies to produce a set amount of electricity from renewable sources by a certain date, spurring the development of clean sources like wind and solar and probably lowering overall emissions nationally. Perhaps most important, some argue that with a strong push by the president, such a measure could actually clear the high bar for passage of 60 votes in the Senate this fall.

Why is our electrical system resisting open source?

A new research report from GigaOm asks an intriguing question.

Why is the smart grid resisting open source?

Canadian researchers hope to green the web, make Canada the world's web server

Canadian researchers hope to stem the global IT industry's rampant output of greenhouse gas emissions by perfecting a way to host the Internet's content purely on green power.

And if their experiment succeeds, Canada could essentially become the world's largest Internet server ? powered with almost no carbon footprint ? and help reduce one of the most significant, growing sources of pollution.

Biofuel Investment in Australia `Inadequate,' Caltex CEO Julian Segal Says

Caltex Australia Ltd., the nation?s biggest oil refiner, called for increased government funding to spur biofuels development as part of an effort to curb greenhouse-gas emissions and bolster energy security.

Australia has ?inadequate funding? for biofuels, with the government devoting just $15 million to the technology, Julian Segal, chief executive officer of Caltex, said in a speech in Sydney today. The U.S. Department of Energy by contrast is investing more than $1 billion to advance the field, he said.

In China, Pollution Worsens Despite New Efforts

BEIJING ? China, the world?s most prodigious emitter of greenhouse gas, continues to suffer the downsides of unbridled economic growth despite a raft of new environmental initiatives.

The quality of air in Chinese cities is increasingly tainted by coal-burning power plants, grit from construction sites and exhaust from millions of new cars squeezing onto crowded roads, according to a government study issued this week. Other newly released figures show a jump in industrial accidents and an epidemic of pollution in waterways.

NOAA: Past Decade Warmest on Record According to Scientists in 48 Countries

The 2009 State of the Climate report released today draws on data for 10 key climate indicators that all point to the same finding: the scientific evidence that our world is warming is unmistakable. More than 300 scientists from 160 research groups in 48 countries contributed to the report, which confirms that the past decade was the warmest on record and that the Earth has been growing warmer over the last 50 years.

Recently, ASPO-USA's newsletter printed an interview (Part 1 and Part 2) with Oil Drum staff member Art Berman (aeberman). Art is a geological consultant whose specialties are subsurface petroleum geology, seismic interpretation, and database design and management. The people doing the interview are members of the "Peak Oil Review Team," abbreviated POR in the text below. This is the shale gas portion of the interview.

POR: Can you give us your latest updated perspective on the shale gas story?

Art Berman: You have to acknowledge that shale gas is a relatively new and significant contribution to North American supply. But I don’t believe it’s anywhere near the magnitude that is commonly discussed and cited in the press. There are a couple of key points here. First the reserves have been substantially overstated. In fact I think the resource number has been overstated.

If you investigate the origin of this supposed 100-year supply of natural gas…where does this come from? If you go back to the Potential Gas Committee’s [PGC] report, which is where I believe it comes from, and if you look at the magnitude of the technically recoverable resource they describe and you divide it by annual US consumption, you come up with 90 years, not 100. Some would say that’s splitting hairs, yet 10% is 10%. But if you go on and you actually read the report, they say that the probable number-I think they call it the P-2 number-is closer to 450 Tcf as opposed to roughly 1800 Tcf. What they’re saying is that if you pin this thing down where there have actually been some wells drilled that have actually produced some gas, the technically recoverable resource is closer to 450. And if you divide that by three, which is the component that is shale gas, you get about 150 Tcf and that’s about 7 year’s worth of US supply from shale. I happen to think that that’s a pretty darn realistic estimate. And remember that that’s a resource number, not a reserve number; it has nothing to do with commercial extractability. So the gross resource from shale is probably about 7 years worth of supply.

For a project that a colleague and I did for a client, I actually went in and looked at all the shale plays and assigned some kind of a resource number to them. I also used some work that was done by Wendell Medlock at Rice University’s Baker Institute. He did an absolutely brilliant job of independently determining what the size of the resource plays in Canada and the US might be.

The resource hasn’t been misrepresented but the probable component has not been properly explained as a much smaller component of the total resource; I guess they just didn’t read the PGC’s report carefully enough. If you take the proved reserves plus the report’s probable technically recoverable number, we have something like 25 years of natural gas supply in North America, which is quite a bit. It’s a lot. I don’t say any of this to give shale gas a bad name.

The other interesting thing about the PGC’s report that nobody seems to pay attention is this: they said there is something like 650 Tcf of potential shale gas. Well, there’s 1000 Tcf of something else. What’s the something else? It’s conventional reservoirs plus non-shale/non-coalbed-methane unconventional reservoirs. So there’s 70 percent more resource in better quality rocks than shale. It just astonishes me that nobody has paid any attention to that.

So that’s the simple view. And then the other thing that we see empirically is that if you look at any of these individual shale-gas plays-whether it’s the Haynesville or the Barnett or the Fayetteville-they all contract to a core area that has the potential to be commercial that is on the order of 10 to 20 percent of the geographic area that was originally represented as all being the same. So if you take the resource size that’s advertized-say for the Haynesville shale, something like 250 Tcf-and you look at the area that’s emerging as the core area, it’s less than 10 percent of the total. So is 25 Tcf a reasonable number for the Haynesville shale? Yeah, it probably is. And it’s a huge number. But the number sure is not 250 Tcf, and that’s the way all of these plays seem to be going. They remain significant. It hasn’t been proved to me yet that any of it is commercial, but they’re drilling it like mad, there’s no doubt about it.

Those are sort of the basic conclusions. And when you look at it probabilistically, which I think is the only intelligent way to look at anything which you have any uncertainty about, what you realize is that the numbers that are being represented by all of these companies as “truth” are probably like the P-5 case, having a 5 percent probability of being true. So they say, “well, our average well in the Haynesville is going to be 7 Bcf,” and I say there will certainly will be wells that make 7 Bcf but there’s no way that the average is that high. My take is that there will probably be 5 percent of wells that will make 7 Bcf.

I just think everybody is caught up in this. I have a slide where I say, you guys need to get over the love affair and get on with the relationship. You keep talking about how big it is and how great it is, but at some point you have to live together and that’s hard work. You have to be honest with yourself and with each other and you have to do some work. I just don’t think we’ve moved past the love affair.

One other important thing is the Barnett shale. We keep coming back to it because it’s the only play that has much more than 24 months worth of history. I recently grouped all the Barnett wells by their year of first production. Then I asked, of all the wells that were drilled in each one of those years, how many of them are already at or below their economic limit? It was a stunning exercise because what it showed is that 25-35% of wells drilled during 2004-2006-wells drilled during the early rush and that are on average 5 years old-are already sub-commercial. So if you take the position that we’re going to get all these great reserves because these wells are going to last 40-plus years, then you need to explain why one-third of wells drilled 4 and 5 and 6 years ago are already dead.

POR: When you say one-third of the wells are already sub-commercial, do you mean they have been shut in, or that they are part of a large pool where no one has sharpened the pencil?

Berman: Some of them never produced to begin with. No one talks about dry holes in shale plays, but there are bona fide dry holes-maybe 5 or 6 or 7 percent that are operational failures for some reason. So that’s included. There are wells that, let’s just call them inactive; they produced, and now they’re inactive, which means they are no longer producing to sales. They are effectively either shut-in or plugged. Combined, that’s probably less than 10 percent of the total wells. But then there are all the wells that are producing a preposterously low amount of gas; my cut-off is 1 million cubic feet a month, which is only 30,000 cubic feet per day. Yet those volumes, at today’s gas prices, don’t even cover your lease/operating expenses. I say that from personal experience. I work in a little tiny company that has nowhere near the overhead of Chesapeake Energy or a Devon Energy. I do all the geology and all the geophysics and there’s four or five other people, and if we’ve got a well that’s making a million a month, we’re going to plug it because we’re losing money; it’s costing us more to run it than we’re getting in revenue.

So why do they keep producing these things? Well, that’s part of the whole syndrome. It’s all about production numbers. They call these things asset plays or resource plays; that reflects where many are coming from, because they’re not profit plays. The interest is more in how big are the reserves, how much are we growing production, and that’s what the market rewards. If you’re growing production, that’s good-the market likes that. The fact that you’re growing production and creating a monstrous surplus that’s causing the price of gas to go through the floor, which makes everybody effectively lose money….apparently the market doesn’t care about that. So that’s the goal: to show that they have this huge level of production, and that production is growing.

But are you making any money? The answer to that is…no. Most of these companies are operating at 200 to 300 to 400 percent of cash flow; capital expenditures are significantly higher than their cash flows. So they’re not making money. Why the market supports those kinds of activities…we can have all sorts of philosophical discussions about it but we know that’s the way it works sometimes. And if you look at the shareholder value in some of these companies, there is either very little, none, or negative. If you take the companies’ asset values and you subtract their huge debts, many companies have negative shareholder value. So that’s the bottom line on my story. I’m not wishing that shale plays go away, I’m not against them, I’m not disputing their importance. I’m just saying that they haven’t demonstrated any sustainable value yet.

POR: How have analysts and investors responded to your studies and your viewpoints?

Berman: My biggest clients, for this kind of talk and work, are investment bankers and investment advisory companies. I gave two talks in Calgary over the last week-one to CIBC and the other to Middlefield Capital. I’ve given multiple talks to energy investment companies. They’re the people who are really paying attention to this. The answer is that a significant portion of the investment banking sector takes what I’m saying quite seriously, but what they do with that I can’t tell you.

POR: How has the gas-producing industry responded to your studies and views?

Berman: The U.S. companies have pretty much chosen to ignore me. Or they’ve made public statements that I’m a kook or I don’t understand or I’m hopelessly wrong. Some them-especially the Canadian companies for some reason-want me to advise them even though my message is not a message that they prefer.

It’s a fascinating process. My sense of it is that the level of interest, and whatever notoriety I have, has only increased. I credit the ASPO 2009 peak oil conference in Denver with really kicking that off. That presentation was a tipping point in awareness about the truth of shale gas reserves and economics. After my presentation, I had almost five hours of discussions with analysts that had attended the talk. Associated Press reporter Judith Kohler published an article -Analyst: Gas shale may be next bubble to burst? that was distributed to hundreds of outlets in the national press and that brought this topic into the mainstream. U.S. E&P executives responded with a series of ad hominem opinion editorials and earnings meeting statements that minimized the fact-based positions that were presented at the ASPO 2009 meeting.

Before that, I spent months making presentations to professional societies of geologists, geophysicists and engineers throughout the Gulf Coast. These are colleagues who do the work of the petroleum industry that gave me what amounted to a peer review. I know that there were silent people in those audiences who disagreed with me, but the overall response was supportive and enthusiastic. I also got hundreds of e-mails responding to my World Oil articles that included testimonials about companies’ experience with shale gas wells in the real world.

E&P executives don’t have any such base, nor do they know about this experience. In all of my presentations, I acknowledge people that include some of the most respected E&P CEOs, opinion leaders, and experts on oil and gas price formation, reservoir engineering, economic evaluation and risk analysis. In addition, there are also many industry analysts in research companies, financial advisory and fund management firms, and reporters in the energy press that consult and publish opinions about my position on shale gas.

The point is that I am not alone. I have a large community of supporters with impeccable credentials. I am a cautious and somewhat conservative person in my professional work because I advise clients on high-risk and very large bets on wells and investments. My reputation and future income depends on the credibility of my evaluations and the quality of my research. I do not believe that the same can be said for the CEOs of the U.S. public companies that dispute my findings.

I’m a fairly busy guy, and a lot of people want to hear the story; I talk to Bloomberg and Platts and others all the time. If anything, I feel as if I’m sort of slipping into the mainstream, in a weird way. It’s a scary thought. I’m now asked to participate in august panel discussions, albeit representing the radical fringe; but a year ago nobody even wanted to talk to me.

I don’t know where it’s going. It seems inevitable to me that it is sort of a bubble phenomenon; but bubbles can go on for 25 years or so, even though everyone knows that’s what’s happening. As long a capital markets continue to fund these things it’s going to keep on going. I’m not saying that’s even a bad thing, though I wouldn’t put any money in it, that’s for darned sure.

POR: Back in the 1960’s the phrase “too cheap to meter” was introduced, by some promoters, as being the future of nuclear energy. Over time, the reality obviously didn’t match the hype. It feels to us that there could be a parallel with the recent 100-year-supply statement…

Art Berman: It could be a big denial issue…

POR: Like that early era for atomic power, the shale gas story still seems so new that there are a lot of uncertainties about the shale gas bucking bronco, if you will. How will the industry respond to the uncertainties? How are they responding to the current tough price signals?

Berman: Not at all right now. I had a whole series of talks that I gave last spring called, “North American Natural Gas: Acknowledging the Uncertainty.” That’s all I want people to do. Not that they shouldn’t drill for it or that I’m right; all I’m saying is acknowledge the uncertainty.

A Few Related Links

Art Berman's Presentation at October 2009 ASPO-USA Meeting Shale Plays: A Time for Critical Thinking

Shale Gas Estimates Perhaps Optimistic - An Interesting and Worrying Talk at ASPO by Heading Out, October 2009

More Natural Gas Controversy by Gail the Actuary, November 2009

ExxonMobil?s Acquisition of XTO Energy: The Fallacy of the Manufacturing Model in Shale Plays by Art Berman, February 2010

This is the EIA's Natural Gas forecast from the current Annual Energy Outlook. While shale gas didn't amount to a very large percentage of production through 2008, the forecast they are using is for it to provide a large increase. Without it, US natural gas production would fall.

The work in the Gulf that is moving toward a more permanent solution to the leaking well beyond the current cap on the well is moving forward at a slow and cautionary pace. In his briefing at 2 pm Tuesday afternoon, Admiral Allen noted that the riser has now been connected between the Development Driller III and the BOP on the relief well. When that pipe is put into place it is full of seawater, and for a variety of reasons it is best that this is replaced with drilling mud of the required density before proceeding any further. (You may remember that it was the reverse of this process that led, in part, to the Deepwater Horizon disaster). Once this process was completed, then the pressure holding the packer in the well so that it sealed against the walls of the well, has been released.

This allows flow down the drill pipe in the well, and then back up through the gap between the drill pipe and the steel and concrete casing of the well that is known as the liner. This gap that the mud will flow through is known as the annulus, and mud will be pumped down the pipe and up the annulus in a process known as circulation, which, because the mud will leave the drill pipe at the bottom of the well is known as “bottoms up.” According to Mr Wells in his later brief, once everyone is sure that the well is in good condition, they will pull the packer. This will likely occur tomorrow, and once that is out of the way and the well recleaned, the final length of casing for the relief well will be run down to the bottom of the well and cemented in place.

Normally this is a job for which Halliburton would be subcontracted (as they would have been contractor for the earlier cementing of the casings higher in the well bore). However, in the brief Admiral Allen became a little coy in regard to who would actually be doing the work.

You know I don’t know off ha(n)d but we can find that out and get it to you. You know a lot of these things are done by subcontractors and there are a lot of them that are out there. And they aggregate together to do what their specialty is and we will get that and pass it to you. I just don’t know off hand.

I expect that this operation will follow much along the same lines, only the relative locations of the choke and kill lines may be relatively displaced by the changes in circuitry that happened during the oil collection phase of the effort.

There is increasingly less concern over the likelihood of there being an additional leak of oil from this well, into the Gulf, though that does not preclude other accidents from happening elsewhere. As Admiral Allen noted:

. . . the Coast Guard received a report that the uninspected towing vessel, Pere Ana C pushing the barge Captain Beauford collided with an oil and natural gas rig in the northern part of Barataria Bay south of Lafitte.

The structure itself is called C117 and that is a state owned well. We have about 6,000 feet of boom around the facility right now, there’s an over flight in progress with Admiral Paul Zukunft and Governor Jindal right now and they are assessing the issues on scene, and will be available to report updates on that later today and out of the JIC and so forth.

GE is expanding its successful Treasure Hunt program outside of its facilities in order to find energy efficiency opportunities in include hospitals, universities, city buildings and private sites through a new collaboration with the Environmental Defense Fund. The sites will learn how to conduct treasure hunts, while GE and EDF will work to verify the energy savings and identify and disseminate industry best practices.

CFOs, CIOs and sustainability teams at large companies have used spreadsheets for years to track corporate carbon emissions.  We are now, however, at a tipping point where the benefits of carbon management software outweigh the benefits of spreadsheets. 

Congress's failure to pass meaningful climate legislation won't actually affect the behavior of most businesses all that much: They have other, more persuasive reasons for pursuing energy efficiency and sustainability.

This report from Deloitte Consulting explores how sustainability professionals at 48 companies in the U.S. address green and triple-bottom-line issues.

A new report from Deloitte surveys sustainability leaders at 48 large U.S. firms to take the pulse of green business practices, and finds widely varying definitions, levels of commitment and areas of focus for firms looking to go green.