The offshore oil industry is 70 years old this year, and industry analyst Matt Simmons says rust is becoming a bigger threat than oilfield depletion. The CEO and founder of investment bank Simmons & Co. International spoke at OTC 2008 this week in Houston. "If the world wants to keep using energy from oil and gas, it will have to rebuild the infrastructure and the cost of doing this could rival the combined cost of the World War II war machine, the post-war Marshall Plan that rebuilt Europe, and the post-war buildout of the U.S. interstate highway system." Simmons said the costs could be enormous--in the $50- to $100 trillion range. Triage needs to happen immediately to prioritize which links in the system are the weakest and need to be repaired or replaced first. Pipelines are old, some dating to World War II. The average age of the drilling rig fleets onshore and offshore is 24 years. Refineries are even older. "No single U.S. state has drawn up a blueprint of how to replace its aging energy infrastructure." Simmons cited infrastructure construction on the drawing board for the Middle East alone is as much as $1.5 trillion. Simmons also said that if and when we start to build back what the energy industry needs, there will be a severe blue-collar personnel shortage that will hamper progress and cause huge cost overruns. "We face a twin challenge," he said. "We need to end our addiction to oil at the same time that we need to rebuild our entire energy infrastructure." --Leslie Haines, Editor in chief, Oil and Gas Investor, firstname.lastname@example.org
Daniel Rice, former CEO of Rice Energy who now sits on the EQT board, addressed the elephant in the room earlier this month at Hart Energy’s Energy Capital Conference.
The nominations are a part of Toby and Derek Rice’s plan to take control of EQT and fully realize what they say was the promised potential of the company’s acquisition of Rice Energy.
A panel of oil and gas capital experts offered some sage advice on attracting private capital at the Energy Capital Conference.