Pumped Up: Chevron Drills Down 30,000 Feet to Tap Oil-Rich Gulf of Mexico
Also from Wired Magazine.
Today, deep-sea rigs are capable of reaching down 40,000 feet, twice as deep as a decade ago: plunging their drills through 10,000 feet of water and then 30,000 more feet of seabed. One platform sits atop each so-called field, thrusting its tentacles into multiple wells dug into ancient sediment, slurping out oil, and then pumping it back to onshore refineries through underwater pipelines.
It’s a business where huge sums are lost (two years ago, BP suffered a $250 million blow when a hurricane took out one of its platforms) but even more can be made. The mother lode of oil in the deepwater Gulf is so significant that Tahiti and other successful fields in this region are expected to soon produce enough crude to reverse the long-standing decline in US oil production of about 10 percent per year.
Even better, a recent discovery by Chevron has signaled that soon there may be vastly more oil gushing out of the ultradeep seabeds — more than even the optimists were predicting four years ago. In 2004, the company penetrated a 60 million-year-old geological stratum known as the “lower tertiary trend” containing a monster oil patch that holds between 3 billion and 15 billion barrels of crude. Dubbed Jack, the field lies beneath waters nearly twice as deep as those covering Tahiti, and many in the industry dismissed the discovery as too remote to exploit. But last September, Chevron used the Cajun Express to probe the Jack field, proving that petroleum could flow from the lower tertiary at hearty commercial rates — fast enough to bring billions of dollars of crude to market. It was hailed as the largest publicly reported discovery in the past decade, opening up a region that is perhaps big enough to boost national oil reserves by 50 percent. A mad rush followed, and oil companies plowed more than $5 billion into this part of the Gulf.
The illustration will appeal to the geeks of this fashion of technology and Big Machinery. Me, I just see it and think, “surely that is too far down to be digging?” I will never escape the memory of matinees like Crack In The World. There are also the implications of extending our violent reach ever further into a marine environment that is already bleeding its hitherto non-impeded species into our fishing nets.
Being in Wired, the article is tech-heavy, rather than oil or political economy. It has a few interesting parts, like this one from Paul Siegele, Chevron’s man in this Havana:
As consensus grows that the world needs to shift away from fossil fuels, extracting oil from the most extreme and costly locations can seem foolishly myopic. If Chevron is going to throw billions of dollars into something untested and possibly doomed to failure, wouldn’t it make more sense to invest in an inexhaustible, greener technology that’s going to have political support a decade from now?
Siegele doesn’t think so. He does know that geological limitations will prevent him from drilling much deeper: It’s a pretty safe bet that below 40,000 feet, the extreme heat has baked off much of the deep-sea troves of crude. And there are financial limits to this frontier, too. Even as Chevron and other oil giants earn record profits, they also face record expenses. For example, the company has commissioned two new deep water rigs that will be able to drill 40,000-foot wells. But at more than $600 million each, they can’t exactly be snapped up on boats.com. “The costs of developing a new oil or gas project are about 65 percent higher today than 30 months ago, and the greatest escalation of costs has been offshore,” says Daniel Yergin, chair of the consulting firm Cambridge Energy Research Associates. At today’s oil prices of $70 a barrel, the current exploration makes sense. But if oil drops below $40 a barrel, Yergin says, the cost of exploring this high-risk frontier will become prohibitive.
But Siegele is hardly worried. Technological breakthroughs have, decade after decade, revived the perpetually doomed oil industry. “Predicting peak oil,” Siegele tells me as we tour the drilling floor of the Cajun Express, “is almost like predicting peak technology” — an exercise, in other words, that to him seems inherently small-minded. Even absurd.