It’s possible that I shall make an ass of myself. But in that case one can always get out of it with a little dialectic. I have, of course, so worded my proposition as to be right either way (K.Marx, Letter to F.Engels on the Indian Mutiny)
Saturday, April 17, 2021
Shell To Exhaust Dwindling Oil & Gas Reserves By 2040
Shell expects to have produced 75 percent of its current proved oil and gas reserves by 2030, and only around 3 percent after 2040, the supermajor said in its Energy Transition Strategy that it will put to a non-binding shareholder vote next month.
Discussing the risk of stranded assets in the energy transition, Shell said that every year it tests its oil and gas portfolio under different scenarios, including prolonged low oil prices, and cross-references assets with break-even prices to assess if they would still be viable in case of low oil and gas prices.
At December 31, 2020, Shell estimated that around 70 percent of its proved plus probable oil and gas reserves, known as 2P, will be produced by 2030, and only 5 percent after 2040.
In 2020, Shell’s proved reserves—taking production into account—decreased by 1.972 billion barrels of oil equivalent (boe) to 9.124 billion boe at December 31, 2020, the firm’s annual report showed.
That’s reserves for just seven years of production, lower than most peers.
The declining reserves life is not unique for Shell. The largest international oil companies have seen their average crude reserves drop by 25 percent over the past five years, which could be a challenge for Big Oil’s production and earnings in the coming years, Citi said earlier this month.
The supermajors reported lower reserves in their most recent reports, also due to the 2020 oil price and oil demand collapse, which forced all of them to write off billions of U.S. dollars off the value of assets.
In Shell’s case, the declining reserves life is not in contradiction to its assessment from earlier this year that its oil production peaked in 2019 and is set for a continual decline over the next three decades.
Fracking crews are increasing their activity in U.S. shale basins, finishing off a slew of DUC wells, according to the EIA’s latest Monthly Drilling Report. As oil and gas companies focus on finishing off wells they’ve already drilled, on the sidelines, observers are wondering whether this is a fluke or whether the industry has really learned its lesson about drilling rigs that they do not intend to complete.
Are we seeing typical industry behavior, which may indicate that we are in for another DUC increase now that drilling activity has picked up?
Tackling the Fracklog
The way to describe the DUC count is a “fracklog” because it measures the number of wells that have been drilled but not yet completed—essentially creating a backlog of half-finished wells that are not producing oil or gas. The higher the DUC count, the more money oil companies have spent drilling wells that are not yet working—ostensibly while drilling more wells, which they also may not complete.
For the U.S. shale industry, the DUC count has been a bellwether for the oil industry; the higher the DUC count, the more money oil and gas companies are sinking into wells that are stuck in limbo and not producing. This could either mean fiscal irresponsibility or a rapidly changing shift in the markets that too quickly rendered wells once deemed wise as obsolete.
Of course, there are always DUCs. The logistics behind scheduling drilling and completion crews necessitate a certain number of drilled wells be made available to later complete. Companies often like to keep several months of drilled wells in inventory. And most wells that are drilled are finished within a year.
But an excessive number of DUCs could signify that something is amiss in the industry.
The Whole Story
The true fracklog didn’t boom during the pandemic. The DUC counts started climbing ever higher sometime in 2017—around the time the U.S. shale industry was catching flack for out of control debt loads.
True, during the pandemic, there were certainly a high number of DUCs. But the EIA reported DUC count of 7,685 in July 2020—after oil demand crashed, rendering foolish the process of spending more money to complete a well that a company didn’t need for production—is just par for the course, according to earlier EIA data. According to the EIA, the DUC count has been over 7,500, for the most part anyway, since mid-2018.
The Dead DUC is Still a DUC
But there are some, like Raymond James analyst John Freeman, who claimed this year in a note to clients that the United States’ true DUC count is much lower, given that many of the wells included in the EIA’s DUC count are dead in the water and many years old, likely never to be completed. According to Freeman, this figure is as much as 22% too high.
A 2019 Federal Reserve of Dallas survey of oil and gas company executives suggests that half of the respondents agree that the EIA is overestimating the number of DUCs.Related: Investors Rush To Oil Stocks Despite ESG Push
In a low oil price environment, oil and gas companies may spend money on finishing off an already drilled well, rather than on drilling a new well. But companies will continue to strive to keep that DUC inventory in their back pocket should the market call for it. But when oil prices have been low for a long time—and demand for crude or gas remains low, those low oil prices may never justify completing a well, resulting in another dead DUC.
Still, those DUCs are counted.
Where We Are Now
In 2014, the number of wells being drilled exceeded the DUC count. When drilling slowed at the end of that year, the number of DUCs continued to rise. There was a period leading up to 2017 that saw a dip in the DUC count. But before too long, DUCs were again on the rise.
The latest data suggests that the number of DUCs began to fall in July 2020 as oil inventories boomed, oil prices were ultra-low, and drilling and fracking activity had slowed to levels not seen in years. The DUC count has continued to fall since then, while drilling and completion activities have started to pick up. The gap between drilling and completion activity has closed over the last few years, while the gap between drilling activity and DUCs has inverted.
But there is an unmistakable correlation between drilling activity and DUCs, with an anywhere from 20 to 50-week lag from rig count shifts to corresponding DUC shifts. If that pattern holds true, we may be in for another increase in the number of DUCs in the next few months. Unless, that is, the EIA revaluates the method it uses for establishing its DUC counts. Or, as some suggest, shale has learned to belt tighten, and spending is shifted more heavily toward completing rather than drilling.
Canada’s crude oil imports fell by 20 percent in 2020 due to lower demand in the pandemic, but the United States further cemented its position as top oil supplier to Canada, supplying nearly four out of every five barrels of oil, the Canada Energy Regulator said on Wednesday.
Canada is a major crude oil producer and exports much more oil than it imports, almost exclusively to the United States. Yet, Canada imports oil from abroad to feed refineries in its Atlantic Provinces, Quebec, and Ontario.
“Less than one third of Canadian crude oil is processed by Canadian refineries for a variety of reasons, such as lack of pipeline access to domestic supplies, specific product requirements of refineries, or because it costs less to import,” the regulator said in its analysis.
Last year, total Canadian crude oil imports plunged by 20 percent annually to 555,000 barrels per day (bpd), down from 693,000 bpd in 2019, because the pandemic crushed demand for fuels.
As imports dropped in volumes, the share of imports from the United States jumped to 77 percent of all imports in 2020 from 72 percent in 2019.
The second-biggest oil supplier to Canada was the world’s top oil exporter, Saudi Arabia, with a 13-percent share of Canadian oil imports, followed by Nigeria with 4 percent of imports and Norway with 3 percent, the Canada Energy Regulator said.
“The source for Canada’s crude oil imports has changed dramatically over the past decade. The United States has moved from a bit player in 2010 to a major supplier today, with the majority of oil imported into Canada coming from our southern neighbour,” Darren Christie, Chief Economist at the Canada Energy Regulator, said in a statement.
The surge in U.S. crude oil production in recent years was the key driver of the U.S. becoming the top provider—by a wide margin—of foreign oil to Canada.
This year, demand for oil in Canada is returning, and with it, optimism in the Canadian oil sector.
“But the million-dollar question now in terms of what’s going to happen with demand is really what’s going to happen with the pandemic,” Canada Energy Regulator’s Christie told CBC in an interview.
By Charles Kennedy for Oilprice.com
Shock Of The Week: Poll Reveals U.S. Pipelines Aren’t Actually Unpopular
When it comes to oil pipelines, it seems that the American people really haven’t lost that loving feeling after all, according to new research conducted by Wakefield on behalf of the Association of Oil Pipe Lines (AOPL).
AOPL’s new data suggests that oil pipelines have a 70% approval rating, despite the hoopla surrounding many of the pipelines that would lead one to believe that Americans are fed up with fossil fuel’s safest and most economical transportation mode.
That approval rating is higher than the maximum approval rating of President Biden, President Trump, or President Obama.
As it turns out, the American people seem to understand that right now, pipelines are the safest, most economical way to transport fossil fuels. And they are not ready to throw in the towel just yet.
That’s despite the appearance in the media that most people are behind President Biden’s cancellation decision of the Keystone XL. And it’s despite the protests at various oil pipeline sites throughout the United States, including the protests over the Dakota Access Pipeline a few years ago that monopolized news headlines.
Other than finding that 70% of all Americans have a “positive impression” of pipelines, the study found the intensity of support to be increasing.
But that’s not to say that Americans are unconcerned with climate change—they are. According to the poll, 68% of all Americans reported steady concern over the past year. But, as one might assume if left unattended, Americans are also concerned with how a climate change battle might affect their utility bills and steady supply of electricity.
As far as concerns go, the study found that Americans rank safety, affordability, and reliability as the three most important aspects of energy.
The survey also found that ultimately, Americans feel that canceling oil pipelines is not a good way to combat climate change, and oppose measures that would see oil and gas jobs cut.
By Julianne Geiger for Oilprice.com
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THEY SHOULD ONLY USE MIDDLE SEAT Blocking middle seats on planes reduces risk of COVID-19 spread: CDC
Leaving the middle seat empty could reduce virus spread by up to 57%
As airlines continue to allow passengers to book middle seats on planes, new research says that leaving the middle seat empty could reduce the spread of the virus by between 23% to 57%, according to the CDC’s report released Wednesday.
Blocking middle seats on planes reduces the risk of exposure to COVID-19, a new CDC report suggests. (iStock)
"Research suggests that seating proximity on aircraft is associated with increased risk for infection with SARS-CoV-2, the virus that causes COVID-19," the CDC said in the report.
In the study, conducted with Kansas State University, researchers measured how far airborne virus particles traveled inside the aircraft using mannequins that emitted aerosol inside a mock plane cabin. The study did not take vaccinations or face mask-wearing into account.
Delta is currently the only airline in the U.S. that’s continued blocking middle seats, however, it will begin to allow passengers to book them after May 1. Other airlines have justified the re-booking by suggesting that air filters on most planes are safe to travelers wearing a facemask, a federal regulation. American Airlines ended its middle seat booking ban in July, allowing flight bookings at 100% capacity while United Airlines did not limit seating on planes during the pandemic at all. Southwest Airlines started rebooking middle seats in December.
U.S. travel continues to rebound with airports across the country seeing more than 1 million travelers daily, a milestone not seen since March 2020, the Transportation Security Administration reported. And it’s unclear if airlines will go back to blocking the middle seat on planes as the industry continues to bounce back. Trade group for the largest U.S. carriers, Airlines for America, referred to a Harvard University report that found a low transmission rate of the virus on planes citing the use of preventative measures to prevent the spread like face mask requirements and cleaning protocols, the Associated Press reported.
The CDC earlier this month released new travel guidance suggesting that fully vaccinated passengers can travel safely in the U.S. without getting tested or self-quarantining. The health agency continued to urge all travelers to continue wearing masks, hand washing and social distancing.
The Associated Press contributed to this report
‘SmartFarm’ device harvests air moisture for autonomous irrigation
By E&T editorial staff Published Thursday, April 15, 2021
A solar-powered, fully automated device that can absorb air moisture at night and release it during the day for irrigation has been developed by a team of researchers from the National University of Singapore (NUS).
Dubbed SmartFarm, the device uses a moisture-attracting material to absorb air moisture at night when the relative humidity is higher, and releases it when exposed to sunlight. The water harvesting and irrigation process can also be fine-tuned to suit different types of plants and local climate for optimal cultivation.
“Atmospheric humidity is a huge source of freshwater but it has remained relatively unexplored,” explained project leader Professor Tan Swee Ching.
“In this work, we’ve tried to mitigate food and water shortage simultaneously. We created a hygroscopic copper-based material and used it to draw moisture from the air. We then integrate this material into a fully automated solar-driven device that utilises the harvested water to irrigate plants daily without manual intervention.” The research team holding the prototype device
The key component of SmartFarm is a specially designed copper-based hydrogel that is extremely absorbent, and takes in moisture up to three times its weight. After acquiring moisture, the hydrogel changes colour from brown to dark green and finally to light green when it is saturated. It also releases water quickly under natural sunlight - one gram of the copper-based hydrogel releases 2.24 gram of water per hour.
The NUS team also tested the quality of the water that was collected using the copper-based hydrogel, and found that it meets the WHO’s standards for drinking water.
At night, the top cover opens to allow the copper-based hydrogel to attract atmospheric moisture. In the day, at a pre-set timing, the top cover closes to confine the water vapour allowing it to be condensed on the enclosure’s surface, particularly on the top cover.
Water droplets will be gradually formed and when the moisture stored in the copper-based hydrogel is completely released, the top cover automatically opens and water droplets which are wiped off by the parallel wipers fall onto the soil to irrigate the plants. The remaining water droplets on the walls of the device continue to provide a humid environment for healthy plant growth.
As a proof-of-concept, the NUS team successfully used the device to cultivate Ipomoea aquatica (commonly known as kangkong): a popular vegetable in Southeast Asia.
“The SmartFarm concept greatly reduces the demand for freshwater for irritation and is suitable for urban farming techniques such as large-scale rooftop farming,” Tan said. “This is a significant step forward in alleviating water and food scarcity in the near future.”
Natural gel solution effectively removes pollutants from water
By E&T editorial staff Published Friday, April 16, 2021
Researchers in Sweden have developed a more eco-friendly way to remove heavy metals, dyes and other pollutants from water.
Researchers from KTH Royal Institute of Technology, in Stockholm, Sweden, in collaboration with Politecnico di Torino, engineered a more sustainable technique for producing hydrogel composites, a type of material that is widely studied for wastewater decontamination.
The solution was found in filtering wastewater with a gel material taken from plant cellulose and spiked with small carbon dots produced in a microwave oven.
Minna Hakkarainen, who leads the Division of Polymer Technology at KTH Royal Institute of Technology, said that the hydrogels remove contaminants such as heavy metal ions, dyes and other common pollutants.
“The total amount of water on Earth doesn’t change with time, but demand does,” she said. “These all-lignocellulose hydrogels offer a promising, sustainable solution to help ensure access to clean water.”
The hydrogel composites can be made from 100 per cent lignocellulose, or plant matter, described by Hakkarainen as the most abundant bioresource on Earth. One ingredient is cellulose gum (carboxymethyl cellulose, or CMC), a thickener and emulsion derived commonly from wood pulp or cotton processing byproducts and used in various food products, including ice cream.
Added to the hydrogel are graphene oxide-like carbon dots synthesised from biomass with the help of microwave heat. The hydrogel composites are then cured with UV light, a mild process that takes place in water at room temperature.
Hydrogels consist of a network of polymer chains that not only absorb water, but also collect molecules and ions by means of electrostatic interactions – a process known as adsorption. According to Hakkarainen, the new process also reinforces the stability of the hydrogel composites so that they can outlast ordinary hydrogels for repeated cycles of water purification.
Graphene oxide has become a favoured additive to this mix, because of its high adsorption capacity, but the environmental cost of graphene-oxide production is high.
“Graphene oxide is a great adsorbent, but the production process is harsh,” Hakkarainen said. “Our route is based on common bio-based raw materials and significantly milder processes with less impact on the environment.”
Graphene is derived from graphite, a crystalline form of carbon. In oxidised form it can be used in hydrogels, but the oxidation process requires harsh chemicals and conditions. Synthesising graphene from biomass often requires temperatures of up to 1,300°C.
By contrast, the researchers at KTH found a way to carbonise biomass at much lower temperatures. They reduced sodium lignosulfate, a byproduct from wood pulping, into carbon flakes by heating it in water in a microwave oven. The water is brought to 240°C and then kept at that temperature for two hours.
Ultimately, after a process of oxidation, they produced carbon dots of about 10 to 80 nanometers in diameter which are then mixed with the methacrylated CMC and treated with UV-light to form the hydrogel.
“This is a simple, sustainable system,” Hakkarainen said. “It works as well, if not better, than hydrogel systems currently in use.”
The research was published in Sustainable Materials and Technologies, Volume 27, April 2021.
High carbon price should be set to minimise use of capture options, study finds
By E&T editorial staff
Published Friday, April 16, 2021
Researchers have called for a dynamic, long-term carbon price system in order to help reduce the demand for CO2 removal technologies and limit the impact of climate change.
The team from Potsdam Institute for Climate Impact Research, in Germany, found that while carbon capture and storage technologies will be an essential part of mitigating climate change, excessive deployment would carry risks in itself such as land conflicts or enhanced water scarcity due to a high demand for bioenergy crops.
Instead, they propose setting a high price for CO2 emissions from the outset that will encourage firms to reduce emissions and to achieve emissions neutrality relatively quickly.
Lead author of the study Jessica Strefler said: “Once we have achieved this, the price curve should flatten to avoid excessive CO2 removal.
“It can be a real win-win: Such a price path reduces both the risks associated with increasing reliance on CO2 removals and the economic risks of very high CO2 prices in the second half of the century.”
Current carbon removal technologies, including reforestation, direct air capture or bioenergy, would still be necessary under this scenario to compensate for the remaining few per cent of emissions that has no technological path to carbon neutrality, such as long-range flights.
Large-scale deployment of these would only be necessary if emissions were reduced too little or too late, the researchers said, such that net-negative emissions would become necessary to reduce global mean temperature again after the target has been reached. Both effects could be avoided with a high enough carbon price early on.
“Carbon pricing is key to reach net zero greenhouse gas emissions - there is frankly no other way to reach that target,” said co-author Ottmar Edenhofer.
“After a high start and a rather steep increase, the price curve should flatten once emission neutrality is achieved, but it needs to remain on a high level if we want to maintain both a fossil-free world and a reasonable amount of carbon dioxide removal.
“Our calculations in fact show that we need a substantial pricing of CO2 emissions throughout the 21st century, with beneficial effects for both the economy and the people.”
Last month, Canada-based direct air capture company Carbon Engineering sold its first major contract to e-commerce firm Shopify as it looks to mitigate its carbon emissions.
No-cement concrete holds potential for decarbonisation and Moon buildings
By E&T editorial staff
Published Thursday, April 15, 2021
Researchers from the University of Tokyo have developed a new method of producing concrete without cement. Their technique offers a means for the construction industry to reduce its carbon emissions, as well as offering potential for building on the Moon and Mars.
Concrete consists of two parts: an aggregate (typically made of sand and gravel) and cement. Cement has been estimated to be associated with 8 per cent of global carbon emissions, making it difficult for the construction industry to reduce its climate impact. Another issue facing the industry is the limited availability of suitable sand for concrete production, which must have a specific size distribution to provide the correct properties.
“In concrete, cement is used to bond sand and gravel,” said lead author of the study, Yuya Sakai. “Some researchers are investigating how more cement can be replaced with other materials, such as fly ash and blast furnace slag, to reduce CO2 emissions, but this approach is unsustainable because the supply of these materials is decreasing owing to reduced use of thermal power systems and increased use of electrical furnace steel.”
A new approach will be required to produce concrete from more abundant materials with less environmental impact. “Researchers can produce tetraalkoxysilane from sand through a reaction with alcohol and a catalyst by removing water, which is a by-product of the reaction,” said Sakai. “Our idea was to leave the water to shift the reaction back and forth from sand to tetraalkoxysilane, to bond the sand particles with each other.”
The researchers placed a copper foil cup in a reaction vessel with sand and other materials. They varied the reaction conditions (such as amount of each material, heating temperature, and reaction time) to find the right conditions to obtain a strong enough product.
The product is likely to have greater durability than conventional concrete due to the absence of cement paste, which is relatively weak against chemical attack and which undergoes growing and shrinking with changes in temperature and humidity.
Ahmad Farahani, second author of the study, said: “We obtained sufficiently strong products with, for example, silica sand, glass beads, desert sand, and simulated Moon sand. These findings can promote a move towards a greener and more economical construction industry everywhere on Earth. Our technique does not require specific sand particles used in conventional construction; this will also help address the issues of climate change and space development.”
It is hoped that – as it does not require the specific type of sand required in conventional construction – this technique could help address climate issues as well as provide a potential way to construct buildings in desert regions and even on the Moon and Mars.
Man sentenced for shooting protected elephant seal dead on California coast Jordan Gerbich, 30, will serve three months in federal prison and pay a $1,000 fine for killing the animal
SIX MORE ZERO'S ARE NEEDED FOR THAT FINE
An elephant seal pup in a pool at the Marine Mammal Center on 20 April 2017 in Sausalito, California. Photograph: Justin Sullivan/Getty Images
Guardian staff and agencies Thu 15 Apr 2021
A man has been sentenced to three months in federal prison for shooting a protected northern elephant seal to death on the central California coast.
Armed with a .45-caliber handgun and a flashlight, on the night of 2 September 2019 Jordan Gerbich, 30, opened fire on an elephant seal at a popular viewing area where the giant aquatic mammals haul out along the shore near the Monterey Bay national marine sanctuary. The elephant seal was discovered the following morning with a bullet wound to the head and its tail fins cut off, according to the National Oceanic and Atmospheric Administration.
Noaa’s office of law enforcement and the California department of fish and wildlife opened an investigation, and Gerbich, who now lives in Utah, pleaded guilty last year to a count of illegally taking a marine mammal, a federal misdemeanor.
Gerbich told prosecutors that he shot the seal after being challenged to do so by an intoxicated friend, “as a kind of grotesque test”, court documents show. He also told investigators he had a history of substance abuse and had suffered physical abuse as a child, which is why he struggled with the need to seek approval from others. He has expressed regret for the incident, saying that he knew the act was wrong, court documents show.
Elephant seals on a beach in San Simeon, California. Photograph: Nick Ut/AP
Gerbich’s attorney said his client viewed the act as “so unusual and troubling”, but prosecutors emphasized that it was premeditated and “did not happen by accident or on a whim”. Gerbich and the friend who told him to kill the seal drove out to the area where the mammals rest and give birth, to shoot the animal.
On Monday, Gerbich was sentenced by the US district judge Dale S Fisher for the crime. After his prison term, Gerbich will spend three months in home detention, will have to perform 120 hours of community service and will have to pay a $1,000 fine, the US attorney’s office said.
Northern elephant seals, named for their large protruding inflatable noses, are massive animals found along North America’s Pacific coast and are protected under the Marine Mammal Protection Act.
The second largest seal in the world, they struggle to move quickly on land, where they haul out on beach areas known as rookeries. Populations have rebounded in recent years, after reaching near extinction in the early 1900s when only a few hundred remained.
Now under protection, they are still under threat from being hit by ships and becoming entwined in fishing nets during their long migrations, which can extend up to 13,000 miles roundtrip.
