Sciencemadness Discussion Board - Endless Oil?

Endless Oil?

Vogelzang - 2-2-2010 at 14:18

Now and then I see articles about enhanced oil recovery, off shore drilling, etc. that a lot of people think will help push the peak of oil production further into the future. This is one of the most optimisitic articles I've seen.

Endless Oil
Technology, politics, and lower demand will yield a bumper crop of crude
By Stanley Reed

Not many people think of the Netherlands as oil country, but a billion-barrel field lies under a nine-mile strip of grazing land along the Dutch-German border. When oil prices cratered in the 1990s, Royal Dutch Shell (RDS/B) and ExxonMobil (XOM) shut the Schoonebeek field down. Company executives reckoned that its thick, hard-to-extract crude wasn't worth the trouble, even though only about 25% of Schoonebeek's oil had been produced. The main evidence of the town's petroleum past was an old-fashioned bobbing oil pump, known as a nodding donkey, which still stands in a parking lot near a bakery.

Now higher prices and technological advances are spurring a new joint venture of Shell, Exxon, and the Dutch government to pump Schoonebeek's reserves once more. New wells drilled horizontally are coming in contact with more of the oil. Steam injected into the rock loosens up its molasses-like crude so it can be brought to the surface more easily. Shell won't say what price it needs to make such efforts profitable, b`ut experts estimate $40 to $50 per barrel will do. At a current price of $80, the field is a clear winner. "We wouldn't do this if the price was really low," says Michael Lander, the Shell executive running the project. The venture is expected to produce 120 million barrels from the reopened western section of Schoonebeek over 20 years. If another section of the field is developed, the recovery rate—the share of oil that gets pumped out—would approach 50%. The industry average is 30%-35%.
PRESSURE TO INNOVATE

Schoonebeek will not flood the world with crude. But its success presents a stiff challenge to those who argue that oil production is in irreversible decline. Consumer demand, technology, and global politics are shifting in a way that could spell a future of oil abundance, not of catastrophic dearth. As Leonardo Maugeri, a senior executive at Italian oil major ENI (E), puts it: "There will be enough oil for at least 100 years."

Many analysts and industry executives have little doubt that there's plenty of oil in the ground. "Only about 32% of the oil [in reserves] is produced," says Val Brock, Shell's head of business development for enhanced oil recovery. Shell estimates 300 billion barrels and maybe more might be squeezed out of existing fields, much of it once thought beyond retrieval. Peter Jackson, IHS Cambridge Energy Research Associates' London-based senior director for oil industry activity, has reviewed data from the world's biggest fields. His conclusion: 60% of their reserves remain available.

The fact that there's still oil for the taking is driving Shell and other majors to come up with new technologies, which are expensive to develop but worth it when crude is riding high. While the price has fallen considerably from the peak of $147 per barrel in 2008, it is still far above what many oilmen expected a few years ago. "You will see companies going into the deep water, going into the arctic, using the best technology," says Maugeri, who sees the oil industry as a dynamic system that responds rapidly to changes in the economic and political environment.

Even if the new technologies add just a few percentage points to the recovery rate, such gains add years to global supply and boost the industry's profits. So the technology of coaxing oil out of the ground is constantly improving. Heating up heavy oil, as at Schoonebeek, is one new trick. Companies can add heavy polymers to the water they blast into a production site to push more oil out; the polymers add weight to the water and increase the pressure on deposits. (Shell is trying such technology on the Marmul field in Oman.) Another tactic is to inject soap into the ground to break the surface tension that makes leftover oil cling to the rock.

Simple methods can help mature oil fields produce more and even uncover bigger reserves than imagined. A study of fields in Indonesia by IHS CERA found that it wasn't uncommon for them to produce more than double initial estimates. Petroleum engineers help the fields live longer just by drilling new wells or installing better pumps. "As a field ages, the operators learn more...that allows them to tweak their operations," explains Leta K. Smith, a Houston-based analyst for IHS CERA.

Sharp falls in production can be arrested. Output at Samotlor, Russia's largest field, was plummeting in the late 1990s. The field's owner, TNK-BP, formed in 2003, has since managed to boost production by a third. Adjusting the placement of the pumps in the wells yielded big gains, while three-dimensional seismic technology gave a better glimpse of the oil-bearing structures under the ground.
IRAQ'S WILD CARD

Pumping the oil that's already discovered isn't the whole story. Explorers, sometimes financed by hedge funds and private equity firms, are finding troves in the deep water off Brazil, West Africa, and even the U.S. At the same time, old and new oil powers—Russia, Brazil, Angola, Nigeria, and Kazakhstan—are ramping up their capacity with the aid of Total (TOT), ExxonMobil, BP (BP), and other majors. These projects could eventually add 5 million barrels to global daily output.

The most surprising action is unfolding in Iraq, which has just cut deals with ExxonMobil, BP, and Shell as well as with Chinese and Russian companies. If all these ventures meet their targets, Iraq could produce as much as 12 million barrels a day, putting it in the super league with Saudi Arabia and Russia. Given the political and logistical obstacles Iraq faces, that seems unrealistic anytime soon. But 6 million barrels a day seems attainable within 10 to 15 years. That level would turn Iraq into OPEC's No. 2 producer after Saudi Arabia.

Moderating global demand can also stretch the supply of crude. After the oil shocks of the 1970s, efficiency gains and a switch by factories to natural gas prompted a nearly 10% drop in global oil consumption in the early 1980s.

The price spike of 2008 may lead to similar results. Lester Brown, president of the Earth Policy Institute in Washington, an environmental group, notes that the U.S. car fleet shrank by 4 million in 2009, thanks to scrapping and reduced sales. He expects that shrinkage to continue, reducing the U.S. fleet by 25 million cars by 2020. He also sees a cultural change occurring in which more people, especially the young, don't see owning a car as a necessity. "We are now looking at something new, a shift in the way people think about automobiles," he says. "That means less oil use."

U.S. oil consumption dropped by 9% over the last two years. The recession certainly hurt demand, but many analysts think oil use in the West has peaked and will not rebound to previous levels. The Energy Dept. sees the consumption of oil-based fuel in the U.S. flattening out in the coming decades. "Are people going to use energy differently in the next [growth] phase?" asks Goran Trapp, head of global oil trading at Morgan Stanley in London. "If so, the people forecasting [strong] demand increases are going to be surprised."

China is one key to answering Trapp's question. Even as the mainland devours oil and coal, the government is pursuing a green agenda. China has the world's top solar panel industry, a power plant in Beijng is one of the world's most efficient, and auto emission standards there are now tougher than those in the U.S. China's official policy mandates that alternate sources support 15% of the country's energy needs by 2020, up from 9% now. So China's petroleum consumption will keep increasing, but perhaps at not so steep a rate as expected. A nasty oil shock is always possible. But the case for bountiful oil is strong.

http://www.businessweek.com/magazine/content/10_03/b41630469...

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bbartlog - 3-2-2010 at 07:52

The author marshalls a host of anecdotes and observations, but never really addresses the main arguments of the peak oilers. Just some observations on his points:

'The venture is expected to produce 120 million barrels...'

OK. That's 1.5 days global supply. Note that peak oil is not an argument against new sources (or old, previously uneconomical sources) being found; it just makes a claim about the shape of the overall production curve over time.

'But its success presents a stiff challenge to those who argue that oil production is in irreversible decline'

Does it? How? A stiff challenge would involve marshalling some numbers to suggest that these kinds of sources can be brought into production fast enough to offset declines from such giant fields as Cantarell. I notice that this article doesn't make any attempt to aggregate any numbers whatever. That would involve a lot of work. But you know, other people have actually done that work and they seem less optimistic than this guy. I'd like to say that they came to different conclusions but in fact this guy rather carefully avoids conclusions (other than trivial ones); it's more like he's evoking an impression of abundance.

'There will be enough oil for at least 100 years'

What does 'enough' mean? Notice this guy never claims that production will exceed the peak of 2005; as far as I can tell all he's saying is that oil is not going to run out in the next 100 years. He's carefully made a statement that he knows is 'not even wrong'.

'Only about 32% of the oil [in reserves] is produced'

This doesn't address the feasibility or economics (same thing, in the end) of retrieval. I could similarly observe that vast amounts of gold are contained in seawater, and it would be just as irrelevant.

'You will see companies going into the deep water, going into the arctic, using the best technology'

This implies high costs and therefore high prices. It does nothing to contradict the impression that we are on the back half of the total production curve.

'Moderating global demand can also stretch the supply of crude.'

I'm sorry; what was the author's claim again? Is it that we won't ever extract the last drop of oil in the ground? That's facile. Is it that aggregate demand for oil is less than it was previously? He shows that *consumption* dropped following the price increase of the 1970s, but 'demand' is a curve showing (hypothetical) consumption at different price points; a drop in consumption does not necessarily imply a drop in demand, merely a shift in the place where supply and demand curves intersect. If the price has just gone up by a large margin, a drop in consumption would logically be ascribed to reduced supply rather than reduced demand. Really it seems like the author doesn't understand economics well enough to even realize that consumption and demand are different entities.

'"We are now looking at [...] a shift [...] That means less oil use."'

So if oil is abundant and people just sort of had a cultural moment and decided to use less, we'd expect prices on the floor as the market was glutted with oil. But of course that isn't what happened; rather, prices sent a signal that we no longer had as much oil (a monstrous one, perhaps the strongest price signal in human history if we consider aggregate money flows), and this resulted in some reduction of oil consumption as well as various efforts to extract more of it. However, the size of the price move and the relative lack of elasticity on both the supply and demand side should not make us optimistic about the ease with which we can either increase supply or change things on the consumption side.

Vogelzang - 3-2-2010 at 14:44

All you have to do is look for articles.

Chevron Engineers Squeeze New Oil From Old Wells
Steam Bath for Aging Field Adds Millions of Barrels of Crude Oil to Reservoir's Output
http://online.wsj.com/article/SB1000142405274870425200457445...

Onboard High-Tech Oil Rig, U.S. Answers to Rising Prices
http://www.popularmechanics.com/science/extreme_machines/425...

There's more than twice as much heavy oil as there is conventional oil.
http://www.slb.com/content/services/solutions/reservoir/heav...
http://heavyoilinfo.com/

[Edited on 3-2-2010 by Vogelzang]

watson.fawkes - 3-2-2010 at 15:03

Quote: Originally posted by Vogelzang

All you have to do is look for articles.

All I had to do was to read Hubbert's Peak by Kenneth Deffeyes when it first came out in 2001. He talks about all of this. There's nothing here to contradict the basic model of how a production peak comes about. If you're going to be a contrarian, at least have the good sense to know what it is that you're against.

bbartlog - 4-2-2010 at 06:12

What are these articles supposed to tell me? I'm not even sure we disagree. Here, I'll outline my overall position and you can tell me where you differ, if at all.

1) I don't believe that world oil production will ever exceed 90 million bpd; rather, it will plateau at its current level and ultimately decrease. Note I do mean *oil*, I am not talking about natural gas liquids or reprocessed coal.
2) There are other sources of hydrocarbon fuel, notably coal and natural gas, as well as other sources of energy, which can substitute for oil, *but*
3) Major capital investment (alternatively, millions of man-years of work, depending on your preferred perspective on resource allocation) is required to switch to these other resources. Mobilizing these requires pain in the form of high prices.
4) Thus, hydrocarbon fuel and feedstock will continue to become more expensive (but with a lot of volatility in the price series)
5) Ultimately there must also be a peak in the overall extraction of hydrocarbons from the ground. I don't have a strong opinion on when this peak will come but I expect to see it within the next twenty years.

Places where I disagree with what I'd call the standard peak oil narrative:

1) I don't expect apocalyptic results (a la Kunstler) in modern capitalist societies. We have flexible mechanisms for allocating scarce resources, lots of spare labor capacity, the ability to substitute inputs. Cars can run on natural gas, trains can take some of the load from trucks, solar power can heat more homes. To be fair, our financial system seems to be broken at the moment, and that may make mobilization more difficult.
2) I don't think much of the EROEI model that peak oil advocates use. It takes a static view of the inputs to energy production and assumes that greater inputs of human labor can't make energy extraction more efficient.
3) Looking at logistic production curves for something like oil in a single country, when there is a large world oil market setting prices, gives a bad picture of the back half of the production curve. It's giving a picture of how much oil can be produced at some particular price. It doesn't tell us how much can be extracted with increasing effort (price). In situations where substitution is difficult I would expect the back half of the production curve to be messy, not a smoothly decreasing curve.

Things I'm not at all sure about : impact on world food production of increased prices for NG (and thus fertilizer); long-term feasibility of nuclear power substitution; viability of very poor countries and their people in this regime of shifting energy sources.

Vogelzang - 7-2-2010 at 13:56

I read M. King Hubbert's 1956 paper before. He believes there isn't any reason for us to think we're going to be destitute because of depletion of oil. He discusses coal and nuclear power as possible substitutes. I don't recall anything in his paper about heavy and extra heavy oil which is more than twice as abundant as conventional oil, or oil sands or oil shale. He doesn't say much about the development of new technologies which we've seen since 1956, such as horizontal drilling, flooding fields with water and/or CO2, off shore oil drilling, etc.

watson.fawkes - 7-2-2010 at 18:00

Quote: Originally posted by Vogelzang

I don't recall anything in his paper about heavy and extra heavy oil which is more than twice as abundant as conventional oil, or oil sands or oil shale. He doesn't say much about the development of new technologies which we've seen since 1956, such as horizontal drilling, flooding fields with water and/or CO2, off shore oil drilling, etc.

Then you want Deffeyes's follow-on book, Beyond Oil, which does discuss these. Even with CO2, the best of the alternate recovery technologies, you don't get more than one-half ultimate recovery from the reservoir rock.

chief - 11-2-2010 at 07:55

The oil price didn't go up ==> The Dollar went down ...

bbartlog - 11-2-2010 at 08:47

If you adjust for inflation and smooth out the bumps, the price of oil is pretty flat from 1947 through the mid-1990s, at about $20 per barrel. Now it's at two to three times that. The devaluation of the dollar does not explain the current price.

gregxy - 11-2-2010 at 10:53

The economic expansion in China and India must be creatating more demand for oil and causing the price to go up.

A side issue, is the predominant theory still that oil came from
dead dinosaurs and plants? Years ago I remember hearing
a theory that oil somehow "distilled" out of the core of
the earth. Given all the places (and depths) that oil has been
found it seems difficult that it had a biological origin.

unionised - 11-2-2010 at 11:04

It seems that nobody has noticed that, if new technology improves extraction efficiency 4 fold then that means the oil will last 4 times as long, which isn't the same as "endless".

Incidentally there are molecules in crude oil that are leftovers from the decay of biological molecules. Phytane is probably the best known. It's very difficult to get geology to explain them because these molecules are not particularly "favoured" in any other way.

bbartlog - 11-2-2010 at 19:21

Quote:

It seems that nobody has noticed that, if new technology improves extraction efficiency 4 fold then that means the oil will last 4 times as long

They didn't notice because it isn't true? I'm not even sure what you mean by improving efficiency 4 fold - is this a quadrupling of EROEI? But in any case, the time to depletion(*) may under some assumptions *decrease* if extraction efficiency increases (see e.g. whale oil). In the case of oil the impact would have to depend on the size of the reserves that are brought within economic reach by this efficiency increase, which for real-world technologies depends on the specific improvement. Regardless, even if you have some scalar measure of efficiency that can be quadrupled, the relationship with time to depletion will not be linear.

(*) - resources do not, in general, become totally depleted, so I'm trying to be generous here and assume you have some particular degree of partial exhaustion in mind, rather than total exhaustion of all oil.

chief - 12-2-2010 at 04:18

@bbartlog: Inflation --> the official data are false ... !
==> Look at the oil-price in terms of gold: Then it's really quite flat, and you see where the $ actually really is ...

How the US-government fakes the statistics: http://www.shadowstats.com/

[Edited on 12-2-2010 by chief]

Vogelzang - 12-2-2010 at 08:15

Look at the table here:

http://www.inflationdata.com/inflation/Inflation_Rate/Histor...

It shows the price of oil every year since 1946, both nominal price and inflation adjusted price.

chief - 12-2-2010 at 11:36

Yes ... the official inflation-rate ... ; thats why I said: Look at the oil-price in oz gold:
http://www.thedailygreen.com/environmental-news/latest/oil-g...

The $ has lost value, but the government doesn't want to admit it: Thats why they say "oil is up" when they should say "$ is down" ...
Also: The peak-oil-swindle last year was just to mask the bailing out of wall-street ... look here:
"More on the real reason behind high oil prices"
http://www.globalresearch.ca/index.php?context=va&aid=90...

bbartlog - 12-2-2010 at 11:42

I'm aware that the inflation statistics are questionable due to changes in the methodology. However, the adjustments proposed at shadowstats do not begin to cover the ramp up in the price of oil in the past ten years or so.
The fact that oil tracks the price of gold fairly well has a lot to do with booms and busts in different investment sectors (in this case commodities). If the correlation were merely a result of gold reflecting the declining purchasing power of the dollar while behaving as some kind of ultimate measure of value, we wouldn't have expected the price of gold to fall by 2/3 after its 1980 peak. The dollar certainly didn't deflate by 2/3 in that time.

chief - 13-2-2010 at 02:29

Gold has fall2n 2/3 after 1980 ?
==> Well: Today its above 1000, look here for the charts: http://www.kitco.com/charts/livegold.html (scroll down to see the last 10 years on one picture)
==> In plain numbers it's above any other historical high, $-wise spoken, although the inflation-adjustes price of gold is oftenly calculated to be at 2300 $/oz and above ...]

Let's face it: If Oil vs. $ is completely flat, as shown in the one link above, then the $ is weak,
==> and we are past "peak $-value" so to speak, not "peak oil" ...

[Edited on 13-2-2010 by chief]

Sandmeyer - 15-2-2010 at 17:10

Quote: Originally posted by Vogelzang

Schoonebeek will not flood the world with crude. But its success presents a stiff challenge to those who argue that oil production is in irreversible decline. Consumer demand, technology, and global politics are shifting in a way that could spell a future of oil abundance, not of catastrophic dearth.

That sort of fanaticism is typical. "Consumer demand, technology, and global politics are shifting in a way that could spell a future of oil abundance, not of catastrophic dearth." It is astonishing that these business fairy-tales still work.

chief - 16-2-2010 at 01:51

@Sandmeyer: So far the peak-oil-story is a fairy tale ..., as well as the climate-warming and the swine-flu-danger ...

You only need to look a bit behind the surface ... and will probably find yourself that "peak oil" was a staged propaganda-act ... :
==> The oil-price went up because of speculation, not shortage, here again about the mechanism:
http://www.globalresearch.ca/index.php?context=va&aid=90...

Don't let Wall Street or the government bullshit you ...

bbartlog - 16-2-2010 at 08:21

No doubt the 2008 price spike involved speculation, which is why I didn't include the price high from that year in discussing the long-term trend. However, the crash following the popping of the bubble did not follow the pattern one would expect of a purely speculative event - the price is still well above the historical level. Further, if we look at production figures from the EIA, we have to wonder why these prices don't result in more supply being brought to market. Oil production (in millions of bpd, averaged over each year, though only the first ten months data is available for 2009) is as follows (inflation adjusted, and note that all prices are above the long-term average).

2003: 79.6 $32
2004: 83.1 $43
2005: 84.6 $55
2006: 84.5 $62
2007: 84.4 $67
2008: 85.4 $91
2009: 84.0 $44

Notice that at the beginning, things are still working as we would expect: when the price rises in 2004, more oil is brought to market. The supply looks a little inelastic (30% price increase gets a 4% output increase) but that would be expected, especially in the short term; it takes a long time to bring oil production online.
After that, things look decidedly strange. The price continues to rise while supply hardly budges. There is a tiny ~2% output bump in 2008 in response to the skyrocketing price, but in general world production is flat. The price drop in 2009 is partly due to the end of the speculative bubble, but also due to worldwide economic contraction. And despite that we're back up over $70 per barrel.
Fundamentally, I don't see why it's so difficult to accept the oil is a finite resource which will have a production curve similar to that for other finite resources. The only question is whether we have in fact hit the peak, and I think the price/production series from these recent years strongly suggests that we have. The question of actual impact (whether we will smoothly switch to alternatives, or whether we will have an apocalyptic transition as suggested by Kunstler, Tainter, or Orlov) is obviously more contentious.

chief - 16-2-2010 at 14:10

You can't look at the years from 2006 on without considering the banking crisis, especially 2008: Banksters went into Oil because $ was weak and housing broke in too ...

The price in recent years doesn't reflect supply and demand -- the market is under the influence of the major economic crisis ...
and that crisis is just going on, it's _not_ over.

70 $ a barrel _are_ 35 $ from a few years ago -- inflation ever since the gold-standard was abandoned by Nixon (because the french let him actually deliver the gold ...)

And what has driven inflation in the years from 2001 on ? Right: The US-engagements in Iraq and the entire region there ... : All costs insane amounts of money, which was just created for the purpose ...
==> Thats how everybody pays for the gulf-wars: By paying higher prices ...

The "peak oil" story, seen in that light, just seems to be a fairy tale ... : The price can be completely explained by politics, no supply-shortage necessary ...

Sandmeyer - 17-2-2010 at 07:55

Quote: Originally posted by chief

@Sandmeyer: So far the peak-oil-story is a fairy tale ..., as well as the climate-warming and the swine-flu-danger ...

Are saying that oil is an infinite resource? I don't know what you mean by "climate warming" and "swine flu danger", but at least for swine flu I can speak from experience. I had that flu and luckily I was young and strong enough to survive it (it was hellish), but I can imagine that it can kill you if your body is weak. The flu is real, and potentially very dangerous, so we should learn to distinguish between existence of a threat and exploitation of a threat by private power.

JohnWW - 17-2-2010 at 09:54

Quote: Originally posted by Sandmeyer

Actually, being young has proven to be a DISADVANTAGE for surviving swine 'flu! Except in a few cases of impaired immune systems, it has infected, and killed, only children and young to early-middle-aged adults. Almost all the cases and casualties have been in people aged under about 53. This is because those people who are older are survivors of 'flu epidemics caused by viruses of closely related H1N1 types, particularly the Asian 'flu epidemic of 1958.

Sandmeyer - 17-2-2010 at 18:17

Quote: Originally posted by JohnWW

According to the mass media, those that died in my country were overwhelmingly patients suffering from some chronic illness of vital organs. Most of the population got relatively mild symptoms, for example my girlfriend had it too but she barely noticed it. What is sure (at least to my mind) is that once you get hard hit (for what reasons, who knows?) you better have healthy organs that can take the extreme stress.

What is unique about this illness is that near the peak I suddenly felt normal, and thought: "Ah, it is over, I can go to the lab." Hour later it came back in a second wave, even worse, high fever, lung pain, then it went like that in waves back and forth, hour after hour, for a week, followed by a recovery over couple of days. At first, I panicked that I might die if it continues like that, then I gave up worrying, it was extremely peaceful to stop worrying regardless of the outcome, it was a very interesting experience.

[Edited on 18-2-2010 by Sandmeyer]

chief - 18-2-2010 at 02:19

The swine-flu was just a act for the benefit of pharma-companies ...
==> Far less casualties then from traffic-accidents ...

R0b0t1 - 21-2-2010 at 00:04

Oil is always going to decline, so that dude's argument is pretty much debased... Although it's more of a reciting of facts paper.

[Edited on 21-2-2010 by R0b0t1]

chief - 21-2-2010 at 03:41

Oil always declining ... ; that's not a argument but a commonplace.

The point is: Everybody thinks if something is "green" or labeled so he can defend it and automagically be in the right, no matter what nonsense it means.
Thats how politics gets excuses for the high price: They don't have to admit for the inflation and other eeconomic causes, but can blame everything on the ominous "peak oil" ...
==> and enough former hippies, leftists etc. will defend it, since they are used to argue on what seems to be the same line ...

Meanwhile since at least a decade all the environment-stuff is beeing abused for anything, only not for the better of humanity.
=====================

Any good scienceman should always look behind the curtains, which in this case yields: Wallstreet was broke, baksters shorted oil (eg. JP.Morgan and Goldman sucks were involved), they manipulated the prices (via paper/derivative-trading) and told the public the "peak ..."-fairytale.

[Edited on 21-2-2010 by chief]

quicksilver - 22-2-2010 at 14:19

Quite a few years ago (early 1980's) I had been making some money and bought some shares in a company called "U.S. Electro-Car". They were penny stocks and they went quite high. I sold off and made some money.
The company had been bought by GM (right when I sold). The electric car that the company had been building was turned into a small vehicle for mines and hazard areas where Carbon Monoxides, etc were sure to be destructive. The concept vehicle would do 60 MPH and needed a charge that could be provided by AC current. The vehicle was actually kept from common public consumer sales. This same concept is being sold today! True story!!!

chief - 23-2-2010 at 00:13

The thing is: For all the world full of electro-cars there would be quite an insanely big battery-recycling-industry necessary ...

Meanwhile Methanol may be the solution: Can be made by Fischer-Tropsch-synthesis from a multitude of sources, eg. coal, waste, wood, biomass etc.
==> and can be used in almost any combustion-engine ...
==================

The electric-car trend might not be the solution, but would keep the busines in the family: The _big_ companies which already exist ...
==> ... meanwhile methanol-synthesis could be quite de-centralized ... better for the people, but worse for big-busines and for big-oil
---> ... and maybe thats a main reason for lobbyism and sponsoring to go towards electric cars instead of biofuel ...

bbartlog - 23-2-2010 at 07:12

Quote:

Methanol may be the solution: Can be made by Fischer-Tropsch-synthesis ... meanwhile methanol-synthesis could be quite de-centralized

Yeah, nothing like a backyard-scale syngas and Fischer-Tropsch plant! I can hardly imagine a process *less* suitable in terms of economy and feasibility at small scale. Nuclear fission, I suppose

. But maybe you were thinking of methanol from pyrolysis of wood, which has other problems...

Vogelzang - 26-2-2010 at 15:26

Squeeze That Sponge
Nearly two-thirds of crude still gets left in the ground. With enhanced oil recovery, companies are determined to lower that number.

By GUY CHAZAN

Often stymied in their quest for new crude, Western oil companies are squeezing more out of the reserves they already have.

Despite the engineering advances of the past century, nearly two-thirds of crude still gets left in the ground. So oil companies are raising the ante, investing billions of dollars in cutting-edge technology to increase the amount of crude they can tap.

he potential rewards are huge: Raising the average recovery rate world-wide to 50% from 35% would boost the world's recoverable oil by about 1.2 trillion barrels -- equal to the whole of today's proven reserves, the International Energy Agency says.

"It's the prize for the next half-century," says Howard Mayson, vice president for technology at British oil giant BP PLC, which relies heavily on enhanced-recovery methods. Among the processes BP uses: flooding reservoirs with polymers that expand like popcorn when they come into contact with hot rocks, thus flushing more oil out of difficult-to-reach nooks.
Higher Costs

Intense effort and the most advanced brainpower in the oil industry will be required to get at these hard-to-extract hydrocarbons, insiders say. The Paris-based IEA says it could take more than 20 years to raise recovery to 50%. Yet the global recession has lowered demand for oil, which could deter some of the investment necessary. Meanwhile, energy prices are higher than they were just a few years ago, making enhanced-recovery methods -- which are energy-intensive -- more costly. The IEA estimates that the cost of the additional oil is between roughly $20 and $70 per barrel, depending on the method. Some require fuel to create heat, others involve the production of chemicals.

The benefits of enhanced recovery are cited regularly in the debate about how much oil is left to pump. "Peak oil" theorists believe the world's oil and gas supplies are fast running out. Champions of enhanced recovery, by contrast, say this isn't so, and point to steady upward revisions in estimates of the world's recoverable hydrocarbon reserves as the industry invents new ways to pump hard-to-get-at oil.

Enhanced recovery is a lifeline for the biggest oil companies, such as Exxon Mobil Corp. and BP, which are under intense pressure from shareholders to keep ramping up production and gaining access to fresh reserves. But that's hard to do when the companies are shut out of the oil-rich Middle East and places like Russia. So they rely more and more on existing fields, some of which have been producing oil already for decades.

"Big Oil is constantly looking for ways to squeeze the sponge, to get the next trillion barrels," says Bob Fryklund, an oil consultant at IHS Inc., a business information and analysis group based in Englewood, Colo. Some smaller energy companies, too, such as Apache Corp. and Occidental Petroleum Corp., have carved out niches in this field. "It's their bread and butter," says Mr. Fryklund.
Pumping Gas

One method of improving oil recovery could become a vital weapon against global warming: Some companies are pumping carbon dioxide into reservoirs to flush more oil out of the ground. The technique could become increasingly attractive as the world seeks to reduce greenhouse gases. Why not put the carbon dioxide to work, the thinking goes, rather than simply storing it in disused oil reservoirs, as is also done currently.

"It feels like a waste parking it underground when it has a terrific impact on oil recovery," says Mr. Mayson, who was involved in using natural gas to increase oil production back in the early 1980s as a young reservoir engineer at Prudhoe Bay, on Alaska's North Slope. Prudhoe, a big source of oil and gas for BP, had been in production just a few years at the time, and presented the company with a problem: what to do with the huge amount of natural gas being produced along with oil.

In those days, oil companies in many remote parts of the world would simply burn the gas off into the atmosphere while producing the oil. But the BP team, of which Mr. Mayson was a part, worked to inject the gas back into the reservoir to increase pressure and so boost recovery. BP now injects more natural gas each day into its Alaskan oil reservoirs than the domestic gas market of the U.K. consumes.

Prudhoe's recovery factor today is expected to be more than 60%, compared with less than 40% when production began in the late 1970s. At the start of the 1980s, the field was expected to last about 30 years, Mr. Mayson says. Now "there could easily be another 50 years to go," he adds. "It's very long-legged, and a lot of that is down to technology." Prudhoe's total recoverable reserves are now estimated to be several billion barrels more than what was envisaged when production started.

Chemicals and other gases, such as nitrogen, have also been used to improve recovery. These additives lower the viscosity, or stickiness, of the oil and improve its flow rate -- like adding detergent to a greasy saucepan. "It dissolves the oil from the rock face, almost like dry-cleaning it," says Mr. Mayson.
After the Flood

The oldest and still the most commonly used method of increasing yield is flooding: This involves injecting water into an oil reservoir to maintain pressure and to sweep oil that is trapped in porous rock structures toward the well. Flooding has been used in the industry for decades. BP now gets 60% of its oil output this way.

One problem with the technique is the injected water can flow into highly permeable layers of rock, known as "thief zones," bypassing much of the oil in the reservoir. To fix this, BP uses a technology called Bright Water, a process involving a chemical which, when cool, is a tightly bound polymer particle, but, when exposed to heat, expands tenfold -- like popcorn. When it enters a thief zone, it encounters hot rocks and "pops," plugging up the zone so that following water will flow elsewhere.

Bright Water was patented in 2002 by Nalco Co., a small Naperville, Ill., specialist provider of chemicals, and developed by BP and Chevron Corp. Trials began in Alaska in 2004. The process has since been used by BP in Argentina and Pakistan. BP says the additional oil the new technology will produce over the next 20 years is roughly equivalent to finding a major new field.

Like other companies, BP is also experimenting with microbes that reduce the viscosity of heavy oil and help trapped oil move more freely.

Another new technology: LoSal, a flooding technique that uses water with reduced salinity, unlike the salt water many oil companies use. BP has discovered that less salinity in the water can improve recovery rates.
Eyes Underground

Meanwhile, real-time monitoring of oil reservoirs helps companies see how effective flooding is and whether there are still pockets of oil that engineers can go after. The technique is often called 4D, because it not only shows what the reservoir looks like in three dimensions but illustrates how it changes over time. One company noted for its successful use of 4D is Norway's StatoilHydro ASA. At its Norne field under the North Sea it has carried out repeated seismic surveys to discover changes in subsurface structures and to monitor flow rates of water, gas and oil in real time. Such techniques have helped lift the recovery factor at Norne to 52% from 40% and extend the field's life past 2015.

Advanced sensors that indicate pressure, temperature and flow rates in real time are increasingly being installed on equipment. This gives engineers a live view of how an oil well is performing, and more timely information about how productivity can be improved.

International Business Machines Corp. is one company at the forefront of such techniques. It integrates sensors, accesses and analyzes the information they provide and makes recommendations based on the data.

Jon Starkebye, regional director of chemicals and petroleum at IBM, says engineers often use production data that's weeks old. That's not as useful as the "live" data IBM can access, he says.

The advanced sensors allow engineers to "communicate with the reservoir in real time...so they can make the right decisions," he says.
—Mr. Chazan is a staff reporter in the London bureau of The Wall Street Journal.

http://online.wsj.com/article/SB124050418449248573.html

Vogelzang - 26-2-2010 at 15:32

The World Has Plenty of Oil
By NANSEN G. SALERI
March 4, 2008

Many energy analysts view the ongoing waltz of crude prices with the mystical $100 mark -- notwithstanding the dollar's anemia -- as another sign of the beginning of the end for the oil era. "[A]t the furthest out, it will be a crisis in 2008 to 2012," declares Matthew Simmons, the most vocal voice among the "neo-peak-oil" club. Tempering this pessimism only slightly is the viewpoint gaining ground among many industry leaders, who argue that daily production by 2030 of 100 million barrels will be difficult.

In fact, we are nowhere close to reaching a peak in global oil supplies

Given a set of assumptions, forecasting the peak-oil-point -- defined as the onset of global production decline -- is a relatively trivial problem. Four primary factors will pinpoint its exact timing. The trivial becomes far more complex because the four factors -- resources in place (how many barrels initially underground), recovery efficiency (what percentage is ultimately recoverable), rate of consumption, and state of depletion at peak (how empty is the global tank when decline kicks in) -- are inherently uncertain.

- What are the global resources in place? Estimates vary. But approximately six to eight trillion barrels each for conventional and unconventional oil resources (shale oil, tar sands, extra heavy oil) represent probable figures -- inclusive of future discoveries. As a matter of context, the globe has consumed only one out of a grand total of 12 to 16 trillion barrels underground.

- What percentage of global resources is ultimately recoverable? The industry recovers an average of only one out of three barrels of conventional resources underground and considerably less for the unconventional.

This benchmark, established over the past century, is poised to change upward. Modern science and unfolding technologies will, in all likelihood, double recovery efficiencies. Even a 10% gain in extraction efficiency on a global scale will unlock 1.2 to 1.6 trillion barrels of extra resources -- an additional 50-year supply at current consumption rates.

The impact of modern oil extraction techniques is already evident across the globe. Abqaiq and Ghawar, two of the flagship oil fields of Saudi Arabia, are well on their way to recover at least two out of three barrels underground -- in the process raising recovery expectations for the remainder of the Kingdom's oil assets, which account for one quarter of world reserves.

Are the lessons and successes of Ghawar transferable to the countless struggling fields around the world -- most conspicuously in Venezuela, Mexico, Iran or the former Soviet Union -- where irreversible declines in production are mistakenly accepted as the norm and in fact fuel the "neo-peak-oil" alarmism? The answer is a definitive yes.

Hundred-dollar oil will provide a clear incentive for reinvigorating fields and unlocking extra barrels through the use of new technologies. The consequences for emerging oil-rich regions such as Iraq can be far more rewarding. By 2040 the country's production and reserves might potentially rival those of Saudi Arabia.

Paradoxically, high crude prices may temporarily mask the inefficiencies of others, which may still remain profitable despite continuing to use 1960-vintage production methods. But modernism will inevitably prevail: The national oil companies that hold over 90% of the earth's conventional oil endowment will be pressed to adopt new and better technologies.

- What will be the average rate of crude consumption between now and peak oil? Current daily global consumption stands around 86 million barrels, with projected annual increases ranging from 0% to 2% depending on various economic outlooks. Thus average consumption levels ranging from 90 to 110 million barrels represent a reasonable bracket. Any economic slowdown -- as intimated by the recent tremors in the global equity markets -- will favor the lower end of this spectrum.

This is not to suggest that global supply capacity will grow steadily unimpeded by bottlenecks -- manpower, access, resource nationalism, legacy issues, logistical constraints, etc. -- within the energy equation. However, near-term obstacles do not determine the global supply ceiling at 2030 or 2050. Market forces, given the benefit of time and the burgeoning mobility of technology and innovation across borders, will tame transitional obstacles.

- When will peak oil arrive? This widely accepted tipping point -- 50% of ultimately recoverable resources consumed -- is largely a tribute to King Hubbert, a distinguished Shell geologist who predicted the peak oil point for the U.S. lower 48 states. While his timing was very good (he forecast 1968 versus 1970 in fact), he underestimated peak daily production (9.5 million barrels actual versus eight million estimated).

But modern extraction methods will undoubtedly stretch Hubbert's "50% assumption," which was based on Sputnik-era technologies. Even a modest shift -- to 55% of recoverable resources consumed -- will delay the onset by 20-25 years.

Where do reasonable assumptions surrounding peak oil lead us? My view, subjective and imprecise, points to a period between 2045 and 2067 as the most likely outcome.

Cambridge Energy Associates forecasts the global daily liquids production to rise to 115 million barrels by 2017 versus 86 million at present. Instead of a sharp peak per Hubbert's model, an undulating, multi-decade long plateau production era sets in -- i.e., no sudden-death ending.

The world is not running out of oil anytime soon. A gradual transitioning on the global scale away from a fossil-based energy system may in fact happen during the 21st century. The root causes, however, will most likely have less to do with lack of supplies and far more with superior alternatives. The overused observation that "the Stone Age did not end due to a lack of stones" may in fact find its match.

The solutions to global energy needs require an intelligent integration of environmental, geopolitical and technical perspectives each with its own subsets of complexity. On one of these -- the oil supply component -- the news is positive. Sufficient liquid crude supplies do exist to sustain production rates at or near 100 million barrels per day almost to the end of this century.

Technology matters. The benefits of scientific advancement observable in the production of better mobile phones, TVs and life-extending pharmaceuticals will not, somehow, bypass the extraction of usable oil resources. To argue otherwise distracts from a focused debate on what the correct energy-policy priorities should be, both for the United States and the world community at large.

Mr. Saleri, president and CEO of Quantum Reservoir Impact in Houston, was formerly head of reservoir management for Saudi Aramco.

See all of today's editorials and op-eds, plus video commentary, on Opinion Journal1.

http://online.wsj.com/public/article_print/SB120459389654809...