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MUD HANDLING IMPROVED WITH A CONSTANT-VOLUME RISER

R.J. Baker Shell International Petroleum Mij. B.V. The Hague The development and installation of constant-volume risers on floating drilling vessels would significantly improve operational safety and reduce the environmental impact of offshore drilling. Because these are declared goals of Shell companies, it has been decided to place this concept into the public domain for further development.

OGJ NEWSLETTER

Will oil prices stay high longer than most expect so industry can generate enough capital for current and future investment to replace oil and gas production? Salomon Bros.' Bernard Picchi thinks so. Assuming no demand growth the next 5 years, world oil and gas demand could total 175 billion barrels of oil equivalent (BOE) for 1990-94, Picchi estimates. Assuming production replacement rates of 50-100% and $5/BOE finding costs in 1990-94, producers will need $440-875 billion for upstream

U.S. BRIEFS

TRANSCO ENERGY VENTURES CO., Houston, acquired a majority interest in Tren-Fuels Inc., Austin, previously known as Natural Gas Co. of Texas. Tren-Fuels uses tank trucks to deliver compressed natural gas to fleet vehicles and plans to place as many as 15 more trucks into service by yearend 1991. TEMCA LIQUIDS CO., Houston. bought a 50% interest in the 500 MMcfd Cameron Meadows gas processing plant in Johnsons Bayou, La., from operator OXY USA Inc, for an undisclosed price. It was recently tied

UTILITY CHIEF: IF U.S. MUST HIKE FEDERAL REVENUE, AN INCREASE IN GASOLINE TAX IS THE BEST BET

William T. McCormick Jr. Chairman and Chief Executive Officer Consumers Power Co. Jackson, Mich. The prospect of higher taxes on U.S. energy is very real as the federal budget summit moves forward. However, there is a world of difference between various proposed energy taxes and their effect on Americans. As President Bush said, "I think taxes wrongly applied can kill economic growth."

WATCHING WASHINGTON THE SPR DRAWDOWN

With Patrick Crow President Bush's order for a small drawdown of the U.S. Strategic Petroleum Reserve is designed to calm crude oil futures markets. Under the Sept. 26 order, the Department of Energy will sell 5 million bbl from the 590 million bbl reserve, with deliveries beginning in 15 days and lasting 30-60 days. Bush said he took the action to thwart speculators who might try to drive up the price of oil.

COMPANIES AGREE TO CUT TOXIC EMISSIONS

Environmental Protection Agency Administrator William K. Reilly said executives of nine major U.S. companies have agreed to voluntarily reduce toxic air emissions at 40 chemical plants in 14 states. When fully implemented in December 1993, the initiatives will aim to reduce toxic air emissions by almost 83%, or 9.46 million lb. The 40 plants are on the list of 205 facilities that EPA has identified as having relatively high estimated risks from toxic air emissions.

W. COAST BEST POTENTIAL FOR OUTPUT HIKE SOON

Bob Williams Senior Staff Writer Only Alaska and California can make a sizable near term contribution to boosting U.S. oil production. In terms of current reserves, all other U.S. oil producing states combined could not ramp up production enough in 1 year to make much of a dent in the natural decline in U.S. oil fields (OGJ, Sept. 17, p. 21). Even with a strong effort from Alaska and California added, the U.S. would at best trim the rate of its oil production decline in 1 year.

E&D DRILLING HITS FAST CLIP IN ARKOMA BASIN

G. Alan Petzet Exploration Editor Exploration and development programs are maintaining their brisk pace in the Arkoma basin of Arkansas and Oklahoma. The basin is playing host to a round of drilling that involves the deepest holes and heaviest rigs ever concentrated there. OXY USA Inc. late last month was preparing to spud a projected 21,000 ft, $12 million wildcat near Danville, Ark., to Cambro-Ordovician Arbuckle, a formation that does not produce commercially in Arkansas.

OGJ NEWSLETTER

Saddam Hussein's threats to attack Middle East oil fields and Israel if economic sanctions start to strangle Iraq have sent 11 prices soaring. Brent closed Sept. 27 at $40.15/bbl for 15 day delivery, up more than $4 on the week. In Rotterdam, premium gasoline prices Sept. 27 soared to $445/metric ton from $415 the week before, gas oil prices to about $345/ton from $294, and heavy fuel oil to $140/ton from $126.

U.S. BRIEFS

DEPARTMENT OF ENERGY rejected bids for the mothballed Tennol Energy Co. ethanol plant in Jasper, Tenn., which it acquired when owners defaulted on a federally guaranteed $64 million loan in 1988. It received two bids, $8.3 million and $2.7 million (OGJ, July 16, p. 34). ENCOAL CORP., signed a $72.6 million cooperative agreement with the Department of Energy to share costs of building and operating a coal liquefaction demonstration plant at Triton Coal Co.'s Buckskin mine near Gillette,

U.S. MOVES TO START TAPPING FOUR STRATEGIC RESERVE SITES

Patrick Crow Washington Editor The U.S. Department of Energy is proceeding with its first crisis-related drawdown of the Strategic Petroleum Reserve. It's a dual test of how the SPR sales and distribution system will function and how the oil will affect the marketplace. Reacting to increasing political pressure to stop speculation in oil prices, President Bush ordered DOE to sell 5 million bbl of SPR crude (OGJ, Oct. 1, p. 37).

U.S. TO BOOST PRODUCTS TAXES, BOLSTER E&P

The Bush administration and congressional leaders have agreed on a U.S. deficit cutting plan that would raise the current 9 cents/gal federal gasoline tax to 21 cents/gal by next July 1 and improve the tax climate for exploration and production. Congress now must approve or reject the budget package, which is designed to cut the federal deficit by $40 billion in fiscal 1991 and $500 billion during 5 years. The E&P package, which the administration insisted upon, is the one President Bush

WATCHING WASHINGTON THE NEXT 5 YEAR OCS SCHEDULE

With Patrick Crow Higher oil prices probably will result in more U.S. Outer Continental Shelf lease sales being held under the next 5 year program, says Barry Williamson, director of the Minerals Management Service. When the current 5 year plan runs its course in 1992, probably only 15 of the 39 scheduled sales will have been held.

OGJ NEWSLETTER

Oil prices continue to swing wildly as the Persian Gulf crisis drags on. Brent for 15 day delivery lost almost $5 on the week, closing Oct. 3 at $35.50/bbl, as markets took note of peace noises from Saddam. Dubai fell $2.35 to close Oct. 3 at $31/bbl.

DOE MAY USE DEFENSE PRODUCTION ACT TO HELP REFINERS

The Department of Energy said last week it is prepared to use its authority to maintain the flow of products from a U.S. refining industry that is running all out. DOE has the power under the Defense Production Act to ensure priority repairs to refineries that experience accidents or outages. It figured refiners used 97% of U.S. operating capacity in August, compared with 93% a year ago. Utilization rates of available capacity are slightly lower.

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