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Peak oil and gas prices and supplies: drilling and fracking fallout - July 26


Tony Hayward's departure follows that of his mentor

Press Association, The Independent
Tony Hayward's departure as BP chief executive comes little more than three years after his mentor and predecessor also left the corporate giant in traumatic circumstances.

Mr Hayward, a 53-year-old BP lifer, took over in May 2007 from former boss Lord Browne, who fell on his sword when it emerged he had lied to a court over his relationship with another man to protect his privacy.

Lord Browne's exit dealt a further blow to an oil giant still reeling from the fatal Texas City refinery blast in 2005, which put the firm's safety record under a harsh spotlight.

The reign of the "Sun King" was ended after 12 years in charge, but Mr Hayward was ready to step in after being groomed as a potential successor early in his BP career, which began in 1982.

In the top job, the less demonstrative Mr Hayward was a world away from the cigars and Montrachet wine of Lord Browne - with a back-to-basics approach concentrating on "closing the performance gap" with rivals such as Royal Dutch Shell.

And under its new boss, BP stole a march on its rival - stripping out layers of management and costs across a stumbling and bloated business, improving its refining efficiency and putting the firm on a stronger footing to weather a global downturn.

All this changed on April 20, when an explosion on the Deepwater Horizon rig in the Gulf of Mexico led to the region's worst ever ecological disaster...
(26 July 2010)



Researchers Confirm Subsea Gulf Oil Plumes Are From BP Well

Sara Kennedy, McClatchy Newspapers
Through a chemical fingerprinting process, University of South Florida researchers have definitively linked clouds of underwater oil in the northern Gulf of Mexico to BP's runaway Deepwater Horizon well — the first direct scientific link between the subsurface oil clouds commonly known as "plumes" and the BP oil spill, USF officials said Friday.

Until now, scientists had circumstantial evidence, but lacked that definitive scientific link.

The announcement came on the same day that the National Oceanic and Atmospheric Administration announced that its researchers have confirmed the existence of the subsea plumes at depths of 3,300 to 4,300 feet below the surface of the Gulf. NOAA said its detection equipment also implicated the BP well in the plumes' creation.

Together, the two studies confirm what in the early days of the spill was denied by BP and viewed skeptically by NOAA's chief — that much of the crude that gushed from the Deepwater Horizon well stayed beneath the surface of the water...
(23 July 2010)



Proceed with caution on shale gas

Tyler Hamilton, The Star
Movie buffs might not describe the sci-fi action movie Alien vs. Predator as a classic, but the 2004 film offers enough entertainment to liven up a lazy Sunday afternoon.

What I liked about the movie, and this is a common theme with this genre, is that your enemy can quickly become your ally when you’re both facing an even more dangerous adversary. In this movie, the only surviving human in an Antarctic base station feels compelled to team up with a green-blooded Predator to defeat a really badass Alien queen.

This is how many people, including environmentalists, view natural gas. It’s a fossil fuel, so from an air pollution and climate-change perspective, it’s something we should be getting away from—eventually.

But natural gas, when you burn it, emits roughly half as much carbon dioxide compared to burning coal and far fewer smog-causing pollutants. In this sense, natural gas is being viewed as an ally in the fight against climate change – and coal.

Environmentalists, while acknowledging we have to reduce natural gas use over the long term, see natural gas as a “transition fuel” that moves us away from coal and toward more renewable-energy sources...

...Me, I think this emerging love affair with natural gas is worrying. Seems we’re getting a little too comfortable – and moving too fast—with the Predator.

For one, if you drill into the numbers this claim of “more than 100 years” of supply appears to be a gross exaggeration. Some petroleum geologists say the “probable” supply is less than 20 years and that shale gas represents maybe seven years of that supply.

Second, it’s no secret that shale gas is to the natural gas industry what the tar sands are to the oil industry – that is, much dirtier to extract. Water is one hot-button issue. Huge volumes of water are required as part of the hydrofracking process. The water is mixed with toxic chemicals and injected under pressure into a well, forcing cracks in the shale rock.

How, and to what extent, this toxic brew can escape into rivers and aquifers is the subject of intense debate. The U.S. Environmental Protection Agency is currently studying the risks.

Folks like Robert Howarth have a potentially bigger concern. We don’t really know much about the greenhouse-gas emissions that result from shale-gas extraction processes, says Howarth, a professor of geochemistry at New York’s Cornell University...
(22 July 2010)



Siemens warns growth could fall 7.5pc if energy prices rise

Tom Molloy, Irish Independent
ECONOMIC growth here could fall by as much as 7.5pc if there is a sudden rise in oil and gas prices, according to a report published yesterday.

Ireland -- which imports more fossil fuels than almost anywhere else in Europe and which generates less energy from renewable sources -- would suffer more than neighbouring countries if energy prices were to spike, according to the report by the environmental consultants AP EnvEcon.

It was commissioned by engineering giant Siemens.

Oil prices are likely to rise as supplies dwindle and emerging economies consume more, while prices could spike suddenly following natural disasters, political tension or wars, the report notes...
(22 July 2010)
You can find the report here and the press release about it here



Is Matt Simmons Credible?

Robert Rapier, R Squared via Consumer Energy Report
I am going to address a touchy subject in this essay, but I simply can’t ignore it any longer. I have noticed that a lot of people are finding my blog through keyword searches of “Debunking Matt Simmons.” About two and a half years ago, I did write an essay called Debunking Matt Simmons. Because of Matt’s recent claims about the disaster in the Gulf of Mexico, there has been a spike in interest over whether his claims related to the disaster are actually credible. So now seems like a good time to revisit the subject.

Claims like "BP will file for Chapter 11 by July 9," and that "the 'real, untold story' is another leak that is 5-7 miles away spewing 120,000 barrels per day" are ruining Matt Simmons' credibility.

The topic is touchy because Matt Simmons has long been revered in the energy business, and some of his fans will be upset with me for writing this.

But Simmons has lately been making what I feel are very irresponsible and sensational claims that don’t hold up to scrutiny...
(23 July 2010)

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