OGPSS - Deepwater Gulf and the presence of salt

The deep waters of the world’s oceans and seas are a frequent topic in discussions of the source of future production of oil. Having talked about the development of the offshore Gulf of Mexico oil and gas fields last time, in this post, I’m going to venture further away from the coast, and look at the deeper wells that are now where the most promising discoveries and developments are made. For the sake of reference, the U.S. Government has defined deepwater as being anything deeper than 1,000 ft. IHS (CERA) has defined it more recently as deeper than 2,000 ft, and in their projections last year had suggested that deepwater fields had the potential to contribute up to 10 mbd to global supply by 2015. This would be up from 1.5 mbd in 2000, and 5 mbd in 2009. And that would, as a “region” put it at the top of the league, in the company of Russia and Saudi Arabia.

Within the United States deepwater production is currently focused in the Gulf of Mexico (GOM) with individual oil fields that compete with state production.

Production from the Gulf Of Mexico comparing some individual platform production. ( Petro Views)

At present (August 2011) there are 27 rigs active in the Deepwater, in water depths ranging from 9,627 ft (Tobago) to one allowed in at 922 ft (GC 50). Eight of the rigs are being run for Shell. In total there are about 90 prospects being considered, while 81% of current GOM production of oil and 47% of natural gas comes from the deep waters of the Gulf.

For the three largest fields cited in the plot, Tahiti, is believed to hold 4-500 million barrels of oil (mb) started production in 2009 in 4,000 ft of water. Production is nominally some 125 kbd of oil and 70 mcf of natural gas. Atlantis lies under 7,100 ft of water and was set to nominally produce 200 kbd of oil and 180 mcf of natural gas. Thunder Horse lies in 6,050 ft of water, and even with delays due to having to do some re-engineering, is still not performing up to the anticipated 250 kbd of oil, and appears to be declining in production at a higher than expected rate. And even when the North field has been added, as Darwinian has noted, production has not been sustained at target levels.

These fields are now generating new projects that lie close to the original discoveries, Thunder Hawk, for example, lies close to Thunder Horse, and is in 5,724 ft of water with total vertical depth (TVD) of the well being 25,885 ft. It is designed for 60 kbd of oil, and 70 mcf of natural gas. Further discoveries continue to be made. In June, for example, Exxon announced a discovery in Keathley Canyon, so that even if the original potential is not achieved (and I have not even discussed fields such as Jack, which has been rated at perhaps 500 mboe) there will continue to be sustained production from the Gulf, even if it is steadily moving further offshore.

This might be a good point to slip in a little comment about salt domes. When the original Spindletop well was drilled in Texas, it was not recognized at the time that the hill from which the well descended had been formed by a salt dome. Yet once this had been grasped, the slight hills that were the surface feature of these domes became a guiding marker for wildcatting across Texas.

John Bratton has provided a little explanation of the initial history of salt in the Gulf. Simplistically, as the global pull separated North from South America it first created a valley :

The tearing apart of plates does not make an ocean right away. Usually, the big valleys first start to fill as salt deposits form, like those found in the Dead Sea in Israel and Jordan, or the Salton Sea in California. These deposits are called the Louann Salt in the area of the Gulf of Mexico. As the big crack at the bottom of North America widened, the ocean filled the big valley permanently, new ocean crust began to form, sediment began washing into the widening hole from the Mississippi, and other rivers and reefs grew along the shore, burying a width of more than 500 km of salt and the edges of the new crust.

Over millions of years, plumes of the light salt began to float up through the heavier sediment that covered it, like the colored liquid in a lava lamp. As the salt made it very close to the surface, sometimes having traveled through more than 10 km of rock and sediment, it pushed up the sea floor above it to form a mound or dome.

The driving force for the movement of the salt lies in the difference in specific gravity between the 2.19 SG of the salt, and the typical 2.7 SG of the overlying sediments. As a result, due to the plasticity of the salt, it will flow under the differential pressure and due to its lighter density preferentially deform upwards. ( This can be illustrated, for example, at the Wieliczka salt mine in Poland where miners have mined what they thought was virgin salt, only to find old mining equipment buried within the rock.) With time that upward movement pushed through and compresses overlying sediments.

Michel Halbouty has described how the Gulf salt, which can now lie some 30,000 ft below the surface, could then create the traps for oil.

Once the movement of salt begins, the forces of buoyancy are constantly at work, depending on the static weight of the sediments above the salt and on the flanks of the salt core. The main motive force of the uplift of the salt through the sediments is the static weight of these sediments, principally on the flanks of the salt core. The salt stock moves in stages through geologic time, depending on the thickness and the weight of the sediments above and around the salt mass. . . . . .
Cycle after cycle of this procedure took place until the domes gradually pierced their way through the overlying beds to their present positions under the surface of the earth . . . . . . .Some of these moved upward rather slowly, so that they could not keep pace with the rapid deposition of sediments and eventually became buried beneath many thousands of feet of overburden. These domes are referred to as "deep-seated," and gas and oil production is generally found in the arched, but unpierced, formations lying over the super-dome area. Other salt stocks, including the one at Spindletop, seem to have developed under conditions that resulted in the salt stocks remaining near the surface throughout their growth history. . . . . Gas and oil production at these domes is therefore likely to be important in the pierced formations that butt against the sides of the salt mass. It was one of these salt cores that finally settled under an area that is known as Spindletop.

It is difficult to see these deeply buried domes given the current geology of the undersea Gulf surface.

Gulf topography (Gulf Blue Plague)

Rather we have to rely on geophysical surveys where the subsea geology is plotted through the return of sound waves, allowing the rocks under the sea to be mapped in three dimensions. Using this technique it is easy to see (even in a simpler 2-D version) the presence of salt domes.

Salt migration and the effect on overlying Miocene deposits in the Gulf (after Morris via Geoexpro ) The image has been colored to enhance the features.

Similar structures extend to the East and are projected to be potential areas for future production closer to Florida. The salt does not, however, just move vertically upwards, but can also flow laterally. However, in earlier times the formations under the salt would not have been distinguishable because of the way that sound waves move through that rock. (The results have been compared with seeing through frosted glass). Thus hydrocarbons in beds below the salt would have been hidden.

Hydrocarbon reservoir that used to be hidden by overlying salt (BOEMRE )

More modern and advanced techniques have allowed formations to be seen both above and below the salt. (Or pre and post salt).

Depth section across the Florida Escarpment showing plays both above and below the salt Section width is 90 km, vertical magnification is 5:1 (Geoexpro)

As with the technology to find these deeper reservoirs so increasingly more complex drilling rigs have had to be developed to reach and develop the deposits. This included technology to drill through the salt, first carried out by Diamond Shamrock in 1983, although it was not until the Mahogany field was discovered by Philips Petroleum that commercial subsalt production began, Both Atlantis and Thunder Horse reservoirs lie sub salt.

Not all the equipment works as anticipated, and this has been evident, not only with the Deepwater Horizon tragedy last year, but in other rigs and other locations.

Hopefully now, however, the industry has learned the lessons that needed to be learned, and the permitting of new drilling means that the new discoveries that continue to be made can be developed without further loss of life.

Drought, renewable energy, Texas, London and Florida

The Governor of Texas has asked the denizens of the state to pray for rain. The state has not had serious rain for months, and the drought conditions have turned severe.

The current drought conditions in Texas.

Conditions are not anticipated to get any better in the next few months. The recent predictions are that the conditions will persist in the area through July.

Predictions of the weather changes through July (NOAA )

Droughts around the world are one of the unfortunate consequences of changing weather, in much the same way as we have seen high snowfalls in other parts of the country this past winter. There will likely be cries about the underlying causes (with folks forgetting that droughts have occurred throughout history), but this post was started because of a potential event-changing occurrence.

This week Thames Water, which supplies 687 million gallons of water a day to the inhabitants of London and the immediate vicinity, was running its first water desalination plant. The region has faced droughts in the recent past as have other regions of the United Kingdom. Earlier solutions included building large water reservoirs, that at Kielder is the largest man-made reservoir in Europe. There is, however, only a certain limited amount of land that can be made available for this use, and so desalination proves an alternate way of supplying the increasing global demand for water.

In the United States droughts have threatened the viability of nuclear power stations, since the shortage of cooling water (as we recently learned again in Japan) is essential to safe plant operation. And therein lies one of the rubs to the situation. As the spokesman for Thames Water noted, the intent is not just to run the plant when there is a drought, since that is going to be too late. Rather at times of lower rainfall the plant (which can produce up to 150 million gallons a day) will pump clean water into the reservoirs, maintaining their integrity, and building up a reserve that will reduce the drought impact if it occurs. The plant was apparently completed last June at which time it was expected that it would just be used in times of drought. Within the last year that thinking has changed, and the plant is now running intermittently, partly to train operational staff, partly potentially also to help meet demand.

According to the Environment Agency, average water use is 148L per person per day in the UK and in the south-east of England it’s as high as 170L (far higher than the government target of 130L). Despite the popular perception of London as an overcast, rain-soaked city, its rainfall rate is, in fact, on a par with Rome, Dallas and Istanbul.

Schematic of the flow path through the desalination plant.

One question that I had relates to the amount of power that will be needed at Beckton. A calculation assuming that it takes 4 kWh to produce a cubic meter of fresh water, suggests that it will need a 21 MW plant. In 2009 the company CEO noted

The (20 MW) plant will be the first in the world to generate all its energy on-site, from renewable sources, including recycled cooking oil.

However the plant has been controversial, not least because although planning to use rapeseed oil, it could also burn palm oil, which is apparently cheaper. That is much more controversial. Planning permission for a second plant nearby at Southall, was refused in June 2010.

Biofuel powered stations in the UK, which includes that in the Tees Valley, where a plant burning 300,000 tons of recycled wood and specially grown wood from plantations, have had a somewhat mixed reception.

But to get back to the original idea of desalination, the largest plant in the United States is in Tampa with a maximum projected size of 35 million gallons/day, though it currently only produces some 25 million, sufficient for 10% of the region’s water needs. It went on line in 2008.

The plant uses about 44 million gallons per day (mgd) of seawater from a nearby power plant’s cooling system, which is pretreated with sand filters and a diatomaceous earth filtration system to remove particles. Reverse osmosis filters then separate 25 mgd of freshwater from the seawater. The unused concentrated seawater is diluted with up to 1.4 billion gallons of cooling water before it is discharged to the bay and that dilution is why environmental studies show no measurable salinity change in Tampa Bay related to plant production.

Which brings us back to Texas. In the latest report on desalination in the state, two possible developments are cited. There is a plan to install a 2.5 million gallon a day plant at Brownsville and a 1 million gallon a day facility on South Padre Island. Unfortunately the South Padre Island initiative failed in a bond election last year, and its future is considered doubtful. Meanwhile the Brownsville Public Utilities Board is considering combining a renewable energy source (shades of the UK) into the plant, in order to leverage funding, and possibly qualify for DOE funds.

But in the meantime, as the discussion continues, the drought gets worse. The discussions started with an initiative in 2002. As those in Texas may find out the hard way, waiting until the crisis is upon them makes it too late to construct the solution that might have helped. It appears that those in the UK and Florida were just a little more prescient. It might be noted that the initial planning for the Florida plant started in 1996.

High Speed Rail - Europe and the American Election

It was President Obama who famously said, after the 2008 vote that “Elections have Consequences.” Well two years later that dictum still applies (as it will two years from now). I bring it up since (h/t to Luis) the European Commission has just released a report on High Speed Rail which gives some of the progress that has been achieved on that continent since the first high speed line was inaugurated between Florence and Rome in 1977, though it was not until the service between Paris and Lyon in 1981 that the boom began. And now Europe has 3,861 miles of high-speed lines where trains can travel at faster than 150 mph (the fastest is over 220 mph in commercial service, 350 mph in trials). The inter-continental service is continuing to grow, though to facilitate progress the EU is seeking to develop common technical standards across the network. Unfortunately, after Tuesday, the prognosis is not that favorable to the change in the United States.



It will be a considerable boon in Europe, as expansion continues. Spain, for example, is planning on expanding the network so that 90% of the inhabitants are within 30 miles of a station. The results can be seen with the reduction in travel times between major cities. (And remember that the stations generally lie in the heart of the city, not an hour or so away as many airports now are).


It becomes faster, and more efficient, as well as (speaking personally) less physically tiring, to travel increasingly great distances in Europe by train, in contrast both with air and car. As a result, the report notes:

The advantages of HSLs, in terms of frequent connections (which can easily be modified depending on demand) and flexibility for passengers, have allowed the railways to compete more effectively against other modes of transport. Since 1997, over 6 million passengers a year have been using the Brussels–Paris HSL. As a result, flights have been cut back on this route.

Overall the growth in traffic has been a six-fold increase in usage.

Since high-speed lines were introduced, the number of passengers opting for this mode of transport has constantly increased. The number of passengers on all German, Belgian, Spanish, French, Italian and British lines increased from 15.2 billion passenger-kilometres (bpkm) in 1990 to 92.33 billion in 2008.

In looking at door-to-door travel times, the report chart shows that air becomes faster than conventional rail at a travel distance (in Europe) of around 240 miles, while air does not become faster than high speed lines until a distance of about 500 miles. I start to think about flying instead of driving at a distance of around 300 miles.

At the present time those dealing with the anticipated growth of the network over the next ten years have not, I suspect, taken into consideration the changing fuel availabilities of the next decade. If, as is a reasonable possibility, crude oil pops over $100 in the next year, thereby drawing increasing attention to the coming of Peak Oil, then it is likely that demand for improved rail traffic will likely rise significantly beyond the 25% increase in growth that has been projected. As I have noted before, trains in Europe are becoming increasingly full, at current rates of demand, even in off-peak hours. In the shorter term, as the report notes, train transport may also be helped by the increasing saturation of existing airports with flights. But it also leads to the problems of using rail to transport goods as well as people. These services have different imperatives, and so the report concludes that two separate systems will evolve.

The difference in speed between a (slower) goods train and a high-speed train impacts on rail traffic management for the simple reason that freight trains spend longer on the track and therefore use up more traffic capacity (train paths). This difference in speed may also cause safety problems when these two types of train pass. This makes safeguarding infrastructure availability, while guaranteeing optimum capacity and security, an extremely difficult task. Physically freeing train paths simply means dedicating HSLs solely to passenger traffic and giving freight a higher priority on conventional lines. This is an option being explored by Sweden in particular.

They do however expect that, if environmental policies are tightened, that rail traffic as a whole might increase to as high as 420 bpkm for the entire network by 2020, from 189 bpkm in 1999. The planned network expansion at present looks to being completed in 2030, at which time it will be at around 20,000 miles of track, and carry 535 bpkm per year, with extensions moving out into Eastern Europe. The initial connection to Russia will be through Finland.


The report even looks at the environmental impact of the change in travel mode, since it recognizes that while the trains are electrically powered, that power does not magically appear in the power lines.


And for those interested in energy efficiency

Although the environmental impact of HSLs can also be reduced by improving the energy efficiency of trains and working on other elements of the vehicle, the carbon foot- print of rail travel is still much smaller than that of air or road travel. In the case of a journey from Paris to Marseilles, CO2 emissions in grams per passenger-kilometre (g/pkm) are just 2.7 g/pkm by HS train, compared with 153.0 g/pkm by air and 115.7 g/pkm by car. From the point of view of energy efficiency, HSTs also perform better, using 12.1 grams of petrol per passenger-kilometre, compared with 17.6 for conventional trains, 18.3 for a coach, 29.9 for a car and 51.5 for an aircraft.

So how does this tie into the first paragraph? Well in the United States, and a part of the Stimulus from the Federal Government, high speed lines had been proposed, with funding from Washington. However, with the election of Republican governors in several states due to receive that money, the plans may have to change. The new governor of Wisconsin, for example, has vowed to kill the high-speed line between Madison and Milwaukee. This was meant to be part of a network that would run from Chicago to Minneapolis, and stopping the project will likely cost the state money and jobs – but as a top campaign issue it is likely something the Governor-elect may have to follow up on.

Similarly in Ohio, the incoming Governor, John Kasich has said that “Passenger rail is dead in Ohio.” In this case he was discussing the $400 million plan to restart passenger service between Cincinnati, Columbus and Cleveland.

Work on the high-speed Florida link has already started, this is expected to carry up to two million folk a year from Tampa to Orlando or back, by 2015. It was not favored by Rick Scott who was just elected Governor of the State, though some of his opposition may come from the investment needed to extend the link from Orlando down to Miami. However the incoming Chair of the House Transportation Committee has already spoken out against it.

On the other hand the fate of the investment in a high-speed link in California has not been changed by the election. The backbone of that system, the 500 miles from LA to San Francisco is planned for completion by 2020. (video here). The discussion is more about where the construction will start.

The Russia:Belarus oil dispute and Western Oil supplies

I hadn’t actually been paying much attention to the Russian:Belarus dispute over oil supplies. After the annual debacles that we are used to over natural gas supplies that flow from Russia to Western Europe through Ukraine, and which seem somewhat quiescent at the moment, I had failed to grasp how much Western supplies of oil from Russia flow through Belarus. But as is pointed out in Foreign Policy the flow is significant, and this is a more far-reaching conflict than I grasped. As a brief review:

In 2001, Belarus unilaterally canceled a contract that mandated the sharing of these revenues, leading to substantial losses for Russian pipeline monopoly Transneft and the Russian state budget. Now, Transneft is demanding that Belarus pay full import duties for the portion of Russian oil that it resells on the European market, a demand that could cost Belarus as much as $5 billion per year. The Belarusian government argues that the Russia-Belarus customs union obviates the need for Minsk to pay duty on imports from Russia. Although deliveries through the Druzhba pipeline have not, as of mid-January, been cut off, the prospect that Transneft (whose chairman is Russian Deputy Prime Minister Igor Sechin, a close confidant of Prime Minister Vladimir Putin) will turn off the taps to force compliance from Minsk is clearly one that has European leaders worried because the European Union imports about a third of its oil from Russia, mostly via Belarus. Already, the prospect of supply disruptions has driven U.S. crude oil prices to a 15-month high, presumably to Moscow's delight.

Well, as my post yesterday showed, I am not convinced that this conflict had a lot to do with the rise in oil prices (which actually dropped a little today, on their overall march upwards). But that does not lessen the longer-term impact of what is going on. It is, as it was with the Ukraine dispute, to with control, with Russia seeking to control fuel distribution in these countries, and through supply controls also influence the directions in which the country moves.

Russia is now warning that it will reduce oil flows to Belarus even further and wants the duty on the roughly 290,000 bd that is refined in Belarus and then exported to the West. At the moment the refineries in Belarus have a relatively short reserve (between a few days and a week, reportedly - depending on source) and the current contracts have expired.

Germany and Poland are believed to be hit hardest once Russia halts shipments through the Druzhba pipeline. Germany depends on Russian crude for about 15 percent of its total consumption, and Poland buys from Russia to meet 75 percent of its market demands.

Minsk has threatened to raise the transit fee for its European customers more than tenfold, from 3.9 dollars to 45 dollars per metric ton, should Moscow not agree to its conditions, RIA Novostinews agency quoted an unidentified expert close to the talks as saying.

At the moment the talks appear to be stalled. However they are not limited to the transit of oil. There is also a dispute over the transmission of electric power. Belarus acts as a transit country for power both to Kalingrad and to the countries of the Baltic. It has assumed somewhat greater urgency with the closure of the Ignalina nuclear power plant in Lithuania. The plant closed on December 31, and there are fears of greater dependence on Russia for future power. Russian complacency about the situation is not, I suspect, exactly helpful.

“It is inevitable that Russia is going to become a bigger supplier of energy to Europe and particularly to the Baltic countries. Ultimately there comes a point where you have to let the old days go,” Chris Weafer, chief strategist on Moscow’s Uralsib bank, told New Europe on 5 January, adding that the Baltics, which sorely need energy supplies, should adopt a pragmatic approach and rely on their eastern neighbor and forget the legacy of the Soviet Union. As long as Russia continues to try and build a modern and diversified economy with greater global integration, then it needs the goodwill of the West just as much as the West needs Russia’s energy.

Bids for construction of a new plant are due to be submitted by the end of this month, with the hope of getting the new plant on line by 2018. (Kalingrad is hoping to have its own reactor in about the same time frame).

In the interim the Baltic states are going to be dependent, not only on Russia for their electricity and oil, but also on satisfactory conditions to allow the transit of both through Belarus on their way.

Meanwhile, over in Ukraine, there is an election underway, with initial voting to take place on Sunday. It is perhaps for that reason that there have been no major gas disruptions so far this year. Anger with the current administration is giving a bit of a boost to a third candidate, so perhaps it is in Russia’s best interests to retain a low profile at this point. In fact Russia is claiming credit for keeping the UK supplied with gas as supplies from Norway dropped due to bad weather at some of the production sites. However Russia is also being nice to Turkey as insurance just in case it will still need to do some bypassing around Ukraine to supply Western Europe after the election is over.

Not that conditions in Ukraine itself have been unaffected. There are some 175 towns and villages that are reported to be still without power, due to the bad weather. This is a decided improvement from the 1,598 who lost power in the Dec 29th storm. At least they are more used to the cold.

Those in Florida who aren’t, and plugged in too many heaters, are also causing power outages down there.