Tuesday, March 26, 2013

Another oil crisis: Petroleum engineer shortage

During the oil boom a few decades ago, petroleum engineers were a dime a dozen, and because the oil industry back then was so lucrative, they were in a very good position financially. However, with the decline of oil prices back in the ‘90s, the demand for petroleum engineers suffered a sharp decline, and the number of students who took up a petroleum engineering course in college decreased as a result.

Image Source: time.com

However, because of the rising prices of oil—the result of the world’s increasing demand for oil, the demand for petroleum engineers are again on the rise. Robert Chase, chair of the Department of Petroleum Engineering at Marietta College, said that enrollment in petroleum engineering programs at universities is increasing at a fast rate for many reasons but mostly because of the rising oil prices.

Image Source: why.knovel.com

But this still isn’t enough, mostly because two-thirds of petroleum engineers are over 40 and will be retiring in the near future, creating more job openings that will be very difficult to fill. In addition, there are still not enough people interested in becoming petroleum engineers, with more people pursuing common careers, such as in medicine and law. As reported by the Bureau of Labor Statistics, there are currently only 30,880 petroleum engineers, whereas there are 305,590 doctors and 570,950 lawyers in the US.

Image Source: cipeg.leeds.ac.uk

The more demand there is for oil, the more demand there will be for petroleum engineers, like Drs. Ali Ghalambor and Boyun Guo, as these are the people who make the extraction and production of oil efficient.

Visiting this Twitter page will give you tons of information about the petroleum and natural gas industry.

Monday, March 25, 2013

REPOST: A model for reducing emissions

Eduardo Porter recently shared the effective strategy to lower gas emissions on this New York Times article.

Image Source: nytimes.com

Who would have thought the United States would one day be a leader in cutting greenhouse gas emissions?

This is the nation, after all, where a former chairman of the Senate committee on the environment, James Inhofe, wrote a book aboutglobal warming called “The Greatest Hoax.” This is where a presidential election took place not six months ago in which climate change barely merited a mention, buried under an avalanche of promises to dig for coal and drill for oil.

Fuel economy performance for cars and trucks is still among the worst in the developed world. And only 7 percent of the nation’s energy comes from renewable sources, less than in most other advanced nations.

Yet when President Obama talked about the nation’s energy revolution during his State of the Union address last month, he could have boasted that American emissions of CO2 had fallen almost 13 percent since 2007. It was perhaps the biggest decline among industrial countries, and substantially steeper than in Europe, which has been much more committed to combating climate change.

Carbon emissions from the United States have never fallen this much, not after the first oil price shock following the Arab oil embargo of 1973, nor after the Iranian revolution of 1979, when American drivers suddenly discovered the virtues of Japanese small cars and President Jimmy Carter installed solar panels on the White House to heat the water.

What stands out most in this shift, however, is not environmental regulation or public concern about global warming but the price of energy and market-driven technological advancements. “It wasn’t so much a policy shift that brought carbon emissions down,” said James Hamilton, an energy economist at the University of California, San Diego. “It was irresistible market forces.”

The United States consumes 9 percent less energy for each $1 of G.D.P. than it did five years ago. Total energy use has fallen about 5 percent in the last five years.

To be sure, regulations have contributed to the process; tighter fuel economy standards are expected to lead automakers to double the fuel efficiency of new cars and light trucks by 2025. Tax breaks are encouraging companies to invest in renewable energy sources and retrofit buildings to increase energy efficiency.

But the main reasons are economic. The great recession and the world’s sluggish recovery have depressed energy use. As in the 1970s, high oil prices have encouraged drivers to drive less, and switch to cars and trucks with better fuel economy.

There is a new force as well: high prices underpinned the widely trumpeted investment in hydraulic fracturing, or fracking, of shale rock rich in oil and natural gas, which pushed the price of gas to some $2 per thousand cubic feet last April, down from $9 four years ago. Cheap gas, in turn, has encouraged power companies to switch to the cleaner fuel, replacing the most heavily polluting source of energy that we know, coal.

Since 2007 the share of the nation’s electricity produced by gas-powered generators has jumped to 30 percent from 21 percent; CO2 emissions from electricity generation have tumbled more than 15 percent. This new fuel brings potential problems of its own. Environmental groups have sounded the alarm about chemicals and methane leaking from wells, potentially contaminating local water supplies and releasing additional carbon into the air.

But fracking also appears, against all odds, to have brought Mr. Obama’s early, hopeful promise to cut CO2 emissions by 17 percent between 2005 and 2020 within reach.

Will our carbon footprint continue to shrink? The Energy Department forecasts that CO2 emissions will tick up nearly 2 percent this year and 0.7 percent in 2014, as the economy recovers. Coal use in power plants is also expected to rebound as gas prices rise from their 2012 trough.

Historical precedent is not promising. The drive for energy efficiency that started in the 1970s did not continue once oil prices fell in the 1980s; among other things, American drivers fell in love with S.U.V.’s and trucks. In 1981, the Ford F-series pickup truck became the nation’s best-selling light vehicle. In 1986, Ronald Reagan had the White House solar panels taken down.

Nonetheless, there are some encouraging signs that this time may be different. The shift from coal to gas-fired power plants should be sped up by new rules requiring old coal generators to install expensive environmental equipment. Oil prices are supported by fast rising demand from the developing world and are unlikely to plunge despite new sources found in Canadian tar sands and American shale.

The United States’ experience with new fuels also offers some options for countries intent on pursuing economic growth while restraining carbon emissions.

China is rushing to develop its large fields of shale gas. Europe — where natural gas, most of it imported from Russia, is expensive and power plants rely heavily on coal — may follow suit. Several European governments have banned fracking or imposed sharp restrictions on it, but some — like Britain — are moving ahead.

Still, the United States’ serendipitous success in reducing greenhouse gas emissions suggests how much more needs to be done than switching from a particularly dirty source of carbon to a cleaner one.

Even if every American coal-fired power plant were to close, that would not make up for the coal-based generators being built in developing countries like India and China. “Since 2000, the growth in coal has been 10 times that of renewables,” said Daniel Yergin, chairman of IHS Cambridge Energy Research Associates.

Fatih Birol, chief economist of the International Energy Agency in Paris, points out that if civilization is to avoid catastrophic climate change, only about one third of the 3,000 gigatons of CO2 contained in the world’s known reserves of oil, gas and coal can be released into the atmosphere.

But the world economy does not work as if this were the case — not governments, nor businesses, nor consumers.

“In all my experience as an oil company manager, not a single oil company took into the picture the problem of CO2,” said Leonardo Maugeri, an energy expert at Harvard who until 2010 was head of strategy and development for Italy’s state-owned oil company, Eni. “They are all totally devoted to replacing the reserves they consume every year.”

Perhaps the most important lesson from the American natural gas boom is how prices drive both demand and supply. Putting a price on emissions of CO2 that reflects the burden they impose on the environment and the threat excessive amounts pose to future generations would almost certainly be the most effective strategy to persuade energy companies, power generators — and you and me — to spew less of it.

Read more articles about the petroleum industry by visiting this Dr. Ali Ghalambor blog site.

Sunday, March 24, 2013

The natural gas boom: Increasing demand for petroleum engineers

For many people, being a petroleum engineer may not sound as glamorous as being a lawyer or doctor. However, because of the increasing importance of natural gas in the global market, the time that parents wish their kids to pursue a career in petroleum engineering, as opposed to medicine or law, is coming sooner than expected.

Image Source: swetanggoti.wordpress.com

Decades ago, the oil boom came with an increased demand for petroleum engineers. However, when oil became cheap during the ‘90s, one by one, many petroleum engineering schools became empty. Today, two-thirds of those oil professionals are over 40 years old; many will reach retirement age in the next few years.

The increasing demand for oil and natural gas and the upward trend of oil prices are two factors that exacerbate the demand for petroleum engineering experts, and since there is a lack of petroleum engineers in the US, American oil companies are opening design shops in Southeast Asia, where there are many engineering graduates. Additionally, the fact that most of the natural gas reserves that the US has found are located in its native soil contributes to the booming demand for petroleum engineers.

Image Source: stateimpact.npr.org

Oil will continue to play a big part in the future energy needs of the US. Thus, the country needs a great supply of petroleum engineers who can figure out the best way to get it out of the ground and into the market.

Image Source: blog.opulentuz.com

Dr. Ali Ghalambor is an expert in petroleum and natural gas engineering. He has written hundreds of articles and books on the subject, including the Natural Gas Engineering Handbook. Visit this Facebook page for more updates about the oil industry.

Thursday, March 21, 2013

The opportunities presented by America's new energy supplies

Near the end of last year, the public saw opportunities and problems with the shale energy revolution. On one hand, it was viewed to be largely beneficial to the U.S. as it could help the nation strengthen its influence in the global market and help the country become more secure and more prosperous amid its economic recovery.

Image Source: rt.com

On the other hand, there were the alleged environmental dangers to the drilling technique known as hydraulic fracturing and some concerns over the regulation of the amount of the nation’s gas to be shipped abroad. Experts argue that a review of the nation’s current energy policies is necessary due to the new reality brought on by the new abundant supply.

Unchecked exportation of liquefied natural gas could negatively affect U.S. manufacturing and competitiveness due to demand shocks and price volatility, said Andrew Liveris, chief executive of Dow Chemical, in a report on CNBC.com. Naturally, the local industries want to reap the benefits of cheaper energy sources.

Image Source: guardian.co.uk

However, pundits have pointed out that the shale revolution’s true impact lies in the effect that it may have on the oil market itself. By focusing on foreign policy and trade pacts that would stem from America’s new energy supplies, the nation could promote free-market principles on the oil market and gain enough influence on global gas prices, which would benefit all consumers.

Image Source: american.com

For updates on developments to the shale energy revolution, follow this Dr. Ali Ghalambor Twitter account. 

Wednesday, March 20, 2013

REPOST: Build That Pipeline!

Fareed Zakaria highlights the importance of the keystone project and better solutions to environmental issues on this article on Time.com:

One way to think about the keystone project--the 2,000-mile (3,220 km) pipeline that would bring oil from the tar sands of Canada to the Gulf of Mexico--is to ask what would happen if it is never built. The U.S. Department of State released an extremely thorough report that tries to answer this question. It concludes, basically, that the oil derived from Canadian tar sands will be developed at about the same pace whether or not there is a pipeline to the U.S. In other words, stopping Keystone might make us feel good, but it wouldn't really do anything about climate change.

Given the need for oil in the U.S., Canadian producers would still get Alberta's oil to the refineries on the Gulf of Mexico. There are other pipeline possibilities, but the most likely method of transfer is by train. The report estimates that it would take daily runs of 15 trains with about 100 tank cars each to carry the amount planned by TransCanada. That would be a large increase in traffic from what now goes north to south, but it would hardly be an insurmountable problem. Rail traffic in this corridor is already exploding: the number of carloads of crude oil doubled from 2010 to 2011, then tripled from 2011 to 2012. And remember, moving oil by train produces much higher emissions of CO[subscript 2] (from diesel locomotives) than flowing it through a pipeline.

Canada could also transport the oil by train or pipeline west to British Columbia and then on to Asia, where demand is booming. Right now that seems a distant and costly prospect, but having visited Alberta recently, I can attest that Canadian businesspeople and officials are planning seriously for Asian markets--especially since they have come to regard U.S. energy policy as politicized, hostile and mercurial. Whoever uses the oil, the CO[subscript 2] will be released into the atmosphere just the same.

Also, if we don't use oil from Alberta, we will need to get it somewhere to fuel our transportation needs--from Venezuela, Mexico, Saudi Arabia or California. Some of these oils are heavy crude, and processing, refining and burning them is believed to be even more harmful to the environment than using fuels from refracted Canadian oil sands. Switching from oil sands to, say, Venezuelan crude (the most likely alternative) would reduce greenhouse-gas emissions by a minimal amount or not at all. To the extent that this would make us use more coal for electricity generation, it would be a big step backward for the environment. For many of these reasons, the scientific journal Nature, long a leader on climate change, argued in an editorial that President Obama should approve Keystone. A decision is expected this spring.

Environmental groups are approaching this project much as the U.S. government fights the war on drugs. They are attacking supply rather than demand. In this case, environmentalists have chosen one particular source of energy--Alberta's tar sands--and are trying to shut it down. But as long as there is demand for oil, there will be supply. A far more effective solution would be to try to moderate demand by putting in place a carbon tax or a cap-and-trade system. Ideally we would use the proceeds to fund research on alternative energy. Washington spends $73 billion on research for defense, $31 billion on health care and just $3 billion on energy. Massive increases in research would make a difference. Targeting one Canadian oil field--or one pipeline company--will not.

Some in the environmental movement seem to recognize that the facts don't really support singling out Keystone, so they have turned to more intangible reasons to oppose it. Climate activist Bill McKibben argues that if Obama were to say no to Keystone, it would be a turning point: "He could finally say to the Chinese, 'We've done something significant. Your turn.'" Of all the arguments for blocking Keystone, this is surely the most naive. Is there a shred of evidence from the past 25 years that China would respond to this kind of unilateral concession by limiting its growth? How did Beijing respond to the Kyoto accords, under which European countries curbed their carbon emissions? By building a coal-fired power plant every week since then!

Opponents of Keystone say that the specifics are less important in this case and that it is the symbolism that matters. And it does. If we block this project--whose source is no worse than many others, rebuffing our closest trading partner and ally and spurning easily accessible energy in favor of Venezuelan or Saudi crude--it would be a symbol, and a depressing one at that. It would be a symbol of how emotion has taken the place of analysis and ideology now trumps science on both sides of the environmental debate.

Find more links to news articles on the energy industry through this Facebook page on Dr. Ali Ghalambor.

In search of petroleum: Is Turkey the next frontier?

The world is hungry for more oil, and because oil supply will eventually run out, finding more sources of oil is becoming more important than ever.

Image Source: online.wsj.com

According to this online article, one of the countries that has a big potential in becoming a major player in the petroleum industry is Turkey. This assumption comes as a surprise considering that Turkey imports 90 percent of the oil and gas it needs. And although the country produces only 70,000 barrels of oil equivalent per day (boe/d) and has only 270 million barrels of proven oil reserves and 218 billion cubic feet of natural gas reserves, more and more major oil and gas companies are becoming interested in Turkey, primarily because of its untapped shale oil reserves, and its location—right in the middle of primary oil-producing regions, namely:

• To the north, the Black Sea, which is considered to be rich in oil;

Image Source: acus.org

• The Azerbaijani oil fields to the east;

• 27 billion barrels of onshore oil fields like Iraq’s Kirkuk field to the south; and

• To the west, the 22+ billion barrels of oil in the Ionian Sea, 4 billion barrels in the Northern Aegean Sea, 7 billion cubic feet of natural gas offshore Greek-held Cyprus, and 33+ trillion cubic feet of gas in the nearby Israeli waters.

In addition to Turkey being investor-friendly, it has a huge web of pipelines, refineries, and export terminals.

Image Source: thewashingtonreview.org

Dr. Ali Ghalambor has co-authored the book Petroleum Production Engineering: A Computer-Assisted Approach to explain the entire process of petroleum engineering. More about his work can be found at this Twitter page.

Monday, March 18, 2013

REPOST: California's clash: Shale oil or green energy

California is divided by opinions concerning the economy and the environment. Forbes.com gives the full details.

Image Source: forbes.com
California’s economic predicament and environmental progression have met head on. But the state’s leaders are saying that the two dynamics can be reconciled, all to potentially capture the nation’s richest “tight oil” deposits.

At issue now is the Monterey Shale, a formation holding more shale oil than anywhere else in the country. It could be a potential gold mine if developers could find a way to extract it and if regulators could appease the environmental community there. Governor Jerry Brown, who has the staunch support of green groups, says that California needs that oil wealth and that the state’s regulators could ensure that the drilling techniques meet strict standards.

“We want to get the greenhouse gas emissions down, but we also want to keep our economy going,” says Governor Brown, during a press conference on March 13. “That’s the balance that is required.” Indeed, the Monterey Shale, which stretches from Central California down through Southern California, holds 15.4 billion barrels of recoverable crude oil, says the U.S. Energy Information Administration. By comparison, North Dakota’s Bakken Field has 3.6 billion barrels — a place that now has 3 percent unemployment. Nationally, 25 billion barrels in proved unconventional shale oil exists.

California has a jobless rate of 9.5 percent. Its budget deficit has been as high as $26 billion, although recently approved tax hikes will cut that way down — a move that could cause some of the state’s business to relocate. According to a study done by the University of Southern California, tapping the Monterey Shale would bring in 2.8 million new jobs while raising an additional $25 billion in new revenues by the end of the decade. Interestingly, California now produces nearly 10 percent of the nation’s oil, which is on par with that of Alaska. Among the leading developers there areChevron and Occidental Petroleum, as well as Plains Exploration, Linn and Breitburn. Altogether, at least 32 drilling sites exist both on land and offshore, all places from where those companies are exploring for oil and doing so without incident.

The primary obstacle to increasing that percentage is, ironically, technological — not regulatory, says Rock Zierman, chief executive of the CaliforniaIndependent Petroleum Association, in Sacramento.

He says that the Monterey geological formation is uncommon, and at present, hydraulic fracturing cannot work there. Fracking, of course, is the controversial method by which producers extract tight oil and gas — a process that uses a concoction of water, sand and chemicals to break those deposits free from the rocks where they rest a mile beneath the ground.

“Our geology is totally different here,” says Zierman, in a phone conversation. “We have not found out how to produce the Monterey Shale. Now, there are dozens of bills that have been introduced to try and shut us down — before we would get started. They could become a problem. But, today, they are not.”

The potential for a run-in is real, however. California’s environmental goals are cultivated by a “global warming law” requiring greenhouse gas reductions of 25 percent by 2020. Voters there rejected an effort in 2010 to rollback that statute until unemployment fell, noting that “new energy” jobs there total around 500,000. Billions, meanwhile, are pouring in from venture capitalists.

Governor Brown is taking a pragmatic approach: Developing California’s oil fields would not only alleviate the economic suffrage there, he told reporters, but it could also provide fuel to the state’s 30 million licensed vehicles. Until people stop driving cars that burn gasoline, those vehicles will need to be fed, he says. California can either continue to import that oil from other nations, or it could aid in its recovery by producing much of it, he adds.

But do not exploratory methods require tons of water — a resource that California cannot afford to spare? According to Zierman with the petroleum group, the state’s golf courses combined consume more water in a day than the oil and gas drillers do in a year.

Are oil and gas developers at eternal odds with the environmentalists? Public policy is often reactive, necessitating immediate action after the fact. If things got desperate, more oil drilling would occur to meet demand and to curb prices both in California and elsewhere.

Throughout the country, new areas are opening up to shale development, with restrictions. Industry is complaining that such oversight is burdensome. But environmentalists are dismayed that pristine regions are even accessible.

Therein is the dilemma, which is how to promote economic development while limiting emissions and degradation.

“Wherever there is an environmental consequence, regulators could require developers to offset that with an environmental gain,” says Bob Bellemare, chief operating officer for Mykrobel, an energy consulting firm in New Mexico. “Markets work better when there are regulations on which industry can depend.”

California has reached a crisis point. As such, Governor Brown wants to pursue the idea of increasing oil production there as a way to provide jobs, boost tax revenues and fuel the auto sector. Achieving those goals, however, cannot negate the ongoing environmental achievements — a proposition to which there are many unresolved questions.

Follow this Ali Ghalambor Twitter page for more updates about oil and gas industry. 

Thursday, March 14, 2013

REPOST: Coal to gas moves are generating economic waves

How does replacing coal to cleaner energy resources induces economic waves? This Forbes.com article provides the information.

Image Source: forbes.com

Shifting from coal to gas hasn’t triggered the financial tailspin about which many utilities had warned. But it has created an economic wave, which is fostering the next-generation of energy jobs while also helping to clear the air.

All utilities that own and operate coal-fired fleets must decide whether to retire or to retrofit their aging plants, many of which were built in the 1950s. Multiple federal regulations are now in the pipeline and involve mercury, coal ash and greenhouse gases. That will result in the closing of a cadre of coal plantsand the construction of numerous combined-cycle natural gas facilities.

“Our analysis shows that switching to cleaner energy sources and investing in energy efficiency often makes more economic sense than spending billions to extend the life of obsolete coal plants,” says Steve Frenkel, director of the Union of Concerned Scientists‘ Midwest office. “Regulators should require utility companies to carefully consider whether ratepayers would be better off by retiring old coal plants and boosting electricity generation from natural gas and renewable energy sources like wind.”

Spending billions to upgrade old coal plants is unwise, he continues, saying that as much as 18 percent of the nation’s coal portfolio should be mothballed. That equates to 353 generators in 31 states.

While the industry is hoping for delay, action will ultimately be inevitable. Standard & Poor’s says that a third of coal plants are working to comply. Utilities such as Exelon Corp. and PSEG Corp. began ditching their older generators in the 1990s and replacing them with cleaner alternatives.

But the ratings agency says that two-thirds of the existing U.S. coal fleet is older than 30 years and must either be retired or retrofitted. The older and smaller facilities are better candidates for closure while the newer and bigger coal plants could be modernized. Coal now supplies about 40 percent of the electricity here while natural gas comprises about 30 percent, says the EnergyInformation Administration. That could rise to 40-50 percent in 20 years.

Coal is responsible for about a third of all carbon dioxide emissions. It also releases double the other pollutants regulated by the Clean Air Act that include sulfur dioxide and nitrogen oxide. When combusted, natural gas produces roughly half the emissions as does coal. But it, too, has its critics who say that the exploration methods are harmful and that more of the national treasure should be invested in sustainable energy.

Several utilities have recently announced that they would retire their older coal-fired plants and replace them with those that burn natural gas. The decisions are predicated on federal and state environmental laws as well as prior court cases, not to mention the relative cheap price of natural gas.

Georgia Power, a subsidiary of Southern Company, is retiring 2,000 megawatts of fossil-fired generation. Altogether, it will be shedding 15 coal and oil facilities. Five years ago, the parent’s fuel mix consisted of 70 percent coal but now it is 47 percent. That coal configuration will fall further unless technologies that would capture and bury carbon are commercialized.

“They are faced with economic choices that are becoming untenable,” says Craig Dowdy, a partner with McKenna Long in Georgia. “Now, with the pricing of natural gas, it has become a good option. I would still advise utilities to have diverse portfolios, which will be their continued plan as it will be for their regulators. It adds to the ultimate reliability.”

Meantime, Duke Energy just held a teleconference with analysts to discuss, in part, its move to shutter 6,800 megawatts of coal-based electricity by 2015. It will spend $9 billion to upgrade its generation fleet, which involves mostly the construction of natural gas units as well as an advanced coal gasification plantthat will become operational later this year.

The company’s progressive chief executive, Jim Rogers, is calling on the U.S. Congress to put a price on carbon. The timing is right, he said, during the call. That’s because the cost of competing fuels is becoming economical: natural gas as well wind and solar. Wind and natural gas have comprised the preponderance of installed generation capacity in the past decade.

Consider MidAmerican Energy, a unit of Warren Buffet’s Berkshire Hathaway: It is nixing five coal-burning facilities by 2016 in Iowa, which is all part of a legal settlement it had reached with the Sierra Club. At the same time, it will retrofit two other coal facilities there next year. For its part, MidAmerican has become a leading wind energy producer.

American Electric Power, meanwhile, said that it would close three coal-fired power plants in Ohio, part of an earlier legal settlement that also requires the company to build 200 megawatts of wind and solar. And, Minnesota Power, a division of Allete, said this year that it would shut down two coal plants in the northern part of the state within two years.

What is the economic impact of switching from coal to gas? Coal has typically been considered more plentiful and its overall tonnage rates have been cheaper than all other competing fuels. Hence its high market share. But the huge new swaths of shale gas that can also be found in the country’s regions where coal now sits also provide a potentially rich new vein.

Billions will be ultimately invested throughout the shale gas supply chain. Those jobs would replace, or add to, those in the coal fields.PricewaterhouseCoopers says the tally will be 1 million new shale-related jobs by 2025.

“Every utility will have a series of coal units that must be replaced over time,” adds attorney Dowdy. “That does not mean that coal will become obsolete. Clean coal technologies will develop but coal will not have the same percentage of the utility market that it has today.”

Federal regulations have hastened the move from coal to natural gas. But abundant and cheap shale gas has sped up that transition. That’s a boon to both the economy and the environment, although one that does not obviate the need for utilities to hold a mix of generation assets.

Other petroleum production issues can be read in this Ali Ghalambor site.

Tuesday, March 12, 2013

Pipelines through the centuries

Pipelines are considered to be indispensable in the oil and gas industry. Vital in gas transport processes, a pipeline system is “a transportation network of pipes, valves, and other parts connected together to deliver gaseous or liquid products from a source (supplier) to a final destination.”

Image Source: news.kievukraine.info

Pipelines, however, seem to have preceded modern natural gas use. Historical evidence suggests that pipelines existed as early as 900 B.C. The Chinese used bamboo tubes to build contraptions that resembled modern pipelines and utilized these apparatuses to carry natural gas.

In the United States, natural gas use didn’t take place until 1821. During this era, pipelines were composed of crude wooden structures which were made from no more than hollowed-out logs. These carried gas from “burning springs” to adjacent buildings where the gas was utilized for lighting. Because of this precarious nature of the technology, engineers came up with the iron pipe in 1843 to mitigate the risks of piping gas.

Image Source: storage.canoe.ca

The rise of modern pipelines

World War II marked an unprecedented surge in petroleum demand for the United States, especially in its war mobilization efforts. The demand heightened after the loss of 50 petroleum tankers which were seized by marauding German submarines. To cater to this emergent situation, the pipeline industry launched a massive program of emergency construction.

The most noteworthy pipeline project at the time was the construction of War Emergency Pipelines (WEP) which was financed by the government. WEP, essentially a nonprofit corporation, was composed of 11 pipeline and oil companies which were organized under government sponsorship. Since 1942, during the the height of WWII, WEP kicked off the construction of the world’s biggest large-capacity cross-country petroleum pipeline system. Of note is an oil line dubbed Big Inch, a line with a diameter of 24 inches and which spanned for 1,340 miles.

Image Source: loc.gov

From then on, the science of pipeline production has moved on to look for better and more modern ways to transport natural gas between destinations.

This Dr. Ali Ghalambor Twitter account provides updates on the latest in the petroleum industry.

Monday, March 11, 2013

Repost: “With Hugo Chavez gone, US oil industry eyes Venezuela”

It seems that Hugo Chavez’s death actually has a deeper impact than previously thought.  Oil analysts don't expect sudden changes in Venezuela oil policies after Hugo Chavez's death. But political change in post-Chavez Venezuela could open its oil industry to much wider foreign investment. Learn more about the future of Venezuela’s oil market by reading this article from The Christian Science Monitor.

Venezuelan President Hugo Chavez's death is not likely to result in near-term changes to the Venezuelan oil industry or global energy landscape, but it could ultimately result in political change that would reopen the country's energy industry to foreign investment.

As news of Chavez's death swept through IHS CERAWeek, the world's largest conference for energy executives, in Houston on Tuesday afternoon, participants flocked to televisions, looking for news on the political future of a country that has the second largest oil reserves in the world.

"It's too soon to say what Hugo Chavez's death means for oil prices," said IHS Vice Chair Daniel Yergin. "But it is certainly true that oil prices are what made Hugo Chavez possible," as the collapse of oil prices in the late 1990s "gave him the opening to become president" and rising oil prices since 2000 "gave him the financial resources to consolidate power."

Analysts and attendees at the Houston energy conference said it was unclear what would happen after the country holds an election for a new president. For now, Venezuela's Vice President Nicolas Maduro is in charge and the country's army chiefs are reported to be supporting him.

"Without (Chavez's) charisma and force of character, it is not all clear how his successors will maintain the system he created," Yergin said.

Among the major integrated oil companies, ConocoPhillips and ExxonMobil could stand to benefit greatly from regime change in Venezuela, if the new leadership allows overseas oil companies to return, analysts said.

The nationalization of Venezuela's oil industry in 2007 resulted in the exit of those two companies who were unable to reach a new agreement with the state-owned oil company PDVSA.


Too Early to Tell

"It's too early to tell how the new leader will handle it, but ConocoPhillips could benefit the most," said Fadel Gheit, senior oil analyst at Oppenheimer & Co.

ConocoPhillips was the biggest foreign stakeholder in Venezuela at the time of nationalization and could benefit greatly from regaining its former assets, Gheit said, adding: "The book value of assets that were confiscated was $4.5 billion (at the time.) The market value is now $20 to $30 billion... ConocoPhillips could eventually see a net gain of $10 billion."

But that assumes ConocoPhillips would want to return to the country. Venezuela's economic problems extend beyond the oil business. "It really much depends on what kind of government will follow Chavez," said Enrique Sira, IHS senior research director for Latin America.

"The only thing for sure is the fact that the industry is in very poor condition -- upstream, downstream, power, and distribution. Electricity has to be rationed. It has a gas deficit that's been running for years and the country doesn't produce anywhere near what it could produce," Sira said.

ConocoPhillips CEO Ryan Lance, who spoke Tuesday morning at the Houston energy conference prior to news of Chavez's death, noted how the global energy landscape has changed dramatically.

"The new landscape is like someone picked up the energy world and tilted it," he said, as countries with great demand for energy and those with ample supplies has changed. The U.S. is now exporting more of its natural resources than ever before, he said. Those exports include shipping record supplies of US gasoline to Venezuela. Meanwhile Venezuela oil exports to the U.S. are on the decline.

Sira said Venezuela could produce as much as 6 to 9 million barrels of oil a day but now it's probably less than 2.5 million barrels. He said oil production peaked in the early year at 3.3 million barrels.

Venezuela ranked fourth in oil imports to the U.S. last year at 906,000 barrels per day, according to the U.S. Energy Information Administration (EIA). But crude oil imports from Venezuela have been declining steadily since 2004, when they peaked at 1.3 million barrels per day.

Venezuela's refineries are also in such poor shape that it has to import gasoline and diesel from the U.S. In December, Venezuela imported a record 197,000 barrels per day of petroleum products from the U.S., according to EIA data.

In the short-run, oil prices may not be greatly impacted by regime change in Venezuela since for now the flow of oil from Venezuela to the U.S. and domestic fuel imports to the South American country are likely to continue current trends, said Houston-based energy analyst Andy Lipow. "We both need each other."

Read this Ali Ghalambor blog for more articles on the oil and gas sector.

Sunday, March 10, 2013

Installing offshore pipelines: Facing the challenge of bringing gas onshore

Due to great demands for oil in recent years, offshore pipelines are also receiving great attention. To date, over a third of the growth in drilling worldwide is expected to come from offshore pipelines alone. This fueled a greater need for the development of offshore pipelines than before, and the number of petroleum engineers needed to efficiently develop and manage these systems has also increased.

Image Source: dnv.com

The task wouldn’t be easy, though. Offshore pipelines are known for being complicated systems as they are installed at the bottom of the sea, and engineers are required to have years of education and training before they can operate offshore pipelines. The location of these pipelines alone makes for an extremely demanding installation process; more so with all the details that come with the nitty-gritty of a system’s operation and upkeep.

Specialized knowledge is required to fulfill such a specialized function. Unfortunately, there has been a notable shortage of literature on petroleum engineering, prompting industry experts Boyun Guo, Shanhong Song, Ali Ghalambor, and Jacob Chacko to write Offshore Pipelines, an up-to-date reference for engineers and developers to conquer the challenging task of bringing oil and gas onshore.

Image Source: pipesyscon.com

The authors wrote the book with pipeline design engineers, pipeline operation engineers, and management personnel in mind, taking into consideration the following objectives:

• For learners to be able to learn cost-effective methods in the management and operation of offshore pipeline systems.

• For learners to be acquainted with the burgeoning science of “deepwater pipelining,” a relatively new technology which has been only developed in the past 10 years.

• For learners to be able to master the art of designing pipelines at a low cost without compromising safety and long-term operability.

Image Source: tower.com

This Ali Ghalambor Twitter account updates followers on the oil and gas industry.

Friday, March 8, 2013

REPOST: Energy-rich nations must lead on climate

This CNN.com article talks about the connection between renewable and clean energy and climate change.

Image Source: cnn.com

Four months ago today, U.S. President Barack Obama declared a state of emergency for five states and the District of Columbia over the approach of Hurricane Sandy. The super storm was a reminder that climate change is blind to faith, socio-economic status and geography. It also underscored that supplying cheap, sustainable energy and mitigating climate change is not a challenge for future generations – it is our challenge today.

And energy-rich nations have a shared responsibility to do more. After all, they have the financial and technical ability, as well as decades of expertise, to create the necessary growth of a new energy industry balanced by renewable sources of power.

But beyond having the resources and expertise, energy-rich nations also have an essential element for any sustainable solution: taking action now is in their own interests. In fact, it is an economic and environmental opportunity that it would be almost foolhardy to miss. Oil and gas are finite. Renewable energy is forever. To extend their energy leadership into the future, countries rich in hydrocarbons should seize this opportunity to invest profits into long-term economic growth.

Recent investments are demonstrating that energy-rich countries have recognized the potential payoff. For example, investments by the United Arab Emirates – home to the seventh largest proven oil reserves – account for 12 percent of the world’s installed concentrated solar power capacity. The United States, a nation predicted to become the world’s largest oil producer, invested $51 billion in renewables in 2011. And Saudi Arabia, a country synonymous with oil production, pledged to invest $109 billion to develop 41GW of solar capacity by 2032. In 2012, despite the global economic downturn, $268 billion was still invested worldwide in renewable energy. Today, renewables remain the fastest growing sector in the energy industry.

These investments are paying off. The price of solar panels has fallen by two-thirds in the last two years, due to the incredible scale-up of production capacity in China. And the price of onshore wind turbines has dropped by 10 percent. Together, renewable power (excluding large hydropower) accounted for 44 percent of new generation capacity added worldwide in 2011.

Yet despite these impressive strides, we need to deploy more renewable power to keep pace with rising energy demands caused by soaring growth in developing economies.

Moving the cost of clean energy to parity with conventional power will require a mix of diverse policy mechanisms, direct government investment and innovative platforms for knowledge-sharing. Energy-rich countries have the resources and expertise to drive the necessary change across these dimensions.

No universal policy will spur energy efficiency and renewable energy development. From the feed-in tariffs that have jump-started renewable energy deployment in Europe, to the state-level renewable portfolio standards that have supported growth in the United States, location specific policies have proven that different approaches can have similar results.

Local governments, states, provinces and countries must continue to be the test-beds for forward thinking policy that result in industry growth and investment. But policy experimentation alone is not enough. Governments, particularly in energy-rich nations, must find ways to multiply the impact of their leadership, by sharing effective policy, learning new policy and reaping the benefits of that experimentation.

While healthy competition has been at the core of innovation for centuries, innovating for the common good requires a new mindset. Safeguarding proprietary knowledge – fundamental to commercial competition – can hinder human development when it comes to advancing common needs like education, human health, poverty reduction, or in this case, global climate change.

In a world of widely distributed knowledge, commercial interests can also gain from a more collaborative model. Companies can no longer afford to rely solely on their own research to innovate complete solutions to complex problems. Instead, they should be able to buy or license information from other companies and implement it accordingly. Using this model, companies can specialize and share risk, as well as reap the rewards.

The estimated $50 billion price tag from Sandy is simply the start. Widespread droughts are driving up food prices around the globe. Powerful tropical storms combined with sea-level rise are doing more economic damage and costing more to recover from than ever before. In short, the economic risk of climate change – the high cost of inaction in the future – far outweighs the cost of action today.

Renewable and clean energy solutions must be essential components of the global energy mix moving forward. Energy-rich nations are in the best position to collectively carry that torch.

The time to do more is now.

Ali Ghalambor is one of the foremost figures in the oil and gas industry because of his remarkable contributions. Follow this Twitter page for more updates.

Tuesday, March 5, 2013

The roles of a pipeline design engineer in offshore drilling

The oil and gas sector greatly relies on pipes. To ensure the profitability of these sectors, an efficient piping system must be established. These systems are used to convey fluids, which may either be liquids or gases, from one location to another, and are central to petroleum processes.

Image Source: weholite.com

To ensure the efficacy of fluid transport using these piping systems, a relatively new engineering discipline has emerged: pipeline design engineering.

In recent years, the demand for pipeline design engineers has increased alongside the need for offshore drilling. To date, over a third of the growth in drilling worldwide is now expected to come from offshore pipelines, thus fueling the clamor for improved academic preparation for the challenging tasks that may confound the budding engineer.

Image Source: cannoncorp.us

It is for this reason that industry experts Boyun Guo, Shanhong Song, Ali Ghalambor, and Jacob Chacko penned Offshore Pipelines to provide students with up-to-date reference in facing the challenges of bringing oil and gas onshore. It also equips future pipeline design engineers with the following sets of skills:

• The ability to design low-cost pipelines that allow for safety and long-term operability.

• The ability to operate pipeline systems in a cost-effective manner.

• The ability to understand the relatively new science of deepwater pipelining.

Image Source: careersinoilandgas.com

Dr. Ali Ghalambor is a renowned leader in the oil and gas sector, and has constantly been recognized for his invaluable contributions in petroleum engineering technology and education. To read more updates on the oil and gas industry, visit this blog.

REPOST: Natural gas futures rally to highest level in nearly 6 weeks

This Nasdaq article reports how climate affects the demand for natural gas in the market .

NEW YORK--Natural gas futures settled at their highest level in almost six weeks Monday, lifted by forecasts for below-normal temperatures that suggest steady demand for gas-fired heating in the coming weeks.

Natural gas for April delivery settled 7.3 cents, or 2.1%, higher at $3.529 a million British thermal units on the New York Mercantile Exchange. That is the highest settlement for a front-month contract since Jan. 23.

A winter storm is expected to dump heavy snow from the Midwest to the Mid-Atlantic in the next few days, according to weather forecasts, while below-average temperatures are expected to persist for at least the next few weeks.

"The latter half of month, with below-normal conditions for the lion's share of the U.S.--that's just lending some late-season heating demand," said Matt Smith, commodity analyst at Schneider Electric.

Roughly half of all U.S. homes are heated using natural gas, so below-normal temperatures typically boost demand for the fuel in the winter.

According to Commodity Weather Group, below-normal temperatures are set to persist across much of the East Coast and Midwest over the coming weeks, the private forecaster said in its outlook for the next 11 to 15 days.

The coming storm is the latest event in a winter that has proven a boon for bulls in the natural gas market. Sustained cold temperatures have led to higher demand and have helped whittle away last year's massive inventory overhang.

Last week, the Energy Information Administration said natural gas inventories fell by a greater than expected 171 billion cubic feet, placing stockpiles at 2.229 trillion cubic feet. That is 12% below last year's level, when a combination of weak demand and surging shale gas production led to a glut of natural gas.

Market watchers caution that the recent rally likely has an expiration date, given the onset of spring.

"We're just running out of winter. Spring is three weeks away," said Dominick Chirichella, analyst at the Energy Management Institute in New York. "I think it's going to take a fundamental change to really convince the buyers to stay in the market at these levels."

Author of various books on petroleum production, Ali Ghalambor continues to deliver numerous technical presentations and courses throughout the world. This Facebook page contains more updates about the industry.

Sunday, March 3, 2013

Natural gas: An important resource in the 21st century

While the onset of nuclear and hydrogen energy has provided some sort of a drawback for the oil and gas sector, the industry per se may not actually be affected by this energy resource changeover anytime soon. In fact, several studies claim that the major source of energy for the global economy in the first half on the 21st century will remain to be natural gas.

Image Source: people.hofstra.edu

This is in accordance with the energy source shift pattern that has been observed time again. Mankind has come a long way since the 15th century when dependence on mere animal and biomass sources was at its peak. As levels of technical expertise improved, man has been able to tap into more efficient resources such as nuclear fission and natural gases. By the end of the 20th century, natural gas use already comprised about 20 percent of the world’s energy resources.

Image Source: commodityonline.com

With the gradual obsolescence of fossil fuels such as coal, natural gas remains to be the most viable source of efficient energy. Apart from the remote possibilities of the anticipated ingress of clean coal technology, expected progress in biotechnology to improve the chances of biofuels, natural gas is continuing to being recognized by the vast majority as the fuel of the future.

Image Source: commodity-tips-call.blogspot.com

While an impending transition may be called into question, leveraging this growing attention to natural gas may still provide players with maximum profitability in the long run.

Read more updates about Dr. Ali Ghalambor and his work at this Wordpress site.