Monthly Archives: June 2010

The `name that BP disaster’ contest

I received an email from a reader today who’s an engineer and who has done worked for energy companies. He took issue with repeated references to BP’s disaster in the Gulf of Mexico as an “oil spill.”

AP

He has a point. This is a leaking well, spewing an ongoing flow of oil into the water, resulting in a large and growing slick contaminating one of the most important waterways in the Western Hemisphere. But that’s a rather verbose description. 

His suggestion: “It should have been called an oil well blowout and drillship explosion and sinking and a grave loss of human life and a pending ecological and financial disaster.”

That’s also a little wordy.  

“Disaster” is concise, and certainly captures the scope of the problem, but it’s not very specific. Same with “BP’s oil disaster.” Given BP’s history, that doesn’t narrow it down enough.

So rather than continue to wrestle with this myself, I’m asking for help. Submit your ideas in the comment section below. Who knows? Your term could be featured in a future column or blog post.

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Schlumberger: Initial impact of drilling moratorium uncertain

The deepwater drilling suspension in the Gulf of Mexico will affect Schlumberger’s ongoing business activities as customers wind down affected operations, Chairman Andrew Gould said in a statement yesterday. The oilfield services company attributed about 3.5 percent of its revenue last year to business in the Gulf of Mexico. WesternGeco Gulf of Mexico revenue amounted […]  More »

Chron Energy Newslinks | 06.11.10 | BP dividend still in limbo. EPA offers the 'audit option.'

• Oil spill rate grows along with public anger. • BP rejects talk of Chapter 11. • Dividend decision not final, says Hayward. • Obama visits with families of dead rig workers. • New Orleans oyster house victim of the spill. • Support from board, other businesses may not be enough to save Hayward. • […]  More »

Gazprom assessing South Stream technical issues

June 11,2010 –Gazprom has completed engineering and reconnaissance surveys in the Black Sea for the South Stream pipeline project to take gas from Russia to central and southeastern Europe…..  More »

Don't like BP in the U.S.A? How about CNOOC?

Is there anything the American public dislikes more these days than BP drilling for oil and owning refineries on U.S. soil? How about Chinese-government-controlled firms drilling here and owning refineries? It could happen, reports Bloomberg: PetroChina Co., vying with Exxon Mobil Corp. as the world’s biggest company by value, would have “persuasive” reasons to seek […]  More »

Map of spill, June 11

Spill, June 11  More »

Bugs to bucks: Microbes make biochemicals

It was no small feat getting common microbes to produce biochemicals from cheap, green and plentiful sources in the lab, but Houston-based Glycos Biotechnologies thinks it may have hit the jackpot by getting them to do it in a large scale, commercial-size facility.

The 2½-year-old firm, whose 13 scientists have been quietly toiling on the microbial technology in a small lab off Washington Avenue, recently announced it had produced lactic acid and advanced ethanol in a plant in Hempstead capable of producing 40,000 gallons a year.

That takes the start-up biotech firm an enviable step closer to commercializing its technology of producing high-value biochemicals from non-sugar-based feedstocks in a short amount of time.

Rich Cilento, the company’s CEO, said the firm will be announcing several joint ventures to bring the technology to Latin America. In May, the company said it is expanding in Malaysia, partnering with Malaysian biotech firm, Bio-Xcell Snd. Bhd., to build a new biochemical plant and research facility.

Construction of the plant begins in the third quarter.

The company’s business plan and technology can support the production of 20,000 metric tons of biochemicals, though long-term plans double that capacity.

“We’re moving quite rapidly, and we’re happy with our success,” said Cilento, whose entrepreneurial portfolio includes founding FuelQuest, a prominent energy supply chain technology and consulting company. He began his career as a space shuttle flight controller at NASA in the late 1980s.

The rapid success of Glycos Biotechnologies, which calls itself GlycosBio for short, underscores the push by clean-tech start-ups to position themselves at the forefront of the emerging biochemicals market. It seeks to replace petroleum-based ingredients with renewable ones to make chemicals used in a vast array of consumer goods.

As the U.S. presses forward to find cleaner-burning motor fuels, much of the same technology is being repurposed or extrapolated to also make high-value clean chemicals, said Mike Rosenberg, vice president of business development at OPXBIO in Boulder, Colo.

The fuel market remains the big prize, but biochemicals can provide companies a revenue stream until the market for renewable fuel improves through better technology and stronger demand, Rosenberg said.

Renewable chemicals

Jim Lane, editor and publisher of Biofuels Digest, said many venture capital sources are investing in renewable chemicals, at least in the near term, because chemicals generally sell for higher prices than fuels.

Dan Watkins, a managing director at Houston-based venture capital firm DFJ Mercury, which invested $5 million in Glycos along with Draper Fisher Jurvetson of Menlo Park, Calif., said that as the cost of petrochemical feedstocks continues to rise, industry will be looking to biochemical technology as a low-cost, high-margin alternative.

“Because prices are increasing on petrochemical feedstocks and because of the energy-intensive nature of the petrochemical production, we think that the economics of biological production are going to be increasingly profitable,” Watkins said. “Anecdotal evidence of this shift is that we are seeing a number of traditional petrochemical companies that have started to explore biological production.”

Using technology developed by Dr. Ramon Gonzalez at Rice University, Glycos is genetically engineering common microbes to digest glycerin, a low-value waste from biodiesel production, as opposed to higher-cost sugar-based sources more broadly in use by clean tech companies. Through a fermentation process, the microbes produce the desired chemicals.

Cilento said the technology easily can be added on to existing biodiesel plants to convert those waste streams into advanced ethanol or other chemicals.

“The feedstock is very cheap and economical. If you can get large volumes of it, then you can make very large volumes of very high-valued chemicals,” Cilento said.

International interest

Cilento said the technology is drawing the attention of investors in some Latin American countries that now produce biodiesel from soybean, grape seed and other plant oils and sell or discard the glycerin byproduct. Part of the attraction is that it also offers the option of making ethanol in countries that don’t have their own crude oil reserves, he said.

Malaysia is one of the biggest exporters of palm oil in the world, making the company’s technology a perfect fit, the company said in a news release.

Although Houston is not a biotech hotbed like California’s Silicon Valley or Boston, Cilento said he believes other firms will launch in the area as the sector gains more of a toehold commercially and attracts greater interest from the traditional energy industry centered here.

The area is home to the largest chemical-producing complex in the country, infrastructure that eventually could be used to distill and refine biochemicals on a large scale.

It also has a highly skilled labor force of engineers, microbiologists and chemists who work in the petrochemical and medical industry.

“It makes perfect sense to have this company here now, diversifying away from the petrochemical industry, which is under pressure internationally,” Cilento said.

monica.hatcher@chron.com

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Senators push to boost corporate liability in spill lawsuits

Widowed spouses and other family members of the 11 men killed on the Deepwater Horizon drilling rig threw their support Thursday behind legislation that would tighten corporate liability laws in response to the disaster. About 20 of the family members appeared in a Capitol Hill news conference to tout the measures Thursday, hours after meeting […]  More »

Senate rejects move to block EPA regulation of CO2

The Senate on Thursday defeated a Republican-backed proposal that would block the Environmental Protection Agency from regulating carbon dioxide and other greenhouse gases emitted from refineries, automobiles and power utilities. The measure was turned back in a 53-47 procedural vote, after roughly six hours of spirited debate over who should be in control of the […]  More »

Another possible BP suitor: the Chinese

Despite today’s 12 percent surge, speculation continues to swirl around BP that its swooning stock will leave it vulnerable to a takeover. Another major such as Exxon Mobil or Shell, which has danced with BP at least twice before, are seen as the most likely buyers.

But this article from the Guardian raises another possibility: PetroChina, the Chinese national oil company. PetroChina bought a 2 percent equity stake in BP in 2004, after BP took a position in PetroChina when the Chinese sold some shares to the public a decade ago.  

At this point, the Chinese may simply be trying to cut their losses.

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BP execs summoned to meet with Obama

The White House just summoned BP executives to meet with President Barack Obama and top administration officials next Wednesday. Ret. Coast Guard Adm. Thad Allen issued the invitation in a letter to BP Chairman Carl-Henric Svanberg. “As part of our ongoing communication, I request that you and any appropriate officials from BP meet with senior […]  More »

Flow rate estimate reaches at least 20,000 barrels a day

Teams of scientists have once again upped their estimates of the amount of oil spewing from BP’s well in the Gulf of Mexico, federal officials announced today — although the startling new numbers don’t account for the portion of the oil now being collected and piped to surfaced tanks. The estimated total flow from the […]  More »

Oil spill kills century-old French Quarter oyster co.

Tourists wandering the French Quarter are accustomed to waiting on epiclines at oyster houses whose shuckers serve up the fruits of the Gulf. Those lines may dwindle — and those shuckers lose their jobs — as the oil leaking from BP’s Macondo well continues to damage oyster beds. One early victim: P&J Oyster Co., a […]  More »

Oil settles above $75 on improving economic news

NEW YORK — Oil prices topped $75 a barrel today following reports that China’s economy is still booming and U.S. jobless claims fell.

Motorists found pump prices lower again, as retail gasoline prices continued to slide across much of the country.

Benchmark crude for July delivery rose $1.10 to settle at $75.48 a barrel on the New York Mercantile Exchange.

China reported exports and imports rose more than 48 percent each in May, reassuring investors that the country’s economy was not being slowed significantly by Europe’s debt problems.

The U.S. Labor Department said jobless claims fell to 456,000 last week. Total claims fell by the largest amount in nearly a year.

Stock markets surged on the bullish economic news. The Dow Jones Industrial Average rose around 235 points, or 2.4 percent. The NASDAQ and the S&P 500 were up by about as much. Energy stock rebounded, including BP, which was up more than 10 percent after falling 16 percent on Wednesday.

The International Energy Agency today raised its forecasts for global oil demand this year, citing stronger than expected economic activity in developed economies. The IEA, based in Paris, boosted its estimate by 60,000 barrels to 86.4 million barrels a day. That’s a 2 percent increase from 2009.

The glowing trade news from China, as well as strong economic reports from Japan and Australia, helped the euro gain against the dollar. Commodities like oil are priced in dollars, so holders of foreign currencies find them less appealing with a stronger dollar.

Cameron Hanover said oil prices could be heading higher. “A good break and finish above $75.75 would point prices higher,” the energy consultancy said in a note to investors, adding: “Of course, this could all be part of a larger move sideways before prices sell off again.”

Retail gasoline prices fell 0.7 cent on Thursday, to $2.706 a gallon. That’s down 19.5 cents from a month ago. The price is 7.9 cents above year-ago levels.

The Energy Department’s Energy Information Administration said in its weekly report that natural gas inventories grew more than expected, up by 99 billion cubic feet to 2.456 trillion cubic feet for the week ended June 4. Analysts expected an increase of 91 billion to 95 billion cubic feet, according to a survey by Platts, the energy information arm of McGraw-Hill Cos.

Natural gas lost 3 cents to settle at $4.647 per 1,000 cubic feet.

In other Nymex trading in July contracts, heating oil rose 2.32 cents to settle at $2.0328 a gallon, and gasoline gained 3.08 cents to settle at $2.0582 a gallon.

Brent crude gained $1.02 to settle at $75.29 a barrel on the ICE futures exchange.

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EPA changes may force strict permits on Texas plants

AUSTIN – The battle over Texas’ air quality took another turn today, when the U.S. Environmental Protection Agency proposed a program for companies to convert the flexible permits issued by the state to standard permits regulating pollution.

“EPA’s responsibility is to ensure that the program in Texas complies with the public-health protections provided for all Americans in every other state under (the) nation’s Clean Air Act. EPA is taking another important step to address deficiencies in the state’s air operating permit program by proposing an audit program to help companies with Texas flexible permits obtain an air permit that meets the protections of the Clean Air Act,” the federal agency said on its Web site in announcing the program.

The program will be published in the Federal Register later in June, launching a 15-day public comment period.

Flexible permits set an air emissions cap for an entire facility but allow leeway for various units within that facility. Federal regulators and environmental groups say that type of permit, never federally approved, hinders enforcement of clean-air rules.

Federal regulators and environmentalists say the permits hamper regulation of air quality. GOP Gov. Rick Perry and businesses have defended the system. Perry has struck back fiercely at the federal government, saying the EPA is cracking down on Texas despite what he describes as its program’s success and without good reason.

The Texas Commission on Environmental Quality said in a statement, “While we support innovative approaches, we do have concerns with the efficiency of the audit concept and how it would overlap the state’s permitting processes. We look forward to studying the proposal and seeing subsequent comments. “

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