Chevron Leak In Brazil: Charges Focus On Safety

Chevron's Spending Spree:
With Profit Down, a Move to Exploit High-Priced Crude
By Kirsten Korosec (CBS Money Watch)

The prosecutor, Santos de Oliveira, said the ongoing leaks provide evidence of irreversible damage. "There's no way to stop this leak until the reservoir is depleted," he said on Monday. "The seal was cracked and oil will leak until it's gone." Chevron spokesman Kurt Glaubitz said the company responded to the incident responsibly and dealt transparently with all authorities. "The flow of oil from the source was stopped within four days and the company continues to make significant progress in containing any residual oil,"

Lately, I haven't posted much here -- been too busy seeking filthy lucre to pay my bills. But this report from Reuters on the Chevron spill in Brazil snapped me out my labor-induced fugue state. I don't usually re-post stories, but Reuters gives a clear, concise review of events to date worth revisiting. So, see below.

The report reinforces my assumption that these oil guys will do anything to save a buck and get at oil that they should have left alone in the first place. Technology always fails, and if you operate near the margins, it fails sooner and more often. Case in point:

Brazil Chevron oil leak charges to focus on safety
03/19/2012 09:56 PM EDT Copyright 2012 Reuters (link is for updated story)

*Police report alleges Chevron cut safety margins * Chevron says it followed industry drilling norms * Some see charges as unfair, say gov't shares blame By Jeb Blount RIO DE JANEIRO, March 19 (Reuters) - A Brazilian prosecutor plans to allege this week that Chevron and Transocean should not have drilled a deep-water well that leaked in November, legal documents showed, giving a glimpse into expected criminal charges that could slow the rush to develop Brazil's vast offshore oil wealth. The accident cracked geological structures in the reservoir and oil will continue leaking from the field until it is emptied, the prosecutor Eduardo Santos de Oliveira told Reuters in a telephone interview on Monday. The prosecutor's comments expanded on his investigations and police reports being used to assemble criminal indictments against U.S. oil company Chevron, drill-rig operator Transocean, and 17 of their executives and employees. The documents, obtained by Reuters, provided the most detailed look yet at possible causes of the oil leak off Brazil's southern coast. They also outline why prosecutors are seeking criminal charges for what industry watchers note is a relatively small spill at a well that was approved for drilling by Brazilian regulators. "We are in uncharted territory," said Cleveland Jones, a Brazilian oil geologist at the State University of Rio de Janeiro. "Do we want better environmental standards? Yes. Did the environment get really hurt? No. If you applied the same standards to the whole industry, you'd probably have to shut it down, and we aren't applying the same standards to others."

read more...

Authorities on Saturday ordered Chevron's Brazil chief George Buck and 16 others to surrender their passports and remain in the country. Criminal charges could be filed by Wednesday, a spokesman for the prosecutor said. A Brazilian judge will then determine whether to proceed with formal indictments. The pending criminal case, along with a record $11 billion environmental lawsuit the prosecutor launched against Chevron in November, show heightened concern over the safety of Brazil's offshore oil boom in the wake of the 2010 BP oil disaster in the Gulf of Mexico. The Chevron leak was less than 0.1 percent of BP's massive spill and no oil reached shore, raising concern from Chevron and others that the charges may be politically motivated or unfair. Much larger and more damaging spills by Brazilian state-run energy giant Petrobras, which owns 30 percent of the Frade field operated by Chevron where the leak happened, have not led to criminal charges against Petrobras or its executives. Chevron, which says it followed accepted industry practice, sought and received permission last week to shut down production at Frade after finding small, unexplained new leaks in the field that had been producing 61,500 barrels a day. That was down from about 80,000 bpd before the November spill. Brazil's oil regulator, ANP, said on Monday it was studying the new leaks but had found no evidence they were growing in volume. The prosecutor, Santos de Oliveira, said the ongoing leaks provide evidence of irreversible damage. "There's no way to stop this leak until the reservoir is depleted," he said on Monday. "The seal was cracked and oil will leak until it's gone." Chevron spokesman Kurt Glaubitz said the company responded to the incident responsibly and dealt transparently with all authorities. "The flow of oil from the source was stopped within four days and the company continues to make significant progress in containing any residual oil," Glaubitz wrote in an email. Chevron said on Thursday they have no indication that recent leaks in the Frade field are related to the November accident. Natural seeps of oil are common in the Campos Basin, home to the Frade field, and are one of the reasons that oil was discovered in the region, Jones said. The basin is the source of about 80 percent of Brazil's oil. A Transocean spokesman said the company had no immediate comment on the documents. On Saturday, the company said it "has always cooperated with the authorities and will also continue to vigorously defend its people." If the charges are filed as expected, the companies and officials probably face years of legal action. Lawyers have had travel bans lifted while similar cases were being litigated, and few individuals or companies have ever been convicted of environmental crimes in Brazil and fewer have gone to jail. Reuters reported Jan. 26 that Santos de Oliveira was preparing charges. The planned indictments wer e based in part on an investigation by Fabio Scliar, head of the Brazilian Federal Police's Environmental Division in Rio. The well that led to the November leak "should not have been drilled," the report signed by Scliar says. When Chevron drilled into an undersea reservoir, high-pressure oil was able to "kick" and surge into the well. A safety valve on the sea floor prevented the oil from shooting up to the Transocean drill rig on the surface, which would have caused a gusher. Failure at such a valve, known as a blow-out preventer, or BOP, led to the BP disaster. The blow-out preventer trapped the kick pressure in the well, cracking the bare rock of the well bore hundreds of meters below the seabed. Oil seeped through the breech into porous rock and cracks then migrated to the sea floor and up to the surface. This should not have surprised Chevron, Scliar's report said. RECKLESS DRILLING OR MISCALCULATION? Chevron's drilling policy is and environmental licensing documents required it to use a substance known as drilling mud at pressures sufficient to "overbalance" reservoir pressure kicks. Mud removes debris upward and holds oil down during drilling. In the 18 previous wells drilled in Frade, maximum reservoir pressure was between 8.4 and 8.6 pounds per gallon, Scliar said, citing interrogations of Chevron and Transocean officials. Those wells used mud at pressure of 9.2 pounds per gallon, giving the company a 0.4 to 0.6 pounds per gallon "mud window," or safety margin, the police report alleges. In the well that leaked in November, Chevron expected maximum pressure of 9.4 pounds per gallon and used mud with 9.5 pounds per gallon of pressure, the report said. This provided a mud window or overbalance of only 0.1 pound per gallon, a safety margin only a quarter to a sixth of those used in the previous wells, Scliar said in the report. Scliar alleged that this shows Chevron k new the pressure was higher than normal, and used mud with less protection. Chevron used the lower safety margin in the last well because heavier mud might have exerted enough pressure to crack the well bore on its own, according to the report. This, Scliar alleged, shows Chevron was aware of the higher pressure and weaker-than-normal rock but drilled anyway. Buck said Nov. 24 that Chevron acted responsibly. The cracking of the well wall was an unfortunate miscalculation of reservoir pressure and rock strength, a not-uncommon occurrence in a business that works in places inaccessible to humans and beneath thousands of meters of ocean and rock. Paul Bommer, a petroleum engineering professor at the University of Texas at Austin, said Chevron faced a "classic well-design problem." "Normally what happens when the mud window gets this close is people will think of stopping and cementing the well to strengthen it," he said. "This is an area where you have to b e very careful." Cementing would have reinforced the bare rock of the well bore against the pressure from the kick and might have prevented the leak, but it would have cost money and time, Bommer said. Chevron's environmental licenses say the company is supposed to store liquids that can close a problem well aboard platforms. Buck has said it took four days to get mud heavy enough to kill the well from shore because storms made work dangerous. Some say Chevron is not the only one to blame for the leak. Petrobras and Japanese group Frade Japan are minority partners in the field, and Brazil's government approved drilling plans. "I wouldn't be surprised if Chevron is found to have done a bad job," said Ildo Sauer, an oil and gas expert at the University of S達o Paulo and Petrobras' former natural gas chief. "But Chevron got approval for its work at every step. It's a farce to attack on Chevron and let the government, with its bigger responsibility, off the hook."

Bill McKibben & Tar Sands Action: Right On!

worth watching...
Tar Sands Action: Phase I Highllights



everyone can do something to persuade the President not to approve the toxic XL Pipeline...

so do it now: call, write, show up

Toxic Tar Sand Oil Kills

image: Climate Change -- Foreign Policy Blogs

The odds are clearly in favour of the oil sands coalition, which holds enormous political influence and has won major legislative victories on several fronts. But the green coalition, especially with Barack Obama in power, has more clout than its limited resources might suggest.  

This policy war rages as North Americans grow increasingly aware of the huge environmental impacts associated with Canada's oil sands. Those include strip-mined Boreal forests, mass duck graves and sprawling toxic lakes. But most importantly, from a global perspective, are the massive levels of greenhouse gases released each year. Extracting and refining crude oil from the oil sands requires much more energy than conventional operations, generally releasing many times more emissions. Despite recent technological advances, the industry has become Canada's fastest growing source of greenhouse gases. It's also now America's number one source of petroleum, far surpassing Saudi Arabia. Major oil sands expansions -- those planned and underway -- appear set to assure that dependence for decades.

That is a quote from Tyee, "In America's Capital, a Fierce Fight over Oil Sands" -- a story very much worth your time.

While opposition to tar sand oil grows, with so much money flowing into Congressional campaign coffers from the oil industry, the war might be lost, and citizens might need to bow to corporate greed one more time.

Call or e-mail your representatives. Tell them, "No toxic tar sand oil, thanks."

Find your representative here: congress.org

Black gold...or, money for nothin'

priceofoil.org

The US imports too much oil, and sends too much of its treasure to other nations. How much, you ask?

2010 Total Imports of Petroleum
(Top 15 Countries, $100/barrel)

Country	Thousands bbls/day	Millions $$$/day	Billions $$$/year	% of Total
CANADA	2,516	$251.6	$91.83	24.09%
MEXICO	1,263	$126.3	$46.10	12.09%
SAUDI ARABIA	1,090	$109.0	$39.79	10.44%
VENEZUELA	998	$99.8	$36.43	9.55%
NIGERIA	1,037	$103.7	$37.85	9.93%
RUSSIA	626	$62.6	$22.85	5.99%
ALGERIA	503	$50.3	$18.36	4.82%
COLOMBIA	366	$36.6	$13.36	3.50%
ANGOLA	409	$40.9	$14.93	3.92%
VIRGIN ISLANDS	263	$26.3	$9.60	2.52%
KUWAIT	207	$20.7	$7.56	1.98%
ECUADOR	198	$19.8	$7.23	1.90%
BRAZIL	275	$27.5	$10.04	2.63%
UNITED KINGDOM	265	$26.5	$9.67	2.54%
IRAQ	429	$42.9	$15.66	4.11%
Total	10,445	$1,044.5	$381.24	100%

You can draw lots of conclusions from this revealing table, source data courtesy of EIA, "Crude Oil and Total Petroleum Imports."

• First, we send a ton of money to Canada, almost twice as much as we do to Saudi Arabia -- not what most people assume.
• Second, After Canada and Mexico, the list contains a bunch of semi-savory, autocratic, or pseudo-democratic states (Brazil excepted). Do you really want to buy guns for dictators instead of schoolbooks for American kids? Do you really like sitting in traffic breathing exhaust?
• Third, this table reflects our consumption of imported petroleum. According to the EIA, we import about 51% of the oil we consume. In 2009, we consumed about 21.3 million barrels of petroleum products per day. At $100 / barrel, we then spend about $778.05 billion annually on petroleum products (this is a bit rough -- we are talking about petroleum products here, and many of these cost a lot more than $100 / barrel.  So, these numbers are conservative.).
• Fourth, if we cut our oil consumption by just 10% (easy with better fuel economy in vehicles, and more diesel or electric vehicles), we would have an extra $80 billion to spend on things like trains... 
• Trains powered by electricity generated from renewable energy? Jobs!
• Trains manufactured in the US? Tracks laid down, and stations built by Americans? Jobs! 
• People on trains are people not idling in traffic, burning fuel and time for nothing. 
• People on trains can read books and get work done, instead of listening to talk radio.
• People on trains powered by clean energy means people not on airplanes burning tens of thousands of pounds of aviation fuel every flight. 
• People on trains means less oil bought and burned, ...more money freed up for more trains, ...less oil burned, ...more school books for kids, more jobs for Americans: a virtuous circle.
• Fifth, burning less oil means we mitigate global warming and leave a planet for our kids to live on, we lead by example, and we become a nation that people in other nations admire and emulate. Again.
• Wow. It would be better for everyone -- except oil company executives -- if we didn't waste so much money on oil, and buy so many guns for dictators, and Lear jets for executives, ...and so few books for our kids, and so few commuter and intercity trains for hardworking people who would rather not sit in traffic, or chauffeur their kids all over town (an overlooked upside to public transportation).
• I know, I'm nuts. Or, a socialist, right?

Read more fun petroleum facts and figures at: EnergyLiteracy.org

go beyond oil :: greenpeace

So, here's one of those bleeding-heart liberal, socialists that Republicans love to mock in their special adolescent way. I'll say this: the woman in this video, Anais, has more courage in her little finger than all of the Fox News blowhards combined.



Let's all find a little courage, and change the world before it's too late.

Check out: gobeyondoil.org

Cut Oil Consumption In Half By 2030

The Union of Concerned Scientists, smart folks, have devised a plan that cuts U.S. oil consumption in half by 2030. This is a big deal.

They project we will consume over 25 million barrels a day in 2030.

Their plan saves 13.9 million barrels of oil per day.

So, let's say our import vs. domestic production ratio stays the same: 60/40

That means, with business as usual we will import 25 x 60%, or 15 million barrels a day.

And let's stipulate that the price of oil stays flat, which it won't, but we'll assume here that it does, at $80.

So, in 2030, with business a usual, we will spend $1.2 billion per day on imported oil.

If we cut consumption by 13.9 million barrels a day and keep the import ratio the same, we spend $533 million per day on imports, a savings of $667 million per day.

Or, $20 billion per month, or $244 billion per year. Saved in imports only.

We would also save $445 million per day on domestic production, or $13 billion per month, or $162 billion per year.

2030	Cost per barrel:	$80
		Barrels / day(x1M)
	Business As Usual	25
	Projected UCS Savings	-13.9
	Revised Consumption	11.1
Imported
Barrels / day(x1M)	Cost / Day	Cost / Month	Cost / Year
15	$1,200,000,000	$36,000,000,000	$438,000,000,000
-8.34	($667,200,000)	($20,016,000,000)	($243,528,000,000)
6.66	$532,800,000	$15,984,000,000	$194,472,000,000
Domestic
Barrels / day(x1M)	Cost / Day	Cost / Month	Cost / Year
10	$800,000,000	$24,000,000,000	$292,000,000,000
-5.56	($444,800,000)	($13,344,000,000)	($162,352,000,000)
4.44	$355,200,000	$10,656,000,000	$129,648,000,000

And these are conservative estimates.

In reality, oil will surely be over $80 per barrel by 2030 -- by a lot. It hit $140 in June 2008.

Think about that: we create a bunch of jobs building the new infrastructure and vehicles required for this plan to work, and we pay for it with the $33 billion a month we save -- OK, we won't get the $33 billion a month up front, we have to do the work first, and it will come incrementally, but our investments will pay for themselves, and the savings will continue forever...let's repeat that, at least $33 billion a month (at $80 per barrel) saved, forever.

Can you think of something better we could do with $33 billion a month than give it to oil companies and other countries? I can. Education comes to mind...for our representatives who got us in this mess, and the people who voted for 'em. All those domestic jobs would be nice, too. And no more oil spills...ah, I'm just dreamin'.

See the plan at the UCS site: National Oil Savings Plan
and then sign the petition.