Very cheap wells with low production (onshore, say ~10 barrel per day) are the ones that tend to be difficult to shut in, as they're not designed for easy temporary shut-ins.
That having been said, most of the "must produce" issues are contractual. There are plenty of contracts with production quotas/etc. Similarly, pipelines need a minimum volume to keep flowing, and once they're stopped, they can be difficult to start again (inspections/etc, as well as physically starting things flowing).
SOME wells can be a little difficult to restart after a shut-in. This includes, for example, offshore wells which extract waxy crude - the crude can simply solidify in the pipe if allowed to cool down to ambient temperature. See link below. This is usually not a big problem for a planned shutdown, as the facility will take measures to prevent such a situation (eg flush the pipes with diesel right after shutdown).
I suspect the problem might be more difficult with some pipelines, as these may be impractical to flush.
https://www.khavaranparaffin.com/articles/161-wax-problems-i...
(Major caveat here: I'm an exploration geologist who later went into remote sensing, so my knowledge of actual operations is pretty spotty. Feel free to ignore me on this, but I'm going to keep rambling anyway.)
I was referring to a lot of onshore wells in declining or very small conventional fields. In many cases, a shut in that lasts for more than a few weeks basically leads to a P&A, as production won't recover without a workover, and a workover isn't worth it. That's what I meant by "not designed for it" -- production is expected to be sub-par after a shut in and a workover was never in the plans. A shut in means a death sentence for some wells, so operators prefer to keep them trickling along when possible, as it leads to a higher EUR. (Also most of these are hooked up to stock tanks, not production gathering pipelines, so it's a bit of a different world.)
However, I'm extrapolating from the very little experience I've had with that. Literally one tiny onshore field in TN (yes, Tennessee) that I worked in/with 15 years ago a summer after undergrad (I was actually mostly collecting seismic with a tiny source and a short string of geophones from the back of a pickup truck, so not terribly closely related). I may very well be way off base.
> You don't drill a $100 million deepwater well without all the bells and whistles. <
You will if you can make a couple $B off it. It's a risk. The deep gulf has mudslides that take out rigs. It happened to Taylor Energy in 2004. All the tech in the world couldn't prevent that spill.
https://www.nola.com/news/article_a55f87c0-8253-11ea-9f24-23...
A loss of containment is very very very bad and a huge problem, but it's not related to a shut in.
I'm well aware of shallow hazards (e.g. mass wasting aka mudslides). I've mapped them in many areas. I'm well aware of the ongoing Taylor spill. I've actually worked with monitoring it using satellite imagery from the regulatory side. I've also worked with it from the oil industry side...
None of that is even remotely relevant here, though... I'm still very unclear how anything you mentioned relates to anything I said...
That having been said, if you think _anything_ around the oil industry isn't done with safety and environmental concerns first and foremost, you've _clearly_ never been anywhere around the industry. I'm dead serious.
What they do is really, really, really damned dangerous and it's fair to debate whether that risk is worth it at a societal level.
However, don't for a goddamn second think that these folks don't care or are sloppy. _Every_ meeting all the way to the top starts with a discussion about safety and possible environmental impacts. I really, really mean that... Every damn one. It's vastly more important than very literally anything else. The first decision is _always_ HSE, never money.
Yeah, things can go wrong in very bad ways. It's not because people don't care or are trying to make a buck at the expense of the environment. It's because they're working in a really difficult environment. Yes, deepwater horizon was preventable. Yes it was due to a poor well design. BP fucked up. That doesn't mean that the oil industry is some evil mustache twirling villain.
You want cheap vegetables, flights across the continent, and plastics? Right now, we have to have oil for that. It ain't ideal, but it's not because people are out there trying to make money off of environmental disasters.
Money comes first, safety second.
Obviously there will be a lot of effort spent on safety, because otherwise there would be even more accidents, and the whole company might be forced to shut down.
As it is, they have just found an equilibrium of safety and greed.
All industrial operations are inherently exercises in risk management. I think it's smug to phrase that as an "equilibrium of safety and greed" but frankly, yes, in order for things with risk to happen, you have to accept a level of risk, which will never ever be 0.
I work in another industry (not oil & gas) where safety is a consideration in every action we take, and it's not just lip-service. It's a down-to-our-bones mentality that we won't do anything unsafe, or allow anything unsafe to happen. Accidents still happen, and it's not because if avarice.
There's no excuse for ignoring external costs - these costs are real and paid by everybody while profits are gathered by only a few people.
It's deeply unethical but more importantly irrational - people profiting from the fossil fuels have no incentives to fix anything if they aren't forced to deal with the external costs.
Currently the system is - they get the profits and everybody pays for external costs. That makes alternatives to fossil fuels less attractive because you will pay "petrol tax" anyway in taxes spent on all the external costs, even if you don't buy any fossil fuels ever.
If anyone had storage to bring online in the next few weeks, in Cushing, Oklahoma, they'd make a killing. At this point, they're going to need to ship it to a port, to get on a tanker.
edit: this tanker is off the gulf coast right now... https://horizonship.com/ship/274m-suezmax-crude-oil-carrier-...
I was wondering whether they couldn't rapidly build some new storage (cost-effectively), but probably the answer is no.
A bunch of gulf coast fisherman, effectively unemployed by Corona hatch a plan to make a buck by taking advantage of the negative price of oil futures. They pool their resources and somehow get their hands on a derelict Venezuelan tanker, cheap because of favorable exchange rates, in order to take delivery of some obscene amount of crude as part of a scheme to make money on futures. Being on a budget of course they crew the thing themselves, it's a ship after all, just a little bigger than the ones they usually handle. Things don't exactly go as planned when they travel to Venezuela to take possession of the ship. Their journey from there to the Port of Houston to pick up their cargo is mired by an incompetent coast guard, environmental activists and a vengeful ex-wife turned local politician.
Of course, the next question is who pays for transport to/from the tanker, labor, dock fees, employees in ship (unless you can simply "park" it for a fee)
It looks like most tankers are ~200,000 metric tons which at ~8 barrels per metric ton is roughly 1.6 million barrels. You also really only need to store it for a month, I think June futures are around $20 still, and so it's a diff of ~$60/barrel.
Details of the above are important to get just right. It works out if you get all the details right.
Barrels 2000000
lease cost / day $350,000.00
Barrel cost -$37
Take delivery profit $74,000,000.00
After 180 days storage $63,000,000.00
Sell/barrel $20
Net $51,000,000.00
I also specifically said "front month contract".
June oil is barely over $20 today and will probably drop under that mark by week's end.
While I realize you're referring to a functioning deep-water well, working as designed, I can't help but remember the complete mess from Deepwater Horizon. If it's difficult to stop a correctly functioning deep-water well, I have even more respect for that mess of a situation (and a bit more disdain for the practice in general):
To imply that deepwater oil production is safe, is crazy. Storms happen. Mudslides (underwater) happen. Pandemics happen. This is why majors contract out to the offshore drillers. They want nothing to do with it.
I'd like to assume there are some EPA rules that preclude one from storing barrels of oil just anywhere, but at the same time, the EPA is currently not enforcing any regulations.
I also wondered about delivery on these contracts. Does that include delivery to any address I specify? Can I get paid $3000 to take 100 barrels and ask them to drop it off at my house?
And then what? After the price recovers and I want to sell the barrels, will someone come get them from house?
Typically, the exchange contract is quite specific about where and how delivery can be made, and “in barrels shipped to your backyard” isn't an option. See, e.g., the delivery procedures here: https://www.cmegroup.com/trading/energy/crude-oil/light-swee...
Also, “barrels” are just a (traditional for the commodity) unit of measure (42 US gallons/35 imperial gallons), not actual containers used for delivery.
Amongst others. It's not enough to just dig a hole in the ground, you have to make sure it doesn't seep into the ground as well. In addition, you have the always present risk of fire...
It's quite difficult to turn-off an active well. Deep-water wells are all but impossible to stop.