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BP will cut jobs, take $1 billion in charges amid oil slump

The plunging price of oil has taken its toll on one of the world’s largest oil companies: Britain’s BP announced Wednesday it would cuts some of its 84,000-member worldwide workforce, as well as take $1 billion in charges over the next five quarters.

The New York Times reports that most of the financial hit will come in the form of severance pay, indicating that the number of job cuts could be significant. The company didn’t say how many positions it intended to shed.

The price of Brent crude has fallen some 40 percent since June. The price per barrel dropped another 1.5 percent Wednesday, to $65.32.

Bloomberg reports that BP’s move is the latest to come amid the price squeeze:

Europe’s third-biggest oil company by market value joins larger rivals Royal Dutch Shell Plc and Total SA in restricting budgets and offloading operations as margins are squeezed by the 40 percent drop in prices since June. BP said in October that about $1 billion to $2 billion may be cut from the $24 billion to $26 billion of planned capital expenditure in 2015.

Here’s where nearly half the oil from Gulf of Mexico spill went

About 2 million of the estimated 4.9 million barrels of oil that escaped from the undersea Macondo well following the April 2010 explosion and fire aboard the Deepwater Horizon rig apparently came to rest on the floor of the Gulf of Mexico, according to new research. It now covers an area of about 1,235 square miles, possibly migrating near deep-sea coral.

Here’s an excerpt from a story in the Houston Chronicle:

“Our findings suggest that these deposits come from Macondo oil that was first suspended in the deep ocean and then settled to the seafloor without ever reaching the ocean surface,” [UC Santa Barbara microbial geochemist David] Valentine said.

Light, freshly released oil normally is generally not expected to sink, and even dispersed oil is more likely to remain suspended in water.

Valentine described the footprint as a “shadow of the tiny oil droplets that were initially trapped” higher up, in the water above. “Some combination of chemistry, biology and physics ultimately caused those droplets to rain down another 1,000 feet to rest on the seafloor,” he added.

Salon: Since Deepwater Horizon, ‘we have voted to do nothing’

Salon.com’s Andrew O’Hehir has a thought-provoking post on the new documentary “The Great Invisible,” about the 2010 explosion and sinking of the Deepwater Horizon offshore oil rig.

O’Hehir makes the point that the film doesn’t demonize BP and other oil companies for the spill, because of our “larger relationship to oil,” as the film’s director, Margaret Brown, put it. She goes on:

“Why don’t we understand our connection to this thing that we use every day, but we never see, as it travels from sometimes miles beneath the surface of the ocean into the tank of our car, and then back out into the atmosphere?” As the oil trader mentioned above observes, we have defined our standard of living by the ability to drive anywhere we want and buy any kind of product, at any hour of the day or night. That simply isn’t possible without a constant, uninterrupted and ever-increasing supply of oil …”

The film also interviews many of the survivors of the accident, in which 11 men were killed. A post by Rachel Guillory of Ocean Conservancy delves into this angle, which includes the many safety lapses associated with the rig:

“There were 26 different mistakes made,” said Keith Jones, father of Gordon Jones—a drilling engineer who died in the Deepwater Horizon explosion. The cement hadn’t cured, he said, there was rubber in the drilling mud and the hydraulics for the blow-out preventer were not working. These stories from staff aboard the Deepwater Horizon support the presidential oil spill commission’s conclusion that the BP oil disaster was caused by a culture of complacency, rather than a culture of safety.

Politico lets environmentalist respond to BP op-ed

Earlier this week Politico, the online politics magazine, allowed an environmentalist with extensive knowledge of the British Petroleum/Deepwater Horizon disaster respond to BP’s widely criticized op-ed published on the magazine last week. Kara Lankford of Ocean Conservancy says: “The full effects of 210 million gallons of oil on the Gulf cannot be easily dismissed …”

Read the full story on Politico.

Is butanol the next big thing in biofuels?

Fuel Freedom recently learned about a man named David Ramey who drove his 1992 Buick Park Avenue from Blacklick, Ohio to San Diego using 100 percent butanol, without making any adjustments to his engine.

Ordinarily this wouldn’t be big news. But with the EPA now considering cutbacks in the 2014 biofuels mandate, some producers of ethanol are starting to turn to butanol as a way of getting around the limitations of the 10 percent “blend wall” that is threatening to limit ethanol consumption. This could be another breakthrough in our efforts to limit foreign oil.

Butanol is the alcohol form of butane gas, which has four carbons. Because it has a longer hydrocarbon chain, butane is fairly non-polar and more similar to gasoline than either methanol or ethanol. The fuel has been demonstrated to work in gasoline engines without any modification to the fuel chain or software.

Since the 1950s, most butanol in the United States has been manufactured from fossil fuels. But butanol can also be produced by fermentation, and that’s where another opportunity for reducing our dependence on fossil fuels exists.

The key is a bacterial strain called Clostridium acetobutylicum, also named the Weizmann organism for pioneering biological researcher Chaim Weizmann, who first used it to produce acetone from starch in 1916. The main use for the acetone was producing Cordite for gunpowder, but the butanol, a byproduct, eventually became more important.

Once set loose on almost any substratum, Clostridium acetobutylicum will produce significant amounts of butanol. Anything used to produce ethanol — sugar beets, sugar cane, corn grain, wheat and cassava, plus non-food crops such as switchgrass and guayule and even agricultural byproducts such as bagasse, straw and corn stalks — can all be turned into butanol. (Of course, not all of these are economical yet.)

Given the modern-day techniques of genetic engineering, researchers are now hard at work trying to improve the biological process. In 2011, scientists at Tulane University announced they had discovered a new strain of Clostridium that can convert almost any form of cellulose into butanol and is the only known bacterium that can do it in the presence of oxygen. They discovered this new bacterium in, of all places, the fecal matter of the plains zebra in the New Orleans Zoo.

DuPont and BP are planning to make butanol the first product of their joint effort to develop next-generation biofuels. In Europe, the Swiss company Butalco is developing genetically modified yeasts from the production of biobutanol from cellulosic material. Gourmet Butanol, a U.S. company, is developing a process that utilizes fungi for the same purpose. Almost every month, plans for a new butanol production plant are announced somewhere in the world. Many refineries that formerly produced bioethanol are now being retrofitted to produce biobutanol instead. DuPont says the conversion is very easy.

What are the possible drawbacks? Well, to match the combustion characteristics of gasoline, butanol will require slight fuel-flow increases, although not as great as those required for ethanol and methanol. Butanol also may not be compatible with some fuel system components. It can also create slight gas-gauge misreadings.

While ethanol and methanol have lower energy density than butanol, both have a higher octane rating. This means butanol would not be able to function as an octane-boosting additive, as ethanol and methanol are now doing. There have been proposals; however, the proposals are for a fuel that is 85 percent ethanol and 15 percent butanol (E85B), which eliminate the fossil fuels from ethanol mixes altogether.

The only other objection that has been raised is that consumers may object to butanol’s banana-like smell. Other than that, the only problem is cost. Production of butanol from a given substratum of organic material is slightly lower than ethanol, although the increased energy content more than makes up for the difference.

Ironically, the EPA’s decision to cut back on the biofuels mandate for 2014 is now driving some refiners to convert to butanol, since its greater energy density will help it overcome the 10 percent “blend wall.”

“Michael McAdams, president of the Advanced Biofuels Association, an industry group, said butanol was a ‘drop-in’ fuel, able to be used with existing gasoline pipelines and other equipment because it does not have a tendency to take up water, as ethanol does,” The New York Times reported last October. “‘It’s more fungible in the existing infrastructure,’ he said. ‘You could blend it with gasoline and put it in a pipeline — no problem.’

“Butanol would also help producers get around the so-called blend wall, Mr. McAdams said…With the 10 percent limitation, ‘you don’t have enough gasoline to put the ethanol in,’ he said. ‘You don’t have that problem with butanol.’”

So here’s to butanol. It will be yet another big step in reducing our dependence in foreign fuels.