Posts from ‘July, 2011’

Ogoni: Less Hot Air and More Action – Gas Flaring Increases in the Niger Delta

Despite repeated commitments by oil companies and governments, gas flaring continues in Nigeria at an environmental cost.

Below is an article published by Think Africa Press:

Gas flaring in the Niger Delta region highlights the environmental problems posed by resource extraction, and the failure of successive governments to tackle these problems. Goodluck Jonathan, elected as president of Nigeria this April, has the opportunity to take action where his predecessors have failed.

Gas flaring is a routine practice with a number of extractive processes, including the flaring of associated gas following oil extraction. It is a wasteful process, as much of this gas could be used to provide fuel, either for the local market or for export. According to some estimates, $2.5 billion is wasted annually through gas flaring in Nigeria. Perhaps more importantly, the release of these gasses damages the health of the surrounding population, releases enormous amounts of greenhouse gases and contributes to acid rain. In fact, according to a World Bank  report released in 2002, gas flaring in Nigeria is the single greatest source of greenhouse gases in sub-Saharan Africa. Nigeria has the secondhighest gas flaring rates in the world, following Russia.

Companies in Nigeria are reluctant to reduce flaring and instead harvest the gas, as gas that is extracted alongside oil is more difficult and costly to separate and process than non-associated gas. So gas flaring is a simpler and cheaper alternative to obtaining the oil.

Shell, under the Shell Petroleum Development Corporation (SPDC) flares the  most gas out of all the corporations operating in Nigeria. The problem has long been recognized and highlighted by organizations, such as the Movement for the Survival of the Ogoni People (MOSOP), who are sharply critical of Shell’s practices within the region. In addition to gas flaring, the multinational is responsible for polluting the delta, killing fish and therefore harming the livelihoods of the people who live there. Shell’s well-publicised Corporate Social Responsibility programmes issue repeated commitments to reducing flaring, but no action has been taken to significantly reduce this dangerous practice. Statements by Malcolm Brinded, the director for exploration and production at Shell, suggest that the company may not be taking gas flaring seriously, as he declared that there was little evidence of the damaging health risks that flaring poses.

Broken promises: Gas flaring is not a new issue, and there have been numerous domestic and international attempts to rein in the practice. Yet each time there has been a reluctance to follow through on government statements and legislation. This was first recognized as an issue in 1969 by the federal government under the leadership of General Yakubu Gowon, who ordered the introduction of gas collecting facilities by 1974. When the deadline wasn’t met, it was shifted forward twice until 1984. This year saw the culmination of the Associated Gas Reinjection Act, as well as General Gowon’s executive order to make excessive gas flaring an illegal practice in the country. However, what started off as an attempt to reduce flaring turned into another royalty payment for the federal government, as companies found it more profitable to pay the annual fine than reduce their flaring practices. The international community eventually took notice and the OECD placed its own deadline on western companies to  reduce flaring by 2008. The deadline has since passed without enforcement or the penalisation of Shell.

Umaru Yar’Adua’s plan: Yet since 2008, the federal government has once again started to prioritise the issue of flaring. There is a risk, however, that these new efforts may follow a similar fate as General Gowon’s initiative. Action was taken under ex-president Umaru Yar’Adua’s government through two new executive orders. The first was the Nigerian Gas Master Plan (NGMP) in 2008. Part of the NGMP  addressed the wasteful status quo by providing legislation to encourage the integration of gas fields within the local infrastructure, and to create a market driven industry out of the resource by 2015, reducing gas flaring in the process. The plan includes the Domestic gas Supply Obligation (DSO), which contains a substantial penalty of $3.5m on companies that fail to integrate gas supplies into the local market.

Promising legislation was passed by the Senate a year later in 2009. It placed another penalty on the industry, this time requiring firms to pay the international market price for the quantity of gas still being flared after January this year. It is disappointing that the federal government did not stand its ground on the legislation: the deadline was moved again to December next year.

Whilst the deadline for the NGMP looms on the horizon and the new deadline for the senate bill is just over a year away, Shell’s most recent Sustainability Report released in April, states that the corporation has recently increased its use of flaring in the Niger Delta, blaming militants and a lack of government funding for this failure. The report also stresses the additional cost of the exercise, stating that additional gas collectors in the region would be priced at another $2 billion. Given that Nigeria’s oil production has amounted to over $56 billion over the last four years alone, the cleanup costs proposed seem more than manageable.

Goodluck Jonathan: the “Gas Revolution Agenda”: Rather than follow through with his predecessors commitment, Goodluck Jonathan launched the “Gas Revolution Agenda” in March this year. Despite the name, there is nothing revolutionary about the agenda. It mostly re-states what has been said since 1969 and there is little that distinguishes it from Umaru Yar Adua’s NGMP. So far, the agenda seems to be little more than a collection of words and intentions. It remains to be pushed into concrete legislation.

But Nigeria does not need another grand plan or agenda, nor does it need new legislation: the laws have been in place since 1984. What needs to take place is the enforcement of the laws and penalties that already exist and for the judiciary to take action for the persistent negligence of the oil industry within Nigeria in living up to its commitments. What is needed is less hot air and more action.

SOURCE

Dear John,

I’ve attached for your perusal up to the minute stuff connected with the proposed Shell/Corrib project in north Mayo.

Maura Harrington

DYING_FOR_OUR_CHILDREN[1]

Peoples Forum Booklet PDF

SIPTU Optimising Ireland’s Oil & Gas Resources

JULY 6, 2011

The Shell-operated Brent Charlie platform 125 miles north-east of Lerwick is to shut down from next Friday on the orders of oil industry regulators amid continuing concerns about safety.

No oil has been pumped ashore from the installation, the hub for the Brent pipeline that comes into Sullom Voe, since January and gas production, which goes through the FLAGS pipeline to St Fergus on the north-east coast of Scotland, has been restricted to one well.

But now the Health and Safety Executive (HSE) has served Shell with a legally-enforceable prohibition notice which means the operator will have to cease production entirely. An HSE spokesman declined to give details of the “safety issues” it was concerned about for legal reasons.

Separately, Shell has been asked to resubmit its safety case – a requirement for all oil and gas installations since legislation was introduced following Lord Cullen’s report into the Piper Alpha disaster of 23 years ago – after carrying out revisions.

The fact of the Brent Charlie shut down emerged after The Guardian newspaper obtained details of oil and gas leaks in the North Sea in 2009 and 2010 about which operators are obliged to inform the HSE.

Among those were seven from Brent Charlie, including the release of 4.6 tonnes of gas on 26th April 2010, which was classified as a “major” incident, meaning that if the gas had ignited many workers on the platform could have been killed.

The platform was built in the 1970s and began operating in November 1976, and is therefore among the oldest in the North Sea, but the Brent field underwent a £1.3 billion upgrade in the mid-1990s to extend its operational lifetime.

The HSE spokesman said: “HSE can confirm that a prohibition notice was served on Shell on 1st July over safety issues on the Brent C platform.” He also confirmed the regulator’s demand for Shell to resubmit its safety case for the platform.

The spokesman added: “Hydrocarbon releases are potential major hazard precursor events and the HSE, the regulator, takes them very seriously. HSE investigates all significant and major releases to establish the root cause, assess compliance with legislation and ensure that the dutyholder takes any necessary remedial action. Ensuring a reduction in hydrocarbon releases is a key priority for HSE, but it is not a new issue.

“Trends in hydrocarbon releases are down, but are showing resistance to further reductions. After being challenged by HSE, the industry agreed a target at the start of this year to reduce hydrocarbon releases by 50 per cent over the next three years. HSE expects all dutyholders to have plans in place to make that reduction happen.

“The safety record for the UK offshore industry continues to improve, with the downward trend of hydrocarbon releases being sustained in provisional figures for 2010/11. Since the tragedy of Piper Alpha, when 167 died 23 years ago today, the industry has had a strong track record which bears good comparison with Norway, who are the other big offshore sector in the North Sea.”

A spokesman for Shell said: “No spill is acceptable and we have made progress. We work closely with regulators and invested over a billion dollars in recent years to upgrade facilities across the North Sea to continue this improvement on our performance.”

SOURCE ARTICLE

Shell has emerged as one of the top offenders despite promising to clean up its act five years ago after a large accident in which two oil workers died.

• Rob Evans, Richard Cookson and Terry Macalister
• guardian.co.uk, Tuesday 5 July 2011 22.34 BST

More than 100 potentially lethal oil and gas spills took place on rigs in the North Sea in 2009 and 2010. Photograph: Alamy

Documents list companies that caused more than 100 potentially lethal – and largely unpublicised – leaks in 2009 and 2010

By Ejiofor Alike: 5 July 2011

Shell Petroleum development Company of Nigeria (SPDC) has linked the rampant cases of crude oil theft in the Niger Delta to international criminal network, and called on all stakeholders to take urgent steps to check the dangerous trend.

According to SPDC, sabotage and crude oil theft was the cause of 22,310 barrels spilled from its facilities in 112 incidents in 2010, representing an average of about one spill every three days.

However, 5,270 barrels was due to 32 operational problems, arising from equipment failures recorded during the period.

Chairman of Shell Companies in Nigeria and Managing Director of SPDC, Mr. Mutiu Sunmonu, said in a remark at an oil and gas event in Lagos at the weekend that the company’s operation in the Niger Delta is increasingly facing various acts of sabotage.

“We do have crude oil theft – those interested in stealing crude from our Niger Delta operation and they have a great network – international network for crude theft; and that needs to be checked. We also have sabotage, where people deliberately damage our facilities to generate contract out of the damage and that also needs to be checked. We do have people, who steal pipelines – they harvest pipes and that needs to be checked. There are also people, who cause spills because they want to make claims as a result of spills that affect them; which they caused,” he said.

The Shell boss, who was represented by a top official of the company, Mr. Mason Oghenejobo, however stated that despite the challenges, the company will continue to promote the growth of indigenous oil producers by releasing more assets.

The oil giant has maintained that sabotage accounted for over 75 percent of oil spill incidents and more than 70 percent of oil spilled from its facilities between 2006 and 2010.

Shell said it paid more than $1.7 million in compensation in 2010, only to those affected by operational spills, while security agents arrested 187 people and seized 20 tankers, 15 vehicles, 28 barges and 38 other boats involved in this illicit business during the period.

It paid more than $4 million in compensation, as well as provided clean water and food to affected communities in 2009.

According to the company, most of the oil in 2009 was spilled in two incidents in Odidi field in Delta State and the Trans Escravos Pipeline.

“At the Odidi field in Delta State, thieves trying to steal the oil from a wellhead caused a blowout that spilled an estimated 78,000 barrels before a specialist well control company was able to bring it under control after 98 days. The thieves had vandalised safety valves that would normally allow the emergency response team to shut off the flow of oil very quickly. The specialist contractors had to create and maintain a safe zone to work while contending with changing conditions such as wind direction, tidal movements and security concerns from militants. Initial quick action by SPDC Limited the spill to the immediate surroundings of the well and almost all of the oil was recovered. A further estimated 18,500 barrels was spilled in the second major incident on the Trans Escravos Pipeline, which was attacked by saboteurs who set off five explosive devices along the line,” Shell said.

SOURCE

July 4, 2011 by Bob Berwyn

State approves 14,000-foot-deep fracking operation without public hearing

SUMMIT COUNTY — Shell Oil & Gas has been cleared to drill deep into a unique geological formation near the Spanish Peaks, in southern Colorado, to explore new natural gas resources.

Huerfano County planning and elected officials gave the exploratory fracking project a conditional green light last week, to the dismay of many local residents who are clamoring for more upfront research and better safeguards against environmental impacts.

The Colorado Oil and Gas Conservation Commission last month denied a citizen request for a public hearing because the request didn’t come from a local government entry.

Shell is responsible for this month’s spill of at least 1,000 barrels of oil into the Yellowstone River, upstream of Billings, Montana.

“To my knowledge, this is the first fracking operation on the Front Range of Colorado,” said Sandy Borthick, member of a citizens group which presented a request for “seven safeguards” to the Huerfano planning and zoning commission.

The approval process was fraught with controversy, as the planning and zoning commission refused to let members of the public speak at preliminary meetings on the approval. Scott King, chair of the commission, threatened to forcibly remove citizens from meetings, according to Ceal Smith, of the San Luis Valley Renewable Communities Alliance.

When audience members protested this action, King responded with, “So sue us,” according to Smith.

The group, Citizens for Huerfano County, requested a public hearing with the Colorado Oil and Gas Conservation Commission, but was turned down because the request did not come from a local government body.

The primary concern of La Veta residents and other citizens is the potential for ground water pollution and dangerous air emissions.

“The goal of the Sierra Club RMC, is to ensure that Colorado water and air resources are clean, public health, environment, and wildlife is protected, and that these are not endangered or impacted by irresponsible oil and gas drilling practices,” said Gopa Ross, chair of the Sierra Club’s Rocky Mountain Chapter oil and gas committee.

Ross has first-hand experience with oil and gas exploration. A water well on her horse ranch in Las Animas County was contaminated with methane gas, arsenic and fluoride by gas drilling in 2006 and impacted again in 2009 during drilling operations. The water well never recovered.

Borthick, a retired editor and writer from the telecommunications industry, has been researching legal remedies, and has come up empty-handed so far.

“It looks like we will have to appeal to Shell directly because our county commissioners and the Colorado Oil and Gas Conservation Commission are satisfied — they think the existing rules are adequate. They aren’t, but we can’t fix that right now, so my immediate goal is to get Shell to sit down with us and see if we can’t get make a deal or get some kind of memorandum of understanding.”

Among the Huerfanos’ concerns is the fact that Shell has only limited geophysical survey data, and that the company is not aware of the area’s unique geology. They want Shell to do a more comprehensive survey to be sure that drilling so deep in the vicinity of the Great Dikes of the Spanish Peaks doesn’t present unmanageable risks.

Hydraulic fracturing or “fracking” is a method of extracting oil and gas found deep in the Earth trapped in pockets of stone. Shell oil leased land two miles west of La Veta to drill a test/exploratory well, the deepest thus far in the area at 14,550 feet.

Shell filed for approval with the Colorado Oil and Gas Commission in late April to drill a hydraulically freaked, 14,000-foot deep well about 2.5 miles southwest of La Veta. The well site is on private land, J. J. Klikus owns both the mineral and surface rights.

By COGCC rules, the local government designee, County Administrator John Galusha, should have been notified sometime soon thereafter. He did not notify the public.

In a written timeline of the approval process, Borthick said, “We are fairly certain the commissioners violated the Sunshine Law in May and it seems likely they met with Shell representatives as well. Their comments at the June 1 meeting indicated great enthusiasm for the project. No public input was allowed at that meeting.”

The oil and gas commission approved the application June 9, brushing aside citizen concerns and ignoring what the citizens group calls “obvious discrepancies and deficiencies on the applications,” including a lack of notice to adjacent landowners, a lack of evaluation of health and environmental effects and a lack of notice to or input from the public.

The seven safeguards requested by Citizens for Huerfano County:

1. A substantial bond or escrow account, to be set aside by Shell before they drill, specifically for remediation, reclamation and to cover expected costs to the La Veta Fire Protection District and cost to cure expected damages to citizen health. Our conservative estimate of the amount of this bond/escrow, just for health damages (assumes no need for additional  remediation and reclamation beyond what Shell already plans to address in its plans, and no need to reimburse LFPD for costs and materials to fight fires caused by Shell’s activities or personnel) is $6,117,000.00 (6117 people in the county, with 10 percent affected, at $10,000 per person).

2. Two surveys, each of 10 square miles around proposed well site before Shell drills:  A) Surface geochemical (“sniffer”) survey to identify and document existing gas seeps B) Surface 3D seismic reflection survey to evaluate the presence and orientation of natural vertical fractures that could flow fluids (gases, drilling fluids, frac’ing fluids), so that drilling and production operations can avoid natural hazards.

3. Full disclosure of frac and drilling chemicals, by CAS number, to the County and the public at least 60 days  before each drill or frac using such chemicals.  Samples taken of drilling and frac’ing fluids before,  during, and after drilling/frac’ing operations, to verify that what Shell thought they were putting in the ground was really what was going into the ground.

4. Water quality: Baseline samples to be taken at least 60 days prior to activity at the well site, for 5 miles in all directions,  of  all domestic and livestock water wells, of the intake to the town of La Veta waterworks, and of all other creeks and surface run-off areas. Monitoring samples from the same sources to be taken, analyzed and reported to the County Health Department (accessible to the public) once a week during well site preparation, drilling, frac’ing,  production and reclamation. If any drilling, frac’ing, or gas production chemicals are detected in domestic wells and/or the La Veta Town waterworks intake, then Shell will cease and desist all operations until the situation is fixed.  No produced water is to be placed on any county paved or dirt roads, or otherwise discharged on the surface.

5. Air quality: Baseline samples to be taken at least 60 days prior to any well site activity on a still day at the well site location, and at the western edge of La Veta (e.g. Ryus and Aspen) and at 3 other points TBD. Monitoring samples from the same sources to be taken once every two weeks during drilling, frac’ing, gas production and reclamation. Whenever readings at any of the five locations exceed allowable limits, as evidenced by an audible alarm in La Veta and at the site, then Shell will  immediately shut-down of all operations at the site, including deliveries and haulage, until the situation is fixed.  All sources of gaseous effluent at the site must be either  (1) fitted with adequate filtering or vapor recovery units, or (2) enclosed. In either case, all gaseous effluent from all sources and enclosures must be filtered and cleaned of toxic chemicals and particulate before being discharged into the air. Noise abatement equipment on all portable equipment and vehicles and noise abatement insulation of all enclosures.

6. A pitless, closed loop drilling system will be used with injection materials mixed in containers and flow back and other produced material stored in containers and trucked off to licensed landfill or suitable disposal site.

7. No Flaring and adequate emergency response: There will be no flaring and Shell will have onsite both fire and hazmat personnel to deal with any fires or other accidents.

SOURCE ARTICLE

From pages 19 & 20 of “Royal Dutch Shell and its sustainability troubles” – Background report to the Erratum of Shell’s Annual Report 2010

The report is made on behalf of Milieudefensie (Friends of the Earth Netherlands)
Author: Albert ten Kate: May 2011.

Shell’s largest unconventional oil resource

Due to “easy” oil getting scarce, oil companies are investing in unconventional oil resources. In general, unconventional oil production has greater environmental impacts than conventional oil production. The Canadian oil sands (often called tar sands) are Shell’s largest unconventional oil reserve. As of 31 December 2010, Canadian oil sands amounted to 26% of Shell’s proven oil reserves. Oil reserves refer to the oil production Shell has secured to exploit in the future.

The oil sands are found in the Canadian province of Alberta. In December 2010, the government of Alberta listed 47 oil sands projects that are planned, underway, or recently completed. The total investment costs for these projects amounted to USD 85 billion.

Typical mining

The extraction of oil from tar sands has many features that are typical to industrial mining: dig up the earth; use lots of energy and water; sell the product; create a huge lake with toxic waste. At Shell’s main oil sands operations, an oily tar mixed with sand, clay and water is dug up in open- pit mines. Enormous trucks deliver these goods to a place where warm water is added to separate sand from the bitumen. After this process, the bitumen goes to an upgrader. In this upgrader (that usually runs on natural gas) the large heavy hydrocarbon molecules are cracked into lighter molecules. The synthetic crude oil is then sold to refineries to make gasoline; the remainder of the process is dumped in a tailings lake.

Some oil sands in Alberta are buried too deep below the surface for open-pit mining. In these cases, the oil will be recovered by in-situ techniques. Mostly steam needs to be injected into the deposit (thermal method), causing hot bitumen to migrate towards producing wells.

Shell’s presence

Shell’s Athabasca Oil Sands Project (AOSP, Shell share 60%) presently comprises two open-pit mines (the Muskeg River mine and the Jackpine mine) and the Scotford Upgrader. The present capacity was developed for a total cost of USD 19 billion. The total resource base is estimated at 3.4 billion barrels, so at the same pace this project could last for almost 40 years. AOSP has many more mining leases along the Athabasca river that may be utilised for oil production in the future.

By mid 2011, oil production is expected to be 255,000 barrels per day.98 Due to efficiency and de-bottlenecking operations the AOSP-production is assumed to increase by another 85,000 barrels to 340,000 barrels a day within the coming 7-10 years.

Shell has several 100% positions in in-situ mining. Production in 2010 is estimated at 18,000 barrels a day, from its Peace River and Cold Lake Orion assets. Shell is proposing to increase thermal bitumen production from its Peace River leases by 80,000 barrels of bitumen per day, through the Carmon Creek project. Investments of USD 3.5 billion are proposed for this project during the period 2011 – 2016. Shell estimates that the project has a 1.5 billion barrels resources potential. The company is also assessing its Grosmont and Woodenhouse in-situ assets including vast landholdings in west Athabasca.

Greenhouse gas emissions of fuels from oil sands

In a study at the request of the European Commission, released February 2011, typical tar sand well-to-wheel greenhouse gas (GHG) emissions were found to be most likely 23% worse than GHG emissions of typical conventional oil sources. For this study, many earlier studies on this subject were reviewed. Shell usually states that fuels derived from oil sands mining have 5 to 15% higher well-to-wheel (GHG) emissions, compared to fuels derived from conventional oil and dependant on crude type & source.

It should be noted that the recent study at the request of the European Commission refers to well-to-wheel GHG emissions. Well-to-wheel emissions include the emissions produced during crude oil extraction, processing, distribution, and combustion in an engine. For all sources of crude oil, 70 to 80 percent of GHG emissions occur at the combustion phase. Combustion emissions do not vary for a given fuel among sources of crude oil. Oil companies can influence well-to-tank emissions only, which account for 20 to 30 percent of total life-cycle GHG emissions.

In the study at the request of the European Commission, the most likely well-to-tank emissions from tar sands fuel were put at 33.9 grams of CO2 per megajoule. These are the emissions that can be influenced by Shell. The most likely well-to-tank emissions for conventional oil were put at 13.7 grams of CO2 per megajoule. So, the well-to-tank emissions of oil sands are almost 2.5 times higher than the emissions for average fuel used in the European Union.

A further extract from this section of the report will be published in the coming days.

THE COMPLETE 73 PAGE REPORT (with reference sources)

James Mason: July 1st, 2011 1:19 pm

Shell’s primary drilling unit “Kulluk” began its long journey from Dutch Harbor to Seattle on Thursday. With six tugs in attendance the huge drill rig headed out of Captain’s Bay where it spent the winter. Once the two-week, 3-knot trip is completed the Kulluk will undergo what Shell spokesman Curtis Smith described as “planned technical upgrades.” The rig goes to Seattle because a larger shipyard than Dutch Harbor can provide is necessary for the work, and Dutch Harbor can’t provide housing and other services for the 400-plus workers needed.

“Dutch is an excellent home for the Kulluk,” said Smith, adding the work should be completed in seven to 10 months and the rig will return in time to move into place in the Beaufort Sea in 2012.

“The necessary permits will have to be in place,” he said. Smith praised the facilities in Dutch Harbor, particularly OSI’s dock where the rig has been moored.

“The dock was purpose-built for the Kulluk because of its unique shape,” he said.

One of the six tugs accompanying the rig as it moved seaward was Nanuq, Shell’s purpose-built Arctic oil spill response vessel. Other tugs included the Ocean Titan and the Ocean Ranger, Gyrfalcon, James Dunlap, and Saratoga.

The Kulluk was transferred from Canada’s Mackenzie Delta to Dutch Harbor to support oil spill contingency plans for the summer 2011 drilling season. Shell had already spent some $200 million on improvements before transportation to the Aleutians. Plans were to use the Kulluk as a standby rig for drilling a relief well, should the need arise.

The moratorium on offshore drilling in the Arctic has caused Shell to suspend most operations in the Beaufort and Chukchi seas.

James Mason can be reached at jmason@alaskanewspapers.com, or by phone at 907-444-7210

Copyright 2011 The Arctic Sounder is a publication of Alaska Newspapers, Inc.

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