Oil and Gas Well Plug and Abandonment

Oil and Gas Well Plug and Abandonment

As the economic life of a well ends or for a commercially failed well (dry hole), the well must be placed in a safe condition. This is accomplished by plug and abandoning the well and this article provides a primer to how a well is plugged and abandoned (P&A). Well P&A have rules governing the process. Rules vary by governing standards and guidelines. For example, rules may require that all production casing, the steel pipe that helps separate the oil and gas production from the exterior rock, be remove. Also,…

Cheniere’s Sabine Pass LNG Exports

Cheniere’s Sabine Pass LNG Exports

In February 2016 Cheniere’s Sabine Pass first commissioning cargo left its LNG (liquefied natural gas) export facility. The available data, in this article’s graphic, shows where these exports were destined for the first four months of operation. The export countries are diverse. Seven export countries have received at least one cargo. Only Brazil has received more than one cargo. Four cargoes have been sent to South America, two to the Middle East, one to Europe and one to India. Drivers in this diverse LNG sendout are driven by a diverse…

Consumer Energy: LED Bulbs are finally ready for primetime

Consumer Energy: LED Bulbs are finally ready for primetime

After years of being expensive and out of reach to the average residential consumer, LED bulbs are finally ready to over take the remaining vestige of compact fluorescent lamps (CFL) and incandescent bulbs. The global LED lighting market is anticipated to grow 45% per year through 2020. Revenue for LED lights is at $13.6 billion in 2014 and is expected to grow to $63.1 billion by 2020. CFLs never really took off because of the pricing point which typically ran 5x-10x higher than incandescent bulbs. When incandescent bulbs were banned in parts of the…

What is an incandescent bulb and why are they going away?

What is an incandescent bulb and why are they going away?

An incandescent light bulb is an electric light source with a wire filament heated to a high temperature by passing an electric current through it until it glows with a visible light.  The development of the incandescent bulb ranged across most of the 1800s from Humpry Davy’s first experiment proving that you could create visible light by passing a current through a thin strip of platinum to a practical commercial version created by Thomas Edison using a carbon filament. Further improvements in the 20th century in the incandescent bulb improved…

The Permian Basin: A U.S.A. Oil Production Powerhouse

The Permian Basin:  A U.S.A. Oil Production Powerhouse

The Permian basin, located in west Texas and southeastern New Mexico, shows how well this area is contributing to the U.S.A.’s oil production. Since January 2010, the compound annual growth rate is 13%, rising from 886,000 barrels per day (bbl/d) to over two million bbl/d. How has this growth come to be? The Permian basin has been in production since the early 1900s. With this much production history behind it, one may suppose that the production level would fail to increase, however, many factors contribute to the production growth. The…

Will US Gulf Coast LNG Go To The U.K.?

Will US Gulf Coast LNG Go To The U.K.?

Will US Gulf Coast (USGC) liquefied natural gas (LNG) land in the U.K.? The following analysis shows the potential from a pricing perspective. For background, the USGC LNG contracts at Sabine Pass LNG Terminal, owned by Cheniere Energy, delivers LNG to the buyers. These are take-or-pay contracts, where the capacity off-taker pays for the liquefaction cost whether they take LNG or not. Mainly, USGC terminals deliver LNG free on board (FOB). FOB means that the liquefaction plant owner delivers LNG on board to the buyer’s vessel. At this point the…

Brexit and U.K. Oil and Gas Production

Brexit and U.K. Oil and Gas Production

The U.K. is a legacy and large oil and gas producer although production has been on the decline. During the 1980s, peak petroleum production almost touched 3 million barrels per day (MMBPD). Production declined to less than 1 MMBPD by 2013, however, a small uptick in production was seen in 2014 and 2015 because of new investments. These investments are targeted to the Northwest offshore of the Shetland Island and the legacy North Sea to the southeast. Now with Brexit, what does this mean for any potential growing production? The…

How does Brexit impact investment in the U.K?

How does Brexit impact investment in the U.K?

According to the International Energy Agency (IEA), energy companies investing in the United Kingdom will be become more reluctant in the short-term – a direct result of the of leave vote. It is estimated the U.K. government will need to find more than $100 billion Pounds for new energy projects to keep electricity flowing to customers. This couldn’t come at a worse time for the U.K. with several plants scheduled for closure in 2016 and needing replacement accounting for 11 percent of the U.K. peak demand. Some companies rethinking their…

How will the Brexit impact Energy in the UK?

How will the Brexit impact Energy in the UK?

The decision of the United Kingdom voting to leave the EU will have profound implications for U.K. energy policy. It is likely that the U.K will have more choice in choosing it’s source of energy, investment in new energy projects may be put on hold, and there could be an impact to Europe’s clean energy change goals.  The U.K. has previously broken with the EU on advocating for nuclear power and shale gas — cleaner sources of energy relative to higher carbon coal. Leaving the EU will allow the U.K…

Brexit – How does it affect US LNG Exports to the U.K.?

Brexit – How does it affect US LNG Exports to the U.K.?

On June 23, 2016 the U.K. voted to leave the European Union. This event caused the British Pound to weaken against the U.S. Dollar. One day prior, the exchange rate was $1.49 per Pound. Towards the end of the day, June 23, the exchange rate fell to $1.36. What does this do to U.S. LNG Exports to the U.K.? Including investment cost recovery, the economics do not look good. The U.K. National Balancing Point (NBP) price was at 34.5 pence/therm or $5.12/MMBtu. With a Henry Hub price at $2.50/MMBtu, the…