Joined: Nov 06, 2007 Posts: 676 Location: Illinois
Posted: Mon Apr 28, 2008 12:11 am Post subject: Re: It’s a myth that the world’s oil is running out
Dreamtwister wrote:
kublikhan wrote:
If there was only enough oil to supply half the worlds needs, that oil would be extremely expensive. All of a sudden, people would start taking a second look at those unconventional or hard to reach oil sources that previously made no sense at $10 a barrel prices, but can generate a nice return at $120 a barrel prices.
No, it doesn't work like that. If oil were $200 or $500 or $1000/bbl, a lot of the oil that remains will never be produced. Ever.
It's already happening. We are turning increasing amounts of attention to tar sands, heavy oil, deep water drilling, etc. I was not suggesting every drop of oil will one day be extracted. All I was saying was that as the price of oil goes up, people can now make money on Canadian tar sands, Venezuelan heavy oil, deep water drilling, etc. Projects that would have shown a loss at $10 a barrel. _________________ The oil barrel is half-full.
Joined: Jul 21, 2004 Posts: 1287 Location: Suburban tar sands
Posted: Mon Apr 28, 2008 12:32 am Post subject: Re: It’s a myth that the world’s oil is running out
KillTheHumans wrote:
tick66 wrote:
I hear this kind of crap all the time especially from the older generations around me telling me that magically old wells seem to be "filling back up again". Where do people get this crap?
Well, Eugene Island block in the GOM if I recall correctly, but its a limited example, and its not being done by an oil fairy, and it sure sounds like even if it was you'd be upset about it anyway, so forget I mentioned it...
The standard theory says that oil often migrates from source rocks to reservoirs. So this "filling back up again" can happen but is not expected to continue forever. Would you encourage sheeple to believe in this mannah from the underworld?
Joined: Dec 07, 2005 Posts: 1855 Location: Australia
Posted: Mon Apr 28, 2008 1:34 am Post subject: Re: It’s a myth that the world’s oil is running out
If we agree that oil is a finite resource, then, quoting Deffeyes, we started running out of it the moment we we tapped the first barrel.
Every year there will be less left underground.
We will however never reach the point where we have run out simply becasue 1) we won't find it all and 2) at some point extracting the remaining oil will be uneconomical.
So given the second postulate, one could argue that we are not running out of oil as we infact never will reach the point when it has run out.
As some of the other posters however stated, this is irrelevant as PO has got to do with when the maximum output RATE was reached and the consequences of the following decline in production RATE.. _________________ Lets take a ride, and run with the dogs tonight
In suburbia
You cant hide, run with the dogs tonight
In suburbia
- Pet Shop Boys
Joined: Mar 04, 2005 Posts: 2642 Location: New Zealand
Posted: Mon Apr 28, 2008 1:59 am Post subject: Re: It’s a myth that the world’s oil is running out
DantesPeak wrote:
Quote:
The bottom line: If oil prices stayed at $180 to $200 per barrel for more than a year or two, huge new oil supplies would come on line, causing crude prices to plummet and tipping the market decisively back towards consumers. The environmental cost of getting really large quantities of oil out of Athabasca and Colorado would be immense, particularly if we attempted to supply the needs of the entire U.S. market from these sources, but at $180 per barrel, I'm confident that the economic necessity would probably trump the environmental problems.
'
shortonoil is right - it's all about btu's gained. But suppose oil did go to $200, the price of extracting that oil would rise about equally as fast - since the cost of utilizing tar sand is mostly energy obtained from other sources - such as natural gas. I suppose it's possible that there could be some efficiencies gained so that we could start using low quality oil when oil hits $200 (when, not if). But that leaves another problem - tar sands oil is too low in quality to be used without upgarding - that is mixing it - with higher quality oil. Without higher quality oil to mix in, tar sands oil is worthless for modern transportation.
So again, this article is spam.
OK, lets try a different tack. I've seen reference to a British firm who can convert heavy to light oil but I can't find it now. But I have found another reference to a Canadian firm who can do the same:
An Oil Change for the Global Economy
Quote:
The challenge, then, is to come up with a process that can upgrade heavy oil so that it can become as useful as light oil.
Genoil, based in Alberta, Canada, has developed such a process, which it calls "GHU" (Genoil Hydroconversion Upgrader). The company describes this process on its Web site as "an improved catalytic hydroconversion technology that economically upgrades and significantly increases the yields from high sulphur, acidic, heavy crude, bitumen and refinery residues."
The CEO of Genoil, David Lifschultz, described this process in simple terms. "Turning heavy oil into light oil -- which is what we do -- unleashes enormous supplies of oil. Additionally, it can also create energy independence from the Middle East."
Energy independence from the Middle East is what the United States is eagerly striving for. A process that "unleashes enormous supplies of oil," as Lifschultz says, can certainly go a long way to create energy independence.
The challenge, then, is to come up with a process that can upgrade heavy oil so that it can become as useful as light oil.
Genoil, based in Alberta, Canada, has developed such a process, which it calls "GHU" (Genoil Hydroconversion Upgrader). The company describes this process on its Web site as "an improved catalytic hydroconversion technology that economically upgrades and significantly increases the yields from high sulphur, acidic, heavy crude, bitumen and refinery residues."
The CEO of Genoil, David Lifschultz, described this process in simple terms. "Turning heavy oil into light oil -- which is what we do -- unleashes enormous supplies of oil. Additionally, it can also create energy independence from the Middle East."
Energy independence from the Middle East is what the United States is eagerly striving for. A process that "unleashes enormous supplies of oil," as Lifschultz says, can certainly go a long way to create energy independence.
Certainly, we must consider how costly the process of increasing the yield of a barrel of oil will be. In this regard, most of us know about the so-called oil sands that exist in certain parts of Canada and the northern United States. From what I've read, extracting oil from these sands is becoming more attractive because it is no longer as cost-prohibitive as it previously was. The seemingly ever-increasing price of oil has now made the process of extracting it from sands more economically feasible.
technewsworld _________________ Human history becomes more and more a race between education and catastrophe. H. G. Wells.
Fatih Birol's motto: leave oil before it leaves us.
Joined: Dec 07, 2005 Posts: 1855 Location: Australia
Posted: Mon Apr 28, 2008 2:25 am Post subject: Re: It’s a myth that the world’s oil is running out
Quote:
OK, lets try a different tack. I've seen reference to a British firm who can convert heavy to light oil but I can't find it now. But I have found another reference to a Canadian firm who can do the same:
None of that matters if it is finite resource. But I am guessing that is not where you want to take the discussion.
What is however the big question is, at what RATE they can produce this. (And to strictly define rate, we need to take net energy content into calculation. i.e. producing a barrel of tar costs heaps more and results in much less energy content than a barrel of light sweet)
So if production of light sweet drops with 5% per year, can this be totally offset through uncoventional oil, at a reasonable cost?
What if depletion rates escalate further (as they normally do after hitting PO on well/field level). Can this method be ramped up to offset that as well..at a reasonable cost?
As Simmons etc have made clear, having HUGE reserves will not save the day if this can't be brought to the market at sufficient RATE and COST. _________________ Lets take a ride, and run with the dogs tonight
In suburbia
You cant hide, run with the dogs tonight
In suburbia
- Pet Shop Boys
Joined: Sep 25, 2005 Posts: 1985 Location: Waiuku, New Zealand
Posted: Mon Apr 28, 2008 3:13 am Post subject: Re: It’s a myth that the world’s oil is running out
Graeme wrote:
The truth is perhaps illustrated by the points made in this article:
Crude Oil Hits $119- Ways to Profit From Peak Oil
Quote:
The bottom line: If oil prices stayed at $180 to $200 per barrel for more than a year or two, huge new oil supplies would come on line, causing crude prices to plummet and tipping the market decisively back towards consumers.
This makes no sense. If prices plummet, then those "huge new oil supplies" become uneconomic and will be stopped.
So unconventional and hard to explore/develop fields will never produce huge amounts of new oil, though they may help to ease the decline.
Joined: Apr 28, 2005 Posts: 3647 Location: West shore Lake Eire, MI, USA
Posted: Mon Apr 28, 2008 6:16 am Post subject: Re: It’s a myth that the world’s oil is running out
TonyPrep wrote:
Graeme wrote:
The truth is perhaps illustrated by the points made in this article:
Crude Oil Hits $119- Ways to Profit From Peak Oil
Quote:
The bottom line: If oil prices stayed at $180 to $200 per barrel for more than a year or two, huge new oil supplies would come on line, causing crude prices to plummet and tipping the market decisively back towards consumers.
This makes no sense. If prices plummet, then those "huge new oil supplies" become uneconomic and will be stopped.
So unconventional and hard to explore/develop fields will never produce huge amounts of new oil, though they may help to ease the decline.
Tonyprep is correct, the author of the article has a fundamental misunderstanding of the difference between the geopolitical oil shocks of the past and the geophysical peak/shock of today. No matter how much oil they find at $200.00 a barrel they will not be able to produce that oil for $10.00 per barrel. The price can only fall if the price to produce those new barrels is really cheap, if those new barrels cost $75.00 each to produce then the price can not fall below that level. To make matters worse the expanding consumer base is coupled with the shrinking resource base putting intense upward pressure on demand.
Say they find a Ghawar size field with extra light oil in it that takes $75.00 per barrel to produce. Because it is extra light sweet they drill like mad to get it going and in 7 years they are producing 4 million bbl/d. What is the oil demand 7 years from now? Even if you keep demand steady how much have existing fields declined seven years from now? _________________ Oxygen: - An intensely habit-forming accumulative toxic substance. As little
as one breath is known to produce a life-long addiction to the gas, which addiction invariably ends in death.--Isaac Asimov
Posted: Mon Apr 28, 2008 6:25 am Post subject: Re: It’s a myth that the world’s oil is running out
Keith_McClary wrote:
KillTheHumans wrote:
tick66 wrote:
I hear this kind of crap all the time especially from the older generations around me telling me that magically old wells seem to be "filling back up again". Where do people get this crap?
Well, Eugene Island block in the GOM if I recall correctly, but its a limited example, and its not being done by an oil fairy, and it sure sounds like even if it was you'd be upset about it anyway, so forget I mentioned it...
The standard theory says that oil often migrates from source rocks to reservoirs. So this "filling back up again" can happen but is not expected to continue forever. Would you encourage sheeple to believe in this mannah from the underworld?
Nope. I was just referencing the example of oilfields "refilling" that I am familiar with. _________________ Freddy RULZ!
www.TrendLines.ca/scenarios.htm Home of the Real Peak Date ... set by geologists (not pundits) (or bankers) (or web "experts")
Posted: Mon Apr 28, 2008 11:32 am Post subject: Re: It’s a myth that the world’s oil is running out
tick66 wrote:
I keep thinking about this Oil Fairy Idea filling up all the wells. Sounds like a good story to tell the kids.
LOL
I am guessing if crude oil keeps on its present price trajectory, soon fairly tales will be modified to replace the proverbial references to a pot of gold with a barrel of the black gold. Trouble is, no matter what the price, crude oil is not so pretty, is smells and it doesn't glisten in the sunlight. And, it doesn't make a pleasant ringing sound when its dropped.
Posted: Mon Apr 28, 2008 12:13 pm Post subject: Re: It’s a myth that the world’s oil is running out
Kublikan said:
Quote:
So at what price would oil have to sell for to make these marginal wells profitable? $130? $140? We should hit that by years end.
These wells require more energy to operate than they produce. Once the spread between what they pay for the energy to operate the well and what they can sell its produced energy for shrinks to a small enough value, no price on earth for their oil will make them profitable.
As we further enter the energy crisis, the cost spread on energy sources will shrink. For example, presently there is very little difference in price between a BTU from electricity and a BTU from oil. This is an historical anomaly, and will continue until only positive energy producing wells exsist.
Joined: Nov 06, 2007 Posts: 676 Location: Illinois
Posted: Mon Apr 28, 2008 12:34 pm Post subject: Re: It’s a myth that the world’s oil is running out
shortonoil wrote:
These wells require more energy to operate than they produce. Once the spread between what they pay for the energy to operate the well and what they can sell its produced energy for shrinks to a small enough value, no price on earth for their oil will make them profitable.
I don't think so. If they are paying $10 in electricity for every barrel they extract, plus maybe another $10 in other costs, and they can sell it for $120 a barrel, they just made $100 in profit per barrel. Sure they used more energy then they got out of the oil, but oil is more valuable because it is so energy dense. You may think they are stupid for burning energy that would be better put to use directly in electric cars or whatever, but as long as there is profit to be made, I really don't think they give a flying fig they are running energy negative. _________________ The oil barrel is half-full.
Posted: Mon Apr 28, 2008 1:41 pm Post subject: Re: It’s a myth that the world’s oil is running out
kublikhan wrote:
shortonoil wrote:
These wells require more energy to operate than they produce. Once the spread between what they pay for the energy to operate the well and what they can sell its produced energy for shrinks to a small enough value, no price on earth for their oil will make them profitable.
I don't think so. If they are paying $10 in electricity for every barrel they extract, plus maybe another $10 in other costs, and they can sell it for $120 a barrel, they just made $100 in profit per barrel. Sure they used more energy then they got out of the oil, but oil is more valuable because it is so energy dense. You may think they are stupid for burning energy that would be better put to use directly in electric cars or whatever, but as long as there is profit to be made, I really don't think they give a flying fig they are running energy negative.
But that's just it. The wells he is talking about are not paying "$20 for every barrel of oil". It would be more accurate (though equally as arbitrary) to say they are paying "$2000 for 98 barrels of water and 2 barrels of oil". _________________ The whole of human history is a refutation by experiment of the concept of "moral world order". - Friedrich Nietzsche
Joined: Nov 06, 2007 Posts: 676 Location: Illinois
Posted: Mon Apr 28, 2008 2:59 pm Post subject: Re: It’s a myth that the world’s oil is running out
Dreamtwister wrote:
But that's just it. The wells he is talking about are not paying "$20 for every barrel of oil". It would be more accurate (though equally as arbitrary) to say they are paying "$2000 for 98 barrels of water and 2 barrels of oil".
He was basically saying that as long as the EROEI is negative, there can be no cash profit. I disagree with that. If you have cheap energy inputs, a negative EROEI, but a product that sells for more than the cost of those energy inputs(plus other costs), you can turn a profit. Now if your input energy costs are currently higher than what your product sells for, then shutter the well until the cost of your product(oil) goes up. Then open it up again when it makes financial sense to do so. I just don't agree that you cannot turn a profit selling oil at $1000 or $2000 just because the input energy cost is $750 a barrel or whatever arbitrary number you would like to use. _________________ The oil barrel is half-full.
Posted: Mon Apr 28, 2008 4:02 pm Post subject: Re: It’s a myth that the world’s oil is running out
kublikhan wrote:
If you have cheap energy inputs
That's a pretty big "if". Where exactly are you finding these cheap energy inputs?
Yeah, if I could pump 9 bpd of oil at a 98% water cut for and sell it at a 600% markup, I'd be laughing. The problem is that just does not happen in the real world. I would be surprised if these stripper wells were operating at a profit at all. _________________ The whole of human history is a refutation by experiment of the concept of "moral world order". - Friedrich Nietzsche
You cannot post new topics in this forum You cannot reply to topics in this forum You cannot edit your posts in this forum You cannot delete your posts in this forum You cannot vote in polls in this forum
News
Discussions
Resources
Members
Forum FAQ
Search
Usergroups
Profile
Log in to check your private messages
Log in
