The tragic loss last week of the Transocean Deepwater Horizon and 11 of its crew — still missing as of the writing of this post — following an explosion while drilling in the deepwater Gulf of Mexico is sure to have reverberations short- and long-term for the industry.

It raises new questions about safety aboard offshore vessels and, at a time when the oil industry was finally starting to make progress on opening up more U.S. waters to offshore drilling, it gives new ammunition to opponents claiming offshore oil drilling and production is potentially hazardous to both crews and the environment.

While the tragedy is a reminder of the potential dangers involved in offshore drilling, one hopes such disasters do not overshadow the tremendous advances made in the offshore drilling industry in recent years that enable drilling for oil and gas from depths that would have been considered unimaginable even a generation ago.

Indeed, there is good reason offshore drilling technology features prominently in New Technology Magazine’s focus on Amazing Wells every year — the technological advances packed into these massive rigs are simply too amazing to ignore. Entering service in 2001, the $500-million Deepwater Horizon was, along with other rigs of the latest generation, a technological marvel from top to bottom.

Consider, for example, their use of computer-controlled dynamic positioning systems that can maintain a vessel’s position to within metres in open water amid 30-foot waves and 70-mile-an-hour winds, without mooring or anchoring. Or consider directional drilling techniques that can pinpoint the drillbit into reservoirs sitting 40,000 feet below the seabed, in waters up to 12,000 feet deep.

We have written about Transocean’s vessels before, and one of the stories in this year’s Amazing Wells feature in June will detail BP’s Tiber discovery, which set a new world standard for the deepest oil well of all time, drilled by none other than the Deepwater Horizon. As was posted to our Daily Update page last September, the semisubmersible rig drilled the well to 35,050 vertical depth and 35,055 feet measured depth (MD), or more than six miles, while operating in 4,130 feet of water.

We are thankful that 115 of the Deepwater Horizon’s crew of 126 were rescued, and our thoughts are with those who are missing and their families. The loss is certainly a setback for the industry (at a time when BP was reportedly close to announcing some good news — a significant oil discovery at the Macondo prospect), and investigations and lawsuits (two already announced) are sure to follow.

In the end, it is hoped the industry will co-operate in a full and transparent way with any investigations that follow, and use any learnings to improve further on the safety of this very complex, high-tech industry. It is also hoped the industry does not lose the audacity to continue to challenge the limits of exploration as it deals with unfortunate tragedies such as this.

In our haste to set limits on, and eventually reduce, global warming-causing emissions, there may be one important aspect we have overlooked — who will we rely on to quantify, assess and report emissions, so we know how much we are releasing and how much is cut.

As costs to emit carbon dioxide, methane and other greenhouse gases are introduced, either through a carbon tax or a cap-and-trade system, a proper accounting becomes vital.

The field is so young there is a critical shortage of trained personnel, according to a Canadian Standards Association speaker who outlined the problem at a Petroleum Technology Alliance Canada (PTAC) conference this week. While there may be post-secondary training programs generally to train pollution monitoring and abatement professionals, there are no comparable professional programs and standards for GHG calculation and monitoring.

And the risks associated with not having a trained and competent workforce to perform this function are potentially huge, as transparency and credibility will be critical. “If we want to prevent an Enron-type scandal, we want to have solid professionals working in this area,” said the CSA’s Pierre Boileau.

A recent State of the Industry Report that surveyed 700 international industry scientists and professionals (The 2009 Greenhouse Gas & Climate Change Workforce Needs Assessment Survey Report) showed a remarkable 88.9% believe the carbon performance management industry will at least double in the next five years; 83.9% report a shortage of qualified GHG staff and experts to undertake current needs and planned initiatives; and 86.8% believe there will be a shortage of qualified experts to support new emissions trading schemes and other policies. Interestingly, 64.5% also believe carbon markets will eventually grow to trade volumes equivalent to or greater than that of other major commodities.

To address this growing labour market gap, the CSA has recently introduced certification programs in the areas of GHG verifiers (to confirm the accuracy of carbon performance reports) and GHG inventory quantifiers (to quantify, assess and report GHG emissions). Details of both programs are available on the CSA website.

As a sector heavy on GHG emissions, the oil and gas industry ought to be concerned about the shortage. Boileau suggests, for example, that every company that is regulated for emissions in some way will need a qualified verifier. Certainly, any company seeking carbon credits for trimming emissions has a vested interest in making sure they can authoritatively quantify their cuts. Hopefully, enough young people will be lured into such newly created “green job” professions to forestall a crisis as we ramp up GHG emissions monitoring and compliance.

The oilsands sector has long been a target of environmental organizations and green-leaning jurisdictions like California, but the latest sideswipes come from some rather more unexpected sources — a major German bank and the International Energy Agency.

First came the report from Deutsche Bank, predicting “the game-changing emergence of a powerful disruptive technology” that will kill demand for oil about the same time as production peaks, just seven years from now. “This is the end of the 20^th Century of Oil; we are entering the 21^st Century of Electricity,” it declares. “We now have a ‘disruptive technology’ in the shape of the hybrid and electric car, that will very likely have a far greater positive impact on oil efficiency than the market currently expects.”

Oil demand “will fall dramatically once the high efficiency fleet hits critical mass; competing structurally cheaper natural gas will exacerbate the pace of demand decline. In our view global oil demand peaks in 2016, with oil prices, before a long, tandem, decline.”

As demand collapses, the costliest sources, like the oilsands, would, of course, be hardest hit. “The value of high capex intensity, long lead time, currently un-developed oil, such as undeveloped Canadian heavy oilsands, oil shales, and Brazilian pre-salt and other ultra-deepwater plays, could be far lower than the market currently expects.”

The least safe investment, the Deutsche Bank report concludes, is “clearly Canadian heavy oilsands and other high capex, carbon-intensive oil recovery processes…. It is a simple fact that the most dramatic cuts in planned capex in the current downturn came from Canadian heavy oilsands plays Suncor, Petro-Canada and Canadian Natural, and that those cuts were huge, approaching 70% within months of the oil price downturn.”

A not-much-less bearish assessment was offered up by the IEA in a report entitled, Transport, Energy and CO2: Moving Toward Sustainability, suggesting that in order to achieve the necessary deep cuts to GHG emissions by 2050, vehicle fuel efficiency be improved 50% by 2030. That could be done using technologies and practices that are cost effective today, it says, followed in later years by a “revolution in technology” likely built on a combination of electricity, biofuels and hydrogen.

Together with shifting travel habits, the prescribed emissions reductions could be achieved — contrary to what some global warming skeptics would have us believe — at lower costs than many assume, it concludes. But conservation has to start quickly. “2050 is only 40 years away. To put transport on a sustainable pathway within that timeframe, current trends must be changed substantially within the next five to ten years. Strong policies are needed very soon to begin to shift long-term trajectories and to meet interim targets.”

Both scenarios suggest the oilsands, and those who invest in them, better start thinking long-term about markets for costly synthetic crude, and about what can be done to bring down costs and GHG emissions in a hurry. Technology is all too often thrown out as the solution to the latter two challenges — there may be no time like the present to prove that so.

With forecasts of between three and six million barrels per day of oilsands production by 2030, the rewards for the Alberta and Canadian economies are potentially enormous.

But with the rewards come risks, particularly the threat of environmental degradation. It is a risk the Petroleum Technology Alliance Canada (PTAC) would like to see tackled early on. To that end, the Calgary-based organization is seeking participants to join a Clean Bitumen Technology Action Plan (CBTAP).

In what it concedes is “a tall order,” particularly in recessionary times when costs of development remain relatively high, PTAC is seeking to find suitable technologies to produce commercially from the resource while minimizing the environmental footprint. Early indications are that industry is interested. In a Technical Information Session July 15, about 80 industry representatives came to learn more about the initiative. Companies have until July 31 to sign on to the initiative.

“My gut feeling is that many companies are going to participate,” PTAC president Soheil Asgarpour said after the presentation. A similar attempt to establish an action plan in the midst of the oilsands boom two years ago fizzled out. “Unfortunately, everybody was too busy,” he said. “The time, I think, is right. Now people can afford spending time to look at technology.”

In his presentation, Asgarpour stressed the many benefits of a collaborative approach — if companies can be convinced to share their research and development efforts. “The key question [is], are we going to get them to the point of sharing information, because really, that’s the biggest hang-up that we have to overcome — sharing knowledge and information,” he said. “If we keep technology to ourselves, collectively we are all going to suffer.”

PTAC, he notes, has established a solid track record over 13 years of demonstrating the value of using a collaborative approach in successfully launching more than 250 research and development projects. As much as $50 worth of technology is developed for each $1 in company investment, he said. While reducing the environmental footprint is the main focus, reducing costs is also a priority.

Though the most obvious environmental challenge is curtailing greenhouse gas emissions as production grows, PTAC also warns of “the potential for a permanent tailings ponds legacy” as well as the need to mitigate impacts on air and land. Both improvements to present day methods of surface mining, steam-assisted gravity drainage (SAGD) and cyclic steam stimulation (CSS) techniques and brand new extraction technologies that could significantly reduce environmental impacts will be examined.

The CBTAP would start with a review of all existing technologies and studies to identify gaps, followed by workshops and topical reports leading to an authoritative document to serve as an action plan for technology development and a foundation for future policy, strategy and investment decisions, according to PTAC. Among those already expressing an interest were ConocoPhillips, Enbridge Inc., EnCana Corporation, StatoilHydro, ISEEE, Alberta Energy Research Institute, and the Canada School of Energy and Environment.

For anyone who might have seen the onshore North American natural gas sector as a sunset industry in recent years, the shale gas story must have come as a rude awakening. It seems not a week goes by without news of growing plays, new players entering the market, as well as novel and better techniques to drive costs ever lower.

Just by glancing at the headlines in the past week, for example, we learn that Talisman Energy Inc. has reassessed its unconventional gas in place at 132 trillion cubic feet, 30 tcf of which may be recoverable as it drives break-even prices to $4; Enbridge Inc. will build the $1-billion LaCrosse pipeline based on support from producers in the Haynesville Shale region of Texas and Louisiana; StatoilHydro, after spending $3.38 billion to grab a stake in Chesapeake Energy’s Marcellus Shale acreage last November, plans to work with Chesapeake to assess 14 different shale plays worldwide; and Eni entered a strategic alliance with Quicksilver Resources Inc. to acquire 27.5% interest in the Alliance shale gas area in Texas, also seeking to gain expertise in exploiting unconventional gas opportunities around the world.

With technically recoverable shale gas from U.S. and Canadian deposits now estimated at well over 300 tcf, there is also increasing speculation conventional and offshore natural gas exploration and development, LNG expansion and arctic pipelines could be undercut as shale gas production continues to boom. Things are changing in a hurry.

And almost lost among such news was a report from the U.S. Department of Energy that it has discovered what it called the world’s first resource-quality gas hydrate deposit in the Gulf of Mexico. As large as the shale gas resource might become, it could be dwarfed by that of gas hydrates, which surpasses all other oil and gas deposits combined. Gas hydrates may remain beyond technological and economic capabilities today, but like coalbed methane and shale gas before it there is little doubt that puzzle, too, will some day be solved. All of which leads me to a couple of conclusions: technology changes everything, and if anything, natural gas on this continent is a sunrise industry, with a long day ahead of it.