The Oil Mess and what we can do about it

1. The Oil Messand what we can do about it

2. Set The Stage – What We Use

3. What We Use It For 72 million cars in USA USA uses 20 MMBOPD, 60% Imported

4. The Cost of Imports • We consume 20,000,000 bbls/day • We import about 12,000,000 bbls/day • At $75.00/bbl this is • $900,000,000/day we pay some one else for oil. • ($10,416/second)

5. The Incentive • The demand for oil found in our own country is important. • The production rates need to be large to make a dent in daily demand. • Continental shelf off shore has been heavily drilled. • Deep water off shore has not been explored AND now exploration technology (mainly advances in seismic analysis) makes it possible to locate prospective areas. • The deep water cost is very high – on the order of $100 million per well. • But the rewards can be high with discoveries on the order of 20,000,000 bbls recoverable per well (see recovery from BP Thunderhorse Field).

6. Transocean Deepwater HorizonDisplacement: 58,000 short tonsCompare with Battleship Missouri at 45,000 tons and Aircraft Carrier Nimitz at 105,000 tons.Drilled deepest commercial oil well in history in Sept. 2009 at a depth of 35,050’ TD in 4,132’ of water, 250 miles SE of Houston.

7. Immediate Effects

8. Spreading Effects

9. Effects • Actual loss of life. • The toll on wild life is not immediately calculable. • Cleaning up 100% of the oil is probably not realistic. • Temporary loss of fisheries and the jobs that go with them. • Loss of the resource.

10. Other EffectsShutting Down Off Shore • Loss of off shore jobs. • Loss of support jobs. • Loss of R/D that made off shore work. • Loss of roughly 10% of the oil and gas we produce domestically.

11. How Big is Big?

12. Some of the Equipment

13. Some of the Equipment

14. Possible Path of the Blow Out From BP Report

15. Improbable Circumstances • The long string can be run and cemented safely. • The cement will set properly and create a seal. • The crew will detect leaks and flow from the well and close the diverters and the BOPS. • The deadman switch will close the BOPS. • The ROVS will close the BOPS. • The BOPS will seal as designed regardless of how they are actuated and regardless of what is inside them.

16. What Are Our Choices • We can import more oil. • Unfavorable shift in balance of trade. • Loss of jobs. • Increase in tanker traffic. • No decrease in emissions. • Deep water drilling must become more fail safe if it is to continue in US – GOM. • Well control must improve • Spill response must improve • Saves jobs. • We can shift oil production back into shallow water and on shore. • Massive investment in IOR • Massive investment in shale resource areas • Massive increase in jobs • We can increase the efficiency of the way we use oil.

17. Comparison Shopping Prius – 16.3 mpg/kLb (49.5 mpg) Town & Country - 4.7 mpg/kLb (20.5 mpg) Suburban – 3.1 mpg/kLb (18 mpg) Impala - 6.6 mpg/kLb (23.5 mpg) Tahoe – 3.2 mpg/kLb (18 mpg) Dodge Ram – 3.2 mpg/kLb (16.5 mpg) Remember we use 361 million gallons of gasoline every day NOW. LET’S USE LESS.

18. Go UT Petroleum Engineers • HOOK EM