[SoothSayer]

The world apparently has excess heavy crude supplies.

Are we talking about significant amounts of this oil grade ... and can we successfully refine this stuff?

If so, and if we build (more) refineries for this oil grade, how many extra years of excess oil supplies would we have?

Would this push Peak Oil back decades?

Would oil from these refineries be more expensive?

[I am NOT including tar sands or Venezuelan gloop as heavy oil!]

[Doly]

$this->bbcode_second_pass_quote('SoothSayer', '
')If so, and if we build (more) refineries for this oil grade, how many extra years of excess oil supplies would we have?

Would this push Peak Oil back decades?

[SoothSayer]

Thanks doly ... a clean precise answer! Makes a change ...

[Heineken]

The real question is what the refined product would cost. Lots, lots more.

Economics is what's really going to drive this issue to the edge.

[fireplaceguy]

$this->bbcode_second_pass_quote('Heineken', 'T')he real question is what the refined product would cost. Lots, lots more.

Economics is what's really going to drive this issue to the edge.

[aahala]

It seems to me the more refinery capacity, the sooner rather than
the later peak will occur.

Humans will consume all the oil available and the more available
the more rapid the consumption.

[SoothSayer]

I found an interesting thread on heavy crudes: here.

The marginal refining capacity in the world cannot process heavy, sour crudes at all, let alone process these crudes into light, sweet products. Converting existing refining capacity to process heavy, sour crudes to produce light, sweet products is expensive and time-consuming. In the U.S., the conversion (for the refiners who are converting) is a multi-year, multi-billion-dollar project. Some refiners have elected to produce light, sweet products only from light, sweet crudes. Others have elected to retire refining capacity. In parts of the world that supply markets with only higher sulfur products or that have dropped out of the market to supply low-sulfur products, little or no conversion will take place and the demand will continue for the diminishing fraction of light, sweet crudes.

Acording to the posters there, refineries CAN be built to process heavy crude ... but ...
* More energy is needed to crack the heavy crude
* Heavy crude viscosity limits flow rates
* Heavy crude refineries need huge capital investment & time
* It is not worth building smal refineries
* Sulphur removal is an extra problem / cost
* Heavy crude is more effective to produce diesel - but demand is for gasoline
* Heavy crude will peak soon thus threatening refinery investments
* Oil companies aren't building refineries for two reasons. First, historically, refineries haven't made a lot of money. The return on investment isn't that great. Second, with the price of crude going up, investing in exploration and production has a significantly higher return. When you compete for investment dollars inside an oil company, E&P wins over refining.
* Sour crude can contain H2S which leads to safety system costs
* Attempting to process heavy crude in light refineries causes production bottlenecks.

So I suppose we need to build a HUGE refinery for heavy & sour crudes, without fussing too much about sulphur extraction or H2S safety, and focus on producing diesel for countries who have weak emissions rules.

If we could persude China to take this diesel then the West could keep the clean oils for itself.

Problem solved. Everyone happy.

[NTBKtrader]

We need gradual demand destruction...

[Zardoz]

$this->bbcode_second_pass_quote('SoothSayer', '.')..Venezuelan gloop...

[Pablo2079]

Isn't Saudi Arabia building some refineries (or a refinery) for it's sour crude? I remember reading that they were going to start exporting more refined product.

I need to find that article.....

[SoothSayer]

$this->bbcode_second_pass_quote('Zardoz', '')$this->bbcode_second_pass_quote('SoothSayer', '.')..Venezuelan gloop...

[nth]

heavy crude as defined above does not really change PO.
It does change the price of oil.

Right now, we have shortage of heavy crude refining capacity. There are about 2-3mbpd of known capacity that is being shut in due to price difference of crude prices. Most of this is Saudi Arabia. US has about 30kbpd of shut in. If there are any large fields being shut in due to quality of crude outside of OPEC, then I have not heard of it. Only Iran and Saudi Arabia have significant amounts held back as far as I can tell from various news sources.

As refineries and products, heavy crude can be refined to gasoline or almost any other type of fuel. It is not diesel only. Yields are lower than sweet crude, so 1mb of heavy does not equal 1mb of sweet. Also, it does not have to produce more toxic air pollution. It does need to produce more sulphur, but it can be trapped. Yes, it is a lot more expensive. For a sweet crude refinery to be modified to sour heavy crude, it requires major rerouting the pipeline structure and adding additional equipment. That is why you get quotes like it is easier to built a new refinery than retrofit existing one.

Venezuela heavy crude can be and is being made into gasoline and other refined products. The boiler fuel was done in the past when oil prices were $10 and they were looking for new markets. Venezuela right now is trying to get out of that business. Venezuela's problem with this heavy crude is not refining, but production. Chevron uses steam injection. This has been the most successful method so far. With the new tax system in place, it is impossible for Venezuela to boost production of the Orinco Belt faster than currently plan. Actually, significant slower as investments from the Majors have stopped.

[nth]

$this->bbcode_second_pass_quote('Pablo2079', 'I')sn't Saudi Arabia building some refineries (or a refinery) for it's sour crude? I remember reading that they were going to start exporting more refined product.

I need to find that article.....

[Tyler_JC]

The key problem is the time delay between deciding to utilize the large deposits of heavy crude and that oil reaching the Shell station.

If Peak Oil is going to happen in the next few years, heavy crude will help to lower the rate of decline in global oil production (for a while, anyway) but won't bring global oil production over the top output reached in say 2007.

However, we will never see $40 oil again. Most of these heavy crude oil projects only look profitable with oil trading in the 60+ range, that's why they weren't considered untill now.

Many countries have large deposits of low grade oil-like resources. The reserves of Canada's tar sands, America's oil shale, Venezuela's oil shale, etc. could potentially number in the hundreds of billions of barrels of extractable oil.

Pretending for the moment that all of these oil-like resources are actually extractable and could be extracted at reasonable prices and at any rate we choose. (:roll:). How much time would we get?

Let's say we have 300 Billion barrels of this heavy oil that we can suck out of the ground. (a fairly generous estimate)

What do the production numbers look like?

We currently use/produce 30 billion barrels a year.

If demand increases 2.5% a year and supply from conventional sources drops 2.5%, how long can we keep up the game with heavy oil?

Not long.

Assuming we can magically increase heavy oil production ignoring geology...we get 20 years. Granted, that's a lot of time, but it's not a real number because it relies on several dozen laughable assumptions. The real number is closer to 5-10 years.

By 2026 we would be using 48 billion barrels a year.
Conventional oil production would be down to 18.5 billion barrels
Heavy oil would be forced to make up for 30 billion barrels of missing oil production.

Funny, that is exactly the amount of oil we use right now!

And the next year, heavy oil production would drop to 0...

With 2/3 of our oil production gone in one year, the Mad Max biker gangs would surely come out of the woodwork.

Conclusion?

Heavy oil will buy us a few years, but it's not a long term solution. (Or frankly, even a middle term solution)

[nth]

Tyler_JC,

If you are going to lump Canadian, US, and Venezuelan and any other carbon rich sources, then you can push out PO for many many years.

In reality, these resources will only be exploited heavily after PO, assuming PO before 2020. Only Canada has accelerated investment. US and Venezuela have only minimal investments. US due to technological barriers and Venezuela due to tax and politics.

As you pointed out, these things don't flow like water. There is no way we can ramp these up to produce a lot of oil if measured by production/reserve ratio. Huge reserves with small production that will last many years.

[Tanada]

$this->bbcode_second_pass_quote('Zardoz', '')$this->bbcode_second_pass_quote('SoothSayer', '.')..Venezuelan gloop...

[nth]

Tanada,

There are a couple of projects refining this into higher quality oil for refinery. You make it sound like it is no good for gasoline, etc....

[RdSnt]

As the shift is more and more towards heavier crudes and tar sands and shales, the decline of petroleum supplies will accelerate.

This is primarily due to the inevitable rapid decline in EROEI and our foolish way of measuring the success of development in dollars spent and gained (profit) as apposed to energy expended.

Prudhoe Bay had a negative EROEI thoroughout it's entire production history, yet becuase the company elites made fat bonuses and good profits the project was deemed a success.