we are in a brand new year, amid hopes for continued improvement in global
upstream activity. With the three-year anniversary of the worldwide Covid-19
shutdown approaching in March, many folks in the global E&P industry hope
that we finally get back to 2019 activity levels and perhaps begin to exceed
we have been working this month on our winter drilling forecast, to be
published in the February issue. Early indications are that we will see some
respectable increases in the U.S. and internationally, perhaps with percentage
gains being in the high single digits. No, we won’t see a 35% increase in the
U.S. like what was experienced last year (which was off of very low activity in
2021), but a decent gain seems likely in 2023, enough to get close to 2019’s
levels. Internationally, where last year’s level bounced back in the low two
digits on a percentage basis, we think that activity will be a bit ahead of the
U.S. pace and not far from 2022’s rate of increase.
A return of
greater exploration work is a trend that’s beginning to show in the data for
2023. That’s a welcome change from the dearth of exploration experienced in the
past several years. So, stay tuned for our full forecast in the February issue.
We expect to have some good news to share.
hypocrisy. In an
annual spectacle, the world’s business and political elite class again reminded
us that we should “do as they say, not as they do.” Despite expressing concern
about the environment and climate change during the World Economic Forum, held
during Jan. 16-20 (as they did in previous years), the attendees again made a
mockery of their policy stands by flying into Davos, Switzerland (site of the
event), in a multitude of private jets. Never mind that to reduce carbon
footprints, some of these flights could have been replaced by riding Europe’s
excellent rail systems or, in a few cases, traveling over relatively short
distances by private car.
But common sense is overruled
by entitlement and arrogance from this bunch. Indeed, research compiled by Dutch
environmental consultancy CE Delft found twice as many private jets flew to and
from airports serving Davos during the 2022 WEF meeting, compared with an
average week of traffic. Similar activity was expected during the 2023 WEF. The
carbon dioxide emissions from those extra flights in 2022 were equal to putting
roughly 350,000 gasoline-powered cars on the road for the same week-long
CE Delft study found that among 1,040 private jet flights in or out of airports
near Davos, 53% were shorter than 466 miles and 38% were under 310 miles. The
shortest flight was estimated at only 13 mi—wouldn’t this have been easier by private
of this year’s WEF attendees are characters previously mired in private jet
travel controversies—U.S. Special Presidential Envoy for Climate John Kerry and
former U.S. Vice President Al Gore. True to form, they both spewed bombastic
and, at times, somewhat weird rhetoric. “When you start to think about it, it’s
pretty extraordinary that we—a select group of human beings because of whatever
touched us at some point in our lives—are able to sit in a room and come
together and actually talk about saving the planet,” said a starry-eyed Kerry
on Jan. 18. “I mean, it’s so almost extraterrestrial to think about ‘saving the
Gore (Fig. 1) ranted and raved about what he thinks are insufficient
efforts to rescue the planet. “We’re still putting 162 million tons [of GHGs]
into it (the atmosphere) every single day, and the accumulated amount is now
trapping as much extra heat as would be released by 600,000 Hiroshima-class
atomic bombs exploding every single day on the earth,” declared Gore. “That’s
what’s boiling the oceans, creating these atmospheric rivers and the rain
bombs, and sucking the moisture out of the land, and creating the droughts, and
melting the ice, and raising the sea level, and causing these waves of climate
remember, folks—the good Mr. Gore is the same bombastic narcissist that once
predicted there was a 75% chance that the entire north polar ice cap would
likely be gone by 2016.
energy mess. You
have to feel for the citizens of the United Kingdom. When it comes to energy,
their political leaders are just plain incompetent. After all, current Prime
Minister Rishi Sunak is the same character who, as Chancellor of the Exchequer
under former PM Boris Johnson, imposed the windfall profit levy that operators
are still dealing with, and there is no sign that it will be lifted.
tempting as it might be to wish for the Conservative Party to be swept out of
power, an alternative Labour Party regime would be even worse for oil and gas.
This reality was on full, chilling display, when Labour Leader Keir Starmer (Fig. 2) participated
in a WEF panel at Davos and basically declared that if his party gains control
of the government, there will be no more oil and gas investment.
One has to
wonder whether Mr. Starmer has a gas stove in his house….
The GOP’s needless Speaker debacle. Just when the E&P
industry and its associations were looking forward to working with the new
Republican majority in the U.S. House to curb the Biden administration’s anti-oil-and-gas
agenda, the new session was hijacked by a small band of insolent, petty GOP
members. Demanding that Speaker-to-be Kevin McCarthy give in to their list of
demands, this group subjected their party, and the country, to 15 rounds of
balloting for the Speaker’s chair until they got their way.
McCarthy finally prevailed in the wee hours of Jan. 7, this exercise delayed
the list of issues that the Republican majority intends to address, including
the blocking of Biden’s most onerous anti-industry ideas. Indeed, this editor
communicated with staffers from two industry associations, who expressed great
frustration with this group of GOP holdouts. These members can talk all day
long about how important it was to achieve certain internal rules and
commitments to particular actions, but the general public doesn’t care. The
optics were not good—most of the public only saw a political party that seemed
incapable of running itself, much less the government. Let’s hope that they
continue to get their act together.
DOE finally admits impacts of
Keystone XL cancellation. In their typical operating mode,
when they don’t want to admit something they find distasteful, the Biden
administration quietly released a Department of Energy (DOE) report in late
December—without public announcement—on the impacts of Mr. Biden cancelling the
Keystone XL Pipeline project in January 2021. As we all suspected, the adverse
impacts were considerable. The report states that 16,000 to 59,00 construction
jobs would have been created by the project, with an impact of between $3.4
billion and $9.6 billion. But none of that happened.
The DOE report was mandated by a
plank in the Infrastructure Investment and Jobs Act that Congress passed and
Biden signed in November 2021. The Biden people did their best to keep the
report from being publicized, but word finally leaked out to the offices of Republican
Senators Steve Daines (Montana) and Jim Risch (Idaho) on Jan. 5. The two
senators quickly issued a coordinated reaction to the report’s findings.
“The Biden administration finally owned up to what
we have known all along—killing the Keystone XL pipeline
cost good-paying jobs, hurt Montana’s economy and was the first
step in the Biden administration’s war on oil and gas production
in the United States,” said an obviously aggravated Daines. “Unfortunately,
the administration continues to pursue energy production anywhere but the United
An equally agitated Risch stated that “the Department
of Energy finally admitted to the worst kept secret about the Keystone
Pipeline: President Biden’s decision to cancel the Keystone XL Pipeline
sacrificed thousands of American jobs.” He noted that “to make matters worse,
his (Biden’s) decision moved the U.S. further away from energy independence and
lower gas prices at a time when inflation and gas prices are drastically
impacting Americans’ pocketbooks.”
Grant gets a promotion. During December 2022, the U.S. Congress passed the
James M. Inhofe National Defense Authorization Act for Fiscal Year 2023, and
President Biden signed it into law on Dec. 23.
The bill’s primary purpose is to authorize appropriations for Fiscal
Year 2023 for military activities of the Department of Defense, for military
construction, and for defense activities of the Department of Energy, plus
But what most people
don’t know is that a passage in this Act authorizes the posthumous promotion of
Union Civil War commanding general and former President Ulysses S. Grant to the
unique rank of “General of the Armies” of the U.S. Thus, Grant becomes just the
third officer to receive this rank. The others are John Pershing, who was
promoted to the rank in 1919 and George Washington, who received a posthumous
promotion in 1976.
This General of the
Armies rank is higher than the World War II five-star grade of “General of the
Army” given to several officers, as well as the five-star “Fleet Admiral” rank
given to several admirals. While one would think that this rank equates to six
stars, no official insignia has ever been instituted. WO
IN THIS ISSUE
focus: Hydraulic Fracturing. In
this month’s lead theme, an author from Universal Pressure Pumping discusses
how casing optimization through predictive
analysis optimizes fracing efficiency. He says that several factors can be
adjusted in a hydraulic fracturing job design to positively affect efficiency
and cost. Meanwhile, an author from Future Market Insights says the outlook for
shale gas fracing in the U.S., Canada and China is on the upswing, given that
technology advances continue to create greater access to abundant supplies.
Managed pressure drilling.
In a Weatherford article, authors say that approximately 40%
of NPT is caused by unplanned issues related to wellbore pressure. Operators
can solve many of these problems by applying an MPD-optimized rotary steerable
BHA to lower costs and increase safety. In a second feature, a Petrofac expert describes
successfully drilling ERD development wells by slot recovery in a depleted
field utilizing MPD offshore Malaysia.
G&G technology. In this feature, a Pan
American Energy author, along with a consulting geophysicist, explains how reflection seismic continues to be useful in
the oil and gas industry, but it can also be applied to help optimize
alternative energies. These include searching for lithium and geothermal and
determining areas for carbon sequestration and subsequent monitoring.