“En route to Singapore, the rig took on water, which forced repairs and an extensive inspection to assure its seaworthiness.” Nice beginning. DV

http://in.reuters.com/article/2011/08/26/cuba-oil-idINN1E77P03U20110826

Reuters

Fri Aug 26, 2011 5:39pm IST
* Rig expected to arrive in Cuban waters in November
* Repsol to drill first wells soon after rig arrival
* Cuba says may have 20 billion barrels of oil offshore
By Jeff Franks

HAVANA, Aug 26 (Reuters) – A new, Chinese-built drilling rig was expected to depart Singapore on Friday or later this weekend on its way to Cuba where it will be used to usher in a new era in offshore oil exploration for the communist-led island.

The Scarabeo 9, owned by Italian oil giant Eni SpA’s [ENI.MI) offshore unit Saipem [SPMI.MI] and contracted in Cuba by Spanish oil firm Repsol YPF [REP.MC], was anchored in Singapore and ready to leave on what an Eni spokesman said would be an 80-day voyage.

A Western diplomat in Havana said the rig would stop in South Africa and Brazil before reaching Cuba in November, with the expectation it will start drilling shortly after arrival.
Oil experts on the island say Cuba may have 20 billion barrels of oil in its still-untapped portion of the Gulf of Mexico, although the U.S. Geological Survey estimates reserves are a more modest 5 billion barrels.

Repsol drilled a well in Cuban waters in 2004 and found oil there, but for various reasons, including the longstanding U.S. trade embargo against the island, has not drilled again.
For Cuba, a big oil find will give its struggling economy a boost and reduce or eliminate its dependence on oil-rich leftist ally Venezuela, which ships 113,000 barrels a day to the island at reduced prices.

Opponents of the Cuban government fear that if significant oil reserves are discovered, it will only further entrench the communist system and its leaders.

Cuban President Raul Castro, 80, is in the midst of liberalizing the Soviet-style economy with the goal of assuring the survival of communism once he and his elderly leadership group are gone.

The Scarabeo 9, which has the latest technology and is capable of drilling in up to 12,000 feet (3,600 meters) of water, was built in Yantai CIMC Raffles Shipyards in Yantai, China, but after a number of delays was shipped to the Keppel FELS [KPLM.SI] shipyard in Singapore last fall for completion.

En route to Singapore, the rig took on water, which forced repairs and an extensive inspection to assure its seaworthiness.

Repsol, in a consortium with Norway’s Statoil [STL.OL] and a unit of India’s ONGC [ONGC.BO], is expected to drill one or two wells before passing the rig to Malaysia’s state-owned oil company Petronas and then on the ONGC unit, ONGC Videsh, both of which have leased their own exploration blocks in Cuba’s offshore.

Venezuela’s PDVSA has said it plans to drill in Cuban waters within a year, while China’s national oil company is considering whether to lease offshore blocks as well, a Cuban oil official recently told Reuters.

Cuban waters border the U.S. part of the Gulf of Mexico and that of Mexico, but U.S. oil companies are forbidden from working in Cuba due to the U.S. embargo put in place five decades ago with the aim of toppling Cuba’s communist government.

(Additional reporting by Stephen Jewkes in Milan and Marc Frank in Havana; Editing by Vicki Allen)

Special thanks to Richard Charter

> Aug 26, 2011 at 11:04 am
> Our guest blogger is Kiley Kroh, Center for American Progress Associate Director for Ocean Communications.
> The Big Oil-backed Consumer Energy Alliance’s “Open The Gulf” campaign consists of eight ads and an initial two-week run in battleground states, featuring several people describing their hardships as a result of increased fuel cost and the temporary moratorium on Gulf drilling after the BP oil disaster, and advocating opening the Gulf of Mexico to increased offshore drilling. Here’s tugboat operator Cory Kief, backed by somber strings: [VIDEO]
> The ads, complete with sad music and images of abandoned barns and empty docks, also contain several glaring inaccuracies and misleading implications:
>
> MYTH: Opening the gulf to new drilling will lower gas prices. Though Colorado farmer Marc Amesh and truck driver David Boyer may have legitimate concerns that rising fuel costs are putting their jobs and businesses at risk, increased drilling is quite simply not the answer. Instead of providing a real solution, the CEA campaign merely parrots Big Oil lies and perpetuates the falsehood that increased drilling will lower gas prices. Even the non-partisan Energy Information Agency found that whether we dramatically expand offshore drilling or stop selling offshore leases entirely, it will have virtually no effect on gas prices – ever.
>
> MYTH: The Obama administration is not issuing offshore drilling permits or leases. According to statistics from the Bureau of Ocean Energy, Management and Enforcement, 68 new shallow water well permits have been issued since the implementation of new safety and environmental standards on June 8, 2010. Permits have averaged more than seven per month since fall 2010, compared to an average of eight permits per month in 2009. For deepwater permits requiring subsea containment, they have approved 112 permits for 34 unique wells, with 19 permits pending, and 21 permits returned to the operator with requests for additional information, particularly information regarding containment. And perhaps the team at CEA missed last week’s announcement that the administration has scheduled a massive sale of offshore leases in the Gulf of Mexico – an auction that encompasses more than 20 million acres in the western gulf.
>
> Before complaining about the rate of issuing new permits and leases, the industry might want to take stock of what they already have – and aren’t using. A recent study conducted by the Department of Interior found that the vast majority of offshore drilling leases remain idle.
>
> Royal Dutch Shell, whose alarming safety record includes numerous spills and violations, was recently given the green light to drill in both the highly dangerous Arctic and a new development well in the Gulf of Mexico. The company also confirmed that “all five of the floating rigs that Shell was operating in the gulf before last year’s BP oil spill and drilling moratorium are now back to work” – a fact that doesn’t jive with CEA’s deceptive ads.
>
>
> MYTH: The economic potential of offshore oil and gas is worth the risk of another blowout. Despite BP’s efforts to convince the broader public that the oil is gone and the gulf is restored, the reality is much grimmer. While the ultimate toll of the spill won’t be known for several years, there is no denying the worst environmental disaster in U.S. history had a catastrophic impact on the Gulf Coast economy and its residents. An NRDC report found that the Gulf of Mexico saw a 39 percent decline in commercial fishing catches overall between 2009 and 2010, representing a $62 million loss in dockside sales. To date, the oil giant has paid out $5 billion in economic damages to individuals and businesses in the region – with 61,558 new claims received in the past three months – and faces billions more in Clean Water Act fines and NRDA liabilities. After their top execs admitted just one year ago that they weren’t prepared to handle a major offshore spill, CEA’s Big Oil backers might want to reevaluate whether that’s a risk they’re willing to take.
>
> Instead of asking why America’s not doing more for Big Oil, maybe Cory the tugboater, Marc the farmer, and David the truck driver should ask BP, ExxonMobil, Shell, and the others why they keep grubbing for American taxpayers’ dollars to pad their obscene profit margins.
>
> Kiley Kroh
> Associate Director for Ocean Communications
> Center for American Progress
> 202-741-6354
> @OceanProgress

Special thanks to Richard Charter

http://www.nytimes.com/gwire/2011/08/24/24greenwire-oil-arpa-e-top-list-of-subsidy-cuts-urged-by-s-57924.html?ref=energy-environment

I really like these proposed funding cuts………….DV

By ELANA SCHOR of Greenwire
Published: August 24, 2011

As the congressional “supercommittee” readies its much-anticipated debt-cutting plan, a quartet of strange-bedfellow groups — two green and two fiscally conservative — today joined forces to pitch $380 billion in cuts to what they billed as environmentally harmful federal subsidies.

The four nonprofits — Taxpayers for Common Sense, Friends of the Earth, Public Citizen and the Heartland Institute — took broad aim at high political priorities of Republicans and Democrats alike in their budget-slashing Green Scissors report. Among the spending items they eyed for phaseout are several of the oil and gas tax breaks unsuccessfully targeted by the White House this year, nuclear power loan guarantees, and a Department of Energy high-tech research program prized by the Obama administration.

Even while offering their slate of energy-money slices to the supercommittee, which must propose more than $1 trillion of cuts to fellow lawmakers by Thanksgiving as part of this month’s sweeping debt limit deal, the advocacy groups acknowledged that many programs they oppose maintain powerful constituencies on Capitol Hill.

“While these cuts are low-hanging fruit” for the four groups, Heartland Vice President Eli Lehrer told reporters today, “we’re not maintaining that they’re going to be easy cuts to make.”

Some of the cuts likely would face weaker resistance than others, such as a proposed repeal of farm supports that were on the chopping block during early spending talks led by Vice President Joe Biden. But others that appear to have momentum face a murky future — for instance, while the ethanol blenders’ tax credit was overwhelmingly rejected by the Senate this year, an alliance of biofuel reformers failed to attach its repeal to the debt-limit deal (E&ENews PM, July 26).

As it stands, the ethanol credit is scheduled to expire at year’s end, allowing Congress to forgo future spending as well as more proactive savings by not acting to renew it.

Ethanol is hardly the only alternative fuel that would see its government support cut by the four groups. The Green Scissors blueprint offers cuts to “clean coal” and carbon capture and sequestration programs as well as DOE’s Advanced Research Projects Agency-Energy (ARPA-E), created by the 2009 economic stimulus bill to promote “transformational energy research” in areas ranging from fuels to clean electricity.

The Green Scissors sponsors did not include ARPA-E in their overall total, adding a footnote explaining that “not all of this spending funds environmentally harmful projects.” Yet their argument that the nascent agency offers “taxpayer subsidies to develop things that the private sector was already using on a large scale” drew early criticism from its supporters.

“Eliminating funding for ARPA-e would be particularly short-sighted … because of the need for breakthroughs in development of clean, low cost energy sources,” Bipartisan Policy Center senior adviser Paul Bledsoe said via email. “Eating your seed corn is not a national strategy for long-term energy competitiveness.”

Bledsoe’s group also helps to steer the American Energy Innovation Council, a coalition of seven top-tier business chiefs including Microsoft Corp.’s Bill Gates and General Electric Co.’s Jeffrey Immelt, which is calling for a $16 billion annual public-sector investment in clean energy development.

What’s in a subsidy?

Washington’s inability to end two major ethanol subsidies as part of the debt limit deal took root this spring as conservatives battled internally over whether the rollback of tax benefits could be construed as a tax increase — a clash that famously pitted Sen. Tom Coburn (R-Okla.) against anti-tax activist Grover Norquist (E&E Daily, June 14).

Former Rep. Bob Inglis (R-S.C.), toppled by a tea party challenger in his re-election race last year and now leading a coalition of conservatives seeking to address climate change, said today that he believed Coburn was the victor in that fight. As a result, Inglis added, GOP members of the newly convened “supercommittee” could consider chopping energy tax expenditures.

“By eliminating subsidies, not only do we get an immediate fiscal benefit in deficit reduction, but we also get the opportunity for growth and revenue flowing to the federal government because of the innovation that could occur as a result,” Inglis said. He was joined by Rep. Earl Blumenauer (D-Ore.) in helping the four advocacy groups unveil their Green Scissors recommendations.

Perhaps the biggest unanswered question facing the 12 members of the debt-cutting panel, including House Energy and Commerce Chairman Fred Upton (R-Mich.), is whether they can take a significant stab at overhauling the tax code given their imminent deadline. Such a tax reform effort likely would be the only viable vehicle for both parties’ leaders to accept politically risky cuts such as a repeal of oil and gas industry benefits.

Inglis said that he hopes the Green Scissors outline could come into play even beyond the “supercommittee” time horizon. But Bledsoe, of the Bipartisan Policy Center, cautioned that “much larger policy issues can best be addressed through a broader deal on tax and budget reform that is desperately needed.

“Reductions in energy subsidies like those for ethanol can play a valuable role in debt reduction, but a systemic approach is needed that considers all national priorities including economic growth, energy security, and environmental impact,” he said.
Click here (pdf) to read the Green Scissors report.

Special thanks to Richard Charter

http://blog.al.com/live/2011/08/deepwater_trouble_on_the_horiz.html

Al.com

Deepwater trouble on the horizon: oil discovered floating near source of Gulf of Mexico spill (Photo gallery, video)
Published: Wednesday, August 24, 2011, 7:08 PM Updated: Wednesday, August 24, 2011, 9:10 PM
By Ben Raines, Press-Register

MOBILE, Alabama — Oil is once again fouling the Gulf of Mexico around the Deepwater Horizon well, which was capped a little over a year ago. Tuesday afternoon, hundreds of small, circular patches of oily sheen dotted the surface within a mile of the wellhead. With just a bare sheen present over about a quarter-mile, the scene was a far cry from the massive slick that covered the Gulf last summer.

Floating in a boat near the well site, Press-Register reporters watched blobs of oil rise to the surface and bloom into iridescent yellow patches. Those patches quickly expanded into rainbow sheens 4 to 5 feet across.

Each expanding bloom released a pronounced and pungent petroleum smell. Most of the oil was located in a patch about 50 yards wide and a quarter of a mile long.

The source of the oil was unclear, but a chemical analysis by Louisiana State University scientists confirmed that it was a sweet Louisiana crude, and could possibly be from BP PLC’s well.

The oil could be flowing from a natural seep on the seafloor near the wellhead, experts said. Other possibilities include oil trapped within the wreckage of the Deepwater Horizon drilling rig, or oil deposited on the bottom during the spill that is slowly working its way to the surface.

The most troubling possibility, according to petroleum engineers, is that oil is leaking up through the seafloor surrounding the sealed well pipe.

Last week, in response to Internet postings by lawyers and environmental groups describing a leak, BP issued a blanket denial, stating, “None of this is true.”

Subsequently, the Gulf Restoration Network and Bonny Schumaker with On Wings of Care took aerial photographs of circles of oil floating in the area Friday. The group filed a report with the National Response Center, the federal clearinghouse for pollution incidents.

“We stand by what we said last week, neither BP nor the Coast Guard has seen any scientific evidence that oil is leaking from the Macondo well, which was permanently sealed almost a year ago,” BP spokesman Justin Saia wrote in an emailed statement Wednesday. “We welcome the opportunity to test any hydrocarbon sheens detected in the area of the well.”

U.S. Coast Guard officials said Wednesday that the earlier reports were investigated by flying over the site.

The Coast Guard determined that the reported sheens resulted from “natural seeps” and permitted pollution releases at other oil drilling sites. Coast Guard officials did not elaborate when asked how those determinations were made, and said that no boats had visited the well location since the reports were filed.

“I think the primary source with high probability is associated with the Macondo well,” said Robert Bea, an internationally prominent petroleum engineer and professor emeritus at the Berkeley campus of the University of California. Bea responded to Press-Register questions via email after examining photographs taken by the newspaper.

“Perhaps connections that developed between the well annulus (outside the casing), the reservoir sands about 17,000 feet below the seafloor, and the natural seep fault features” could provide a pathway for oil to move from deep underground to the seafloor, Bea said.

“Looks suspicious. The point of surfacing about 1 mile from the well is about the point that the oil should show up, given the seafloor at 5,000 feet … natural circulation currents would cause the drift,” Bea said. “A Remote Operated Vehicle (ROV) could be used to ‘back track’ the oil that is rising to the surface to determine the source. This should be a first order of business to confirm the source.”

Oil analysis

Samples collected by the newspaper Tuesday were provided to Scott Miles, a chemist at LSU. Together with oil chemist Ed Overton, Miles conducted the chemical analysis that federal officials used to fingerprint the Deepwater Horizon oil – known as MC252.

“Looking at the fingerprinting, the samples were low concentration, so it is not giving a real good picture. It is possible it could be MC252. It’s south Louisiana crude for sure,” said Miles. “You can’t say 100 percent that it is from the spill itself, but they do need to get somebody out there to investigate further.”

Miles said he could smell the oil in the samples as soon as he opened the jars.
“The fact that it is right over the Macondo well site is pretty tantalizing,” said Overton, who was one of the first people contacted by the National Oceanic and Atmospheric Administration after the spill began in April 2010.

“There is no way to say for sure whether the well is leaking, based on what is on the surface,” he said. “Of course it is suspicious.”

Overton noted that a number of natural seeps had been found within 12 miles of the well, and that those nearest the well would bear a similar chemical signature.

Phillip Johnson, author of the Standard Handbook of Petroleum and Natural Gas Engineering and a professor at the University of Alabama, said that photographs from the site were intriguing, but it appeared that a fairly small amount of oil was reaching the surface.

“There are two broad categories you would consider. One is leakage, and two is residual oil. I’d say leakage is pretty unlikely. That would imply that the seal on that well – which is about 5,000 feet of cement – failed. That’s unlikely,” Johnson said. “Then you think of residual oil that might be present in the 5,000 feet of riser pipe that wound up on the bottom. Large amounts of the platform ended up on the bottom. Those things could have oil in them that is slowly working its way to the high points and floating out.”

Riser pipe connected the well to the Deepwater Horizon rig on the surface. Neither the pipe nor the rig has been salvaged.

Johnson also suggested that heavier fractions of oil may have settled to the bottom during the spill. Over time, as bacteria degrade oil on the seafloor, the lighter fractions might be released and float to the surface, he said.

The Press-Register reporters located the area where the oil was rising to the surface by going to a point directly over the Macondo well and then moving in the direction of the prevailing surface current. The first blobs of oil seen on the surface were detected about a half-mile from the well. The frequency of the sightings increased gradually over the next half-mile.

In the Olympic swimming pool-sized area where the oil was rising most frequently, new sheens were erupting every few seconds on all sides of the 36-foot boat.

Marcus Kennedy, who piloted his fishing boat, the Kwazar, 115 miles from Dauphin Island to the well site, said he was stunned by the heavy petroleum scent in the air. A nearby data buoy recorded winds of less than 2 mph at the time.

Mahi-mahi and blue runners were schooling in the area. In the distance, yellowfin and blackfin tuna could be seen churning the water to a froth as they attacked bait. A 40-foot whale shark also surfaced in the area.
_____
Jeff Dute contributed to this report.

Special thanks to Richard Charter

http://www.adn.com/2011/08/20/2023935/our-view-shell-spill.html

BOTTOM LINE: North Sea spill underscores the need for a sharp watch in the Arctic. (DeeVon per Richard Charter)

Published: August 20th, 2011 07:11 PM
Last Modified: August 20th, 2011 07:11 PM

The oil that leaked from a valve on a Royal Dutch Shell pipeline in the North Sea has spilled into the question of offshore drilling in Alaska’s Arctic.

Drilling foes cite the Aug. 10 spill, which Shell pegged at 1,300 barrels, as an example of why we shouldn’t allow drilling in the Beaufort or Chukchi seas. They argue that too little is known about the Arctic environment, too little support is too far away if something goes wrong, and conditions are too harsh for effective spill cleanup.

Critics argue that Shell should have been more forthcoming about the North Sea leak and spill. Shell didn’t go public with the incident until two days after discovery, and then acknowledged a continuing small leak after reporting the spill was under control.

What should Alaskans take from this?

This should be a caution, not a show-stopper.

First, Shell’s 2012 work in the Arctic is exploratory. There’s a big difference between exploration and production, with far less risk in the former.

The Coast Guard, the Bureau of Ocean Energy Management, Regulation and Enforcement and Interior Secretary Ken Salazar have said they’re confident Shell can safely handle exploration of what appear to be world-class sources of oil and natural gas. Let’s find out what’s there.

If fields prove up, production is still eight to 10 years away. More permitting will be required. We have time to learn more and prepare. During exploration, Shell can further refine its operations and build public confidence.
Second, let the North Sea spill be a reminder of the need for constant vigilance and no complacency.

Third, the only way to guarantee no spill in the Arctic is to never drill or produce there. That’s not realistic. Companies already produce oil in the Arctic with both nearshore and onshore operations and, onshore, the means to move oil to market. The nation needs the energy and the jobs; Alaska wants to fill its pipeline for decades yet.

What should Shell take from this?

First, constant vigilance and no complacency. That’s what executives Marvin Odum and Pete Slaiby have promised for Alaska’s Arctic. They must deliver.
Second, be forthcoming about everything — risks, mitigation, prevention and response.

If there’s a spill or any other problem, let people know right away. In the long run, that will go further to build trust and support than any effort to manage the message.

No spill is good, but let’s hope the North Sea spill is more lesson than damage. Let’s learn, and proceed with care.

Special thanks to Richard Charter