As the tail end of Hurricane Isaac left the US Gulf Coast battered and sodden with floodwater, ExxonMobil announced a US$ 500 000 contribution to the disaster relief fund. It was a benevolent and under reported gesture from the world’s largest company, which along with its fellow oil majors has been often castigated in the press for its past transgressions.

ExxonMobil employs approximately 5000 staff in the Baton Rouge, Louisiana, area, and more in other areas of the state. The wider economic benefit of the company’s local presence is difficult to gauge, but it is clear that Exxon’s operations form an integral part of the economy on the oil-rich Gulf Coast.

Interestingly, Baton Rouge also features highly on a list of the heaviest polluting US refineries, based on 2010 EPA data. Refinery operations necessarily release hazardous air pollutants into the environment, which can agitate proximate residents into action. For example, community groups, including representatives from Louisiana, are currently perusing litigation against the US EPA for failing to uphold the Clean Air Act against refineries.

Undercurrents of resentment often boil over. A large fire at Chevron’s Richmond, California, refinery earlier in the year garnered international news attention, and stoked residents’ anger over Chevron’s presence in the neighbourhood. Residents were advised to stay indoors as the fumes from the blaze suffused, but many were still hospitalised with breathing difficulties.

Chevron offered to reimburse the medical expenses of those affected, but the issue remains. However, in a city with high unemployment and crime rates, there is no doubting the economic importance of a facility that supports 1600 jobs and pays substantial taxes to a cash-strapped local government.

And yet there was similar story this year on the East Coast. At one stage, 36 000 jobs were in jeopardy when Sunoco’s Marcus Hook and Philadelphia refineries, along with ConocoPhillips’ Trainer refinery, all looked set to be shuttered. State and local entities were estimated to lose US$ 560 million in revenue. But there are now deals in place to secure the future of all these facilities, much to the relief of those concerned. A deal between Sunoco and The Carlyle Group, a private equity firm, will see the Philadelphia refinery remain open and subject to US$ 200 million of investment. These improvements will increase efficiency, reduce waste and minimise emissions.

The fate of the East coast refineries is emblematic of a general move away from refining by the oil majors. Smaller companies are moving in, modernising and increasing efficiency to meet tough new environmental laws and economic constraints. This trend will prove positive both for those living near refineries and the refineries themselves, as some of the older complexes become more modern, efficient and economically beneficial.

Written by Joe Hester, Editorial Assistant, Hydrocarbon Engineering.

The Olympic rings have been taken down in London, and following a science-themed Paralympics opening ceremony, the Paralympics logo and athletes are now taking the stage.

Science and technology was a fitting theme, highlighting both the possibilities and opportunities present for the unprecedented number of paralympians through medicinal advancements and streamlined competitive wheelchairs and prostheses.

Of course, working on a magazine in the global energy sector, I am no stranger to the capabilities of human innovation and perseverance. The oil and gas pipeline industry is constantly pushing its boundaries, and technology often overflows into other societal or commercial uses.

Industrial welding as we know it was developed in the early 20^th Century, spurred on by demands forged from WW1 and 2. For today’s international oil and gas pipelines, welding is a crucial consideration. Whether automatic, manual, semi-automatic or robotically-controlled, it is necessary throughout the construction phases, and during upkeep.

Welding stories prevailed last week, as Gazprom confirmed that the final joint at the second string of the Nord Stream gas pipeline was welded, completing the lengthy construction process. Gas deliveries to Europe via this second string are expected to commence in Q4, 2012.

Similarly, the State Oil Company of Azerbaijan (SOCAR) broadcast its use of automatic and semi-automatic welding technology for the first time on a gas pipelaying project.

Welding is only one of the many aspects of pipeline construction, commissioning and maintenance, and its various forms, devised to tackle individual challenges of space, safety, cost-efficiency and more, highlight ingenuity and human ability to overcome challenges ahead, provided the motivation (whether it be a gold medal or industry acknowledgement), investment and support exists.

Despite moving further and further away from direct human interaction in most areas in the pipeline industry, the individual welder is still an important part of the larger puzzle. Often working in collaboration with his technical AI counterparts, his role has not been replaced.

As the wheelchair rugby (or murderball as the game is nicknamed) competitors know, technology is a vital asset to raw human talent. Spectators at these high octane games will not only witness the blurred line of where an athlete ends and machine begins, but also see the on-staff welders, as important as the familiar medics, on the sideline ready to patch up any injured wheels.

Some critics have argued that with continuous advancements in technology, it is impossible to compete fairly, asking the question of who deserves the medal – the athlete or the engineer? It is clear to me, however, that technology is a vital component of our lives and in our industry, and the best technology is that which enhances the best human attributes.

Written by Cecilia Rehn, Editorial Assistant, World Pipelines.

Image courtesy of Lincoln Electric.

The October issue of Oilfield Technology has a feature on fracturing technology, and I have been commissioning companies to write about it. During this process one of my contacts called me up and agreed to provide an article on this topic so long as ‘fracking’ was spelt ‘fraccing’. I mentioned that our spelling of the word with a ‘ck’ was just a matter of house style, as we often need to take a company line on various spelling and grammatical rules for the sake of editorial consistency. But he explained that the spelling of the abbreviated version of ‘fracturing’ is actually highly controversial in North America, where opponents of the practice of hydraulic fracturing tend to use the ‘ck’ version of the word, with advocates preferring to use the softer ‘cc’ spelling. I certainly was not aware that this was such a sensitive issue.

My contact explained that his company (and the industry in general) perceives that ‘fracking’ suggests a degree of sinister explosiveness, which is obviously not the sort of image that we’d like to disseminate around the world. It’s not altogether clear why these connotations should be the case, other than the word’s more obvious negative association to the infamous ‘f’ word. Or is it the fact that the word makes people think of the word ‘cracking’ – which has destructive, noisy and generally troublesome connotations? Either way, we have now made the decision to err on the side of caution and change our house style to the industry-preferred spelling of ‘fraccing’. To me, however, the word just doesn’t appear to sit right on the page. I can’t help reading it as ‘frace-ing’, which to me sounds like some abbreviated slang term for ‘friending’ someone on ‘facebook’. There is one other alternative. We could stop being lazy and just write ‘fracturing’. It is, after all, only an extra two letters…

Written by Anna Scordos, Editor of Oilfield Technology.

Some positive news for a change…

Some positive noises have been emerging from the coal industry recently. CEO of Xstrata, the world’s largest exporter of thermal coal, went on record last week as believing the market had reached bottom. Commenting on the miner’s H1 earnings, Peter Freyberg said: “I think the market probably bottomed about a month ago and there’s been steady improvement over the last four or five weeks, where we’ve seen thermal prices increasing by US$ 5 or US$ 6 in the spot market.”

Meanwhile, in a recent Global Energy Weekly, Bank of America Merrill Lynch noted the recent rally in US gas prices, which were up 60% in 3 months. This is welcome news as ultralow gas prices have led a number of utilities to switch from coal to gas. With gas prices up, however, coal has come back into the equation in some regions – particularly where the lower-cost PRB coal is burned.

… but there’s still too much coal

The coal industry will not be celebrating just yet, however. Low demand in Europe and China and increased exports from producers – particularly the US – is still weighing down the price of coal (bar a minor increase during the recent Colombian rail strike), leading BHP Billiton, Rio Tinto and Xstrata to lay off workers in Queensland. Rio Tinto and BHP have also closed a mine each in the region.

The Indonesian Coal Mining Association (ICMA) has also reduced its production forecast for this year: “The biggest problem is oversupply, because the US has started pouring [its] production into east Asia […] And also Canada has started exporting,” said Supriatna Suhalo, the executive director of the ICMA.

Coal prices will remain flat

Reporting from the Coaltrans Australia conference, Clyde Russell, a Reuters market analyst, noted a distinctly more subdued mood as miners come to terms with low prices and increasing costs of production: they can still talk a good game but privately delegates were worried. It seems coal’s stay in the doldrums is set to last for a while yet.

As a publisher of five industry leading international magazines targeted specifically at the global energy sector, we here at Palladian Publications are fully aware of the power of advertising. Australia’s burgeoning LNG industry is currently utilising this power, as the country readies itself to become the world’s leading exporter of LNG.

The Wheatstone LNG project in Western Australia is one of seven additional facilities due to come onstream in the country by 2016. The joint venture partners behind the project, Chevron and its contractor Bechtel, recently launched a recruitment drive, with plans to employ 5000 workers. An advertising campaign is underway on billboards around Perth, as well as approximately 100 buses in the metropolitan area. There are plans to roll the adverts out across the state in August.

At the heart of the campaign is a pledge to recruit thousands of workers solely from Australia. Chevron and Bechtel have not applied for an Enterprise Migration Agreement (EMA) and insist that foreign workers will only be brought in as a last resort.

However, the recruitment drive has received a mixed reception, with the Australian Manufacturing Workers Union’s Steve McCartney labeling it a farce. He argues that the campaign is merely creating the illusion that Chevron and Bechtel are trying hard, so that they will be treated lightly when they do eventually apply for the EMA.

Ultimately, the success or failure of any advert hinges on its ability to engage the consumer. If the target audience considers the campaign to be a farce, it is doomed to failure, regardless of how many buses the message is plastered across. It will be interesting to monitor how the Australian public reacts to this particular campaign.

Written by Callum O’Reilly, Editor of LNG Industry

In the Dallas, Texas suburbs, a man stands accused of trying to blow up a natural gas pipeline. Authorities say Anson Chi detonated a bomb at a natural gas regulator station last week: he was critically injured as a result; the station and pipeline fared much better, experiencing only minor damage.

In the wake of this act of alleged pipeline vandalism, Chi’s anti-government sentiments have become apparent. He had posted pages and pages of comments online railing against income tax and the banking system: he even filmed himself ripping up a 1040 tax form, arguing that there is no law requiring average American citizens to pay income tax. “I will not file, nor will I pay a single penny in income tax until I see the law,” Chi said in the video.

Talking of tax, the UK press recently uncovered that one of the nation’s favourite comedians had been paying a puny 1% tax on his (quite substantial) earnings, by using a ‘legal loophole’. Jimmy Carr’s accountant was instructed to file taxes in the channel island of Jersey (which is not part of the UK and is therefore a ‘tax haven’ for UK citizens). Carr, presenter of humorous current affairs panel shows and quiz shows, has since apologised for what Prime Minister David Cameron blasted as his “morally wrong” tax arrangement.

Now, as far as I am aware, Mr Carr hadn’t expressed any particular opposition to the systems of Her Majesty’s Revenue and Customs, but this didn’t stop him exploiting a loophole in British law and escaping the tax that millions of ordinary people pay. Equally, I’m not sure if Mr Chi ever aired any particular views about the oil and gas industry in his rants, but this didn’t stop him from attacking the pipeline with a home-made bomb.

Sometimes our anger is misdirected and sometimes our actions have consequences that we don’t acknowledge. The pipeline company is not the US government, is not the income tax system, is not the banking practice. We must be clear on this: the oil and gas industry is not a universal bad guy you can hit at when you want a fight.

Chi’s comments in a 2007 online radio interview may help explain the way he sees it: “It’s not just the IRS. It’s also the government and the federal reserve. It’s everything tied together, and they’re all working as one. And so, you can’t just attack one part of the dragon, you’ve got to attack the whole dragon and slay the head off.”

Written by Elizabeth Morant, editor of World Pipelines.

Hydrocarbon Engineering recently attended ACHEMA 2012 held in Frankfurt, Germany.

ACHEMA is held every three years and brings together around 4000 companies involved in every aspect of the process industry from oil and gas to pharmaceuticals.

The event

The event is spread over 10 halls, each with three floors and attracts over 150 000 delegates from students to company CEOs. Running alongside the exhibition is a series of lectures introducing new technologies and discussing the different sectors of the process industry. Hydrocarbon Engineering had a stand at the event in Hall 9.2.

Throughout the week delegates get the opportunity to visit hundreds of thousands of stands related to their corner of the process industry. For me, my main focus was those companies involved in the downstream oil and gas processing industry. I was lucky enough to see SPX, Invensys, Intergraph, Aveva, ThyssenKrupp Uhde, Lurgi, CRANE, Metso etc etc…in fact too many to mention. Each stand had its own individual look and one that really stood out for its originality was ThysenKrupp Uhde who had a GIANT interactive book, the 2011 Book of Ideas.

Companies also took this event as an opportunity to hold press conferences to launch new products and introduce prospective clients and the media to the company as a whole. This can be incredibly useful if a company has many subsidiaries! Also, as ACHEMA is one of the biggest processing shows in the world it gives companies an opportunity to launch their new look and that is just what Cal Gavin did.

Overall ACHEMA is a great platform for knowledge gathering, making new contacts, doing business and putting names to faces. It’s a busy, busy show but incredibly well organised and with the introduction of the Partnering Program and the ACHEMA App, the event is only going to get better.

The next one will be held in Frankfurt once again in 2015 from 15 – 19 June.

Written by Claira Lloyd, Editor of Hydrocarbon Engineering.

In the developed world, we tend to take the essentials – fuel and food – for granted. Ensconced in our routines, we forget that these items reach us at the end of a long supply chain, and that it is entirely plausible for this chain to be severed if certain factors conspire.

In recent months, a couple of events in the UK have thrown this fact into sharp relief. The more significant of the two occurred in March, as fuel distributors and tanker drivers threatened to strike, causing motorists to panic buy ahead of the Easter break. The second occurred earlier this month, when Manchester airport ran out of fuel, thus disrupting holidaymakers’ flights. Fuel supplied to the airport from the Stanlow refinery was found to be contaminated, which led to a supply pipeline being turned off.

These two events exemplify the fragility of supply. When transposed onto a national scale, the potential consequences are more alarming. The announcement of the closure of the Coryton refinery in Essex following the insolvency of its owner, Petroplus, signals the latest episode in a worrying trend. The 117 000 bpd facility supplies 10% of the UK’s total fuel products and employs 1000 workers in the local area, whose jobs are now in jeopardy. Its closure would leave only ExxonMobil’s Fawley refinery, Southampton, in close proximity to the London/South East region.

There are calls for the government to intervene. Trade union group Unite claim that the French government has contributed US$ 24.6 million to help save Petroplus’ Petit Couronne complex. In these austere times, it seems unlikely that the same would be done for Coryton. All is not lost, of course: there has been interest from buyers. Elsewhere, newer industry players such as Ineos have succeeded in turning a good profit from a UK complex with a troubled history (Grangemouth).

The UK previously had 18 refineries supplying its fuel. With the closure of Coryton, as well as Petroplus’ Teeside facility which was shuttered in 2009, it now has six. These statistics appear alarming, but they do not paint the whole picture. There may be fewer facilities, but those remaining have greater capacities and are more technologically advanced. This, coupled with less demand stemming from a weak economy, better engine fuel efficiency and a general push towards carbon consciousness, helps justify the shrinking sector.

But, in a trend that mirrors the slow and steady closure of Britain’s power plants, the country must ensure that it is equipped for the future. If these closures continue without arrest and the existing refining structure is lost, then the logical extreme suggests the country would have to rely on imports. Anyone who queued at a petrol station over Easter will testify to the vulnerability and frustration that can be felt when at the very end of a volatile supply chain.

Written by Joe Hester.

US coal producers must be feeling pretty unloved at the moment. Having seen domestic demand drop in the face of ultralow gas prices and increasingly stringent environmental regulations, US producers have been increasing the amount of coal exported to the markets in Europe and Asia. However, this flood of new coal into the consuming markets has seen prices drop to loss-making levels for higher-cost US and Russian producers, as well as smaller miners in South Africa, Colombia, and Australian and Indonesia. If it drops any further – as many analysts think it will – it will even begin to threaten the profits of the mining majors.

Pressure is now building for US producers to cut back production, curbing the glut of coal and allowing the market to rebalance. And this pressure will only increase as US utilities are starting to cancel contracted tonnages and even to sell coal from inventories that are at record levels – further dampening domestic demand.

So, more bad news for an industry that has already seen its share of pain this year – at least until the immediate oversupply issues are worked out. Longer-term, however, the market looks better balanced and the potential for US exports to Asia more sustainable. Until then, the US industry faces a horizon with far more dark clouds than silver linings.

Written by Jonathan Rowland, Editor of World Coal.

As an Editor of a global energy publication, I offer support to the international oil and gas industries. Indeed, anyone who is employed within the industry hopes for the sector to remain healthy, and feels concern when negative news stories appear on television. When I read about gas companies’ plans for massive expansion in Australia I think, “Brilliant! That will be great for the industry.” When I hear about the huge increase in demand for energy in Asia I think, “Fantastic – more demand for oil and gas makes for a stronger market.” When I hear about companies’ initiatives to move operations into the Arctic my initial reaction is, “Yes – let’s race each other to those supplies! … So long as we don’t damage anything there of course … I’m sure we wouldn’t. We’re more careful than ever before nowadays. I’m sure it will be fine!” In my keen-spirited desire to support the success of the industry I have, at times, thought, “Shale gas bonanza in the USA? I’m sure the fracturing techniques can’t be as risky as some people claim – they probably just don’t understand the process fully. We’ve hit the jackpot! Let’s get at it – and fast!” But when I heard that shale gas had been discovered in my hometown of Blackpool, a Victorian seaside town in the Northwest of England, I thought, “Hydraulic fracturing has begun in the UK – great! … Hang on, my parents live there…”

It made me realise that sometimes it’s easier to support progress in the industry when you are supporting it remotely and far from the front line of industrial development. ‘NIMBYism’ is a pejorative term used within various industries to denote the negative public reaction against plans to develop industry close to residential areas, or areas regarded as worthy of protection.  In the oil and gas industry, striving to develop more and more facilities and processes to increase yields – the voice of the NIMBYs is often an annoyance. We see their protestations as an unnecessary and uninformed barrier to progress, and can’t always understand why they don’t want us to succeed with our projects as much as we do. “Can’t they understand that we really really need this stuff in the ground? What do they think they cook with? Where do they think the petrol they put in their cars comes from?”

NIMBYism is a difficult issue to deal with, and I can empathise with both parties either side of the divide on debates such as the one raging in the seaside holiday resort in which I grew up. The claims of the possibility of harmful carcinogens finding their way into local drinking water supplies are lent more weight on a personal level when you realise it is your family that will be drinking it. Of course, the reality is that it’s a huge concern if anyone in the world is affected negatively by any industry practice – irrespective of relationships involved. All we can do as an industry is try to progress in a responsible manner, minimising the negative impacts on the families and communities we necessarily need to operate in close proximity to, in this ever-crowded world.

Is there really a way to keep everyone happy all of the time? I think we know the answer to that….

Written by Anna Scordos, Editor of Oilfield Technology, LNG Industry, Energy Global.