Increasing Oil Reserves

Homer008 submitted on 06/30/2007 Official AutoSpies Timestamp: 6:27 PM
from: www.autospies.com

[30] user comments | category: Spy Shots

Tags: JULY 9th, 2007 Time Magazine

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JULY 9th

2007 Time Magazine

Increasing Oil Reserves

I wrote on a commentary section on Autospies...(Before, I was banned for like 3rd or 4th time) that our oil reserves in the world is on or about 40 years..and, most German car fans mocked me.

PART II:

An annual British Petroleum report claims that the world has enough oil reserves to last 40 more years.

But...

Scientists question whether the world really has that long to go before its fuel gauge hits empty.

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EnnNorak - 6/30/2007 10:19:22 PM

+1 Boost

If you include Alberta's tar sands and extreme conservation, we can probably get another 100 years out of oil. Vast U.S. coal reserves will help also as gasoline can be made from coal. World population control would reduce demand and help stretch out ever-dwindling supplies. We need to go nuclear big time and develop efficient solar cells to generate power for electrolysis of water in a future hydrogen economy.

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Homer008 - 7/1/2007 12:49:33 AM

+1 Boost

I also agree with you on the nuclear power..take a look at France and Japan. Most of France's electricity flows from Nuclear power plant. Not only has this saved $ but pollutes a heck of alot less!

France also proves that nuclear power is safe.

moto - 7/1/2007 1:06:39 AM

+3 Boost

France also proves that when you're sitting on piles of nuclear fuel and nuclear waste, then you can't go around starting wars in foreign countries -- you've got to keep your military protecting your nuclear sites.

Until nuclear power is both safe AND doesn't result in radioactive wastes that must be guarded to prevent dirty bomb manufacture, then maybe it will be cost effective. But it isn't. Believe it or not, it's more expensive than solar or wind power.

moto - 7/1/2007 1:15:33 AM

+4 Boost

Note also that not all published reserves are equally believable. OPEC is notoriously unreliable in posting its volume of proven reserves.

EnnNorak -- the massive lobbying that is trying to convince people that tar sands are an attractive source of energy is disgraceful. You might as well try to extract oil from the aphalt on your roads. Tar sands need so much energy to separate the useable oil that only massive government subsidies would make it economically feasible to proceed. And this doesn't even count the environmental cleanup costs (which are either ignored or passed on to consumers).

If you want to subsidize energy, please subsidize renewable energies that don't cause such pollution.

Wallerstein - 7/1/2007 4:19:47 AM

+2 Boost

http://www.payvand.com/news/06/oct/Shah-Nuclear-Plants.jpg

w209w114 - 7/1/2007 2:35:03 PMView My AgentSpace

+3 Boost

Moto,

Im surprised we actually have intelligent people posting actual facts instead of lucid speculative scenarios on this website. Congratulations, Keep it up.

cdoke - 7/1/2007 9:42:18 PMView My AgentSpace

+1 Boost

Jagexpert,

That is actually a very important point, and one that I had neglected to even mention. There are prroportedly immense reserves of gas hydrates in the oceans. I am very lucky in this respect, because one fo the moderators for my honors class as a freshman was Dr. Sloan- THE world expert on gas hydrates. It is exceptonally rare to find something on the subject in which he is not cited as a reference. The biggest problem with it, from my understanding, is that it is difficult, but not impossible, to actually obtain in a stable fashion.

cdoke - 6/30/2007 10:33:49 PMView My AgentSpace

+4 Boost

There is a sort of caveat lector that must be understood when one reads “reserves”. The word has a very specific meaning. The word is meant to describe the amount of oil or gas that is left to be produced from the perspective of the present. This means that these amounts must be physically and economically feasible for production. In addition, it also means that the reserve amount is predicated upon the economic and technological situation as of the time that the analysis is done.

As the technological and economic situation changes so too do reserves. The petroleum industry in many ways is self-correcting. As the price increases petroleum companies do everything they can to rush hydrocarbons to market simple because there is massive price uncertainty in the petroleum industry. As this comes to market it suppresses the price and the price dips again. There are complicating factors as demand is also seasonally cyclic- but this does not change the point.

What we are now experiencing is a more structural increase in the prices of oil due to increased demand from Asia. However, there is a larger and longer term structural cycle that results from the fact that as prices rise, previously uneconomic projects become economic, but for sustained production from these projects the price must remain structurally high. The issue isn’t running out of oil, the issue is running out of cheap oil. Yes, Hubbert’s Peak did accurately describe the decline of conventional production in the United States, however due to the USGS and other operations we knew probably more about U.S. geology than the rest of the world combined.

So, the way to increase reserves is two-fold a) having increased prices b) more effective technology. There is a price point, for example, when the oil shales of western Colorado will become reserves: giving the United States by far the largest reserves on earth- 5 times the oil that was ever present in Saudi Arabia. Funny isn’t it, the way to free ourselves from foreign oil is to have high prices?

The job of we Petroleum Engineers is to address the technology issues. For example, I have a professor who is working to decrease drilling costs immensely by using star-wars class lasers. Boeing relinquished some of their patents on this subject to the Petroleum Engineering department at the Colorado School of Mines. It is actually very interesting, she can use the laser [2 MW as I recall]to chip the rock, melt the rock or vaporize the rock. Meaning she can “case” (hydraulically isolate formations) as well as drill and perforate all in one.

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cdoke - 6/30/2007 10:36:25 PMView My AgentSpace

+2 Boost

Of course, you can always go with the old fashioned, but increasingly harder, way to increase reserves-find new economic reserviors.

Bmw8ter - 7/1/2007 8:07:27 AM

+1 Boost

You're also aware that technology to extract the oil from shale, on a mass level, is 10-20 years out, and even then, it might still be an expensive process which will have to be recouped somehow, i.e...there won't be a huge reduction in the price of oil.

cdoke - 7/1/2007 12:15:58 PMView My AgentSpace

+3 Boost

Having attended the Colorado Oil Shale Symposium: Yes and no in a way. We can extract it now but it is exceptionally inefficient- and they are still really in the development stage. Oil has been extracted from the oil shales, though. Shell has an exceptionally odd process when they drill tight offset wells and freeze the wellbores and the formation in order to hydraulically isolate a section, then inject steam at HPHT.

Exxon has a method that at the moment seems more practical to me. They call it "Electrofrac". This method really is not difficult to implement as it is primarily current technologies.

I stated this in my message: Yes, if the final cost to utilize these technologies exceeds the current price [which I have no doubt it will] the price must remain structurally high to support sustained production from them. I never said there would be a price reduction due to the shales- you may reach a price plateau however. Prices will continue to trend upward overall barrign something radical going on, but cyclicly. Perhaps I did not explain that well.

Homer008 - 7/1/2007 2:05:39 AM

+2 Boost

cdoke, answer me this.
1) Is oil a nonrenewable resource? If, you've answered, "Yes" then goto #2
2) Has oil manufacturing process of the oil shales of western Colorado you claim U.S. has is 5 times the oil that was ever present in Saudi Arabia a FACT or is this your hope or a theory? Do you have a proof to back this up as a feasible answer to the posibility of oil going dry in 40 years? Are you going to bet your hope on this for the entire human race who depends so much on oil? If, no then goto #3.

3) Hubbert’s Peak to me is the study of how human species adapt to the changes due to increase of price on oil..but this has nothing to do with oil fields drying up. The solution is to adopt to the change as fast as humanly posible. We need to adopt to the changes and be flexible. First step is to lessen the dependance on oil. Start building more hybrids or even tribrids (tribrids are the vehicle that uses 3 source of energy which includes hybrid, Solar and gas engine or it could be hydrogen, hybrid and solar. Any combination of 3). The nuclear power is short term solution at this time. U.S. needs this now. We also need to build more windmills. Its proven in countries like Holland. Also start investing on Wave motion from the ocean to create electricity. Solar power needs to be used more...take a look at Palm Deserts of California! Heck, it basically generates electricity for entire city from it! So, basically your star wars lazer drill that you mentioned may solve problems now but not in near future. I'm looking at a longterm solutions. The problem is to get the world involved all in a sync. but that's just not going to happen, mostlikely. Every powerful empire has collapsed and one of the main reason was due to the depletion of the natural resources surrounding it. (check out, Collapse of the civilization by Jared Diamond)

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Bmw8ter - 7/1/2007 7:55:06 AM

+2 Boost

With respect to renewable energy sources, solar cells and wind mill farms require an ungodly amount of space to be able to produce the same amount of energy that 'one' Nuclear Plant produces.

Homer008 - 7/1/2007 12:55:03 PM

+1 Boost

You have obviously never been to places like Palm Springs or Palm Desert area of California! Your perspective on not having amount of space might change once you realize how much of vast open desert is available with sunlight shining down 365 days out of the year! Wind Mill farms has been successfully integrated into the small countries like Holland and you'll never them complaining about not having enough space. Meat and potato of the matter is that solar and wind and wave powers are infinite FREE source of energy that'll last forever. It does not Pollute. There are no adverse danger of any sort. It pays off itself in time.

If, a Internation Space Station can collect enough solar rays to convert for electricity from outer space, I don't see how some of you can't fathom that it is very posible back here on earth with little more inginuity.

cdoke - 7/1/2007 1:08:13 PMView My AgentSpace

+1 Boost

Nicehomer,

All reserve numbers are estimates. In the Petroleum Industry we have certain ways of dealing with uncertainty and certain SEC rules about what is called "reserves" and a further breakdown of that. There are 1.5 Billion BBLS of oil in the Oil Shales. The actual reserves may be 1.2 they may be 1.8 but for such an immense structure- it does not matter. The Department of Energy published a paper on this matter I don't rmember how long ago which stated that the felt we could produce 200,000 barrels a day from oil shale by 2011, 2 million barrels a day by 2020, and ultimately 10 million barrels a day. This I think is almost lunacy. Maybe they know something I don't.

They are trying to get it so they can produce from the Oil Shales at a cost of $40 per BBL. Personally I don't think that is going to happen. More power to them if they think they can do it.

Let me say this about Hubbert's Peak. Hubbert's Peak was created by generating a chart of cumulative production (Q) Vs. Annual production divided by the cumulative production P/Q. In the near term the data is linear, however, the early time data is not. The linear trend is one assumption and has the basic form P=a(1-Q/Qt)Q. There is another more implicit assumption that the number of new discoveries is a linear function of the number of fields still left to be discovered. That is an assumption that really does not stand up well to the data. If you want to read more about this there is a book "Beyond Oil- the view from Hubbert's Peak" written by Deffeyes a graduate of my department, a bit of a fool, and now a professor at Princeton [the only reason he is there is that he wrote another book in 2001 basically predicting the peak of oil in 2002. Didn't happen that is why he wrote the above book.

Let me say this Hubbertians have been predicting the Peak of world oil consistently since 1998. Each year, when it does not happen, they move the prediction back a year. That really is not a credit to the theory. Further, the assumption of linearity is just wrong- for the world the chart does not become even close to linear until 1983.

I support anything that would loosen the demand. Be that as it may different energy generation techniques aren't really going to do a lot. 3.0% was from fuel oil. Gas was almost 20% and it would be more advantageous to focus on removing that from the generation mix. Windmills and solar power aren't going to do much about the oil situation. Oil will contine to become more expensive as a function of time- although I freely admit that this is not, adjusted for inflation, the highest prices we have ever seen, but there are certain circumstances around that. With high enough prices and little enough domestic demand, we can undo the trade deficit time 10 by exporting oil.

Bmw8ter - 7/1/2007 11:48:35 PM

0 Boost

nicehomer...I understand where you're going, but how is a windmill farm or solar cell farm in the desert beneficial to say, someone in Miami? Different locations will require a different approach. You can't put a windmill farm near a city of 5 million. They only produce a fraction of the energy that a nuclear or fossil fuel plant produces. Plus, solar panels have a relatively short lifespan and are expensive and the energy source for the windmills pretty much comes and goes "like the wind".

As far as pollution goes, coal fire power plants use scrubbers to dramatically cut down on emissions, and coal is one of the most abundant resources in the world; why not burn it to create power. Nuclear power is extremely safe and clean, but as far as the waste goes....oh well. The benefit outweighs the associated risks. Considering that technology advances by roughly 2 years for every 1 year past, I'm sure someone will figure out what to do with nuclear waste.

cdoke - 7/1/2007 3:01:46 PMView My AgentSpace

+1 Boost

Correction: The Colorado Oil shales have 1.5 TRILLION BBLS potential reserves.

Sorry I wasn't paying attention to what I was writting and got a little sloppy there.

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cdoke - 7/2/2007 3:54:02 PMView My AgentSpace

+2 Boost

I don't teach- I'm only 24 [ONLY I say...goodness]. I am a graduate student and no grad students actually teach in my department. I will have my Master's degree in Petroleum Engineering in December [only took a year].

My department is the department of Petroleum Engineering at the Colorado School of Mines. Most have probably never heard of CSM but it has many nicknames such as "the Harvard of Engineering", "MIT of the West" et cetera.

My department is one of if not the best petroleum engineering department in the world. We were paid by Abu Dhabi to establish and run Abu Dhabi Petroleum Institute. Egypt has approached my department with the desire to establish a branch of it there in Egypt where graduates will receive School of Mines diplomas.

...That Diploma by the way, is THE coolest one you can get in the engineering world. Go to Google and type "Silver Diploma"

Georgemia - 7/5/2007 3:21:07 PM

+1 Boost

Solar and wind would work just fine in Miami. Here, we have about 85% of the sunlight that they have in the Southwest, which is more than enough. Even with current technology, you can put a 5KW solar array on your roof (built to withstand hail and 150MPH winds) for $15K to $20K. At current market rates, it will be paid for in 15-20 years, with a lifespan of 30 to 40 years.
You don't need vast expanses of open spaces, when rooftops and parking garages can collect so much sunlight.
Whether you're fighting global warming, decreased supplies, or working for National Security, you just have to be paying attention.

chewy - 7/1/2007 5:44:43 PMView My AgentSpace

+2 Boost

We do have to save some oil to continue to make plastics. A world without plastics is probably scarier than a world without fossil fuels to burn.

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DieselRules - 7/1/2007 8:40:02 PM

+1 Boost

Fashion will skew things even more. For example, the latest "in thing" in China is the 2-car family ... much more status than having just 1 car.

This article has generated 16 comments, mostly from a small number of viewers. This indicates that even on a web-site of motor-heads, most people don't care.
Most Americans don't know (or care) that more of their oil comes from Canada than from Saudi Arabia (your #2 source).
Or that Alaskan and Canadian crude is very clean, but the Venezuelan crap (burned for electricity on the East coast) has extremely high sulphur levels which cause acid rain, amongst other problems.

Until gas is $10- a gallon, most people won't care beyond complaining.

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rocker - 7/2/2007 12:27:25 AM

+3 Boost

Rather good banter going on, unusual for this site. People do care but what more can we do. Last year when gas shot to record highs, people cut back and it forced a price reduction. Oil and gas spikes, most times it levels back out. OPEC and traders are why it is high, not the reserves remaining in the earth. And don't get me started about Chavez, Nigerian Rebels and all the nature freaks in the US. It's kinda like the Y2K bug. Nothing happened but a lot of companies made a lot of money off of it. If we were really gonna run out in 40 years, it would be really nasty right now. World wars, civil wars, genocide and complete chaos. I agree cut consumption, find alternatives but remember Iran just raised the cost of a gallon of gas to US$0.44. If we were running out, it would be much higher in the countries that produce oil but don't use much. It's like the weather, everybody likes to bitch about it.

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BMW995 - 7/2/2007 1:54:28 PM

+1 Boost

The wild car to me for oil is demand, not supply.
Specifically Chinese and Indian petroleum demand. These countries are now developing and fast. It's a natural desire for humans to want an automobile, to drive beyond their villages and see the world (also, the Chinese are fast becoming real auto enthusiasts).
And to think, the U.S. consumes 25% of world petroleum production. Guess what folks, we're going to have some stiff competition for oil in the coming decades.
Buy oil service companies and hold for the long term.

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cdoke - 7/2/2007 8:54:02 PMView My AgentSpace

+1 Boost

Oh you shouldn't.

I most certainly am no expert on gas hydrates- Hell I am not necessarily an expert on the petroleum industry either.

The fact that you even knew about the existence of gas hydrates is to your credit. I mean, I spend all of my time in an environment were it is easy for me to find out stuff like that.

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