Lessons Learned

Rare Earths are in the news (no not the disco band from the 70's, but the 17 elements and their alloys that are essential to many high tech applications), see: http://www.proactiveinvestors.com.au/companies/news/11256/china-rare-earths-are-not-a-bargaining-tool-11256.html, and since I am working in part for the mining industry these days, it took me back to my earliest encounters with these strange and wonderful outliers on the Periodic Table. In 1978 I was doing lab work in the Michigan State University geology department with Dr. Thomas Vogel, who was investigating immiscible magmas from Mt. Desert Island in Maine (the work was published in 1980: http://www.jstor.org/pss/30062379). My job was to grind up core plugs from opposite sides of flow boundaries in the samples and take them over to the nuclear reactor in the basement of the old Engineering building for neutron activation. Got to wear a dosimeter badge and then bring back the “hot” samples in the back of Vogel's Volvo station wagon surrounded by lead bricks. I've often wondered since how much stray radiation that vehicle picked up and what would have happened if he tried to drive it across the Canadian border with today's detection technology! Anyway we did neutron activation analysis using a pulse height analyzer attached through a teletype interface to the University CDC 6500 mainframe to store and analyze the data (high tech stuff at the time). I did the linear regression analysis to calibrate against standard samples on a programmable TI calculator that stored the programs on a magnetic card. And it was notable for me because it marked one of two key learnings for me early in my scientific career.
I remember distinctly we were plotting the relative abundances of the REE's based on the pulse heights from the multi-channel pulse height analyzer. I was fitting a best fit linear regression to the data, and Dr. Vogel wanted all the plots to go through the origin, because theoretically, with none of the element present, there should be no reading. Being the one doing the lab work, I knew from experience that there would always be some cross-contamination of samples, so I insisted that the plots should be a best fit to the real data and not include the origin as a valid data point. After a few discussions over beers at the Peanut Barrel, Dr. Vogel agreed, and the lab and data analysis procedures developed by a third-year undergraduate student went into the paper published by two PhD's and a Master's candidate. Lesson learned: never forget it's all about the rocks.

My willingness to argue the point was informed by an experience the summer before as a student geologist in Exuma Sound on the research vessel R/V Gillis out of the Rosenstiel School of Marine and Atmospheric Sciences at the University of Miami (http://search.datapages.com/data/doi/10.1306/212F7B99-2B24-11D7-8648000102C1865D). We were mapping turbidites off the Bahamas using deep water piston coring and I was part of the deck crew. As one of the core barrels went over the side, I noticed that it did not look the same as the others, as if the weight drop had already been triggered or not set correctly, but I didn't say anything because I was just a student watching from the deck. Four hours later the barrel was retrieved with no sample and considerable waste of the ship's time.
Lesson learned: sometimes the junior members of the team are the ones who see things that the experienced hands have gotten complacent about. That's why a co-pilot can abort a takeoff and any member of an offshore rig crew can shut down the operation without retribution if they feel a procedure is unsafe.

From the SPE Intelligent Energy Conference

Some highlights from Tuesday's technical sessions in Utrecht Netharlands last week:

- Shell and CapGemini talked about USD$5B in value from fields "born smart" or intelligent from the design phase, mostly from instrumented well bores, but also mentioned predictive maintenance as a goal
- Chevron gave a very generic presentation on transformational change around prioritizing their 200-some intelligent field projects
- Saudi Aramco defined their I-Field as mostly real-time drilling operations, with a goal to reduce the number of wireline operations (bet SLB and HAL loved to hear that!) to reduce costs
- BP had one of the more interesting and relevant talks, indicating their instrumentation now at over 2M tags on over 700 wells including 80% of their top 100 producers, and using real time monitoring to add 50K BOE / day in production. Preventative maintenance scheduling is in planning for their downhole flow meters in Azerbaijan. They are letting their producing asset customers drive the projects rather than pushing the technology, with goals of shifting support roles from offshore to onshore and reducing personnel on board
- Statoil's presentation on Integrated Operations specifically mentioned multi-field control centers for monitoring rotating equipment, but it was still in reactive mode
- PIPC closed out with a very high level presentation on best practices for automated oilfields

- Got a good look at PointCross's dashboard and workflow user interface, they are more concerned with the data management behind the scenes

Into the Fray (s) ...

Once again, it seems the oil industry has missed an opportunity to be proactive and provide the public with critical information that could help citizens impacted by oil drilling make intelligent and informed decisions. I speak of course of the Marcellus Shale play, where there is an ongoing debate over the environmental impacts of hydraulic fracturing (identifying it by its full technical name avoids all those style questions about "frac' -ing" or "fracking" - see http://blogs.chron.com/newswatchenergy/archives/2010/01/post_12.html).
We all know that our industry has access to plenty of technology tools for the timely distribution of information about leasing, drilling, and completions. So why are we not sharing this information as far as necessary or possible with the public? In Pennsylvania and West Virginia, we have the opportunity to develop a fresh relationship with communities not already numbingly familiar with the oil and gas business like in parts of the South and West. Yet it takes a bunch of social activists from MIT to decide that information about oil and gas leasing should be made available to communities through Google Earth?
See: http://civic.mit.edu/projects/c4fcm/extract
C'mon guys...

BRIC becomes BICSA for Climate Change?

Given the recent attention to the BRIC economies (Brazil, Russia, India and China) after their June Summit in Yekaterinburg, Russia, it was interesting to open the New York Times this morning and see not Dmitry Medvedev or his designee seated at the table with Barack Obama, the Chinese Premier, the Indian Prime Minister and the Brazilian President at the close of the Copenhagen Climate Summit, but the President of South Africa. Perhaps the choice was more of a preference for a growinge economy with a vested interest in biomass and energy and an easier negotiating partner than just the heft of population and GDP?

Monthly Reading in World Oil

A few fun tidbits from the August 2009 issue of "World Oil" from Gulf Publishing...

1) On page 7 in Perry Fischer's Editorial, a new way to define your position on the political spectrum by testing your belief in Global Warming vs. Professional Wrestling. I guess you might be a Dittohead if you think The Undertaker has more professional credibility than Al Gore.

2) On page 11 a news item about a Morgan Stanley trader who "built up a hefty unauthorized oil futures position after drinking at lunchtime, before hiding the deals overnight". Makes me wonder if he would have stayed under the radar if he had reversed the process and done his dealing at night and hiding during lunch. And okay, who here hasn't "built up a hefty ... GAS futures position" after eating at a Tex-Mex restaurant?

3) And finally a nod to those of us explaining to school age kids why they should pay attention in Math class - on page 17 in an excellent discussion on the potential of shale plays, Arthur Berman casually mixes up averages, modes, and correlations. It pays to think for a moment why there is a 3.5 year difference between the average and the mode of horizontal well producing lifetimes. This tells you a lot about the distribution of values without ever seeing a chart if you remember your basic math. Just like it tells you a lot about the real estate business that they insist on using median home values instead of averages, and refer to home prices "from the 200's".

Enjoy and stay skeptical...

Word Cloud

Some interesting technology that got publicity during President Obama's inauguration speech:
http://en.wikipedia.org/wiki/Tag_cloud

Here is a Word Cloud from this blog:




It was created and is posted at:
http://www.wordle.net/gallery/wrdl/1022920/Energy_Industry_Blog

Nitrogen in Gasoline?

Anyone else wondering why Shell is advertising an inert element as an "enhancement" to their automotive fuel? Last I heard Nitrogen and other inert elements actually lowered the BTU rating of hydrocarbons at the wellhead, why would we want to put them back in? Perhaps a hint here:
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article5927869.ece
A coincidence that this marketing push comes at a time when Shell is suffering market loss due to their abandonment of alternate energy strategies? And what about the parallels of all the oil companies suddenely using geeky scientists to push their agendas? Remember during the Bush years when scientists weren't very cool? Well maybe our new administration has at least moved toward bringing respectability to to technical professionals who work in the energy industry... that would be a welcome, if unintended, change...