Successful Bakken Drilling Technology May Start to Go Global: That's Why "Peak Oil" is "Peak Idiocy"
I reported earlier today on the ongoing oil boom in North Dakota's Bakken region, which has set fresh oil production records in six out of the last seven months and now produces 6% of America's crude oil. And all of this is taking place in an area that was never expected to produce so much oil, despite the 4.3 billion barrel estimate of reserves there, because the dense, nonporous rock in the Bakken region makes extraction extremely difficult and costly.
That all changed when advanced horizontal drilling and hydraulic fracturing techniques started successfully tapping Bakken oil two miles below the surface in 2006. After some initial success with the new technology, the original estimates were for peak Bakken production of only 220,000 to 280,000 barrels per day, but daily production went above 280,000 in April this year by September had reached 341,384 barrels. Oil production is expected to hit 400,000 barrels per day by next year, and remain at that level or higher for the next 10-15 years.
That all changed when advanced horizontal drilling and hydraulic fracturing techniques started successfully tapping Bakken oil two miles below the surface in 2006. After some initial success with the new technology, the original estimates were for peak Bakken production of only 220,000 to 280,000 barrels per day, but daily production went above 280,000 in April this year by September had reached 341,384 barrels. Oil production is expected to hit 400,000 barrels per day by next year, and remain at that level or higher for the next 10-15 years.
"Know-how gained from North Dakota's once-perplexing Bakken shale formation is being used to exploit other onerous oil plays across the globe. Oil companies and countries a world away have taken notice of North Dakota's success, said Lynn Helms, director of the state Department of Mineral Resources.
Companies say they are aiming to apply technology learned from the Bakken to geologically similar shales in China, France, Poland, Canada and in some U.S. states, including Wyoming, Utah and Colorado. Companies already have used Bakken technology to successfully tap the rich Three Forks-Sanish formation, directly below the Bakken."
MP: New, advanced techniques for drilling oil have revolutionized the domestic oil industry in North Dakota in ways that couldn't have even been predicted just a few years ago, and will likely also open up new oil production in other parts of the world in the near future (like the Alberta Bakken in Canada) that also would have been unimaginable before this year. That's one reason that "peak oil" is peak idiocy: it always underestimates the ultimate resource - human capital (i.e. human ingenuity and the resulting innovation, advances, new technology) - which is endless and boundless, and will never peak.
126 Comments:
This shows the difference between Liberal thinking which is "The worse is going to happen eventually so let us take steps like its happening now" vs Conservative (a misnomer in this context) thinking which is "We are a great country, we solve problems for us and the world, we are optimistic about the future and we'll keep getting better".
Oil production is expected to hit 400,000 barrels per day by next year, and remain at that level or higher for the next 10-15 years.
We use about 20 Million Barrels of liquid fuels Every Day in the U.S.
Meanwhile, Prudhoe Bay has dropped from about 2.1 Million Barrels/day to around 0.5 million bpd.
Somewhere between 350,000 bpd, and 500,000 bpd the pipeline becomes the world's largest chapstick, and production will have to be shut down. Chevron ITIW said that this is likely to happen within the next two years.
There is nothing "Conservative" about closing your eyes, putting your hands over your ears, and going la-la-la-la.
Just childish.
Rufus, what do you suggest then?
The solution is already in place. Has been for a couple of years.
The CAFE Standards set forth in Energy Independence and Security Act are for 35 MPG in 2020.
That should bring our gasoline (or, gasoline equiv.) use down to around 100 Billion Gallons/Yr.
The RFS was expanded under the same act to require 36 Billion Gallons of Ethanol usage by 2022.
That brings us to looking for about 4 Million Barrels/Day of Gasoline. For that we need a little less than 8 Million Barrels/Day of Crude. We can, probably produce 5 Million for several years.
So, instead of going on the world market, and looking for 10 Million Barrels/Day of Crude, and One million of Gasoline, we'll be looking for approx 3 Million Barrels of Crude, or One and a half million barrels of gasoline.
We'll still be short on diesel, but, with Warren Buffet buying railroads, I assume a lot of our presently, truck-delivered freight will go by choo-choo.
Just a broad overview, but it seems obvious that that is where we're going.
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In 1970, U.S. oil production was 9 1/2 million barrels a day and imports were less than 1 1/2 million barrels a day.
In 2005, U.S. oil production was 5 million barrels a day and imports were 10 million barrels a day.
Thanks for your socialist solution rufus but I'd rather let the free market take care of the situation instead of having some collection of malthusian morons impose what they think might be a solution when all they're really doing is reaching for our collective wallets through some new tax extortion scheme...
Meanwhile why don't you ask YOUR fellow travelers to get out of the oil business...
The peak oil debate is over
by Dr. James Schlesinger
October 8, 2010
Dr. Schlesinger served as Chairman of the Atomic Energy Commission (1971-73), Secretary of Defense (1973-75), Director of the CIA and was the first Secretary of Energy (1977-79).
If something cannot be sustained, it will eventually not be sustained… ultimately it will shrink.
Secondly, you cannot produce oil unless you first discover it.
Third, a resource that is finite cannot continually have its production increased.
First, we remain heavily dependent on super-giant and giant oilfields discovered in the 50s and 60s.
Second, old super-giants like Burgan in Kuwait and [Cantarell] in Mexico have gone into decline earlier than had been anticipated… and going into decline have been Alaska, the North Sea, western Siberia and the like.
Third, while it is not yet “Twilight in the Desert” (as you may have read) still we are well into the afternoon, even in Saudi Arabia. Even the Ghawar oilfield is increasingly hard to sustain.
Fourth, in 2004 we experienced our first demand-driven price spike, as opposed to the previous price spikes driven by supply interruptions. We still operate at about the level of production capacity of 2004.
Next, given projected decline curves running from 4 to 6 percent, and the projected increase in demand during the next quarter century, we shall require the new capacity equivalence of five Saudi Arabias.
But clearly, large conventional oil production is increasingly no longer part of the future unless there is a technological breakthrough...raising the ultimate recovery rate from existing fields, which at this moment we cannot expect.
In general we must expect to get along without what has been our critical energy source in expanding the world’s economy for more than half a century.
Can the political order face up to the challenge? There is no reason for optimism.
We are likely to see pseudo-solutions, misleading alternatives and sheer sloganeering.
It has been suggested by some that if we open the urban transit market to competition we might reduce our fossil fuel usage by as much as thirty percent and with that decline of course we get a significant decline in pollution.
Also, I may add, James Schlesinger has a BA, MA, and Ph.D in Economics from Harvard (Phi Beta Kappa and Summa Cum Laude).
By the way, Juandos, you old "Capitalist," you, You do know that the Ethanol Subsidies Expire on Jan. 1st, right?
There is nothing "Conservative" about closing your eyes, putting your hands over your ears, and going la-la-la-la.
Just childish.
which can be equally applied to your proposed "solution" I might add
Dr. Perry mentions:
"the 4.3 billion barrel estimate of [Bakken] reserves"
This credible source puts the Bakken technically recoverable oil at "on average, 200 billion barrels" -- not far removed from the total proven reserves of all of Saudi Arabia (267 billion barrels).
Click here and explore far larger untapped resources which are awaiting nothing more than government approval to develop them.
Rufus,
Without looking too deeply I think your predictions for future gasoline consumption may be too optimistic.
Over the years gasoline usage has risen despite increases in cafe standards and improved gas mileage in part to population growth, and in part because with improved gas mileage, people to tend to drive more, not less. There's no reason to think this trend will reverse due to the the higher CAFE standards for 2020.
Even assuming that ethanol mandates survive, I don't think you have accounted for the fact that a gallon of ethanol has an energy equivalent of only 2/3 gal. of gasoline?
Even assuming your optimistic 100billion BPY, I think the number per day is closer to 5 million per day that the 4 million you estimate.
Buffett isn't buying railroads to replace existing trucking, but because he thinks they're a good investment. I see no reason to assume that the current mix of shipping modes will change significantly.
"By the way, Juandos, you old "Capitalist," you, You do know that the Ethanol Subsidies Expire on Jan. 1st, right?"
A day of rejoicing for all of us, assuming they are allowed to.
The Bakken is nothing new. It is still a lower quality "non-conventional" reservoir. Simple Economics dictate that as Peak Oil arrives (the low-hanging fruit is gone - I will discuss later) higher prices for oil will ensue making these lower quality, non-conventional oil sources become economic.
I was personally involved in drilling and completing dozens of these horizontal Bakken Shale wells in the Williston Basin for a large US company back in the mid 1980's to early 1990's.
Our industry has made improvements in both horizontal drilling (longer laterals) and hydraulic fracturing (mainly addressing reduction of residual transport fluid damaging effects by migrating away from heavy metal cross-linked gels to linear 20# gels and less sand pac k) in the last 30 years.
However, the main driver for the Bakken Shale's revival (as well as many other lower quality oil reservoirs revial as well as offshore and geopolitically-unstable areas of production) IS HIGHER OIL PRICES FROM THE EFFECTS OF PEAK OIL BY DEFINITION DRIVING OIL PRICES HIGHER. To wit: 1985 Oil Price was appx $15/Bbl vs. 2010 Oil Price of $82/Bbl.
If you would like more, please visit my Blog:
http://bestblogging.blogspot.com/
I enjoy your Blog Mr. Perry we just disagree on this subject.
Keep up the good work and Best to You -
D. Mark Loyd, PE
We will still run out of oil someday, because we are using it faster than it is made.
We may replace natural crude oil with man-made synthetics, but we will run out of conventional oil regardless of ingenuity. Only timing is an issue.
"By the way, Juandos, you old "Capitalist," you, You do know that the Ethanol Subsidies Expire on Jan. 1st, right?"...
In all seriousness thank you Señor rufus for reaffirming something I'd read regarding that...
I'm a person who likes tortillas and this bit on ethanol is NOT a minor detail...
BTW rufus I'm not an oil idealogue but I do recognize that fact that crude oil today is where its at from a practical standpoint...
Well we know about the climate warming scam, well the Saudis want to make money off that also:
From the UK Guardian: Saudi Arabia to seek compensation for climate pact oil losses
Saudi Arabia and other oil-producing nations stake claim to projected $19bn losses if oil production declines due to global climate deal
'Saudi Arabia and some other Opec oil-producing countries claim that they will have to adapt their economies to a world which uses less oil and say they could lose as much as $19bn a year if countries are forced to cut fossil fuel use. Their argument is that they have only oil and sand as resources and it would be unfair to penalise them'...
Personally I find it both ironic and a bit humerous that this world wide fraud of AGW (anthropomorphic global warming) could be taking on a life of its own...
Well D. Mark Loyd I've taken at look at your D. Mark Loyd's "MY TWO CENTS WORTH" and I do believe you have quite the interesting site there sir...
Definitely worth bookmarking IMHO...
Thanks for that...
"We may replace natural crude oil with man-made synthetics, but we will run out of conventional oil regardless of ingenuity"...
Hey hydra, interesting you should make that comment because of what I was reading this particular site you may also find of some interest: Methane: A Scientific Journey from Obscurity to Climate Super-Stardom
Its all about the methane clathrates...
You have training in chemistry can easily see the possiblities this might have...
The cafe standards are a joke, with practical vehicles alredy getting 45 MPG and better. But Ron is right, increasing efficiency means more use, until prices increase faster than efficiency.
We could create thousands of jobs tomorrow if we would let oil companies drill on land.
Thank You juandos for your kind words.....just trying to spread some intellectually honest thoughts from my little corner of the world (read:knowledge base). Hope it helps you in some small way and please visit my blog if ever you have something you would like to discuss.
Best to You....
In 1970, the U.S. with a population of 203 million used 11 million barrels of oil a day.
In 2005, the U.S. with a population of 295 million used 15 million barrels of oil a day.
So, the U.S. population increased 45% and oil use increased 36%.
Yet, Americans live in bigger houses, have more appliances, drive bigger cars, etc. Per capita living standards improved substantially from 1970 to 2005.
On the production side, the U.S. offshored heavy goods and shifted production into lighter goods (many goods in the Information and Biotech revolutions, and service industries, weigh almost nothing).
Also, I may add, the U.S. imported offshored heavy goods at lower prices and at higher profits, and exported lighter goods (with market power) at higher prices and at higher profits.
"We could create thousands of jobs tomorrow if we would let oil companies drill on land"...
Speaking of which, consider this AP story about Hollywood: Oil field near 'black Beverly Hills' may be threat to residents
Considering California's massive debt why are the residents whining about a revenue stream that could mitigate some of California's citizens self-imposed problems?
Oh my D. Loyd Mark your YouTube link in your posting: WeekEnd QE Facts and Humour is rightously cruel on 'The Bernanke' but absolutely hilarious at the same time!
Good find!
From CNBC: Secret Walmart Survey Shows Inflation Already Here
Ron, it is true; I tend toward the "optimistic" at all times. :)
I'm not sure "Jevon's Paradox" is truly informative in this situation for the reason that: we probably won't drive prices low enough for that to become a factor. I think the "trick" for the next decade will be to manage to spend at least a "little" time "Out" of Recession.
As for mileage, I'm assuming we will continue to move toward engines like the new one from GM. The new Buick Regal will offer a 2.0L TDI that delivers 220 HP (on E85,) and the Same Mileage as Gasoline.
If we open the urban transit market to private enterprise most of it would simply shut down. There is no rational market for most of what is publicly operated at a loss, according to Winston and Shirley.
Peak Oil should not be confused with rising oil prices. There are many reasons why oil prices rise and fall over time.
With all respect to Dr. Schlesinger, he is merely stating an opinion based upon his personal experiences. Economics as a discipline does not support the notion of Peak Oil. Prices and Markets do not operate based upon the simple notion. Prices and Markets use far more information. Finally, if Dr. Schlesinger and other peak oilers are so certain please feel free to act with their own money instead with all of our money. They can use the huge win falls to support those of who were wrong (if they are not vindictive). The unfortunate fact is that Peak Oil is not a robust idea that can generate economic rents without the government intervening to make it so by creating scarcity.
Seriously, let's separate out the natural notion that there is a fixed amount of oil on the planet earth from the socio-economic notion that oil plays a material role in the economy at the moment. Peak oilers confuse there certainty with the former with the later. It is simply wrong. The two are distinct. Humanity and Markets will and is working on alternatives as it has done for a long time. Jaw boning upon impending doom is a cowards game. Humanity at this point needs people committed to real solutions that leverage innovative ideas not the totalitarian reasoning.
articles from this week:
http://www.bloomberg.com/news/2010-11-10/oil-prices-will-be-substantially-higher-by-2012-goldman-says.html
http://af.reuters.com/article/energyOilNews/idAFBRU01112520101110
http://www.cbc.ca/money/story/2010/11/09/iea-world-energy-report.html
http://www.good.is/post/getting-oil-is-getting-expensive/
http://www.news.ucdavis.edu/search/news_detail.lasso?id=9673
http://earlywarn.blogspot.com/2010/11/iea-acknowledges-peak-oil.html
http://gregor.us/oil/crude-oil-production-forecast-to-2015/
the report from the US joint forces command, forecasting that the world would need another saudi arabia by 2015:
http://www.jfcom.mil/newslink/storyarchive/2010/JOE_2010_o.pdf
US dept of energy; see page 8
http://www.eia.doe.gov/conference/2009/session3/Sweetnam.pdf
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Ron is right, the cuurent mix of shipping modes won't change much. Shipping by rail still requires a truck at both ends of the trip, for the most part. High value shipments go by truck because trains are too slow. Generally rail shipments must be over 600 miles to make sense.
"the world would need another saudi arabia by 2015"
We have at least 6 or 7 Saudi Arabian equivalents right here in the USA. And, that does not even include our enormous Natural Gas resources.
The only thing we're lacking is the blessings of government bureaucrats to develop our vast hydrocarbon resources.
The discipline of economics most certainly supports the idea of peak oil. So does the discipline of mining.
Sure, rising prices will make more marginal reserves economically recoverable, but they are still marginal reserves. We will run out, it is only a question of when and at what price. I don't see any point in classifying the answer as liberal or conservative.
And sure, ingenuity may derive an entirely new economy, not dependent on oil, but it will probably happen as a response to high oil prices as supply fails to keep up with demand.
P,
The world will never run out of energy. The economics already show the way, e.g. higher oil prices, more alternative energy, fewer and smaller assets and goods, greater efficiency, more conservation, less globalization (to reduce transportation costs), and perhaps an actual decline in living standards.
When we get out of this recession (according to Buffett, we're still in recession), oil prices will skyrocket, high-cost extraction methods and alternative energy will become relatively cheaper. Supply will increase to meet increased demand.
"Saudi Arabia and some other Opec oil-producing countries claim that they will have to adapt their economies to a world which uses less oil and say they could lose as much as $19bn a year if countries are forced to cut fossil fuel use. Their argument is that they have only oil and sand as resources and it would be unfair to penalise them'..."
Poor babies! It's hard to dredge up much sympathy for OPEC, but I think it may be an important admission by them that they no longer have much control of the global oil market.
"Oh my D. Loyd Mark your YouTube link in your posting: WeekEnd QE Facts and Humour is rightously cruel on 'The Bernanke' but absolutely hilarious at the same time!"
Oh that's a great video, thanks! Cruel? Compared to the treatment I think 'The Bernanke' deserves. this is downright kind.
Hyrda said: "Generally rail shipments must be over 600 miles to make sense."
As a major GM sheet metal plant, that's what we do. No more West Coast assembly plants (outgoing) or Pittsburgh steel (incoming), so all of our coiled steel shipments in are by truck and about 90% of our shipments out are by truck (300 tonnes per day).
Off the top of my head, I think Arlington, Texas assembly is the last plant left for rail shipments out of Flint. We used to have a eight rails into the plant and two from a barn. We just use the two from the barn now, and one of those has been cut in half by a building addition and can only get half the rail cars in.
Gentlemen,
I hope you won't mind if I join the Peak Oil debate. It certainly is worthy of much debate. Let me begin by stating that I am a Petroleum Engineer and have no formal education in economics. I must confess though, if the "practical" training I have received in the engineering field post-university relative to the education I received at university in Engrg is relative to the same education to those in the Economics field, I am certain my "practical" lessons in economics of the oil and gas industry should permit me as somewhat qualified in that side of this debate.
While I would not personally and completely agree that Economics is in all respects the Dismal Science, recognizing it's shortcomings would serve us all well.
Next, the field of Petr Engineering must also handle occasional "variables" which inject thier own levels of unreproducible results. I broach these two disciplines in this fashion because, at the end of the day, we must side with one and against the other, which will also provide some very compelling arguments.
The fact that I fall on the side of Engineering should come as no surprise to anyone.
On to my supporting thesis regarding Peak Oil which is now broken into two posts due to warning of excess chars......
Continuation from Prior Post....
"P" makes many compelling arguments but a couple I would like to kindly, and respectfully, attack. First, I very much agree that as P cites there are many reasons why oil prices rise - especially now. I will not stray from the Peak Oil subject but if you find you have absolutley nothing else to do and would like to investigate mine they are here @ my blog if you so choose - http://bestblogging.blogspot.com/.
Next, I will point out that the corollary to P's statement is that one WOULD EXPECT oil prices to rise contemporaneously with Peak Oil - they are inseparable as a simple and most important relationship exists in the oil and gas industry and it is called supply and demand. So, I do in fact disagree with the statement from P that Peak Oil should not be confused with rising prices due from the mere fact this statement is simply an ad hominem fallacy adn does not address the issue at hand - do oil prices rise with Peak Oil and is Peak Oil a proven / accepted phenomenon.
Second, while Economics as a discipline may or may not support the "notion of" Peak Oil , Geology and Petroleum Engineering as taught by all accredited US institutions of higher learning do support Peak Oil theory. As a young Petroleum Engineering student at Texas A&M a quarter of a century ago, I was taught "Hubbert's Peak" which is commonly accepted then and now in the Oil community. I find it quite incredible that I am "living" that intriguing theory called Hubbert's Peak that as a student so long ago I barely grasped the true implications of. Truly prophetic was Mr. Hubbert.
Thirdly, I really don't understand what P means by "Unfortunate fact is that Peak Oil is not a robust idea that can generate economic rents w/o the govmt interventing to make it so by creating scarcity". Peak Oil is real. It happens in EVERY field discovery past, present and future. While govt intervention very much impacts oil prices (i.e., devaluing US$, Military Protection-for-Cheap Oil Trade, etc) Government does NO WAY affect the fundamental profile of non-restricted oil flows from an underground, porous and permeable strata we refer to as oil reservoirs. If one will simply withdraw from ad hominem fallacies this becomes abundantly clear.
Continued Again......
Continued from Prior Post......
Next, I beleive if you study the progress of we humans and our leveraging via mechanization and industrialization of OIL (fossil fuels), you will see that OIL and other FOSSIL FUELS are the single-most important input in the economic prosperity of all developed nations. With this understanding, I see no way to separate oil and its' dwindling "deliverability" we term "Peak Oil" and the resulting pressures it will place on this most precious commodities' prices with the role it plays in any human economy. For this reason, many people are arguing for regularly reductions in GDP as they cite no more cheap oil (i.e., low hanging fruit). This is an academic argument that seems reasonable to me but that I have put no real thougt into.
Finally, humanity does need people to rationally devise replacement alternatives. I find common ground here. We will need many sources of fuel as we feel the effects of Peak Oil. What I do not beleive is that those alternatives are economic with the current levels of oil prices and even more so natural gas prices are today (short Nuclear and it has it's own set of disposal / safety issues that must be addressed) and I adamantly oppose government subsidies to achieve same.
We as a race should and are working on alternatives. Peak Oil believers are scientists who have studied the unambiguous profiles of the systematic recoveries of hydrocarbons and they are repeatable - in every instance that the flow is not being restricted at surface due to demand requirements or storage facility limitations, and the like.
There is no "jaw boning" and rjs has posted many respected publications and authorities who believe in Peak Oil. Many on the list (IEA, etc) were once non-beleivers who as more data comes out have swithced sides. Everyone will accept Peak Oil in the next few years.
Best......
MY TWO CENTS WORTH,
Peak Oil -- no doubt -- is real. But, the 64 trillion dollar question is (always) “when?”
Clearly, we ain’t there yet (not even close). Equally clear is the fact that each revision to Peak Oil predictions is repeatedly proven false by -- as Dr. Perry correctly names it:
“the ultimate resource - human capital (i.e. human ingenuity and the resulting innovation, advances, new technology) - which is endless and boundless, and will never peak”
Click here for a more sober (yet still utterly, totally, completely and repeatedly foiled by human ingenuity) assessment of Peak Oil.
Click here and discover where we can find at least 6 to 7 Saudi Arabian equivalents (that we already know of).
"Timing" Peak Oil is an academic exercise. None of we entrepreneurs give a crap about that no more so than a trader cares to exactly time the peak of the market on any given day.
What you are seeing is the effects of Peak Oil. Here and now. Look at hte very subject of this thread. The Bakken was not commercially viable 30 yrs ago when I worked it but now the RUSH IS ON.
MY TWO CENTS WORTH sez:
“What you are seeing is the effects of Peak Oil.”
Your’e dead wrong. And, if you bothered to examine the quantitative evidence, you would know that.
The truth is that ANWR alone could have prevented the global price spikes of 2008 (all around the world). See the quantitative facts in the above link.
Again…
Click here for a more sober (yet still utterly, totally, completely and repeatedly foiled by human ingenuity) assessment of Peak Oil.
Evergreen Libertarian said...
"It has been suggested by some that if we open the urban transit market to competition we might reduce our fossil fuel usage by as much as thirty percent and with that decline of course we get a significant decline in pollution."
Who are these "some" you mention? References please, preferably with links.
I may be wrong, but it's my impression that almost without exception, urban transit systems, especially those involving rail, require massive infusions of taxpayer money to start up, and then continuing infusions to operate, in order to keep user fees low enough so that the system will actually have any users. I can't imagine any private firms being interested in "competing" in such money losing ventures.
A 30% reduction in fossil fuel usage would be a pretty spectacular amount. What assumptions are being made about changes in commuter behavior? And, more importantly, what actual fuel usage per passenger mile numbers are being used, based on the experience of existing transit systems, to predict such a drastic reduction?
And, last but not least, what types and amounts of pollution decline would be anticipated, considering the many different types of byproducts produced by various fuel sources?
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This comment has been removed by the author.
MY TWO CENTS WORTH,
As we witnessed in 2008, anytime world oil demand exceeds world oil supply (even by a tiny amount), prices will rise very sharply until curtailed demand restores balance. Then, prices will return to more reasonable levels.
This classic economic feedback mechanism will ensure that the catastrophes predicted by the “Peak Oil” doomsters will never happen. Instead, what will happen is that alternatives will gradually become more popular and more cost justified.
And, just as the world shifted from whale oil to petroleum, the world will (if the damn politicians stay the heck out of the way) gradually move “beyond petroleum” (at least so far as transportation is concerned).
Click here for a related essay on the so-called “Sustainability” fraud.
Rufus,
"The new Buick Regal will offer a 2.0L TDI that delivers 220 HP (on E85,) and the Same Mileage as Gasoline."
I'm having trouble finding useful information on this new engine other than promotional material which claims mileage estimates "nearly the same" as for gasoline, which is, incidentally, in the range of 20 city / 30 highway. That's not much help toward a CAFE goal of 35. Can you point me to something more substantial on the subject?
Hopefully you aren't really promoting the idea of ethanol as motor fuel, considering the negative energy balance it would currently provide when delivered to my tank, and the sheer physical impossibility of ever replacing a meaningful amount of gasoline, not to mention all the other negative consequences of large scale production.
I wasn't actually considering the Jevons Paradox, but merely pointing out that historically, people tend to drive more when it costs them less to do so, either because the price per gallon of fuel is lower, or that gallon carries them further, as it will will with higher CAFE standards in place. There's no need for lower prices.
Ron, the Buick Regal is a fairly heavy car, and they're marketing it as a "sport" model (ie 220 HP.)
The same engineering will start appearing in the smaller engines/cars within a year or so. I just gave it as an example of a modern engine in which ethnol will achieve parity with gasoline - mileagewise, and with more power.
The average net energy calculation, right now is 2.3 to 1, with the vast majority of that inputted energy being nat. gas.
However, as they start building the cellulosic plant additions that calculation could easily become 20 or 30 to one, or greater as the lignin is used to power the process, and, in addition, to produce large quantities of electricity.
Rufus,
You didn't provide any references for the Buick engine technology. I'm eager to learn how engineering can get equivalent power and fuel economy out of a fuel that contains only 2/3 as much energy per gallon as gasoline. Marketing pronouncements from Buick or sites promoting E85 aren't adequate, for obvious reasons.
I would also love to see some support for your claimed energy balance of 2.3 to 1, as I'm not aware of any recent claims with anywhere near that high a number. Are you sure you are including all energy inputs into that calculation?
What about the amount of water used in the process?
What about the effect on food prices of this diversion of corn to fuel? I'm sure you also must be aware of the natural limit to the amount of gasoline that can be replaced by ethanol even if every acre of corn in the US was used to make it, with none left for food.
Celulosic ethanol sounds great, but after all the hoopla we have heard for so many years, there is still no real world practical operation, only experiments. What's the problem? Also, as with corn, you must consider the physical limitations. It's easy to say "Oh, we'll just grow switchgrass for fuel." But have you considered the vast land areas that would have to be converted to it's growth to replace any meaningful amount of gasoline? Consider resistance from the NRDC and Sierra Club, among others. Again, how about the huge amounts of water required for this additional growing and processing?
I would really like to see some unbiased references for this also, including the amazing 20-30x energy balance. Being optimistic is fine, but there are practical concerns. Your ideas and predictions for the future seem overly simplistic, and I don't get the warm, fuzzy feeling about them that you seem to have.
Rufus,
"The average net energy calculation, right now is 2.3 to 1, with the vast majority of that inputted energy being nat. gas."
By the way, wouldn't it make more sense to use natural gas directly as a fuel rather than the cooking up moonshine with it?
Ron: I'm with you on this. I believe in ingenuity and human capital, but I draw the line when it defies physics. I've heard the Buick argument stated as, yes ethanol has lower energy, but higher octane, and this is released by burning at higher compression ratios.
I guess we get that compression for free.
Like Obama stimulus.
There are huge land areas not being used. We can grow switchgrass in our front lawn, and have municipal switchgrass collection.
What about the effect on food prices from converting corn to fuel?
----------------
You have no idea how much fallow land is out there. As oil prices increase we will tap more marginal resources of oil.
Same for corn.
Right now I sell hay for horses. Those horses are occupying land that could be planted for corn. Horses are a luxury that will go first. Cattle eat mostly waste products and are only fattened on corn. Because it is cheap. We may eat leaner beef.
SBVOR, normally, the term is stability rather than sustainability = stagnation.
My two cents:
I laughed at the statement that peak oil wasn't a robust idea, too.
What I worry about is that it may be so robust that I cannot afford to run my tractors, and mules become cost competitive.
Some farmers made the switch in the last fuel crunch.
There is a real conundrum. If fuel is so expensive we have to shift to draft animals, then the draft animals will be competing for space needed to raise fuel.
This happened in reverse around 1945. Tractors made draft animals obsolete. This freed up a lot of land used to graze animals.
This meant a lot more food could be produced. This led to low food prices, a farm Exodus, and farm subsidies to keep farms in existence.
For all the bad aspects of farm subsidies, they may eventually turn out to be money well spent.
Peak trader is right.
Our economy depends on growth. At some point sustainability requires a steady state economy.
We have no model for an economy that works this way.
But there is no reason to assume we could not have a stagnant economy that was always good.
PeakTrader & Hydra,
Sorry…
Sustainability = Stagnation (no doubt about it).
And, stagnation is never, ever “good”.
The Sustainability Cult will soon become far more dangerous than the CAGW Cult (which is rapidly dying).
Sorry. I can't believe alcohol will achieve parity with gasoline. I'm a chemist and that idea does not fly. I'm also a sailor and I have used alcohol, propane, kerosene, and natural gas for heating and cooking. It takes a long time to boil water over alcohol, and it takes more of it. And that is free combustion, not constrained by the exigencies of internal combustion.
Whatever combustion technology applies to one fuel applies to them all: higher pressure, higher temperature, and more oxidizer results in a more complete burn.
Sbvor:
Lets substitute stagnation with steady state.
Eliminate the emotional context.
What if you had a business that made the same profit every month. You could not increase it and could not invest it.
All you could do is spend and enjoy It.
Why is that so bad?
Because you have no reason to work more?
Hydra,
Since a stagnant economy will not generate any new jobs, you can start by explaining to me how you will go about -- forcibly, I presume -- achieving zero population growth.
8Ahh.
Excellent point.
But dont put this on me. Its not my idea.
Yes it does seem that zero growth means zero population growth and zero resource growth as well.
Spaceship earth.
I have no children. What make you think force is involved?
Hydra,
"I've heard the Buick argument stated as, yes ethanol has lower energy, but higher octane, and this is released by burning at higher compression ratios."
That can't be the whole story. Unless the Buick engine can change compression ratios when you switch between gasoline and ethanol, you can't get the same power from the lower energy fuel. To get the same power you will have to use more of it. You can't have both the same power and the same fuel mileage from fuels with different energy contents. As you say, it defies physics.
See the following on octane rating:
"Octane rating does not relate to the energy content of the fuel (see heating value). It is only a measure of the fuel's tendency to burn in a controlled manner, rather than exploding in an uncontrolled manner. Where octane is raised by blending in ethanol, energy content per volume is reduced."
Higher octane means slower burning, which means higher compression ratios can be used, thus more energy from combustion becomes mechanical energy.
See this on the relative energy contents of some common fuels.
Diesel - 138,700 BTU/gal
gasoline - 125,000 BTU/gal
ethanol - 84,600 BTU/gal
I agree the sustainability cult is a cult. What is the alternative? The expanding universe cult?
Ron: I agree. You don't get more miles out of less energy.
Internal combustion complicates things on acccout of adiabatic expansion, but you still don't get something for nothing.
Ron, Hydra, alcohol can stand a lot more compression than gasoline. It, as a result, is much more amenable to higher levels of EGR (Exhaust Gas Recirculation.)
You control the "Compression" by way of a variable Turbocharger. Crank up the turbo when gas is the fuel, and, voila, more compression.
Of course, a sophisticated computer chip, Variable valve timing, and Direct Injection are very much necessary for optimum flexibility.
The second part is EGR. When loafing around you use more EGR. This has the practical effect of lowering the "Displacement" available for Fuel.
This is what the Edison 2 guys did that won the Xprize. The Xprize ($5 Million) was given for being the first manufacturable 4 seat car to reach 100 mpge. They used E85.
Ron, you asked about a zillion questions in that last comment. I'm tired, and going to bed (I'm an old fart;) but if you'll check back tomorrow I'll try to have some explanations for you.
Juandos:
I'm an Ms level chemist not a PhD. I claim no special knowledge and my expertise is limited to energetic materials.
Without seeing your citation ill say this. Clathrates are cages. Cages contain energy. If you are saying there is a caged energy source we need only release, then that would be a game changer.
The world will never run out of energy until the sun Burns out
The cost of collecting it and storing it may vary wildly over time.
At one time the best way to extract solar energy from the earth was with mules.
Rufus:
I don't claim to be an expert, but you are an idiot.
Mix alcohol with air and compress it. It will explode. If you mix it with too much or too little air the explosion and energy released will not be perfect.
Same for gasoline except the perfect gasoline explosion releases more energy.
The longer the piston stroke, the more adiabatic the combustion and moere efficient. Also more torque, hence diesel engines.
The shorter the stroke the more immediate power you extract (acceleration) and the more energy you waste. That is why auto engines are normally oversquare (more diameter than stroke): to maximize performance described as acceleration.
(somebody correct me here, if Im wrong)
.
Rufus:
You do not get to crank up the compression for free. That takes energy.
You can accept a more uncontrolled explosion with an oversquare engine because the pressure drops faster as the cylinder recedes. Temperature, too.
Diesel engines burn slower and expend energy over a longer (more adiabatic) stroke. The longer stroke translates into a longer crank arm and more torque, but less acceleration.
What any of that has to do with MPG is indeterminate, depending on many other factors. My diesel tractor is highly efficent, but gets 5 MPG.
Rufus:
how much compression alcohol can take compared to gas macht nicht.
Mix it with air and it can only compress so much beroe it explodes.
Detonation wastes energy, so slower burning (at constant temperature) is more efficient.You cannot maintain the constant temperature with different energy content.
Basically you need and engine optimized foe a given fuel air ratio. Variable valve timing is an attempt to get around this.
This classic economic feedback mechanism will ensure that the catastrophes predicted by the “Peak Oil” doomsters will never happen. Instead, what will happen is that alternatives will gradually become more popular and more cost justified.
================================
Precisely.
Rufus:
If you have a company that produces more power than it takes in as energy, Id like to buy some stock.
Hydra (11/15/2010 12:45 AM),
Well, at least we agree on that.
Of course, as I noted in my essay on the Sustainability Fraud, all bets are off once central economic planning is involved.
Central economic planning -- embraced by all Sustainability cult members -- is (ironically) the ONLY scenario actually capable of causing the world to run out of any given resource.
Certain rare earth elements could be the first to go (in the name of Sustainability, of course).
Hydra, idiot here, I'm cutting and pasting this from part of a comment by Larry D. on a thread at Wattsupwiththat:
Wattsupwiththat thread
In answer to your other MS Level Chemistry question: it requires somewhere over 20 psi boost pressure to E85 to ignite.
Mostly, in these production cars you're going to see them coming in around 14.5:1.
You get one heck of a lot more power out than you have to put in to get to 14.5:1.
Let's try that again.
It is very easy to feed an engine far more fuel than it can successfully burn because internal combustion spark ignition engines are inherently air limited. They can burn no more fuel than the air they can process allows. Therefore the real measure of performance of a fuel is how much energy can you release burning that fuel with a fixed amount of intake air in the engine. To do that, you need to compare the actual energy released at fuel air mixtures that real engines produce maximum power, and at their stoichiometric fuel air mixtures (which is where they spend most of their time on light throttle cruise).
By that measure ethanol and E85 specifically easily out perform gasoline.
Typical gasoline Thermal energy 18,676 BTU/lb Gasoline stoichiometric fuel air mixture of 14.7 – 15.2:1 — it will release between 1270.4 and 1228.7 btu per pound or air burned.
Pure ethanol typical Thermal energy 11,585 BTU/lb 9.00:1 stoich fuel air mixture = 1287 BTU/lb of air burned.
Typical E85 Thermal energy 12648 BTU/lb 9.765:1 stoichiometric fuel air mixture= 1295 BTU/lb of air burned.
Cont. from Larry D.
Using the lower heating values you get:
Typical gasoline Thermal energy 18,676 BTU/lb Gasoline Max power rich 12.5:1 = 1494 BTU/lb
Typical gasoline Thermal energy 18,676 BTU/lb Gasoline Max power lean 13.23:1 = 1411.6 BTU/lb
Typical E85 Thermal energy 12648 BTU/lb rich max power fuel air mixture 6.48:1 = 1951.8 BTU/lb
Typical E85 Thermal energy 12648 BTU/lb lean max power fuel air mixture 7.38:1 = 1713.8 BTU/lb
Anyone who asserts that ethanol and E85 produce less power than gasoline simply does not know what they are talking about. In real engines the direct conversion from gasoline to E85 at comparable fuel air mixtures for the fuel used, yields about a 5% gain in power if no effort is made to optimize the engine for ethanol/E85.
If the engine is optimized for E85, you can make upwards of 20% more power than gasoline on the same displacement engine. The 5% figure above is the power increase quoted by Ford Motor company for E85 in their engines. Saab also has engines that they rate at higher power output on E85 than the same engine on gasoline.
If you really want to learn something about the "burn physics" of ethanol vs. gasoline I recommend you hit that link to the thread over at Wattsupwiththat, and read Larry D.'s contributions.
He's been studying, and running ethanol in his own cars for years. He's a nice man, and his comments are very informative.
Rufus,
You must mean Larry L.
The info you provided makes my point. Look at the air/fuel mixtures. To produce an equal # of BTUs requires roughly twice as many pounds of alcohol as gasoline at full power, and 50% more at stoichiometric.
If I wish to drive my car at a constant speed, I will need to produce some # of BTU/hr. Comparing gasoline with E85 or ethanol tells me I will need 50% more E85 to do the same job as gasoline. Or as we say it in the US, fewer miles/gal.
If you don't believe this, try the same comparison between gasoline and diesel, which has a higher energy content than gas. You will need more gasoline to do the same job or get the same max power.
I don't believe anyone argued that equivalent power couldn't be produced from E85, just not with the same amount of fuel. Lower energy content equals either lower power or lower mileage.
If you're in doubt, try the same comparison between gasoline and diesel, which has a higher energy content than gasoline. You will need more gasoline to do the same job or get the same max power.
I understand your EGR argument, but it takes a certain amount of energy to get the job done, so there's a lower limit to how much fuel/time period is needed.
In gasoline engines, the primary function of EGR is to provide cooling to the combustion chamber using relatively cooler exhaust gas to compensate for the reduced cooling provided by leaner fuel mixtures at cruise. A higher temperature causes undesirable NOX byproducts to form.
"Peak Oil believers are scientists who have studied the unambiguous profiles of the systematic recoveries of hydrocarbons and they are repeatable - in every instance that the flow is not being restricted at surface due to demand requirements or storage facility limitations, and the like"...
Hmmm, funny so where the 'scientists' that attempted to foist of AGW scam onto an unsuspecting world...
Juandos,
Peak Oil believers are scientists who have studied the unambiguous profiles of the systematic recoveries of hydrocarbons and they are repeatable - in every instance that the flow is not being restricted at surface due to demand requirements or storage facility limitations, and the like"...
Hmmm, funny so where the 'scientists' that attempted to foist of AGW scam onto an unsuspecting world...
I have always rebuked the AGW Scam as have many other scientists...to wit:
http://bestblogging.blogspot.com/2010/10/acclaimed-scientist-hal-lewis-resigns.html
Someone here (sorry my memory isn't so great) posted something very basic and very cognizant of the basis for all energy here on earth - i.e., THE SUN. And it is the basis for all energy we harness here. Oil just happens to be the best, most energy dense, man has found. It required hundreds of millions of years to form and that is the rub were are recognizing with Peak Oil - a Deliverability Issue. With Peak Oil, man will learn to utilize other, less efficient sources and maybe even experience a lower of GDP - I don't claim to know teh answer to that. But I do beleive that unless and until the "Sun Burns Out" we will have energy. In what "capturable rate / level / usefulness" will determine our existence, living standards, etc.
I would proffer one more of "man's paradoxes" I will call it. Does not our entire current system of "bartering" known are financial system not completely rely upon fractional reserve banking? If so, and since our economy is 40% finance-dependent now (a really dumb move) how can our economy help but be severly impacted by any limitations upon growth served up by Peak Oil or anything else for that matter as Finance relies upon Fractional Reserve Banking - i.e., Growth of Money Supply adn GDP. Seems to me the real "scatter and/or wild cards" in the next-generation fuel capture, conversions, utilizations will be achieved, or achieved with much delays / inefficiencies, due MORE to something I have only recently begun to study and it is called Queing Theory, Crowd Psychology, etc. Ken Deffeys has some things on these subjects. To me, it addresses more of the "inefficiencies and hurdles" to the free market. Ivy League stuff that a common such as myself prolly can't understand anyway but I'm givin' it a go........
Seems to me Finance and Fractional Reserve Banking should have major attention focused on them NOW as they can not work without major growth and yet they are the "market" for putting together we entreprenuers with capital providers to make this necessary transition happen.
I know in my small biz it is quickly becoming a paradox. I am beginning to lose funding for my "solid conventional domestic oil prospects" from traditional sources (US Cos who MUST CHASE unconventionals due to relative sizes). The Hedge Funds and Private Equity guys are banging on the door daily. Problem is they want more than a pound of flesh and are quick to point out they are the new gate keepers and if you want to play.....you must pay their MAJOR FEES. They have managed a strangehold on the domestic fossil producers. Most all of my peers have moved in with these guys out of necessity. It is a really bad and inefficient TAX on the consumer because it has created a middle man in the exchange. The suppliers must raise prices and the consumers must pay it or do without. Once again, DC screws us for campaign contributions.....Glass-Stegall.
WOW, what a great find... If we extract all 4.3 BILLION barrels of oil from the North Dakota oil field that will extend the world's supply of oil for --- 43 days...
The world currently uses about 100,000,000 barrels of oil a DAY...
Optomystic (11/15/2010 9:45 AM),
1) I’m not sure where Dr. Perry got his 4.3 billion barrel figure. But, that number is arguably low (by 195.7 billion barrels). The Bakken reserve has “on average, 200 billion barrels” of technically recoverable oil.
2) Click here and understand that the USA easily has oil and oil equivalent resources at LEAST 6 to 7 times the proven reserves of Saudi Arabia -- if only your pals in government would allow us to develop those ENORMOUS resources.
3) Click here and understand that ANWR alone could have prevented the global price spikes of 2008 (ALL around the ENTIRE world).
“Peak Oil believers are scientists who have studied the unambiguous profiles of the systematic recoveries of hydrocarbons and they are repeatable”
Unambiguous? Repeatable? ROTFLMFAO!
Click here for a short list of just SOME of the (all over the map) predictions.
Click here for more sober calculations (which utterly ignores enormous USA resources described here).
Click here for the larger Peak Oil post.
Click here for the entire EIA presentation.
SBVOR,
You have made some good posts and credible in my mind on several points. No doubt, when the govmt gets involved and devalues currency by the many means or arbitrarily closes off potential areas of commercial hydrocarbon reserves such as ANWAR, etc, then the "inefficiencies" are brought to bear. They skew everything no doubt. We have commercial reserves now in the Rockies unconventional oil basins (as I have acknowledged prior) although I do question your proferred quantifications of same.
However, when you make posts such as you have ROTFLMAO - with NOTHING CREDIBLE to support / add - YOU and THOSE LIKE YOU, demean the debate and further destroy the credibiiity of the oil and gas sector AS A WHOLE.
To WIT: The ridiculous claims of the US Shale Gas commercial viability in the Barnett, Hainesville, etc currently. And I further support those (unlike yourself) with facts - see the 10-K results, etc @ my blog here - http://bestblogging.blogspot.com/2010/10/us-shale-gas-plays.html.
If you and your ilk would simply be honest intellectually and admit these plays are economic currently and in the last five years when NG Prices were double where they are now; however, we believe the future holds for higher oil prices and/or we believe entrepreneurs will arbitrage this disparity betweeen current Oil:NG Price Ratios, or many of the other while not commercial now but we believe in the future will be for these reasons, THEN YOU WOULD NOT FURTHER DISTANCE PEOPLE OUTSIDE OF OUR INDUSTRY TO OUR NOBLE GOAL OF PROVIDING RELIABLE, NECESSARY FOSSIL FUELS FOR THE HUMAN RACE'S REQUIRED USE - obviously among other noble causes.
Please stop your self-interested delusional attacks for short-term gains. In the end, they will be exposed for what they are and while you can just get another moniker and be another unrecognizable troll on another blog, you have caused major damage to the industry that I must continue to make a living in.
With whatever respect may be due....
"will never peak?" Really? Did you just write that? Never? Ever?
Technology will figure this out. So we should subsidize it and protect it. Oh wait, are we talking about oil drilling or alternatives? I get confused.
"Oil just happens to be the best, most energy dense, man has found. It required hundreds of millions of years to form and that is the rub were are recognizing with Peak Oil - a Deliverability Issue"...
So I take it you don't buy into the abiotic oil either, right?...:-)
Well I'm not going kid you about that and yes I do understand and don't disagree with your stance on easily reclaimable oil from a practical point of view...
Hence the reason I alluded to methane hydrates in an earlier comment in this topic...
I don't think we have with our present technological base much choice today (or in the near future) escaping from carbon based energy sources regardless of how much we want to...
MY TWO CENTS WORTH (11/15/2010 10:45 AM),
You are utterly lacking in credibility and unworthy of any further response.
Chevy returns to Indie with 2.4L Twin Turbo Direct Injected E85 V-6 Rocket.
Can't wait to get the HP numbers on that puppy.
The implications of the International Energy Agency’s (IEA) new report, World Energy Outlook 2010, are stark. Its 25-year “New Policies Scenario” projects that it is most probable that conventional crude oil production “never regains its all-time peak of 70 million barrels per day reached in 2006.” In this scenario, crude oil production is most likely to stay on a plateau of around 68-69 million barrels per day.
The End of Cheap Oil
Ron is right and Rufus is wrong.
Move on.
Rufus; you can't get something for nothing. Ethanol has less energy content than gasoline and gasoline has less energy content than diesel.
Per gallon. But diesel is also heavier than gas so the energy content by weight is not so different.
Evergreen Libertarian is wrong, too. Ron is right again. Mass transit isn't saving us anything.
=================================
Central economic planning -- embraced by all Sustainability cult members -- is (ironically) the ONLY scenario actually capable of causing the world to run out of any given resource.
Where was the central planning that caused us to run out of Passenger Pigeons, or Heath Hens?
Your statement is proven false.
That said conservationists and central control will cuase shortages sooner. I call it the stupid petri dish idea. We are a culture consuming the AGAR on a dish. Conservationists realize wee will soon hit the edge of the dish and a die-off will occur.
Their solution is to set up and artificial edge to the dish and say we have to conserve the AGAR outside this boundary.
Which means we face die-off sooner.
Dumb.
SBVOR,
You might want to peer at some global crude production statistics - they've been pretty flat for the past few years.
Remember, America was the Saudi Arabia of oil long before Saudi ever got that title.
My Two Cents Worth,
I myself have checked out Berman's blog on shale gas; admittedly, he along with a few others (perhaps including yourself), might be onto something big about shale gas's economics, meaning, it may not economical in today's price climate - meaning, there could be a scam.
Time will tell, we'll see.
Hydra sez:
“Where was the central planning that caused us to run out of Passenger Pigeons, or Heath Hens?”
What? Did no species die off prior to the emergence of homo sapiens? Were there no predators prior to the emergence of homo sapiens?
To refute the straw man argument of the century, I refer you to the late great George Carlin.
1) “You might want to peer at some global crude production statistics - they've been pretty flat for the past few years.”
Quoting an IEA report dated June 11, 2009:
“The OPEC-11 have reduced output by a total 3.1 mb/d [3.1 million barrels per day] of the pledged 4.2 mb/d [4.2 million barrels per day] reduction in production agreed since September 2008.”
Recessions reduce global demand. To prevent prices from dropping through the basement, OPEC deliberately reduces their production. If our idiot “leaders” ever get out of the way and allow the global economy to resume any sort of meaningful growth, OPEC will reopen their spigots and production will rise.
Click here for relevant EIA production data.
Click here for the source.
Click here for the demand side.
Click here for the source.
Click here to get a better picture of the quantitative facts on global supply and demand.
2) “Remember, America was the Saudi Arabia of oil long before Saudi ever got that title.”
Click here and you will understand why Saudi Arabia cannot hold a candle to USA hydrocarbon resources (and never could).
StVis,
Thanks for your level-headed observations and yes, you are correct on both counts:
1. World Production has been extremely flat for the last six years adn considering those were amongst some of the highest on record I think it should be a very strong indicator for even the most cautious that amidst that kind of demand (as indicated by prices) supply could not be increased; and
2. I have been on the Shale Gas Scam wagon for atleast as long as Art. He is a fantastic scientist and unlike Buffet and Muenger (who recently amidst the Bank scandals and knowing what they were), chose to protect their investments rather than the country and each's integrity. The facts are in and unambiguous over the last five years atleast regarding Shale Gas. I think one day these plays will likely be economic when fossil fuels necessarily rise in price but those folks in CHK stock now may NEVER see a return. Too much dilution, write downs of assets, reserves produced at below economic levels, Goodwill, Aubrey selling / buying artwork w/SH monies, etc.
Thanks and Best......
It is undisputed within my profession that the ME is the World's largest owner of Oil Reserves.
If one wanted to truly understand, beyond simple Price movements of Oil, some of hte underlying currents relative to what is going on in the ME - and hence relative to the worlds' supply of oil - one could do the following:
1. Go get a copy of the late Matt Simmons' book: "Twilight in the Desert". The title gives it away but he provides some great support for the subject of quickly depleting ME Reserves; and / or
2. Read this at my blog: http://bestblogging.blogspot.com/2010/11/peak-oil-and-how-oil-is-priced-in-next_4509.html; and / or
3. Consider this - http://www.hydrocarbons-technology.com/projects/manifaheavycrude/
which is some details on the Manifa Field development of Saudi Arabia.
The Manifa Field development gives much insight into the current shape of the ME Oil Reserves in what I will call "Judge what they DO and NOT WHAT THEY SAY". A little elaboration....Manifa is an offshore, POORER QUALITY HEAVY OIL Project. Now consider for just a moment what that means. First, it is offshore instead of onshore so you can imagine the hugely greater development costs. Next, it is HEAVY oil and hence of much less value than SA's onshore reserves.
It takes no critical thinking to know that if SA (the largest oil reserve holder in ALL OF OPEC) is developing OFFSHORE HEAVY OIL then their LOW HANGING FRUIT IS GONE!!! They, like the rest of us in this biz, develop our most lucrative prospects first.
Check it out. I have no agenda just sharing data from some folks utterly lacking in credibility and not worthy of responses.....to some.
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I told myself I would no longer respond to the childish diatribe but for those so interested in knowing the facts re: World Oil Production and how they ARE IN FACT AS I REPRESENTED IN MY POST - here they are from the US Energy Information Agency (EIA) - http://www.eia.doe.gov/emeu/aer/txt/ptb1105.html
Geesh some people.....
Addendum to this prior comment:
Actually global oil production has been steadily rising since the first quarter of 2009 (as global demand began to rebound).
Click here to view global oil supply & demand (World Oil Balance) for 2009 & 2010.
Click here for the raw source data.
Click here to put those figures into historical perspective.
Note that Q3 of 2010 matched the previous peak production from Q1 of 2008.
Click here for the larger post (including direct links to citations).
Readers will kindly note that:
Compared to the EIA data cited by MY TWO CENTS WORTH -- the IEA data I cited in my previous post is more current, more granular (quarterly vs. annual) and more easily analyzed (spreadsheet vs. text).
But, seriously, what did you expect?
I did not expect you to say THAT YOU WERE WRONG but tell me, do you really believe people on this board are buying your SHIT?
Looks like MY TWO CENTS WORTH is getting truly desperate…
I would further note that the EIA data cited by MY TWO CENTS WORTH are not even truly global. The citation notes that their data are derived from “Selected OPEC Producers” and “Selected non-OPEC Producers”.
This accounts for the lower production levels reported by EIA vs. IEA.
Did no species die off prior to the emergence of homo sapiens?
================================
OK, So what? No central planning caused them to die off, either.
The statement was that central planning was the only office that can cause shortages, and we know that isn't true.
Hydra,
The birds you cited are NOT resources, they are prey items -- BIG DIFFERENCE!
“World Production has been extremely flat for the last six years adn [sic] considering those were amongst some of the highest on record I think it should be a very strong indicator for even the most cautious that amidst that kind of demand (as indicated by prices) supply could not be increased”
1) Click here & examine EIA data documenting past world oil production.
Click here for the EIA raw data.
Note the decline in production during the severe recession of the early 1980s.
Did production decline at that point because:
A) The world reached Peak Oil
or
B) A really nasty recession caused demand to drop and, in response, producers reduced supply.
During recessionary periods -- in response to dropping world demand -- it is not at all uncommon for world production to remain flat or even drop.
2) Click here and note that the EIA anticipates healthy growth in world oil production at LEAST through 2025.
Click here for the EIA source.
3) Click here & examine recent IEA data documenting that global demand has already rebounded and global production has also rebounded.
Click here for the raw IEA data.
4) Click here and further note that, during the recent global financial bubble, world supply fell only VERY slightly behind world demand. The lag was so small that ANWR alone could have made up the difference for the ENTIRE WORLD!
5) Click here and note that the EIA (without considering ANY of the untapped resources documented here) expects Peak Oil to arrive no sooner than 2049.
Click here for the EIA source.
“We have commercial reserves now in the Rockies unconventional oil basins (as I have acknowledged prior) although I do question your proferred [sic] quantifications of same.”
1) Click here and note that I cited each of my CONSERVATIVE sources. Which sources do you doubt and why?
2) Note that the estimated “200 billion barrels” of technically recoverable oil is only HALF of the total available in the Bakken alone. Who’s to say that -- by 2049 (or 2094) -- we won’t have the technology to recover the OTHER 200 billion barrels?
3) Also note that 800 billion barrels in USA Oil Shale is the CONSERVATIVE mean estimate. There could be “1.8 trillion barrels”. Again, who’s to say we won’t develop technologies to recover that entire amount?
“commercial hydrocarbon reserves such as ANWAR”
You claim to be a “Petroleum Engineer” and you don’t even know how to spell ANWR [Arctic National Wildlife Refuge]?
Really? Seriously?
They are not resources now, we hunted them to extinction. And these were renewable resources. Hunting and supplying pigeons was big business. There were billions of them and we users them all up.
No central planning involved.
When the alternatives become cost justified, that will define peak oil, won't it? How can you say that peak oil won't happen because it will be replaced by cheaper alternatives?
That'ss rich. Blind optimism and circular logic at once.
Wow! The comments on this site got a bit stickey...
Does anyone know about the group called CERA (Cambridge Energy Research Associates)?
I've often seen this outfit referenced in other work...
These folks at CERA seem to be a bit more optimistic than most regarding the near future of crude oil extraction it seems...
Anyway CERA has the following you might find interesting that came out in 2009: The Future of Global Oil Supply: Understanding the Building Blocks
Juandos,
After just scanning the bullet points in your citation, I can already see that this is a report well worth examining.
You always offer citations of interest -- kudos.
...That's one reason that "peak oil" is peak idiocy: it always underestimates the ultimate resource - human capital (i.e. human ingenuity and the resulting innovation, advances, new technology) - which is endless and boundless, and will never peak.
I take it that you have not done the math. Horizontal drilling, which is not 'new technology', of $10 million dollar wells that produce 60 barrels per day does not do anything to offset Peak Oil. End of story.
Even the IEA, which has ignored the story for years and has grasped at every straw possible, has finally admitted that the Peak Oil argument is sound. It did not to that because its analysts do not know about horizontal drilling of shale formations but because there is no way for such drilling to offset the decline from conventional sources.
To understand the problem all you need to look at are the following graphs.
Reported OPEC oil reserves
IEA Production Model
IEA Production Scenarios
The first figure shows the big problem for the optimists. OPEC's reported reserves are not reliable. Countries did not use the drill bit to find more oil. They just reported higher reserves so that they can get their share of the quotas. And after that fraud OPEC countries forgot to take out production from the reported reserve.
For the record Mark, that OPEC production dwarfs all production possible from shale formations both in gross terms and after accounting for the substantial energy investment that is required to produce a barrel of shale oil.
What is Peak Idiocy is falling for narrative and not doing your own homework.
This shows the difference between Liberal thinking which is "The worse is going to happen eventually so let us take steps like its happening now" vs Conservative (a misnomer in this context) thinking which is "We are a great country, we solve problems for us and the world, we are optimistic about the future and we'll keep getting better".
No. This shows what happens when people do not think. The optimists have no idea about the math. The pessimists confuse oil production with energy needs.
There is nothing "Conservative" about closing your eyes, putting your hands over your ears, and going la-la-la-la.
While I would normally agree isn't that what conservatives with the false Iraq WMD claims.
http://www.youtube.com/watch?v=cpP7b2lUxVE
The solution is already in place. Has been for a couple of years.
The CAFE Standards set forth in Energy Independence and Security Act are for 35 MPG in 2020.
CAFE standards will not help us. What will help is to get government out of the way and let people bid for oil in the unhampered marketplace. When prices get too high they will choose to drive less, to drive more efficient vehicles, or to look for substitutes.
It has been suggested by some that if we open the urban transit market to competition we might reduce our fossil fuel usage by as much as thirty percent and with that decline of course we get a significant decline in pollution.
I agree. If people can get to work more effectively and cheaply they will choose to rely on mass transit operators that can provide them with what they want. That is not as easy when there is no competition and a protected monopoly has no need to compete for riders.
Yes, VangelV, I am aware of EROEI and it is clear by citing same you are an industry insider / investor.
I chose not to throw it out, in addition to the myriad of other fallacies that the troll named SBVOR so erroneously cites - he even uses the wrong EIA charts for World Oil Prod, geez.....
Anyway, I have come to the conclsion based upon my frustration and realization that Mr. Einstein was correct in his beliefs regarding the ONLY TWO INFINITIES HE KNEW OF (along with the more important conclusion) - of Man and the Universe - that when I visit sites and/or Blogs that allow unmoderated TRASH the likes of ONE SBVOR here, that I should move along. I hope the remaining respectful posters will not take offense to my prior statement as it was not intended against them.
If the remaining folks here (and any future sites where one bad apple is allowed to trash the intellectual debate resulting in similar action) appreciate what I offer, they know where to find me. If not, they are free to pursue others.
It's sad becuase I think Mark Perry's blog has much to offer but he will need to control the trolls or he will continue to lose legit posters.
I am now breaking my connection to this thread.
Thanks for your insight and come see me....
This credible source puts the Bakken technically recoverable oil at "on average, 200 billion barrels" -- not far removed from the total proven reserves of all of Saudi Arabia (267 billion barrels).
At 80 barrels of production per well you need 60,000 wells to produce the 5 million barrels per day that you need to replace each and every year due to depletion in conventional fields. Those wells would require the investment of $312,000,000,000 and will not produce a single barrel of additional oil.
How likely is it that we will get 60,000 wells drilled every year? How likely is it that we can find the billions of gallons of water that we need to drill those well. How likely is it that we can dispose of that water safely?
The math is actually very simple and no amount of wishing will change the cold reality. Peak oil is upon us. Production of light sweet crude peaked in 2005 and will never get higher. New unconventional oil will need to produce more barrels than what is being lost because the amount of useful high-value product that can be extracted from heavier unconventional oil is lower.
Clearly, Peak Oil is not upon us and will not arrive any sooner than 2049.
(Click here for the full EIA presentation.)
If the Dims ever allow the USA to develop our vast resources, Peak Oil won’t happen in this century.
But, for the religious cult members who insist the end is nigh, no amount of evidence will ever shake their blind faith.
Mass transit is potentially efficien but in practice it is not because it has to move so many empty seats. A bus or train goes in full and returns empt so you have a 50% load factor at peak. Local bus lines in my area have expenses that work out to more than 60 cents per passenger mile.
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