March 2014

First oil

Times … they are a changin’

Pramod Kulkarni / World Oil


“The order is rapidly fadin’, and the first one now will later be last, for the times they are a-changin’.” — American folk singer Bob Dylan, 1964.

Truth be told, times have always been changing. It’s just that the individuals and entities, with entrenched interests, can feel threatened by the change. In the late 19th century, the stagecoach and buggy whip manufacturers did not see the emergence of the horseless carriage, much less automobile manufacturing, gasoline pumping stations at every corner, and interstate highways. Rightly enough, horses are now relegated to rodeos and dude ranches.

There are transformative changes underway in the energy, transportation and manufacturing industries. We need to be cognizant of these changes, and not get left behind like the buggy manufacturers.

It’s gas. If you’re old enough to remember The Graduate, the movie, Dustin Hoffman’s character gets this career advice, “One word: Plastics!” Now the word is natural gas, because of its growing supply and reduced environmental impact. Middle Eastern oil fields have long been ablaze with gas flaring (a sight visible from space), because of the economic decision to only produce oil. Steadily, producers are reducing flaring and capturing the valuable energy resource.

Now natural gas, in all of its forms (methane, propane, CNG, LNG, GTL, etc.), is emerging as the fuel of the future. While this fact is not yet reflected in the U.S. gas price at Henry Hub, we can see CNG and LNG distribution infrastructure slowly taking shape. In the oil field, field gas or LNG is being used to drive drilling rigs and pressure pumping units. CNG is being used as a motor fuel in diverse areas, such as India and Israel. My vote goes to 100% electric cars with drive-by-wire controls. Natural gas would be used for electric power generation. The Tesla electric car already has a range of 300 mi at 55 mph. For the time being, however, gasoline from crude oil is the fuel of choice, because of its high energy density and convenience (no need for compression or liquefaction).

3D printing. The ability to “print” three-dimensional objects is causing a stir in the manufacturing sector. During the recent GE Oil & Gas annual meeting in Florence, a manufacturing engineer described a turbine nozzle that requires more than 30 welding and brazing operations. GE used 3D printing and a process called additive engineering to create a solid nozzle that requires no welding or brazing. When GE engineers showed the 3D nozzle to its vendor, there was pin-drop silence, as the vendor executives realized their business model had just vanished. The vendor’s R&D department had not envisioned the emergence of 3D printing.

Scientists at the Karlsruhe Institute of Technology in Germany are shaping ceramic-polymer powder, with 3D laser lithography, to manufacture a light, low-density material with a porous, lattice design that is also incredibly strong (applying the same principle as wood or bone). In the future, this technology could be used to print continuous pipe that is both light and strong. With such a possibility, OCTG suppliers may be better prepared for the future to realize that they are in the pipe business, and not necessarily the steel business.

Fusioning us out of business. There’s one research entity that has tried for more than 50 years, to put the oil and gas industry out of business. Scientists at the Lawrence Livermore National Laboratory in California are pursuing the “holy grail” of releasing fusion energy greater than the amount of energy used to confine the fuel. In the Feb. 12 issue of Nature, the Lawrence Livermore scientists have reported a milestone of sorts—achieving fuel gains greater than one, for the very first time. Every-day use of energy from nuclear fusion may still be 50 or more years away, or could never happen, but the tantalizing possibility remains.

These are exciting times. But the next great adventures are always around the corner. What will our great-grandchildren do—harness energy from outer space or establish colonies on the ocean floor? wo-box_blue.gif 

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Pramod Kulkarni
World Oil
Pramod Kulkarni
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