The Oil Messand what we can do about it

Set The Stage – What We Use

Primary Energy

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What We Use It For

Products from a Barrel of Oil

Gasoline43%

Diesel20%

Jet Fuel9%

Lube/Feed Stock16%

Heating Oil8%

LPG4%

Gasoline

Diesel

Jet Fuel

Lube/Feed Stock

Heating Oil

LPG

72 million cars in USA

USA uses 20 MMBOPD,60% Imported

The Cost of Imports

• We consume 20,000,000 bbls/day

• We import about 12,000,000 bbls/day

• At $75.00/bbl this is

• $900,000,000/day we pay some one else for oil.

• ($10,416/second)

The Incentive

• The demand for oil found in our own country is important.• The production rates need to be large to make a dent in daily demand.• Continental shelf off shore has been heavily drilled.

• Deep water off shore has not been explored AND now exploration technology (mainly advances in seismic analysis) makes it possible to locate prospective areas.

• The deep water cost is very high – on the order of $100 million per well.

• But the rewards can be high with discoveries on the order of 20,000,000 bbls recoverable per well (see recovery from BP Thunderhorse Field).

Transocean Deepwater Horizon

Displacement: 58,000 short tonsCompare with Battleship Missouri at 45,000 tons and Aircraft Carrier Nimitz at 105,000 tons.

Drilled deepest commercial oil well in history in Sept. 2009 at a depth of 35,050’ TD in 4,132’ of water, 250 miles SE of Houston.

Immediate Effects

Spreading Effects

Effects

• Actual loss of life.

• The toll on wild life is not immediately calculable.

• Cleaning up 100% of the oil is probably not realistic.

• Temporary loss of fisheries and the jobs that go with them.

• Loss of the resource.

Other EffectsShutting Down Off Shore

• Loss of off shore jobs.

• Loss of support jobs.

• Loss of R/D that made off shore work.

• Loss of roughly 10% of the oil and gas we produce domestically.

How Big is Big?

Rank Site Location Date Tonnes - high end Approx Bbls Approx Gal1 First Gulf War Kuwait - on shore 1/23/91 1,500,000 11,333,413 476,003,3512 Lakeview Gusher Kern, CA - on shore 3/14/1909 1,230,000 9,293,399 390,322,7483 Ixtoc 1 Blow Out Bay of Campeche Mexico 6/3/79-3/23/80 480,000 3,626,692 152,321,0724 Deepwater Horizon oil escaped into sea 4/22-7/15/10 343,470 2,595,123 108,995,1665 Aegean Captain Tanker off Trinidad 7/19/1979 287,000 2,168,460 91,075,3086 Fergana Valley Russia pipeline spill 3/2/1992 285,000 2,153,348 90,440,6377 Nowruz Platform Blow Out Iran off shore 2/4/1983 260,000 1,964,458 82,507,2488 ABT Summer Tanker off Angola 5/28/1991 260,000 1,964,458 82,507,2489 Castillo de Bellver Tanker off S. Africa 8/6/1983 252,000 1,904,013 79,968,563

10 Amoco Cadiz Tanker off France 3/16/1978 223,000 1,684,901 70,765,83211 MT Haven Tanker off Italy 4/11/1991 144,000 1,088,008 45,696,32212 Odyssey Tanker off Canada 11/10/1988 132,000 997,340 41,888,29513 Sea Star Tanker off Iran 12/19/1972 115,000 868,895 36,493,59014 Irenes Serenade Tanker off Greece 2/23/1980 100,000 755,561 31,733,55715 Urquiola Tanker off Spain 5/12/1976 100,000 755,561 31,733,55716 Torrey Canyon Tanker off England 3/18/1967 119,000 899,117 37,762,93317 Exxon Valdez Tanker off Alaska 3/24/1989 34,033 257,140 10,799,881

Some of the Equipment

Some of the Equipment

From BP Report

Possible Path of the Blow Out

Improbable Circumstances

1) The long string can be run and cemented safely.2) The cement will set properly and create a seal.3) The crew will detect leaks and flow from the well and close the

diverters and the BOPS.4) The deadman switch will close the BOPS.5) The ROVS will close the BOPS.6) The BOPS will seal as designed regardless of how they are actuated and

regardless of what is inside them.

What Are Our Choices

• We can import more oil.– Unfavorable shift in balance of trade.– Loss of jobs.– Increase in tanker traffic.– No decrease in emissions.

• Deep water drilling must become more fail safe if it is to continue in US – GOM.– Well control must improve– Spill response must improve– Saves jobs.

• We can shift oil production back into shallow water and on shore.– Massive investment in IOR– Massive investment in shale resource areas– Massive increase in jobs

• We can increase the efficiency of the way we use oil.

Comparison Shopping

Prius – 16.3 mpg/kLb(49.5 mpg)

Impala - 6.6 mpg/kLb(23.5 mpg)

Town & Country -4.7 mpg/kLb (20.5 mpg)

Tahoe – 3.2 mpg/kLb(18 mpg)

Suburban – 3.1 mpg/kLb(18 mpg)

Dodge Ram – 3.2 mpg/kLb(16.5 mpg)

Remember we use 361 million gallons of gasoline every day NOW.LET’S USE LESS.

• Go UT Petroleum Engineers

• HOOK EM