How much truth is there in President Obama's latest favorite mantra that we consume a disproportionate share of the world's oil, especially considering how little of the world's reserves we have? Posted on 03/09/2012 4:15:57 AM PST by Kaslin
How much truth is there in President Obama's latest favorite mantra that we consume a disproportionate share of the world's oil, especially considering how little of the world's reserves we have?
Recently, Obama said: "But here's the thing about oil. We have about 2, maybe 3, percent of the world's proven oil reserves. We use 25 percent of the world's oil. So think about it. Even if we doubled the amount of oil that we produce, we'd still be short by a factor of five."
First, let's look at the raw numbers and then examine Obama's misleading framing of the issue. This is important because he uses these statistics to justify his reckless expenditure of federal funds to pursue alternative "green" energy sources, such as the disgraceful and scandalous Solyndra project.
The United States has some 20 billion barrels of oil in reserves. By "reserves" we're talking "proven" reserves, meaning those that are certain to be recoverable in future years from known reservoirs under existing economic and operating conditions. That is, we have 20 billion barrels of oil that is recoverable at current prices and under lands currently available for development.
That definition excludes many oil reserves that Obama has declared off-limits. According to the Institute for Energy Research, we have more than 1.4 trillion barrels of oil that is technically recoverable in the United States with existing technology. The largest deposits are located offshore, in portions of Alaska and in shale deposits in the Rocky Mountain states. So the United States has more recoverable oil than the rest of the non-North American world combined. The Heritage Foundation says this is enough to fuel every passenger car in the nation for 430 years. Therefore, "it is merely semantics -- not a scientific assessment of what America has the capacity to produce -- that allows critics to claim repeatedly that America is running out of energy."
When you add in recoverable resources from Canada and Mexico, the total recoverable oil in North America exceeds 1.7 trillion barrels. "To put this in context, Saudi Arabia has about 260 billion barrels of oil in proved reserves."
Another critical point: Even using the restrictive definition of reserves Obama is using, the 20-billion barrel figure is misleading, because Obama is clearly implying it is a fixed, or static, number -- as though with every barrel of oil we consume, we are pushing the oil energy doomsday clock another second toward the apocalypse. But in fact, that number is not static, but constantly in flux.
The institute tells us that in 1980, for example, the United States had 30 billion barrels of oil in reserves. But over the next 30 years -- through 2010 -- we produced 77 billion barrels. Now, how can it be that we produced almost 2 1/2 times more oil than we had available, consumed a great deal and still ended up with plenty left over?
Obama's own Energy Information Administration is predicting a steady increase in reserves on land currently available for exploration. Heritage's David Kreutzer says, "It projects that improvements in technology and the economics of extraction, production, and sales actually will lead to a 23.7 percent increase in U.S. reserves -- even after extracting billions of barrels of oil in the interim."
There's more. Obama's formulation conflates two different measures. True, we might have only between 2 and 3 percent of the world's recoverable reserves -- as narrowly and misleadingly defined -- but we don't consume 25 percent of the world's oil reserves, which is what Obama wants you to believe. We consume closer to 22 percent -- but it's not of reserves; it's of the world's oil production. But, as Heritage notes, "we consume about 22 percent of the world's production of everything," not just oil. Consumption is determined by income, not by available resources -- and for those who are always knocking the United States, we also produce about 22 percent of the world's total output of all goods and services.
Admittedly, we don't produce 22 percent of the world's total oil output; it's more like 6 to 10 percent. But experts say this number will increase even if we don't access the other abundant sources that Obama has declared off-limits.
For overblown and in some cases completely fabricated environmental concerns, Obama is preventing us from greatly expanding the pie of our oil reserves, from offshore drilling to Alaska to Keystone to fracking, and at the same time throwing government money down the ratholes of projects that aren't sound and economically prudent enough to warrant substantial private investment dollars.
He's told us he wants to bankrupt the coal industry, get us out of gas-driven cars and into electrical clunkers and onto bike paths, and increase the price of gas.
Why don't we believe him?
This takes all of the industries in each of the sectors, and combines them into one chart. You can sort by Net Profit Margin, and see where your favorite industry fits into the list.
Don't forget to consider the market capitalization. You'll find some industries near the top, but with very small market capitalization, relative to other industries.
There are several others. I am just a serial poster, mostly of cut-and-paste variety.
With the glut of Natural gas out there shouldn't the price of propane go down?
Propane isn't methane. And the relative high price of propane and other natural gas liquids is part of what is driving the "glut" of natural gas.
Many companies are going after the natural gas liquids from "wet" shale gas fields. They develop the field and build gas processing plants to recover the natural gas liquids. A lot of that is happening in Southern Texas. The Natural Gas is almost a byproduct at this point. But the low price will drive more consumption and eventually bring that price back up.
We have coal. Lots of it. But, some of it is dirtier than others. In East Texas, I think we have the dirtier coal (high sulfur content), which requires more scrubbing or results in more pollution.
But, don't we have a huge amount of low-sulfur coal in the upper Midwest and Western states? The same stuff that Clinton put off-limits by executive order?
Is there really a huge difference in the emissions? If so, wouldn't it be more efficient to build the power plants right on the edge of the coal deposits and feed the power into the grid?
I've tried several different ways to figure out what you meant by this and cannot figure it out.
How do you imagine stack scrubbers are related to transmission losses? It doesn't matter if the power plant is immediately adjacent to the electrical load or a thousand miles away.
The requirement for pollution controls doesn't change, until you get very close to major cities, then it becomes more stringent, meaning expensive and causes even more losses.
I think he meant that:
They are two independent clauses, rather than clause being dependent on the other.
But as you pointed out, coal gasification still requires scrubbers, and the process is more energy intensive than the power line losses.
I am an electrical engineer, specialized in power systems, working for the oil/gas industry from a family of coal miners. I took some nuclear engineering course in college but in the early 80's this looked like a dead end. Most of my "hobby" time is consumed reading energy news.
We have coal. Lots of it. But, some of it is dirtier than others. In East Texas, I think we have the dirtier coal (high sulfur content), which requires more scrubbing or results in more pollution.
The lignite we have in Texas could be (and is) described as "dirt that burns". It has a lower energy per volume rate compared to most coals.
But, don't we have a huge amount of low-sulfur coal in the upper Midwest and Western states?
There is a lot of that left in the Midwest that is not all that low in sulfur. In the huge powder river basin is a large lower sulfur coal (sub-bituminous) that has a lower BTU content than the Midwest bituminous coal.
The same stuff that Clinton put off-limits by executive order? I believe you are referring to the Executive Order designating 1.7 million acres of land in southwest Utah as the Grand Staircase-Escalante National Monument.
Is there really a huge difference in the emissions?
In terms of sulfur emissions, yes. This was the acid-rain concerns back at the 70's or so that shut down a lot of Ohio and other Midwest coal mines.
If so, wouldn't it be more efficient to build the power plants right on the edge of the coal deposits and feed the power into the grid?
Some of that is done, like with the Texas lignite mines where the volume of "coal" to be moved is so great compared to the energy produced.
But you can move a lot of coal by train fairly cost effectively. The advantage of coal fuel is you don't have to build pressure containing vessels or the like to store a 30 day supply. The market is pretty good at coming to the least cost solution without government interference.
More expensive than what option?
Extra consumption is required to overcome transmission losses (being farther away).
But compared to a Gas pipeline, where you have to be moving 167 MW of gas for 100 MW of delivered electric power, the slightly lower losses of a gas pipeline are greatly offset by the massive amount of more energy that has to be moved the same distance before reaching the power plant.
By converting to electric power farther out, less energy has to be transported the greater distance.
Not scrubbing it. :-) But, as you pointed out -- coal gasification still requires scrubbing.
I should have added I worked in the electric power industry for a few years before I got too bored to stay with them. They develop people extremely knowledgeable in narrow areas of specialty related to their work, typically.
The idea of spending 20 years doing something like transmission line relaying, terrified me.
As a consulting engineer, our goal is to work ourselves out of a job to go on to the next one. We are hired by oil/gas companies to build facilities. We engineer/design a facility, specify and procure equipment and assist with construction. Most of the construction assistance is answer questions either due to our own mistakes, changes from vendor supplied equipment, making design changes due to forced changes during construction, etc.
It means every job has a defined ending. It usually only last longer than that because it is going badly. Doing very good work shortens the length of time the job will keep you employed. For some, this is terrifying; they need more perceived security. Over time I figured out that you make your own security by being good at what you do. Sometimes I didn't do so well and my time got cut short. Sometimes my personal attitude was the biggest problem. Sometimes I moved from companies that would have kept me for the next project but I was eager to lead another big job started by someone else.
By having many different clients and working different types of facilities, we learn a lot of different ways of accomplishing design requirements. Good consulting engineering companies get a lot of repeat business. Bad ones get a lot of different clients before closing.
I've enjoyed the travel it has given me. I don't like the time it takes away from the family. I really enjoy getting to visit new places. It makes for some interesting personal conflicts. It sure is not for everyone.
okay, I see that. The gasification process doesn't use an actual scrubber, but it still spends energy removing the contaminates and has other significant losses in the gasification process.
Well, it's not exactly a "transmission loss" but it's a loss nevertheless. Just like a gasoline powered vehicle loses about 80% of its fuel's energy as heat...the coal burning process is only so efficient.
The coal doesn't burn clean, or scrubbers wouldn't be necessary, the gasification process is much hotter, much more like a catalytic converter temperature, and those same scrubbers wouldn't likely be in the mix.
I really doubt those units are free, use no energy, require no maintenance and are not detrimental to overall efficiency.
Of course if the coal was near to a given city or there were an established rail connection for supplying coal, the pipeline and transmission issue would also not apply.
What I can tell you from looking at my power bills, CMP couldn't "efficiency" their way out of a wet paper bag, not to mention the third world crappy reliability.
Needless to say, I think power should be produced near where it is consumed, and let those who overuse it suffer the environmental consequences of their demands. I hate the uber-grid.
Agreed. There are multiple points of loss in both systems.
Just like a gasoline powered vehicle loses about 80% of its fuel's energy as heat...
Most of the losses are in the heat engine, but not 80%.
the coal burning process is only so efficient.
Yes, but the gasified coal is still going to go through heat engines and still be limited by the Carnot Cycle.
The coal doesn't burn clean, or scrubbers wouldn't be necessary,
The scrubbers are not there because of the burning process being "unclean". The scrubbers are added because of the impurities in the coal besides pure carbon and hydrogen. Those impurities still exist in a gassified process and they are "cleaned" with their own process.
the gasification process is much hotter, much more like a catalytic converter temperature, and those same scrubbers wouldn't likely be in the mix.
The difference is the "scrubbing" is done before the final combustion instead of after wards. This still consumes energy and adds to the system inefficiency.
I really doubt those units are free, use no energy, require no maintenance and are not detrimental to overall efficiency.
No, in both systems, the units to clean up consume energy, cost money to build and maintain. The both contribute to the losses of each system.
Of course if the coal was near to a given city or there were an established rail connection for supplying coal, the pipeline and transmission issue would also not apply.
Every major city has rail. No major city wants a power plant, gas or coal, contributing to their overall pollution. Nearly every major city has some compromise already of nearby or adjecent power plants to balance cost.
I think power should be produced near where it is consumed
You think that because you don't understand the losses in moving fuel versus moving electrons.
I hate the uber-grid.
You are only suggesting replacing a electrical grid with a less efficient and more polluting pipeline grid.
I don’t know, your flowchart looks pretty darn efficient to me. All those additional fuel/chemical byproducts and hydrogen, three sources of electric power.
The only thing missing was the use of leftover heat for heating the plant facilities, or as a marketable heat source for an adjacent industry.
CO2 sequestration is just so much crap. Those regulations need to be eliminated as AGW is an obvious hoax.
3 power generators and 7 major power consumers.
If the efficiencies you want to imply resulted in more power for less fuel (cost) it would be done today without tax payer subsidies. It is not because it is not; it cost mores.
While I agree about CO2 sequestration for global warming is junk, it has great use in enhanced oil recovery. In West Texas and some others places it is used to recover more oil from older fields.
bump
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