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Oil field with rich history marks 100th anniversary
KERN BUSINESS JOURNAL
A U G . / S E P T. 2 0 1 3
To appreciate future, understand past
Holly Arnold
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n the midst of Elk Hills Oil Field stands a small wooden derrick, a 16-foot-tall replica of a drilling rig long removed from today’s hightech, automated oil operations. Dedicated on June 16, 2011, by Elk Hills operator Occidental of Elk Hills Inc., a subsidiary of Occidental Petroleum Corp., it marked the 100th anniversary of the first producing well at the 47,000-acre field, located 30 miles southwest of Bakersfield in Kern County. Associated Oil Company Well No. 1, rotarydrilled to a depth of 4,027 feet on June 16, 1911, yielded 45 barrels of oil per day. A century later, the Elk Hills Oil Field is California’s largest producer of natural gas and natural gas liquids, with cumulative production over the life of the field approaching 2 billion barrels of oil equivalent (BOE). “There are not many products that can boast of being over 100 years old, while remaining strong and relevant in today’s modern world, but the production and work being done at the Elk Hills Oil Field is one of them,” states the foreword to a 2011 book commemorating the centennial anniversary. Commercial oil development in Kern County began in 1861, two years after the first U.S. oil well was drilled in Pennsylvania. The industry gained importance when the battleships of the Great White Fleet returned in 1909 from a global voyage to showcase American naval power. Difficulties in accessing coal supplies during the 14-month journey convinced President Theodore Roosevelt that the battleships of the future should be fueled by oil. President William Howard Taft designated Elk Hills as a Naval Petroleum Reserve in 1912. But legal battles kept production to a trickle until 1919. And by the time Elk Hills was opened up to full production in 1976, it had been used as an oil resource for the U.S. Navy for only one year. Occidental (Oxy) purchased the government’s majority interest in Elk Hills in 1998. The company has customized a range of recovery processes to the field’s complex reservoirs, steadily increasing production with cumulative production since 1998 exceeding 490 million net BOE. “Through technology, capital investment and exploration, we have turned our original 425-millionbarrel acquisition into an 838-million-barrel play, an increase of more than 95 percent,” said Oxy Elk Hills President and General Manager Bob Barnes. “Safety is a core value,” said Armando Gonzalez, manager of health, environment and safety at Oxy Elk Hills. In 2012, Elk Hills completed its state-of-the-art emergency services center, which consolidates emergency response and security. The company also has a strong commitment to protecting the environment. Elk Hills’ environmental initiatives include the preservation of endangered species habitats, emissions reduction, waste minimization and recycling, and cultural resource preservation. Oxy has been recognized for outstanding environmental stewardship by the U.S. Environmental Protection Agency, the California Department of Conservation, the Wildlife Habitat Council and others. Oxy’s operations generate considerable economic value in the communities where it operates. The Elk Hills workforce increased from 900 employees and contractors in 1998 to more than 5,000 in 2012. Oxy’s net capital investment in Elk Hills since 1998 exceeds $5 billion. Oxy is the No. 1 property taxpayer in Kern County. The company has provided financial contributions, as well as employee volunteer time to numerous local organizations, including the United Way of Kern County, the Bakersfield Homeless Center and the Taft Union High School Oil Technology Academy. As part of the centennial celebration, Oxy Elk Hills provided funding to a Taft College program that encourages K-12 students to pursue careers in science, technology, engineering and math. Holly Arnold is the external relations manager of Occidental of Elk Hills Inc.
Kern County can thank tiny, ancient deposits of plankton for its oil riches.
Tiny ancient sea life created Kern’s vast oil ‘treasure’ By Jan Gillespie
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hen you’re standing at the gas pump filling your car, you’re probably a bit tense wondering how big the final cost will be. But did you ever wonder where this energy comes from? The fact that gasoline contains the energy that makes our cars run is not surprising. Many people think that our oil came from dinosaurs. Not a bad guess in some ways — the composition of oil is similar to the organic substances one would find in dead plants and animals (fats, proteins and carbohydrates). And, of course, dinosaurs were very large and would contain a lot of organic matter. However, there were just not enough dinosaurs to supply all the oil we use. Most of the oil in the San Joaquin Valley was formed during a time period called the Miocene — about 5 million to 25 million years ago. At that time, the San Joaquin Valley was occupied by a deep ocean. Bakersfield lay offshore from the beach along the eastern shoreline. The ocean became deeper to the west, near Taft. This ocean teemed with large animals — whales and giant sharks, whose remains are still found at Sharktooth Hill, east of Bakersfield. These animals represented the top of the food chain. They ate smaller fishes, which in turn ate tiny plankton. Let’s look at the modern day blue whale. A blue whale weighs about 150 tons. It eats about 1,500 tons of plankton each year by straining enormous amounts of sea water through sieves in its throat. That means there has to be many more pounds of plankton in the world than there are pounds of whale. The microscopic plankton that forms the base of the food chain has the remarkable ability to convert energy from the sun into energy that can be used by animals higher in the food chain. So it’s the smallest organisms that contain the most stored energy. Collectively, they have larger mass than the big animals. And the ultimate source of their energy is sunlight. Diatoms were some of the most common plankton in the ocean that covered the San Joaquin Valley. Diatoms are tiny single-celled algae that live inside a protective shell made of silica. There were untold billions of diatoms living in the valley sea, floating about near the surface, soaking up sunshine, and turning minerals and water into proteins, carbohydrates and fats. Many were eaten and many were not. Diatoms that remained uneaten sank to the bottom of the sea when they died. Ordinarily, the dead diatoms, like most dead creatures, would decompose and be eaten by scavengers. However, the Miocene Sea in the San Joaquin Valley was only partially connected to the larger Pacific Ocean. Therefore, circulation
was poor and the bottom of the sea became a dead zone in which the water contained little or no oxygen. Very few living things can make use of carbon energy sources without oxygen. Those that can are mainly bacteria with very slow metabolisms and they cannot convert food to energy very quickly. These bacteria were the only creatures that could survive in the oxygen-starved waters at the bottom of the San Joaquin Sea. As a result, the dead diatoms piled up faster than they could be decomposed by the slow- metabolizing bacteria. Hundreds of feet of dead diatoms accumulated on the sea floor in the western San Joaquin Valley and each diatom was like a tiny battery storing energy from the Miocene sun in the tissues of its body. The largest accumulation of these creatures was in the layer of rock that we know today as the Monterey Shale— the most important oil source rock in our basin. In order to produce oil and gas, the organic matter in the dead diatoms must be cooked. Imagine a cold hamburger patty in a frying pan. Now turn on the stove. As the temperature of the frying pan rises, a slick of grease forms on the bottom of the pan. This fat represents energy stored by the cow from which the hamburger came. The same happened to the diatoms buried deep in the rock layers beneath the San Joaquin Valley. As the valley floor sank, the accumulated diatoms were carried deep into the earth where temperatures are much warmer than they are at the surface. As the diatoms heated up underground, the fats and oils in their bodies swelled and fractured the Monterey shale and some of the oil escaped. The escaped oils were slowly released into the waters present in the rock layers. Of course, oil and water do not mix very well and, just as in a bottle of oil and vinegar salad dressing, the oils from the bodies of the diatoms floated upward as they tried to rise to the top of the water. Much of the oil remains trapped within the Monterey Shale and may someday be produced by “fracking,” or hydraulic fracturing the shale. In some areas in the San Joaquin Valley, huge tectonic forces created folds and faults in the rock layers that trapped the rising oil in underground reservoirs or pools. More of these folds and faults are found near Bakersfield than near Fresno. Thus, we are the area with a thriving energy business. These pools have been discovered by geologists and pumped to the surface so that we can use the energy to power our economy. So, one could say that our economy is powered by ancient solar energy captured and stored by plants and animals that lived long ago! Jan Gillespie is a geology professor at California State University, Bakersfield.