Posted on 07/03/2008 5:58:05 PM PDT by Kaslin
Oil: With the long July Fourth weekend, you might get a chance to see your senator or representative. If so, you should be ready to dispel a few myths politicians now have about drilling for more oil.
These responses are based on a number of widely held myths. Sadly, they've become the backbone of the Democrats' energy policy. They include:
• "We can't drill our way out of our energy crisis."
Actually, we can. As we've noted before, conservative estimates put the total amount of recoverable oil in conventional deposits at about 39 billion barrels. Offshore, we have another 89 billion barrels or so. In ANWR, 10 billion barrels.
In oil shale deposits, we have more than 1 trillion barrels of oil. In perspective, that's about four times the total reserves of Saudi Arabia. And if estimates of shale reserves as high as 2 trillion barrels prove true, we'll have about a 300-year supply of oil just from shale. This compares with current estimated total U.S. oil reserves of about 21 billion barrels.
ANWR alone is expected to yield 1 million barrels of oil a day. Now make the highly conservative assumption that we're able to get a like amount of oil from the other sources — for a total increase of 3 million to 4 million barrels of oil a day.
(Excerpt) Read more at ibdeditorials.com ...
There is also a VERY large deposit that was found in central Utah by a small family oil drilling company out of Michigan a couple of years ago. Supposedly much larger than Prudoe Bay.
The Siggard discovery. A couple of nice wells. Not much in the way of a second act [at least by way of Google]. Wolverine oil. In no way another Prudoe Bay.
As I read it, that part of it's a big lie i.e. ANWR involves a hell of a lot more than 10 billion barrels. The biggest problem ANWR has is mosquitoes, which kill large animals and make it impossible for humans to work there in the summers. ANWR needs DDT in massive quantities.
Oil shale isn't convention crude oil. It takes a lot more than a drilling a hole, installing and cementing casing and perforation. That there is a lot of it goes without saying. Shell may have a viable technique ... all it involves is heating a few hundred few of rock in a mile or so large square, surrounding that square with a frozen barrier to keep the surrounding groundwater out and the product being extracted in ... then IIRC depending on gravity to bring the product to a producing “well.”
It may work. There can be absolutely staggering amounts of product inside the freeze wall. But it won't be cheap, it won't be easy and it won't be for at least a few years.
You might want to read up on it. The technology on getting the shale oil out has greatly been improved
I believe that only one hole has been drilled, fairly close to the sea. As I understand it, that was "tight holed" meaning that whoever knows what was found isn't telling. Any evidence to the contrary [please no Gull Island stories ... there are so many problems with that one that it has no credibility at all.]
A Shell executive who testified in front of a congressional committee recently said that their most recent test (for some reason only as recent as 2005) yielded 1800 barrels from a test plot.
The test involved heating the vertical section of shale under the test plot with microwaves to heat it up, while also inserting pipes containing refrigerant into deep holes drilled all around the perimeter of the site to create an underground "ice dam".
To me this sounds like something that is not yet ready to be scaled up to significant production levels.
I also think you may be doing is confusing / conflating “oil shale” [kerogen — absolutely not fluid without heating to 600 degrees or higher to thermally mature the kerogen -- see my comment on what Shell is testing but not yet doing on a commercial scale in the Green River Formation], gas production from shales [the Barnett and whole lot of others where the product is natural gas not oil and which has a lot of potential for keeping natural gas supplies adequate but isn't going to produce much liquid fuel] and finally the Bakken where there is a huge area where oil is producible from fractures [natural and man made] and from horizontal "laterals" carefully steered within a fairly dolomitic layer sandwiched between two shale layers. The sweet spots in the Bakken are pretty darn sweet, but the state of North Dakota is not one gigantic Elm Coulee.
I'm curious...Where do those people think oil comes from?
US companies have more advanced technologies than these countries. So there is no reason why U.S. companies cannot extract the 2 trillion barrels of oil from shale oil in the U.S.. Actually the Democrats have banned any shale oil extraction in the U.S... But if that ban is lifted then oil companies can produce oil from shale oil since other countries are doing it.
http://en.wikipedia.org/wiki/Oil_shale_extraction
"As of 2008, oil shale extraction is being undertaken in Estonia, Brazil and China,
As of 2008, only four technologies are in commercial use, namely Kiviter, Galoter, Fushun, and Petrosix.[3]
According to a survey conducted by the RAND Corporation, the cost of producing a barrel of oil at a surface retorting complex in the United States (comprising a mine, retorting plant, upgrading plant, supporting utilities, and spent shale reclamation), would be between US$70–95 ($440–600/m3, adjusted to 2005 values). This estimate considers varying levels of kerogen quality and extraction efficiency.
Royal Dutch Shell has announced that its in situ extraction technology in Colorado could become competitive at prices over $30 per barrel"
I am not the Rand Corporation, but I would much sooner start with coal; Beyond that bet on the true number being a lot more than $95 in 2008 dollars; then factor in the belief by a lot of market participants [aka "the shorts"] and most of the people frequenting this thread that a hundred bucks a barrel is outrageously high; and then consider the wisdom of making a huge fixed investment when the whole thing is going to collapse to to less than one Yergin [or $38 per barrel] after either the market comes to its senses ... or the Government steps in to save us from the market ... or those pesky Enron refugees voluntarily stop fleecing the American public.
So who are the real price-gougers?
From 1981 to 2006, the oil industry made $867 billion in profits. Yes, that's a lot. But over that same time, they paid total taxes of $1.2 trillion, Energy Department data show. And that doesn't include taxes of $519 billion paid to foreign countries.
If I read this right the $1.2 trillion in U.S. taxes the oil companies have paid is beside the taxes consumers pay at the pump. Government truly is the thief.
World supply has not kept up with world demand. That is the reason prices of oil keep rising.
The price of oil will keep rising. I'll see you here in a few months when it is $200 per barrel. If you are right then the speculative bubble will pop . It won't pop because it isn't a bubble.So oil from shale is feasible even at $95 per barrel or $110. Shell says they can do it for $30 per barrel.Actually I hope you are right about this being speculation but I think that is not true.
The government cannot save a anything from anything much less a market. The government can't do hardly anything and nothing efficiently. Which of the hundreds of state,local, or national governments in the world are producing good cars for example? Toyota? Oh that's right that is a private company (capitalism). Government schools, war on crime , war on drugs , war on poverty, all failures of government. government is a wasteful inefficient evil monstrosity.
The price of oil will keep rising. I'll see you here in a few months when it is $200 per barrel. If you are right then the bubble will pop . it won't because it isn't a bubble.
This is just one reason why government planning can NEVER work :
http://www.mackinac.org/article.aspx?ID=9529
Economist F.A. Hayek, most famous for his book “The Road to Serfdom,” developed a theory typically called the “knowledge problem.”
Essentially, Hayek argued that no one individual, or even group of well-informed individuals, could ever have enough knowledge to plan a market. Hayek said that knowledge was localized, meaning every individual has the best knowledge about their specific place, condition, needs and resources, but no one had enough knowledge about anyone else’s to make decisions for them.
Hayek’s free-market ideas were seen as sound reasons why government cannot, and should not, attempt to control economies.
I've got this thing going on now for some time, and I thought I'd share it with y'all ('specially since its an IBD sourced thread).
The above chart is a product of Excel and was created by myself based on Excel data gleaned from multiple Excel spreadsheets available at EIA
Stay tuned for more charts correlating different affects, etc.
ping for later.
Contact your Congress critters to let them know that you are tired of high gas prices.
Sarcasm. Sorry, I thought it clear that I did not believe line of “reasoning”.
I also don’t buy the “drill here, drill now, pay less” line.
If it was “drill here, drill now and pay less than you would have if you had not drilled here, and drilled now” ... I would endorse the slogan.
Dude. Gonna have to kick your ass. Sorry ‘bout that.
Anyways, what do you think this is?
Maurice Hinchey is my local congresscritter.
I heard him being interviewed on a local show today.
He, of course, was opposing the approval of new drilling, but he was using a new argument I hadn’t heard before.
He was claiming the oil companies already have x amount (I don’t remember the exact number) of wells they are not utilizing that they could be using.
He was claiming no new leases should be granted when they aren’t even using the wells they already have.
Now...coming from Hinchey - I suspect his facts are wrong, but I was wondering if anyone here who knows more than I do would have any idea what the hell he’s talking about?
I find it rather amusing that you use Hayek’s examples.
Have you seen ONE operating fuel station “out of gas”?
If you have, I’d like to know how long it’s been closed, because it sure didn’t close because it couldn’t buy product...
I have yet to see any station either on the little island I live on or the mainland *NOT* have fuel to sell.
This simplistic equation tells me that there is NO shortage, you fool!
You and I are being manipulated by a (OMG, here it comes) SPECULATIVE BUBBLE! If you don’t believe me, just look at the facts yourself: NO loss in production anywhere, no loss in refining anywhere, not a single place unable to acquire fuel to sell, yet, it’s a “shortage”, and this proclaimed shortage is driving the price of fuel through the roof!
Grow up! I KNOW you’re far smarter than that!
God Bless.
those taxes don’t amount to squat when you realize that the oil companies do not have to fund their own defense forces to protect themselves from piracy.
So there is a shortage because supply has not kept up with demand. You should learn about definitions and economics and stop believing the Democrats/Marxists and the liberal/Marxist mainstream media.
you, Don W, are repeating the Democrats/Marxists’ talking points, blaming the speculators etc. Your post sure sounds like Democrat talking points to me.
The fact is that speculators and oil companies are not manipulating oil prices. Oil prices are rising because supply has not kept up with demand since 2005. That’s simple economics. World Oil production has barely risen since 2005 while world oil demand has skyrocketed during that time.
http://en.wikipedia.org/wiki/Peak_oil#Production
“World oil production growth trends were flat from 2005 to 2008. According to a January 2007 International Energy Agency report, global supply (which includes biofuels, non-crude sources of petroleum, and use of strategic oil reserves, in addition to crude production) averaged 85.24 million barrels per day (13.552×106 m3/d) in 2006, up 0.76 million barrels per day (121×103 m3/d) (0.9%), from 2005”
I believe in free market capitalism .What do you believe in an economy regulated by government idiots or in full Marxism/socialism? It seems like you are a Marxist to me since you believe government can better run the economy than free market speculators. I believe in no regulation by government.
I'll meet you here next year to see that the price of oil will be at least $200 per barrel. If this rise in oil prices were a speculative bubble or driven by speculation then it will surely pop soon. But it won't because the price is being set by the law of supply and Demand not speculation.
Your name calling says more about you than me and name calling from anonymous posters on the Internet doesn't bother me.
I think you mislabeled your axises. Is this seasonal consumption of “all liquids” or?
Conventional crude + condensate production worldwide is pretty much flat since mid 2005 in response to price increases. Some above ground factors in play. Some pure geology. All of the fields that have ever produced more than a million barrels a day are in decline due to depletion with the possible exception of Ghawar. That should tell the optimists [and the pessimists] something.
ping
I am a bad example as I am the littlest of the little. Crews went to work last week on two wells I have an interest in. If we are successful, these two wells will be back on production producing perhaps 5 barrels a day combined. Every little bit helps, but only a little bit.
As a general rule, companies are producing whatever they can at present. Some that are down for mechanical reasons are staying down for longer than the operators would like because workover rigs and specialty crews are very much in demand.
Real disasters like Thunderhorse are few, and being sorted out by the big boys as soon as they can be.
The chorus the Democrats have been singing of late is that of the acreage that has been leased, most does have associated production. That is how it works and has always worked. An oil company leases acreage, does some exploration usually starting with seismic surveys and maybe drills if it looks promising. Some of the promising prospects work out. Some don’t, but in large acreage packages not all of the acreage is ever going to be a good candidate for a drill bit. Offshore or in remote locations, the whole process will take several years. In the meantime, no wells will be drilled, no oil will flow, and those that criticize the oil companies for not developing their acreage [principally Dems at this point] are idiots.
There is no shortage of $145 oil. There is a shortage of $50 oil. That is why oil does not sell for $50 or $60 or ...
When oil dropped under $10 back in the 1990s, IIRC the actual growth in US inventories during the drop for the high teens was something like ten million barrels. What was occurring, was that buyers making offers below the last trade were finding suppliers [Saudi Arabia mostly] that were willing to sell.
Do markets over react? Off course. Do markets correct? Also clearly correct. Does any of this mean that there isn’t a serious at least medium term constraint on the supply of liquid fuels? Nope. Which brings me back to the proposition that prices are behaving normally in setting the quantity demanded on a supply demand curve.
Will the supply curve shift to the right? For conventional crude oil, maybe not. At some point [maybe now] there are geological constraints and insurmountable “above ground factors” such as Chavez and the ongoing oil war in Nigeria.
the speculator that Rush interviewed on his radio program confirmed there is not a current supply problem.
She explained the speculation is about future demand - it is specualtion on a long term trend.
And because investors believe that in less than 5 yrs. that demand will outpace supply - that is why speculators have driven up the price.
And because the speculation is based on where we’ll be 5 and 10 yrs. down the road, she said that all we would have to do is annouunce new drilling and the price would immediately drop today - because the long term supply had changed (killing the argument that what happens 10 yrs. down the road won’t affect today’s prices)
“The chorus the Democrats have been singing of late is that of the acreage that has been leased, most does have associated production.”
He made it sound like there a bunch of workeable wells, just sitting there. Functioning wells that could be spurting oil today if it weren’t for gosh darn lazy evil big oil guys waiting for the prices to get to $200/barrel before they’d get off their a$$es and produce it.
So, essentially his argument was that evil big oil already has plenty of already-drilled wells on public land that they could already be producing oil with - and they aren’t - so why should we allow them to drill more wells?
Anyone got a good fact-based response to what I am sure is liberal lunacy? (it is Hinchey after-all)
Oil companies do not drill wells for the purpose of letting them sit idle.
If you drive by an oil field and see a number of pump jacks that aren't spinning, don't assume that those wells are out of production. If they are in good repair, the wells are probably on timers because given limited fluid entry they would “pump off” all the fluids entering the well bore if run continuously. This does no good in any sense and will damage the bottom hole pump.
Fact based response: Hard to disprove a delusion, that has no relation to fact.
Question for Hinchey: “If you were an domestic oil producer would you be actively attempting to reduce your profitability by limiting your production?”
I should have searched for this earlier...just came upon this release from Hinchey....
http://www.house.gov/list/press/ny22_hinchey/morenews/062608UseItOrLoseItFloorVote.html
Well Hinchey is an idiot [almost undoubtedly not news to you]. The bit about 4.8 million barrels a day in production being withheld is lunacy. I would love to see the math purporting to support that lulu.
no one challenges him.
He throws this stuff out there, counting on the fact that the reporter interviewing him, and most of the listeners don’t know enough about the industry to directly challenge his claims at that moment.
On that point he’s right.
But you can usually count on him being wrong about everything else.
No corporation or industry does AFAIK.
Don your post met with several negative response, rightly so.
Let’s get back to basics. Buyers and sellers must agree on a price. When they do, a mutually beneficial transaction occurs. Let’s not whine about it.
For example, you can ask any price you want when you sell your house. That doesn’t mean you will get it. Any gasoline station should be able to charge $20/gallon if they want. They won’t get it. Oil companies should be able to charge any price they want as well. If it is too high, they won’t get it. Markets are self-correcting.
By contrast, governments are not self-correcting. But for mortality, FDR might still be President and the great depression might never have ended. Stalin, Hitler, Saddam were never stopped internally, though they clearly deserved it. The government has kept a lot of US energy off the market for bogus “environmental” reasons, and it is not clear that there is any end in sight.
. We can’t drill our way out of our energy crisis .
There are other opinions.
http://www.lifeaftertheoilcrash.net/
The party’s about over. In 20 years world oil production will be half what it is today.
Oh, I have heard that lame excuse, and frankly I am sick and tired of all the lame excuses the left uses for not wanting to lift the ban on drilling
Kind of hard to even see the “awash in oil of the late nineties.”
The charts that I think tell the story best are some you don't show [not a criticism -- a lot of good stuff here] --- the decline curves for the U.S. onshore without Alaska; the world new discovery curves; and the world production curves that show just how much India and China impacted demand and thereby removed the cushion of spare capacity.
Thanks.
I looked into that concerning the seismic crews. Wouldn't you know it? The goverbmnit canca finger out its own statistics. I discovered the totals didn't match the aggregate of the subtotals, and the subtotals didn't agree with the sub-category detail. So I redid the chart and rehosted it. The graphs should reflect what really going on in the field now.
In any case, I took it upon myself to create the following (I hope you won't hold it against me):
The following chart is "stacked" in that the color coded portions of each bar show the contribution that each category contributes to the magnitude of each individual bar.
...the decline curves for the U.S. onshore without Alaska; the world new discovery curves; and the world production curves that show just how much India and China impacted demand and thereby removed the cushion of spare capacity.I'll see what I can do 'bout that.
Examination of the charts suggests that there is a correlation betwixt the ending gasoline stocks and prcie. However, I'm baffled as to how reserves can increase in any manner whatsoever. Because clearly there's a digression between production and product supplies. That explains the decrease in ending stocks over time. So I have no idea how ending stocks are increasing when product supplied digresses from product produced.
Furtheremore, its interesting to note the impact of the unprecedented drilling frenzy that began at the end of Carter's term and total crude production. The U.S.A. drilled its ass off for what benefit?
yes, but government is not a thief. it provides a valuable service to these companies, especially those companies which have operations in foreign and hostile lands. the money our government has expended to secure oil reserves in Iraq, and the neighbors that Iraq threatened, is much more than the oil companies pay in taxes.
Then these noble Congress critters lie about the problems they created and blame "Big Oil" and "speculators" instead.
Thieves is far too kind for what these scum sucking traitors really are.
Some posts at FR are right on the money. Yours is one of them.
Thank you. I think I was lobbed a softball on that one though.
I don't want to face you down at high noon that's for sure! ;^) lol
Sarah Dippity I s’pose!!
LOL
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