Policy issues pertaining to the oil and gas sector in India

This article discusses the various phases in petroleum product consumption in India from 1960 to 1996, and analyses the changes in consumption patterns. Consumption is growing rapidly although the intensity of petroleum use and the proportion of petroleum in the overall secondary energy consumption is actually on the decline, especially since the mid-1980s. The proportion of middle distillates in total consumption, especially HSD (High Speed Diesel) which accounts for 45%, is very high mainly because of distortions caused by Government subsidies. The article also analyses expected demand for petroleum products up till the year 2010, emphasizing the need to address the particularly fast growing demand for middle distillates. Further, the article discusses various policy issues pertaining to upstream and downstream activities of oil and gas supply, and emphasizes the need for increased investment in exploration and development, better management of existing reserves, rationalization of pricing policies and the creation of modern infrastructure to meet growing needs.     

Norway's offshore petroleum industry

During the past decade, Norway has become an important oil and gas producer. Annual production is six times national consumption. Development policies of the national government have been cautious, and future policies will probably follow a similar pattern. The government recently opened offshore areas poleward of 62°N latitude, a decision likely to have a significant impact on Norway's future as an oil producer. Norway maintains a tight reign on foreign oil company participation, domestic downstream processing of crude, oil company taxation and oil revenue investment within the national economy. Norway's large inflow of oil-related capital investments and production revenues have contributed to significant inflation and to changes in local labour supplies. Norway has always used its petroleum industry to further the country's overall development goals, a policy that will continue in the years ahead.     

Conflicting energy and environmental policies: The portsmouth oil refinery

This case study presents the series of decision-making processes surrounding a current environmental issue—the Portsmouth oil refinery in Virginia. Crude oil must be refined before it can be used as fuel. Additionally, some oil must be desulfurized for use other than as gasoline. In 1977, the nation imported about one million barrels of oil a day. Although the US Department of Energy has emphasized the critical need for greater east coast refinery capability, the east coast is to supply only 25% of its refined oil needs. In the same year, the east coast met its demands for petroleum products from three sources: (a) refinery production, 22.7%, (b) product imports, 28.0%, and (c) products from the Gulf Coast, 49.3%.¹ The energy program after the Arab oil embargo has an objective of encouraging the construction of oil refineries and petrochemical plants in the United States rather than abroad. The tariff is higher on imports of refined oil products than of crude oil, and new refineries are allowed to import a large proportion of their requirements tarifffree.The US federal government does not directly regulate the locations for oil refineries or methods of desulfurization. The oil import program, however, does influence decisions concerning location of desulfurization facilities and refineries, and air and water pollution standards affect methods of refining, besides making desulfurization necessary.The opinions expressed in this article are those of the author and do not necessarily reflect those of the United States Department of Defense.     

Impacts of Bakken Shale Oil Development on Regional Water Uses and Supply

The Bakken shale play in western North Dakota is one of the largest unconventional oilfields in the United States, but published research about impacts on the region's water resources is rare. In this study, besides examining North Dakota water management policies and activities, we also analyzed three datasets: the Bakken horizontal well completion data (2008‐2014), North Dakota permitted water consumption data (2000‐2014), and groundwater level and streamflow observations in western North Dakota (2000‐2014). We found from 2008 to 2014, the annual total industrial water uses for Bakken shale oil development ranged between 0.5 and 10% of statewide total consumptive water use. The percentage increases were between 3.0 and 40% within the Bakken oil production region. The increased population of temporary oilfield service workers contributed additional domestic water use, which was equivalent to ~15% of annual industrial water use for the shale oil development in the Bakken. Despite being in a semiarid region, the impact of Bakken development on regional water supply was limited because the water in the Bakken was adaptively managed and the region received on average over 20% more precipitation than normal during 2008‐2014. Of the 15 glaciofluvial aquifers under study, 12 have seen water levels increasing or unchanged and the water levels for the remaining 3 aquifers have decreased.     

Evaluation of Generic Types of Drilling Fluid Using a Risk-Based Analytic Hierarchy Process

The composition of drilling muds is based on a mixture of clays and additives in a base fluid. There are three generic categories of base fluid - water, oil, and synthetic. Water-based fluids (WBFs) are relatively environmentally benign, but drilling performance is better with oil-based fluids (OBFs). The oil and gas industry developed synthetic-based fluids (SBFs), such as vegetable esters, olefins, ethers, and others, which provide drilling performance comparable to OBFs, but with lower environmental and occupational health effects. The primary objective of this paper is to present a methodology to guide decision-making in the selection and evaluation of three generic types of drilling fluids using a risk-based analytic hierarchy process (AHP). In this paper a comparison of drilling fluids is made considering various activities involved in the life cycle of drilling fluids.This paper evaluates OBFs, WBFs, and SBFs based on four major impacts—operations, resources, economics, and liabilities. Four major activities—drilling, discharging offshore, loading and transporting, and disposing onshore—cause the operational impacts. Each activity involves risks related to occupational injuries (safety), general public health, environmental impact, and energy use. A multicriteria analysis strategy was used for the selection and evaluation of drilling fluids using a risk-based AHP. A four-level hierarchical structure is developed to determine the final relative scores, and the SBFs are found to be the best option.     

数字石油矿区的设计构想

从数字地球和石油矿区相关概念出发,分析了信息技术在石油矿区可持续发展中的重要地位和作用。从油田开发、炼制对生态环境的影响及信息、信息技术在油田可持续发展中的作用方面探讨了数字矿区建设的必要性;从数字石油矿区建设的可行性、任务及构成方面提出了数字石油矿区的设计思想。同时分析了数字石油矿区的建立对优化资源配置、环保治理、基础设施和产业结构优化、矿区规划与决策产生的影响及其在矿区可持续发展中的应用前景。     

Rationalization of imports, refineries and distribution of petroleum in Sub-Saharan Africa

This paper outlines policies to secure and reduce the cost of oil supplies in Sub-Saharan Africa (SSA), taking into account the existing forces at play: limited foreign exchange, competition for increasingly scarce funds, and the likely emergence of Africa as the fastest growing centre of energy demand over the coming decade. It identifies major inefficiencies in petroleum procurement, refining and distribution, and analyses the specific bottlenecks at each stage of the supply chain. Many of the diseconomies, estimated to yield savings of US$1.4 per year, are traced to an inefficient regulatory set-up in SSA countries, as well as unnecessary government interference in the downstream petroleum sector. In particular, price controls, small topping refineries, monopolistic agencies, government subsidies and opaque management structures prevent the working of efficient market mechanisms. The paper discusses the importance of policy reform, outlining what changes need to be implemented on the levels of institutional arrangements, closing of inefficient units, petroleum pricing and encouraging foreign investment in the sector.     

The outlook for oil

Between now and 2000, the demand for oil is expected to be moderate and the supply abundant. Economic growth is almost twice as slow as in 1973 and requires 25–30% less energy per unit of GNP. The demand for oil is therefore growing at a rate of two to three times slower. Meeting the demand for oil between now and 2000 is within the capability of the oil-producing countries, in many cases with modest additional investment. Gas and coal will be very cost competitive in relation to oil and will serve as a break on future explosive price increases.     

A conceptual model for response to Arctic oil spills

The potential for oil spills in Arctic regions has increased significantly because of the development of petroleum resources. Response to an oil spill in the Arctic is likely to be much slower than that in the temperate region because of the remoteness of the area and its severe climate. In the face of these unique problems, accurate prediction of the extent and subsequent movement of an oil spill is vital to any cleanup effort. Presented is the framework of a program to study the movement of oil spills in the Arctic. Existing models of oil spreading and polar ice dynamics are reviewed and areas where new model development is required are defined. A system design is developed that may be used for developing a plan to act in the event of a major spill.     

Training carbon management engineers: Removing a major hurdle for geologic CO2 storage by increasing educational capacity

Implementing geologic storage of CO₂ at a material scale (ca. 1 Gt C/year) will require an industry comparable in size to the current oil and gas industry and a workforce trained in subsurface engineering. Since the same technologies that apply to hydrocarbon production apply to the subsurface storage of CO₂, petroleum engineering (PE) graduates will be valuable candidates to work in the carbon storage industry. We expect however that the demand for PEs from the oil and gas industry will increase, and that already strained educational capacity will not be sufficient to supply both industries. Thus we advocate building new targeted educational infrastructure. We present a model curriculum based on an existing accredited multidisciplinary degree program. This program combines the fundamentals of petroleum engineering with the subsurface architecture emphasis of geology and the environmental perspective of hydrogeology. We indicate key elements of this program that could be integrated with other, more traditional undergraduate engineering majors that also deal with the subsurface.     

Assessing corporate–community involvement strategies in the Nigerian oil industry: An empirical analysis

The desire of oil companies operating in the Niger Delta to secure their social license to operate, and address their community development obligations, has led in recent years to the adoption of corporate social responsibility (CSR) policies and strategies. Drawing on quantitative and qualitative data collected in host communities within the Niger Delta in Nigeria, the paper compares the effectiveness of two different corporate–community involvement strategies. The evidence suggests that while the corporate–community foundation model has certain advantages over the in-house community investment model, both approaches suffer from a common shortcoming that limits the impact of oil companies’ efforts on community development in their host communities. The paper concludes by exploring the implications of the research findings for corporate–community involvement in the Nigerian oil industry.     

意大利石油天然气工业及环境保护

论述了意大利及其他欧盟国家的石油天然气防大学工业及环境保护的基本概况,对我国石油企业环保工作提出了建议。意大利及其他欧盟国家社会和经济平衡发展,自然资源利用与保护并重。自然保护区的环境保护法律法规健全,健康、安全、环保已成为政府、公民和企业的共同理念和行动。我国的石油企业应学习意大利等国的经验和做法,在进行工程建设和生产时,应将开发利用经济资源和保护自然资源并重的理念贯穿始终。遵守法律,在工作实际中加强对自然环境的保护。     

Environmental management in resource-rich Alberta, Canada: first world jurisdiction, Third World analogue?

Economic growth is frequently touted as a cure for environmental ills, particularly for those in Third World countries. Here we examine that paradigm in a case study of Alberta, Canada, a wealthy, resource-rich province within a wealthy nation. Through provincial-scale datasets, we examine the increasing pressures of the forest, petroleum, and agricultural industries upon the ecosystems of Alberta within management, economic, and political contexts. We advance the thesis that economic activity leads to environmental degradation unless ecosystem-based management is integrated into economic decision making. Agricultural lands cover 31.7%, and forest management areas leased to industry cover 33.4% of Alberta; both continue to increase in extent. The rate of logging (focused on old-growth by government policy) continues a decades-long exponential rise. Current Alberta annual petroleum production is 52.5 million m3 crude oil and 117 billion m3 of gas. As of early 1999, there were approximately 199,025 oil and gas wells and a conservative total of approximately 1.5-1.8 million km of seismic lines in Alberta. Fire occurrence data indicate no downward trends in annual area burned by wildfire, which may be characterized as driven by climate and inherently variable. When logging and wildfire are combined, the annual allowable cut in Alberta is unsustainable, even when only timber supply is considered and the effects of expanding agriculture and oil and gas activities are ignored. Ecosystem degradation in Alberta is pervasive and contrasts prominently with a high standard of living. A wealth of ecological data exists that indicates current resource-based economic activities are non-sustainable and destructive of ecosystem health yet these data are not considered within the economic decision making process. Given the complex, compounded, and increasing ecosystem perturbations, a future of unpleasant ecological surprises is likely. We conclude with tentative predictions as to where current trends in Alberta may lead if decisions biased against ecosystems continue.     

Designing a mixed performance measurement system for environmental supply chain management using evolutionary game theory and balanced scorecard: A case study of an auto industry supply chain

This paper proposes a mixed performance measurement system using a combination of evolutionary game theory and the balanced scorecard (BSC) in environmental supply chain management (ESCM) that measures and evaluates business operations using the four different perspectives of finance, customer, internal business process, and learning and growth. ESCM plays an important role in the supply chain which leads to the reduction, reuse and recycling of resources involved in both upstream and downstream activities. This paper presents guidance for practical managers in evaluating and measuring ESCM by developing a knowledge-based BSC and evolutionary game theory. The primary purpose of this paper is to apply the proposed method in a case study to one of Iran's biggest auto industry supply chain SAIPA Company. The results of this study indicate that the adoption of ESCM, in the absence of regulatory pressures and cost-saving measures is triggered by public pressures and its implementation is limited by organizational factors and strategic myopia.     

Encouraging Natural Gas Exploration in Developing Countries

Significant distinctions that exist between crude oil and natural gas compel that separate terms for gas be included in petroleum agreements. Fiscal terms, production shares and cost recovery are, like oil, important economic considerations in gas agreements. However, unlike oil agreements, other economic terms will also need to receive attention because gas agreements need to give explicit recognition to the process for commercializing the gas discovery.     

Tri-generation investment analysis using Bayesian network: A case study

The increasing energy demand, increasing energy dependency, energy supply security, and environmental concerns have become a part of business policies since COP21 agreements in Paris, 2015. Combined cooling, heating, and power (CCHP or tri-generation) systems play an important role in paying the necessary attention to these policies. Tri-generation investment is a complex decision with hybrid use of energy resources. This article aims to reduce the complexity of this decision by the use of Bayesian belief networks in pre-investment stage of tri-generation investment project cycle. The proposed model gives an insight into decision analysis and helps the decision-makers either generate or purchase from it in order to meet the energy demand with different scenarios. The model is studied for a university case. The investment decision for a CCHP (tri-generation) system will be discussed as an alternative for purchasing the electricity and natural gas from the national grids.     

A MUNICIPAL WATER SUPPLY INVESTMENT PROBLEM IN RHODE ISLAND1

ABSTRACT: The traditional “requirements” approach to water system planning presumes perfectly inelastic demand and arbitrarily selects a fixed water requirement per capita per day as a planning target. Economists have often pointed out that such a policy leads to over-investment in water supply facilities; a superior approach would maximize some measure of net benefits incorporating price-sensitive demand. Using a dynamic programming model to depict an investment problem in Rhode Island, we find that ambiguities about how to incorporate price-sensitive demand into a decision framework may make such an approach as arbitrary as the requirements approach. Water conservation responses may be a function of other social parameters than water price; if so, variations in these social parameters should be regarded as economic alternatives to water supply investments.     

Potential use of oil shale for direct production of power in Jordan

Up until the present, Jordan has relied almost exclusively on imported petroleum for its primary energy requirements. Encouraged by emerging technologies and recent fossil fuel discoveries, Jordanians are seriously examining exploitation of their own indigenous energy resources to meet projected mid- and long-term power requirements. The most prominent of the known resources is oil shale. This report addresses the oil shale-for-power-production option in Jordan. Under consideration are 20 MW and 50 MW demonstration units and a 400 MW commercial-scale plant. The report focuses on three areas: (i) the engineering feasibility of using Jordan's oil shale in a circulating fluidized bed combustion (CFBC) boiler; (ii) environmental aspects of the proposed oil shale-for-power plants(s); and (iii) the economic feasibility of the proposed plant(s). The results could be useful for other low- to middle-income countries considering oil shale as an option for power production.     

Establishing an effective production sharing type regime for petroleum

The primary reason for developing a nation's petroleum resources for export is to generate government revenues. The goal of most governments is to maximize the net present value of their petroleum revenues subject to efficient exploration and production practices and depletion considerations. This paper seeks to provide a basis for the determination of an effective tax regime that will achieve this goal. The analysis focuses on 12 standard production sharing contract options applied to four hypothetical exploration environments. A relatively recent Resource Rent Tax option is also examined as an add-on to production sharing contracts or other tax regimes. The results highlight the need for governments to understand and to use: (1) appropriate profit criteria, (2) an understanding of multi-national petroleum corporation behaviour, and (3) a priori geologic information in establishing effective tax regimes for petroleum.