OGPSS - Shell looks to the future

Each year the larger oil production companies provide their views of the future, and I recently reviewed that for ExxonMobil. Shell has now produced their projections, though in a somewhat different format as the document “New Lens Scenarios” which deals with future projections as a set of differing options. That does not make these views less informative.

In reviewing where the world will go, Shell looks more to political impact as the future unrolls. They see the European Union stuck in a Trapped Transition” where:

the ‘can’ keeps being ‘kicked down the road’ while leaders struggle to create some political and social breathing space.
so there is continuing drift, punctuated by a series
of mini-crises, which will eventually culminate in either a reset involving the writing off of sign and political capital (through pooling for example) or the euro unravelling.

On the other hand countries such as China and Brazil are resilient:

in their different ways, they had the financial, social, political, or resource ‘capital’ to respond and reform, following a room to Manoeuvre pathway.

Within the next thirty years, as the population grows, so a greater percentage, up to 75%, will live in cities. And these will consume a greater fraction of the global energy supply, perhaps as high as 80%, up from the current 66%.

The document is very much slanted as a Socio-political forecast, with considerable polemic in regard to the weaknesses that the company perceives to exist in the West.

Shell postulate two different scenarios for the future. There is the Mountain scenario, where business continues very much as usual, and then there is an Oceans scenario where the” powers that are” work toward a more accommodative approach to those in the developing world, and the less fortunate layers of society.

The document begins with the impact if the Mountain scenario is to prevail, driven through a top down control, largely through existing institutions. Shell is not enamoured of this:

In the US, for example, income and wealth inequality continue to increase, with stagnating middle-class earnings, reduced social mobility, and an allegedly meritocratic higher education system, generously supported by tax exemptions, whose main beneficiaries are the children of the successful. superimposed on this class divide is an increasingly serious intergenerational divide, as commitments to the elderly via entitlement programmes crowd out discretionary expenditures that could rebuild economic and social infrastructure. Similarly, in Europe an ageing population and commitments to high levels of entitlement, which are frequently underfunded, create a mixture of social and political strains that deflect attention from the core structural economic issues facing the region.

Driven by this gloomy picture of the future Shell anticipate that global GDP growth through the 2030’s will average under 2%. This will, in turn, moderate the growth in energy demand. Increasing urbanization, the growth of the service sector and the greater use of electricity in developing countries, Shell anticipate that the strong correlation between economic and energy demand growth will be broken.


Figure 1. Shell projection of future energy supply, through 2060 under the Mountain scenario. (Shell)

N.B. All the illustrations come from the Shell New Lens Scenarios document.
Shell anticipates that hydrogen, an up and comer just a few years ago, and now largely neglected, will undergo a “phoenix-like” resurrection and find a market both in industrial and transportation as an alliance of government and private industry push a hydrogen infrastructure post-2020. They anticipate that the use of liquid fuels for passenger road transport will peak in 2035, and that by 2070 the global passenger transportation network, using roads, could be nearly oil-free, as hydrogen and electric powered vehicles take over.


Figure 2. Shell future projection of vehicular fuel sources.

The energy burden will transfer from crude oil to natural gas, which will increasingly underpin the global economies, as China joins the top tier of natural gas producers.


Figure 3. Sources of liquid fuels through 2060 (Shell)

The increase in the volumes of natural gas that become available from tight shales and coalbed sources are sufficient that, by 2035 Shell anticipates that natural gas will not only displace crude oil as the primary transportation fuel, but that it will also encourage a robust pretrochemical industry based on methane. Shell sees the possibility of US energy self-sufficiency in the 2030’s as peak oil theories are abandoned.

The availability and broad use of natural gas will also allow time for credible carbon capture and sequestration technology to be developed and demonstrated, so that by the time that coal is needed as a fuel (around 2075) it will be usable while sustaining the zero-carbon dioxide levels for electricity generation that become widespread by 2060.

In the alternative Oceans scenario, the more accommodative approach, Shell looks to a willingness to share technology and compromise on issues of ownership and profit as a way of encouraging globalization and developing productivity. Societal interconnectivity is encouraged by greater use of the Web, and this leads to significant changes, with existing leaderships yielding to allow a broadening of governance and significant reform. The greater spread of information and connectivity makes for the more fluid nature of geopolitics that names the scenario, as increasing populism is both a source of innovation and a challenge to stability. Populism is seen as a challenge to US dominance, and is considered likely to cause “destructive and violent reactions” as globalization progresses.

This progress is seen as most likely to through technological interconnection between entities that creates a new class of Mandarin who is less accountable to traditional masters. In this scenario Shell see the world increasingly run by more flexible, and decentralized governments “that have embraced radical pathways 
to economic sustainability”. And this includes both the United States and China. In this regard they quote the work of Anne-Marie Slaughter of Princeton on a New World Order.

This change from the current business-as-usual (BAU) model has an impact on fuel availability and use. The encouragement of entrepreneurship is seen to significantly increase the penetration of solar power into the energy mix, while sustaining the era in which crude oil contributes beyond that of the Mountains scenario.


Figure 4. Energy Sources under the Oceans scenario projected by Shell.

In comparison with the projections under the BAU natural gas is less of a player, though Shell don’t explain either where the additional oil will come from, or why the rush to invest in natural gas is turned off. They anticipate that the reliance on hydrocarbons will cause a rise in price that will open the door to new resources and technologies, particularly with solar power.

In this future Shell sees the developing world taking more of the energy pie, yet transitioning rapidly into a lighter industrial society, with a large service component. (One wonders where the necessary heavy industry goes, as it also transitions to become 80% more efficient?) Heat pumps become a widespread domestic unit, with their benefits in energy efficiency. And, in order to sustain their market share, internal combustion engines become increasingly efficient and technically advanced. While crude oil use will increase until the 2040’s, beyond that time the increased use of biofuels will allow liquid fuel dominance to continue in vehicular use. There are two main sources for these biofuels, first generation fuels, mainly sugar based ethanol, which will contribute some 4 mbd by 2050, and second generation biofuels from non-food crops which come to dominate beyond that time. As this transition occurs so traditional biomass use will disappear by the end of the century.

The different consequences of the two scenarios, as they impact fuel sources, and the unconventional nature of the Shell answers to “where will the resource come from” is shown in two plots that summarize the two energy futures.


Figure 5. Energy sources of the future, as seen by Shell under two different scenarios – Mountains and Oceans.

Under the BAU Mountain view the additional required energy will come in the natural gas side of the house, with Methane Hydrates being the major new source of fuel. With the competing Oceans scenario the energy comes from the development of kerogen from the oil shales of Colorado, Wyoming and Utah. By the end of the century renewable energy will supply more than half the electricity demand around the world, with solar carrying the greatest share of this. However they do not see the electricity generating industry becoming carbon neutral until the 2090’s, as CCS penetrates the industry.


Figure 6. Shell’s view of electricity power sources by 2100.

Shell foresee that the problems of energy storage (80% of the solar power in many OECD countries is generated in the summer) will be overcome through the use of electrolysis and the storage of the resulting hydrogen.

There is much to debate over the basis on which Shell have derived the scenarios that form this report. It remains more optimistic about the oil and gas futures that I can find a basis for accepting, but nevertheless it is well worth reading as it provides two views of what might come about. The impact of societal pressures and drivers produce two different energy futures, and while I suspect that reality will be quite different, with “unknown unknowns” having great influence, the effort is worthwhile.

Deepwater Oil Spill - changeover completed.

Well, in one day the progress on the Deepwater Horizon moved significantly further towards the end. First the capping stack was removed from the well, and then, after a strong initial tug on the BOP, and transition spool, they were unlatched and moved away by the Q4000. As they left it was clear that there was no pipe, or hydrates under the BOP, though there was a thin film of a liner inside the BOP mount. This was then cleaned off, and a new gasket inserted. Once that was in place, then the new BOP (from the second relief well) was brought to the well, and lowered until it into place. (There is a Youtube video of the separation with the mount and BOP clearly separated by 3 minutes into the tape.)

Waiting for the new BOP

There was no drill pipe under the BOP, when it was lifted, nor any evidence of one or of any hydrates in the casing of the well itself. Thus some of the concerns that I had turned out to be unwarranted, but we did not know until the BOP was gone, what the conditions were likely to be. The next step in the process is to ensure that the BOP is working properly, and then the relief well will be completed at the beginning of next week.

With the "new" BOP in place.

That will likely be when we find out whether the annulus between the production casing and the well liner is full of oil or drilling mud. Given that a number of my concerns over the condition of the well have turned to be worse than the actual condition, I think I will hold off, at this time, on making any on that one.

Deepwater Oil Spill - stopping the fish

The attempts to recover pipe from within the blowout preventer (BOP) on the Deepwater well have now halted, without being able to recover any of the pipe. Instead attention is now being given to the removal of the BOP itself and its replacement with the BOP from the second relief well. In his remarks on Friday Admiral Allen gave, as his explanation:

What we have found is we have gone down there, the pipes have settled against the side of the BOP and we can't successfully put the overshot devices over them. We've come to the conclusion that any more attempts at fishing are probably not going to result in success.

And at a meeting this morning between our science team and the BP engineers it was decided to recommend to the principals, the cabinet secretaries we go ahead with the removal of the blowout preventer and the replacement of the blowout preventer with the one that's on Development Driller 2.

This is due to the one whose apparent fragility of the pipe that keeps breaking and falling off to the side and also the unknown condition of the BOP below that and I can talk about that in a little bit.

So the plans are right now to replace the BOP. The approximate timeline going ahead is as follows, starting today and through Saturday and Sunday we will make preparations to remove the BOP and replace it.

This did not agree with what I saw occurring during the time that I watched both the recovery attempts over the last two nights, and from the videos that others posted on Youtube, and which I referred to in those posts. However, not being a part of the team running this operation there may have been some things happening that I and others are not aware of.

I still remain concerned about the condition of the lower section of the BOP and the presence of either hydrates or cement, both in the area of the BOP rams, and around the drill pipe as it extends down into the well. To explain the concern in perhaps a little more detail, let me first talk a little about the casing hanger that the Admiral referred to as one of the limiting well conditions today.

The casing hanger is the device at the top of the well that holds the production casing in place. In the extended transcript of his press conference on Friday, he referred to the company that made the hanger (Dril-Quip) and gave a link to the drawing of the hanger, this one, which I have labeled, because I am going to try and explain, using this and other diagrams, what the Admiral meant with some of his remarks, as I interpret them, and some of the concerns I continue to have.

Labelled section showing the parts of the casing hanger (note that there is an animation at the source site)

In essence, at the top of the production casing, the long continuous tube that was placed from the sea bed down to the bottom of the well, there is a hanger that holds the top of the casing against the surrounding liner and well head assembly. To show that in more detail I am going to use a different source, to highlight the hanger section.)

Casing hanger.

The casing comes up through the center and connects to the top element. The weight of the casing now pulls the upper section down, seating the conic surface, and also spreading the elastomeric packer (the black layer) which pushes out against the sides of the surrounding wellhead wall, providing the seal. This seal is between the liners around the top of the well, and the production casing, it is, in other words, the seal at the top of the annulus between the production casing and the wall of the well.

I have put this in to explain what the Admiral meant when he was talking about trying to lift the BOP off the well head, which means unlatching it from the top of the well head assembly. The BOP latches around the top of the assembly shown in the top figure.

To remove the assembly, the Admiral has approved the following process:

Commencing on Monday and through Tuesday the Discoverer Enterprise will latch on and remove the capping stack. And the capping stack will be temporarily stored nearby on the ocean floor. Once that has been completed the Q4000 will move in and connect to the BOP and will unlatch it.

And then there'll be a series of two decision points will occur. We will attempt to pull it free and we are prepared to apply up to 80,000 of force in addition to the weight of the blowout preventer to lift it. We call this the gentle tug.

If the blowout preventer comes free we will then use the (Boa Sub-C) and the ROV's to attach a line to it and cut it (the drill pipe) just above the well and at that point we can bring the BOP to the surface on the Q4000.

If for some reason the blowout preventer does not come free with a gentle pull, our intention then is to manually open the ram sequentially down through the blowout preventer and then raise the blowout preventer and cut the pipe at the well head.

He later explains why there is this limit of 80,000 lb in the “gentle pull.”

What they’re concerned about is somehow potentially dislodging the hanger and the casing hanger that is at the top of the well. That is also the – as you know that is a device that contains the seal between the annulus and the well and the blow out preventer. So the threshold for the pull has more to do with the potential to unseat the casing hanger and the seals that seal off in the annulus.

So that if you go back to the second illustration, the seal is maintained by the weight of the production casing, pulling the head of the hanger down so that the elastomeric seal spreads. If the upward lift on the BOP is transferred through the drill pipe to the top of the casing, they are concerned that if the DP is held within the casing hanger, that pulling it too hard may take the weight of the seal, so that it contracts back from the wall, and opens up the annulus.

Now to explain why that might happen, and why there might be all sorts of other concerns, let me move away from the hanger itself, and go to a modified frame from the Dril-Quip video. (For those looking at the video I have changed the picture to show the center as though it were the drill pipe).


To make life easier for me I am just showing the lower end of the BOP, below the rams, the central drill pipe and the upper end of the well head (without the hanger detailed).

Now in a normal situation the drill pipe would be held by the three rams at the bottom end of the BOP, and slightly above the picture. In an ideal world there would be nothing else in the gap around the drill pipe (i.e. the annulus).

But we know that above the rams, that there is either hydrate or cement around the DP.

View from the fishing camera showing the top of the drill pipe above the BOP rams, surrounded by what may be either a hydrate or cement fill.

And the pipes are held and seem unable to be moved

What we know is, the pipes that we can see are in pieces, sitting inside the lower marine riser package and we are having trouble lifting them out with the fishing devices. We have no further information and cannot tell the condition of the pipe below the blowout preventer.

If the material holding the pipes extends down into the rams of the BOP and below it could fill the upper annulus down through the casing hanger. Thus pulling on the BOP would exert a pull, through the DP and this fill, on the hanger and could unseat it.

Should the BOP not move, the plan is to open the rams on the BOP, so that it no longer holds the pipe. But if the rams are cemented in place by the fill, this may be very difficult to do, since trying to flush out that fill on Thursday evening didn’t work. And even if it did work, the fill may occupy the annulus between the BOP and the DP below the rams and above the latch, so that the DP is still held by the cement. (At which point if the chemicals don’t release it they might try the jetting again, since that works both on cement and hydrate). It is only by freeing the BOP from the drill pipe, and hoping that the pipe remains held by the underlying fill within the hanger, that the BOP can be released, removed and replaced.

The problem is that if, when the rams are opened, the cement/hydrate holding it is not strong enough, then the pipe may fall to the bottom of the well, carrying with it the evidence on what actually happened to it within the BOP. (Opening the rams will also drop out the other two pieces of pipe currently above the rams). Tough decisions.

Deepwater Oil Spill and San Jose Mine concerns

There has not been much apparently said about the fishing for pipe within the blowout preventer (BOP) at the Deepwater well today. The project seemed to come to a studious pause with the discovery of a considerable volume of hydrates around the shear valves in the Deepwater BOP, as opposed to the lesser quantities of hydrates in the 3-ram stack that was placed on top of the well, as part of the shut-in procedure.

The interlocking crystals appear to be filling the empty spaces just above the rams in the BOP, and holding the pipes in that space with sufficient tenacity to make them difficult to remove. If that is indeed the case, and the crystal growth extends down through the BOP and into the spaces at the top of the well then it poses a potentially significant problem to the extraction of the drill pipe, and the removal of the existing BOP. The current BOP needs to be replaced so that a functional BOP can be placed in its stead, and the well can be conventionally plugged and sealed and then abandoned.

However, if the hydrates have extended down through the mechanism and space of the BOP, then, as with the upper set of rams, the moving parts of the BOP may no longer be functional, meaning that the drill pipe cannot be released. This then raises a further complication, since if the drill pipe continues to extend below the BOP (and it is believed to extend some 3,000 ft) it too may be held within a hydrate plug that fills the space between it and the steel and cement rings that form the upper lining of the well. I will probably explain how we use that principle in bolts that hold the mine roof up around the world that are often called full-column resin anchors, in a Sunday tech talk fairly soon, but the net result is that the BOP and drill pipe may be locked in place.

This makes the next step in the process somewhat difficult to predict, since the intent in removing the BOP was both to allow the well to be plugged, but also to provide a backup protection for the top of the well, at the time that the relief well drilled into the lower part of the well, and where the changing pressure condition at the bottom of the well might cause the seals at the top of the well to rupture and, with inadequate protection at the bottom of the well potentially allow the well to start leaking again.

While this consequence is somewhat unlikely, it depends on the condition in pieces of the well that are not available for inspection. Hydrates above the shear ram suggests that it is likely that they extend below the rams, but there is no way of knowing without clearing the passage. And the extent, or even the possibility of the drill pipe being held within a plug of hydrates is not that much different to it being held in a cement collar that adhered as the cement was pumped to the bottom of the well.

The hydrates above the ram could be removed (either with the high-pressure jetting or chemical/thermal soaking) but it may be more difficult to get through the BOP to release the underlying catch holding it within the sea-floor mount, and to release the drill pipe, or even to section the drill pipe to release the assembly. And just before midnight (as I did a last check after writing this post) they started flushing the BOP with some fluid.


Moving down to Chile, the machine that will be used to drill the relief well is a variant on a raise drilling machine, that is used more commonly for boring holes upwards from the underground space, rather than reaming them down. It is a Strata 950, made by Murray and Roberts through RUC Cementation. The unit, was, apparently, only built last year.

RUC Cementation has established the capability to design and manufacture specialist large diameter raise borers in its Kalgoorlie workshop. During the year (2009), three Strata 950 raise borers (the most powerful underground raise drill rig in the world) were completed, one for its own use and the other two for group operations in South Africa, Canada and Chile.

Raise borers normally work by drilling a small hole (13-inch diameter) down from the surface to an existing underground space. Then a reaming head is attached to the drill steel at the bottom of the hole, and the head rotated and pulled back up the hole, allowing the debris to fall into the larger hole below it. It is a relatively fast and effective method of creating shafts, and is increasingly used at the surface and in underground mining.

Normal use of a raise borer .

In some cases, such as the present one in Chile, it is not possible to get the larger reaming head down to the bottom of the shaft. In that case, once the initial central bore has been completed, then a second reaming head is mounted and will drill down along the same line, with the debris still falling down the central hole, and being disposed of underground.
This alternate way of drilling is not as fast, since the operation has to be careful not to block the borehole with the cuttings from the reamer, and it is a little more difficult to keep going straight. The following two pictures are of a competing model but serve to illustrate the principle of the Down Reaming process:


In contrast to up-reaming the drill shaft is in compression which might help on longer bores. One of the drilling requirements is to watch the torque that develops in the drill rods, since this can build-up to sufficient levels that, if suddenly released (as in drilling broken rock) it can whip the head around sufficiently fast as to break the string.

The actual teeth on the bit are specially designed for the rock that the bit will be expected to penetrate, but they are conventionally bit or button teeth, similar in shape to those used in the smaller cones of a conventional oilwell bit.

Reaming head being loaded into place.

The drill will operate from a concrete pad, which is, I gather, now poured, but must set before operations can commence tomorrow, and the hole is not planned to be lined, which may also cause problems, since there is no easy way to deal with rock that falls behind the head. However this particular one is called “David” so let us hope it can meet all challenges.

The Strata 950.

I do have a couple of other concerns. One is that the miners were apparently getting water from an underground stream, and one worries as to whether this water leaves the mine though an existing natural channel, or if it has been flowing to the bottom of the mine, where it might have been earlier collected and pumped out. If the sump pump no longer has power, this could imply that the mine is slowly flooding. And in that regard, the decision not to send power down into the mine, means that they could not send down and power small pumps that the miners could then use to keep their current location dry.

Crystals and the Gulf of Mexico Blowout

The situation in the Gulf, in regard to the Deepwater Horizon fire and oil spill continues to evolve. Since my last post on this, the size of the operation has continued to grow, with some thought now being given to dredging barriers along the coastline. What I thought I cover a little today, among other things, is the problems that occur when oil leaves a hot reservoir and suddenly enters a pipe on the floor of a very cold sea, causing some of the constituent chemicals to crystallize out. To illustrate this, I took a picture of one of the pipes that used to sit in my office, since it helped visualize a problem we had been given, and is along the lines of that now facing BP.

Barium Sulfate Crystals growing in a 3-inch I.D. pipe that carried oil from the deposits under the North Sea. (Scale is in cm) (Growths of this size can occur in less than 24 hours).

You will note that the crystals have reduced the effective diameter of the pipe down to about 1.5 inches, cutting the flow the pipe can carry by 75% (roughly). These are but one example of a number of different chemicals that can precipitate out in the pipes that carry oil from the reservoir, where it hot, up through colder zones as it rises through the different pipes on its way to land. There are two different aspects to the problem that I want to cover since it relates to the formation of methane hydrates in the capture box that BP had fielded at the end of last week.


The first of these is on the growth of the crystal hydrates within the confinement box that BP had lowered over the middle leak in the riser. However, rather than dig back into my notes, I am going to suggest that those who want to understand the chemistry/physics go to The Obligate Scientist. He uses a plot from the USGS to illustrate the conditions that transition methane gas to methane hydrate as a function of temperature and pressure (depth in the ocean).

(Source USGS )

To which, to give it current relevance, the USGS have added what happens at the sea bed, exemplifying this with a seabed at 2 km deep, while in this case it is only about 1.6 km. However the temperature is still sufficiently low to cause the hydrates to form.

(Source USGS )

The temperature of the fluid is critical, as can be seen, but for the temperature to reach that level requires a certain amount of residence time, for heat transfer to take place. Unfortunately in constructing the box the way that BP did, while providing stabilizing plates that would stop the box sinking into the sediment, these also act as heat radiators, ensuring a very rapid heat loss to the surrounding sea and a faster drop in temperature for the gas, accelerating the formation of the hydrates.

As I mentioned above there are two problems that then arise. The first of these is the immediate constriction of the flow path, as the first figure shows, the second is that if the crystals were to break off, or grow freely to that size and then enter the flow channel, then unless they are all smaller than about 30-40% of the flow channel diameter, then they will jam together and block the flow channel. (I have photographs somewhere of a pair of particles, both nominally less than half a tube diameter wedged together in the middle of said tube and effectively blocking it – hence the rule of thumb).

So as the crystals grow they both reduce the flow channel itself, and also increase the risk of total blockage. Now it might be suggested that if the speed of the fluid were increased that this would not give the crystals time enough to form and cause the above problems. These are three, originally similar sized nozzles through which water was fed at 40,000 psi. (It is used in industrial cutting) The top orifice was totally blocked after 48 hours of operation using untreated tap water, the center orifice is largely closed after 104 hours using softened water, and the bottom orifice is still clear after 200 hours using de-ionized water. The water velocity was around 2,400 ft/sec and, as you may note deposits still grew.

After Hashish (Flow Industries)

Keeping deposits from clogging feed lines is thus a tad more complicated than it may first appear. And while I note that BP is now apparently planning on lowering a second smaller cap into position, there may need to be other modifications (such as an inner liner of Teflon to insulate the flow from the radiative metal of the box) that have been added (perhaps an internal heating system) to help alleviate the problem.

The Unified Command Center has noted the following update to the resources mobilized to help with the spill:

Total response vessels: more than 290

Boom deployed: more than 1.1 million feet (regular plus sorbent boom)

Boom available: more than 1.4 million feet (regular plus sorbent boom)

Oily water recovered: approximately 3.6 million gallons

Dispersant used: approximately 372,000 gallons

Dispersant available: approximately 180,000 gallons

Overall personnel responding: approximately 10,000

There was a “real time” transcript of the press conference that BP held at noon (6 pm in the UK) in which they commented that the second dome that they will try to cap the well with is going to be much smaller (about the size of a barrel) and that this should be tried within three days , and if that doesn’t work they are thinking of tapping into the pipe to drain the oil without seawater contamination. One of the problems, apparently has been the high gas content of the oil. Much higher than had been anticipated.

The box is being made smaller so that warm water (from the surface) can be poured over it to keep the temperature above that at which the hydrates form.

Now they've gone from "one extreme to the other". The "top hat" dome is 5ft tall, 4ft wide. Warm sea water will be pumped down. As they lower the dome it will already be operational - hooked up to a ship on the surface. It will be more difficult to place but they will succeed.

It should be in place by the end of the week.