Peak Oil / Oil Reserves

Science & Technology Biosciences
21

I am. Is there a prediction out there based on science? One that amounts to: “Based on scientifically verifiable sizes, densities, etc., of specific oil fields today, given current pumping technology, given no new drilling, given no improvements in pumping technology, we have X barrels of oil left that will run out on such-and-such date given current pumping rates.” This paper also says:

While the world does contain large amounts of unconventional oil resources that can substitute for crude oil, the substantially higher capital and production costs…[means that we are not including unconventional oil in our analysis.]

So, any prediction that has any semblance of certainty would have to presume that there is no technological growth, no new oil fields found, no accounting for the “large amounts of unconentional oil resources,” etc., and it would amount to: the oil fields we are pumping out of today have X amount of barrels left and will run out on such-and-such date given current pumping levels. This would give us firm planning grounds. If, given some reasonable predictions on demand (call it Y), Y exceeds X, then we would have to plan for something in advance. But I don’t know that there is anything out there but statistical masturbation.

22

But I don’t know that there is anything out there but statistical masturbation.

ROTFL! :slight_smile: That’s a great one, I love it! Do I have your permission to use that?

23

By all means.

24

Clearly, by reading the article, they have included probable reserves as proven. So this would include areas like ANWR, I assume. In any case, I asked Charlie a few months ago if ANWR would make much difference over the long haul, and he said no.

Assuming the authors have things straight, they also state that public information on the size of the reserves is not reliable and there are large discrepancies in industry data.

Anyway, they are very modest throughout the paper in assuming that the predictions could be wrong. I don’t know the science behind figuring out how large an oil field is, but I presume if those data were available they would have used them. I suppose that it why they give a range between world supply peaking between 2004 and 2037. Obviously this is a huge range.

25

Ok, For Peak Oil Scenerios, It was my understanding that the problem was more or less a technological/economic one. I will more or less attempt to report in plain language what the theory is.

For all Oil Fields, it stands to reason that the oil easiest to get out of the ground will be pumped out first, then the oil that is second most easy to get out of the ground, then third, etc, etc.

The Same can be said of Oil Finds. The Oil that is Easiest to find will be the first tapped, the Oil that is second easiest the second, and again so on and so forth.

The Economic Problem is, after a while it will not be rational and or cost effective to find any more oil, that is when the total costs of pumping one more barrel of oil exceed the price of that barrel.

Now, supply and demand can only take care of the situation for awhile, with costs increasing and the price going skyward, before oil reaches a price that consumers are no longer willing to buy it at.

And with the huge energy demands of our society, Energy is Life. A popular “factoid” of advocates of peak oil is that we are now more or less literally eating oil. That is, that the total non-renuable (non-solar) energy input from growth, manufacture, and transportation more or less equals the calorie output of whatever foodstuff is being manufactured. Energy interruption would be a death nell for the entire system.

End Report

The Problems with this scenario is that technology is assumed to be a constant, or at least (and most generously to the theorizers) develop at a constant rate. Say someone, lets call him Ellis Wyatt :slight_smile: , makes oil much, much easier to find and to pump, then the model is broken and the peak pushed back 20 years.

Also the problem is a demand side one as well. The model assumes an almost constant demand for fossil fuels into the near future. Development of alternative power sources can stem demand for fossil fuels, and eventually replace them like Rock Oil (petroleum) replaced Whale Oil.

26

I suppose that it why they give a range between world supply peaking between 2004 and 2037. Obviously this is a huge range.

But it’s a specific range, which isn’t even validated. I would more easily accept “oil will eventually peak” than the unvalidated range they give.

27

The Problems with this scenario is that technology is assumed to be a constant, …

Yes, and not just technology related to finding and drilling, but the entire supply chain. Since this argument is economic, one has to consider that these direct costs are only one part ofnthe entire cost. By the time the product reaches the consumer, you also have costs of refining, cost of delivery and all sorts of “overheads”. Technology keeps addressing these and making these cheaper.

Secondly, if one considers the current cost-to-consumer in the US and compare that to the cost in many other developed countries the direct costs would probably need to triple before one could even speak of a crisis.

28

Academically and scientifically, yes. Practically, I doubt it will have a big impact. Fission power plants still have the capability to last hundreds if not thousands of years and they will likely be cheaper than nuclear fusion.

Fission is stone age compared to fusion power. Fission power requires extraction of Uranium, which is not that common, and the waste products are nasty stuff that’s very expensive to deal with - not to mention creating Plutonium that can be used in nuclear bombs. If some of the current research into small scale fusion reactors works out, they could also be small enough to form thousands of highly distributed and relatively economical power systems, which is extremely unlikely to ever happen with fission reactors. One source that I read recently indicated that each cubic kilometer of seawater contains more energy in the form of fusable deuterium than the entire known supply of hydrocarbon fuels in the world. I have little doubt that it also outstrips the energy from available Uranium by many orders of magnitude.

I don’t think your namesake was content to let whale oil lamps dominate lighting by the way :blush: Progress is good.

29

One source that I read recently indicated that each cubic kilometer of seawater contains more energy in the form of fusable deuterium than the entire known supply of hydrocarbon fuels in the world.

That’s INCREDIBLE. :frowning:

30

Fission is stone age compared to fusion power. Fission power requires extraction of Uranium, which is not that common, and the waste products are nasty stuff that’s very expensive to deal with - not to mention creating Plutonium that can be used in nuclear bombs. If some of the current research into small scale fusion reactors works out, they could also be small enough to form thousands of highly distributed and relatively economical power systems, which is extremely unlikely to ever happen with fission reactors. One source that I read recently indicated that each cubic kilometer of seawater contains more energy in the form of fusable deuterium than the entire known supply of hydrocarbon fuels in the world. I have little doubt that it also outstrips the energy from available Uranium by many orders of magnitude.

…

I agree that fusion will have advantages over fission, if and when controlled fusion is ever perfected, but in the meantime, the case for fission is pretty good. Regarding a few of your points:

  1. Rarity of uranium. It’s true that uranium is somewhat rare, but it’s more abundant in the Earth’s crust than such elements as bromine, antimony, mercury, iodine and silver. And uranium is not of much use for anything besides fission. And if commercial breeder reactors are ever perfected, uranium resources will be extended in usefulness by a factor of over 100. And don’t forget thorium! It can be turned into fissile uranium, and used to fuel a fission reactor; and there is almost 4 times as much thorium in the Earth’s crust as there is uranium.

  2. Waste products of fission. Yes, they’re quite toxic, but they are also produced in small volumes and are easy to deal with. We’ve known how to dispose of them for a long time; the barriers against safe disposal today are political, not technological. And while the fusion reaction itself does not produce any radioactive products, it’s likely that there would still be lots of radioactive waste to deal with from a fusion reactor because the structure would be very strongly irradiated by neutrons, so it would end up becoming radioactive. It won’t be a problem we can’t deal with (even though the ecofreaks won’t like it) but then, we can deal with the fission products too.

  3. Using plutonium to make bombs. The plutonium that’s produced in a fission power reactor is of an isotopic composition that makes it hard to use for making bombs. Using this “kind” of plutonium, one is likely to get a bomb that doesn’t work, or “fizzles” spontaneously in a low-yield explosion.

  4. Small scale reactors. There are plans today for fission reactors that are less than 1/10 the size of today’s large commercial reactors, so they could be made small if there was a reason small ones were needed.

Anyway, I don’t mean to disparage fusion, because some day it will probably be an important source of energy. But, it could take a long time to develop. (It already has.) In the meantime, nuclear fission is a pretty darned good source of energy.

31

Growing Chinese (and soon, Indian) demand for oil has led to talk of a looming oil-crisis. If oils starts to run short, someone will probably figure a smarter way to produce more. For years, there has been talk of getting oil from shale and from “oil sands”. The WikiPedia has an entry. It also has a link to a U.S. Navy presentation about shale oil.

Saudi’s current estimated reserves are 300 billion barrels. Compare this to an estimated 1,500 billion barrels in U.S shale-based potential oil. Problem is, people have been trying to get at shale oil for over a hundred years. Many have given up the effort. It is simply not practical at the prices that producers could expect to receive. Near the end of the U.S. Navy presentation (mentioned above), there is a chart showing the cost-per-unit (barrel?) for the Alberta, Canada operation. It has dropped from around $30 in 1983 to under $10 in 2003. While it is becoming in cheaper to produce oil from oil-sands, the price of oil is rising. These two things, taken together, mean that such oil is becoming increasingly profitable.

The Economist (April 22nd,2006, pg 67) gives the following prices at which various sources become economically viable:

$20 : Conventional Oil

$40 : Tar Sands; Brazilian cane-based ethanol; “gas-to-liquids”, “coal-to-liquids”

$50 : Shale Oil

$60 : U.S. corn-based ethanol

$80 : Biodiesel

Of course, it takes time, and an expectation of long-term likelihood of a higher price before companies will set themselves up to exploit the costlier sources. Already, Alberta, Canada is seeing a little boomlet!

The real threat is that the environmentalists will throw road-blocks in the way of the new technologies. Already, Republicans like Elizabeth Dole are voting to ban off-sore drilling. Greenpeace is objecting to oil-sands, so I suspect that oil-sands do have potential. With the acceptance of arbitrary fears as a norm, it is pretty easy for environmentalists to think up some “problem” from anything new.

32

Regarding the oil from shale,

Last year while working near grand junction I quite a few Halliburton drilling rigs set up in several different locations. Apparentely they are thinking the same thing.

33

The Economist (April 22nd,2006, pg 67) gives the following prices at which various sources become economically viable:

$20 : Conventional Oil

$40 : Tar Sands; Brazilian cane-based ethanol; “gas-to-liquids”, “coal-to-liquids”

$50 : Shale Oil

$60 : U.S. corn-based ethanol

$80 : Biodiesel

Are those prices per barrel? Because if so, everything on that list except biodiesel is already viable.

34

Sounds about right, I know that bioethanol is viable around the prices he mentioned there :lol:

35

Yes, they are $ per barrel. And, yes if prices were to stay as high as they are today, then many more of these are viable. Right now, the price of oil is just above $70, the price of 2007 oil is about $75. However, the price of 2012 oil is just over $65.

Here are some prices. Apparently, “the market” thinks oil prices are going to come down slightly. This is in spite of the certainity of increased demand. OTOH, the market also seems to think the price is not going back to the $30’s. If this is true, then the Canadian businessmen are right to be going ahead with their Alberta projects.

36

Yes, they are $ per barrel. And, yes if prices were to stay as high as they are today, then many more of these are viable. Right now, the price of oil is just above $70, the price of 2007 oil is about $75. However, the price of 2012 oil is just over $65.

Here are some prices. Apparently, “the market” thinks oil prices are going to come down slightly. This is in spite of the certainity of increased demand. OTOH, the market also seems to think the price is not going back to the $30’s. If this is true, then the Canadian businessmen are right to be going ahead with their Alberta projects.

If I were a Canadian businessman I’d rather buyback my companies stock and only provide a tiny bit of my product into the market, long term, the big bucks are on their way.

37

It’s far from clear that the price of oil will stay as high as it is or rise over the next decade or so. In the early 1980’s, oil went all the way to $60. However, it was back down to $20 by the end of that decade. Then, in 1999, “The Economist” had an issue with a cover that read “Drowning in Oil”; an rticle inside said “$10 might actually be too optimistic. We may be heading for $5” (HT: Bill Miller).

There’s no doubt that demand has risen relative to available production capacity; but, the high price draws more supply. The supply takes some years to come online. First, producers want to see signs that the demand will stay high, before they go out and spend money on rigs and refineries. (The Wall Street Journal of July 5th, 2006 had an article about how the number of rigs in the gulf of Mexico is reducing, because some middle-east producers are renting them instead. They’re able to pay the $100,000 - $300,000 per day rental rates because of the current price of oil.) The article notes: “Companies world-wide are currently building 91 major offshore rigs, up from fewer than 10 in 2003”. Forbes too had an article about the rig demand.

The Canadian oil suppliers might do best to pump out all they can while they can get a good price and even to sell enough future supply to people who’re betting prices will stay this high. Even assuming prices rise, the Canadian producers are in the oil-production business, and would best focus on that and minimize the extent of their involvement in the oil-speculation business.

38

Who says the price is even high now?

http://georgereisman.com/blog/2006/05/gaso…lon-and_10.html

39

It’s true that most of the increase in the $ price of oil is explained by inflation. Still, in the 1990s oil was about 5 gold ounces per 100 barrels, but it’s hovering around 12 to 15 gold ounces today. That is even a little higher than it’s late-1970s level. (A source.)

The high price is going to bring increased supplies to market. The Canadian sources have been mentioned above. The Wall Street Journal of today (July 10, 2006) had an article about the middle eastern countries experimenting with extracting more oil from their “heavy oil” fields. The techniques are more expensive than normal, but the higher oil-price makes it profitable. Though still experimental, similar techniques in Californian fields resulted in extraction of 80% of oil from some fields where previous techniques could only extract 15%. The oil-companies are hoping to increase the extraction from selected heavy-oil fields in the middle-east from under 10% today, to around 40%. With the right minds on the job, I expect there’s a good chance they’ll surpass that target.

The market expects the demand-supply situation to get better in 2009. According to Barrons (July 10th), oil that is priced over $74 today can be bought for $73 if you want it delivered in 2009 and $70 if you want it delivered in 2011.

40

Very true. We’ve all heard of the various means of extraction that become profitable at “$xx” per barrel. Every single one of those $xx’s that I’ve ever heard of has been reached.

The market behaves very well that way.

Ah, but the chicken littles? I severely doubt they’ll eat their words. They’ll just keep thinking up new crises, or pretending that this one will still happen. Or legislating such that they will make it happen.