Written by Wood Group Intetech's Dr Liane Smith (Director and Founder) and Kyle Volf (Manager, USA)

Society’s tolerance of industrial accidents has dropped dramatically. Even small-scale issues have the potential to diminish a company’s brand value. As the appetite for risk has fallen, oil and gas operators have had to employ increasingly sophisticated monitoring and control systems to provide safeguards for their wells, pipelines, and production facilities. Yet many firms lack visibility at field or enterprise level because information relating to well production, barrier equipment, and design is held in different departments or various formats. These ‘silos’ make it difficult for management teams to identify problems, make informed decisions, and take remedial action.

Without an integrated source of well integrity data or a uniform method of analyzing that data, it is difficult for oil and gas firms to effectively manage the human and organizational aspects of risk.

Improvements in safety and serious lapses

In 2010, a year that saw safety issues related to oil and gas exploration dominating headlines around the world, the rate of fatalities was actually the lowest on record. This finding was based on an analysis of 3,411 million work hours of data in 102 countries by the International Association of Oil & Gas Producers (OGP), who has been publishing safety data since 1985.

Despite the continuous improvements in personal safety, the oil and gas industry has had to deal with several process safety lapses in recent years. The most significant of these was the Macondo incident in the Gulf of Mexico. Within months of Macondo, the OGP established the Global Industry Response Group (GIRG), which is overseeing industry efforts to determine what can be done on an international scale to improve well incident prevention, intervention, and response capabilities. The GIRG has determined more reliable well safety relied on renewed efforts in four key areas:

• Creation of an industry-wide well control incident database

• Assessment of blow-out-preventer reliability and potential improvements to this equipment

• Improved training and competences and more attention paid to human factors

• The development and implementation of key international standards pertaining to well design and well operations management

Complexity and confirmation bias

Benchmarking using such KPIs is critical given that every large organization is, by its very nature, complex. Moreover, different levels of understanding and accountability will exist within any large organization, making it a challenging task to ensure process safety and effective risk management across all aspects of its business. Indeed, even the best designed, engineered, maintained and operated assets and facilities are still vulnerable to human failings and organizational complexity.

One recognized example of the latter is the asset based organization model, which can lead to conflicts of interest. Under the asset model, there will be an engineer or someone responsible for managing a group of wells and who must balance good practice against production targets. If that person encounters a situation where they have to weigh safety concerns against production or financial targets, they may be more likely to not elevate concerns when compared to safety engineers.

Another example of how process safety can be undermined by human error is where engineers and specialists working in groups have the tendency to ‘normalize risk’. This can be the case where a test has been conducted thousands of times, an abnormal reading is returned on a single occasion, and is therefore more likely to be viewed as an anomaly. Whereas if that test was being conducted for the first time and an abnormal result were returned, it would be cause for major concern. This phenomenon is also known as ‘conformation bias.’

Constant risk

The renewed emphasis on process safety and work in the area of asset integrity has highlighted the importance of safety considerations through the lifecycle of an oil and gas asset, as well as for every phase of a major project. Information on the status of safety-critical well barrier components must be completely dependable, and the components must operate as reliably as possible should a problem arise at any given point in time. Yet many firms continue to rely on handover documentation and a patchwork of bespoke production management databases and spreadsheets to manage data.

What is needed is a systematic management system, especially since it can take a long time to gather statistically relevant data. Industry bodies such as the OGP now recommend that systems be implemented for consistent collection and analysis of data and related information on more than just major incidents.

One emerging model is the well integrity management system (WIMS), which aligns all elements including the business process, handover, data management, and risk management. As a sub-set of asset integrity management, WIMS exist both at a documentation and software level, and combine key well operating and production data within a framework for decision-making, management processes, and organizational structure.

A holistic approach

An advanced WIMS can interface to a wide range of third-party databases to collate the necessary information for analysis and identification of wells shifting outside critical safe operating limits, for the assessment of equipment reliability and well risk, and for real-time estimation of corrosion in the well tubing. Data can also be acquired directly via tablet PCs in the field, entered manually, or via spreadsheet loader – and synchronized instantly with the central database to provide a comprehensive, singular view.

Documenting institutional well integrity management into a software product and working system can have major benefits for a large company when combined with a robust approach to knowledge management and placed in the hands of trained and experienced personnel. It ensures consistency of data, which is vital for oil and gas firms with global operations who need the confidence that the right people have access to the right information at the right time for rapid, informed and consistent decision-making. It also ensures consistency in terms of knowledge management and approaches to well integrity. This is essential given large oil and gas firms tend to have a high turnover staff internally.

With operating well data consolidated within a single user interface, the addition of smart functionality enables operators to analyze the well condition automatically in real time and generate concise reports customized to their individual requirements. This ensures they have the specific ‘tools’ needed to satisfy local regulations, proactively identify potential problems, and plan test schedules and repairs.

Automating for operational efficiency

Spills and leaks through loss of well integrity can harm people, the environment and a firm’s reputation. In addition to the severe curtailment to production and cost of shut-in, there is also the cost of restitution and remediation. The aging of wells in many parts of the world does tend to result in increasing risk of leaks, particularly related to loss of integrity in the outer annuli of the well.

WIMS provide decision makers with the intelligence they need to strike the right balance in today’s risk-averse environment. At the same time, WIMS can help address the human and organizational factors surrounding well integrity by quickly focusing staff attention on problem areas of an asset, and by providing the ability to manage by exception.

Ultimately, WIMS can ensure the engineering/safety function operates independent of commercial considerations, so that design and risk decisions are free from the complexity of meeting financial targets.

Intetech has recently been acquired by Wood Group and will be known as Wood Group Intetech, part of Wood Group Kenny.

Written by Lauren LaFronz, Triple Point Technology

Oil is a very popular commodity due to its high consumption levels and versatility. According to the International Energy Agency, close to 90 million barrels are used globally every day. This makes it the most widely traded commodity, both physically and financially, around the world. 1

However, high consumption and versatility aren’t the only things for which oil is well known. Mention the oil markets, and it’s a good bet that volatility and its cousin's instability and unpredictability are among the first things that come to mind for many people.

The oil market is highly complex, with multiple fluctuating supply and demand side variables including geopolitical issues, new oil sources, and speculative trading that contribute to oil’s extreme volatility. This volatility significantly increases risk exposure and makes price clarity elusive for producers, refiners, merchants and traders.

Geopolitical Risk

Supply disruptions due to geo-political issues have become relatively frequent events, causing significant price spikes as the delicate supply-demand balance is thrown off kilter. Issues in the Middle East in particular have a large influence on oil prices because of the region’s massive reserves. Political issues in other important supply regions, such as Latin America and Russia, are creating additional market uncertainty as well.

It is an understatement to say that the uncertainty and volatility caused by geopolitical issues make for a very risky market, and renders any kind of business planning a complex and seemingly insurmountable task for oil market participants.

Shale Oil

Shale oil has enormous potential, with U.S. reserves alone totaling an astounding 1.5 trillion barrels of oil –more than five times the stated reserves of Saudi Arabia.2 However, they currently remain largely untouched, because extracting oil from shale is expensive and complex. That is, for now.

New technologies are being developed that could potentially revolutionize shale oil production by making it cheaper and easier to extract. Should one or more of these technologies become commercially viable, shale oil would become an abundant fuel source. However, there is much debate in the industry about if and when feasible extraction technologies will come to fruition. The testing required to explore and perfect these technologies is extremely expensive, making it an endeavor largely limited to companies with exceptionally deep pockets.

These technical uncertainties further exacerbate the murkiness surrounding the world’s future oil supply, and underscore the importance of having access to advanced analytics that enable accurate and informed decisions.

Demand Side Ambiguity

While geopolitical developments and technical uncertainties create significant doubt as to the levels of future crude supply, forecasting market demand is no less challenging. All major centers of consumption have been affected to some degree by the global economic slowdown. While overall consumption continues to grow, according to the IEA, the rate of growth in global crude demand fell from an annualized growth rate of 3.2 percent in 2010 to 0.9 percent in 2012. But the future of oil consumption is not relegated to the picture of gloom and doom painted by these numbers. There are signs that the economy is starting to turn around. According to the International Monetary Fund, global economic conditions improved modestly in the third quarter of 2012, primarily due to increased activity in emerging market economies and the U.S., and economic growth is projected to rise throughout 2013.

The Speculators Effect

Despite the global downturn, trading in physical crude and derivative instruments has been robust over the past few years. The oil futures market trades more than one billion barrels of oil each day. The entire world produces only around 85 million a barrels a day – meaning that more than 90 percent of trading involves speculators, who never actually take physical possession of oil. 3 These speculators enter and exit the market quickly, basing trading decisions solely on price momentum and recent volatility.

There is no absolute evidence to show that this activity has a sustained and quantifiable effect on the market, but many industry observers believe that volatility is being exacerbated through high-volume trading by speculators (the “speculators effect”) – particularly during periods with a high level of market uncertainty.

Solutions for an Unstable Market

The potential for volumetric shocks on both the supply and demand side of the crude market combined with the potential for increased volatility due to the “speculators effect” leaves companies increasingly exposed to risk. In order to effectively and efficiently manage this exposure, market participants must have sophisticated, end-to-end Commodity Management solutions that provide both the metrics required to measure exposure and the insights needed to successfully manage it. These sophisticated solutions enable crude market participants to:

• Mitigate enterprise risk

• React quickly

• Maximize profitability

• Minimize supply chain risk

Commodity Management solutions are most commonly available in traditional “local” or desktop installations; however, they are increasingly being delivered through mobile platforms and as ‘in-cloud’ solutions, giving users multiple deployment options.

The New Risk Management Imperative

The oil business was built on the reputation of mavericks and risk-takers. But in today’s climate, the risks are so much greater and the consequences of poor decision-making are far more serious. Unprecedented volatility due to a combination of geopolitical issues, changing demand, speculators, and a myriad of other factors make it exceptionally difficult to run a profitable business these days.

An inability to manage this volatility-induced risk has an overwhelmingly negative impact on the bottom line. For many businesses it will be fatal. Mitigating these risks with the use of an advanced Commodity Management solution is imperative for any firm that plans on a long-term future and takes its shareholders’ interests seriously.

To find out more, visit www.tpt.com

Estonia, the birthplace of online voting and Skype, is now on a mission to lead the world in fracking technology, reports the AP.

With a population of over 1.3 million people, the small East European country gets more than 90 percent of its electricity needs from shale oil, making it the world's most shale-dependent country.

“With interest in non-conventional energy resources surging globally, Estonia wants to carve its own niche by perfecting the technology needed to produce cleaner electricity and high-grade fuel products from oil shale — know-how it wants to export to distant places such as Jordan and the US,” according to the AP.

Of course, like the US, the practice of large-scale shale mining has environmentalists concerned about the level of pollution or contamination to underground water supplies such efforts would lead to. Unlike the US, however, Estonia's oil shale resources are very different from the deposits found in America. The shale rock in Estonia contains organic matter that can be used to produce a liquid oil similar to crude, whereas the shale formations in the US contain natural gas, which can be brought to the surface and sold with minimal processing.

So long as world oil prices remain high enough to keep shale viable, Estonia could have a very valuable set of expertise to export.

"We have almost a 100 years' experience working with oil shale in Estonia. If you know something, and if there's a market, you try to sell it," Tarmu Aas, a board member at Eesti Energia, told the AP.

Until recently, the market for shale oil has been virtually nonexistent. High crude oil prices have changed that. For the most part, analysts believe oil prices will remain between $80 and $100 a barrel as countries like China, India and others increase their consumption.

In addition to the US, shale could become particularly important in Jordan, where about 97 percent of oil and gas needs are imported and the country sits on about 34 billion barrels of shale oil. So long as world oil prices stay above $60 per barrel, Eesti Energia (aka Enefit) estimates that its Jordanian venture will be profitable.

"Everything depends on the oil price. The oil price moves this train," Aas told the Ap.

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General Electric Co has hopped on the shale boom bandwagon—reportedly investing billions of dollars into fracking technology, a controversial method of extracting oil and gas.

By buying up fracking-related companies and opening a new laboratory in Oklahoma, the company believes that cutting-edge science and improved technologies will reduce the controversies that have the public so worried, mitigating the potential environmental and health hazards involved.

"We like the oil and gas base because we see the need for resources for a long time to come," Mark Little, a senior vice-president, told CBC news.

Although the company has had little involvement in the oil and gas sector over the last decade, GE has invested more than $15 billion in US natural gas in the last few years. GE doesn't drill the wells or produce oil or gas, but rather manages some of the major risks involved in the process—an effort placating the concerns of some environmentalists.

That includes working to reduce and clean up wastewater, improve fracking methods and reduce air pollution released during drilling. GE has a variety of expertise that will prove beneficial to the industry. Of some of its devices, GE will use technologies that can relay information to people on the surface about exactly what is happening one to two miles below ground.

"It's exciting to see," Michael Shellenberger, one of the founders of Oakland's Breakthrough Institute, told CBS news. "I think it is a positive response to legitimate public concerns about the environmental impacts [of fracking]."

Not only will industry gain more information “than ever before,” but also tools to help improved production and profits.

"There are some real technical issues that these folks at GE might be able to make real progress on," Neil Donahue, a professor of engineering and public policy at Carnegie Mellon University in Pittsburgh, added.

At the very least, GE's move into the natural gas market is a good sign that industry is working to make a promising energy source as environmentally sustainable as possible in its pursuit.

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This launch marks the start of a nationwide investment in infrastructure seeking the ultimate prize of wiping out nearly two-thirds of the nation's heavy goods vehicle (HGV) emissions.

Gasrec's ground-breaking new facility in Daventry is the first of its kind. It will lead to significant cuts in pollution and fuel costs; allow gas-powered or dual-fuel trucks to use Bio-LNG; and will operate in a similar way to a traditional petrol station.

Bio-LNG is Gasrec's proprietary blend of liquefied natural gas (LNG) and liquid biomethane (LBM) - a natural, green source of renewable energy produced from organic matter such as household food waste. Gasrec is Europe's largest producer of this fuel.

Transport Minister Norman Baker said: "The innovation shown by Gasrec and its partners in projects like this can help the UK meet its ambitious carbon reduction targets while creating green jobs to build the economy.

"This announcement represents a significant step towards achieving carbon and air quality benefits and I am very pleased that demonstration fleets from the Government's Low Carbon Truck Demonstration Trial will be refuelling from this site."

Compared with pure diesel equivalents, Bio-LNG can cut fuel costs by 20-30 percent and CO2 by a minimum of 20 percent, while delivering a 90 percent reduction in NOx and particulate matter emissions. Running the UK's HGV fleets on Bio-LNG could cut haulage emissions by up to 65 percent, according to a report by consultants Ricardo-AEA.

Gasrec commercial development manager, Doug Leaf said: "The launch today is a very proud moment for everybody at Gasrec. It clearly shows how our technology, innovation and ambition are leading the way to shrink pollution and costs for the UK's HGV haulage fleet.

"It is a pleasure to see our service not only saving customers significant sums of money but also helping them to play their part in protecting the environment. Big haulage companies are working and investing with us because they understand this intrinsic value.

"This is the important first step of a journey which we have high hopes will be a national success story."

Daventry is the first site identified by Gasrec as part of its national Bio-LNG refuelling network planned to be up and running by the end of 2015, helping the UK meet its 80 percent greenhouse gas reduction target by 2050.

The fuelling station officially launches on Thursday, May 23. The facility opens with Parliamentary Under Secretary for the Department for Transport Norman Baker MP's visit to the Daventry International Rail Freight Terminal site, near Junction 18 of the M1 in Northamptonshire.

The planned network will be conveniently located near motorway junctions so that 85 percent of the UK's HGV population will have at least one location within four hours' drive. The entire system will be monitored from a control centre in Daventry and is set to keep expanding.

Storing enough fuel to fill 700 HGVs a day, each of the manned stations will be equipped with five refuelling lanes and ten dispensers using 'fast-fill' technology accessed by drivers carrying smart key controls.

Key benefits of Bio-LNG:

• Cheaper than diesel
• Reduces the pollution and global warming impact of vehicles more than any other commercially available fuel
• Renewable - supply is effectively inexhaustible and conforms to all criteria set by the Renewable Energy Directive  
• Proven engine noise reduction
• Robust supply chain, providing both security and resilience

Gasrec is specifically looking to serve multi-location logistics organisations and in the last 18 months has already installed eight refuelling stations at customer sites. Clients include B&Q, Sainsbury's, and Tesco.

The facility

The Daventry site is capable of fuelling up to 250 HGVs a day in the first phase from three Bio-LNG dispensers. The second phase will increase that capacity to up to 700 vehicles.

Gasrec will provide training and support to drivers. This will initially be carried out at the station, before customers' own teams are able to train their colleagues.

Fuel is stored at -160 degrees Centigrade and is pumped through vacuum-insulated pipework all the way to the dispenser nozzles. A five-person Gasrec team will staff the station 24-hours a day.

The supply

Gasrec's liquefied biomethane production plant in Albury, Surrey, is capable of producing more than six million litres of diesel equivalent a year. The plant is located next to a large municipal landfill site and the gases from the decomposition of organic waste are cleaned and liquefied. The fuel produced is guaranteed to be at least 96 percent biomethane and no more than four percent nitrogen.

Bio-LNG is delivered in liquid form and dispensed either as liquid or compressed gas. Unlike other forms of compressed gas, refuelling facilities do not need to be next to a high pressure gas main. This compressed gas has biomethane in its blend.

SOURC: Gasrec

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Texas, the second largest state in the Union, rich in oil and renewable resources alike stands as an internationally recognized energy capital. Already a leader in oil drilling activity, Texas now has at least ten shale plays of production potential that could very well reshape the future of the industry in the US.

Although only a few of those plays are being tapped, Texas oil production reached a 25-year record high of 2.139 million barrels a day last November. According to a study conducted by the University of Texas-San Antonio, the Eagle Ford shale production gave a $25 billion economic boost to the area in 2011. It also supported some 48,000 jobs in the oil and gas market alone.

Before 2011, shale production was practically nonexistent. Once it took off in 2011, it nearly tripled by 2012.

The latest UTSA study revealed something even more spectacular: the 2012 economic impact from Eagle Ford was $61 billion—the biggest oil and gas development in the world last year.

According to an article in Forbes, “there are several studies that point to the Eagle Ford Shale eclipsing the East Texas Field as the biggest oil field ever discovered in the lower 48 states.”

That also accounted for a whopping 116,000 jobs in once sparsely populated parts of the state.

While the US Geological Survey (USGS) estimates that the Eagle Ford recoverable reserves is around 10 billion barrels of oil (two and a half times North Dakota's Bakken shale), complete development of the field is set to take the patience of decades.

But Eagle Ford represents just one of Texas' numerous shale play in a state where more than half of the country's (20 percent of the world's) drill rigs are turning. Initial estimates of Texas' Cline Shale play point to recoverable reserves of 30 billion barrels of oil.

Devon Energy Corp, an independent oil and natural gas exploration and production company, has stepped up as one of Cline's early-in players. Under a partnership with Sumitomo Corporation, which has invested $1.4 billion in Devon's activities in that play, Devon's 2013 plans to drill in the area are aggressive (up to 140 wells).

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Nuclear physicist Ernest Moniz was confirmed Thursday as the new US secretary of energy in a 97-0 vote in the Senate.

Moniz previously served as the energy secretary during the Clinton administration and has been working as a professor at the Massachusetts Institute of Technology. Though Moniz's nomination had been approved in April, Sen. Lindsey Graham (R-SC) held up the process in protest of budget cuts for a nuclear processing facility in their home state. Graham argued that the proposed $200 million in cuts from the state would threaten a plant being built at South Carolina's Savannah River nuclear site.

Moniz supports Obama's “all of the above” energy policy, including fracking, offshore drilling and clean coal technology. Filling the position of former energy secretary Steven Chu, Moniz will have a series of important decisions to make regarding the future on natural gas in the country.

"The Sierra Club and its 2.1 million members and supporters congratulate Dr. Ernest Moniz on his confirmation as the new Secretary of Energy," Deb Nardone, the Sierra Club's Beyond Natural Gas campaign director said in a statement Thursday. "As energy secretary, Dr. Moniz will make important decisions that will shape America’s energy and climate landscape for decades to come, including the agency’s response to 24 proposed liquefied natural gas terminals that could export up to 45 percent of the nation’s total natural gas production. We urge Secretary Moniz to take a time out on exports to complete a thorough economic and environmental assessment."

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As the global population reaches nearly nine billion people and counting, the demand for energy is moving at a pace in which the world can hardly keep up (while emissions rise to levels it can hardly afford). In the first half the the 21st century alone, energy demand is expected to double, leaving governments scrambling for solutions. Like President Obama, leading energy companies agree that it will take an “all of the above” approach—even Big Oil.

Royal Dutch Shell's CEO Peter Voser recently said that the US and world need to take climate change seriously and increase the use of renewable energy-generating sources, but that ultimately the abundant supplies of natural gas will be the backbone of an immediate cleaner future. As the world's largest gas producers, both the US and Shell will lead the way.

“The world needs to follow America’s lead and take full advantage of the cleanest-burning fossil fuel, and that’s natural gas,” Voser said during a speech at a luncheon held by the Boston College Chief Executive’s Club of Boston. “Increased use of natural gas is the biggest single step that the world can take today to begin reducing [carbon dioxide emissions].”

With the biggest share of the market, Shell has some 22 million tons of it refers to as “LNG equity,” not including the company's stake in other projects like Chevron's massive Gorgon gas project in Australia and the 7 million tons of uptake expected to come from a recent deal with Repsol SA after acquiring assets in Trinidad and Peru.

"Beyond this, we have a lot of projects that we are studying,” Andy Brown, Shell's Upstream International Director, said in a press conference. “That really reinforces our position as a the leading LNG trader across the world.

“Actually, if you look at Shell today we produce about as much gas as we do oil. And of all the majors, we probably have the largest proportion of gas... It really is our commitment to this industry and the environmental benefits that we see behind gas that underpins that positioning.”

TIGHT AND SHALE GAS

Further exploration in tight and shale gas, particularly in the US, is providing a richness of opportunities for the company and country alike.

“Tight and shale gas has been really what has transformed our industry in the last few years,” says Brown. “It has doubled the amount of recoverable gas in the world and transformed the energy outlook of the US.”

Flashback to five years prior, and it was a different picture. “We thought we would be gas short,” Brown adds. “The tight and shale gas revolution has transformed the picture” to essentially the opposite, driving a “reindustrialization of the Midwest.”

LEADING BY EXAMPLE

Leveraging its position in the market, Shell is not only using natural gas to power its own drilling rigs, ships and heavy trucks, but encouraging others to make the same transition as the company invests heavily in building the infrastructure to fuel trucks and boats to run on it.

And despite the challenges—from funding projects to economic uncertainties—Shell's approach makes the pursuit of natural gas economic while prices are low.

“If you’re just producing natural gas and selling it into a pipeline, of course it’s a pretty challenging market right now,” Marvin Odum, president of Shell Oil Co., the company’s Houston-based U.S. Arm, told Fuel Fix. “If you have the ability to play through that whole value chain of producing, marketing, liquefaction on through to transportation and then delivery to a higher market, you see that’s a better business.”

The company also believes that despite a massive increase in natural gas production in the US, there is “not going to be a flooding of the LNG market” and that, in time, other areas will develop, Brown says. China's LNG demands will increase by a fivefold, while European markets standby until CO2 pricing schemes make the fuel less expensive and public concern over the effects of “fracking” for the fuel eases.

For now, Shell is working on changing those public perceptions in collaboration with industry and NGOs to develop standards exploring those resources, which the company believes can be done without posing any harm to the environment or nearby communities.

“It's so important for us to set the standards the industry has to apply,” says Brown, which will ultimately put the outlook of natural gas on “much better footing.”

The company also highlights the important role a natural gas-powered market would play in renewable energy.

“Gas is the natural ally of renewables like wind and solar,” Voser says. “Wind and solar are intermittent energy sources [but] natural gas can keep the electricity flowing when the sun doesn’t shine and the wind fails to blow. Unlike many other energy sources, gas can be switched off and on quickly, and its global supply is increasingly diverse, which enhances energy security.”

The potential for transformation in America is huge. Though the US imports 20 percent of its energy today, in just a matter of years the shale gas boom and an influx of clean energy technologies will put the country on track to becoming completely self-sufficient.

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The May Edition of Energy Digital is now live!

Read the May Edition of Energy Digital here

Say hello to a clean energy future as we report on some very significant projects developing around the world in this month's issue:

Oil and Gas: Shell Takes the Lead on Natural Gas, Welcomes the Future of Clean Energy

Oil giant Royal Dutch Shell takes the lead in natural gas, a move the company says will be the most significant in reducing CO2 emissions and serve as a complement to renewable energy. Thanks to the US shale boom, energy independence is closer than ever.

Renewable Energy: Revolutionary Wind Turbine Platform Premiers in Massive Wind Farm Project

Meanwhile, Australia brings its massive 420 MW Macarthur Wind Farm project online, making it the largest wind farm in the Southern Hemisphere. The country's biggest utility companies join forces with a wind turbine manufacturer that has managed to develop a technology that can tap even low to medium wind speeds—a huge win for Australia and the future of the wind industry as a whole.

Mining: Earthquakes Prove to Produce "Economic-Grade" Gold Deposits

Apparently, there's a silver lining in the occurrence of earthquakes—and it comes in the form of gold. Australian scientists recently confirmed the link between the formation of gold deposits as a result of earth's naturally occurring 20,000 annual earthquakes.

Green Tech: Nest Partners with Utilities, Aims for Peak Energy Efficiency Across the US

Nest Labs reveals the new and improved Nest v3.5, while at the same time making its energy-saving features available across the nation with the help of a few strategic partnerships in the US utility market. Saving energy is a beautiful thing—just look at these iPod-generation thermostats!

Top Ten: Oil Reserves in the World

Which countries actually have the largest reserves?

The May issue is also packed with great content and in-depth interviews with some of the world's leading companies and key players, plus much more.

Enjoy!

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As Australia builds up its liquefied natural gas plants, energy workers are reaping the benefits with the highest salaries in the world—but not for long. As the country's resource boom inflates costs and threatens onshore developments, developers are turning to the sea for billions of dollars in savings, reports Bloomberg.

Australia's oil and gas workers currently earn an average annual salary of $163,600—35 percent higher than employees in the US (double the global average), according to Hays Plc and Oil and Gas Job Search.

Shell is pursuing the first LNG facility in the world and Exxon Mobil Corp is preparing to use the world's largest ship to turn gas into liquid at an onshore field, avoiding the cost of pipelines and port facilities. Woodside Petroleum Ltd is looking into sea-based technology, dodging an onshore plant for its Browse project. Both moves is expected to save the companies nearly 20 percent what they would pay onshore.

Many developers are turning to Asian-built floating projects to keep Australia competitive with the suppliers in North America and East Africa.

“A lot of people have been saying Australian LNG is now over, it’s going to be priced out of the market by U.S. LNG exports and competition from Canada and East Africa,” Mark Greenwood, a Sydney-based analyst at Citigroup Inc., told Bloomberg. “In our view, we are going to see continued investment in Australia, just a different sort.”

As the demand for LNG skyrockets, especially in nearby Asian markets, developing Australia's resources is critical in meeting growing energy needs.

“Of the 90 million tons a year of new projects that need to be approved globally in the next three years to satisfy LNG demand by the end of the decade, as much as a third of that may come from proposed floating LNG plants and expansions of onshore developments in Australia,” Neil Beveridge, an analysts at Sanford C. Bernstein & Co, told Bloomberg.

There are currently six onshore projects under construction in Australia, three already operating.

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Following the massive explosion at the West Fertilizer Co plant in Texas, killing up to 15 people and injuring over 160 Wednesday, the Environmental Protection Agency discovers that the company had lied about the presence of such risks.

In an emergency planning report to the EPA and local authorities, the company wrote that there was “no” risk of fire or explosion, indicating that the 54,000 pounds of anhydrous ammonia on hand but nothing dangerous enough to cause a devastating incident.

In 2006, the company also failed to get or qualify for a permit, according to the Associated Press. Complaints of the smell of ammonia also led to investigations under the Texas Commission on Environmental Quality in the same year when the company failed to provide an adequate risk management plan to the EPA.

Seeing that the $10 billion industry continues to grow, the risk factors involved, though uncommon, will become of increasing importance. Because a lot of fertilizer is made with natural gas, the fertilizer market will especially be growing in the US, where fracking activity is seeing a boom period.

At this point, it appears the Texas plant explosion was not the result of criminal activity, but “we're not ruling that out,” Seargeant W. Patrick Swanton of the Waco Police said in a press conference Thursday morning.

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Yesterday, Belize's Supreme Court declared offshore drilling contracts issued by the Government of Belize (in 2004 and 2007) null and void, providing a dramatic and potentially definitive setback to The Government of Belize and the petroleum prospecting companies issued the contracts.

The ruling, handed down by Justice Oswell Legall, was in response to a case brought by Oceana, COLA, and the Belize Coalition to Save Our Natural Heritage. It effectively ends the Belizean government's immediate effort to allow offshore oil drilling in the Meso American Reef, the second largest barrier reef in the world.

The court overturned the contracts after determining that the government failed to assess the environmental impact on Belize's ocean, as required by law, prior to issuing the contracts. The court also found that contracts were made to companies that did not demonstrate a proven ability to contribute the necessary funds, assets, machinery, equipment, tools and technical expertise to drill safely.

Oceana has campaigned against offshore drilling in Belize for more than two years. In 2011, after collecting the 20,000+ signatures required to trigger a national referendum that would allow the public to vote on whether or not to allow offshore oil drilling in Belize's reef, the Government disqualified over 8,000 of these signatures effectively on the basis of poor penmanship, stopping the possibility of a vote. Oceana answered by quickly organizing the nation's first ever "People's Referendum" on February 29, 2012 in which 29, 235 people (Belize's entire population is approximately 350,000) came from all over the country to cast their votes. In this historic vote, 96% voted against offshore exploration and drilling. The government subsequently almost lost its majority in the national election that followed these votes. Oceana is fighting for a complete ban on offshore drilling in Belize and believes the Government of Belize should allow the people to express their opinion in an official referendum.

"This is a great day for the people and country of Belize and its democratic process and it shows that we, as ordinary citizens, need not sit back and only complain about all the wrong decisions our Government makes, but that we can use the Judiciary system to settle them," said Audrey Matura-Shepherd Vice President of Oceana in Belize.

Oceana has long voiced its concern about the potentially devastating impact of an oil spill on Belize's reef and its economy, which depends heavily on tourism and the barrier reef. The companies were granted the oil concessions essentially in secret. Princess Petroleum, whose contract was just overturned, began as a hotel and casino company before it was granted concession to explore for oil. The company was granted exploration rights by the Government of Belize over the Blue Hole, a UNESCO World Heritage Site and popular travel destination made famous by legendary ocean explorer Jacques Cousteau.

Bill Lahey, a senior partner at the law firm of Anderson & Kreiger that helped represent Oceana in this case said, "Anderson & Kreiger is honored to have helped Oceana win this major victory which protects one of world's most precious barrier reefs and tourism in Belize."

SOURCE: Oceana

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The “All Risk, No Reward” Coalition released an ad last week condemning the Keystone XL pipeline project.

The group includes the League of Conservation Voters Education Fund, League of Women Voters, Keystone XL Truthforce, STOP Tarsands, and the Nebraska Farmers Union, among others. The ad suggests that the project is a “bad deal” due to the inevitability of another oil spill and the fact that the oil would not even be distributed and used in the US domestic market.

The ad alludes to the over 30 spills that occurred in the northern US in its first year and another recent spill affecting neighborhoods in Arkansas after a pipeline ruptured.

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Pavilion Energy Pte. Ltd. (“Pavilion Energy”) has been incorporated by Singapore investor, Temasek, with an initial authorised capital of S$1 billion, to tap into Asia’s growing energy demand.

As the region’s economies continue to transform and urbanise, the demand for clean energy, especially Liquefied Natural Gas (LNG), is expected to increase.

According to the International Energy Agency, the global use of gas will rise 50% by 2035, from the 2010 levels. Gas will account for a quarter of the world’s energy mix, especially with increasing demands from large economies such as China which is replacing coal with gas as an energy source. 

Pavilion Energy will look to partner with energy industry leaders and players to meet the region’s growing gas needs.  It may also co-invest alongside Temasek, which has been stepping up its investments in the energy and resource sectors over the last few years.

Pavilion Energy has appointed one of the most respected oil and gas industry leaders, Tan Sri Mohd Hassan Marican, the former President and CEO of Petronas, as the chairman of its Board. Pavilion Energy will also enlist the expertise and experience of other well regarded industry captains and business leaders such as Mr Liew Mun Leong, former CEO of the CapitaLand Group, to reinforce its business and corporate governance leadership. 

The company has also appointed Mr Seah Moon Ming as its Chief Executive Officer. Mr Seah joined Temasek in March as Senior Managing Director, Special Projects, to establish the new energy business entity. He was most recently the Deputy CEO of ST Engineering, overseeing ST Aerospace, ST Electronics, ST Kinetics and ST Marine.

Mr Seah said, “To secure long term and stable supply of LNG to our customers in Singapore and the Asian region, we will be sourcing our LNG supply from multiple sources and various partners in North America, Europe, Asia, Africa and Australia.

 “We also expect to participate and invest in various parts of LNG value chain to ensure long term LNG supply. These could include LNG trading; investing alongside international oil and gas companies as partners to develop upstream LNG projects; building of LNG storage and re-gasification terminals; and investing in LNG shipping. Long term secure and reliable supply is critical to success in the LNG business.”

 Over the coming months, Pavilion Energy will work to set up the various parts of its operations and it expects to be operational in September 2013.

SOURCE: Pavilion Energy Pte. Ltd.

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Following Exxon's oil spill in Arkansas last week, this video emerged of the heavy crude flowing through the streets of Little Rock. Some 40 homes were evacuated—a backyard nightmare.

The Pegasus pipeline, which is over 60 years old, carries up to 90,000 barrels of crude a day over 800 miles from Illinois to Texas. At least 12,000 barrels of Canadian crude oil and water spilled last Friday afternoon. The US Environmental Protection Agency is holding Exxon responsible for the major cleanup effort, while the company continues to investigate the cause of the incident.

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Written by Emily Couch

An oil spill in an Arkansas town is bringing more light to the risk of transporting fuel across a national labyrinth of pipelines. President Barack Obama has to weigh the risk factors and benefits of the Keystone XL project.

Environmental groups are using the Exxon Mobil Corp pipe bust on March 29 in Mayflower, Arkansas as the fighting reason as to why Obama should reject Keystone while industry groups assert that pipelines continue to be  the safest way to transport oil.

The US State Department is undergoing the colossal task to come to a decision if Obama should approve the Keystone project. The review of this plan is vital because Keystone crosses an international border. The White House is very serious about the safety of the pipeline system and The Environmental Protection Agency is working with local officials and Exxon on the Arkansas spill.

Congress argues that the Keystone project will create thousands of jobs. Battling the unemployment issues in the U.S. could not come soon enough and is said to improve U.S. energy security.

Related Story: Keystone XL Would Only Create 35 Permanent Jobs

On March 22, the Senate approved 62-37, a non-binding resolution encouraging the development of Keystone. The pipeline could carry more than 800,000 barrels of diluted bitumen, or dilbit, from Alberta, Canada to refineries along the U.S. Gulf Coast, if built. Currently, Exxon’s pipeline Pegasus runs from Patoka, Illinois to Nederland, Texas and carries up to 96,000 barrels a day.

Around 11.9 billion barrels of oil, gasoline and other refined products are transported across the network of pipelines, according to John Stoody, the Director of Government and Public Relations for the Association of Oil Pipe Line. The members of this Washington based group own about 85 per cent of the liquid pipelines in the US

Meanwhile, environmentalists continue to argue that the spill is a reminder that oil companies should not be trusted to transport toxic chemicals. 

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A Canadian train carrying crude oil through western Minnesota derailed Wednesday, causing the first major spill in North America by rail transit—a bad omen for the prospect of the Keystone XL pipeline?

Canadian Pacific Railway Ltd, Canada's second-largest railroad, reported that 14 of its 94-car, mile-long train fell off the tracks. A spokesman says only one 26,000-gallon tank had ruptured and has yet to comment on the type of crude spilled. Meanwhile, the Minnesota Pollution Control Agency estimates that 20,000 to 30,000 gallons, 475 to 715 barrels, leaked, Reuters reports.

Colder weather has somewhat hindered cleanup, making it more difficult to recover thickening oil. Frozen grounds, fortunately, offer more protection to surface or ground water in the area.

Rail shipment of oil has rapidly increased in North America as oil production has outgrown pipeline capacity. On average, about 40,000 barrels per day were shipped via train to the US in 2012, according to Canada's National Energy Board.

Although environmentalists continue to vehemently oppose the prospect of pipelines carrying oil from Canada's vast tar sands to refineries in the US Gulf Coast, supporters beg the question: is rail any better?

Actually, it probably is. Spills from rail cars are rare, and delivering crude by rail has been historically effective for producers to develop massive volumes of oil production in areas of the US lacking pipelines. The Keystone oil pipeline alone has already seen twelve oil spills in North Dakota—the largest of which included about 400 barrels of oil. And that's just the beginning. Is it worth the risk?

Photo Credit: REUTERS/Doug Bellfeuille/Minnesota Pollution Control Agency/Handout

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After years of being plagued by some of the Amazon's most productive and destructive oil fields, Peru declared an environmental state of emergency this week.

According to Peru's Environment Ministry, contamination from oil fields operated by Argentina-based Pluspetrol has included high levels of lead, barium and chromium in addition to other petroleum-related compounds. Indigenous groups in the Plastaza River basin, including the Quichua and Ashuar, have complained about the pollution for years.

The 90-day emergency orders Pluspetrol to take immediate action to reduce the contamination in the surrounding population, following an $11 million fine levied against the company in January.

"We know that there has been bad environmental behavior by the company," Environment Minister Manuel Pulgar-Vidal said in a radio interview. "If indeed at some point remediation was done, it was not done adequately and that includes inadequate action by the authorities from 2003-2005."

Though the fields have been operated for nearly 12 years by Pluspetrol, the field's previous operator, Occidental Petroleum, had not exactly operated under any better circumstances. Since Pluspetrol took over in 2001, constant oil spills and contamination of local rivers has continued. Unfortunately, in a country lacking requisite environmental quality standards, government has historically failed to address the problem.

“The government is to blame because it has permitted this,” Rep. Marisol Perez Tello told the media.

For the first time, environmental quality standards were set for contaminants in Peruvian soil, published in the Peruvian TV news magazine Panorama on Monday. The country has also lacked an environment ministry until 2008.

Although former president Alan Garcia opened up the Amazon to mining and oil exploration, current President Ollanta Humala has come under immense pressure to reverse some of the damage.

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Chevron struck oil in a deepwater well in the Gulf of Mexico for a second time a week.

Last Tuesday, the company discovered a large amount of oil at the Shenandoah-2 well, according to partners Anadarko Petroleum Corp and ConocoPhillips. Today, just 12 miles nearby and 190 miles off the coast of Louisiana, Chevron said its Walker Ridge Block 98 well in Coronado prospect encountered over 400 feet of net pay.

"Between the Coronado discovery, the potentially giant Shenandoah discovery, and our recent high bids on remaining open blocks in the Shenandoah/Coronado mini-basin, Venari is firmly positioned for significant growth in a future production hub in the Gulf," Venari Chief Executive Brian Reinsborough said.

Chevron is in the midst of completing a number of other expensive, large-scale projects in ultradeep waters of the Gulf of Mexico. By 2017, the company aims to boost its daily oil and natural-gas production to 3.3 million barrels from 2.7 million barrels it averaged in 2012.

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US oil production is expected to exceed its oil imports later this year for the first time in nearly two decades, according to a recent report from the US Energy Information Administration.

By that time, the gap between monthly US crude oil production and imports is expected to be nearly 2 million barrels per day, states the EIA's March 2013 Short-Term Energy Outlook.

The projected change is mostly attributed to the rising domestic crude oil production the country is experiencing from shale and other tight rock formations in North Dakota and Texas. The estimate, however, is subject to change depending on supply conditions by next year.

As an example, the report warns “supply would decrease if a strong 2013 hurricane season disrupts US offshore oil production (and thus delays or prevents a crossover), or increase if there are higher-than-expected increases in tight oil production (meaning production might exceed imports sooner than forecast).”

As far as the future looks now, the EIA states that by 2014, monthly crude oil production will top 8 million bbl/d, the highest level since 1988, while crude oil imports will fall below 7 million bbl/d for the first time since 1995.

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