Feb 25, rig welder(6G-6GR)

by fayaz
(mangalore,karnataka,india)

I have 21years exepereince in welding and fabrication i am at present working in rig. i am looking good opportunity in middleast

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EPA Needs to Fix Air Emissions Proposal

Howard Feldman, API director of scientific and regulatory affairs, spoke with reporters today about proposed rules for oil and natural gas air emissions.  This is what he had to say.

EPA's proposed rules for the oil and natural gas sector, which address sources of air emissions including those associated with hydraulic fracturing, are due to be finalized in the first week of April. The rules are important because they would over time affect hundreds of thousands of natural gas development operations.

A new study conducted by Advanced Resources International, which we are releasing today projects the rules as proposed would significantly slowdown drilling, resulting in less oil and natural gas production, lower royalties to the federal government, and lower tax payments to state governments.

Unless EPA makes changes to the proposal, the study found that between the time these rules are implemented and 2015:

Overall drilling for natural gas using hydraulic fracturing would be reduced by up to 52%, reducing drilling by as much as 21,400 wells;Natural gas production from hydraulically fractured wells would decline by up to 11% compared to what would otherwise have been developed;Oil production from hydraulically fractured wells would decline by up to 37% compared to what would have otherwise been developed;The federal government would not collect up to 8.5 billion dollars in royalties due to reduced drilling and production;State governments would not collect up to 2.3 billion dollars in severance taxes due to reduced drilling and production.

This analysis does not even attempt to estimate the lost jobs and decline in other economic benefits that would result from reduced drilling and reduced oil and gas supply services.

As we suggested in our comments on the proposal, EPA must make changes to this rule and allow for reduced emissions while not impeding the massive job creation and economic revitalization that we’ve seen in states like North Dakota and Pennsylvania due to the shale boom.

First, reduced emission completions requirements should be less prescriptive and limited to circumstances that are cost-effective and technically feasible. A one-size-fits-all approach will not work.

EPA should also allow more time to implement the requirements once they are final. The equipment prescribed to conduct reduced emission well completions will simply not be available in time to comply with the current final rule schedule.

Manufacturers and industry need two to three years to design, manufacture and certify a sufficient number of control devices and train personnel.

We also think the system of notifications, monitoring, recordkeeping, performance testing and reporting requirements for compliance assurance must be simplified. Taken as a whole, these requirements would be overly burdensome for the small and/or temporary facilities that EPA is regulating. They would waste time and resources for the industry and EPA.

The benefits of shale energy development are indisputable. Nationwide, shale gas development was supporting 600,000 jobs in 2010, according to a December IHS-Global Insight report. Natural gas prices have fallen by half from their level three years ago. That is benefiting families that heat their homes with natural gas, as well as businesses and consumers that buy their electricity from utilities that generate it with natural gas.

Low natural gas prices are also benefiting chemical manufacturers and other businesses that use natural gas as a raw material, and that is encouraging businesses to locate new facilities in America rather than overseas.

The president has called for his administration to reign in burdensome regulations. At a time when the government is desperate for revenue, and America’s gasoline prices are high, applying overly burdensome regulations would be bad public policy and could place an even bigger burden on Americans in the form of higher energy costs.

EPA can fix these rules so they reduce emissions yet are still compatible with oil and natural gas development that creates jobs, government revenue and improves our energy security. We ask them to keep these recommendations in mind as they finalize the rule.

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Fact Checking the Administration’s Fact Checker

White House Communications Director Dan Pfeiffer put up a blog post last week, fact-checking his boss’ all-of-the-above energy strategy – perhaps because others have found the president’s energy assertions are more myth than fact, that he’s really offering an almost-none-of-the-above approach. Let’s review the White House’s defense.

Pfeiffer:

“The fact is, oil is bought and sold in a world market. And just like last year, the biggest thing that’s causing the price of oil to rise right now is instability in the Middle East.”

This important acknowledgement – echoed by Federal Reserve Chairman Ben Bernanke – accurately depicts the reality that crude oil is a global commodity whose pricing is affected by global events. Keep that in mind as we continue.

Pfeiffer:

“The truth is that there is no silver bullet to address rising gas prices in the short term, but there are steps we can take to ensure the American people don’t fall victim to skyrocketing gas prices over the long term.”

History suggests that just as global crude markets are affected by unrest and uncertainty that could restrict supply, they also can be affected by developments that expand supply. That’s what happened in the summer of 2008:

So, yes, supply matters – even the prospect of increased supply can have impact. So then the question is: What can the United States do to have more effect over crude oil supply, which, as nearly everyone agrees, is key to what happens at the pump?

We could approve the Keystone XL pipeline, which would bring upwards of 800,000 barrels of oil per day from Canada. We could endorse a federal offshore drilling plan that actually includes new areas for development, to increase domestic supply. We could open access on federal lands that currently are off limits. Studies indicate a tiny piece of the vast Arctic National Wildlife Refuge (ANWR), for example, could deliver 1 million barrels or more per day.

Unfortunately, the administration has said no the Keystone XL, no to a more robust offshore drilling plan and no to fully developing our onshore resources in ANWR, the Rockies and other areas. While the administration says it’s for greater domestic oil and natural gas production, it’s actually doing little to foster that and in a number of cases is blocking it.

Pfeiffer:

“Since 2008, U.S. oil and natural gas production has increased each year, while imports of foreign oil have decreased. In 2011, U.S. crude oil production reached its highest level in 8 years, increasing by an estimated 110,000 barrels per day over 2010 levels to 5.59 million barrels per day. U.S. natural gas production grew in 2011 – the largest year-over-year volumetric increase in history – and easily eclipsed the previous all-time production record set in 1973. Even if you fail to give the Obama Administration the credit it deserves in helping to expand this production, any notion that production has been blocked or slowed, doesn’t square with the facts.”

Actually, the notion that the administration has blocked or slowed oil and natural gas domestic production is well-supported by fact:

There has been a “systematic decline” of energy production on federal lands in the West in the past two years, according to a study by EIS Solutions released in January. According to Bureau of Land Management data, the number of new federal oil and gas leases is down 44 percent, while the number of new drilling permits and the number of new wells drilled both are down 39 percent.According to the Energy Information Administration, federal production in the Gulf of Mexico is estimated to be down 21 percent from 2010 – falling from 1.55 million barrels per day to 1.32 mb/d last year to an estimated 1.23 mb/d this year.Ten federal agencies currently are looking at more regulation of hydraulic fracturing, threatening the catalyst to the current natural gas revolution.

So, another question: If overall domestic production has increased while production on western federal lands and in the Gulf has decreased, what does that mean? It means the increases are coming from areas not under federal control – that domestic output is increasing despite the administration’s policies, not because of them.

Pfeiffer:

“We believe an all-of-the-above approach doesn’t need to come at-any-cost. That is why just as we make available more than 75 percent of our potential offshore oil and gas resources, the Obama Administration continues to study the feasibility of exploration, development, and production in other areas.”

Here we have some statistical flim-flammery. While the administration has made available for development 75 percent of federal offshore resources that meet the government’s definition of undiscovered but technically recoverable resources, these areas only account for 13 percent of the United States’ total offshore acreage. That’s how a 75 turns into an “F” on development.

Pfeiffer:

“As you can see, the claims and the facts just don’t add up.”

The White House’s problem is the facts do add up. We’re looking at a 21 percent decline in Gulf production and a trajectory on federal lands that’s heading down. It’s an administration that says one thing on energy and does something else – sending mixed messages to Americans and global energy markets.

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More on Moving Global Markets

The Marshall Institute’s William O’Keefe has a must-read on Fuel Fix for folks puzzled by the recent AP analysis that discounted the effect of domestic drilling on global crude pricing, which is the key component (76 percent) in fuel costs.

Remember, the AP said its statistical analysis of 36 years of monthly, inflation-adjusted, gasoline prices found no correlation between the level of production from U.S. wells and prices at the pump.

O’Keefe:

“The AP attempts to use a disconnected statistic, domestic production, to make an erroneous correlation to counter arguments in favor of more U.S. exploration and development. In doing so, the wire service offers the public a political statement in place of objective analysis.”

O’Keefe continues:

“To begin with, domestic oil production has been steadily declining since its peak in 1970 when it averaged 9.64 million barrels per day (MMbbl/d). From 1978 to 2010, domestic production reduced 37 percent. In that same period, the price of gasoline increased by nearly 60 percent—climbing from a national average of $1.61 to 2.56 per gallon. This data seems to suggest what many of us already learned in ‘Economics 101’; there’s an inverse relationship between supply and demand. That means that as the availability of a product/service (ie. oil, wheat, gold, etc.) declines, prices will rise.”

And:

“The AP even concedes this point mid-way through the story, noting ‘if drilling activity rises around the globe for a sustained period of time, gasoline prices can fall as that new supply eventually finds its way to market.’ Yet, it then implies that crude oil prices are insensitive to changes in supply as if it is a unique commodity. The story ignores what has happened to prices when for example a hurricane disrupted production and refining in the Gulf coast region, or when Nigerian or Libyan oil production has been disrupted. The price of crude goes up and then down when supplies come back on line. So when other factors are relatively stable, an increase in supply relative to demand will lower price. How much depends on the increase in supply.”

O’Keefe then moves to the lost energy opportunities resulting from current policies:

“… a policy of NO and a self imposed moratorium on increased exploration has probably resulted in hundreds of thousands of barrels or more not being produced. Adding those unproduced barrels to the current global supply would put downward pressure on crude oil prices which translate into to lower gasoline prices. Instead, there has been a policy of NO to the eastern Gulf of Mexico, NO to offshore drilling, NO to Alaska’s coastal plain, and NO to Keystone XL. With a more enlightened energy policy our oil production over the course of this decade could increase by a million barrels a day or more. That is not trivial.”

O’Keefe is certainly right on that, because, as noted here and by energy analyst Geoff Styles in a recent blog post, the key to the situation is the United States’ actual ability to impact global crude markets by affecting daily spare capacity – the amount of available crude above current demand. Styles writes:

“Traders have to think about how prices are really set, and they understand that it's the interaction of the last few million barrels per day of supply, demand and spare capacity that really count, along with inventories. An extra million or two barrels per day – a quantity of which North America is certainly capable – can make a huge difference in oil prices.”

Supply matters. Although the administration implies agreement by talking about releasing oil from the strategic reserve, the president seems only to believe that markets can be affected by lowering demand while saying, in effect, that current domestic oil production is good enough.

Most Americans disagree. Recent polling shows strong support for the Keystone XL pipeline and for greater oil and natural gas production here at home. They believe more of our own supply would make a difference with markets that are moved by expectations and strong leadership.

View the original article here

Recalculating the White House

Monday the White House had a blog post up saying:

“While profits soar, oil companies are receiving about $7,610 a minute in tax breaks.  That’s $4 billion a year of your money.”

During the latest economic downturn, when industries were shedding jobs and limiting spending, the U.S. oil and gas industry was doing the exact opposite.  Over the past few years we supported around 9.2 million U.S. jobs and, when given the opportunity, invested hundreds of billions of dollars into the United States to find new resources and generate the energy that American’s need.  So despite doing everything the Administration looks for in an industry – create jobs, invest in the United States, innovate – it does not appear to be enough.  The false argument now being made is that the industry is somehow not paying its fair share.

First, let’s put profit in perspective.  The oil and gas business generates revenue from its worldwide activities – however, it costs a huge amount of money to be successful.  That is why the real analysis for profits should be profit margin – how much profit does the industry earn on its sales.  In that light, during the most recent quarter the profit margin for “Major Integrated Oil and Gas” was 6.2%, which ranked 114th out of 215 industries.  So, I guess if profitability targets an industry, look out “Publishing – Periodicals” at 51.7%!

Second, let’s look at the claim that the industry is getting “tax breaks”.  These “breaks” are essentially deductions that the industry, along with many other industries, are eligible to claim.  They are not tax credits (which reduce taxes dollar for dollar) or grants from the government.  They are tax deductions for business investments that will generate tax revenues in the future.  Unlike the case of credits or grants, the government will still be paid the full amount of tax owed on our operations.

To illustrate let’s take a look at one of the deductions the president proposes to change, that for Intangible Drilling Costs (IDC). Currently large integrated oil companies can currently deduct 70% of their IDC costs over the first year and the rest over the next four years, under the president’s plan companies would have to spread the deduction over time – let’s say seven years. So for a well costing $5,000,000 the deduction schedules look like this:

Under both plans the amount being deducted will be the same, which means the taxes ultimately being generated would be the same.  The industry however uses the cash flow from the deduction to invest in equipment and jobs as they continue to drill and develop energy here in the United States.

Finally, let’s put the $7,610/minute point into perspective.  The oil and gas industry pays substantial amounts to the federal government in rents, royalties, bonus payments and, oh yes, taxes.  In total, these payments have been around $86M/day or $59,000 a minute!  An over 700% return on their “investment”.  So, at the end of the day, it is not the government supporting the industry, but the industry supporting the government.

Additional taxes or royalties may raise this amount in the short term, but it will eventually drive away investment.  This shouldn’t be surprising, by being able to reasonably recover costs, companies are able to drill more, and drilling more produces more American energy and more revenue for the government, not to mention more jobs.  The president’s plan will actually produce less, less, and fewer.

So while the White House tries to shape the numbers on the industry, the real numbers are as follows:

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Mar 17, Offshore platform cook

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Life in the Barnett Shale: Energy, Jobs, Growth

Local businessman Tim Osborn says that when he was a schoolboy growing up in North Texas, his hometown probably didn’t have more than 250 people. Today the area is vibrant, with 10 times that number living there. Work is plentiful, housing is booming and there’s room to grow – thanks to the oil and natural gas industry and the energy-rich Barnett Shale.

The area about 30 miles north of Dallas is thriving with oil and natural gas development in the Barnett Shale providing the magnet for other kinds businesses and industries. “The reason it has grown is the oil and gas business,” says Osborn, president of CBA Automation, an electrical and instrumentation contractor. “We have other industries moving here because this is a prospering area.”

Others are doing well, too. Check out this video detailing the oil and natural gas industry’s positive impacts on life in North Texas:

Here’s a slideshow that also helps capture the way of life in the Barnett Shale:

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