Google, Microsoft, and Amazon have been very vocal about their efforts to reduce the world’s dependence on fossil fuels. But as the Wall Street Journal and Gizmodo have reported, these same companies are currently teaming up with the fossil fuel industry to help them squeeze as much oil and gas out of the ground as possible.
Oil has always been hard to find and hard to extract, and so the industry has teetered precariously on the edge of profitability several times throughout its history. Over and over again, experts have predicted that we’ll soon run out of accessible, affordable oil — but so far, they’ve been wrong. Just when things look bleakest for black gold, new technology swoops in to keep the industry afloat.
In the early days, that technology came in the form of better drills and pumps. As we explain in the video above, today’s technological savior is artificial intelligence. Computer algorithms that perpetually improve themselves can automate the discovery of new reserves and streamline fossil fuel extraction — a big boost for companies that now have to compete with wind and solar.
In 2018, the oil and gas industries spent an estimated $1.75 billion on AI — a sum that is projected to balloon to $4 billion by 2025. To get their piece of that pie, big tech companies are developing AI for oil companies, even as they publicly celebrate their sustainable initiatives.
We reached out to Google, Amazon, Microsoft, and Total for comment on this piece. None of them responded.
Oil prices spiked after U.S. air strikes in Iraq killed a top Iranian commander, heightening geopolitical tensions.
Iranian Major-General Qassem Soleimani, head of the elite Quds Force and top Iraqi militia commander Abu Mahdi al-Muhandis were killed early on Friday in a U.S. air strike on their convoy at Baghdad airport, the Pentagon said
While equity markets turned lower, oil prices surged on news of Soleimani’s death, with global benchmark Brent crude shooting 3.02% higher to $68.25 per barrel and U.S. West Texas Intermediate crude jumping 2.75% to $62.86 per barrel.
News of the strikes came after U.S. Defense Secretary Mark Esper said on Thursday there were indications Iran or forces it backs may be planning additional attacks after Iranian-backed demonstrators hurled rocks at the U.S. embassy in Baghdad following American strikes on Sunday against bases of the Tehran-backed Kataib Hezbollah group.
Esper warned that the “game has changed” and it was possible the United States might have to take preemptive action to protect American lives.
In currency markets, the dollar weakened as investors snapped up safe-haven Japanese yen but was flat against the Euro. The dollar index, which tracks the dollar against a basket of six major rivals, was down 0.09% at 96.758.
U.S. energy regulators approved Tellurian’s request to start site preparation work at its proposed $27.5 billion Driftwood LNG export project in Louisiana.The U.S. Federal Energy Regulatory Commission (FERC) said Driftwood could start vegetation clearing and grading, demolition and removal of existing buildings, and dredging of marine berths, among other activities.
The company plans to source natural gas from the Permian Basin to Driftwood via its proposed Permian Global Access Pipeline (PGAP), Tellurian said drew strong interest during an open season from West Texas natural gas producers seeking delivery to the rapidly growing natural gas market in Southeast Louisiana.
The $3.7 billion PGAP is a proposed 625-mile, 42-inch interstate natural gas pipeline originating at the Waha Hub in Pecos County, Texas, and terminating at Gillis, Louisiana, north of Lake Charles, Louisiana. Construction could begin as early as 2021, and the project could begin service as early as 2023 with a capacity of 2 Bcf/d.
PGAP is one of three proposed pipelines that would comprise the estimated $7.3 billion Tellurian Pipeline Network, which is integral to its planned $15.2 billion Driftwood LNG export project near Lake Charles.
The pipeline network also includes the proposed Haynesville Global Access Pipeline (HGAP) and the Driftwood Pipeline. HGAP would be a 200-mile, 42-inch pipeline with capacity to transport 2 Bcf/d to the same interstate pipelines near Gillis. The 96-mile, 48-inch Driftwood Pipeline would provide 4 Bcf/d transport from Gillis to the Driftwood LNG facility.
“With FERC’s approval, we are doing some preliminary work on the site,” Tellurian spokeswoman Joi Lecznar said in an email, noting “we have progressed to completing over 27% of our engineering, and we have ordered some equipment in order to prepare for construction.”
Driftwood is designed to produce 27.6 mtpa of LNG or about 3.6 Bcf/d of natural gas. Tellurian has said it plans to start building the liquefaction plant in early 2020 and produce the first LNG from the facility in 2023.
Driftwood is one of about a dozen LNG export projects in North America that said they could decide to build their plants in 2020. Together those plants, which analysts said will not all be built, would produce over 160 mtpa of LNG.
Several of those projects, including Driftwood, had previously said they could make that final investment decision in 2019.
The U.S.-China trade war and a global oversupply of the fuel that caused gas prices in Europe and Asia to fall made it difficult for several LNG developers to sign enough long-term customer agreements this year. Those agreements are needed to secure financing for their billion dollar projects.
Total world demand for LNG reached a record 316 mtpa in 2018 and is projected to soar by around 100 mtpa by 2023, according to the U.S. Energy Information Administration.
Unlike most proposed U.S. LNG export projects that will liquefy gas for a fee, Tellurian is offering customers the opportunity to invest in a full range of services from production to pipelines and liquefaction.
(Reuters) — The U.S. Federal Energy Regulatory Commission (FERC) on Thursday approved the construction of four proposed liquefied natural gas (LNG) export facilities in Texas totaling about 6.2 billion cubic feet per day (bcfd) of capacity.
The projects are NextDecade Corp’s (NEXT.O) 3.6-bcfd Rio Grande, Cheniere Energy Inc’s (LNG.A) 1.5-bcfd Corpus Christi Midscale, Exelon Corp’s (EXC.O) 0.8-bcfd Annova LNG Brownsville and Texas LNG’s 0.3-bcfd Brownsville.
One billion cubic feet is enough gas to supply about 5 million U.S. homes for a day.
“The Commission has now completed its work on applications for 11 LNG export projects in the past nine months, helping the United States expand the availability of natural gas for our global allies who need access to an efficient, affordable and environmentally friendly fuel for power generation,” FERC Chairman Neil Chatterjee said in a release.
The three Brownsville proposals (Rio Grande is a Brownsville plant) are to build greenfield projects along the Brownsville Ship Channel to receive gas from the nearby Permian and Eagle Ford shale basins and have faced concerns from environment and safety advocates.
To gain approval, the Brownsville projects have taken steps like pledging land for the preservation of endangered big cats – jaguarundis and ocelots – that live in the South Texas area.
All four of the projects approved Thursday have applications pending before the U.S. Department of Energy seeking authorization to export gas to countries without free trade agreements with the United States, FERC said.
They are just four of more than four dozen LNG export projects under development in the United States, Canada and Mexico.
Including the projects under construction, U.S. LNG export capacity is expected to rise to 6.9 bcfd by the end of 2019 and 9.6 bcfd by the end of 2020 from 6.8 bcfd now.
That keeps the United States on track to become the third biggest LNG exporter in the world in 2019, behind Qatar and Australia, and the biggest supplier of the fuel in 2024.
So far this year, FERC has approved projects proposed by Venture Global Calcasieu Pass LLC; Driftwood LNG LLC; Port Arthur LNG LLC; Gulf LNG; Eagle LNG Partners Jacksonville LLC; Venture Global Plaquemines LNG LLC; and Freeport LNG’s Train 4 Expansion Project.
In addition, FERC said four projects are now pending before the
MACKINAW CITY, Mich. (AP) — Enbridge Inc. said Monday that it retrieved a 45-foot steel rod that was resting against an underwater oil pipeline where lakes Michigan and Huron converge.
The debris had been at the bottom of the Straits of Mackinac since September, when aborehole collapsedduring geotechnical work in advance of the construction of a tunnel to surround the Line 5 pipes. Enbridge deployed a remote-operated vehicle to remove the rod on Saturday night, said spokesman Ryan Duffy.
“Favorable weather conditions at the Straits in recent weeks prevented the water from icing over, providing Enbridge a window of opportunity to complete this work,” he said.
The rod had moved from its original position near the pipeline and was found resting on the west leg. It never posed a safety or environmental risk to Line 5, the water or ship traffic, Duffy said.
Enbridge Energy had been collecting rock and soil samples, which it finished Sept. 12 thePetosky News-Reviewreported. But the company did not report the incident to Michigan Department of Environment, Great Lakes and Energy until Nov. 19, according to documents obtained by the newspaper.
The collapse also caused a long piece of drill rod to become lodged beneath the lake bed, and a piece of the equipment to fall on top of the lake bed.
The tunnel would enclose the Straits of Mackinac’s portion of the 66-year-old pipeline, which is also known as Enbridge Line 5. It runs from Superior, Wisconsin to Sarnia, Ontario.
Ryan Duffy, Enbridge spokesman, said the two-months span between the date of the incident and the report were spent determining the best way forward.
PIPELINE PROJECT SPOTLIGHT
Phillips 66, Bridger Pipeline
Project includes construction of an oil pipeline from the Bakken and Rockies production areas to Corpus Christi, TX
The Associated Press has learned that the FBI has opened an investigation into the process by which Pennsylvania Governor Tom Wolf’s administration issued construction permits for the Mariner East Pipeline project.
All three spoke on condition of anonymity because they said they could not speak publicly about the investigation.
The focus of the agents’ questions involves the permitting of the pipeline, whether Wolf and his administration pressured environmental protection staff to approve construction permits and whether Wolf or his administration received anything in return, those people say.
The Mariner East pipelines are owned by Texas-based Energy Transfer LP and the construction is estimated to cost $3 billion. Energy Transfer says it is the largest investment of private money in Pennsylvania history.
Wolf’s administration declined comment on the investigation Tuesday. In the past, Wolf and his administration have said the permits contained strong environmental protections and that the Department of Environmental Protection wasn’t forced to issue the permits.
An Energy Transfer spokeswoman said the company had not been contacted by the FBI about the Mariner East.
The chief federal prosecutor in Harrisburg, PA, U.S. Attorney David Freed, declined comment.
Wolf has said that the pipeline’s economic benefits would outweigh the potential environmental harm, and that the Mariner East would be part of a distribution system that the industry needed.
The state’s building trades unions have seen a huge influx of work on the Mariner East pipelines and Marcus Hook. Exploration firms drilling in the booming Marcellus Shale and Utica Shale fields shipping natural gas liquids through Mariner East pipelines and Marcus Hook have helped the U.S. become the world’s leading ethane exporter.
The roughly 300-mile (480-kilometer) Mariner East 1 was originally built in the 1930s to transport gasoline westward from Marcus Hook. It was renovated and, in 2014, began carrying natural gas liquids eastward to the refinery from southwestern Pennsylvania’s drilling fields.
Construction permit applications were submitted in 2015 for two wider pipelines, the 350-mile-long (563-kilometer) Mariner East 2 and 2x, designed for the same purpose, but stretching farther, through West Virginia’s northern panhandle and into Ohio.
Both were projected to be open in 2017. But Mariner East 2 began operating in late December, and Mariner East 2X could be complete in 2020.
Residents of neighborhoods near the planned route have expressed safety concerns about the pipeline.
County and state prosecutors are also investigating the pipeline.
Chester County’s district attorney, Tom Hogan, opened an investigation last December. In March, Pennsylvania’s attorney general, Josh Shapiro, said his office had opened an investigation on a referral from Delaware County’s district attorney.
At the time the permits were issued, Wolf denied applying pressure to approve the pipeline permits. Rather, he said he had simply insisted the department stick to its own timeline to consider them and that he believed the department had done its due diligence.
Requests from environmental opposition groups to halt construction was denied, but they did win additional protective steps in a settlement.
In depositions and internal documents that became exhibits in the appeal, department employees said the schedule to consider the applications had been sped up, but none said they had been forced to approve permits over their objections.
NEW YORK (Reuters) — BP Midstream Partners LP is considering expanding its Mars crude oil pipeline to accommodate new volumes from offshore oil fields, Chief Financial Officer Craig Coburn said on Tuesday.
The Mars pipeline, which has a mainline capacity of about 400,000 bpd, would potentially be expanded to ship increased crude volumes from Gulf of Mexico fields such as Vito and Power Nap, Coburn told analysts and investors on the company’s third quarter earnings call.
More details about any plans will be given early next year, Coburn said. BPMP owns a 28.5% interest in Mars, according to its website.
BP Midstream’s total third quarter pipeline gross throughput was more than 1.6 million barrels of oil equivalent per day, slightly lower than the previous quarter, Coburn said.
The decline was due, in part, to disruptions in service caused by Hurricane Barry in July.
Caesar, a crude oil pipeline, Cleopatra, which carries natural gas, and the Ursa oil pipeline all reported lower throughput for the quarter due to the hurricane and maintenance activity by offshore producers, Coburn said.
The gross throughput impact of Barry was approximately 100,000 barrels per day of oil equivalent, he added.
Offsetting the disruptions was record throughput on the BP 2 pipeline, Coburn said. He said throughput on the pipeline during the third quarter was a record 316,000 barrels per day, the highest achieved on BP 2 since its initial public offering.
“We expect pipeline gross throughput in the fourth quarter to be higher than first quarter,” Coburn said.
(Reuters) — Enbridge Inc, said on Friday it plans to seek the Canada Energy Regulator’s approval to auction off rights to ship crude on its Mainline system, more than a month after the watchdog said the company will not be allowed to offer contracted space on the pipeline to shippers.
In a highly unusual move, the regulator halted the auction after major producers in the country protested Enbridge’s plans to switch to longer-term contracts from monthly allocation.
Enbridge, which also reported better-than-expected third quarter profit on Friday, said it expects to place the Canadian portion of the Line 3 replacement into service on Dec.1 after delays due to tribal and environmental challenges.
Line 3 is part of Enbridge’s Mainline network that transports western Canadian oil to Midwest refineries and the replacement project would double capacity to 760,000 barrels per day, providing much-needed relief from congestion on existing Canadian pipelines.
The company had earlier reached a deal with crude shippers for an additional charge till the U.S. portion of the Line 3 oil pipeline is completed.
The company also said on Friday it expects several of its growth projects to be operational in 2019, including the $700-million Gray Oak pipeline – the biggest of three new pipelines connecting the U.S. Permian basin to the Texas Gulf Coast.
Canada’s oil producers are desperate for new export pipelines as rising production and tight capacity on existing pipelines and rail have led to the Alberta government curtailing output.
The company’s adjusted profit of 56 Canadian cents per share in the third quarter, beat analysts estimate of 52 Canadian cents as it moved 5% more crude on its Mainline system.
Net income attributable to common shareholders was C$949 million ($719.43 million), or 47 Canadian cents per share, in the three months ended Sept. 30, compared with a loss of C$90 million, or 5 Canadian cents per share, a year earlier.
The year-ago quarter included some charges, including a non-cash expense of C$1.02 billion.
(Reuters) — U.S. oil export terminal operator Moda Midstream LLC said on Thursday it has begun to enhance its Moda Ingleside Energy Center (MIEC) in Ingleside, Texas, to allow the docking of larger-sized vessels and is considering a new pipeline as well.
Moda has begun structural enhancements and dredging to Berth 5 and improvements to Berth 4, which will allow for the docking of Suezmax class vessels and Very Large Crude Carriers (VLCCs), respectively, the company said in a statement.
The company said it was evaluating construction of an additional pipeline called the Moda Ingleside Express Pipeline, which would be bi-directional and run between MIEC and Moda Taft Terminal, located in Taft, Texas.
MIEC receives crude from the Cactus Pipeline, the Cactus II Pipeline and the EPIC Crude Oil Pipeline, while the Taft Terminal is connected to the EPIC Crude Oil Pipeline and Moda’s 20-inch pipeline between the Inner Harbor and MIEC, the statement said.
BROOMFIELD, Colo. (CBS4)– It has been a tough year for the oil and gas industry as presidential candidates call for a ban on fracking and the state legislature overhauls regulations. But one Colorado operator is leading the way in the new world.
Extraction Oil and Gas company began implementing cutting-edge mitigation techniques long before the new law which prioritizes health and safety.
“We have to really bring it,” said Brian Cain with Extraction. “As oil and gas companies we have to step-up.”
Cain said Extraction has the most at stake as a Colorado-only operator. The company was one of the first to switch from diesel power to electric.
“It’s a step change for our industry. It runs basically like a Tesla,” said Cain.
The change eliminates the smell and noise associated with diesel generators, but the company didn’t stop there. It erected sound walls and a berm around its drilling pad and began using a special synthetic drilling mud to eliminate the odor of oil and gas.
“Part of what we wanted to do is make our operations as little impact as possible.”
Which is why the company does extensive air monitoring and water testing as well.
“Here in Broomfield, we actually agreed to water testing that is above and beyond the law.”
Cain said they also signed a contract with Broomfield to do 24-7 air monitoring, measuring 50-60 chemicals at a time.
“As part of our operator agreement, we give money to the City and County of Broomfield and let them do their own air monitoring and that way we’re maximizing the credibility. They have an independent third party air consulting firm conducting it. They’re experts. Everything we’ve seen is well below any levels of concern, well below. So we’re very excited about that and we think that’s a game changer for Colorado. It’s important to be adaptable and that’s what you have to be in the new world here.”
Despite all the best practices Extraction has in place, Broomfield City Councilwoman Guyleen Castriotta says they still get complaints about odor, construction noise and health concerns. For her, like many opponents of oil and gas, no level of mitigation is enough. She said her goal is to ban drilling in residential areas.
But the director of the Colorado Oil and Gas Conservation Commission, which is charged with implementing the new law, says his goal is to mitigate the impacts to the extent possible while allowing drilling to continue.