Free Markets, Free People

Bruce McQuain


Chevron’s Kern River Basin – Things That Make You Go “Wow”!

As most of you know I took a short trip to beautiful Bakersfield California a couple of weeks ago at the behest of the American Petroleum Institute (who paid for the trip) to tour Chevron’s Kern River Basin oil fields. Here’s a short intro video by API that will get you into the game.

Jeff Hatlin, the guy describing most of the facilities and the area, was a fabulous tour guide. And the rest of the staff there (Jim Swartz, David Boroughs, Carla Musser, Ray Thavarajah, Kevin Kimber, Kelly Lucas and Omer Saleem) took a day out of their busy schedules to acquaint 4 bloggers with a huge asset that has been producing oil for over 100 years. My thanks to all of them.

As you might imagine, the “easy oil” days of yore are long over. As Jane Van Ryan, the narrator of the video, notes, the area was first discovered because oil was literally seeping out of the ground. No more. The oil produced at Kern River is what is known in the industry as “heavy oil”. That means the viscosity is very high. For many years in the early days, its viscosity limited its use to asphalt and roofing tar.

That presents an interesting set of problems when you talk about recovery. You’re trying to pump some pretty thick stuff out of the ground and, as you can imagine, that takes a whole bunch of energy. And the oil doesn’t sit in pools, but is distributed throughout the sand layers. So it seems obvious that the way to address the problem is to find a way to lower the viscosity of the oil and cause it to flow before trying to recover it.  As you might imagine, that’s not as easy as it sounds. The way Chevron has addressed those needs is through steam flooding and new drilling techniques such as horizontal drilling.

You saw Jeff Hatlin talk about how that steam is generated (and you got to see the steam generators in the video) and injected into the ground. In the 20 square miles of the Kern River Basin facility, there are approximately 770 steam injection wells helping the 8,700 production wells bring up the oil from depths of over 1,000 feet. What the steam injection wells have allowed Chevron to do is move the field from its primary production days, when only 5-10% of the oil was being recovered, to a production percentage between 50 to 80% with steam flooding. This enhanced recovery technique has helped Chevron keep the field at an 80,000 bpd production rate when, without it, it would be producing very little oil at all.

Another technique which allows more efficient recovery is the 3D modeling that you saw Dale Beeson talking about.  The model in the video has 155 million cells, each 50′ x 50′ x 2′.  That’s a massive amount of information stored, updated and accessible to the Chevron staff as they plan their next wells.  Much of the data for this model is gathered through 660 “observation wells” drilled strategically over the vast property.  Temperature and fluid saturation are monitored allowing for efficient heat management and the location of the richest oil deposits. It is through the integration of that information plus the nearly 1,000,000 data points gathered through out the field on any given day by other means, that Chevron meets its goal of reducing its production decline in the Kern River Basin to 1% a year.

A final technique introduced into the Kern River field in 2006 is horizontal drilling. The 3D modeling helps Chevron exactly pinpoint layers of oil producing sand and using advanced drilling techniques, precisely place the horizontal well in that sand layer. To give you an idea of the efficiency difference, a typical vertical well will produce about 3 bpd of oil. A horizontal well will produce about 100 bpd.

Given all of that, however, there was something else I learned that just blew my mind. While they’re producing that 80,000 bpd of oil, they’re also pumping up 555,000 bpd of water. In fact they joke about really being a water production facility which produces oil as a by-product. That’s more true than you might imagine.

But it also means they must process a half a million barrels of water a day, separate the oil from it and do something with the remaining water. This is where it gets interesting. You heard Jane mention they process and purify some of it through walnut shell filters for agricultural use. In fact, they have about 272,000 bpd in excess that they send through that process and then is sold to California for use in growing all those luscious veggies Californians are so wild about. My guess is that most of California has no idea that’s the case. That avocado you’re enjoying may have been produced with water from Chevron’s Kern River Basin field.

So what do they do with the remaining 231,000 bpd of the water they pump up?  They make steam.  Lots and lots of steam.  And that brings us to something else of which I’m pretty sure the average Californian isn’t aware.  Part of that steam powers up to 20% of the California electrical grid.   It’s called ‘cogeneration’, and Chevron has actually built steam powered electrical plants on the field which are plugged into the California power grid and provide on-demand electricity.  They use the waste steam generated in the steam injection process to power these plants.  Clean energy and highly efficient clean production.

That’s what had me saying “wow” at the end of the trip.  Two critical commodities to California – electricity and water, produced as  by-product of a third critical product, oil.  And all three are produced in a efficient, environmentally friendly way.

If I were Chevron, I’d be telling this story everywhere I could.  It’s not quite the resource-raping, greed-is-king “Big Oil” caricature the media and many of our politicians are fond of painting, is it?


The Promise And The Reality (Part II) – Massive Waste, Fraud And Abuse Likely With Passage Of “Stimulus” Bill

The fear-mongering and panic inducing rhetoric used by the Obama administration and Congresional Democrats concerning the “stimulus” bill has set up another probable broken promise – this time on an unimaginably massive scale.

The Promise: The end of wasteful government spending and more accountability:

-Make Government Spending More Accountable and Efficient: Obama and Biden will ensure that federal contracts over $25,000 are competitively bid. Obama and Biden will also increase the efficiency of government programs through better use of technology, stronger management that demands accountability and by leveraging the government’s high-volume purchasing power to get lower prices.

- End Wasteful Government Spending: Obama and Biden will stop funding wasteful, obsolete federal government programs that make no financial sense. Obama and Biden have called for an end to subsidies for oil and gas companies that are enjoying record profits, as well as the elimination of subsidies to the private student loan industry which has repeatedly used unethical business practices. Obama and Biden will also tackle wasteful spending in the Medicare program.

The administration’s promise was transparency, bid competition, and new auditing resources and oversight boards.

The Reality: But this “stimulus” bill will most likely overwhelm any ability to properly monitor the spending anticipated. And, if such proper monitoring and regulating of spending is indeed required, it will drastically slow the spending process which is supposed to provide the stimulus.

The Obama administration’s economic stimulus plan could end up wasting billions of dollars by attempting to spend money faster than an overburdened government acquisition system can manage and oversee it, according to documents and interviews with contracting specialists.

The $827 billion stimulus legislation under debate in Congress includes provisions aimed at ensuring oversight of the massive infusion of contracts, state grants and other measures. At the urging of the administration, those provisions call for transparency, bid competition, and new auditing resources and oversight boards.

But under the terms of the stimulus proposals, a depleted contracting workforce would be asked to spend more money more rapidly than ever before, while also improving competition and oversight. Auditors would be asked to track surges in spending on projects ranging from bridge construction and schools to research of “green” energy and the development of electronic health records — a challenge made more difficult because many contracts would be awarded by state agencies.

The stimulus plan presents a stark choice: The government can spend unprecedented amounts of money quickly in an effort to jump-start the economy or it can move more deliberately to thwart the cost overruns common to federal contracts in recent years.

“You can’t have both,” said Eileen Norcross, a senior research fellow at George Mason University’s Mercatus Center who studied crisis spending in the aftermath of Hurricane Katrina. “There is no way to get around having to make a choice.”

So here’s the choice – remove the oversight, drop the transparancy, go with “no-bid” contracts and eschew the auditing process which will slow the spending to a trickle, or keep them in place and accept the molasses slow flow of supposed stimulus funds.

The probability is we’ll see the promise go by the boards. Why? Because of the insistence by both Congressional leaders and the administration that this bill be passed now, that it can’t wait and that it shouldn’t be debated (and by implication, shouldn’t be closely examined either).

“We don’t have the means to make sure we don’t blow through billions of dollars and give it to the wrong people,” said Keith Ashdown, chief investigator at the nonpartisan Taxpayers for Common Sense. “We’re on track to lose billions, if not tens of billions, to waste, fraud and abuse.”

Goodger said the federal contracting system has been extremely troubled in recent years. He emphasized the lack of trained employees to manage contracts, which he called a “human capital crisis.”

Stan Soloway, president of the Professional Services Council, a group that represents government contractors, does not oppose the stimulus package. But he said the government appears to lack the planning and the “infrastructure and architecture” upfront to manage the spending.

“Without it,” he said, “we’re going to have a repeat of what we’ve seen over and over and over, from major weapons systems to Katrina and Iraq.”

Hope and change.

~McQ


Obama’s Foreign Policy Dilemma

Despite all the happy talk about hope and change concerning America’s foreign policy the reality is every nation out there has its own agenda and America still stands in the way of many of them.  In the case of our allies, their agenda usually entails seeing how much of the load they can get America carry.  And, while the hope, hype and spin claim that this is the dawn of a new era, in reality the clock is ticking:

Vladimir Putin of Russia

Vladimir Putin of Russia

The danger is that, as the novelty of the Obama administration begins to wear off the U.S. will be left with little more to show for its renewed focus on diplomacy than the Bush administration achieved.

Before that occurs, U.S. officials are hoping a willingness to engage in a way that the Bush administration never was will produce progress. Major reviews of U.S. policy toward Afghanistan and Iran are currently under way and are expected to produce new options for Obama within several weeks.

The options produced may be new for Obama, but will they be new for those nations at which they’re aimed? And will they address the fundamental problems in the areas they are intended or will they simply be the same policies with shiny new names? While Obama may come up with what he considers many new options, in reality the options are quite limited when it comes to some of the nations who are going to challenge him (and that will be dictated by the attitude those nations take to any new Obama initiatives).

As the Washington Times notes, his foreign affairs problems are beginning to cascade:

On Friday, Pakistan – the recipient of billions of dollars in U.S. aid – released from house arrest Abdul Qadeer Khan, the nuclear scientist who for two decades ran a black market that sold nuclear-weapons technology to U.S. adversaries including Iran and Libya.

Two days earlier, Kyrgyzstan announced that it would not renew a U.S. lease at

Mahmoud Ahmadinejad of Iran

Mahmoud Ahmadinejad of Iran

the Manas air base, a critical transshipment point in the Afghanistan war. Meanwhile, the Russians – who offered Kyrgyzstan $2 billion in cash and loans to oust the Americans – said that they intend to establish a new base in a breakaway enclave of Georgia, the country Moscow invaded over the summer in response to a Georgian assault on another enclave.

If this were not enough, Iran last week launched a crude satellite into space, suggesting that the Islamic regime has mastered at least some of the technology for multistage, long-range missiles.

Finally, Yemen on Sunday announced that it had released 170 men arrested on suspicion of having ties to al Qaeda. Just two weeks earlier, the terrorist group called Yemen its base for the entire Arabian Peninsula.

And let’s not forget that the Obama administration has already upset India with its claim that it would involve itself in the India/Pakistani dispute over Kashmir.

A president’s primary job involves foreign policy. He is the sole architect and executor of it. But thus far, it seems more of a distraction than a focus for Obama. He has primarily concerned himself with his domestic agenda and delegated his foreign policy role to Biden – at least for the time being. But Biden isn’t the decision maker and lack of focus on foreign affairs could see the US end up, diplomatically, behind the power curve if enemies perceive him as not being fully engaged and his diplomatic effort lacking leadership.  That is a weakness they would try to exploit.

If that ends up happening, all of this happy talk will quickly go out of the window and the Obama administration could be facing the same stark choices, and options, that his predecessor faced – if he’s lucky.

~McQ


S-CHIP – An Incremental Move To Universal Health Care

If you harbored any doubt about the real purpose of the recent S-CHIP bill which expanded government health care, these excerpts should remove it:

Obama at a White House signing ceremony said, “I refuse to accept that millions of our children fail to reach their full potential because we fail to meet their basic needs” (Pulizzi/Johnson, Wall Street Journal, 2/4). He added, “In a decent society, there are certain obligations that are not subject to tradeoffs or negotiation, and health care for our children is one of those obligations” (Mussenden, Media General News/Richmond Times-Dispatch, 2/5). He said, “The way I see it, providing coverage to 11 million children [through SCHIP] is a down payment on my commitment to cover every single American” (Levey, Los Angeles Times, 2/5). He continued, “It is just one component of a much broader effort to finally bring our health care system into the 21st century,” adding, “I am confident that, if we work together, if we come together, we can finally achieve what generations of Americans have fought for and fulfill the promise of health care in our time” (Washington Times, 2/5).

House Speaker Nancy Pelosi (D-Calif.) said, “This is the beginning of the change that the American people voted for in the last election and that we will achieve with President Obama” (Los Angeles Times, 2/5). Rep. Charles Rangel (D-N.Y.) said, “I cannot think of a better investment than the health of our children” (Graham, “Triage,” Chicago Tribune, 2/4). Sen. John Kerry (D-Mass.) said, “We’ve waited far too long for this day. America’s kids should be guaranteed comprehensive care whether they need dental care, mental health, medical or surgical treatment” (Rhee, “Political Intelligence,” Boston Globe, 2/4). House Energy and Commerce Committee Chair Henry Waxman (D-Calif.) said, “While this bill is short of our ultimate goal of health reform, it is a down payment, and is an essential start” (New York Times, 2/5).

Keep your eye on the ball because this is moving very, very quickly.

~McQ


Stray Voltage

Al Sharpton must sniff a payoff somehere.  He’s protesting in front of Bernie Madoff’s place.

Bill Press pushes for a redefinition of “public interest” to include making terrestrial radio stations carry a format that fails everywhere it is tried to the detriment, naturally, of one that succeeds.

After years of pandering to them, John McCain makes the staggering discovery that Democrats are no more bi-partisan than the GOP.

The Taliban release a video of them cutting off a Polish engineer’s head.  The Obama administration mulls a change in strategy which would have them essentially abandon the Karzai government in Afghanistan and negotiate with the Taliban.  And, unsurprisingly, some on the left just want to know why we’re still there.

Larry Sabato, director of the University of Virginia’s Center for Politics says there’s a good reason the “stimulus” bill is so big: “It’s just irresistible,” he said. “Congress says, ‘This is a freight train.’ They have to jump on because there might not be another for years.”.

The U.N. agency for Palestinian refugees suspended aid to the Gaza Strip on Friday?  Why?  Because representatives of the Palestinian’s government were stealing relief supplies from the UN.  Well, at least, unlike ours, the Palestinian government makes no bones about what they are.

Smartphone sales were up 68% while iPhone sales  topped 101% in 2008. No recession there.

Bush is gone but the left still can’t let him go.  Will Ferrell demonstrates his case of BDS in a classless Broadway show.  Yeah, I know, everyone’s a critic.

So how’s Obama doing so far?  Well let this Brit clue you in.

While the US moves inexorably toward European-style socialism, Peter Hitchens, writes about the one nation fighting against it in Europe.  Favorite quote:

In the modern world, the Left, who claim to be the romantic rebels and lovers of liberty, have become the dogmatic spokesmen of remote power. The Right, who are derided as supporters of dictatorship and closet ‘fascists’, are the real revolutionaries and romantics.

Enjoy.

~McQ


America’s “New” Foreign Policy

Joltin’ Joe Biden previewed it in Germany yesterday:

As promised, Vice President Joe Biden reached out to the international community Saturday, saying the U.S. is open for talks with Iran and Russia to repair relations, and willing to work with allies to solve world problems.

But in his first major foreign policy speech for the new administration, the Democrat also warned that the U.S. stands ready to take pre-emptive action against Tehran if it does not abandon its nuclear ambitions and support for terrorism.

Repair relations?  Just words at the moment.

Pre-emptive action? I thought we quit doing that stuff. OK, pre-emptive action. Also known as maintenance of the status quo policy. “We want to repair relations but reserve the right to pre-emptively attack Iran”.

Good luck with that.

And while he said it is time to mend fences with Moscow, he said the U.S. continues “to develop missile defenses to counter a growing Iranian capability, provided the technology is proven and it is cost-effective.”

Continue to develop missile defenses? Status quo – but again, with the caveat “we want to mend fences”.

Good luck with that.

The article notes that Biden was “short on details”. No particular surprise there. But apparently the “tone” was just music to the diplomats ears.

For instance:

“I think Vice President Biden came to Munich today in a spirit of partnership,” British Foreign Secretary David Miliband told AP Television News. “I think he set an ambitious agenda with big goals and high objectives, and he called and challenged us to work with him. I think that’s the right spirit.”

That hits me as diplo-speak for “he’s going to do things the way we want them done”. And, of course, that’s not leadership.

Understand too that diplomats are also going to give this a positive spin because they stand to gain from it. That’s why Russia said:

“The tonality was rather encouraging. It was really a serious call to restart U.S. foreign policy — including, clearly, Russian-American relations,” said Konstantin Kosachev, head of the international relations committee in Russia’s lower parliament house.

That’s diplo-speak for “we think we can roll these guys”.

What details Biden did give included the aforementioned continuation of the missile defense and this:

“It’s time to press the reset button and to revisit the many areas where we can and should be working together with Russia,” said Biden. Yet, he added that the U.S. will continue to have differences with Moscow, including opposition to its efforts to carve out independent states in Georgia.

Again, “just words” and status quo.

And to Europe, Biden said:

Biden, who also met privately with a number of world leaders, including top officials from Russia, France, and Germany, told allies that they will be expected to share the burdens of fighting extremists and bolstering weaker governments and poor nations.

“America will do more, that’s the good news,” said Biden. “But the bad news is America will ask for more from our partners.”

I’m not sure why asking more from our “partners” is “bad news” but it certainly reflects a continuation of the status quo.

Lastly, this:

On another topic, Biden told the leaders that the U.S. needs their help in taking the detainees now held at Guantanamo Bay, Cuba.

He repeated Obama’s vow that the U.S. will adhere to its values, not torture, and will close the detention center at Guantanamo that has spurred such criticism from European allies.

Of course we’ve since learned that the Obama administration has reserved the right to approve more intensive interrogation techniques and, of course, you don’t need Guantanamo if you continue give the CIA permission to use rendition as a tool to deal with terrorists.

But apparently, to this point, that hasn’t really penetrated the good will that Obama still enjoys among the Euro types. Once the new wears off and they’re actually pushed to contribute “more” they’ll probably “discover” the duplicity of Biden’s words.

Hope and change.

~McQ


Paging Ashley Judd…

Reality is calling:

Fish and Game Director Cal Groen told the Joint Finance and Appropriations Committee that Idaho’s estimated 824 wolves are impacting the state’s deer and elk population.

He says big game populations are decreasing by as much as 15 percent a year. Without the wolves, Idaho’s deer and elk herds would be increasing 7 percent a year.

Groen says the wolf packs have become overcrowded and wolves have begun to kill each other.

I assume Judd has an opinion about this too.

~McQ


But Don’t You Dare Question My Patriotism

Looks like the same old stuff to me

Looks like the same old stuff to me

Change?  Where? From the NY Times via Newsbusters:

Mr. Obama called Ms. Collins and Mr. Specter, as well as Senator Olympia J. Snowe of Maine, another Republican expected to support the deal, to acknowledge they were acting against pressure from their party and, one official said, to thank them for their patriotism in helping advance the bill at a critical time.

So the man who bristled at any questioning of his patriotism now implies that those who won’t vote for this monstrosity of a bill are unpatriotic?  I told you that dissent would become unpatriotic.

Hope and change.

~McQ


John Kerry Was For Tax Cuts Before He Was Against Them

Apparently the Brainiac known as John Kerry is again displaying his wit an wisdom for all to see.  Mary Katherine Ham caught him on the floor of the Senate pontificating about why tax cuts were bad:

I’ve supported many tax cuts over the years, and there are tax cuts in this proposal. But a tax cut is non-targeted.

If you put a tax cut into the hands of a business or family, there’s no guarantee that they’re going to invest that or invest it in America.

Can I get me some of that Gray Poupon?

Can I get me some of that Gray Poupon?

They’re free to go invest anywhere that they want if they choose to invest.

If you feel like you’ve just been hit in the solar plexus, welcome to the club. While technically true, his statements are so stunningly ignorant it’s hard to fathom how one could actually articulate them with a straight face.

This man who wanted to be president is sure that only government can “invest” these dollars properly – like the first half of the TARP funds, some of which went toward buying banks in China – but that the majority of Americans would “invest” them ignorantly or not at all.

Per Kerry you can’t be trusted to spend your money the way John Kerry wants it spent – on bike paths and Frisbee Golf Courses or other misbegotten projects he finds preferable. The poster boy for rule by the elite, Kerry manages in three sentences to underscore why this travesty of a bill will fail. The economic ignorance embodied by his words, and the fact they fairly represent the dominant thinking in the dominant party and their lackeys is amazing but true.

With people like Kerry in charge, it is going to be a long, debt-ridden and impoverished 4 years, folks.

~McQ