Shannon, The USA uses about 17 million barrels of oil per day. They can only withdraw 3.9 million per day from the Strategic Oil Reserves. Quite a difference. I also wonder if the Alaskan pipeline will be able to deliver, since much of it is above ground and has to be heated (power outage) to keep the oil running. My dad worked on that years ago. Hope this answers some of your questions. Karen

-- Karen (barbinst@wcta.net), July 01, 1999

Answers

Karen, thank you. I've done the math on this one and it doesn't look good. I suppose my neighbors and I, and all of you, will be on the bottom of any ration list that's made up. My husband is an aircraft attorney and I'm wondering if anyone is going to be buying/selling airplanes and engines if there's not enough fuel to fly them. Just one more thing to consider......

-- Shannon (Teacherof3@aol.com), July 01, 1999.

I am not persuaded that the government would release any significant amount of the strategic petroleum reserve for private consumption.

-- dave (wootendave@hotmail.com), July 01, 1999.

Paula Gordon stated as follows in an e-mail on Roleigh Martin's list, June 30, 1999:

"According to several reports I have heard, the Alaskan Pipeline apparently has a major challenge on its hands to remediate in time the embedded systems that control the valves on the pipeline."

-- Lane Core Jr. (elcore@sgi.net), July 02, 1999.

Howdy--

Recently a relative of mine--and a total straight shooter--returned from the North Slope where he was heavily involved in Y2K remediation for the big rigs up there.

I had emailed him a posting from this forum that many will recall regarding chips in the bottom of well, chips in the bottom of the ocean, etc. The upshot of the posting was that the oil industry was toast.

I cannot comment substantively on that gloomy prediction of the fate of the worldwide oil industry, except to say that I agree that the oil industry is indeed in serious trouble. However, as to the specifics of the Alaskan oil fields, I can pass on some items that you may find interesting.

First off, the Cuz was amused by the posting (wish I could find the durn thread), because while it purported to be well-informed, he didn't recognize much of what the author was talking about. I do not have my notes from our conversation in front of me, but let me mention a few things I do clearly recall.

1. There aren't a lot of chips on rigs--anywhere. I don't believe the Cuz's experience extended to offshore platforms, but from the typical West Texas rigs to the most sophisticated platforms on the North Slope, there aren't a lot of chips. Cuz said--"A rig is simply not a good place for electronics of any kind--way too many violent vibrations."

2. They do have some monitoring equipment near the rigs, but it is hardly mission critical--for instance, monitoring the level of the mud pits (a special kind of mud is injected into wells to increase their output). But if the monitors go, they just send a guy out there with a tape measure. A little cold, but no problem.

3. Regarding the need for electricity to keep the oil flowing. Yes, indeed. Absolutely key. But since electrical supply is problematic on the Slope in the best of circumstances--it goes out twice a month, I believe was the statement--they have a huge number of generators, and 2.5 YEARS supply of diesel.

4. The upshot of the Cuz's discussion was that he expects that the oil will flow south. There WERE some Y2K issues that concerned his company and needed attention; he went up and took care of them. Job done.

Whether or not the supertankers will be able to load, travel and offload in the continental US-or Japan, wherever they're selling these days--I do not know. I also have grave doubts about the refineries functioning smoothly. The oil business is key to almost every industry in the world, and I think they are going to have problems. That means we're gonna have problems.

This, and an earlier posting of mine may seem strange to some, as I've offered up some specific (and frequently anecdotal info) that is positive, will reiterating my belief that Y2K will be far more than a bump in the road. But I think people deserve the facts--even the small, lame ones I have to offer, burdened with caveats and qualifications.

For what it's worth,

-- William in Dallas (bcheek@onramp.net), July 02, 1999.

William:

Does your cousin work primarily in drilling/exploration, or in production?

As I understand it, more of the chip problems are associated with the production side than with the exploration side. Just my take on what I've read and heard.

Thanks for the info.

-- Jon Williamson (jwilliamson003@sprintmail.com), July 02, 1999.

Yo, Jon

Frankly Jon, I'm not sure. But "rig" has always meant drilling and exploration to me, so you may be right.

The Cuz works for a major manufacturer of oil field equipment. I hesitate to get more specific without giving him a call for an OK, but he did promise to give a more detailed response to the post I sent him, so if that actually gets done, I will of course, post it here.

Have a great morning,

-- William in Dallas (bcheek@onramp.net), July 02, 1999.

William in Dallas,

Re: Your Cuz in Alaska on quantity of embedded chips in oil rigs. That depends on what type of well it is. Stripper wells (shallow, with only minor output of production) do not have embedded systems. Most of the substantial wells in 'oil country' down here in the lower 48 do have anywhere from 8,000 to 10,000 chips or so. The problem is that a lot of oil-rig workers, supervisors and even engineers don't realize what they've got because the systems are sealed and out of sight. Many have worked flawlessly since day 1 and have never needed attention. Conversion to these chip systems began in earnest about 10 years ago and most significant-sized wells were upgraded to chips by 1995... about the time some folks began to think about Y2K.

I've got contacts at one oil-well engineering firm that specializes in chip systems... who tells me that he's still amazed that even NOW (as of late June) there are still engineers, VP's of oil firms that will swear on a stack of Bibles that their wells don't have any or only a handful of chips. These consultants come in and show them other wise and they go, "OH S___" and then the fun and fireworks begins usually with more rounds of denials that the chips might have any defects.."but we've never had a problem, before"... followed by more denial followed by phone calls to systems manufacturers and then the ring-around-the-rosie begins.

Bottom line: Chances are there are more chips in those wells in Alaska than what your cuz realizes. This is what the whole industry has been waking up to for the past year. In 1997 when the embedded chip issue first began getting discussion in public, my contacts tell me that most everyone in the industry including consultants didn't think it would be a problem, and didn't think the industry had that much exposure. (Everyone knew of personal situations where they knew there were a bunch, but it never dawned on them that the whole industry had consumed so much...tunnel vision)

So William, yes there are indeed chip problems probably even a lot more in Alaska than anyone has realized without doing exhaustive estimates. Now, I have NO sources with direct first-hand information on Alaska...so I can't say yeah or nay on your cuz's assertions in Alaska. With the weather extremes I wondered myself on the chip usage being uselful. Also weather temps and keeping the lines warm, I had wondered about needed to keep provisions for emergencies anyway up there. So, in my earlier posts I've not factored the Alaska situation into the equation EXCEPT on the SCADA Pipeline problem. There is where I'm told you would expect to see the problems arise for Alaska crude regardless of what is happenning at the well-head itself.

-- R.C. (racambab@mailcity.com), July 02, 1999.

Rigs are used for drilling wells. It's true that they are mostly mechanical, although computers are used during the drilling process to run electrical sensing devices down the hole. Offshore, production platforms look very similar to some rigs; hence the confusion. In fact, rigs are often on platforms.

It doesn't really matter. The Y2K risks are concentrated in two areas for the oil industry: getting the crude oil from the well through the refinery, and in the offices where the business is run.

-- Dog Gone (layinglow@rollover.now), July 02, 1999.

RC wrote:

"I've got contacts at one oil-well engineering firm that specializes in chip systems... who tells me that he's still amazed that even NOW (as of late June) there are still engineers, VP's of oil firms that will swear on a stack of Bibles that their wells don't have any or only a handful of chips. These consultants come in and show them other wise and they go, "OH S___" and then the fun and fireworks begins usually with more rounds of denials that the chips might have any defects.."but we've never had a problem, before"... followed by more denial followed by phone calls to systems manufacturers and then the ring-around-the-rosie begins. "

I realize that this may qualify me for the POOLE award, but could you ask your contacts if they can provide you with some specifics about wells that have lots of chips and therefore the potential for lots of problems.

Paul Davis has said before that date sensitive chips always have a way to change the date - i.e. you don't have to dig up a pipeline to get at the chip to change/test the date. If your contacts can provide some more specific info then perhaps we can look further into this issue.

-- Johnny Canuck (j_canuck@hotmail.com), July 02, 1999.