SPE-GCS Blog

May 1st, 2019

“In God we trust. All others must bring data.” – W. EDWARDS DEMING

Permian Basin and the Gas Conundrum

The Permian basin was in the news for a unique reason this time. Natural gas prices at the Waha hub in West Texas tumbled to record-low negative levels on April 3, as takeaway constraints, coupled with compressor station issues at one pipeline, stranded the gas produced in one of the hottest basins in our industry. Prices dived down to -$3.38/MMBtu – a scenario where the producers are paying others to take their gas! In other regions where the primary production stream is gas, companies have the liberty to restrict production when prices fall. But in the Permian, where gas is mostly considered a byproduct, producers have limited options other than to produce and sell or flare the gas, because oil and …

May 1st, 2019

MAY 1989

The U.S. monthly seismic crew count falls to its lowest point since the Society of Exploration Geophysicists began keeping a monthly count in 1974, with 129 land and marine crews. 

DOE Secretary James Watkins tells 10 DOE national laboratories to intensify research into electrolytic fusion following recent reports of a breakthrough in cold fusion.

WTI crude: $20.23/bbl

U.S. rig count: 751

MAY 1999

Transportation Secretary Rodney Slater reports that, due to the success of the Oil Pollution Act of 1990, passed in response to the Exxon Valdez incident, in 1997 tanker spills were limited to 22,429 gallons out of 107 billion gallons of oil transported that year.

Chevron begins shutting down its beleaguered Point Arguello project off Santa Barbara, California, while they continue to look for a buyer for what was once touted as the biggest find ever …

April 1st, 2019

“The best way to find yourself is to lose yourself in the service of others.” – MAHATMA GANDHI

As we enter into the second quarter of 2019, we get into the busiest season for our section. Several of our legacy and new one- day events are set to take place in the next two months. The study groups and committees have put in a lot of effort to plan these events and I wish them the best for a successful execution! Please refer to the events calendar at www.spegcs.org for event information.

This season also calls for action from our members and board officers. We’re preparing to identify candidates to fill the vacant positions in the board for 2019-2020. We’re also in the process of selecting our most deserving volunteers for the annual section awards. Our nominations and succession committee, headed …

April 1st, 2019

APRIL 1959

Canada’s chief of mines reports that if the initial atomic blast in Alberta’s Athabasca tar sands is successful, plans call for a series of hydrogen bomb blasts to be set off at the same time.

A major new technique for waterflooding is announced by Core Lab, involving the injection of water at the gas-oil contact, rather than the oil-water contact, as in the conventional method.

East Texas crude: $3.25/bbl

U.S. rig count: 2,057

APRIL 1979

Thanks to natural gas regulations, operators report submitting one million pieces of paper in one case, and 1.5 tons of paper in another case, in order to qualify for eligible gas prices. (Sounds like about one tree per filing!)

In terms of dollar averages at the bachelor’s degree level, petroleum engineering graduates continue to command top dollar at $1,788/month, with chemical engineers second at $1,633/month.

U.S. …

March 1st, 2019

"Strength lies in differences, not similarities." – STEPHEN R. COVEY

Membership Trends

Since 2014, we’ve experienced a steady drop in our membership every year. A few years ago, our combined professional and student membership was around 20,000; presently, it’s around 15,000. About 6,000 professional and student members allowed their memberships to lapse after the end of 2018. I’m assuming this is an oversight from these members and I’m hopeful many of them will renew in the coming months. With that said, the historic downturn and volatile oil prices have left a mark on our membership levels, and it’s indeed a big concern that we’re trying to address.

In an effort to educate industry professionals across the Gulf Coast Section about the SPE and the benefits of membership in the society, the Membership Committee is relaunching our Ambassador Program. The SPE-GCS board is …

March 1st, 2019

MARCH 1989

Texaco reports an economic solution to disposal of some oilfield waste in the application of their coal gasification process to produce fuel-grade synthesis gas from tank bottom sludge.

Japan, Iran’s biggest customer for crude oil, is under pressure from its government to cut Iranian crude imports as a result of Ayatollah Khomeini’s call for the death of UK author Salman Rushdie.

WTI crude: $18.51/bbl

U.S. rig count: 761

MARCH 1999

For the first time since 1951, there are no drilling rigs operating in North Dakota. Just two years prior, there were an average of 18 rigs operating on any given day, with 260 wells drilled per year and a labor force of almost 10,000 employees. (We’re back!)

Oil and gas sector respondents report being fully prepared to prevent the feared Year 2000 computer problems, otherwise referred to as …

February 1st, 2019

“There is nothing certain but the uncertain.” – UNKNOWN

Oil Prices

2018 was a mixed year for our industry. Oil prices soared to highs that the market hadn’t seen in almost four years, but also succumbed to some of the largest single-day drops. Early predictions from Wall Street pointed to barrel prices in excess of $100. Instead, the market experienced the worst drop in over two years. Amidst all the volatility in prices, we saw the United States become the world’s largest oil producer in 2018. The key factor driving US production levels was the Permian Basin. In spite of Permian Basin drillers having issues with pipeline takeaway capacity, oil production increased by nearly 900,000 barrels per day last year.

With falling demand and increasing production from the Permian Basin, more price uncertainty is possible this year.

Infrastructure constraints …

February 1st, 2019

FEBRUARY 1969

No significant effects on propane supply are forecast for the Southeast following the January explosion of 16 railroad tank cars (480,000 gallons) of the product at Laurel, Mississippi.

Shell’s Rocky Mountain division completes a computer study of 200 rod- pumping configurations for deep, high- volume oil pumping conditions and concludes that the optimum efficiency is obtained from pumps smaller than 1.75 inches, stroke lengths less than 120 inches and surface equipment with unconventional geometries.

US active rig count: 1,118

FEBRUARY 1989

New EPA underground storage tank requirements instituted following a 20,000-gallon leak from a South Dakota tank in 1986 may force the closure of 26,500 service stations, while requiring tank owners to have at least $1 million in tank leak liability insurance.

Turkey and Iran agree to a trade pact valued at $2 billion, with Iran receiving construction aid for …

January 1st, 2019

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is the most adaptable to change.” – CHARLES DARWIN

We exit 2018 and step into 2019 while looking at the plethora of opportunities ahead. There is a lot of focus on the digital transformation of the oil and gas industry. For several decades, the industry has not taken advantage of the opportunities derived from the meaningful use of data and technology. Data from a single rig can be in the range of several terabytes, yet only a fraction of that data is used for interpretationanddecisionmaking.Otherindustriesseemto havemadeadvancementsinrevolutionizingtheirbusinesses  throughaholisticadoptionof digitaltechnologies.Observing their success, the oil industry is slowly realizing that digital transformation extends beyond Silicon Valley and is something that organizations need to adopt if they expect to survive in the next decade. …

January 1st, 2019

JANUARY 1974

United Nations diplomats complain to the UN that they are having trouble getting gasoline for their official limousines in New York, one of which is Jamil M. Baroody of Saudi Arabia, a prime mover in the recent oil embargo.

The Interior Department prepares to issue permits for construction of the Alaska crude-oil pipeline this month, now that Congress has removed right-of- way and environmental impediments.

US active rig count: 1,417

JANUARY 1989

An investigation concludes that a gas release caused by removing a pressure relief valve from piping associated with a condensate injection pump is believed to be the cause of the July Piper Alpha disaster in the UK North Sea that cost 167 lives.

War-weary Iraq and Iran are seen to be gradually normalizing international business relations again, having put behind them a five-month cease-fire and a …