Feeds:
Posts
Comments

Archive for December, 2014

Christmas Global Warning

*     *     *

Image found here.

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Advertisements

Read Full Post »

Vortex Tools discusses why oil prices (and gasoline prices) have declined, the inefficiency of U.S. oil and gas, and what can be done to make a profit at low crude prices.  

If you haven’t kept track of the recent changes in oil and gas prices, here are the basics:

  • People are happy at the pump: Gasoline prices are at a four-year low (down 40% from six months ago). Eight states are expected to have gas below $2/gallon, and the 2015 nationwide average is projected to stay lower than 2014 average.
  • Oil and gas companies are scaling back: In addition to gasoline prices sitting at a four-year low, crude oil prices just hit a five-year low. Currently, they’re at the low-to-mid-$60s/barrel range. There are projections that the slump is not over, that these low prices could hold through 2016, and that oil may not get above $100/barrel again for a long time.

While there are natural ups and downs with commodity prices, this rapid decline was unforeseen by most, and the timing is bad for the industry. The Organization of Petroleum Countries (OPEC) reduced the oil estimates needed in 2015 by 300,000 barrels down to 28.9 million. Doesn’t seem like a lot percentage wise, but it’s the lowest in 12 years. With lower demand, drilling rig counts are down, 2015 budgets are getting slashed, and oil company stocks are falling.

Even with low prices, the Middle East has no plans to slow down their production. Some say this is a way to root out terrorist influence, others say it’s a way of protecting market share, but whatever the case, the success or failure of the U.S. oil and gas industry doesn’t majorly play into their plans.

What this has done is highlight the inefficiency of U.S oil and gas.

The Middle East claims that their costs per barrel are at about half of U.S. costs (and significantly lower than the average cost of all other countries), so $60/barrel oil may cut into their profits, but in the U.S., where $60-$64/barrel is considered break-even price for shale production, $60/barrel can be a breaking point.

Probably doesn’t hurt that Saudi Arabia has $700 billion in foreign currency reserves thanks to higher oil prices.

From: https://i0.wp.com/cdn.na16.netdna-cdn.com/wp-content/uploads/2012/06/scrooge-mcduck.jpg

Pretty much what I think of, head-into-coin injuries be damned

You can debate the profit mark—which will also fluctuate due to legislation, available technology, and world issues—but generally speaking, the U.S. oil and gas industry has two modes, both of which avoid efficiency:

  • When oil prices are high, they’re too busy to invest in innovation/efficiency and it’s full on drill, baby, drill!
  • When oil prices are low they don’t have any money to invest in innovation/efficiency.

These maxims hold true until legislation requires oil and gas companies to change, and 2015 is a year of legislation when it comes to making companies deal with flared gas, vented vapors, and the volatility of oil.

It also doesn’t help that U.S. companies largely focus on what will boost their stocks this quarter, even if it’s to the detriment of say, next quarter. Oil and gas companies care about their bottom line (which is good—you should make a profit in business), but they often don’t have the ability (read: time and/or money) to care about efficiency in their processes, even if doing so would greatly increase their bottom line.

I recently met with a customer that had posters everywhere that said something like, “Safety first, environment second, profit third.” I joked that the reality is actually, “Profit, profit, profit… and don’t get me fined while you’re at it.” This doesn’t make them villains. The reality is I’ve worked in enough green industries to know that the way you get people—individuals or business groups—to care about environmental issues is to make them money while doing good.

To be blunt: No company primarily cares about environmental issues when they’re facing heavy losses and/or going out of business.

Given that Vortex tools improve oil and gas efficiency and gives an environmental benefit, here’s some of what we can do (and are expecting to grow into more in the coming year):

2015 is set to be a rocky year for oil and gas producers/operators. It’s time to squeeze every bit of efficiency and value from production.

*     *     *

*Sources and image credit listed in the comments.

Colin McKay Miller is the VP of Marketing for the SpiroFlo Holdings group of companies:

SpiroFlo for residential hot water savings (delivered 35% faster with up to a 5% volume savings on every hot water outlet in the home), industrial water purification (biofilm removal), and reduced water pumping costs.

Vortex Tools for extending the life of oil and gas wells (recovering up to 10 times more NGLs, reducing flowback startup times, replacing VRUs, eliminating paraffin and freezing in winter, etc.).

Ecotech for cost-effective non-thermal drying (for biosolids, sugar beets, dairy waste, etc.) and safe movement of materials (including potash and soda ash).

Read Full Post »