Taxing Fracking: Proposals for Ohio's Severance Tax

Outlines the proposal to raise the state's severance tax on oil and gas extracted by fracking and return most of the revenues in income tax cuts, concerns with the proposal, and recommendations for using the severance tax to restore jobs and services

Assessing the Economic Cost Benefit Analysis of Fractionating Raw Condensate into Specific Products by the Atuabo Gas Processing Plant, Ghana

In Ghana, the condensate market is nascent, but however has the potential of accelerated growth, as the nation continues to discover more gas reserves in addition to the existing reserves. The objective of the study was to analyze the condensate production by Ghana Gas and assess the economic viability of expanding the existing Atuabo Gas Processing Plant to facilitate the fractionation of raw condensate (which is currently being sold for limited industrial use) into specific products. The study is also geared towards identification of a means of optimizing the country’s gains from this product as well as recommending such optimizations for the benefit of the country. A quantitative survey based on the Net Present Value (NPV) economic model (of a Condensate Fractionation Unit configuration that yields Pentane foamer, Rubber Industrial Solvent Oil, Natural Benzene, Vegetable oil extraction solvent) was used in analyzing the feasibility of condensate production optimization in Ghana. The economic analysis of the raw condensate sale, yielded a net present value (NPV) of US $143,080,318.03 whiles that of the fractionated products yielded a positive NPV of US$ 167,471,583.84. Comparing the two models indicated clearly that the fractionated products were more viable and lucrative. This value of approximately US $ 24,391,265.81 was more than the NPV of the economic model for the sale of raw condensate. Furthermore, the sensitivity analysis which elaborates effects of changes in raw material, prices of product and rate of return due to errors of estimation of investment cost proved, there is a ninety percent (90%) probability that the economic model for the project will yield a maximum NPV at the end of the project. Implying that fractionating condensate would be lucrative for Ghana National Gas Company. Therefore, the results from the Net Present Value (NPV) economic analysis revealed that Ghana Gas, Atuabo stands to gain immense benefits from fractionating condensate into Pentane foamer, Rubber Industrial Solvent Oil, Natural Benzene, Solvent for vegetable oil extraction. After performing the economic analysis with the net cash flow (NPV) model of both scenarios, it was also ascertained that should the proposed expansion project be carried out, measures should be taken to ensure constant or increased supply of natural gas (plant condensate) and also to reduce capital expenditure in order to enhance the project’s success since the afore mentioned are the most influential element. Keywords: Economic Cost Benefit Analysis, Fractionating, Raw Condensate, Atuabo Gas Plan

Identification of technical barriers and preferred practices for oil production in the Appalachian Basin

The Appalachian Basin is characterized by great number of stripper wells and marginally producing oilfields that face a number of production problems. The purpose of this study was to identify the main problematic issues and preferred solutions for oil production in the Appalachian Basin. Investigation and identification of oil production problems and preferred solutions began with searches in the Society of Petroleum Engineer (SPE) library, and Petroleum Technology Transfer Council (PTTC) website. In addition, journals, workshop, conference were used to find additional information. Formal interviews were arranged with oil producers to gain more insight into problems in the Appalachian Basin. Accordingly, the following production problems were identified and ranked in order of decreasing importance: water production, poor understanding of reservoir heterogeneity, limited availability of compatible water for water injection, lack of sufficient reservoir data such as permeability, porosity, and primary production data for reservoir characterization, and paraffin and asphaltene causing operational issues. The technologies that are investigated included: water controls treatment, water-handling methods, and reservoir characterization using Artificial Neural Networks, paraffin and asphaltene control. In addition, corrosion problems and electrical cost reduction are discussed

Master of Science

thesisThe West Sak heavy oil reservoir on the North Slope of Alaska represents a large potential domestic oil source which has not been fully developed due to difficulties with producing viscous oil from a cold reservoir. Past studies have evaluated the economic viability of producing from West Sak, but given the rising demand for oil, a fresh evaluation of the economic feasibility of heavy oil production processes from West Sak is warranted. Therefore, the objective of this project was to design a set of possible processes for recovery of heavy oil from West Sak and identify any economic barriers to production. Discounted cash flows were used to determine the investor's rate of return (IRR) for each process assuming oil sold for either a fixed price or followed a given price forecast. Capital and operating costs were estimated primarily using the methodology suggested by Seider et al. (2008). Three different scenarios were analyzed using this methodology: a base case and two alternatives for oil transport (dilution with gas-to-liquids and upgrading via hydrotreating). Polymer flooding was selected as the recovery method for all scenarios and production rates were estimated from recovery curves published by Seright (2011). Each scenario also investigates the possibility of using oxy-firing for CO2 capture as an alternative method for providing process heating. Results of the economic analysis show that the base case would produce an IRR of 41% (dilution would produce a 45% IRR, and upgrading a 6% IRR). A sensitivity analysis performed on the model's inputs gave a range of possible IRRs for the base case of 30% to 50%, dilution's range was 24% to 62%, and upgrading ranged from -2% to 29%. Both the base case and dilution scenarios have no economic barriers to development. If West Sak heavy oil as produced can be delivered via pipeline, then the base case would be the economically preferable scenario. Upgrading is not economically feasible due to high capital costs which drive up the required oil price and result in large severance tax liabilities

Oil futures prices in a production economy with investment constraints

We document a new stylized fact regarding the term structure of futures volatility. We show that the relationship between the volatility of futures prices and the slope of the term structure of prices is non-monotone and has a "V-shape." This aspect of the data cannot be generated by basic models that emphasize storage while this fact is consistent with models that emphasize the investment constraints or, more generally, time-varying supply-elasticity. We develop an equilibrium model in which futures prices are determined endogenously in a production economy in which investment is both irreversible and is capacity constrained. Investment constraints affect firms' investment decisions, which in turn determine the dynamic properties of their output and consequently imply that the supply-elasticity of the commodity changes over time. Since demand shocks must be absorbed either by changes in prices, or by changes in supply, time-varying supply-elasticity results in time-varying volatility of futures prices. Estimating this model, we show it is quantitatively consistent with the aforementioned "V-shape" relationship between the volatility of futures prices and the slope of the term structure

U.S. oil production: the effect of low oil prices

This special report presents the results of OTA’s analyses of a group of factors we believe will strongly influence the future direction of U.S. oil production. These factors include the expected profitability of new investments in drilling, the potential of new oil exploration, development, and production technologies, the nature of the remaining oil resource base, and structural changes in the oil industry. The special report also provides a brief discussion of some policy options for Congress to consider if it decides to moderate the expected accelerated decline in U.S. oil production

Taxation of Oil and Gas in the United States 1970-1997

This article provides an extensive examination of all major types of taxes and royalties levied on the oil and gas industry by federal, state, and local governments in the United States during the 1970-1997 period. Important taxes levied on the oil and gas industry can be grouped into three broad categories based on their effects on resource extraction: (1) production, (2) property, and (3) income. Reliance on these three types of taxes differs substantially among the eight key states responsible for about 73 percent of U.S. oil and 83 percent of U.S. gas production (Alaska, California, Kansas, Louisiana, New Mexico, Oklahoma, Texas, and Wyoming). A detailed comparison of differences in institutional structure and effective tax rates for the eight major oil and gas producing states is presented

Development of An Economically Viable H2O2-based, Liquid-Phase Ethylene Oxide Technology: Reactor Engineering and Catalyst Development Studies

Ethylene Oxide (C2H4O, abbreviated as EO), a high volume chemical intermediate is used as a raw material for a variety of consumer products, such as plastic bottles, anti-freeze, sports gear, detergents and paints. In 2009, approximately 19 million metric tons of EO were produced and its demand is projected to grow at an average rate of 3-4% per year over the next decade. Currently, EO is manufactured by the silver catalyzed ethylene epoxidation process which is highly energy intensive and wasteful because much of the ethylene (feedstock) and EO (product) burns to form carbon dioxide, a greenhouse gas. Worldwide, commercial production of EO releases 3.4 million metric tonnes of CO2 each year making it the second largest emitter of CO2 among all chemical processes. Furthermore, loss of ethylene feedstock to burning represents a loss of $1.1 billion per year worldwide. In this dissertation, an alternative liquid phase ethylene epoxidation technology (henceforth referred to as CEBC EO process) has been demonstrated with both homogeneous Re-based and heterogeneous Ce- and W-based catalysts. In this process, the ethylene gas is compressed under pressure (50 bars) and dissolved in a liquid reaction medium containing the oxidant 50 wt% H2O2/H2O, promoter pyridine N-oxide and catalyst (methyl trioxorhenium or W-KIT-6 or W-KIT-5). The ensuing catalytic reaction produces EO with near complete selectivity with no CO2 detected in either the liquid or gas phases. Methanol is employed as a co-solvent to enhance the ethylene solubility in the liquid phase. At the operating conditions (P = 50 bars, T = 20-40 °C), the volumetric expansion studies reveal that the liquid reaction phase (methanol+H2O2/H2O) is expanded by up to 12% by compressed ethylene. The corresponding ethylene solubility is 22 mole %, converting ethylene from being the limiting reactant in the liquid phase at ambient pressure to an excess reactant at the higher pressures. Fundamental engineering studies (volumetric expansion, mass transfer and conversion studies) essential for achieving pressure-intensification established the optimum agitation speed for Re-catalyzed ethylene epoxidation to be 1200 rpm. Operating at conditions that enhanced the ethylene solubility and eliminated interphase mass transfer limitations maximized the EO productivity (1.61-4.97 g EO/h/g metal) on MTO catalyst, rendering it comparable to the conventional silver-catalyzed process. Further, intrinsic kinetic parameters, estimated from fixed time semi-batch reactor studies, disclosed the moderate activation energy (57±2 kJ/mol). Based on a plant-scale simulation of the CEBC EO process using Aspen HYSYS®, preliminary economic and environmental assessments of the process are performed, both of which are benchmarked against the conventional silver-catalyzed ethylene epoxidation process. The capital costs for both processes lie within prediction uncertainty. The EO production cost for the conventional process is estimated to be 71.6 ¢/lb EO. The CEBC process has the potential to be competitive with the conventional process if the MTO catalyst remains active, selective and stable for at least six months at a leaching rate of approximately 0.11 lb MTO/h (or 5 ppm Re in the reactor effluent). Comparative cradle-to-gate life cycle assessments (LCA) reveal that the overall environmental impacts on air quality, water quality and greenhouse gas emissions are similar for both processes given the uncertainties involved in such predictions. The LCA results implicate sources outside the EO production plants as the major contributors to potential environmental impacts: fossil fuel-based energy required for natural gas processing (used for producing ethylene, hydrogen and methanol) in both processes and to the significant requirements of coal-based electrical power for compressing large volumes of recycled ethylene and other gases in the conventional process. These results of the economic analysis prompted the evaluation of alternative catalysts that are inexpensive and exhibit the best performance metrics (high activity, near complete selectivity towards desired product and high stability). These evaluation studies identified tungsten and cerium based catalysts as possible alternatives. W-based catalysts formed EO with near complete selectivity and recycle studies established catalyst durability. Further, the EO productivity with these catalysts (0.3-3.2 g EO/h/g W) is of the same order of magnitude as the Re-based and Ag-based catalysts

Design, analysis and remote monitoring of a solar powered orphan oil well pumping system in Nigeria

This thesis explores the issue of orphaned wells, which are abandoned oil and gas wells left uncapped, leading to the release of greenhouse gases, including methane and hydrogen sulphide gas H₂S, which is lethal to humans into the atmosphere. These wells contribute significantly to global warming, as methane is a potent greenhouse gas with a high heat-trapping capability, unfortunately due to it cost an average of 100,000CAD per well for oil well plugging, most oil industry abandon these wells. The research identifies cost-effective strategies to mitigate the impact of abandoned wells using renewable technology, specifically focusing on a comprehensive system sizing approach for Olobiri oil well 17. To address the problem, the study recommends the use of solar-powered pumps to remove the remnants of oil from the wells. PVsyst software is employed to determine the appropriate pump size if the system ran continuously or solar peak hours of the location. The results demonstrate that a 5-hour running time yields higher system efficiency compared to continuous running time. Based on HOMERpro optimization result, a 50kW PV unit and 54.9kW batteries are recommended for the system setup, resulting in improved efficiency and cost-effective option during the 5-hour operation with an overall efficiency of 11.4% and pump efficiency was 37.9% compared to a continuous flow system efficiency of 5%, and the pump efficiency of 11%. For monitoring and data logging purposes, the addition of PLX DAQ aids in real-time monitoring system for the design characteristics such as PV voltage and current, inverter AC output, oil level and temperature. This low-cost data logging system allows for easy maintenance and provides valuable data for further analysis since the PLX DAQ is a Microsoft Excel’s add-on. Also, due to the site location and the specification describing the location, Lora Technology is implemented for real time monitoring, which is independent on the internet network. In conclusion, this research highlights the importance of addressing orphaned wells' environmental impact and proposes a viable solution for capping using renewable technology, particularly solar-powered pumps, to mitigate greenhouse gas emissions and the potential hazards posed by abandoned wells