Everyone enjoys a party, but cleaning up the empties…not so much. I am of course referring to Alberta’s abandoned/suspended well problem: a thorn in everyone’s side and currently the topic du jour in Canada’s oilpatch. From the viewpoint of an eco-warrior, it is a black eye for the government and the province. But it is also a nasty hangover for industry, and particularly small companies that are most at risk of perishing. The abandonment/reclamation (A/R) problem is at the epicenter of a [Read more]
Natural gas and power can move anywhere, but oil is too dangerous? How long do we have to put up with this nonsense?
Enough is enough. Major, nation-building infrastructure projects are being derailed for no good reason. Meanwhile almost anything can proceed in the name of green energy, no matter how appalling the environmental footprint, and all is silent. Pipelines currently bear the brunt of the attack, because everyone likes a dopey villain. People in British Columbia swear they will put their lives at risk to stop construction of any oil pipeline. Their sad enthusiasm is built on the work of [Read more]
Do we really have 100 years of natural gas? Maybe, if we avoid the feral pig approach to development
Last week I postulated that the world is possibly looking at massive production shortfalls, and despite current conventional wisdom shale resources won’t be able to make up the difference. There are a number of reasons for this misconception, with a primary one being that the media always needs a current object of desire that sweeps all before its path. Some weeks it’s Justin Bieber’s tattoos, others it’s shale resources. (Some phenomenon last longer than others, such as climate change – often [Read more]
A shortage of capital and surplus of turmoil may soon decimate global oil production, and shale hype won’t fill refineries
Despite the risk of sounding like an anti-shale lunatic, it’s important to counter the fan-boy mentality that’s gripped the media and swept away the common sense of analysts and commentators who might possibly know better. Any discussion about potential future global production shortfalls is dismissed with a hand wave and the ubiquitous “shale production will fill the void” nonsense. The same phenomenon existed 25 years ago with the “call on OPEC”, where it was universal knowledge that OPEC [Read more]
Energy education is sorely needed: A primer in weighing the alternatives
The energy business presents a challenge for the media to cover. Energy is wildly complex while the energy reporting business tends to have attention deficit disorder, or worse. Of course some other businesses are complex as well, but few have so many technical, economic and political aspects that are so globally intertwined. Specific aspects are also completely different. Natural gas is far different than oil, downstream businesses have more to do with chemical processing and marketing [Read more]
Venezuela vs. forest fires: mesmerized by minor market wiggles while global oil production threatens to implode
The consensus chatter on big media energy news sites is that the current oil price rally is for real, driven by production shortfalls in Canada (forest fires) and Nigeria (general mayhem). A few of the more exotic analyses get into storage statistics at Cushing, Oklahoma or Saudi Arabia’s latest attempt to jerk markets around to suit their mood. It’s all very interesting and great gossip material, but the proverbial piano is over our heads and we really should pay attention. Global crude [Read more]
Would a Trump energy policy be clever, ridiculous, or dangerous? Or will it be a footnote to his wrecking ball agenda?
Sometimes the best thing to do in life, when in a difficult spot, is to find something to laugh about. If there’s nothing you can do about the situation, why not see the lighter side? Which brings us, obviously, to the US presidential campaign. US politics has never been this interesting, and couldn’t be more so if it was a monkey vs. a minion. Which it is. No need to point out which is which, I presume. To be fair, Trump isn’t completely ape-like, but his responses can be; he might do [Read more]
No, the US is not an oil swing producer – there’s a pile of bankrupt companies to prove it
A recent article implied that the US is now the global oil swing producer. Actually the article more or less stated it, not implied it. The thesis was based on an interview with some random self-interested market commentator, yet is now well on its way to becoming an accepted truth because of Bloomberg's credibility. Not that half baked theories are anything new to the web, of course; such ill-documented speculation is what breathed life into the internet so stories like this shouldn’t be a [Read more]
Remediations Part II: Open-ended, massive clean up costs require cooperation or bankruptcy is at risk
In one of my previous articles, I looked at some of the issues related to the well abandonment/reclamation (A/R) process in Alberta. One of the biggest problems is that A/R costs are a bit like an iceberg. What is visible with respect to an abandonment or reclamation is a small piece of what’s involved. The rest could be anything. An iceberg's hidden part is beautiful clear ice, the unseen part of an old oil spill is generally somewhat less attractive. To make matters worse, the full extent of [Read more]
Alberta’s inactive well problem: Incentives needed to kickstart reclamations as who can afford to sign blank cheques?
Alberta currently has a big problem, aside from its decimated economy. Thousands of non-producing wells dot the landscape, many drilled decades ago. Pressure is growing to reclaim these sites due to new environmental concerns, and also ironically because landowners are losing surface rental income as companies go bankrupt. The pressure is unfortunately building at a remarkably bad time. The problem began in the late 1940’s and early 50’s as major new discoveries meant lots of drilling. Since [Read more]