Peak oil?

David · David's Garage

With all these articles about global warming, I thought I'd throw out the theory of peak oil. The theory is that the world has reached or is about to reach it's maximum capacity to produce oil. If this is in fact true, all these problems of global warming may be a moot point in the not so distant future.

Here's the one statistic that leads me to believe there's a lot of truth to the theory:

Saudia Arabia has oil reserves of 262 billion barrels and they are producing around 10 million barrels a day. If you do the math it works out to 72 years of oil.

Sure there are many other areas producing oil, but Saudi seems to be the bench mark. I don't think we'll run out in 72 years, but I do think oil is going to start getting a lot more expensive when everyone realizes the easy oil is running out and we're going to have to start drilling in much more difficult areas.

Christien · Christien's Garage

I think, like global warming, this is one of those issues that's SO clouded by partisan politics that we may never really know the truth. I watched a documentary on peak oil a couple months ago, and if you believe what it said, you'd be terrified. My wife and I talked about it at length, and both agreed that, despite plenty of current evidence to the contrary, the human race as a whole is far too intelligent and resourceful to let everything fall to ***** to the extent predicted by the film.

Saudi Arabia may be the current benchmark, but given a bit more time and a few more dollars per barrel as the demand for oil rises ever more and western Canada will own the world the way the middle east does now. It's estimated the world's largest untapped oil deposits are under Alberta, it's just much more expensive to extract than it is in the ME. Of course, once the value of the oil hits that certain mark where it's economical to spend the higher cost to extract it...

The Gaijin · 04-10-2007, 06:19 AM

The first edition was called "Peak Whale Oil" and was written 100 years ago. Amazon has a few used copies if you care to read it.

Rick Lee · Rick Lee's Garage

I don't know how peak oil would affect global warming, since it doesn't affect the sun spots or prevent volcanos. You'd have to believe that any temp. shift on Earth is solely the result of human actions. And humans aren't even the cause of the majority of CO2. Maybe peak oil would finally get us drilling in ANWR and off the Gulf Coast and maybe build some more refineries. Saudi Arabia will be in big trouble when they no longer have oil revenue and all their people have to start doing the kinds of jobs they now import foreigners to do for them. Anyway, Canada is the largest source of oil for the US right now, so no big change there when it becomes the world's largest source.

red-beard · red-beard's Garage

The next "fuel" source is already in use. Nuclear fission.

cashflyer · 04-10-2007, 09:59 AM

Peak Oil is sooo 2005
Peak Oil:

M.D. Holloway · 04-10-2007, 09:59 AM

Oil reserves are primarily a measure of geological risk - of the probability of oil existing and being producible under current economic conditions using current technology. The three categories of reserves generally used are proven, probable, and possible reserves.

Proven reserves - defined as oil and gas "Reasonably Certain" to be producible using current technology at current prices, with current commercial terms and government consent- also known in the industry as 1P. Some Industry specialists refer to this as P90 - i.e having a 90% certainty of being produced.

Probable reserves - defined as oil and gas "Reasonably Probable" of being produced using current or likely technology at current prices, with current commercial terms and government consent - Some Industry specialists refer to this as P50 - i.e having a 50% certainty of being produced. - This is also known in the industry as 2P or Proven plus probable.

Possible reserves - i.e "having a chance of being developed under favourable circumstances" - Some industry specialists refer to this as P10 - i.e having a 10% certainty of being produced. - This is also known in the industry as 3P or Proven plus probable plus possible.

The whole thing is a numbers game driven by speculation and margins. There are billions to be made and countries to control and for what it is worth we will not run out of oil for another 2000 years at the earliest.

74-911 · 04-10-2007, 10:47 AM

Quote:

Originally posted by Rick Lee
Maybe peak oil would finally get us drilling in ANWR and off the Gulf Coast and maybe build some more refineries.

From what I have read, it would take at least 10 years to bring any oil from ANWR on-line and the amount won't make a dent in our oil imports.

As to drilling on the gulf coast? From the southern tip of TX to near Florida is wall to wall oil wells. Florida has banned off-shore drilling as I understand it because of possible damage to their tourist industry. I believe CA has also banned off-shore drilling for much the same reason. If you want more wells drilled off-shore, talk to them.

Everyone wants more refineries, just not in their back yard. TX and LA nearly have more refining capacity than the rest of the states combined.

It seems everyone wants more and cheaper gas, as long as it comes from somewhere else.

Rondinone · 04-10-2007, 11:45 AM

Quote:

Originally posted by LubeMaster77
Oil reserves are primarily a measure of geological risk - of the probability of oil existing and being producible under current economic conditions using current technology. The three categories of reserves generally used are proven, probable, and possible reserves.

Proven reserves - defined as oil and gas "Reasonably Certain" to be producible using current technology at current prices, with current commercial terms and government consent- also known in the industry as 1P. Some Industry specialists refer to this as P90 - i.e having a 90% certainty of being produced.

Probable reserves - defined as oil and gas "Reasonably Probable" of being produced using current or likely technology at current prices, with current commercial terms and government consent - Some Industry specialists refer to this as P50 - i.e having a 50% certainty of being produced. - This is also known in the industry as 2P or Proven plus probable.

Possible reserves - i.e "having a chance of being developed under favourable circumstances" - Some industry specialists refer to this as P10 - i.e having a 10% certainty of being produced. - This is also known in the industry as 3P or Proven plus probable plus possible.

The whole thing is a numbers game driven by speculation and margins. There are billions to be made and countries to control and for what it is worth we will not run out of oil for another 2000 years at the earliest.

As a scientist at a DOE laboratory I have followed this debate for years, and while you are correct we should be very concerned about the short term outlook. A better number is oil in place, of which there are 6 trillion barrels. We have produced 1.1 trillion so far, and may produce 2 trillion total if the general trend of 30% recovery continues. Running out (i.e. how much we have) is not the same as hitting maximum production (i.e. how fast we can pump). The lower 48 hit peak oil in 1971 and is still producing, but we must import to make up for the loss plus the growth. A good analogy is the world has never run out of food, yet plenty of people starve.

Care to comment on worldwide production for the last two years? Despite the highest sustained price in history, worldwide production is flat. Check www.eia.doe.gov for stats and see for yourself. We could be within a decade of hitting the peak. Maybe sooner.

The GAO just released a report on this subject last month. Go to www.gao.gov (http://www.gao.gov/new.items/d07283.pdf) to find it. While you're at it, google the Hirsch report. The USGS also issued a report in 2001, but it is wildly optimistic to the point where even congress doesn't believe it. BTW the USGS predicted prior to 1971 that the lower 48 would not peak until 2000.

Speaking of congress, google representative Roscoe Bartlett to see what he thinks about this issue. You might be surprised.

Bottom line, worldwide oil production will peak, and nothing can change that. There is evidence that this event has already started, but it won't be obvious until we're well past peak. Higher prices will inflate reserves but again, it's not how much we have, it's how fast we can pump. The biggest fields, which were developed first, pump the easiest. The fields which are developed last are more difficult to pump. Plus they are smaller.

For anyone who is truly interested in the facts, I would suggest visiting www.theoildrum.com for starters, as well as reading the above referenced reports.

Also, take a look at the most recent committee report on science and see where your federal tax research dollars are going. The motivation behind the current ethanol craze goes way beyond global warming. Finally consider this: Why would a man from an oil family get in front of the country and propose alternatives to oil? Bush has done this in every one of his SOTU addresses. Why does BP advertise Beyond Petroleum? Why does Chevron want you to join them? Why has Hugo Chavez gotten mouthy? Why are we spending billions to develop Canadian tar sands if there is so much more oil available elsewhere (at a capital cost of $500,000 per bpd)? Not to mention that tar sand upgrading is a CO2 nightmare.

Why are we so excited about a test well drilled through a mile of ocean and 5 more miles of rock (Jack 2)? Isn't there easier oil elsewhere?

And no, the world is not going to end over this.

M.D. Holloway · 04-10-2007, 12:14 PM

Wells in West Tejas and OK that have been idle for years are kick'n in now. Why, cuz its can make you money now.

We get a bunch of petro from Africa and the Middle Beast and just maybe, the politically smart thing to do is to invest and investigate alterntive sources of crude that is home grown. Crude mining practices have got'n way way better than before and the cost to explore and drill is actually far less than it ever has been due to the precisness and the probility of success.

Bio-based fuel? Seems like the agro sector has shifted to a democratic leaning more than ever. What would you do as a Republican? Me? I would try to help the ag market and be thought of as a guy that wanted to bring back some production to the US and clean up emissions. Talk about killing 3 birds with one shot.

As for the big fuel companies shifting? They have lost lots of love lately and any message that they send out best be that they are actively pursuing alternatives when in fact they are really not throwing the money they could at it if they so decided.

Also, I have been in plenty of refineries and none and I mean none run close to capacity - best is 80%. They play all sorts of games with terms. Only someone with petro eng knowledge would see that they are sneaking up on getting to 100% capacity and then, when they say they are at 100% they really are not because, once again, it is all in how you define capacity and trust me fellas, the Devil is in the definition!

M.D. Holloway · 04-10-2007, 12:53 PM

The US Refinery capacity utilization is roughly 90% according to the US Energy Information Administration. We have the highest productivty and uptime. Refineries overseas in the Middle Beast and Asia are a pathetic joke.

Oh ya, and for you Canada folks, the US gets 16% of its imported oil from you and 85% of its natural gas. Thanks dudes!

Rondinone · 04-10-2007, 02:02 PM

Quote:

Originally posted by LubeMaster77
Wells in West Tejas and OK that have been idle for years are kick'n in now. Why, cuz its can make you money now.

We get a bunch of petro from Africa and the Middle Beast and just maybe, the politically smart thing to do is to invest and investigate alterntive sources of crude that is home grown. Crude mining practices have got'n way way better than before and the cost to explore and drill is actually far less than it ever has been due to the precisness and the probility of success.

Bio-based fuel? Seems like the agro sector has shifted to a democratic leaning more than ever. What would you do as a Republican? Me? I would try to help the ag market and be thought of as a guy that wanted to bring back some production to the US and clean up emissions. Talk about killing 3 birds with one shot.

As for the big fuel companies shifting? They have lost lots of love lately and any message that they send out best be that they are actively pursuing alternatives when in fact they are really not throwing the money they could at it if they so decided.

Also, I have been in plenty of refineries and none and I mean none run close to capacity - best is 80%. They play all sorts of games with terms. Only someone with petro eng knowledge would see that they are sneaking up on getting to 100% capacity and then, when they say they are at 100% they really are not because, once again, it is all in how you define capacity and trust me fellas, the Devil is in the definition!

Old wells being newly profitable is a perfect example of increased cost causing reserve growth. Even so, a few 90% watercut wells in TX won't make up for a 20% drop at Cantarell.

We're going to starve Mexicans of corn so that farmers won't vote democrat? Then why does the current congress support Bush's plan? Get out of the fumes, you're hallucinating!

As far as refinery capacity, I think you know better than to bring that up. Refinery capacity is often cited as a reason for increased gasoline cost, but that is a straw man argument. A lack of refinery capacity, even if it did exist, could not cause an increase in cost for the refinery input. Refinery output yes, refinery input no. Crude is a refinery input and crude is at the highest sustained price it has ever been. Can't be a refinery problem.

BP just funded a $500,000,000 biofuels center at UC Berkeley. Not exactly chump change, even by DOE standards. You say PR, I say take a look at BP's production numbers for the last 3 years. Take a real close look at the North Sea fields.

M.D. Holloway · 04-10-2007, 02:22 PM

Starve Mexicans? Please. The only a Mexican is gonna starve is if he is can't get his sub-minimum wage from a food processing plant. Corn and beans have been bumper - yields are at record levels in many sectors and the interesting thing is is when this normally occured it meant a drop in the bushel fetch - not so with the bio futures kicking in. It is a market driven on speculation just like the crude market.

My point about the wells starting up again has everything to do with profiteering - plain and simple.

As for capacity - that is reference to peak production being hit. It hasn't. From drilling or from refining. The jack well mentioned is a fine example for new found sweet but maybe it also should be mentioned are the exploration and drilling restrictions imposed along the gulf as well as dozens of sites throughout the Southwest and West and lets not even bring up Alaska - thanks to mineral rights laws and enviromentalists concerns. Not saying they are not just...

As for BP funding research into other sources like Bio-fuels? I would be very surprised if they didn't. They are not dumb by any measure. Ask yourself this question, if you headed up BP and needed good press and a diversified play what would you do? I would not bank on the crude much the same reason why Chevron or ExxMo is involved in many facets of petrochemical feed stock not just light or medium distillates.

Now, I have to go back to sniffing aromatic hydrocarbons!

red-beard · red-beard's Garage

As an owner of an oil well, can I sell or not sell my oil when I want? I know I can do what I want. Why should I sell when oil is $15 per barrel (and collect only a tiny part of that!)?

74-911 · 04-11-2007, 07:12 AM

Quote:

Originally posted by red-beard
As an owner of an oil well, can I sell or not sell my oil when I want? I know I can do what I want. Why should I sell when oil is $15 per barrel (and collect only a tiny part of that!)?

things may have changed over the years but as the landowner you probably signed over all rights to the well with the lease in exchange for a % share in the oil pumped out. You have no say in the operation of the well itself.