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THE International Energy Agency (IEA) Thread pt 1 (merged) A

Discuss research and forecasts regarding hydrocarbon depletion.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby Doly » Thu 27 Jul 2006, 08:10:10

$this->bbcode_second_pass_quote('ElijahJones', 'I')f you fall into that demographic for whom current prices force a change in employment, ie you cannot afford to drive to work, so you have to find a lower paying job nearby that allows you to ditch the car then effectively peak oil has altered the income distribution in the nation.


But will things pan out like that? I see another scenario as more likely: companies have tighter margins than individuals, generally speaking. Peak oil will affect companies more than it affects individuals. So it won't be a matter of changing your job because you can't afford to drive, but a matter of losing your job because your company goes into bankrupcy.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby shortonoil » Thu 27 Jul 2006, 09:32:41

Doly said:

$this->bbcode_second_pass_quote('', 'S')o it won't be a matter of changing your job because you can't afford to drive, but a matter of losing your job because your company goes into bankrupcy.


Right on, companies have fixed overhead. As demand drops, from increasing oil prices, the average profit margin of 6%, for most companies, soon disappears and their fixed overhead eats them up. Stagflation sets in, as more people loss their jobs and the unraveling process sets in. The FED and every other central bank in the world are now expanding the money supply at a frantic pace to soften the blow. Once companies begin to realize that their profits are just a matter of inflation and not real money, they will start cutting back big time. I think the oil companies have already figured this out.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby FairMaiden » Thu 27 Jul 2006, 15:31:21

$this->bbcode_second_pass_quote('', ' ')That is assuming a declining cost of production.


If the price of oil is going up - then the cost of production for everything will also increase, no? I believe I read somewhere that the cost of the Alberta oil sands project was way higher than expected bc raw materials, transportation, etc costs were much higher at the current oil prices.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby Zardoz » Thu 27 Jul 2006, 16:07:07

$this->bbcode_second_pass_quote('FairMaiden', '')$this->bbcode_second_pass_quote('', ' ')That is assuming a declining cost of production.


If the price of oil is going up - then the cost of production for everything will also increase, no?...


Amen, sister:

Big oil's pain
$this->bbcode_second_pass_quote('', 'B')etween 2001 and 2004, the average costs to operate a land-based oil well in the U.S. nearly tripled...


Oilsands Sector Shudders Under Growing Cost and Environmental Pressures
$this->bbcode_second_pass_quote('', 'S')ome of the sparkle appears to be coming off what has been the jewel of Canada's energy sector, as the northern Alberta oilsands face runaway costs, unbridled development and mounting environmental concerns.
"Thank you for attending the oil age. We're going to scrape what we can out of these tar pits in Alberta and then shut down the machines and turn out the lights. Goodnight." - seldom_seen
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby joewp » Thu 27 Jul 2006, 17:12:08

$this->bbcode_second_pass_quote('Zardoz', '
')Oilsands Sector Shudders Under Growing Cost and Environmental Pressures
$this->bbcode_second_pass_quote('', 'S')ome of the sparkle appears to be coming off what has been the jewel of Canada's energy sector, as the northern Alberta oilsands face runaway costs, unbridled development and mounting environmental concerns.

And this from that link too:
$this->bbcode_second_pass_quote('', ''')'And they have to tear up four tonnes of landscape, all for one barrel of oil,'' Gore said in the latest issue of Rolling Stone.

''It is truly nuts. But you know, junkies find veins in their toes. It seems reasonable, to them, because they've lost sight of the rest of their lives.''

Alberta Premier Ralph Klein retaliated, saying: ''I don't know what he proposes the world run on, maybe hot air.''


Maybe that's all we'll have left when the oilsands become too expensive (in dollars and energy) to extract, Ralph!
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby Fergus » Thu 27 Jul 2006, 17:21:52

$this->bbcode_second_pass_quote('joewp', '')$this->bbcode_second_pass_quote('Zardoz', '
')Oilsands Sector Shudders Under Growing Cost and Environmental Pressures
$this->bbcode_second_pass_quote('', 'S')ome of the sparkle appears to be coming off what has been the jewel of Canada's energy sector, as the northern Alberta oilsands face runaway costs, unbridled development and mounting environmental concerns.

And this from that link too:
$this->bbcode_second_pass_quote('', ''')'And they have to tear up four tonnes of landscape, all for one barrel of oil,'' Gore said in the latest issue of Rolling Stone.

''It is truly nuts. But you know, junkies find veins in their toes. It seems reasonable, to them, because they've lost sight of the rest of their lives.''

Alberta Premier Ralph Klein retaliated, saying: ''I don't know what he proposes the world run on, maybe hot air.''


Maybe that's all we'll have left when the oilsands become too expensive (in dollars and energy) to extract, Ralph!


Wow, that sentence says a lot. A Premier (not sure what thats equivalent to in American politics, but an offical none the less) saying we have to do drastic things to get a barrell of oil or else! Did not refute the stupidity of it, but defended policy thats seems silly instead? Things that make you say 'Hmmmm....'
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby PolestaR » Thu 27 Jul 2006, 20:25:05

If Al Gore is right and they have to "tear up" 4 tonnes of landscape for one barrel of oil, could someone point out to me how you wouldn't burn more than that one barrel of oil doing all that work?

It sounds highly unreasonable that they can make money IF so much energy has to go into it just to get one barrel out. Isn't the oil sands feasible when oil is at $40/barrel, does that mean they can still get a profit at $40/barrel? If so it must mean Al Gore is lying, or somehow the whole operation is subsidized by someone.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby Tanada » Thu 27 Jul 2006, 21:06:24

$this->bbcode_second_pass_quote('PolestaR', 'I')f Al Gore is right and they have to "tear up" 4 tonnes of landscape for one barrel of oil, could someone point out to me how you wouldn't burn more than that one barrel of oil doing all that work?

It sounds highly unreasonable that they can make money IF so much energy has to go into it just to get one barrel out. Isn't the oil sands feasible when oil is at $40/barrel, does that mean they can still get a profit at $40/barrel? If so it must mean Al Gore is lying, or somehow the whole operation is subsidized by someone.


4 tons of landscape is nothing, I can excavate that much with a small construction backhoe burning less than a cup of diesel in the process. Add in transport to the processing plant and you might burn a couple gallons. That leaves 39.8 gallons to be processed and upgraded into fuel products.
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Made weak by time and fate, but strong in will
To strive, to seek, to find, and not to yield.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby PolestaR » Thu 27 Jul 2006, 21:32:36

$this->bbcode_second_pass_quote('Tanada', '4') tons of landscape is nothing, I can excavate that much with a small construction backhoe burning less than a cup of diesel in the process. Add in transport to the processing plant and you might burn a couple gallons. That leaves 39.8 gallons to be processed and upgraded into fuel products.


Excavation is just the start of the process though, transporting, grinding/whatever else they do to it, 4 tonnes of raw material to process a barrel seems like it would use quite a lot of energy.

And by 4 tonnes is that 4000KG? Or some weird american metric. If it is 4000KG then it takes 4000KG to get 160KG of oil.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby Russian_Cowboy » Fri 28 Jul 2006, 02:22:30

$this->bbcode_second_pass_quote('PolestaR', '')$this->bbcode_second_pass_quote('Tanada', '4') tons of landscape is nothing, I can excavate that much with a small construction backhoe burning less than a cup of diesel in the process. Add in transport to the processing plant and you might burn a couple gallons. That leaves 39.8 gallons to be processed and upgraded into fuel products.


Excavation is just the start of the process though, transporting, grinding/whatever else they do to it, 4 tonnes of raw material to process a barrel seems like it would use quite a lot of energy.

And by 4 tonnes is that 4000KG? Or some weird american metric. If it is 4000KG then it takes 4000KG to get 160KG of oil.


Polestar, I am agree that mining oil sands is an environmental and economic madness. The company I am working for is producing oil sands using the steam assisted gravity drainage. It involves no excavation, just drilling a double well one above the other, heating the upper well walls, and getting heavy oil right from the lower oilwell. AFAIK, 90% of the oil sand deposits in Canada are only accessible via drilling.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby Dave-oz » Fri 28 Jul 2006, 04:28:47

What everyone in this post has overlooked is that at each of the new price points ofr oil over the past 3 years their has been demand destruction, especially in developing countries. So the current 84-85 mbpd 'plateau' represents probably, what?, 90-95mbpd of demand, only some of which can be met. Latest story is that Ethiopia's foreign reserves have been reduced by 20% this year paying for oil imports at $70-75 pb, and many towns have fuel shortages:
http://allafrica.com/stories/200607240019.html
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby PolestaR » Fri 28 Jul 2006, 04:29:55

$this->bbcode_second_pass_quote('Russian_Cowboy', 'P')olestar, I am agree that mining oil sands is an environmental and economic madness. The company I am working for is producing oil sands using the steam assisted gravity drainage. It involves no excavation, just drilling a double well one above the other, heating the upper well walls, and getting heavy oil right from the lower oilwell. AFAIK, 90% of the oil sand deposits in Canada are only accessible via drilling.


I must admit I am rather ignorant on the whole process of obtaining oil from the oil sand, though it does interest me somewhat. I don't think it requires a whole lot of research to realize how much damage it does to the environment though. :)
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby PolestaR » Fri 28 Jul 2006, 04:33:28

$this->bbcode_second_pass_quote('Dave-oz', 'W')hat everyone in this post has overlooked is that at each of the new price points ofr oil over the past 3 years their has been demand destruction, especially in developing countries. So the current 84-85 mbpd 'plateau' represents probably, what?, 90-95mbpd of demand, only some of which can be met. Latest story is that Ethiopia's foreign reserves have been reduced by 20% this year paying for oil imports at $70-75 pb, and many towns have fuel shortages:
http://allafrica.com/stories/200607240019.html


Good point. I don't see too many people wondering how much oil we would be consuming if the price was currently ~$30. That could be because people assuming it wouldn't change too much, but alas, it is naive to think the poorer countries haven't stopped buying as much.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby seahorse2 » Fri 28 Jul 2006, 09:26:21

Russiancowboy,


I'm concerned about the amount of natural gas use in Canadian oil sands production. There are reports that North American natural gas is peaking or has peaked. Do you share this concern?

Do you see THAI coming online soon in Canadian development? If so, would it significantly reduce any concerns about natural gas usage for Canadian oil sands development?
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Unread postby shortonoil » Fri 28 Jul 2006, 11:40:20

seahorse2 said:

$this->bbcode_second_pass_quote('', 'I')'m concerned about the amount of natural gas use in Canadian oil sands production. There are reports that North American natural gas is peaking or has peaked. Do you share this concern?



From what I have read, most of the NG used in the sands production is stranded gas. Fields that are too small to make it economically viable to build a pipe line into, to bring out the gas. I have also read (somewhere?) that some people are concerned that these gas reserves will not last that long, but the real problem with the concept of the tar sands lays in the declining ERoEI of conventional oil. As it declines, which it will indefinitely, thanks to the Laws of Thermodynamics, direct and indirect energy costs will increase. The rising cost of energy, in energy terms, is already seriously affecting the entire oil sector. Even conventional oil development is seeing declines in high energy budget environments, that is offshore development.

From WorldOil.com

$this->bbcode_second_pass_quote('', 'R')espondents indicated a marked focus shift away from offshore drilling. Worldwide, only 12% expect to shift their focus toward offshore versus 32% that expected to do so a year ago. This may be because, although reservoirs on land tend to be smaller than offshore, they are generally less costly to develop and can be brought online more quickly.


http://www.worldoil.com/MAGAZINE/MAGAZI ... R=Feb-2006

This is the result of the increasing energy cost of producing oil. Since at least 1/3 of the direct exploration and development costs of oil is energy:

http://dieoff.org/page197.htm

$this->bbcode_second_pass_quote('', 'A') quantity of energy equivalent to about 1 1/2 bbl of petroleum was used per foot of drilling by the petroleum exploration and development industry in 1977, a bit more than half directly as fuel and a bit less than half as fuel to produce the equipment and services used. This quantity has been increasing in recent years (Figure 7.18b) as the petroleum industry has increasingly drilled deeper, offshore, and in hostile environments such as Alaska and as a larger percentage of petroleum is produced using energy-intensive secondary and tertiary recovery. An additional 0.6 bbl equivalent per mean foot was used in 1977 for refining petroleum, The energy investments, yields, and their ratio (EROI) are given in Figure 7.19.


We will see ever declining development of low ERoEI sources, like the tar sands. Natural gas from comerically viable fields will not be used for very long to produce oil. The First and Second Law will not permit it.

"Paper money eventually returns to its intrinsic value: zero." --Voltaire
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby Russian_Cowboy » Fri 28 Jul 2006, 23:49:56

$this->bbcode_second_pass_quote('seahorse2', 'R')ussiancowboy,

I'm concerned about the amount of natural gas use in Canadian oil sands production. There are reports that North American natural gas is peaking or has peaked. Do you share this concern?

Do you see THAI coming online soon in Canadian development? If so, would it significantly reduce any concerns about natural gas usage for Canadian oil sands development?


I do not know too much about it. Probably there is a way to recycle a part of the oil produced from the tar sands and burn it instead of the gas. Other options might include burning CO+H2 mixture obtained from coal using the Fisher-Tropsch reaction or injecting into wells steam heated by a nuclear or a coal (or maybe wind or solar) power plant.
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Re: Plateau, or no? IEA Supply Chart says "maybe"

Unread postby shortonoil » Sun 30 Jul 2006, 10:30:50

Russian_Cowboy said:

$this->bbcode_second_pass_quote('', 'O')ther options might include burning CO+H2 mixture obtained from coal using the Fisher-Tropsch reaction or injecting into wells steam heated by a nuclear or a coal (or maybe wind or solar) power plant.


I once did a calculation on the nuclear energy requirement necessary to produce the needed US 20mb/d oil demand from the tar sands. It presently takes 600 million cubic ft of NG to produce 1 million barrels of oil. That quantity can not be reduced very much because the bitumem needs hydrogen, that comes from NG, to convert it into crude. To replace that energy would require 365 1000 megawatt reactors (your average large reactor) running 24-7. Oil from the tar sands to offset Peak is nothing more than a pipe dream.


"Earth is an insane asylum, to which the other planets deport their lunatics." --Voltaire(Memnon the Philosopher) 1761.
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