May 2022 /// Vol 343 No. 5)
What’s new in exploration: Oil is still a good word
Exploration has been occurring ever since the first family of upright humans asked “what’s over there,” deciding to move to greener ground.
If it were not for the fossil tar pits at La Brea, in Los Angeles, what would the Hollywood film animators have done to the animated movie, “Ice Age?” What would the Romans have used in their trébuchet-launched fire balls to conquer Gaul? What would the brewery in Ukraine do to make anti-tank “cocktails?”
News: SPE and the AAPG have decided not to merger. I understand efforts toward survival within declining professional organizations, but there has been little P and not much A in the G. The now-Euro AAPG version has jumped over the wall of evil-P. SEG and SPE are still talking. That is encouraging. Greece announced that the country will begin exploration drilling for the first time in over 20 years to reduce reliance on Russian energy. No comment from the U.S. DOE or DOI. While ExxonMobil joins windmill tech, the firm’s exploration survives and thrives offshore Guyana. ConocoPhillips is expanding its oil E&P in the North Sea. Congratulations!
Exploration has been occurring ever since the first family of upright humans asked “what’s over there,” deciding to move to greener ground. Chthoniids formed alliances, resettling onto their neighbors’ territory [who took it from someone earlier]. Usually, the issue was taking control by killing and enslaving local sub-humans for access to resources. Neanderthals were apparently attempting to distill tar 200,000 years ago in Central Europe. Perhaps they had soothsayers looking into 2022.
Ideologies that teach badness of others fail to mention their intentions. When the Sultan of Oman conquered Indonesia, he used methods that were followed by the Japanese army of WW2. Lenin in 1917 showed the way for Stalin to take over two-thirds of Europe. Might I mention that among what each took as prizes were resources of energy. Each began their journey as explorationists, first in trade, then in trust, then ending in death. What can we see in parallel with the situation in Ukraine or with forced greening of the planet? Answer: A small, determined group believing themselves intellectually superior, some with tanks, others with media, relentlessly pushing. Who is subduing whom right now? I refer you to the “Evolution” illustration in the 1889 edition of Mark Twain’s novel, A Connecticut Yankee in King Arthur’s Court, Fig. 1.
Biden the chief explorer. After killing almost all U.S. exploration on federal leases, then asking for higher royalties, U.S. President Joe Biden flips around yet again and tries to source oil from Iran and Venezuela. The U.S. solution—Strategic Petroleum Reserve (SPR) releases. Does anybody remember how many barrels of salt water can be dissolved for every 100 bbl of oil removed from a cavern like those used in the SPR? [15 bbl of salt or 2.38 m3] Cavern shrinkage (aka closure) is estimated to be approximately 2 MMbbl per year, but it may be significantly higher.
What to do with all that salt water? The SPR is estimated to hold about 727 MMbbl of oil in subsurface areas that only have an authorized capacity of 714 MMbbl. Politicians were never good at simple math.
Hysteresis: Should anybody tell Biden et. al. the ratio of exploration time to production? I recall Amoco (1998) saying something about the cost of delays in seismic data acquisition, processing and interpretation on a certain offshore block constituting a value to them of nearly $320,000 per month. How does that fit with “9,000” permits?
History lesson, CERA. As stated by the CERAWeek website, “Now in its 40th year, CERAWeek is widely considered to be the most prestigious annual gathering of CEOs and Ministers from global energy and utilities … along with a growing presence of tech. It has been described by the Financial Times as the ‘the Davos of energy.’”
In 1983, Cambridge Energy Research Associates (CERA) was founded in Cambridge, Mass., by Dr. Daniel Yergin and James Rosenfield. Dr. Yergin is author of the Pulitzer Prize winning book, The Prize, as well as his 2011 effort, The Quest: Energy, Security, and the Remaking of the Modern World. Emphasis on remaking. Yergin is vice chairman of S&P Global and serves as Chairman of CERAWeek. Maybe we should rethink our involvement in persons, companies or organizations that are blatantly anti-exploration.
If the world ran on lemonade, our industry would be the leader in its provision—paraphrase from Corky Frank, senior vice president for Refining, Marathon Oil, circa 1988. I believed him.