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A Very Scary Graphic

Discussions about the economic and financial ramifications of PEAK OIL

Re: A Very Scary Graphic

Postby Plantagenet » Thu 06 Feb 2014, 12:51:03

$this->bbcode_second_pass_quote('ROCKMAN', ' ')So we do a much slower transition…just like we’re doing now. But is that moving along fast enough? I suspect most would say no. So exactly how is the public going to be forced to transition faster? Certainly a huge upset in the oil supply would provide a lot of stimulus. But then we’re back to the problem of the economies not being able to afford the transition.


Thats why we're lucky that fracking and NG have come on-line to help cushion he economic hardship and postpone the transition away from fossil fuels. We've got a little more time to deal with peak oil and make a transition to alt fuels.

Unfortunately, I don't see much understanding of this among our political leaders.
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Re: A Very Scary Graphic

Postby ROCKMAN » Fri 07 Feb 2014, 17:34:14

P - Maybe. But consider how the oil surge came about: higher oil prices. Higher oil costs that reduces the capital available for expanding transitional infrastructure. We had much more capex when oil was selling for $30/bbl. But the lower oil cost reduced the incentive to expand the alts. As usual the system is very reactive. Unfortunately we need to be a lot more proactive. So let's hold our breath waiting for that change. You go first. LOL.
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Re: A Very Scary Graphic

Postby AndyA » Fri 07 Feb 2014, 18:02:24

$this->bbcode_second_pass_quote('dissident', '')$this->bbcode_second_pass_quote('AndyA', '
')$this->bbcode_second_pass_quote('', '3').357 trillion barrels of “technically” recoverable oil with shale oil 10% of that total! All that oil and everyone, with the possible exception of Saudi Arabia, is producing flat out. That is over 100 years worth at current consumption rates. Is that a joke or what?



Of God not this retarded crap again. It's kerogen not oil. You need to convert it into oil using heat. It takes about one hour at 500 Celsius to cook it and then you have to process what you obtain. You also have to crush the shale oil rock first in order to cook it. The energy expense is at least an order of magnitude more than for tar sands syncrude production.

Anyone who goes around talking about shale oil production from kerogen is a con artist. There is not a single commercial or a functional research pilot production facility on the planet. Shell has recently quit its R&D efforts to set one up after 40 years of trying. None of the oil majors are developing this resource. Exploration costs for kerogen derived oil are at the moment close to zero because it's a manufacturing process nobody is in the process of establishing and not oil extraction.

The change in the management at Shell partly explains why it withdrew from R&D in this area. The money makers lack appreciation for the black hole of funds called research. It's too bad, this R&D is needed more than ever by the fossil fuel industry.


Calm yourself. If all kerogen was included we would be talking about an order of magnitude more TRR. Obviously it is not, though you seem obsessed about it. Of course tar sands are not oil either, but technically you can recover oil from tar sands.
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Re: A Very Scary Graphic

Postby AndyA » Fri 07 Feb 2014, 18:10:07

$this->bbcode_second_pass_quote('ROCKMAN', '&')quot;3.357 trillion barrels of “technically” recoverable oil with shale oil 10% of that total! All that oil and everyone, with the possible exception of Saudi Arabia, is producing flat out. That is over 100 years worth at current consumption rates. Is that a joke or what?"

Again the misinterpretation of in place reserves (whether technically recoverable or commercially recoverable) with production rates. The price of oil has never and wil never been determined by the amount of reserves...proven or otherwise. The price of oil is determined for the most part by the dynamics of demand and supply relationship. And the supply is determined by the potential production rate. It doesn't matter if there are 2 billion bbls or 20 billion bbls of oil in the ground if the max global production rate is 100 million bopd. That rate plus the demand modulated by the ability to pay will determine the price of oil...not "3.357 trillion barrels of technically recoverable oil".


Not at all. Where have I mentioned production rates? Of course I know the difference between stock and flow. The simple fact remains that there is a lot of not yet extracted oil out there and people are spending gobs of cash to extract it.

This thread and my comments are about the ongoing investment in extraction. You want to pretend I am talking about price and rates, have fun.
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Re: A Very Scary Graphic

Postby Quinny » Fri 07 Feb 2014, 19:14:00

I posted that graph last Friday. It is very scary. It demonstrates the scale of the predicament we find ourselves in.
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Re: A Very Scary Graphic

Postby rollin » Fri 07 Feb 2014, 22:40:37

Rockman, nowhere did I state a rate or date for the transistion. That's your interpretation.
As far as replacing the old car, you were supposed to be saving all along for one.
LOL

Now I am not a great proponent of electric cars but they are a great example of breaking the catch 22 cycle. The electric car can be made 90 percent efficient.
The average car uses about 560 gallons of gasoline a year. Since the average ICE vehicle only gets 15% of the energy to it's wheels, that's 3173 kwh. Throw in a conversion and storage loss of 15% and that's 3650 kwh per annum to run the car.
Ok, I did not include the radio, headlights etc., so lets say 4000 kwh per annum for a well designed electric to run 13,000 miles per year. That is roughly 11 kwh per day. In my area the solar insolation averages 4 kwh per square meter/day. At a crummy 15% PV efficiency that means about 18 square meters (193 ft2) of PV needed to run the car on the average. Let's use typical grid costs for cost. That is about $407 per annum for "fuel". Compare this to about $1800 for gasoline.
Since a new report from the NREL states solar PV electric will cost six cents per kwh within ten years, that would halve the cost to run the vehicle.
Put solar panels on the roof of the car and reduce the battery size, reduces cost and weight even further and extends range. Also consider that some areas of the US have 6 kwh/day/ meter2 insolation, not the 4 that I get.

So we have displaced over 500 gallons per car per annum. If a 50% penetration into the market occurred that is about 4 million barrels of gasoline a day would be displaced at a huge savings. That is gasoline, not oil. I think about 20 to 24 gallons of gasoline can be produced from a barrel of oil. Our total use per day of gasoline in the US is about 8.7 million barrels per day.

So how much gasoline are we getting out of all this fracking at such huge costs? A million barrels per day? ?

So much for handling descent. Unlike oil net energy, PV and wind are becoming cheaper with time. Electric cars will become better and cheaper with time and numbers also.
OK, so I have hung it out there. I know that there is a contingent of wind, PV and alternative car disbelievers in the wings. So put up your own math, not just Koch derived propaganda pieces I keep hearing repeated over an over again like some dark religion. Let's see the numbers.

Oh yeah, once we stop burning all that coal, diesel and bunker fuel we will get about an average of 10% free gain from PV output. Use your sunblock.
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Re: A Very Scary Graphic

Postby AndyA » Sat 08 Feb 2014, 02:08:52

$this->bbcode_second_pass_quote('pstarr', '')$this->bbcode_second_pass_quote('AndyA', 'N')ot at all. Where have I mentioned production rates? Of course I know the difference between stock and flow. The simple fact remains that there is a lot of not yet extracted oil out there and people are spending gobs of cash to extract it.

This thread and my comments are about the ongoing investment in extraction. You want to pretend I am talking about price and rates, have fun.
"Gobs of cash" is talking about "price and rates" and that all ties back to reserves. "Technically recoverable oil" only becomes "reserves" at a particular price point, when the market can bear the cost of extraction. Unfortunately the market can not and never will bear $100+ oil and so much of that OOIP will remain forever 'in place.'

Right, so now "price and rates" tie back to reserves? WTF? What have rates got to do with reserves?
The market cannot bear $100 oil? Got some proof of that? Or have prices been over that for the past few years? Of course some of US consumed oil is cheaper, but not all. An international benchmark such as "Brent" has been over $100 for years now. Never will, is just your opinion, based on little more then wishful thinking.

Gobs of cash, for the illiterate, is talking about the already invested money, searching for and laying infrastructure for extraction of moar oil. Obviously they understand that money is worthless without oil, so they are spending money to get oil, rather then having heaps of money and no oil.
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Re: A Very Scary Graphic

Postby ROCKMAN » Sat 08 Feb 2014, 20:30:57

No offense meant Andy. In my world reserves are only reserves if they can be produced. And they can only be produced at the required price and rate. If the price or production rate is too low they won't be produced. Thus those "reserves" may or not be reserves. No need to rake it personal: neither the thread or all the comments are just about you. Sometimes one person's comment spurs other comments.

Rollin:"As far as replacing the old car, you were supposed to be saving all along for one." But that's the point I was tying to make: we haven't been "saving" for the future. President Carter tried to nudge us in that direction...see what that got him. LOL.
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Re: A Very Scary Graphic

Postby rollin » Sat 08 Feb 2014, 23:23:17

Rockman, a bit off topic but not far. I have been wondering what the composition of Bakken oil is. I have heard that it is fairly low molecular weigh due to constraints rock porosity. I have also just read that it varies with time as the well ages. Sounds like permeation separation to me.

I haven't been able to find any corroborating reports or articles on this. Could you head me in the right direction?
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Re: A Very Scary Graphic

Postby Pops » Sun 09 Feb 2014, 10:04:31

$this->bbcode_second_pass_quote('AndyA', '
')The simple fact remains that there is a lot of not yet extracted oil out there and people are spending gobs of cash to extract it.

The fact that is even simpler is that the "oil" left may cost more to extract than consumers are able to pay. Resources are not reserves and are totally dependent on someone making a profit to become so.
From the EIA
$this->bbcode_second_pass_quote('', 'T')he total resource base of oil and gas is the entire
volume formed and trapped in–place within the Earth
before any production. The largest portion of this total
resource base is nonrecoverable by current or
foreseeable technology. Most of the nonrecoverable
volume occurs at very low concentrations throughout
the earth's crust and cannot be extracted short of
mining the rock or the application of some other
approach that would consume more energy than it
produced. An additional portion of the total resource
base cannot be recovered because currently available
production techniques cannot extract all of the in–place
oil and gas even when present in commercial
concentrations. The inability to recover all of the
in–place oil and gas from a producible deposit occurs
because of unfavorable economics, intractable physical
forces, or a combination of both. Recoverable
resources, the subset of the total resource base that is of
societal and economic interest, are defined so as to
exclude these nonrecoverable portions of the total
resource base.



$this->bbcode_second_pass_quote('AndyA', 'T')he market cannot bear $100 oil? Got some proof of that? Or have prices been over that for the past few years?

Brent has averaged $108 +/- $10 for over 3 years, each time demand rises on growth pressure the price also rises and the economy cools. Draw your own conclusion.

$this->bbcode_second_pass_quote('AndyA', 'G')obs of cash, for the illiterate, is talking about the already invested money, searching for and laying infrastructure for extraction of moar oil. Obviously they understand that money is worthless without oil, so they are spending money to get oil, rather then having heaps of money and no oil.

The spin of the original article from Rapier is that the majors had so much profit they either wound up blowing it or invested it so wisely that a glut is just around the corner and the price is about to plunge. He then says to buy XOM like Buffett did.
?
He says XOM foolishly wasted billions of profit - and -
they wisely invest billions in new production that will any day cause a glut of oil from all that investment crashing the price
But either way he wants us to buy XOM . . .

--
It seems there is growing evidence that much of the billions invested recently will not be returning anything because the projects are being abandoned and the deep pockets those billions came from are growing empty. I've listed some and started a couple of threads on the topic.

We aren't talking about conventional reservoirs like the North Slope or North Sea or any of the other giants. Once the infrastructure was completed and the wells drilled into the reservoir they flowed for years and decades with relatively little cost.

"New" oil comes from what are essentially manufacturing processes. LTO, kerogen & bitumen are more like manufactured products rather than old fashioned conventional oil where all the cost and risk was up front and little capital was needed after the oil started to flow. LTO for example doesn't flow. It requires a large investment initially to create cracks just to allow it to migrate from the rock. Production then declines very fast since it can only flow as far as the cracks produced initially so the flow from that one well declines fast and you need to drill another immediately.

Tar sands are the same, first you build the upgrader but then you are basically strip mining - a far cry from Jed Clampett's Bubblin' Crude.

The largest "resource" for hydrocarbons is oil shale as is found in Colorado. These are more correctly called kerogen-bearing shales since they contain no oil, only the undercooked precursor to oil: kerogen). Don't confuse these rocks with the "tight" shale in N Dakota that actually contain trapped oil but have such small pore spaces the oil can't migrate without the artificial pathways created by "fracking". The more correct term for the rock in ND is oil-bearing shale and the product is tight oil. [I revised this section, Pops]

Shell said as recently as 2005 they could squeeze oil from the stone in Colorado profitably at $30/bbl. In 2013 they gave up after 40 years trying with oil above $90 a barrel.

--
So yeah, there is more oil out there, the second half of the curve has to come from somewhere after all. But the simple fact is it will be more and more expensive and it will come slower and slower - that is the definition of peak oil.
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Re: A Very Scary Graphic

Postby ROCKMAN » Sun 09 Feb 2014, 12:40:19

Rollin - Here's a host of info. Let me know if it doesn't contain the answers you're looking for...not sure what you're focus might be. Here's way more tech detail that even I have little interest to digest. Once my crude leaves the lease all I care about is when the check will show up and not what happens to the oil. LOL.

The rapid introduction of shale oil to the refinery has come with interesting consequences for the fluid catalytic cracking unit (FCCU). To aid refiners in understanding the implications of shale oil, a detailed feed analysis and cracking studies of a representative Bakken shale oil and its fractions, compared to a typical Mid-Continent vacuum gasoil (VGO), are provided here. These results aid in understanding how best to optimize operations and maximize FCC value. A key element in this optimization is appropriate catalyst selection to overcome some of the challenges commonly associated with processing shale oil. In particular, the presence of iron and calcium in variable quantities can be addressed through the application of a catalyst with an optimized matrix and mesoporosity.

Properties of raw Bakken crude - Shale oil is highly variable. Density and other properties can show wide variation, even within the same field.1–4 For this study, a sample of raw Bakken crude was obtained from a refinery. The crude was light and sweet with an API gravity of 42° and a sulfur content of 0.19 wt%. The properties of the Bakken crude used in this study closely matched those in the published assay. Similar to other light crudes, raw Bakken crude has a low amount of FCC feed (< 28% at 680°F+). The straight-run (SR) Bakken sample was distilled into a 430°F− gasoline cut and a 430°F–650°F light cycle oil (LCO) cut, and the properties of these cuts were measured. The gasoline composition and properties were analyzed via proprietary octane calculation software based on detailed gas chromatography analysis.6,7 The gasoline fraction from the straight-run Bakken sample was highly paraffinic and had low octane numbers [a research octane number (RON) of 61 and a motor octane number (MON) of 58]. The LCO fraction had an aniline point of 156°F and an API gravity of 37.6°, resulting in a diesel index of 59. While the Bakken crude sample was light and paraffinic, it also had a heavy end.

Processing challenges - Light sweet crudes are generally easy to process, although challenges arise when these crudes are the predominant feedstock in refineries designed for heavier crudes. Shale oils, like other light sweet crudes, have a much higher ratio of 650°F− to 650°F+ material compared to conventional crudes. Bakken shale oil has a nearly 2:1 ratio, while typical crudes, such as Arabian Light, have ratios near 1:1. A refinery running high percentages of Bakken oil could become overloaded with light cuts, including reformer feed and isomerization feed, while at the same time growing short on feed for the FCCU and the coker. Refiners running predominantly shale oil could shut down the vacuum distillation and coker units, and send the entire atmospheric tower bottoms (ATB) portion to the FCCU. Many refiners would still be short on FCC feed, and some have considered bypassing a portion of the whole shale oil around the crude distillation unit to fill up the FCCU capacity. Also, while the highly paraffinic Bakken ATB would crack to high conversion, the expected low delta coke would result in low regenerator temperatures and possible difficulty in circulating sufficient catalyst to maintain reactor temperature.

Shale oil cracking yields - To examine the impact of shale oil on FCC yields, cracking was performed with whole Bakken crude, a 430°F+ distillation of Bakken, a 650°F+ distillation of Bakken and a reference sample of a typical Mid-Continent VGO. Cracking was done over an FCC catalyst in a fixed-fluidized bed advanced cracking evaluation (ACE) test unit8 at a constant reactor temperature of 980°F, using three catalyst-to-oil (C/O) ratios (4, 6 and 8) for each of the feeds. The catalyst used in the experiments was an FCC catalyst with an optimized matrix and mesoporosity, deactivated metals-free using a cyclic propylene steaming (CPS) protocol. The whole Bakken crude resulted in low coke and a low-octane gasoline. While the whole Bakken crude yielded significant gasoline, much of the gasoline was from uncracked starting material in the feed. The yields of the 430°F+ and 650°F+ distillations of the Bakken crude were similar to those of the Mid-Continent VGO reference sample. The 650°F+ distillation of the whole Bakken crude had higher coke than the Mid-Continent VGO due to its heavier end and higher Conradson carbon number.
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Re: A Very Scary Graphic

Postby rollin » Sun 09 Feb 2014, 18:45:44

Thanks Rockman, I was looking for the actual composition of the oil, compounds, molecular weight, isomers, etc. But from the description of the refinery process and challenges that Bakken oil presents, it appears to be mostly low molecular weight high paraffinic composition.
Maybe we should just run it straight into the engine. LOL
I will keep on searching.
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Re: A Very Scary Graphic

Postby Synapsid » Sun 09 Feb 2014, 18:54:33

Pops,

The largest "resource'' is shale oil, not to be confused with oil shale--tight oil...

Should the terms be reversed? Shell gave up on oil shale, as did Chevron in 2012 and Exxon way back in 1982.
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Re: A Very Scary Graphic

Postby ROCKMAN » Sun 09 Feb 2014, 20:20:37

Syn - A valid point. But I'm not sure if it should even be classified as a resource. By the same token all the Sea water on the planet could be classified as a huge hydrogen resource that could supply all our energy. Just like shale oil all we need is figure out how to utilize it economically.
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Re: A Very Scary Graphic

Postby Synapsid » Sun 09 Feb 2014, 23:59:37

Pops, ROCKMAN, pstarr,

The first line in my post is a quote from Pops. It sounds backwards to me, so I asked if the terms should be reversed.

(Oil shale should be left where it is. The Book Cliffs are part of my favorite region of the country and I don't want them molested any further.)

By the way, if you aren't familiar with the Colorado Plateau and adjacent parts of the Rockies you should visit. The states often have road signs along the highways telling you what formation you're driving through and its age, for some geology on the fly. I tried to get the State Geologist here in Washington interested in something similar, years ago, but got nowhere, and that's a shame because the range of geology in this state is extraordinary.

The highway signs are useful along with the old AAPG geological highway maps, unlovely as they are. Too, the Mountain States have beautiful state geologic maps to take along; Wyoming's is especially nice.
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Re: A Very Scary Graphic

Postby Pops » Mon 10 Feb 2014, 09:11:25

You're right Syn, I should avoid the whole oil-shale/shale-oil bit because I never get it right. More better to say oil bearing shale or tight oil (LTO) for the stuff in N Dakota and kerogen bearing shale for the stuff in CO because it isn't "oil" bearing at all.
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Re: A Very Scary Graphic

Postby sparky » Mon 10 Feb 2014, 21:02:27

.
Rock if you think it get misleading , the media in general doesn't even has a clue
and worst doesn't care much .

History :shock:
shale oil have been exploited in Estonian for nearly century
the locals burn it like coal to fire retort distiller ,
it was one of the fuel source of Hitler Reich
the other were Romania , Hungary , Poland and Alsace
for each of those site he sacrificed men and equipment to keep them as long as he could
launching counterattacks to get them back when lost
there might be some others I'm not aware of
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