JAMES VAN BLARICUM

Pipeline - A pipe through which natural gas, crude oil or petroleum products are pumped between two points, either onshore or offshore.( signal oil and gas company )

Benzene - An aromatic hydrocarbon present to a minor degree in most crude oils. (Products manufactured from benzene include styrene, phenol, nylon and synthetic detergents).

james e van blaricum

The situation presents a challenge. The future must balance the growing demand for petroleum products with protection of the global environment. james van blaricum





The One Call Program - All of the states have instituted what is known as a ‘one call’ program, which provides excavators, construction crews, and anyone interested in digging into the ground around a pipeline with a single phone number that may be called when any excavation activity is planned. This call alerts the pipeline company, which may flag the area, or even send representatives to monitor the digging.( james e van blaricum )


Fracture acidizing, also known as acid fraccing is the most widely used acidizing technique for stimulating limestone or dolomite formations . In an acid fracturing treatment a pad fluid is injected into the formation at a rate higher than the reservoir matrix will accept. This rapid injection produces a build-up in wellbore pressure leading to cracking (fracturing) of the rock. Continued fluid injection increases the fracture’s length and width. Acid (normally 15% HCl) is then injected into the fracture to react with the formation and create a flow channel (by etching of the fracture surface) that extends deep into the formation. This allows more reservoir fluid to drain into the wellbore along the new fractures once the well is put back on production.

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Companies called “jobbers” handle the wholesale distribution of oil. There are 15,000 jobbers in the U.S., and they sell just about everything that comes out of a barrel of crude oil. Jobbers fill bulk orders for petroleum products from gasoline stations, industries, utility companies, farmers, and so on. james e van blaricum




Ethanol, which is often blended in gasoline, contains less energy per gallon than gasoline. However, a 10-percent or less ethanol blend would have only a slight impact on fuel efficiency. According to U.S. Department of Energy and U.S. Environmental Protection Agency fuel economy guidelines, E-85 (85 percent ethanol/15 percent gasoline blend) may reduce fuel efficiency by 26 percent.( james van blaricum )

Production casing, alternatively called the ‘oil string’ or ‘long string’, is installed last and is the deepest section of casing in a well. This is the casing that provides a conduit from the surface of the well to the petroleum producing formation. The size of the production casing depends on a number of considerations, including the lifting equipment to be used, the number of completions required, and the possibility of deepening the well at a later time. For example, if it is expected that the well will be deepened at a later date, then the production casing must be wide enough to allow the passage of a drill bit later on.

james van blaricum

BNOC - British National Oil Corporation set up 1976 abolished 1985. signal oil and gas company





Pipelines can measure anywhere from 6 to 48 inches in diameter, although certain component pipe sections can consist of small diameter pipe, as small as 0.5 inches in diameter. However, this small diameter pipe is usually used only in gathering and distribution systems. Mainline pipes, the principle pipeline in a given system, are usually between 16 and 48 inches in diameter. Lateral pipelines, which deliver natural gas to or from the mainline, are typically between 6 and 16 inches in diameter. Most major interstate pipelines are between 24 and 36 inches in diameter. The actual pipeline itself, commonly called ‘line pipe’, consists of a strong carbon steel material, engineered to meet standards set by the American Petroleum Institute (API).( signal oil & gas company )


Seal or Cap - Rocks (salt, clays or cemented sandstone) in right shapes and relative positions to form traps.

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Environmental Impact Assessment (EIA) - Part of project management concerned with identifying through a formal written technical evaluation likely impact (positive and negative) of a proposed development or activity on natural and man-made environment. signal oil & gas company




Acoustic log - Record of time taken by a sound wave to travel over a certain distance through geological formations.( james e van blaricum )

Hexane - Petroleum liquid found in small amounts in condensates.

james e van blaricum

Low oil prices are good for the consumer and the world economy. Low oil prices act as a check on inflation. signal oil and gas company





Aerial Patrols - Planes are used to ensure no construction activities are taking place too close to the route of the pipeline, particularly in residential areas. Unauthorized construction and digging is the primary threat to pipeline safety, according to INGAA( james van blaricum )


Because acid is produced over a period of several hours or longer, acid fraccing treatments using Arcasolve™ may need to be performed in a different way to existing acid fraccing treatments. Fractures would need to be held open for at least several hours and possibly up to a day. The pad fluid used in conventional treatments would probably not be needed - Arcasolve™ would be injected directly.

signal oil & gas company
Gasoline - Mixture of lighter liquid hydrocarbons used chiefly as a fuel for internal-combustion engines. Produced by fractional distillation of petroleum; by condensation or adsorption from natural gas; by thermal or catalytic decomposition of petroleum or its fractions; by hydrogenation of producer gas or coal; or by polymerisation of hydrocarbons of lower molecular weight. james van blaricum




Peak load storage facilities, on the other hand, are designed to have high-deliverability for short periods of time, meaning natural gas can be withdrawn from storage quickly should the need arise. Peak load facilities are intended to meet sudden, short-term demand increases. These facilities cannot hold as much natural gas as base load facilities; however, they can deliver smaller amounts of gas more quickly, and can also be replenished in a shorter amount of time than base load facilities. While base load facilities have long term injection and withdrawal seasons, turning over the natural gas in the facility about once per year, peak load facilities can have turn over rates as short as a few days or weeks. Salt caverns are the most common type of peak load storage facility, although aquifers may be used to meet these demands as well.( signal oil and gas company )

Low oil prices are good for the consumer and the world economy. Low oil prices act as a check on inflation.

signal oil and gas company

Mercaptans - Strong-smelling compounds of carbon, hydrogen and sulphur found in oil and gas. Added to natural gas for safety reasons. james e van blaricum





Signed by 45 governments and EU in Lisbon, Portugal on 17 December 1994.( signal oil & gas company )


Installing well casing is an important part of the drilling and completion process. Well casing consists of a series of metal tubes installed in the freshly drilled hole. Casing serves to strengthen the sides of the well hole, ensure that no oil or natural gas seeps out of the well hole as it is brought to the surface, and to keep other fluids or gases from seeping into the formation through the well. A good deal of planning is necessary to ensure that the proper casing for each well is installed. Types of casing used depend on the subsurface characteristics of the well, including the diameter of the well (which is dependent on the size of the drill bit used) and the pressures and temperatures experienced throughout the well. In most wells, the diameter of the well hole decreases the deeper it is drilled, leading to a type of conical shape that must be taken into account when installing casing.

james van blaricum
Ethanol, which is often blended in gasoline, contains less energy per gallon than gasoline. However, a 10-percent or less ethanol blend would have only a slight impact on fuel efficiency. According to U.S. Department of Energy and U.S. Environmental Protection Agency fuel economy guidelines, E-85 (85 percent ethanol/15 percent gasoline blend) may reduce fuel efficiency by 26 percent. signal oil & gas company



Interstate pipelines consist of a number of components which ensure the efficiency and reliability that is needed from a system that delivers such an important energy source year round, twenty four hours a day, and consist of a number of different components.( signal oil & gas company )


In addition to separating oil and some condensate from the wet gas stream, it is necessary to remove most of the associated water. Most of the liquid, free water associated with extracted natural gas is removed by simple separation methods at or near the wellhead. However, the removal of the water vapor that exists in solution in natural gas requires a more complex treatment. This treatment consists of ‘dehydrating’ the natural gas, which usually involves one of two processes: either absorption, or adsorption.

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Preventative Maintenance - This involves the testing of valves and the removal of surface impediments to pipeline inspection. signal oil & gas company



Recovery Factor - Ratio of recoverable oil and / or gas to estimated oil and / or gas in place in reservoir. Determined by a various factors such as reservoir dimensions, pressure, nature of hydrocarbons, and development plan. (see also Primary, Secondary and Tertiary Recovery.)( signal oil and gas company )


Hydrogen (H) - Reactive, colourless, odourless, and tasteless gaseous element with atomic number of 1. Element is usually classed in group 1 (or Ia) of periodic table. Lightest of all gases, hydrogen combines with carbon to form a variety of gaseous, liquid and solid hydrocarbons.

james e van blaricum
Longer-term factors that have been tied to variations in gasoline versus diesel prices include the different seasonal price variations for the two fuels, and differing tax rates. signal oil and gas company



Problems are particularly pronounced in the case of gas wells. A particular problem is the removal of high viscosity fluids. The time required to achieve cleanup increases significantly as fluid viscosity increases. For example, in a gas well in a 0.1 mD permeability formation, a fluid such as oil or water that has a viscosity of 0.25 cP at reservoir temperature is easily removed from the formation. Maximum rate is attained after about 3 days. At 25 cP viscosity, maximum rate is attained after about 20 days. 250 cP fluid is difficult to remove from the formation and only 24% of the fracture fluid will have been produced after 400 days of production. Similar increases in cleanup time are seen as fracture length increases .( james e van blaricum )


The first instance of natural gas successfully being stored underground occurred in Weland County, Ontario, Canada, in 1915. This storage facility used a depleted natural gas well that had been reconditioned into a storage field. In the United States, the first storage facility was developed just south of Buffalo, New York. By 1930, there were nine storage facilities in six different states. Prior to 1950, virtually all natural gas storage facilities were in depleted reservoirs.

james van blaricum
The use of certain organic solvents in gas and water injection wells may reduce the gas or water relative permeability and permanently reduce well production. The use of a water based acidizing system with good penetration would be preferred for such wells allowing much easier control over the wetting characteristics of the formation. james e van blaricum



Why Recent Retail Diesel Prices Have Been Higher Than Gasoline Prices - In recent months, U.S retail diesel prices have averaged anywhere from 25 to more than 70 cents above the retail price for regular gasoline, according to the Energy Information Administration. Historically, diesel prices had tended to be lower than for gasoline.( james van blaricum )


Arcasolve™ may be used to effectively stimulate natural fracture networks. Deep penetration along fractures can be achieved before acid is produced. Laboratory evaluation to date has been positive. Field trials are currently being conducted in the Austin Chalk.

signal oil & gas company
In fact, associated hydrocarbons, known as ‘natural gas liquids’ (NGLs) can be very valuable by-products of natural gas processing. NGLs include ethane, propane, butane, iso-butane, and natural gasoline. These NGLs are sold separately and have a variety of different uses; including enhancing oil recovery in oil wells, providing raw materials for oil refineries or petrochemical plants, and as sources of energy. james van blaricum



Natural gas pipelines are subject to regulatory oversight, which in many ways determines the manner in which pipeline companies must operate.( signal oil & gas company )


In undamaged formations even significant permeability increases over a 3 to 6 meter radius around the wellbore will result in less dramatic stimulation than achieved when removing damage. There is a practical limit of about a 50% increase in injectivity or productivity of undamaged oil or water wells which can be achieved using matrix stimulation.

signal oil and gas company
Even with the SPR and friends in the right places, the United States is not out of the woods. We still buy more than half our imported oil from OPEC countries, 11 percent of which comes from volatile Arab OPEC countries. james van blaricum



Completing a well consists of a number of steps; installing the well casing, completing the well, installing the wellhead, and installing lifting equipment or treating the formation should that be required.( signal oil and gas company )


Turbine compressors gain their energy by using up a small proportion of the natural gas that they compress. The turbine itself serves to operate a centrifugal compressor, which contains a type of fan that compresses and pumps the natural gas through the pipeline. Some compressor stations are operated by using an electric motor to turn the same type of centrifugal compressor. This type of compression does not require the use of any of the natural gas from the pipe, however it does require a reliable source of electricity nearby. Reciprocating natural gas engines are also used to power some compressor stations. These engines resemble a very large automobile engine, and are powered by natural gas from the pipeline. The combustion of the gas powers pistons on the outside of the engine, which serves to compress the natural gas.

james e van blaricum
After the crude oil has reached the refinery, huge round tanks store the oil until it is ready to be processed. Tank farms are sites with many storage tanks. james e van blaricum



Natural gas can also be formed through the transformation of organic matter by tiny microorganisms. This type of methane is referred to as biogenic methane. Methanogens, tiny methane producing microorganisms, chemically break down organic matter to produce methane. These microorganisms are commonly found in areas near the surface of the earth that are void of oxygen. These microorganisms also live in the intestines of most animals, including humans. Formation of methane in this manner usually takes place close to the surface of the earth, and the methane produced is usually lost into the atmosphere. In certain circumstances, however, this methane can be trapped underground, recoverable as natural gas. An example of biogenic methane is landfill gas. Waste-containing landfills produce a relatively large amount of natural gas, from the decomposition of the waste materials that they contain. New technologies are allowing this gas to be harvested and used to add to the supply of natural gas.( james e van blaricum )


Research expenditure allowance (R&amp) - Relief makes allowable against a participator’s liability for any field, R&amp costs that do not became allowable in a particular field within three years of being incurred.

james van blaricum
Shale shaker - Drilling mud passed over to sieve out cuttings. signal oil and gas company



Natural gas can also be formed through the transformation of organic matter by tiny microorganisms. This type of methane is referred to as biogenic methane. Methanogens, tiny methane producing microorganisms, chemically break down organic matter to produce methane. These microorganisms are commonly found in areas near the surface of the earth that are void of oxygen. These microorganisms also live in the intestines of most animals, including humans. Formation of methane in this manner usually takes place close to the surface of the earth, and the methane produced is usually lost into the atmosphere. In certain circumstances, however, this methane can be trapped underground, recoverable as natural gas. An example of biogenic methane is landfill gas. Waste-containing landfills produce a relatively large amount of natural gas, from the decomposition of the waste materials that they contain. New technologies are allowing this gas to be harvested and used to add to the supply of natural gas.( james van blaricum )


Condensate - Liquid mixture of pentane and higher hydrocarbons.

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Net present value (NPV) - Discounted value of future cash flow. signal oil & gas company

JAMES E. VAN BLARICUM

The natural gas used by consumers is composed almost entirely of methane. However, natural gas found at the wellhead, although still composed primarily of methane, is by no means as pure. Raw natural gas comes from three types of wells: oil wells, gas wells, and condensate wells. Natural gas that comes from oil wells is typically termed ‘associated gas’. This gas can exist separate from oil in the formation (free gas), or dissolved in the crude oil (dissolved gas). Natural gas from gas and condensate wells, in which there is little or no crude oil, is termed ‘nonassociated gas’. Gas wells typically produce raw natural gas by itself, while condensate wells produce free natural gas along with a semi-liquid hydrocarbon condensate. Whatever the source of the natural gas, once separated from crude oil (if present) it commonly exists in mixtures with other hydrocarbons; principally ethane, propane, butane, and pentanes. In addition, raw natural gas contains water vapor, hydrogen sulfide (H2S), carbon dioxide, helium, nitrogen, and other compounds.

signal oil and gas company

There is a need for improved acidizing methods which are effective for the removal of drilling fluid damage from long horizontal intervals. Arcasolve™ is effective for this application.

Sulfur exists in natural gas as hydrogen sulfide (H2S), and the gas is usually considered sour if the hydrogen sulfide content exceeds 5.7 milligrams of H2S per cubic meter of natural gas. The process for removing hydrogen sulfide from sour gas is commonly referred to as ’sweetening’ the gas.

(signal oil and gas)


Although there are several ways that methane, and thus natural gas, may be formed, it is usually found underneath the surface of the earth. As natural gas has a low density, once formed it will rise towards the surface of the earth through loose, shale type rock and other material. Most of this methane will simply rise to the surface and dissipate into the air. However, a great deal of this methane will rise up into geological formations that ‘trap’ the gas under the ground. These formations are made up of layers of porous, sedimentary rock (kind of like a sponge, that soaks up and contains the gas), with a denser, impermeable layer of rock on top. This impermeable rock traps the natural gas under the ground. If these formations are large enough, they can trap a great deal of natural gas underground, in what is known as a reservoir. There are a number of different types of these formations, but the most common is created when the impermeable sedimentary rock forms a ‘dome’ shape, like an umbrella that catches all of the natural gas that is floating to the surface. There are a number of ways that this sort of ‘dome’ may be formed. For instance, faults are a common location for oil and natural gas deposits to exist. A fault occurs when the normal sedimentary layers sort of ’split’ vertically, so that impermeable rock shifts down to trap natural gas in the more permeable limestone or sandstone layers. Essentially, the geological formation which layers impermeable rock over more porous, oil and gas rich sediment, has the potential to form a reservoir. The picture below shows how natural gas and oil can be trapped under impermeable sedimentary rock, in what is known as an anticlinal formation. To successfully bring these fossil fuels to the surface, a hole must be drilled through the impermeable rock to release the fossil fuels under pressure. Note that in reservoirs that contain oil and gas, the gas, being the least dense, is found closest to the surface, with the oil beneath it, typically followed by a certain amount of water.

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In order to process and transport associated dissolved natural gas, it must be separated from the oil in which it is dissolved. This separation of natural gas from oil is most often done using equipment installed at or near the wellhead.

In undamaged formations even significant permeability increases over a 3 to 6 meter radius around the wellbore will result in less dramatic stimulation than achieved when removing damage. There is a practical limit of about a 50% increase in injectivity or productivity of undamaged oil or water wells which can be achieved using matrix stimulation.

A third way in which methane (and natural gas) may be formed is through abiogenic processes. Extremely deep under the earth’s crust, there exist hydrogen-rich gases and carbon molecules. As these gases gradually rise towards the surface of the earth, they may interact with minerals that also exist underground, in the absence of oxygen. This interaction may result in a reaction, forming elements and compounds that are found in the atmosphere (including nitrogen, oxygen, carbon dioxide, argon, and water). If these gases are under very high pressure as they move towards the surface of the earth, they are likely to form methane deposits, similar to thermogenic methane.(james e van blaricum)


The United States has also turned to non-Arab and non-OPEC countries for oil imports. Today, we import much of our oil from Canada and Mexico. This is good for us because we have friendly relations with our neighbors, and because the oil doesn’t have to be shipped so far. Still, the amount of oil that we can import from Canada and Mexico is limited. By law, Mexico can only export half the oil it produces to the United States.

james van blaricum

With natural gas trapped under the earth in this fashion, it can be recovered by drilling a hole through the impermeable rock. Gas in these reservoirs is typically under pressure, allowing it to escape from the reservoir on its own.

Natural gas storage plays a vital role in maintaining the reliability of supply needed to meet the demands of consumers. Historically, when natural gas was a regulated commodity, storage was part of the bundled product sold by the pipelines to distribution utilities. This all changed in 1992 with the introduction of the Federal Energy Regulatory Commission’s (FERC) Order 636, which opened up the natural gas market to deregulation. Essentially, this meant that where natural gas storage was required prior to Order 636 for the operational requirements of the pipelines in meeting the needs of the utilities, it is now available to anyone seeking storage for commercial purposes or operational requirements. Storage used to serve only as a buffer between transportation and distribution, to ensure adequate supplies of natural gas were in place for seasonal demand shifts, and unexpected demand surges. Now, in addition to serving those purposes, natural gas storage is also used by industry participants for commercial reasons; storing gas when prices are low, and withdrawing and selling it when prices are high, for instance. The purpose and use of storage has been closely linked to the regulatory environment of the time.

The use of certain organic solvents in gas and water injection wells may reduce the gas or water relative permeability and permanently reduce well production. The use of a water based acidizing system with good penetration would be preferred for such wells allowing much easier control over the wetting characteristics of the formation.(signal oil & gas company)


Fluids used in the fracture acidizing process (pad fluid, acid or additives) can be detrimental to well performance following the job. This can be due to clean up problems or a reduction in the formation permeability adjacent to the fracture.

james e van blaricum

Petroleum products–gasoline for cars, fertilizers, etc.–have brought untold benefits to Americans and the rest of the world’s people. We depend on these products, and, as consumers, we demand them.

Petroleum has been known throughout historical time. It was used in mortar, for coating walls and boat hulls, and as a fire weapon in defensive warfare. Native Americans used it in magic and medicine and in making paints. Pioneers bought it from the Native Americans for medicinal use and called it Seneca oil and Genesee oil. In Europe it was scooped from streams or holes in the ground, and in the early 19th cent. small quantities were made from shale. In 1815 several streets in Prague were lighted with petroleum lamps.

Americans know this dependence can be dangerous. We were first alerted to the danger in 1973 when some Arab countries stopped shipping oil (called an embargo) to the United States. These countries belonged to an international trade group called the Organization of Petroleum Exporting Countries or OPEC for short.(signal oil and gas)


In addition to inspection with pigs, there are a number of safety precautions and procedures in place to minimize the risk of accidents. In fact, the transportation of natural gas is one of the safest ways of transporting energy, mostly due to the fact that the infrastructure is fixed, and buried underground. According to the Department of Transportation (DOT), pipelines are the safest method of transporting petroleum and natural gas. While there are in excess of 100 deaths per year associated with electric transmission lines, according to the DOT’s Office of Pipeline Safety in 2001, there were 2 deaths associated with transmission pipelines, and 5 deaths associated with distribution systems.

james e van blaricum

Natural gas is usually stored underground, in large storage reservoirs. There are three main types of underground storage: depleted gas reservoirs, aquifers, and salt caverns. In addition to underground storage, however, natural gas can be stored as liquefied natural gas (LNG). LNG allows natural gas to be shipped and stored in liquid form, meaning it takes up much less space than gaseous natural gas.

Once the well is completed, it may begin to produce natural gas. In some instances, the hydrocarbons that exist in pressurized formations will naturally rise up through the well to the surface. This is most commonly the case with natural gas. Since natural gas is lighter than air, once a conduit to the surface is opened, the pressurized gas will rise to the surface with little or no interference. This is most common for formations containing natural gas alone, or with a light condensate. In these scenarios, once the christmas tree is installed, the natural gas will flow to the surface on its own.

Well casing is a very important part of the completed well. In addition to strengthening the well hole, it also provides a conduit to allow hydrocarbons to be extracted without intermingling with other fluids and formations found underground. It is also instrumental in preventing blowouts, allowing the formation to be ’sealed’ from the top should dangerous pressure levels be reached. For more technical information on blowouts and their prevention, click here. Once the casing has been set, and in most cases cemented into place, proper lifting equipment is installed to bring the hydrocarbons from the formation to the surface. Once the casing is installed, tubing is inserted inside the casing, from the opening well at the top, to the formation at the bottom. The hydrocarbons that are extracted run up this tubing to the surface. This tubing may also be attached to pumping systems for more efficient extraction, should that be necessary.(signal oil and gas)


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James Van Blaricum - Record oil prices drive Shell 1Q profits up 25 percent

AMSTERDAM, Netherlands - Royal Dutch Shell PLC’s first-quarter profits rose 25 percent, Europe’s largest engery company reported Tuesday, on unheard of prices for a barrel of oil.

Shell said its average selling price of crude oil leaped by 66 percent to more than $90 per barrel from the first quarter a year ago. James Van Blaricum

Jim Van Blaricum That sent net profit soaring to a record $9.08 billion, up from $7.28 billion. Sales rose 55 percent to $114 billion.

Analysts said the performance was impressive, especially because expectations were already high.James Van Blaricum

Shell “delivered a very robust overall performance, with all the divisions outperforming the consensus and our estimates,” wrote analyst Alexandre Weinberg of Petercam in a note on the earnings. Jim Van Blaricum

“Exploration and production numbers were clearly impressive, in spite of higher industry costs and the weak dollar. … Flow generation from higher hydrocarbon prices might be underestimated for the entire group of majors (big oil companies).” Signal Oil and Gas

Chief Executive Jeroen van der Veer said in a statement the strong numbers were due to a “good operating performance, combined with increased oil and gas prices.”

Shares rose 3.3 percent to 25.545 euros ($39.93) in Amsterdam.

Earnings from oil production rose 52 percent to $5.14 billion, due almost entirely to the price increases.

The company said combined production of gas and oil equivalents increased by less than 1 percent to 3.4 million barrels per day, as a 9 percent rise in gas production outweighed a 6 percent fall in oil production. James Van Blaricum

Refining profits also increased, rising 31 percent to $2.37 billion, but the company warned that margins were under pressure. Signal Oil and Gas

Stripping out the impact of oil inventories that have risen in value, refining profits would actually have fallen 20 percent, Shell said.

Still, analysts said that was better than expected.

“At first sight, it seems that better marketing and trading were able to offset the weak refining environment,” Weinberg said, adding that he believes margins have recovered somewhat in the current quarter, and upgrading his recommendation for shares to “Buy” from “Add.” James Van Blaricum

Shell “trades at an average 15 percent discount to peers and we deem this unjustified,” he said.James Van Blaricum

Shell has invested heavily to improve production after a string of setbacks, including an accounting scandal in 2004 in which it was forced to reduce the size of its proven reserves several times. More recently, it has faced attacks on its pipelines in Nigeria and a forced sale of part of its stake in a major project on Russia’s Sakhalin Island to a state-run enterprise.Signal Oil and Gas

One of its new projects, producing bitumen — a heavy form of petroleum — from oil-rich sands and shale in Canada, is paying off. The company reported the segment separately from oil and gas production for the first time and it showed earnings of $249 million, more than doubling from the same quarter a year ago.James Van Blaricum

James Van Blaricum - Strike at Scotland Refinery Forces BP to Shut a Pipeline

PARIS — Workers walked off the job Sunday at the only oil refinery in Scotland, requiring BP to close a pipeline that supplies about a third of Britain’s petroleum needs.

The strike at the site, the Ineos refinery in Grangemouth, began at 6 a.m., after workers of the Unite union and management were unable to agree on proposed pension changes. It was set to run for 48 hours. James Van Blaricum

The refinery’s power plant supplies steam and electricity to the nearby Kinneil plant, which processes oil and gas. With the strike, which halted the Kinneil site, BP was forced to close the pipeline, said Joanne McDonald, a spokeswoman for BP. Signal Oil and Gas

At the Kinneil plant, crude oil piped in from North Sea oil platforms is “stabilized” and natural gas is drawn off, before about 20 percent of the oil is pumped to the Ineos refinery for processing into fuel, McDonald said. That is enough to meet 30 percent to 35 percent of all British demand. James Van Blaricum

The remainder is loaded onto tankers to supply the world market, she said.

McDonald said the pipeline, known as the Forties Pipeline System, “would be operational again within 24 hours” of the projected end of the strike Tuesday. Signal Oil and Gas

James Van Blaricum - Average gas price tops $4 a gallon in San Francisco

After days of inching upward, gasoline on Sunday crossed the $4 threshold in San Francisco. The city became the first in the mainland U.S. where the average gallon of regular unleaded self-serve gasoline cost more than $4, according to AAA’s Daily Fuel Gauge Report.
To be exact, the average in the city was $4.006.

People tanking up didn’t express shock. Some were angry, and some resolved that they would get used to the new normal. This being the sort of city that has a monthly bicycle rights protest, some were positively gleeful at the $4-plus price.Signal Oil and Gas

“I like it when it goes up,” said Shannon Wu, 26, an events planner from Oakland who was filling up a Honda Element. She hired the vehicle for the day from a car-sharing service so she could help her boyfriend move. She hasn’t owned a car for a couple of years.

“Anything that discourages driving,” she said, “is good.”

Other California cities will probably soon see signs for $4 regular too. “San Francisco is just the suffering pioneer,” said Judy Dugan, research director for Consumer Watchdog, a nonprofit consumer advocacy group. “The rest of California will soon follow, and most likely the rest of the country.” Signal Oil and Gas

Many cities were a half-step or less behind on Sunday – with the average at $3.878 in Los Angeles, $3.994 in Santa Barbara and $3.924 in San Diego.

San Francisco wasn’t the first in the U.S. with an average above $4. Earlier this month, the island of Maui got that honor.

But with a , analysts expect energy to be the talk of the summer. Consumers will ruminate more on the implications of $4 gas than they did of, say, $3, a barrier broken in California in May 2006. (Gasoline crossed $2 a gallon in the state in September 2003.)

“Four dollars is truly a mental barrier for a lot of people,” said Michael Geeser, a spokesman for AAA of Northern California. When it comes to actually filling their tanks, though, “for many people, it doesn’t matter if it’s $4 or $3.97. They still have to use their cars to pick their kids up from school or get to work.” Signal Oil and Gas

“I’m surprised the whole oil market has moved up so quickly,” he said. “It has caught a lot of people off guard.”

The first time the national average crested the $2 mark was in May 2004. It hit $3 in September 2005 in the wake of Hurricane Katrina. Prices in California are higher mostly because of the cleaner-burning gasoline the state mandates.

At the Shell station on the corner of Folsom and 5th streets, where regular unleaded cost $4.199, there was little talk about blame. As they watched the numbers ratchet up like on a casino slot machine, some motorists talked about survival strategies.

Eric Miller, 27, bought just one gallon of regular unleaded for his Saturn so he could get to church. “I can’t afford gas right now,” said the Daly City resident, who does several odd jobs to get by. “You have to buy a gallon at a time.”

Likewise, a man who gave his name as V. James put just $5 in his Toyota Celica so he could get over the bridge into Berkeley to meet friends. He would fill up there, he said, where he believed gas was cheaper. “We can bang our heads against the wall, but it’s the new reality,” said James, 60, who works at a BMW repair shop. “It means people will be more inclined to knock on the boss’ door to ask for a raise.”

Mia Brumfield, 27, a campaign reports specialist from Sacramento who was visiting family and friends in San Francisco, said she joined a recent protest at the state Capitol over the rising cost of living. “Going to work now is what I can afford,” she said. “I am angry but I don’t see a change.”

In the Chicago area, unleaded sells for about $3.50, said Tom Brantner, who was ending a vacation with his wife in San Francisco and filling up his rental car. It’s not $4, but it’s a lot more than it was a year ago, and it’s having an effect.

“I see it at our church, I see it in our stores,” said Brantner, 54, who lives in Algonquin, Ill., and is a salesman for a ball-bearing importer. “I think it’s really going to affect our country, and it scares me.”

James Van Blaricum - Gasoline could hit $7 a gallon in four years
Gasoline could hit $7 a gallon in four years: CIBC Crude predicted to top $200 by 2012 on tight supplies, pushing gas higher
Surging crude prices, which could surpass $200 a barrel in four years on tight supplies, could push gasoline prices to as high as $7 a gallon, CIBC World Markets analysts said Thursday.

Crude supplies are actually lower than some official estimates indicate, while demand is unlikely to fall anytime soon, according to a statement by analysts led by Jeff Rubin at CIBC, an investment bank. They forecast that these tighter supplies and continued strong demand will drive oil and gasoline prices to roughly double their current levels by 2012.
“It is increasingly clear that the outlook for oil supply signals a period of unprecedented scarcity,” said Rubin. “Despite the recent record jump in oil prices, oil prices will continue to rise steadily over the next five years.”

The front-month crude contract slid Thursday to $116 a barrel, after hitting a historic high of $119.90 a barrel Tuesday. Retail gas prices averaged $3.56 a gallon Thursday, according to AAA, a new record high. See Futures Movers.
Some analysts, however, said crude prices could turn lower. Standard & Poor’s predicted Thursday that crude prices could tumble to about $90 a barrel by the end of this year with the U.S. economy struggling in recession, though the range of that forecast is plus or minus $50. See full story.
Overstated estimates
CIBC based its prediction on an analysis of crude-production estimates by the International Energy Agency, which the investment bank says has overstated supplies because the agency counts natural-gas liquids as part of the output. Stripping out natural-gas liquids, the global oil market is much tighter, and oil production will hardly grow, they added.
“While natural-gas liquids only account for 10% of total supply, they account for virtually all of the increase in petroleum-liquids production since 2005,” said Rubin in a news release.
“Stripping out natural-gas liquids, oil production has not grown for over two years, which certainly goes a long way to explaining why oil prices have doubled over that period,” he added.
The portion of natural-gas liquids in total oil production is increasing, from about 4% in the 1970s to an estimated 10% by 2012, CIBC said. Natural-gas liquids are not a viable substitute for oil and cannot be economically used as a basis for gasoline, diesel or jet fuel.
Latest data from the Energy Information Administration, the statistical arm of U.S. Energy Department, indicated domestic drilling of natural gas liquids was increasing, while domestic oil production was falling.
Natural gas liquids production averaged 2.4 million barrels a day so far this year, gaining 4% from the same period of the last year, while crude output fell 1.9% from a year ago to 5.1 million barrels.
More natural gas comes with oil
Beyond methane which is what the home consumers burn, natural gas at the well contains a range of readily liquefiable gases, which agencies like the IEA have traditionally included in total oil supply.
IEA, a Paris-based energy adviser to 27 developed countries, said in its April monthly report that global oil production stood at 87.3 million barrels a day in March.
While natural gas can occur on its own, much of the world’s natural gas is found together with oil.
James Williams, an economist at WTRG Economics, an energy research firm, agreed that natural gas liquids found together with crude oil have been increasing, while “there isn’t much growth in oil,” he said. “The lack of oil growth has been due to the lack of investment.”
Accelerating depletion of existing oil fields and a lack of investment in new fields have resulted in a rising ratio of natural gas to oil in drilling in mature oil fields.
Some oil producers have been promising to invest more to increase production capacity. Abdalla Salem el-Badri, secretary general of the Organization of Petroleum Exporting Countries, said early this week the cartel is planning to spend $160 billion over the next four years to boost oil production capacity by 5 million barrels a day. See full story.
Demand in non-OECD countries to exceed OECD
While supplies are seen tight, there is little evidence to suggest that there will be any reduction in oil demand, CIBC predicted, as demand growth outside the Organization of Economic Cooperation and Development offsets slowing demand in OECD countries.
Countries such as Brazil, China and Russia have seen surging sales of automobiles, while car sales in the United States and Europe have been declining or flat. Gasoline, diesel and other transportation fuels account for about half of the world’s oil consumption.
CIBC predicted that by 2012, oil consumption in the rest of the world will exceed OECD. OECD countries currently consume about 50 million barrels a day of crude, 13 million barrels a day more than non-OECD countries. James Van Blaricum
Demand from major oil producers and exporters is also seen rising. Over the last three years, oil consumption in OPEC members has grown an average of over 5% a year. Combined demand from OPEC members, together with Russia and Mexico, already stood at about 13 million barrels a day, the world’s second largest after the U.S.
“With production faltering, soaring rates of domestic fuel consumption will soon cannibalize export capacity,” adding more pressure to the world energy market, said Rubin in the report.
Fuel consumption in some oil producing countries was partly boosted by extremely low prices. Retail gasoline was only about 25 cents a gallon in Venezuela and 60 cents a gallon in Saudi Arabia, Kuwait, and Iran

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