oil for $15.00 a barrel?

http://www.ar15.com/forums/topic.html?b=1&f=5&t=349511 ^

[whd23]

Whoops! I missed the following post that pointed out that a barrel of oil is only 42 gallons. So:
(4x10^9 barrels) * (42 gallons/barrel) * (6.58 lbs/gallon) / (2000 lbs/ton) = 552.7x10^6 tons.

Looks close enough for me!

[delacoert]

Don't give in too quickly!

Annual production of turkeys in 2004 was 250,000,000 head.

If we conservatively estimate that every turkey has 20 pounds of guts (I doubt it's really that high), then that's a maximum of 2.5 million tons of turkey guts a year.

The inventory/scam artist is claiming 600 million tons of turkey guts are available.

[delacoert]

inventory inventor

[whd23]

I think that was just the author (or editor) making some simplifications. From the article:

Just converting all the U.S. agricultural waste into oil and gas would yield the energy equivalent of 4 billion barrels of oil annually.

Obviously, keeping the mass in terms of turkey waste (the input stream of the Carthage plant) make things simpler.

[Born Conservative]

I've already solved this problem. My car runs efficiently on bald eagle heads.

You'll get better mileage if you use spotted owls instead...

[dcwusmc]

A barrel of oil weighs in at about 42 gallons, not 55.

[delacoert]

$80/barrel is a far cry from the $15/barrel touted in the original article.

ROFL

Yeah. They pitched it to their investers as $15M to build a plant that produces crude at $15 a barrel. Turns out it cost $40M to build the plant (oops) that produces crude at $80 a barrel (oops). Their most excellent sales department locked in contracts that require them to sell the oil at $40 a barrel (oops). Then they say aw shucks we just made a few mistakes. This is the pattern of the whole miracle-energy-source industry.

[Law is not justice but process]

As with so many environmental miracles, this one has feet of clay. The hoped-for tax credit did not come through and apparently the cost projections were a bit off (for instance, since there is still a market for turkey guts as feed, they now have to pay $40 a ton or so for their feedstock): the result is production costs more in the $80 per barrel range. Perhaps a bit more work on the efficiency and economics can make this work. As of now, it is just not profitable.

See this link for details:

http://www.fortune.com/fortune/smallbusiness/articles/0,15114,1018747,00.html

[infocats]

Don't you mean crud oil?

I stand corrected ;-)

[delacoert]

...feet of clay
...cost projections were a bit off
...$40 a ton or so for their feedstock
Perhaps a bit more work on the efficiency and economics can make this work

You're being incredibly optimistic.

You say, "$40 a ton or so," when feed stock was reported as $30 to $40 a ton, so it's more like "$30 a ton or so." (That nuance has a 20% favorable effect on the numbers.)

The article says 2 barrels of light crude per ton of ofal are produced when it's more like 1.5+ barrels. (That's more favorable shading of the numbers on the order of 20%.)

The article compares the $80/barrel production cost of the light crude with the $50/barrel selling price of diesel. This has two big misrepresentations in one comparison:

1. Comparing production costs with selling prices is an outrageous misrepresentation. (The shading of the numbers here really pi$$es me off - it's a really big effect, but it's impossible to prove how much the profit ought to be. Right now CWT is selling their product at a 50% loss!)

2. The light crude will require further refining to bring it to "diesel quality", which costs more money and reduces the volume. (That's more shading of the numbers on the order of 25-50%.)

Even if you use the shaded numbers, the cost of the light crude, if the olaf were free, would still be $60/barrel.

To go from free olaf all the way to bio-diesel probably results in production costs of $100+/barrel. And that's not even talking about the problems with bio-diesel, i.e., it doesn't store well because it readily oxidizes to form gums.

The discussion of a $1/gallon government subsidy that gets tossed in the article is obviously important to investers, but it's infuriating bull5hit to tax payers and consumers. The only honest way to compare is real production costs.

The other problem with the discussion in this thread is the suggestion that other agricultural waste and sewage could just be substituted for the ofal. Well there's a reason they don't use the other stuff - the production costs are even higher.

The most honest characterization offered in this article was the phrase "improbable alchemy," and even that is off target. The technology is real, not alchemy. The problem is that snake-oil salesmen find a way to make money selling something that doesn't work as promised, and there's plenty of wide-eyed (Wilbanks-faced) suckers who just gotta believe it's true.

[Law is not justice but process]

"You say, "$40 a ton or so," when feed stock was reported as $30 to $40 a ton, so it's more like "$30 a ton or so." (That nuance has a 20% favorable effect on the numbers.)"

I must be missing something here. If they pay $40 a ton for feedstock, the production cost would be higher than if they paid $30 a ton. I was assuming the worst case scenario for production costs, not the best. Still, you think the assumptions in the article I linked to were out of whack, you need to go back to the 2002 article where they estimated production costs of $15 a barrel after subsidies. It may not be snake oil, but the guy who sold this to the investors must have been a heck of a talker. Still, even at $90 a barrel, or a more realistic $100, they are only one big attack on a Saudi oil facility away from turning a profit.

Mind you, I won't rush out and invest my money in this project, but if someone wants to risk their own money on it, I would certainly wish them success. The day may be coming when poultry producers have to pay big bucks to treat and then landfill their waste as the market for offal as feed may be regulated out of existence. If oil prices stay above $50 a barrel, that alone could push this process into profitability. I sure would appreciate it if Congress would keep my tax money entirely out of the equation, though.

[Ditter]

I don't want to live downwind of this plant.

[delacoert]

I sure would appreciate it if Congress would keep my tax money entirely out of the equation, though.

Me too.

[farmfriend]

Rights, farms, environment ping.
Let me know if you wish to be added or removed from this list.
I don't get offended if you want to be removed.

List of Ping lists

[endthematrix]

Nuthin like an update...

They counted on getting paid $42 per ton of animal waste, then end up paying %52 for it. Whoopsie!

[mc5cents]

"If a 175-pound man fell into one end, he would come out the other end as 38 pounds of oil, 7 pounds of gas, and 7 pounds of minerals, as well as 123 pounds of sterilized water"

MOBIL OIL IS PEOPLE!!!!

[F.J. Mitchell]

After hearing today that Russia is the world's second largest exporter of oil, a light bulb lit up over my head, nearly blinding me. Thank goodness I learned a lesson from previous brain storms and wear welding goggles, even when I am asleep.

Who could contain hungry Russia if oil were made obslete? How much more terroristic could the Arabs and Islamites become if oil were rendered worthless and sand became the entree at all their meals-dessert too? How in God's name would we absorb the remainder of the population of Mexico, if oil was cheaper than dirt?

I suspect that the USA could have become energy independent, back in Carters gas crisis. I have an opinion that the USA is pretending to be too danmn stupid to solve our fuel dependency, because in reality we are in fact, too damn stupid and too poor to continue providing the life style our dollars have caused oil producing nations to become accustomed to, should we allow our adequate and able technology make those idiots only source of income , as oblsete as the dodo bird.

[Bear_Slayer]

38 pounds of oil, 7 pounds of gas, and 7 pounds of minerals, as well as 123 pounds of sterilized water".

My wife would disagree with the gas ratio.