KCRag Forum

KCMax wrote: To be fair, before she was briefed by McCain's people, she probably though cap-and-trade had to do with baseball.

Rimshot.

Interesting:

http://www.kansascity.com/637/story/1719640.html

America?s hunger for gasoline subsides and is unlikely to return


Gasoline consumption has been down the last two years, in part because of the recession. Even when the economy picks up, three underlying trends mean the U.S. might never use as much gas again:

?New standards for cars and light trucks, including SUVs, will make U.S. vehicles more fuel-efficient.

?The growth in the number of U.S. vehicles, after surging the last 30 years, is likely to plateau. The country now has more than four vehicles for every five people, including children.

?Alternative fuels will grow enough to cover increased fuel needs.
...
That decline is reverberating through the oil industry. Refineries now use only 78.5 percent of their capacity, the lowest level since the federal government began routinely collecting the information in 1990. Valero Energy, which once bought refineries enthusiastically, now snaps up ethanol plants instead.

And Chevron Corp. recently announced it was reorganizing its U.S. refining business, which could include selling or closing refineries.

I saw a documentary on PBS this week called "Learning from Cuba's Response to Peak Oil," which I found very interesting.  Over a period of weeks, Cuba lost half of its' oil after the Soviet Union collapsed. Most of the consumption of oil is engaged in food production and distribution.  The average adult Cuban lost 20 lbs. during this period.  The documentary focuses on how Cuba changed its' food production from an oil-based industrial farm model to more organic, urban-based farms.

One of the problems addressed, in addition to the peak oil problem, is the challenge of adapting to soil depletion caused by modern farming practices using oil-based fertilizers.

http://www.livevideo.com/video/mercofsp ... cuba-.aspx

This is an interview about the documentary.

http://www.youtube.com/watch?v=f7i6roVB5MI

RIP Hummer - 1999-2010

G.M. to Close Hummer After Sale Fails

US military warns oil output may dip causing massive shortages by 2015

The US military has warned that surplus oil production capacity could disappear within two years and there could be serious shortages by 2015 with a significant economic and political impact.

DaveKCMO wrote: US military warns oil output may dip causing massive shortages by 2015

The CEO's of SHell and ConocoPhillips have been saying the same since 2008.

http://dailyreckoning.com/shell-calls-p ... 5-sort-of/

Anybody with their ear to the ground, or even near the ground, should have noted that crude oil prices made a substantial recovery in the midst of one of the worse recessions since the great depression.  That's because demand in the US really did not fall off as much as many would have had us believe (about a million barrels per day - 1/20th) and global demand has stayed constant...all this against the backdrop of the world's producers struggling to meet the demand.  

http://seekingalpha.com/article/199400- ... urce=yahoo

Governments start to worry about peak oil.  Article suggests that consumption will soon outpace production.    Don't count on the unidentified projects materializing. 

ah, no worries.  We'll all have gone on to the great Mayan hereafter by 2012

Highlander wrote: Anybody with their ear to the ground, or even near the ground, should have noted that crude oil prices made a substantial recovery in the midst of one of the worse recessions since the great depression.

Price was below $70 a barrel today for awhile with the price of gas really dropping.  Guess it has to do with the Euro dropping in value to the dollar.

http://www.msnbc.msn.com/id/37187976/ns ... d_economy/

Other investments seen as risky had a rough time Monday. Oil traded below $70 a barrel for the first time since February but finished above that psychological benchmark. Oil is priced in dollars so a stronger dollar discourages investors from buying oil. Crude fell $1.45 to $70.16 per barrel on the New York Mercantile Exchange.

BP Twitter spoof generates $10K for Gulf helpers

Read more: http://www.miamiherald.com/2010/06/02/1 ... z0pnnpeFxu

http://www.miamiherald.com/2010/06/02/1 ... s-10k.html

"Drilling and production are not risk free but the overall risk is minimal.  Major spills from production facilities are extremely rare.  During storms, fields are shut in at the well heads to ensure no problems result from harsh seas.  During drilling, there are several lines of defense against any potential environmental and safety concerns.  Everything is massively over-engineered.  Spills cost companies in downtime, loss of product and fines, it's in their best interest that these things are few and far between which should be obvious from the pretty impressive environmental and safety records associated with offshore production."

Anecdotal bs falls short of reality.

"The number of spills from offshore oil rigs and pipelines in U.S. waters more than quadrupled this decade, a trend that could have served as a warning for the massive leak in the Gulf of Mexico, according to government data and safety experts."

http://www.usatoday.com/news/nation/201 ... mess_N.htm

phna wrote:
Anecdotal bs falls short of reality.

Yes, the American press presents reality particularly when it comes to getting the facts straight on highly technical issues.   That articles is apples and oranges and ridiculous in the context of the BP disaster.  You wouldn't know anecdotal if it smacked you in the face.  

Please. There isn't one substantiated fact in the previous quote and an unreliable conclusion. Apparently, since hindsight permits more scrutiny, the statement came from the foremost expert
on offshore drilling,who might know how a "major spill" is specifically defined, who may be verbose with all the minutae,  tech babble and redundant engineering integrated (into systems similar to the Deepwater Explorer) which were designed to prevent a "MAJOR DISASTER"; or is it  called it a major spill? a catastrophe? oh no, its  a FACT!  That smaks ya in the face pretty hard doesn't it!

It maybe true it wasn't even technical failure at all; Blame MMS oversight, Halliburton, BP, Transocean, Congress, Dick Cheney, yourself. Notwithstanding that, concluding that "Major spills from production facilities are extremely rare" was anecdotal at first written and factually depraved. Here's another recent report with more 20/20 hindsight.

"While the Deepwater Explorer blowout and leak is expected to be the worst offshore oil catastrophe in U.S. history, the federal government documented 330 oil spills related to offshore drilling between 1964 and 2009. A total of 550,500 barrels of oil were spilled (23,121,000 gallons), mostly in the Gulf of Mexico, from a variety of causes including weather, equipment failure, human error and blowouts."

http://liveshots.blogs.foxnews.com/2010 ... latestnews

Considering the extreme rarity of of "major spills" at production facilities the best conclusion that can be made is that  this current "situation" is estimated to be as big as all the previous spills combined, 23,000 million gallons (and counting)!

phna wrote: Please. There isn't one substantiated fact in the previous quote and an unreliable conclusion. Apparently, since hindsight permits more scrutiny, the statement came from the foremost expert
on offshore drilling,who might know how a "major spill" is specifically defined, who may be verbose with all the minutae,  tech babble and redundant engineering integrated (into systems similar to the Deepwater Explorer) which were designed to prevent a "MAJOR DISASTER"; or is it  called it a major spill? a catastrophe? oh no, its  a FACT!  That smaks ya in the face pretty hard doesn't it!

It maybe true it wasn't even technical failure at all; Blame MMS oversight, Halliburton, BP, Transocean, Congress, Dick Cheney, yourself. Notwithstanding that, concluding that "Major spills from production facilities are extremely rare" was anecdotal at first written and factually depraved. Here's another recent report with more 20/20 hindsight.

"While the Deepwater Explorer blowout and leak is expected to be the worst offshore oil catastrophe in U.S. history, the federal government documented 330 oil spills related to offshore drilling between 1964 and 2009. A total of 550,500 barrels of oil were spilled (23,121,000 gallons), mostly in the Gulf of Mexico, from a variety of causes including weather, equipment failure, human error and blowouts."

http://liveshots.blogs.foxnews.com/2010 ... latestnews

Considering the extreme rarity of of "major spills" at production facilities the best conclusion that can be made is that  this current "situation" is estimated to be as big as all the previous spills combined, 23,000 million gallons (and counting)!

All of the of the specific incidents in the blog were 1970 and before; 39 years ago.  There has been only 1 major spill since 2000 and it was only 4000 Barrels (Total Petroleum USA) and it was not oil, probably drilling mud.  Since 1970, the size and frequency of major spills dropped dramatically and all but one were related to hurricanes.  Only two of these occured in the 90's and both were relatively small (<15000 Barrels).  No major spill since 1970 was related to well control issues other than the BP well.  I'll stand by my earlier non-anecdotal comment that major spills are very rare.  I'd also say that airline accidents are very rare in context of that industry but they do happen.   As for the smaller spills since 1970 being major environmental problems, here is an article that might put things in perspective.

http://geology.com/nasa/oil-seeps/

The previous article you posted was flawed, particularly this statement:

"Richard Charter, a marine expert with the environmental group Defenders of Wildlife, said the smaller spills should have foreshadowed bigger mistakes were on the way.

"Carelessness is usually a sign of impending disaster," he said."

Well, no it's not because we are not talking about apples and apples (and I'd dispute that the industry has been careless as a whole).  There's a huge difference between minor discharge during offtake and transportation operations and a well control related spill.  The latter is rare and serious business and wells are indeed over-engineered to cover contingencies.  The BP disaster, and I have a pretty good idea what happened, is a result of departure from industry norms during execution of the well.  Displacing the drilling mud with water (first line of defense against a blow out) on a problem well was the primary cause of the incident. Normally that is not a major problem to do that once the reservoir is properly  isolated behind casing but there were signs that doing this in this particular well might be problematic in that regard.  The BOP's not working was dumb luck for BP and having two shear ram stacks instead of one would probably be the best piece of regulation that could come out of the disaster.

Having said all that, drawing any conclusion that this event was bound to happen from a series of minor spills since 1970 is kind of like saying an airliner is bound to crash because the seats are in dirty.

There's no way I am going to see eye to eye with you or many others on the safety of drilling.  This incident notwithstanding, I think the record of the petroleum industry has been nothing short of remarkable but I am an insider who has a different perspective than the author of Fox blogs.  I also think the airline industry has a remarkable safety record but every time I step on a plane, I realize there is a chance it will crash and kill a lot of people as planes do crash.  The odds are hugely against it but it does happen.

they were all between "1964 and 2009. A total of 550,500 barrels of oil were spilled (23,121,000 gallons), mostly in the Gulf of Mexico, from a variety of causes including weather, equipment failure, human error and blowouts."

The one incident you cherry picked was the worst. However, it is rare that ONE incident would be as big as all of those in that time period!  However, its invalid to conclude that these accidents are rare. Furthermore, a major spill is more specifically defined in this story, it wasn't in the quote presented.  What you state as "relatively small" is actually considered a "major spill" by definition or at least a medium one.
Again, facts vs experience (anecdote). Reality is here, and anecdotes are in the past.

This isn't about coming "eye to eye" with anybody, it's about facts needed to help explain why these damn disasters occur. Insider perspective is superfluous in this case. Engineering is superfluous when oversight agencies like the MMS are in bed with the industy and the POSTUS has to admit "cozy culture" wasn't changed. Safety records are superfluous when greed enters in the decision making process and the parties involved point the finger of blame after the fact.  Thanks for your perspective.

Whatever happened to  cause this will probably be debated for years and years.  But the base cause is human activity.  And humans are far from perfect.  Pure accidents and dumb accidents will happen, no matter the safeguards, backup systems, etc.

This country and the world needs energy.  And we need to go and get it whereever it is.  Yes, there is the rally cry of get rid of SUV's and limit personal transportation but I have read 80% of the energy we use goes to buildings, our homes our offices and so on.  Energy efficiency is the key but that will not reduce our overall energy usage since our population is still increasing and more of the world is becoming modern. 

That doesn't mean just drill anywhere anytime but drill where we can with safety and with safeguards in place.  And review and oversight it as much as possible.

aknowledgeableperson wrote: Whatever happened to  cause this will probably be debated for years and years.  But the base cause is human activity.  And humans are far from perfect.  Pure accidents and dumb accidents will happen, no matter the safeguards, backup systems, etc.

This country and the world needs energy.  And we need to go and get it whereever it is.  Yes, there is the rally cry of get rid of SUV's and limit personal transportation but I have read 80% of the energy we use goes to buildings, our homes our offices and so on.  Energy efficiency is the key but that will not reduce our overall energy usage since our population is still increasing and more of the world is becoming modern.   

That doesn't mean just drill anywhere anytime but drill where we can with safety and with safeguards in place.  And review and oversight it as much as possible.

You don't get to be one of the top revenue generators in the world and make mistakes.  The more money you make, the more resonsibility you have for quality of service and product.  The more detrimental the accident to the environment/customer base/etc., the more detrimental it should be to your company.  Imagine if all of the gardening soil Walmart sold for a year turned people's yards into toxic, unplantable soil for years to come.  I would think a major hit to their reputation, coupled with lawsuits and government interaction and accountability would be in order.  This is why oil contracts are not generally given to small companies.  There are an incredible number of rules/regs/safety mechanisms in place for off-shore drilling, and if a multi-billion dollar company, many times over, cannot be responsible enough to avoid an unacceptable accident, we should rethink who and why we allow people to drill offshore.  In this case, there should always be one accountable entity.  Finger pointing is unacceptable when the consequences are so large.  To me, it does not matter how many companies were involved, or why this happened.  If it wasn't terrorism, then all I have to do is follow the money trail to who profits the most from drilling to identify the responsible party.  Contractors or not, BP cannot continue to accept money from their contracted business endeavors without also accepting responsibility for the supply chain they created, and the accident created within it. 

bobbyhawks wrote: You don't get to be one of the top revenue generators in the world and make mistakes. 

Sure you do. After your first big accident, you get your industry nice and cozy with the government and get a $75 million dollar liability cap put in place. Now you're free to make mistakes in the supposedly 'free market', knowing full well that you can behave irresponsibly. That huge safety net will be there to catch you if you fall.

Yeah, I honestly do blame the government more than I blame BP for this one. It's really a possibility that they would have used additional safeguards on this and other wells if not for that massive safety net.

bobbyhawks wrote: This is why oil contracts are not generally given to small companies.  There are an incredible number of rules/regs/safety mechanisms in place for off-shore drilling, and if a multi-billion dollar company, many times over, cannot be responsible enough to avoid an unacceptable accident, we should rethink who and why we allow people to drill offshore.  In this case, there should always be one accountable entity.  Finger pointing is unacceptable when the consequences are so large.  To me, it does not matter how many companies were involved, or why this happened.  If it wasn't terrorism, then all I have to do is follow the money trail to who profits the most from drilling to identify the responsible party.  Contractors or not, BP cannot continue to accept money from their contracted business endeavors without also accepting responsibility for the supply chain they created, and the accident created within it. 

If you are going to drill offshore, especially deepwater, you are not a small company.  You might be a small player in the industry but you are not a small player.  And yes, technically and legally, the permit holder would be the one responsible for the cleanup costs.  The contract between the company with the permit and a subcontractor could shift some of that liability between them but only between them.  So no matter what BP is on the hook for this.  How much is the question.

aknowledgeableperson wrote: If you are going to drill offshore, especially deepwater, you are not a small company.  You might be a small player in the industry but you are not a small player.  And yes, technically and legally, the permit holder would be the one responsible for the cleanup costs.  The contract between the company with the permit and a subcontractor could shift some of that liability between them but only between them.  So no matter what BP is on the hook for this.  How much is the question.

Companies almost never drill prospects of this magnitude with 100% interest.  Anadarko had at least 20% and another company (small company, name escapes me) had something like 10%.  BP is the operator and the buck stops with them but their partners are also on the hook for their percentages.