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Interview with BP’s chairman of the board Carl-Henric Svanberg

Kjell Aleklett, Aleklett’s Energy Mix
Many were very surprised by the announcement that the managing director of the telecommunications company Ericsson, Carl-Henric Svanberg, was to become the new chairman of the board of BP. Why would he leave the telecom industry, an industry of the future, for the oil industry whose best days lie behind it? In today’s Svenska Dagbladet [a national broadsheet in Sweden] there is a six-page report (it has many images) with the headline “Boyhood Dream” that can maybe provide some explanation. In the interview he notes that he must choose his words carefully even though they are in Swedish. He is conscious that what he says will be translated and spread further over the internet. He is quite correct – here is an example (below).

It can be important to know a little about Carl-Henric Svanberg’s background now that he is to lead one of the world’s largest companies. He was born in Porjus in northern Sweden. Porjus is commonly associated with the expansion of Sweden’s hydroelectric power infrastructure and his father was a project leader for expansion of the hydroelectric power station in Porjus. Therefore, it is not surprising that he chose an education as a civil engineer and later augmented this with education in economics at Uppsala University. The fact that an engineer now sits at the rudder of BP may be very important for the future.

…The thing that is described here, depletion, is one of the problems that await Carl-Henric Svanberg and other heads of international and national oil companies. They face an enormous challenge. The reporter posed the question, “Do you believe that the world’s sources of oil will have run dry (“sina”) in 40-50 years?”. Svanberg answered, “It is difficult to say. Of course, many experts believe it. I believe that the demand for oil will fall faster than the available supply.” In Swedish the word “sina” [run dry] is commonly used in association with the end of milk production by a cow. In 40-50 years there will still be producing oil wells. The question from the journalist was far too vague and it would have been quite correct to answer “No”. They should have asked about “Peak Oil”…
(3 Jan 2010)

In New Gas Wells, More Drilling Chemicals Remain Underground

Abrahm Lustgarten, propublica
For more than a decade the energy industry has steadfastly argued before courts, Congress and the public that the federal law protecting drinking water should not be applied to hydraulic fracturing, the industrial process that is essential to extracting the nation’s vast natural gas reserves. In 2005 Congress, persuaded, passed a law prohibiting such regulation.

Now an important part of that argument — that most of the millions of gallons of toxic chemicals that drillers inject underground are removed for safe disposal, and are not permanently discarded inside the earth — does not apply to drilling in many of the nation’s booming new gas fields.

Three company spokesmen and a regulatory official said in separate interviews with ProPublica that as much as 85 percent of the fluids used during hydraulic fracturing is being left underground after wells are drilled in the Marcellus Shale, the massive gas deposit that stretches from New York to Tennessee.

That means that for each modern gas well drilled in the Marcellus and places like it, more than 3 million gallons of chemically tainted wastewater could be left in the ground forever. Drilling companies say that chemicals make up less than 1 percent of that fluid. But by volume, those chemicals alone still amount to 34,000 gallons in a typical well…
(27 Dec 2009)

Low-Carbon Recovery

Peter McKenzie-Brown, Language Matters
There are a number of people like Harold Nikipelo out there. The president of Edmonton-based Lifeview Oil and Gas Management Services, Nikipelo thinks he’s developed a better mousetrap – a new tool for heavy and conventional enhanced oil recovery. He joins such innovators as Sonic Technology Solutions Companies and N-Solv Corporation in his efforts to create practical, low-carbon recovery systems.

When you get him started, Nikipelo begins by enumerating the competing systems. Steam-assisted gravity drainage (SAGD) has been advancing for more than 20 years. More recent approaches include Petrobank’s toe-to-heel air injection (THAI) and its CAPRI system, which places a nickel-based catalyst bed in a horizontal wellbore. Other companies are experimenting with pulsed wave-front technology, solvent injection, electrical down-hole heating, steam flooding and the injection of solvent gases like carbon dioxide.

By no means is Lifeview alone in its efforts to find the holy grail of low-carbon recovery. One of the most important trends in bitumen recovery is the drive to produce the stuff with lower emission ratios. In the best of all possible worlds, this means better environmental credentials and lower cost of recovery. For environmental and economic reasons this is the wave of the future. Increasingly, production systems will have to respond to demands for reduced pollution – especially the emission of greenhouse gases (GHGs)…
(3 Jan 2010)

Is the United Kingdom facing a natural gas shortage?

Rembrandt, The Oil Drum
A cold spell facing the United Kingdom has caused anxiety over the security of the country’s natural gas supplies. The Conservative Party warns that a gas shortage is about to hit the UK due to a lack of storage capacity. In response, National Grid, owner of the UK gas transmission system, states that there is “no danger of the UK running short of gas”.

Anxiety increased when National Grid gave a gas balancing alert, asking power suppliers to use less natural gas, a message which was repeated again last Thursday.

In this post, I explain some of the issues underlying the current UK natural gas situation, including a growing long-term mismatch between the supply that the United Kingdom can itself provide, and UK customer demand.

Natural gas demand at unusual highs

The United Kingdom’s current winter is the coldest one since December 1981, with sustained temperatures between 0 ° and -15 ° Celsius (5 ° to 32 ° Fahrenheit). These low temperatures pushed gas demand up to 463 million cubic meters (MCM) on 8 January 2010. This level was higher than the previous record of 449 MCM reached in 2003, and more than 100 MCM above normal seasonal demand…
(9 Jan 2010)

National Grid appeals for more gas as imports fail to arrive

Tim Webb, The Guardian
National Grid issued another appeal this lunchtime for more gas supplies to be pumped to the UK after imports from Norway failed to arrive.

Unusually cold weather led to a shutdown of the Ormen Lange processing centre in the Norwegian Sea, interrupting gas flows to the UK at a time of peak demand.

The so-called gas balancing alert has been issued four times so far this month. National Grid has only used it five times in total since the system was introduced three years ago.

A spokeswoman said later in the afternoon that the market had responded and alternative supplies procured to make up the shortfall.

Most of the UK’s gas arrives by pipeline from the North Sea or continental Europe as well as in liquefied form in tankers.

The alert was sparked after 39m cubic metres of gas – enough to meet about a 10th of UK demand – which the National Grid expected to be imported by pipeline mostly from Norway and also the continent, via Belgium, did not arrive earlier today…
(11 Jan 2010)

Saudi craving for oil comes at a price

Abeer Allan, Financial Times
As Saudi Arabia’s economy has grown in recent years, industrial capacity and car ownership have increased exponentially with it.

It is no surprise that demand for oil is increasing at such a rate that, when combined with a shortage of gas and the inefficiency of power generators, supplies by the world’s biggest oil exporter are likely to be constrained, analysts warn.

Domestic Saudi consumption of oil jumped by 16.4 per cent year on year in August because of an unprecedented surge in the burning of crude, according to a report by the International Energy Agency in November. As a result, the IEA has revised up its forecasts for Saudi domestic oil consumption to 2.6m barrels a day in 2009 and 2.8m barrels a day this year.

Last year, the kingdom said it increased its production capacity to a record 12.5m barrels a day. But, to meet domestic and industrial power demand, it burns 1.25m barrels a day, according to the ministry of water and electricity.

“We expect the 1.25m barrels to double in 20 years, which will prompt consideration of alternatives like nuclear or solar power plants to produce electricity,” says Saleh al-Awajji, the under-secretary for electricity…
(11 Jan 2010)
sent in by EB reader driller

Iraq Could Delay Peak Oil a Decade

Stuart Staniford, the Oil Drum
raq could delay peak oil a decade–with the emphasis on the could.

I have been associated with the view that the stagnation of oil supply growth from late 2004 on was likely to be the onset of a “bumpy plateau” of oil production – that oil production would not go too much higher, although it wouldn’t decline quickly either. You can see articulation of this point of view, for example, at old Oil Drum pieces like Why Peak Oil is Probably About Now, and Hubbert Theory says Peak is Probably Slow Squeeze.

Generally, events of the past few years have been reasonably kind to this point of view. The major producers (eg Russia and Saudi Arabia) seemed to have more-or-less reached production plateaus. Overall global production bumped up a little in late 2007 and early 2008 in response to the very high prices, but not much. Similarly it fell in 2009 in response to the great recession, but not much. Bumps on the bumpy plateau, it has seemed to me (and this would be even more true if you looked at the data ex-biofuels). Now production is going up again. Here’s what the latest data for global liquid fuel production looks like (with the monthly price on the right axis):…
(6 Jan 2010)