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Nov
21
Oh, you mean that peak oil
November 21, 2007 |
It is a commonplace in the peak oil world that all the elephant sized pools have been found. For the Jim Kunstlers of the world the excitement of watching industrial civilization and, most importantly, suburbia, come to a grinding dystopic end overwhelms their humility in the face of nature.
News in from Brazil suggests there might just be a drop or two of oil left to be discovered:
Last week’s news centred on the Tupi field – at present, little more than a couple of exploratory wells 280km off Brazil’s coast in the Santos Basin. But those two wells have confirmed that the field holds between 5bn and 8bn barrels of oil, not far short of the entire reserves of Norway, which were 8.5bn last year, according to figures from BP. The field, potentially, would add more than 50 per cent to Brazil’s 14.4bn barrels of proven reserves of oil and natural gas equivalent.
Yet Tupi could be just the start. Its oil is trapped under a giant salt shelf, 800km long, 200km wide and up to 2,000 metres thick. Its average thickness is about 500 metres, according to Nilo Azambuja of HRT, a Rio de Janeiro company that provides geological services to Petrobras, Brazil’s publicly controlled oil company.
The Tupi field lies at a depth of 6,000 metres, beneath 2,000 metres of sea and 4,000 metres of rock and salt. financial times
This oil is very deep in conditions which are very nasty. However, at $100.00 a barrel this is a recoverable resource.
More to the point, what else is out there? Billion barrel fields are supposed to be as extinct as the dinosaurs. But here one shows up.
Comments
10 Comments so far
Without resorting to predictions of end-of-times gloom, mightn’t it still be prudent to consider alternatives to petroleum-fueled technologies? Given that petroleum resources will (maybe not tomorrow or in 50 years but in the longer term) dwindle and run out, the costs of finding and providing petroleum will rise and rise; at what point does oil production and consumption become, dare I use the term, unsustainable?
I think this is about the only topic I ever comment on this site. Oil consumption is not going to become unsustainable; it’s going to become expensive, and even then that is a long time off.
The simple fact is that alternative energy options will look more attractive while oil stays expensive and somebody will figure it out.
I am all for moving away from oil. And I suspect that the singe thing which will move us is price.
My point is that the gloomsters who are awaiting end times for oil are likely to be proven wrong over and over as the value of the oil left in the ground increases. And as that value increases the incentive to substitute alternate fuels and technologies will grow.
To take one example, does anyone really need to drive a car or truck weighing 2000-5000 pounds in the city? People do because they - quite rightly - feel unsafe in the tiny, very light, vehicles which would actually makes sense for city driving. So, one relatively easy way of radically resucing oil consumption would be to designate certain streets first “truck free” and later have a maximum weight for cars travelling on them. And, by doing this a powerful incentive to build light weight transportation would be created.
Sounds reasonable, but a little statist!
Whoops, the anon post was me.
The only incentive required is to increase the price of energy. That will happen naturally or can be imposed through taxation.
For Example on Taxation alternatives:
How about a revenue neutral tax shift, 2% more off the GST for a 30% increase on gas tax. No new net tax, poor are not affecting (they tend not to drive cars)
Similarly, stagger household electricity prices, $0.10/kWhr for the first 650kWhrs, $0.20/kWhr for the next 500kWhrs and $0.40/kWhr thereafter. Not sure how good the numbers actually are, but you get the idea. Again, cheap power for those who can barely afford it and make it more expensive for those who use power extravagantly.
Fancy schemes are not required. Just phase in these pricing strategies over 5 years, clearly outline what you are going to do so people can anticipate and plan and presto-bingo a reduction in energy consumption.
The problem is not just finding and extracting oil from places like many thousands of feet below the surface of the Atlantic, as in the Brazil find and the Jack2 well that was all over the news in Sept. 2006, but the rate at which you can pull out that oil.
The peak oil guys like to point out that it’s not just the size of the reserve in the ground that matters, but the size of the spigot you can drain it with. If you found a 100 trillion barrel oil field, but it could be tapped at a very low rate (make up your own reason why), say 1 million barrels/day, it would do virtually nothing to delay peak oil, even though it would represent over 3,000 years of oil supply at our current level of consumption. The problem is that those huge, cheap oil fields (like Ghawar, Cantarell, etc.) that are approaching decline or are already in decline are also the ones that provide huge flow rates. Replacing them with more expensive and typically much lower flow rate reserves means the price of oil will rise a lot unless the tension between supply and demand lessens.
‘Peak oil’ should read ‘peak cheap oil’.
Production rates are a broadly question of cost. The number of injection wells, the number of production wells, the size of the processing equipment all affect production, and the more and bigger they are, the faster the production.
Oil companies work on the basis of Net Present Value for field exploitation - i.e. they carry heavy discounts for oil they anticipate they will produce in the future. That results in a tendency to always maximize production rates.
True, many of the large “cheap” fields are in decline. But the current large “expensive” fields will still break even at around $40.00-$50.00 a barrel. Thats approaching a 100% margin in today’s oil market, and that is a huge incentive to get as much out as soon as possible.
“Peak Oil” will only occur once the cost of getting it out of the ground exceeds the price it can be sold for, that will only happen when we no longer use oil as our primary source of energy.
You conservatives won’t take the time to understand the peak oil theory. It seems pretty obvious that cheap oil is a diminishing resource and when the demand for cheap oil exceeds the supply the market will force the price to skyrocket (like gold). High priced oil is going to cause chaos due to recession starvation and war. We “alarmists” know that there were probably solutions (conservation, nuclear power, wind, solar, geothermal to name a few) for the lack of cheap oil, the problem is our leaders fiddled for the last 30 years when they should have been finding & implementing solutions. The power and greed of big oil would not allow the implementation of reasonable solutions. I believe it is too late for god, technology or anything else to make up for the 85 million barrels of light sweet crude that is currently burned in the 880,000,000 vehicles that are on the world’s highways.
I read an essay that said “I told you so, oil is over $90 and everything is fine”. Get a grip guys, the refiners have yet to process one drop of $90 oil. You conservatives better put in some rice and beans and check your ammunition.
on a matter that auto manufacturers along with many drivers who are upset with escalating gasoline prices, are discussing:efficient, environmentally sound aleternatives to the internal combustion engine.Excited about the possibility that one alternative energy source in particular, hydrogen fuel cells, could both free americans of reliance on foreign oil and slow the degradation of the earth’s atmosphere.
what do you think and how i write essay about this….please help me…