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[1THING] Blog: Archive for February, 2013

[ It’s our 1Thing for March….The International Crane Foundation ]

Soaring to New Heights: The International Crane Foundation
In 1941, there were only 23 whooping cranes on the entire planet, pushed to the brink of extinction by overhunting and loss of habitat. Now, thanks to organizations including the International Crane Foundation in Baraboo, Wisconsin, their number is now in the hundreds.
The International Crane Foundation was founded in 1973, dedicated to preserving all 15 species of crane worldwide. The non-profit organization is dedicated to research, education, habitat protection, captive breeding and reintroduction of cranes into their natural habitat.
Near their headquarters in central Wisconsin, ICF is studying wild sandhill cranes to learn more about their habitats, how the population develops, and interactions between cranes and people. ICF is also a key partner in current efforts to return the whooping crane to the eastern United States. They support this work through captive breeding, monitoring, ecosystem research and education. ICF is also working to protect and restore water supplies and habitat for whooping cranes in other regions, including the wintering area for the last naturally occurring population along the Gulf Coast of Texas.
But the work of the foundation doesn’t stop on this continent. They’re also involved in crane preservation efforts in China, Africa, and Russia.
The work of ICF has earned them numerous accolades. Earlier this year, founder George Archibald was awarded the Audubon Society’s $100,000 lifetime conservation achievement prize, one of the richest environmental awards in the world.
The International Crane Foundation is open to the public from April 15-0ctober 30, where visitors can take a guided tour of the world’s cranes, hike nature trails, and browse nature themed items from around the world in their gift shop. They also offer school field trips and group tours.
Go to www.savingcranes.org for more information.


[ Hickenlooper Threatens to Sue Cities and Towns That Have Passed Bans on Fracking ]

Gov. John Hickenlooper announced that he won’t tolerate action taken by cities and towns to ban oil and gas drilling within their borders, and promised to take them to court.


[ U.S. Monthly Crude Oil Production Hits 20-Year High ]

Crude oil production in the United States surpassed 7 million barrels per day (bpd) in November last year, the first time since December 1992 that output reached that level. According to numbers released by the U.S. Energy Information Administration today, the U.S. produced 7.013 million bpd in November and 7.030 million bpd in December.

Driven largely by increased production of “unconventional” or “tight” oil from the Bakken Shale in North Dakota and Montana, and Eagle Ford in Texas, U.S. crude oil production has been on a steady climb annually since 2008. (See related: “Photos: Bakken Shale Oil Boom Transforms North Dakota” and “Oil Train Revival: North Dakota Relies on Rail to Deliver Its Crude“) Overall output for 2012, at 6.474 million bpd, was the highest since 1995. (Annual U.S. production reached its peak in 1970: 9.63 million bpd.)

How long can this crude oil boom last? That is a matter of debate, as Great Energy Challenge blogger and Duke University scientist Bill Chameides notes, pointing out that some observers think the longevity of this boom has been overstated. Most recently, geoscientist J.David Hughes, writing in the journal Nature, questioned certain EIA projections on shale gas and oil output, concluding, “Declaring U.S. energy independence and laying plans to export the shale bounty is unwise.”

But at least in the short term, the boom is expected to continue. The EIA forecasts that crude oil production will continue its upward trend for the next two years, hitting more than 7.8 million bpd in 2014.

(See related post: “The Big Energy Question: How Has Fracking Changed Our Energy Future?“)


[ Shell Suspends Arctic Drilling Plan for 2013 ]

Shell's rig, the Kulluk, floats aside the yellow tug, the Alert, in Kiliuda Bay, Alaska, where it was towed after its New Year's Eve grounding. U.S. Coast Guard photo by Petty Officer 3rd Class Jonathan Klingenberg.

Shell’s rig, the Kulluk, floats aside the yellow tug, the Alert, in Kiliuda Bay, Alaska, where it was towed after its New Year’s Eve grounding. (Photograph courtesy U.S. Coast Guard, Petty Officer 3rd Class Jonathan Klingenberg)

The troubles that roiled Shell’s rig, the Kulluk, off the coast of Alaska this past winter will reverberate through the summer; the oil company announced today it would not seek to drill in U.S. Arctic waters in 2013. (Related: “In Kulluk’s Wake, Deeper Debate Roils on Arctic Drilling“)

“We’ve made progress in Alaska, but this is a long-term programme that we are pursuing in a safe and measured way,” said  Marvin Odum, director of Shell’s Upstream Americas division.  “Our decision to pause in 2013 will give us time to ensure the readiness of all our equipment and people following the drilling season in 2012.”

Shell never drilled into oil-bearing formations in the Arctic last year, but completed top-hole drilling on two wells in the Beaufort and Chukchi seas, marking the industry’s return to offshore drilling in the Alaskan Arctic after more than a decade. (Related: “Ice-Breaking: U.S. Oil Drilling Starts as Nations Mull Changed Arctic“) Shell noted the drilling was completed safely, with no serious injuries or environmental impact.

But other troubles beset its two specially equipped rigs. Its drill rig, the Noble Discoverer, slipped its anchor in Alaska’s Dutch Harbor last summer before heading north, and after it returned in the fall, a small fire broke out aboard ship. But it was a mishap with Shell’s other rig, the Kulluk, that mobilized an extraordinary rescue and recovery drama. A violent storm caused it to lose its mooring to tow ships and run aground on New Year’s Eve. (Related: “Pictures: Errant Shell Oil Rig Runs Aground Off Alaska”)The U.S. Coast Guard-led response, including a rescue of the crew by helicopter, eventually involved more than 700 people.

The incident ended with no spill of the diesel fuel or oil products that the Kulluk carried. But Shell said that both the Kulluk and the Discoverer will be towed to Asia for maintenance and repairs.

Because Shell’s permits for drilling in the Arctic were predicated on use of the two rigs, the decision to forgo drilling this season is not unexpected.  But how long a “pause” in Shell’s plans will depend not only on the company’s own timetable, but on U.S. regulators. After the Kulluk incident, U.S. Interior Secretary Ken Salazar ordered a 60-day review of last year’s Arctic drilling program, the results of which are expected by the end of next week.

Although none of Shell’s mishaps involved drilling, some environmentalists are urging a revamp of the exploration plan to include more stringent safeguards, while many others are working to halt drilling altogether.

“It appears Shell is realizing they need to take a more careful approach to ensure they don’t put the Arctic’s  people and marine life at risk,” said Marilyn Heiman, director of the Pew Charitable Trusts’ U.S. Arctic Program, in an email. “The causes of last year’s mishaps must be remedied so they do not occur in the future. It’s time that all parties, from the administration and local communities to conservation groups and industry sit down and develop world class industry standards and ecological and cultural protections to safeguard the Arctic.”

David Yarnold, president of the National Audubon Society, however, maintains spills will happen no matter how careful the oil companies are.  ”Shell has seen the ice. Or the light,” he said in a prepared statement. “Drilling amid ice floes in the neighborhood of nurseries for threatened wildlife isn’t either smart or safe. Shell seems to have come to its senses for now – but how many accidents did it take?”

But Shell, which has invested more than $4.5 billion in leases and equipment for exploration in the Alaskan Arctic, said it is committed to drilling there in the future. “Alaska remains an area with high potential for Shell over the long term,” the company said, adding that resources there would take years to develop.

A 2008 report by the U.S. Geological Survey estimated that the area north of the Arctic Circle holds 13 percent of the world’s undiscovered oil, and 30 percent of its undiscovered natural gas. (Related: “Pictures: Four New Offshore Drilling Frontiers”)


[ Shale Gas and Tight Oil: Boom? Bust? Or Just a Petering Out? ]

The oil and gas industry promises “a few days of fracking” for “decades of … production.” But is it true?

Believe it or not, some people don’t buy the fracking boom story. Some predict bust. Others, more of a petering out. What gives? Let’s begin with a story about a lunch.

Lunch with a Skeptic

In the spring of 2008, I was anticipating a lunch meeting with Matthew Simmons. In the oil and gas industry Simmons was considered something of a legend or a pariah, depending on one’s point of view. Either way, he was an iconoclast.

Having served as an energy advisor to President George W. Bush, Simmons had become increasingly concerned about Saudi Arabia’s ability to keep its oil spigot flowing indefinitely. In his book “Twilight in the Desert: The Coming Saudi Oil Shock and the World Economy” (Wiley, 2005) Simmons predicted that, with Saudi Arabian oil past peak production, hard times would fall on a world disproportionately dependent on Saudi oil to power its cars and stabilize prices.

Was he right? A good deal of debate surrounds the answer; some have said he was off his rocker, others have called him prescient (see here and here).

And while his predictions of $200 per barrel of oil by 2010 never came to fruition (prices peaked at about $145 per barrel in 2008 — click on chart below for history of prices), the financial crisis of 2008 might have had something to do with that.

weekly oil and gas prices

The left axis/red line represents the weekly West Texas Intermediate spot price per barrel, the main benchmark for North American crude. The right axis/blue bars indicate the U.S. weekly average per-gallon retail price for all grades. (Data sources: Weekly Cushing, Oklahoma WTI Spot Price and Weekly U.S. All Grades All Formulations Retail Gasoline Prices)


Talk of Bluster on a Blustery Day

Anyway, back to the lunch. I remember the day as sunny and blustery. Through the windows the trees swayed to and fro and the flowers on the azaleas held on for dear life. Inside, things were popping too; Simmons was full of energy, warm, forthcoming and absolutely sure of himself.

Eventually the conversation turned to shale gas, a topic whose buzz about the coming shale gas revolution had just begun to reach a fevered pitch. A couple of years later many experts (and some non-experts, such as yours truly in posts like this and this) would hail shale gas as a “game changer.”

But Simmons distanced himself from those “experts.” “It’s all hype,” he told me over lunch that blustery day, a sentiment he later conveyed to energy consultant Steve Andrews (co-founder of the Association for the Study of Peak Oil & Gas USA): “I’ve never seen the industry hype something crazier.”

When I asked him about such characterization, Simmons explained it had to do with the long-term productivity of fracked wells. The industry was claiming (and still is, by the way) that a single fracked well “can be in production for 20 to 40 years.” If it’s true, it’s quite a deal — frack a well, then stand back and pump out energy and profits for decades.

But the unconvinced Simmons argued that he’d seen the data from existing fracked wells and they simply did not support a decades-long production curve. He was convinced that the productivity of fracked wells rapidly declined with time — by 70 percent in the first year and another 20 percent in the second year, leaving only 10 percent for all those supposed decades of production.

That lunch-time discussion was memorable and I was saddened to learn a couple of years later that Simmons had died.

Was He Wrong About Fracking?

Was Simmons just plain wrong about fracking and tight oil and shale gas? One could argue he was. Because of shale gas, natural gas prices are as low as they’ve been in more than a decade, coal usage in the United States is down, and tight oil production in the Bakken and Eagle Ford formations is on the rise. Because of tight oil and shale gas, America’s energy prospects have never been brighter. A recent report by the International Energy Agency predicts that the United Sates will become the world’s largest oil producer by 2020 and a net oil exporter by 2030.

Maybe Not

And yet, while the fracking business is booming, there are some naysayers out there who have argued that this particular king has no clothes. (See here, here, here and here.)

Now add J. David Hughes of the Post Carbon Institute to the naysayer list. Seeming to channel Simmons in the Comment section of last week’s edition of the journal Nature, Hughes claims that “the production of shale gas and oil is overhyped.” As Simmons did, he points to the rapid decline in production rates of fracked wells. Having studied the data from 65,000 U.S. shale wells from 30 shale-gas and 21 tight-oil fields, Hughes concludes that

“Wells decline rapidly within a few years. Those in the top five US plays typically pro­duced 80–95% less gas after three years. In my view, the industry practice of … inferring lifetimes of 40 years or more, is too optimistic.”*

Hughes argues that to keep total production up in the face of declining production from existing wells, the industry will need to continue to drill more and more wells in less productive areas — making the whole enterprise less profitable. Either production will halt or energy prices will head upwards.

Hughes closes out his comment with the following not-so-optimistic assessment of the promise of shale oil and gas:

“Governments and industry must recognize that shale gas and oil are not cheap or inex­haustible: 70% of US shale gas comes from fields that are either flat or in decline. And the sustainability of tight-oil production over the longer term is questionable. … Declaring US energy independence and laying plans to export the shale bounty is unwise.”

Could be that despite fracking and its current bounty, we’re not going to be able to drill our way to energy security after all.


End Note

New data [pdf] by the U.S. Energy Information Administration shows a similar steep drop-off in well productivity.


[ Tesla’s Musk Promises to Halve Loan Payback Time to DOE, Jokes About ‘Times’ Feud ]

Tesla CEO Elon Musk offered a sort of parting gift to Energy Secretary Steven Chu Tuesday, as the pair were about to conclude a session at the ARPA-E Energy Innovation Summit near Washington, D.C.

Asking for a for a bit more time to make an announcement, Musk first said he thought the Department of Energy’s 2009 loan to the California-based electric carmaker had been a success. “We’re exporting cars, we’re selling powertrains to two of the most respected brands in the world … an electric car won Car of the Year last year. I mean, this is pretty good stuff,” Musk said of Tesla.

“So if people are going to attack the DOE for bloody Solyndra—honestly—then there should be some praise for the DOE when there is a success. So I want to make a public commitment, and we’re going to codify it, that Tesla’s going to cut the payment time in half of the loan.”

Last fall, the DOE asked Tesla to work out a faster repayment schedule for the $465 million loan, which it made to the company in 2009. The company agreed, speeding up the first payment, which was originally due this March. Musk’s commitment at ARPA-E cuts the overall payback time of 10 years by half.

Chu, who announced this month that he is stepping down as secretary, just smiled as the audience applauded.

Musk was also able to joke about his recent,  heated flap with The New York Times over its account of a test drive that ended with Tesla’s Model S on the back of a flatbed truck. (See related post: “In Tesla Motors-NYT Spat, Cold Realities About Electric Cars.“) That piece sparked a war of words (and driving logs) between Musk and the reporter, John Broder.

Atlantic editor Steve Clemons, who moderated the session with Chu and Musk, noted that Musk’s first foray into business was the software company Zip2, in which the Times invested. “You actually helped take The New York Times online,” Clemons said.

“I think that’s called being hoisted on your own petard,” Musk replied.

New York City Mayor Michael Bloomberg, BP Capital founder T. Boone Pickens and others are appearing at the three-day ARPA-E (Advanced Research Projects Agency – Energy) summit, which also spotlights a variety of projects the agency has funded. (See related story: “Storage, Biofuel Lead $156 Million in Energy Research Grants.”) The creation of ARPA-E was authorized by Congress in 2007 and it began funding projects in 2009.


[ 500 kW Community Solar Garden Under Construction in Boulder County, Colorado ]

On February 22, 2013, Clean Energy Collective broke ground on a 500 kilowatt (kW) community-owned solar array in Xcel Energy’s Colorado service area. The array will service roughly 100 residential, commercial, and nonprofit customers. The plan is a result of Xcel Energy’s Solar …


[ 500 kW Community Solar Garden Under Construction in Boulder County, Colorado ]

On February 22, 2013, Clean Energy Collective broke ground on a 500 kilowatt (kW) community-owned solar array in Xcel Energy’s Colorado service area. The array will service roughly 100 residential, commercial, and nonprofit customers. The plan is a result of Xcel Energy’s Solar …


[ Environment Colorado launches paid media campaign to protect national parks ]

Environment Colorado launched a paid media campaign to protect Colorado’s national parks from oil and gas drilling.


[ Fort Collins, Colorado Passes Fracking Ban ]

In a 5-2 vote on the night of the 19th, the Fort Collins City Council voted to ban fracking within the city limits.