Skip to comments.Peak oil and other fallacies: John Kemp
Posted on 01/21/2013 6:09:34 AM PST by thackney
"The limit of production in this country (the United States) is being reached, and although new fields undoubtedly await discovery, the yearly (oil) output must inevitably decline, because the maintenance of output each year necessitates the drilling of an increasing number of wells.
"Such an increase becomes impossible after a certain point is reached, not only because of a lack of acreage to be drilled, but because of the great number of wells that will ultimately have to be drilled."
This assessment could have been written recently about the outlook for oil production from North Dakota's Bakken formation or by any member of the Association for the Study of Peak Oil (ASPO).
In fact, it was written by Carl Beal at the U.S. Bureau of Mines in 1919.
Beale dramatically warned his readers: "At present the country is facing a serious shortage of petroleum ... favourable territory has become scarcer, competition has increased and the demand for petroleum and its products has created a market that cannot be adequately supplied."
When Beale was writing, the United States was pumping 3.8 million barrels per day and had produced a total of 4 billion barrels over the previous 50 years. The bureau expected domestic reserves to run out by the 1930s ("Decline and Ultimate Production of Oil Wells" 1919).
By the end of 2012, however, U.S. wells had produced about 205 billion barrels, 50 times as much, an amount that would have been unimaginable in 1919. And daily output was almost 7 million barrels, twice as much as in Beale's time.
Fears about declining output from old fields, lack of new discoveries and peaking oil supplies crop up every few decades, almost always in the same form and usually at times when oil prices are rising strongly.
(Excerpt) Read more at uk.reuters.com ...
Texas is rediscovering oil in old fields long abandoned. There is no shortage of oil. And natural gas is so plentiful that the problem is profitability.
We are suffering form Peak small government.
Good article until the very last sentence when he could no longer restrain himself from the now-requisite AGW nonsense.
That is not true. What is happening is changes in technology, such as steerable horizontal drilling, makes producing field that prior were not economic, now worth going after.
Also, old fields get additional infrastructure and technology installed. Where the original drilling program could only produce 25~30% of the oil in place, enhanced oil recover techniques such as water or CO2 flood allow more oil of existing play to be recovered. Now we get something like 60% of the oil in the field recovered.
Think of a glass of dry sand. Now pour oil over it and let it soak in. If you only stick a tube down the middle and try to draw the oil out, you only get a fraction of the oil. Now add tubes around the outside of the glass and push water down them. Eventually you start cycling the water from the outside into the center draw point. This will wash out additional oil to be recovered. No new oil is added to the glass, but you now get more out of the field.
Reserves are not total oil in place numbers. They are only the amount that can be economically produced with today's technology. If prices go higher, or technology advances, the same field can now be claimed to have higher reserves without new oil coming into the field. The only difference is the economic ability to produce more oil.
Someone remarked, “Peak oil? Of course that’s a problem. There are only so many whales in the ocean. But we should be more concerned about ‘Peak ambergris’.”
The molecules in gasoline must come from somewhere. At present they come by taking apart and reassembling the atoms and molecules in hydrocarbon-rich crude oil. However, any source of these atoms and molecules could be used, the main factor is cost.
The truth is that the earth is almost literally awash in hydrocarbons that could be used to make motor vehicle fuels. At present crude oil is, on balance, the least expensive source, but for example the instant that coal or natural gas becomes less expensive on a relative basis, industry would quickly switch sources. We could use switch grass or algae today for a primary source if we were willing to pay $26/gallon for the finished fuel, which the US military does, but only the US government does because it can print money.
It is for this reason that peak oil is a specious worry because the only thing that counts is the price of the finished fuel product, not the supply levels of specific sources of the hydrocarbons used to make the fuels. The final price of fuel will reflect not only the cost of the raw materials but also the capital investment and costs of operating the extraction, processing and refining process.
see for example:
Turkey Fuel? Factory to Turn Guts Into Crude Oil
for National Geographic News
November 25, 2003
As Americans prepare to gobble down 45 million turkeys on Thursday, a factory in Carthage, Missouri, is turning the feathers and innards of the feted bird into a clean-burning fuel oil. Changing World Technologies (CWT), a New York environmental technology company that is behind the project, also has plans to turn the organic waste from chickens, cows, hogs, onions, and Parmesan cheese into light crude oiland those are just the some of CWT’s proposed ventures.
The company works such miracles through thermo-depolymerization (TDP), a process by which waste materials are broken down by intensive heat and pressure to produce natural gas, fuel oil, and minerals. The company’s CEO, Brian Appel, says he can turn any type of carbon-based wastebe it computers or offalinto combustible fuel. But he admits many people are skeptical.
[The company went bankrupt, not because the process didn’t work, but because the cost of the end product was too far below the market price for its energy value. In short, it exactly proves my point. —tBW]
Not so surprising.
The planet is big...bigger than most folks can appreciate. Resources are there, and those that “appear” to be dwindling may just appear that way to further an agenda.
Price has a lot to do with that as well. At $90/bbl, pulling out this old oil becomes profitable. The same goes with shale oil. But at $50/bbl, these sources no longer are profitable.
The reason oil prices are so volatile is because there is such a huge diversity of marginal prices. In Saudi Arabia, they can sell oil at $10/bbl and still make money. But there is no way that producers in Alaska, California, or even North Dakota can make a profit at that price.
In fact, the Monterey is thought to hold over 400 billion barrels of oil, according to the U.S. Geological Survey. That's nearly half the conventional oil in all of Saudi Arabia.
And don't forget the Green River Formation that weighs in at 3 Trillion barrels, with 1 Trillion recoverable with todays technology
Note: 1 Trillion barrels is about equivalent to the entire worlds known oil reserves.
BTW. Saudi Arabia Ghawar (largest oil field) is starting Enhanced Oil Recovery methods to keep their flow rates up. They are also leaving the era of cheap oil.
My primary reason to think this is possible is because there would have had to be more dinosaurs than insects here today to render down to oil in the quantity we have already consumed.
In my opinion, the aboitic oil theory is not possible for many reasons.
First it is not dinosaurs, but algae, plankton and other items. The sedimentary basins where oil/gas is found is from time periods when it was underwater. Usually oceans but some freshwater as well. If you squeeze algae you get oil out of it. If you trap it in sediment without oxygen, squeeze and cook it for millions of years, you get oil/gas.
People tend to forget the earth changes in the time frame of hundreds of millions of years. No commercial oil/gas operation is outside of sedimentary basins. No oil/gas sources are ever found in igneous rocks which is pushed up from below.
Places like Hawaii that have very little sedimentation and lots of igneous rock pushed up from below have essentially no oil/gas.
Oil/gas is often found in layers trapped by a sealing cap rock. Depending on the geological conditions at the time this sediment is laid down, the resulting porosity and permeability of the rock changes. If it is coming up from the bottom, how does it get past the sealing rock below? That is what holds the oil/gas in place, otherwise it wouldn’t be in those layers.
Some question the depths. But 3 centimeters every thousand years adds ups to miles over hundreds of millions of years.
Combine that info with the fact we use heat and pressure to break down oil into smaller, simpler molecules. This is consistent with the fact that older, more thermally mature oil/gas fields tend to be more gas than oil.
So you mean that my old stripper wells are not going to recharge from abiotic oil? :-(
[The company went bankrupt, not because the process didnt work, but because the cost of the end product was too far below the market price for its energy value. In short, it exactly proves my point. tBW]
Or you could say that the product out required too much energy in to make.
So even if the product out is worth more, it would still take more expensive energy to produce it.
A lot of the Obummer “green” projects never looked at the overall energy equations.
I would think places like Hawaii, which are of volcanic origin, would naturally have no hydrocarbons because of how they were formed. Although someday it may be a fantastic mine for copper and gold, whereas the aboitic formations would likely be more stable than volcanic.
Any aboitic formation would probably take thousands if not millions of years to produce large quantities and would gradually seep into reservoir type areas where we find it today.
To add fuel to any aboitic theory; here we consider most methane to be of anaerobic organic origin, there are other planets with huge quantities and its highly unlikely those were formed by organic processes. Who knows those planets may be dripping with oil too.
No matter how it was formed, its mighty nice we found it.
Only if you ignore the cap rocks that prevent the migration of oil to the shallower reservoirs.
To add fuel to any aboitic theory; here we consider most methane to be of anaerobic organic origin
When there is not sufficient oxygen, methane is the lowest energy state for carbon and hydrogen to exist. After planet/moon cools down from formation, the lower energy state for those atoms will eventually be reached. If the hydrogen ratio is higher, ethane and the like will be the result. However, none of these have ever found the heavier, more complex hydrocarbons of Paraffins, Naphthenes, Aromatics and Asphaltics of crude oil. Those are biotic in origin.
By the way, that marketing was trying to tie it to the time period, not the formation.
In 1930, Sinclair's advertising writers noted that Wellsville-refined lubricantsthe best in the tradederived from Pennsylvania grade crudes laid down more than 270 million years earlier. These oils were mellowing in the ground during the Mesozoic era when dinosaurs populated the earth. The obvious sales message was: the oldest crudes make the best oils. But how to dramatize this?
A series of advertisements in 104 newspapers and five national magazines feature a dozen of the strange dinosaurs, from hideous-fanged tyrannosaurus rex and three-horned triceratops, to the unaggressive, vegetarian apatosaurus (brontosaurus), a 40-ton lizard with neck and tail each 30 feet long. The campaignconfined entirely to Wellsville oilswas a great success. The curiosity value of it was tremendous.
“...required too much energy in to make.”
Not true. Consider that the original energy input was in the form of meat scraps and other organic refuse from processing turkeys. This energy was in a form that previously had no economic value. Indeed, it had cost because it had to be disposed of in a legal manner and was being hauled to a landfill.
This issue is not the amount of energy but the economic value of the form it comes in. Another example would be high sulfur coal. A ton of it has far higher costs associated with properly handling emissions and these costs are reflected back as a deduction on the market price of the coal. Better yet, consider waste tires, which have a horrible emission profile, but that are very high in energy content.
All these examples prove my point. We are awash in sources of hydrocarbons that can be converted to usable fuels. The only issue is cost relative to other sources. At present crude oil is less expensive. So, the entire concept of “peak oil” is just as specious as “peak whale”.
Never think for a second that the national graphic is without an agenda.
Followed the TDP debacle from the original article in Discover, or Omni (don’t remember which). The problems at the carthage plant, and with the $$$ability of the process had nothing to do with the process. They had everything to do with government interference and twisted market mindset. The carthage plant, who usually had to pay to have the offal disposed of, and had intended to provide it to the TDP folks (they would have gotten a cut of the output dollars)turned around and began charging the TDP guys a per ton fee (lowering the output $$$). The govt pulled some tax chicanery, and the the biodiesel designation was witheld (further lowering the output $$$). Local folks complained of the smell (they lived near a turkey abattoir, how good could that have smelled?) and the TDP guys had to shut down and re-tool filters (further lowering the output$$$). Finally, just prior to the TDP Plant opening, it was found that a large percentage of the welds performed during production were faulty (prudent distrust notwithstanding...the welders I know take great pride in their ability to provide EXACTLY what the job and the customer call for....it’s a pride in skill thing). This caused a delay ($$$) in getting the plant up as all bad welds had to be redone (do union contractors provide a warranty for work performed? the delay appeared to be enough).
As to the energy in/energy out, the original articles and subsequent testing with larger systems showed the process to be close to 97% efficient WITH some of the output being recycled to provide power for the process, the water was recycled and loss was minimal, and in addition to the ‘orange diesel’ produced, the dry mineral output (depending on feed-stock) was sale-able as well.
Imagine two flatbeds pulling up to the local tire graveyard or land-fill. Some setup time, arranging feedstock into piles, and after an appropriate time, the landfill is no-more. Even the dirt with old oil caked into the soil can be processed out. New park? Soccer pitch?
Just a humble .02, but someone did not want these guys to succeed.
If the output was a clean enough oil, it could be used in automobiles that have been re-fitted for that purpose. They might like that better than driving around smelling of french fries and chinese food. Of course the biggest issue will be transportation to the consumer, but if that consumer is willing to pay for it, so be it.
I was very interested in the CWT process and was cheering them on, but the economic truth from the beginning was that this was only going to be “sustainable” unless it received enough subsidies and grants, which is only “sustainable” the Krugman Dictionary of Economic Terms.
Before they filed Chapter 11 bankruptcy, they had been the recipients of multiple multi-million dollar grants and loan guarantees, at least one initially and then more than one to help them buy the equipment to control odor.
Now why they decided to locate a plant that required many trucks hauling turkey waste every day is beyond me. Any truck hauling such products is going to have a substantial odor plume.
Early literature from CWT showed that sewage sludge could be converted. They claimed that the amount of sludge in the US, if converted by their process, would produce enough oil to displace all oil imports. This goes to the complaint about the energy balance of their process. The determination of economic viability is an economic calculation, not one of energy balances. I also saw discussion about converting municipal waste to oil.
It became apparent that one big problem the process has is it is hard to run correctly when the feedstock varies too much or has too much water.
When landfill space gets to be more expensive, that is one value driver that could eventually tip the economics in the favor of CWT. I look forward to the day when a lot more of what we throw away is converted to something useful rather than just being buried.