Tag Archives: California

Monterey Shale estimate bungled: background & causes

Repost from the Post Carbon Institute

The Peak Oil Crisis: The Monterey Shale Debacle

May 28, 2014  |  Tom Whipple

Last week the LA Times ran a story saying that the U.S. Energy Information Administration (EIA) is about to reduce “its” estimate of the amount of shale oil that can be recovered from the Monterey Shale under California by 96 percent. This reduction cuts the estimate of producible shale oil in the U.S. by 60 percent.

This development, of course, came as no surprise to those of us who have been watching the Monterey Shale situation closely. To begin with, anyone with the most rudimentary knowledge of geology knows that California is where great tectonic plates have been banging together for millions of years turning the earth below the surface into an incredible jumble. To produce shale oil one needs nice flat strata of oil bearing rock that run on for miles.

Then of course we have the issue of Chevron, which has been drilling in California since 1879. If one believes there really are 15 billion barrels of shale oil under the state, then why isn’t Chevron pumping it out by the tanker load?

Thus the interesting parts of this story are: who said there were 15.4 billion barrels of shale oil under California in the first place?; and how did the Department of Energy come to accept such an obviously flawed estimate, and trumpet the story far and wide so that many investors and policy makers in California and Washington fell for it?; and then why did it come to such a screeching halt leaving the country’s prospects for “energy independence” a dubious proposition?

Moreover, the government’s retraction of its estimate of shale oil prospects in California raises issues about just how good are its forecasts that North Dakota and Texas will continue producing large amounts of shale oil into the next decade.

The great Monterey Shale oil myth got its start back in July 2011 when the EIA stapled a cover on a contractor-produced “study” that it paid for entitled Review of Emerging Resources: U.S. Shale Gas and Oil Plays. In the fine print of the cover pages, however, the EIA did note that the “views in this report should not be construed as representing those of the Department of Energy.”

The underlying study, which was prepared by a small consulting company, INTEK, Inc., in Arlington, Virginia, purports to have been based on a wide range of sources and methods. However when it came to California the report’s author, Hitesh Mohan, said the California portion was primarily based on technical reports and presentations from oil companies. Presentations from oil companies are prepared to raise money from investors and can be expected to lay out the most optimistic view possible.

The methodology that produced the mythical estimate seems to have been something like this: take the 1,700 square miles of the Monterey Shale, drill 28,000 wells in it at the rate of 16 wells per square mile, wait until each well produces 550,000 barrels of oil, and you have your 15.4 billion barrels. Later research showed that only a handful of California oil wells ever produced 550,000 barrels of oil or anything close.

The California story only gets worse. The California oil industry funded a joint study by the University of California and the industry which concluded that exploiting the supposed 15 billion barrels of shale oil would result in from 512,000 to 2.8 million new jobs in the state; would increase per capita GDP by $11,000 and boost government revenue by up to $24.6 billion per year. All the politicians had to do was get out of the way, stop all this environmental nonsense over fracking and more regulations, and the state would be rich.

The writing on the wall came last year when thorough and independent studies by the Post Carbon Institute pointed out first that very little oil was coming out of California due to fracking of shale deposits as compared to those in North Dakota and Texas. In December of last year, a second and more detailed well-by-well study of what was actually happening in California blew the ridiculous INTEK/EIA conclusion out of the water. Although the Post Carbon Institute studies got little nationwide attention, several California newspapers and TV stations, which are much closer to the state’s well-being, did in-depth stories concluding that the 15 billion number and the ensuing riches were unlikely eventualities.

It is obvious that the new studies brought pressure on the Department on Energy to take a second look at what they were saying about shale oil in California. When it became obvious that were endorsing nothing but industry hype, they did an about face and lowered the estimate to 600 million barrels, which in itself may be high.

The EIA’s reaction to questions about one of the biggest blunders in its history is interesting. EIA Director Adam Sieminski told the Wall Street Journal that the oil bearing rocks are still under California, but the technology to extract the oil has not yet been developed. Industry spokesmen are more upbeat, saying that hundreds of smart engineers are working on the problem of producing California’s shale oil and that someday, if not sooner, they will be successful.

The California shale story raises once again questions about just where America’s shale oil and gas production is going and along with it the future of industrial society. Naturally, none of us want to hear that hard times, lower economic growth, and fewer jobs lie ahead. The Department of Energy clearly is trying to draw a fine line between the gross over-optimism exhibited in the Monterey shale incident and an energy apocalypse. But, do we really have to wait until the evidence of over-optimism is so overwhelming that it has to be admitted? There are several other “Monterey Shales” out there well-understood in the peak oil community where the Department of Energy continues to make overly optimistic estimates which will one day rebound to the detriment of us all.

Originally posted at Falls Church News Press.

National energy boom blurs political battle lines

Repost from The Associated Press, The Big Story

National energy boom blurs political battle lines

By NICHOLAS RICCARDI — Apr. 19, 2014
Energy Politics
FILE – This March 25, 2014 file photo shows perforating tools, used to create fractures in the rock, lowered into one of six wells during a roughly two-week hydraulic fracturing operation at an Encana Corp. well pad near Mead, Colo. The energy boom is scrambling national politics. Democrats are split between environmentalists and business and labor groups. Some deeply-conservative areas are allying with conservationists against fracking, the technique largely responsible for the surge.  (AP Photo/Brennan Linsley, File)

DENVER (AP) — The U.S. energy boom is blurring the traditional political battle lines across the country.

Democrats are split between environmentalists and business and labor groups, with the proposed Canada-to-Texas oil pipeline a major wedge.

Some deeply conservative areas are allying with conservationists against fracking, the drilling technique that’s largely responsible for the boom.

The divide is most visible among Democrats in the nation’s capital, where 11 Democratic senators wrote President Barack Obama this month urging him to approve the Keystone XL pipeline, which is opposed by many environmental groups and billionaire activist Tom Steyer. The State Department said Friday that it was extending indefinitely the amount of time that federal agencies have to review the project, likely delaying a pipeline decision until after the November elections.

Several senators from energy-producing such as Louisiana and Alaska have distanced themselves from the Obama administration, while environmental groups complain the president has been too permissive of fracking.

There is even more confusion among Democrats in the states as drilling rigs multiply and approach schools and parks.

California Gov. Jerry Brown was shouted down at a recent state convention by party activists angry about his support for fracking. New York Gov. Andrew Cuomo has kept fracking in his state in limbo for three years while his administration studies health and safety issues. In Colorado, Gov. John Hickenlooper has drawn environmentalists’ ire for defending the energy industry, and a ballot battle to regulate fracking is putting U.S. Sen. Mark Udall in a tough situation.

But the issue cuts across party lines.

Even in deeply Republican Texas, some communities have restricted fracking. In December, Dallas voted to effectively ban fracking within city limits.

“You’re looking at a similar boom as we had in tech in 1996,” said Joe Brettell, a GOP strategist in Washington who works with energy companies. “The technology has caught up with the aspirations, and that changes the political dynamics fundamentally.”

Those technological advances have made it possible for energy companies to tap deep and once-untouchable deposits of natural gas and oil. They include refinements in hydraulic fracturing, or fracking, which is the injection of chemicals into the ground to coax buried fossil fuels to the surface.

The U.S. is now the world’s largest natural gas producer and is expected to surpass Saudi Arabia soon as the world’s greatest oil producer, becoming a net exporter of energy by 2025.

The boom has brought drilling rigs into long-settled neighborhoods, raising fears of water contamination, unsafe traffic and air pollution, and outraging residents.

Pollster Steven Greenberg said Cuomo provides little notice before his public appearances because anti-fracking protesters will crash his events. Republicans blame the governor for stymieing growth. New York voters split evenly on fracking, with Democrats only modestly more likely to oppose it than Republicans.

“No matter what he decides, he’s going to have half the people upset with him,” Greenberg said. “From a purely political point of view, it’s hard to argue with his strategy — punt.”

In California, Brown has a long record of backing environmental causes, but he’s drawn the wrath of some environmentalists for supporting fracking. One group cited the $2 million that oil and gas companies have given the governor’s causes and campaigns since 2006. Democrats in the Legislature have proposed a freeze on fracking but are not optimistic Brown will support it.

The Democratic split is sharpest in Colorado.

Hickenlooper, a former oil geologist, has been a staunch supporter of fracking; at one point he said he drank fracking fluid, albeit a version without most of the hazardous chemicals. His administration has fought suburban cities that have banned fracking, insisting that only the state can regulate energy exploration.

In response, activists are pushing 10 separate ballot measures to curb fracking. One measure would let cities and counties ban it. The effort has the support of Colorado Rep. Jared Polis, a wealthy Democrat. At the state party’s recent convention, he gave a rousing speech nominating Hickenlooper for a second term but acknowledged “none of us … are going to agree on every single issue.”

Some Colorado Democrats worry that the ballot push is bringing energy groups who generally support Republicans into the state. One pro-fracking group has spent $1 million in TV ads.

Jon Haubert, a spokesman for the group, said leaders in both parties think the measures are economically dangerous. “We look at that and say this seems to be an extreme opinion,” he said, referring to the initiatives.

The ballot measures will force Democratic candidates to choose among environmentalists, labor groups and Colorado’s business community, whose political and financial support is vital to Democrats in the swing state.

Udall embodies this dilemma. He’s an environmentalist in a tight re-election campaign with Republican Rep. Cory Gardner, who represents an oil-and-gas rich, mostly rural congressional district.

In an interview, Udall declined to say if cities should have the right to ban fracking. “I’m not a lawyer,” he said.

Hickenlooper has put in place several landmark regulations — requiring that drilling occur a set distance from homes and schools and limiting methane emissions from energy exploration. But that has not assuaged activists such as Laura Fronckwiecz, a former financial worker who got involved in an effort to ban fracking in her moderate suburb of Broomfield after a drilling well was planned near her children’s elementary school.

A Democrat, she’s aghast at her party’s reluctance to embrace the cause. “Ten years ago, I’d say it was a progressive cause they’d get behind,” Fronckwiecz, 41, said, “but much has changed, and the politics of oil and gas are not what you’d expect.”

Fronckwiecz says she has Republicans and Libertarians in her coalition, as do activists pushing to limit fracking in energy-friendly Texas. While the GOP-dominated Legislature in Texas has rejected efforts to limit drilling, activists have earned small victories in towns and cities that have limited drilling, and one big win, the Dallas vote.

Sharon Wilson, Texas organizer for the environmental group Earthworks, says she gets a warm reception from conservatives and Libertarians. “When they come into your community and start fracking,” she said, “it does not matter what your political affiliation is.”

NRDC report on Valero meeting – Valero’s Magic Box

Repost from NRDC Switchboard, Diane Bailey’s Blog

Valero’s Magic Box, balancing sludge v. stink of crude oil

Posted March 26, 2014

valero meeting.jpgLast night I learned all about the magic box of Valero’s “operating envelope” at their Benicia (San Francisco Bay Area) refinery during their public meeting for the proposed Crude Oil Rail Terminal.  Valero staff described the proposal to a packed audience, speaking cheerfully about bringing two 50-tanker car trains of crude oil in and out of Benicia each day. The friendly façade crumbled a little during the lengthy explanation to concerned community residents about the type of crude oil that could be coming in those tanker trains, confirming that they may carry dirty tar sands and volatile Bakken crude oil.

Valero - Feedstock Profile (any crude can fit in the blend box) (2).png

This slide from Valero’s presentation shows the magic box that bounds the density of the crude oil – the sludge factor, and the sulfur levels – aka the stink factor – of the crude oil that the Valero Benicia refinery is capable of handling.  It turns out though that the refinery can take a lot of different kinds of crude oil outside the magic yellow box; these are the yellow triangles.  The yellow triangles outside the magic box include both Bakken and tar sands crude oil.  That is to say that they can get the world’s dirtiest and most dangerous crude oils into the magic box of the refinery operating envelope by mixing them.  That’s right, they can brew up an exceptionally hazardous cocktail of tar sands sludge mixed with volatile Bakken crude oil to get inside the magic box.

So, Valero can take the sludgiest, highest stink crude oil and cut it with lighter oil.  Then, voila, they say there are no changes to the balance of sludge and stink in the crude oil refined.  Although this mix may look like the same old conventional crude oil according to Valero’s magic box theory, the reality is that this kind of blend of extreme crude oils creates the greatest public health hazards. Why? It retains the toxic heavy metal contamination from sludgy crudes and that comes out as air pollution; It is much harder to process, which means even more air pollution; it is unstable, prone to volatilizing toxic hydrocarbons like benzene; and it is highly corrosive, putting the refinery and infrastructure at greater risk of accidents.

Will Valero come clean with a real analysis of the public health, safety and environmental risks of the project when the draft Environmental Impact Report comes out next month? Or will they hide these impacts in magic boxes?

California Senate hearing on crude oil train safety, Wednesday 3/19

Repost from Contra Costa Times
Agenda – Joint Hearing on Emergency Response to Rail Accidents 3-19-14 CA Senate
Background – Joint Hearing on Emergency Response to Rail Accidents 3-19-14 CA Senate

Sacramento: Train accidents and emergency response subject of state Senate hearing

By Tom Lochner  Contra Costa Times
Posted:   03/18/2014 02:48:11 PM PDT | Updated:   84 min. ago

SACRAMENTO — Amid public concern over several train accidents and explosions in North America over the past year, and increased transport of crude oil into California by rail, two state Senate committees will hold a joint public hearing on emergency response to rail accidents on Wednesday.

In Northern California, much of the crude-by-rail is headed for Contra Costa County, home to four oil refineries. A fifth refinery is located in nearby Benicia.

There will be presentations by officials of several state agencies responsible for emergency response:

  • Office of Emergency Services
  • Department of Fish and Wildlife, Office of Spill Prevention and Response
  • Department of Forestry and Fire Protection
  • Department of Toxic Substances Control
  • Certified Unified Program Agencies (CUPAS), including the Sacramento County Environmental Management Department

The hearing, by the Environmental Quality and Natural Resources and Water committees, will be at 9:30 a.m. in the California State Capitol, Room 3191, in Sacramento.

Public participation is invited.

The hearing will be televised. More information is available at http://senate.ca.gov/tvschedule. {To access the video, go to this link, note the correct ROOM number – 3191, then click on “Listen To Rooms” at left.  Find the correct room number again, and click. – BenIndy editor RS]