Book reviews

was used to consider the two ques- tions: What price and rate of return would be required to stimulate a cer- tain level of exploration to find a given amount of oil and gas? And second, what amount of oil and gas can be anticipated from the Permian basin at the present or some future price and rate of return? Output from the model is presented and examined in terms of associated dissolved gas, non- associated gas and oil resulting from various price levels and rates of re- turn.

The partially developed basin study was applied to the offshore Gulf of Mexico. Additional elements intro- duced into the analysis in this case were necessary due to the offshore trend to explore in increasingly deeper water depths with time. The changeover from exploring for crude oil to that for natural gas also was cited as an additional factor which had to be accounted for.

The concept that the parent popula- tion of oil and gas fields is log- geometric is introduced. The effects of economic truncation of the data set of the parent population of oil and gas fields was investigated. Evidence as found that in certain cases, the major-

ity of oil and gas fields remaining to be discovered in a partially explored area could have sizes in the vicinity of, or below, the mode of the observed size distribution for the fields already disc- overed. This led to the conclusions that the mode of the observed field size distribution was linked directly to the cost of drilling a wildcat well. It was recognized that in a cross section of exploration plays, basins and coun- tries the mode of the observed dis- tribution migrated towards the smaller sizes as the cost of drilling falls. These ideas developed into the concept of economic truncation which was ap- plied to the Gulf of Mexico model to successfully produce a set of marginal cost curves.

In this third study the concepts de- veloped earlier of the application of discovery process modelling have been used to investigate the exhaus- tion of the population of oil and gas fields by the exploration process. Fu- ture discoveries have been categorized and examples used for illustration. Economic aspects and changes in the objectives have been considered.

A concluding section turns to quan- titative mineral resource assessment. The objective being to develop proce-

dures to estimate the number of undis- covered mineral deposits in a similar fashion to that used for oil and gas discoveries. A discussion of descrip- tive mineral deposit models leads on to one of grade and tonnage models and then to some idea on how to estimate the numbers of undiscovered deposits that occur in a region. The results of the estimates of undisco- vered metal endowment within the study area are presented.

An in-depth insight is given into discovery process modelling as applied to oil and gas fields. The ability to unmask the effect of an economic overprint placed on an observed field size distribution by the economic con- ditions that prevail in any particular region is invaluable. Unmasking this effect is a most important element in the scheme used in the text to estimate the number of oil and gas fields re- maining to be discovered. The techni- ques used have been able to compen- sate for the somewhat different man- ner in which onshore and offshore oil and gas plays exhibit economic trunca- tion of field size distribution.

AlIan Spencer Guil&3rd, Surrey

UK

When the worst-case happens

PIPER ALPHA - Lessons for Life Cycle Safety Management

Proceeding of a symposium organized by the Institution of Chemical En- gineers, September 1990

The Institution of Chemical Engineers, 1991

This collection of 14 papers will be of interest to all those with technical responsibilities for oil rigs, oil and gas processing and safety. The papers are ordered into five section:

1. Causation. 2. Escalation/Assessment. 3. Procedures and Practice. 4. Emergency Planning and Com- munication. 5. Cost of the lessons.

356

The cost of the Piper Alpha disaster amounted to billions of US dollars. This collection of technical papers therefore warrants a wider readership than its uninspired title might attract.

The accident record associated with UK North Sea operations, which is listed annually in the Brown Book, is useful to place the symposium pro- ceedings in context.

In the symposium preface, F. Craw- ley, the Chairman, states ‘It is unfor- tunate that society seems to need major events to remind it of its duty and the continuing need for attention to safety. Whilst fully accepting this statement, the statistics show that in five years 10 or more people have been killed.

Taking these accident statistics together with an autobiographical account of life on a North Sea oil rig,’

major accidents seem inevitable. Robert Orrefl’s book, Blow Our, is compulsory reading for those who re- quire an insight into North Sea safety regulations in theory and what hap- pens in practice.

Readers of Piper Alpha - Lessons for Life Cycle basely management, may be divided into two groups. There will be those who consider that the two-day symposium and the wide- spread dissemination of its proceed- ings may have an appreciable influ- ence on North Sea safety standards. There will be a second group which may dwell on the W.S. Atkins paper; in particular on the following quota- tion:

It is worth recalling the consequences of the primary event on Piper Alpha at 10.00 pm on 6 July 1988. The escalation of the event leading to the massive fireball that engulfed the platform some twenty two minutes later has one terrible parallel with the Manchester air disaster: The time avail- able should have been sufficient for all the

UTILITIES POLICY July 1991

Book reviews

0 Life raft launch systems failed or were operated ineffectively

0 Helicopter evacuation was made im- possible due to fire and smoke

0 Evacuation routes from primary mus- ter points in accommodation were im- passable

0 Communications were lost to other nearby installations and the shore.

Secondary consequences included:

0 Great difficulty was experienced in evacuating from such heights (ie main platform levels)

0 Haphazard collection and pick-up of survivors at sea level was experienced _ ie no plan existed, no pre- designated points were established - hence no equipment such as lifejack- ets, rescue light/beacons were avail- able. (This is not a criticism of the efforts of the rescuers)

0 Most rescue craft were there only by coincidence.

Overall, there is little or nothing in the report of this two-day symposium to reassure us that there will not be furth- er major accidents in the North Sea.

Table 1. UK offshore oil and gas accidents.

Year 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989

employed on installations

9 200 12 100 12 500 10 500 22 000 21 000 21 500 28 700 31 300 29 000 22 300 28 200 29 300 30 700

Number of fatal accidents Installations

16 10 0 7 1 4

11 7

12

3 6

171 2

Vessels 1 1 4 3 3 2 2 2 1 1 0 0 2 1

Number of serious accidents (injuries to persons)

Installations Vessels 50 7 35 5 33 7 39 4 42 3 54 5 37 2 41 6 44 15 85 18 72 29 38 21 73 12 73 12

Notes: The estimated number employed includes construction workers and the personnel of mobile drillings rigs, service vessels, ships, barges and survey teams, and is not directly comparable with numbers shown for previous years.

personnel to have escaped if the perform- ance of the actual evacuation had matched the standard generally accepted by the offshore industry.

The main consequences of the primary event were:

0 Fire prevention systems were knock- ed out

0 All alarm and Public Address systems failed

0 Emergency power systems were only partially effective

0 Control Room was effectively des- troyed

0 Command structure was disrupted - key personnel unavailable

0 Emergency shutdown may not have been fully effective (Not proven)

0 Some muster points/lifeboat stations were rendered untenable (Not one lifeboat was launched)

Gilbert Jenkins

Sunningdale, Berkshire, UK

‘Robert Orrell, Blow Out, R. Hale, UK, 1989.

Generating more heat than light

LEAST-COST PLANNING IN THE GAS INDUSTRY: A study prepared for the Office of Gas Supply

by Ian Brown

Office of Gas Supply, July 1990, pp 34

The title of this paper may confuse some readers, for it is directed at least-cost planning in a very specialist sense; and such confusion typifies a subject which seems to generate (perhaps appropriately) considerably more heat than light. In this paper the presentation itself further compounds the difficulties.

Least-cost planning is defined as ‘meeting the need for energy services with the least costly mix of energy supplies and energy efficiency im- provements’, but the focus is on the last phrase - energy efficiency im-

UTILITIES POLICY July 1991

provements. It refers to provision of demand reducing conservation techni- ques by an energy supplier, usually as an alternative to greater production capacity.

Clearly this booklet is intended for policymakers and practitioners rather than theoreticians, but the lack of any coherent basis for such an approach makes the arguments difficult to assess. The main (implicit) argument for such a process seems to be the existence of market failure - an ironic argument for a newly privatized indus- try when such failure is often a justi- fication for nationalization. In this case the nature of the failure is of two sorts - the failure to reflect social costs (particularly pollution) fully in the in- dustry’s planning, and some failure in consumer’s decisions to implement (or not) energy-saving investment. The latter may occur for a number of

reasons: myopia because of diverg- ence between social and private dis- count rates; unwillingness to invest because of uncertainty about how long the benefit would be enjoyed and whether the cost would be recouped when property is sold; and lack of consumer information.

The paper goes on to discuss how least-cost planning by the industry might alleviate these problems. Most experience to date has been with elec- tricity utilities in the USA, with some least-cost planning in joint gas and electricity utilities and some in gas

companies, and the paper poses two main questions for comparison - be- tween the gas and electricity industries and between US experience and that in the UK. As a collation of experi- ence the paper is helpful, outlining in considerable detail the mechanism of schemes which have been im- plemented or are being developed. However, the failure to identify the underlying justification for least-cost planning makes this evidence some-

357