-

Notice how the energy breakthroughs are in oil and natural gas.

Exxon Mobil Corp.’s huge new oil discovery in the Gulf of Mexico is good news for domestic energy production, but it’s even better news as a sign that last year’s panic over the BP spill won’t continue to cripple American offshore oil exploration. Every so often, reality triumphs over politics.

Exxon had been ready to drill on the site last year before the Obama Administration shut down all deepwater drilling in the wake of the BP spill. The Interior Department is still issuing very few permits, only 15 for new wells since it lifted its moratorium in October, but Exxon received one of them and struck black gold at 7,000 feet below sea level and some 230 miles at sea.

That’s nearly 3,000 feet deeper than BP’s Macondo well and shows how technology and innovation have opened up oil and gas resources that were impossible to detect, much less reach and develop, only a few years ago. Exxon estimates the field contains some 700 million barrels of oil equivalent, one of the largest finds of the last decade.

The great energy irony of recent years is that governments have thrown hundreds of billions of dollars at wind, solar, ethanol and other alternative fuels, yet the major breakthroughs have taken place in the traditional oil and natural gas business. Hydraulic fracturing in shale, horizontal drilling and new seismic techniques are only the best known examples.

Private companies must innovate to survive, and they have the profit incentive to do so, while government cash is usually steered to politically favored companies that may or may not know what they’re doing. If you live off federal grants, you need to work the corridors of power more than the technology. Federal grants for cellulosic ethanol are rife with political earmarks, for example. This is why these columns have argued that the political fad of alternative energy has misallocated scarce capital when the economy can least afford it.

The risk of oil spills has not vanished. But one lesson of the BP debacle is that better management and practices could have prevented it. The Obama Administration is making it harder to obtain permits, which will eliminate all but the biggest companies from deepwater drilling and (unfortunately) raise the cost of production.

Far more important for safety is the effort that the oil industry is taking to contain future deepwater spills. ConocoPhillips, Exxon, Shell and Chevron have led an effort, since joined by other companies, to form the Marine Well Containment Co. to build a spill containment system that will be permanently placed in the Gulf starting next year.

The companies are attempting to apply the lessons from the BP fiasco, and their expectation is that the system would be able to handle a blowout as if it were a contained well at depths of up to 10,000 feet. The companies have committed $1 billion to the project, and we’re told the cost could reach $1.5 billion. If you believe Big Oil companies are inherently evil, you’ll think this is one more confidence trick. But no rational company or CEO wants to endure the reputational damage that accompanied the BP spill.

The Exxon discovery is a display of the animal spirits that still live in the U.S. energy industry, notwithstanding the political efforts to stifle them. As much as Washington tries, the U.S. economy is hard to keep down.

Original Article

-

Louisiana Oil and Gas Association’s Northwestern Louisiana Natural Gas Vehicle Fleet Seminar

DATE:

Tuesday June 14, 2011

8:00 AM to 11:00 AM CDT

Add to my calendar

LOCATION:

Petroleum Club of Shreveport

416 Travis Street

15th Floor

Shreveport, LA 71101

Learn how Natural Gas Vehicles (NGVs) can provide solutions for your fleet to accelerate your company’s cost savings while fueling the American economy and driving down your environmental footprint .

We will show you how to initiate a successful conversion program using Northwestern Louisiana service providers, and you may be surprised to discover …

* Louisiana offers a 50% tax credit to offset conversion costs.

* There are 9 current and upcoming natural gas fueling stations in the region.

* Several companies across Northwestern Louisiana can service and maintain natural gas engines.

* Natural gas offers fueling solutions for light-, medium- and heavy-duty vehicles.

Join us for breakfast as we discuss these topics as part of our exciting agenda.  Plus, hear success stories from customers in the region.

Seats are limited, so click to REGISTER NOW!

Registration is complimentary and includes breakfast and seminar materials.

Original Article

Louisiana Oil and Gas Association’s Northwestern Louisiana Natural Gas Vehicle Fleet Seminar

DATE:
Tuesday June 14, 2011
8:00 AM to 11:00 AM CDT
Add to my calendar

LOCATION:
Petroleum Club of Shreveport
416 Travis Street
15th Floor
Shreveport, LA 71101

Learn how Natural Gas Vehicles (NGVs) can provide solutions for your fleet to accelerate your company’s cost savings while fueling the American economy and driving down your environmental footprint .

We will show you how to initiate a successful conversion program using Northwestern Louisiana service providers, and you may be surprised to discover …

• Louisiana offers a 50% tax credit to offset conversion costs.

• There are 9 current and upcoming natural gas fueling stations in the region.

• Several companies across Northwestern Louisiana can service and maintain natural gas engines.

• Natural gas offers fueling solutions for light-, medium- and heavy-duty vehicles.

Join us for breakfast as we discuss these topics as part of our exciting agenda.  Plus, hear success stories from customers in the region.

Seats are limited, so click to REGISTER NOW!

Registration is complimentary and includes breakfast and seminar materials.

-

WASHINGTON, June 7 (UPI) — Washington is considering ways to make the process to get approved to work in the offshore energy sector easier, a regulator said.

The Bureau of Ocean Energy Management, Regulation and Enforcement announced it was working on revisions to its permit process.

“We are constantly looking for ways to create a smarter, more efficient and more transparent permit review process,” BOEMRE Director Michael Bromwich said in a statement. “Our goal is to make the process of submitting permit applications easier, reduce the time it takes to review permits and improve BOEMRE’s communication with operators during the permit review process.”

Republican lawmakers have criticized the offshore drilling regulator for dragging its feet on the approval process. Higher energy prices have sparked renewed interest in tapping into domestic energy resources.

Offshore drilling, however, is under scrutiny following last year’s oil spill in the Gulf of Mexico. A well failed in the deep waters off the coast of Louisiana, sparking a fire that killed 11 workers and led to one of the worst environmental disasters in the history of the industry.

The BOEMRE said there are 24 permits for deep-water work awaiting approval and 18 others that were returned seeking more information about safety responses.

Original Article

-

By Kathrine Schmidt

HOUMA — A central Louisiana oil prospect made more accessible by new drilling techniques is getting buzz around the state and could create new business for companies in Terrebonne and Lafourche.

Geologists have estimated the Tuscaloosa Marine Shale — which spans central Louisiana and western Mississippi — could contain tens of billions of barrels of oil that could be tapped with the same horizontal drilling techniques that made a boom of the Haynesville Shale in north Louisiana. Companies like Devon Energy and Denbury Resources have snapped up hundreds of thousands of acres of leases in response.

“We have several clients that are very excited about it,” said Kenny Smith, CEO of the T. Baker Smith engineering and survey company. The firm is working on preliminary design and environmental work in the area, he said.

Once an epicenter of inland oil-and-gas drilling, that activity has dwindled in south Louisiana as reservoirs have been depleted and concerns have risen about coastal erosion. But south Louisiana’s oilfield abstractors, engineers, tool-rental companies and machine shops have picked up business in the Haynesville Shale as well as other fields like the Marcellus, Barnett and Eagle Ford.

“It will be a rush just like every other shale play,” says Dan Collins, an independent landman who works in Baton Rouge and has worked extensively with Tuscaloosa leases. “If it works, it will be much more of a rush.”

The price of crude oil, now trading at nearly $100 per barrel, is one factor. The Tuscaloosa Shale is one of only a handful in the United States that contains oil, Collins said. Other prominent prospects contain chiefly natural gas, but so much so that their exploration has caused a long-standing drop in natural gas prices, meaning a successful oil find could mean big money.

The Tuscaloosa is potentially even better for Terrebonne and Lafourche companies because it’s so close. It cuts across the center of the state from roughly from just above Baton Rouge to across the north shore, through parishes including East and West Feliciana, St. Helena and Tangipahoa.

According to a paper from Global Hunter Securities, an equity research firm, the Tuscaloosa Marine Shale is between 11,000 and 14,000 feet below ground, covers 3.7 million acres and is estimated to contain as much as 60 billion barrels of oil.

As early as 1996, LSU researchers estimated the find could contain as much as 7 billion barrels, but at the time the technology had not advanced to make it a moneymaking proposition. While the process of “fracking,” as it is known, gives new access, the Tuscaloosa play won’t necessarily be easy to exploit.

More mature shales are easier to plan and extract resources from, and oil is more difficult than gas, Collins said.

“It’s going to be as much of an art form as it is actual drilling and engineering,” he said.

Advocates for drilling in the area say that they face another delicate balance outside of the engineering challenges. The process of “fracking,” by which water and chemicals are pumped down oil-and-gas wells at high pressures to release the resources from the rock, has been coming under increasing social and political scrutiny.

Critics of the process say that chemicals or gases released by the fracking process or associated oilfield activity or missteps, like equipment malfunctions, lead to contamination of drinking-water supplies. They cite alarming examples, such as water from a faucet igniting with a match, as instances in which the process has gone wrong.

The practice has run into protests and public opposition across the country, particularly in the Northeast, and the White House has begun a 90-day study looking into the process.

The state is due to host a public hearing on the first use of the technique as early as June, the Associated Press reported last month.

Original Article