Halliburton to Blame for the Oil Spill?

In a recent Wall Street Journal article, information was given about how the tests for the cement formula, which was supposed to seal the natural gas, were done incorrectly, and some never done at all. Their were four tests, the first three were either done incorrectly or were tested on a different cement formula than the one used. The last test showed that the cement formula was fine. However, BP asked Halliburton, a leading cement contractor, to change the formula once more, and Halliburton never took a final test of the new formula. This is a major reason why the oil spill occurred, and more investigations are underway to figure out how the spill happened and what went wrong. Halliburton still blames BP for changing the formula in the first place and for not running their own tests after pumping.
I find this article really interesting because it just shows how different companies have to work together and trust each other not to make mistakes. Blame is now being thrown around and it is unclear whose fault it really is. This obviously shows some protocol was not handled correctly and that better measures need to put in place, as mentioned many times about the incident. At the end of the article, Halliburton states that legally they are fine because their contract with BP protects the company from liability. I thought this was very interesting, it shows how complicated the contracting process is and what sacrifices companies have to make in order to contract with a company, BP had to place their trust in Halliburton. I think it is slightly unfair that they are protected however, if investigations come out saying that the improper cement formula was the cause then it will be hard to get justice over what happened due to their contract.

- Caitlin McGonnigal

Conoco's Earnings Double as Prices Rise

ConocoPhilips said that it will try and ramp up its sales for next year and also will put its refineries on a two year plan to shore up finances. Initially Conoco did not wish to sell its refining properties in order to avoid selling their assets at deep discounts because of the recession. But now the company is changing track after a rebound in fuel demand pushed prices higher for refineries. It reported that in its third quarter earnings more than doubled benefiting from higher oil and gas prices and improved margins for refined products.

The sale of their assets marks a new shift from their debt fueled acquisition spree when commodity prices were soaring. However there is also a good chance that this corporation will spend billions next year on assets. They also have some stakes in the political world as they hope republicans will take over in the congress so that taxes will be lowered and regulations will be reduced. Overall Conoco has been doing very well as their earning have doubled.

In my own personal opinion this would be a great company to invest in as gasoline prices are continuing to rise and thus will continue to increase their earnings.

http://online.wsj.com/article/SB10001424052702304173704575578031256512428.html?mod=WSJ_Energy_leftHeadlines

Ryan Parker

oil consumption

Exponential improvement in an economy entails an exponential need and demand for oil. This is current situation with China, according to an article of the Wall Street Journal, since late 2008, demand for oil had risen dramatically. As a result Petrochina, one of the largest oil companies in China, enjoyed 5.21 billion increase in profit just in the past year. The high demand for oil, and thus the increase level of profit, is attributed to the allocation of Chinese government stimulus spending to “energy-intensive” endeavors. As a result of this high demand, the oil company raised its crude-oil production by 1.3% and the average selling price rose by 46%. China is now the world’s largest energy consumer, following the United States, and, according to recent statistics, accounts for 40% of the increase in the global oil demand this year.

Let us follow the chain of events: improving economy means higher energy demand or higher energy consumption (people have more money to spend on electronic appliance and other things of that sort)which means more oil production(because oil companies must rise to meet the level of demand), until of course, all our oil is gone. As I said in my last blog-we keep forgetting that oil is a finite resource.

http://online.wsj.com/article/SB10001424052702304173704575578103834060866.html?mod=WSJ_Energy_leftHeadlines

Google to Fund Offshore Power Project

Google and two other companies promised to invest tens of millions of dollars in a new offshore wind energy project that will provide power to 1.9 million homes. This project would start with the building of a wind atlantic transmission line which would transmit the power created offshore to the mainland. This project is estimated to take about 10 years. It would stretch from the coast of New Jersey to Virginia. A Japanese trading company will provide the start up financing and helping out with logistical issues. This transmission line could cost up to 5 billion dollars said a senior executive, which means that the companies investment would only be financing a small portion of the total costs. 


Also as of now there are no wind turbines operating in the Atlantic Ocean and this is an important stepping stone to pave that way for more. This project is also expected to spur the creation of more wind farms throughout the northeast. As this transmission line will allow cost of wind farms to cut down 20%  of their expenses as they will not have to build their own transmission lines. Overall this project is going to benefit everyone involved as it will spur more wind farms and support renewable energy. I am fully behind this project and every impressed by google to initiate this.   




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Ryan Parker 

E(85) Greater Ethanol in Fuel Mixture

My blog is based on a short article I read in the wall street journal. Although it does not have a lot of information I think it addresses an important movement in the oil and gas industry. According to this article the EPA(Environmental Protection Agency) recently approved an increase in the ethanol level in gasoline for news cars(those manufactured after the year 2007). It will, from now on, allow ethanol to make up about 15% of fuel mixture (a 5% increase from before). In addition, the EPA has also issued a “labeling program” where gasoline stations are expected to label the amount of ethanol included in the fuel they provide and a list of automobiles for which the fuel is approved for. This new decision has caused a lot of confusion and doubt among auto makers, many equipment makers and the petroleum industry. Many who oppose this decision feel that the “EPA [should] postpone [their] decision until more testing [is] done." However, the director of EPA’s clean-air agency believes that sufficient amount of testing has been done for the increase of ethanol in fuel to be approved.

I was a little skeptical at first but now I am starting to think that it is a good decision. For example, using more ethanol may lower the cost of fuel, increase income for farmers that produce corn, reduce harmful emissions, and possibly create more jobs.
The only problem, in my opinion, is that E85(fuel with 15% ethanol) cannot to be used with existing engines- they have to somewhat be modified (which is why many automaker have issues with this decision). I think the government should offer these automobile production companies with greater incentives so they can make engines that is compatible with increase level of ethanol in the fuel.

http://online.wsj.com/article/SB10001424052748703673604575550261503126190.html?mod=WSJ_Energy_leftHeadlines

Where the BP Oil Spill All Started

In a recent Wall Street Journal article, the author remarks on how WSJ has done some research into how the drilling in the Gulf began and why the BP oil spill may have been inevitable due to issues started way before. Shell was the company to initiate the Gulf of Mexico drilling, as they found oil there in 1989. This entrepreneurship led to a focus on the Gulf of Mexico, from oil companies, politicians, society, and even environmentalists who wanted to detract attention from the shores of California. The boom for oil in the Gulf was too fast for regulation and safety codes to catch up. As we all know, one of the major issues in the BP oil spill was the fact that regulation was not followed correctly and safety procedures were not upheld. So, this initial boom which was too quick of the evolution of better safety procedures may have caused the spill.  The article also relates the way America was headstrong towards off-shore drilling in the Gulf to the way America was towards changing aspects of the economy, eventually leading to this recession. It is interesting to view it in this light. Maybe America has a tendency to act too quickly. In the upcoming years, as new energy becomes more developed, it will be very important to make sure the safety and security develops as well. Nuclear energy is one the most feared, so the safety and regulations for this source of energy will be extremely important.
I also found in very interesting that Shell was the one to initiate the Gulf of Mexico drilling. On the subway yesterday, I noticed that Shell has advertisements all over the metro train stating them as innovative and reliable. Including statements such as, "Let's think around the corners," it gives an image of Shell being innovative and a group of entrepreneurs. But it is also saying that they will not "cut corners." Which is a statement that they'll be reliable, unlike BP. Shell is using a symbol of change and development, and I found it interesting that they were the ones to find off-shore drilling in the Gulf, proving their past as entrepreneurs.

- Caitlin McGonnigal
http://online.wsj.com/article/SB10001424052748704657304575540063579696700.html?mod=djkeyword

California to Get Two Solar Plants on U.S. Public Land

A bill was passed which approved construction of two solar plants on California land. These two new projects are the first solar panel plants approved for U.S public federal lands. They are also the first of many solar plants to be approved later this year and will hopefully more than double the U.S's solar power production. These projects were said to be milestones as they are the first and show the U.S's increased interest in renewable energy. This technology that they are putting in is called thermal solar energy. It consists of concave mirrors which focus heat on a pipe in order to heat the water in the pipe to steam and thus turn a generator. This will also positively effect the economy as it brings 1 billion dollars to California, creates 950 jobs and also supplies electricity to 500,000 homes.

Personally I believe that this is the best thing that could of happened for both the U.S government and the state of California. Renewable energy is the way of the future and it is about time that the U.S starts implementing these types of plants. Along with the renewable energy it also helps the current recession by providing jobs and income. Overall this is a great thing!

http://online.wsj.com/article/SB10001424052748703843804575534392249151072.html?mod=WSJ_Energy_leftHeadlines

Ryan Parker  

Effects of Oil Spill

Deep Water, Deep Trouble, an article from the wall street journal, clearly illustrates the consequences that many players in this industry are facing as a result of BP’s “oil disaster”. First off, as a result of this oil spill many shareholders are challenging management to minimize the risk in deep water offshore drilling in every way possible. For instance, soon after the incident in the Gulf of Mexico about 50 global investors sent messages to many oil companies asking how they will responded if an offshore accident is to occur with their company. Andrew Logan, director of oil industry program at CERES, believes that investors are looking deeper into oil companies then they had in times past; currently before they make any investments they look for things such as that a “robust spill contingency plans and clear guidelines for contractor selection and oversight.” Investors are also looking deeper into the reward system at these companies to make sure that “compensation and incentive packages for senior management include specific links to environmental, health and safety targets.”
In addition to the rise in concern from investors, The U.S. Senate is working towards a bill that could potentially make oil companies liable for unlimited damages if another incident is to occur in the Gulf of Mexico. It is getting increasingly difficult for oil companies to survive when they have to balance sufficient production, focusing on the environment, and giving greater attention to safety, and if this bill is passed, becoming self-insured.


Through this article we can also see how a bad decision or complacency of one company can effect so many others in that industry. I completely agree with investors decisions to look deeper into the companies operational system before they make an investment but I think the bill the senate is trying to pass a bit questionable. If this bill is passed and oil companies have unlimited liability, it would make it almost impossible for them to be insured which will definitely create another problem.

http://online.wsj.com/article/SB10001424052748703453804575479643629599782.html?mod=WSJ_Energy_leftHeadlines

Milestones in Renewable energy

The Unites States Government approved the construction of two solar power facilities by the Chevron Corporation and NTR PLC an Irish renewable energy developer in california this tuesday. The solar facilities will use an arrangement of large dishes lined with mirrors to capture the sun's energy and convert it into solar power. One will be built in the imperial valley by NTR PLC and the other is to built outside of San Bernardino by Chevron Energy Solutions. Gov. Arnold Schwarz stated that together both facilities are projected to bring more than $1 billion into California's economy create about 950 jobs and provide electricity for up to 500,000 homes. These two facilities are just the first of many and the state of California is likely to approve the construction of several others by the end of the year.


I think that these two facilities are a milestone in renewable energy revolution, and it is important for other states to follow in california footsteps as it leads the surge in solar energy. Not only are emission being cut significantly by each factory being out into commission but a new economy and jobs are also being created. California was greatly affected by the recession,but with developments and projects that are taking place in the states energy industry this may no longer be the case as new market for energy is created.


-Jaisukh Samaha


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Importance of Cleaner Energy

This article from the Wall Street Journal describes Obama restating the importance of cleaner energy. Not only does this eliminate our dependence on foreign oil, but it will create new jobs. Similar to my last post, where I discussed new jobs in the research and development of cleaner fuels, this article relates to the topic of new jobs stemming from new energy. Obama brings up ideas of new jobs for contractors, factory workers, and engineers. With our failing economy, there has been a focus on creating new jobs for those who are currently unemployed or for creating a new market entirely out of new energy.

I found it very interesting that last class when the speaker asked our class what we thought the most pressing issues were, the first few people who answered all spoke about the need for cleaner fuel and new energy. I feel that this is a feeling that many people across the U.S. have. It is such a pressing issue and the opportunities and benefits that cleaner energy holds make it very appealing.

- Caitlin McGonnigal

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