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Question: Decline Vs. New Drilling

General discussions of the systemic, societal and civilisational effects of depletion.
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Re: Question: Decline Vs. New Drilling

Unread postby mekrob » Wed 20 Sep 2006, 13:15:17

$this->bbcode_second_pass_quote('AirlinePilot', 'A')ll great points Mekrob.

I'd like to add a very key issue here. Those estimates are for everything going PERFECTLY. No Hurricanes, No Middle East conflict.
Moderate groth in demand, no Wars, no Venezuela, no China, plenty of workers and infrastructure, and a VIABLE WORLD ECONOMY.

Get the picture?

I think its coming MUCH sooner than 15 years.


Not to mention full availability of the oil for the importers. If the producers decide to cut us off (partially or wholly), then while we have the capacity, we won't have the supply. This is fairly likely on a world-wide scale, at least partially for every nation since they'd rather sell it at higher prices to themselves than for $60-70 to Americans in SUV's.
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Re: Question: Decline Vs. New Drilling

Unread postby Dezakin » Wed 20 Sep 2006, 15:12:03

$this->bbcode_second_pass_quote('mekrob', '')$this->bbcode_second_pass_quote('', 'U')nconventional oil easily represents trillions of barrels. Its everything from ultra-heavy tars to coal and gas being spun into liquid fuels.


I'd really like to know where you get that information (of trillions of barrels of oil). From what I know, the US has the equivalent of 200 bln barrels in coal. There's supposedly another trillion in shale and about 3 trillion in tar sands and ultra-heavy (Orinco Belt in Ven.). But those 4 trillion barrels are total reserves converted into liquid oil (I'm not sure if API 5 degree or less oil counts as a liquid).


http://en.wikipedia.org/wiki/Coal

Coal liquefaction processes yield at least 2 barrels per ton.

$this->bbcode_second_pass_quote('mekrob', 'W')e're still not so sure of the net return of energy on shale oil. It will likely be 1:1, but with improvements can get up to 1.5:1. But you have to consider this: they are using only the best oil in the best area. Once you factor in the fact that you can't extrapolate this to the entire Green River Formation to conclude that all of the "oil" shale will have that same EROEI. I'd imagine less than 10% having an EROEI higher than 1, simply because the EROEI of the current crop is so damn low. Thus, only a couple hundred billion barrels is recoverable, maybe.

You have to do this again to tar sands and ultra-heavy oil. Trillions of barrels of "oil" there, but how much is really there? The EROEI is pretty low, I believe around 1.5:1 (thus shale is probably even lower). Again, only a small part is actually going to be recoverable. Once that NG is gone, they're going to have a hard time getting to that tar, especially since 80% of it is too deep to get with surface mining.


Energy return is vastly overrated in importance. The end product is fuel, not energy. You can stick a nuke on top of any of these sites for process heat; Conceptually you turn uranium into gasoline. We'll likely do that shortly as natural gas becomes too precious to burn. It will likely become a hydrogen source for coal liquefaction as global hydrocarbon demand climbs.
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Unread postby FatherOfTwo » Wed 20 Sep 2006, 16:32:17

$this->bbcode_second_pass_quote('Dezakin', 'W')hen the price is right, production can climb.


Sure, but only within limits. If the price of oil was $150, there still wouldn't be that much more oil sands development going on in Alberta. There just isn't the bandwidth to do it. Labor shortages, housing shortages, infrastructure problems etc. You can dump all the money into the area you want, those things aren't going to change overnight. In fact, the Canadian and Alberta governments are talking about slowing things down.

$this->bbcode_second_pass_quote('Dezakin', 'N')ot many with capital are that confidant in 50 dollars per barrel oil or higher for extended lengths of time, or we'd be seeing development of coal liquefaction on a much larger scale.


And I'd bet that they aren't confident in $50/barrel because few truly understand that peak production of conventional oil is here, or a few years off at most. No one has good enough data to predict, so they will stick to the old paradigm. They will always stick to the old paradigm until it is so blatantly obvious that we've passed peak that they'll feel safe enough to say, ok - the game has changed.

Earlier this year the energy trading firm that I deal with put out their long term price targets (2008) for WTI. It was only $38US. I laughed, I asked the guy I deal with (who is peak oil aware) what the deal was, why are the targets so low?

"We like to err on the side of caution. $37 represents the 200 week moving average on the price of WTI. The 12 month strip price is rising, so we may be in for some volatility in the coming months."
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Re: Question: Decline Vs. New Drilling

Unread postby Troyboy1208 » Wed 20 Sep 2006, 16:57:55

Be careful citing Wikipedia. It is not considered a legitimate source. Articles can be edited. Often people with ulterior motives will re-arrange articles more to their liking. There have been some famous cases of this in politics when you look up political candidates. People in the opposite party would edit the biography and make the individual look bad or they would edit their own candidate's biography to make them look better. As an educator it is generally accepted that students cannot use Wikipedia as a reference. I have found scores of errors in articles on that site. Just dont want you guys to get caught with your pants down thats all.
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Re: Question: Decline Vs. New Drilling

Unread postby mekrob » Wed 20 Sep 2006, 17:15:32

$this->bbcode_second_pass_quote('', 'B')e careful citing Wikipedia. It is not considered a legitimate source. Articles can be edited. Often people with ulterior motives will re-arrange articles more to their liking.


Thank you. I hate it when people cite it. It's fine if you do as long as you make sure that the article has proper references. It's far too easy to manipulate the truth. It's the equivalent of getting your news from Fox.

$this->bbcode_second_pass_quote('', 'C')oal liquefaction processes yield at least 2 barrels per ton.


Yes, I forgot about that. So about 300-400 bln in US coal reserves which puts peak off for 1650-2200 days: about 5 years. Yippee.

$this->bbcode_second_pass_quote('', 'E')nergy return is vastly overrated in importance. The end product is fuel, not energy.


This is economic genius, but practical stupidity. It simply doesn't work when you are trying to use that energy to power a nation. If you keep losing more and more energy and at an increasing rate (as the good shale and tar is gone), then you keep digging yourself into a deeper hole. What it is good for though is keeping this idiotic paradigm going and brining on another scam in which to make money, not energy. We are after energy buddy, not money.
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Re: Question: Decline Vs. New Drilling

Unread postby Dezakin » Wed 20 Sep 2006, 18:08:28

$this->bbcode_second_pass_quote('mekrob', '')$this->bbcode_second_pass_quote('', 'B')e careful citing Wikipedia. It is not considered a legitimate source. Articles can be edited. Often people with ulterior motives will re-arrange articles more to their liking.


Thank you. I hate it when people cite it. It's fine if you do as long as you make sure that the article has proper references. It's far too easy to manipulate the truth. It's the equivalent of getting your news from Fox.


Check the original source then; Attacking wikipedia for data that most agree on is a red-herring in this discussion. Most people agree that there are 1 trillion tons of recoverable coal reserves today.

$this->bbcode_second_pass_quote('', '')$this->bbcode_second_pass_quote('', 'C')oal liquefaction processes yield at least 2 barrels per ton.


Yes, I forgot about that. So about 300-400 bln in US coal reserves which puts peak off for 1650-2200 days: about 5 years. Yippee.


400 billion barrels? At 20 million barrels per day this is 20000 days worth right? 54 years? Or are you referring to the global market...

At the most conservative estimate using only US coal. 2 trillion barrels worth if liquefied using global coal reserves. Say we use 100 million barrels per day, this is still 25 years...

$this->bbcode_second_pass_quote('', '')$this->bbcode_second_pass_quote('', 'E')nergy return is vastly overrated in importance. The end product is fuel, not energy.

This is economic genius, but practical stupidity. It simply doesn't work when you are trying to use that energy to power a nation. If you keep losing more and more energy and at an increasing rate (as the good shale and tar is gone), then you keep digging yourself into a deeper hole. What it is good for though is keeping this idiotic paradigm going and brining on another scam in which to make money, not energy. We are after energy buddy, not money.
Theres enough nuclear energy to power as much as you could ever want. We're after fuel.
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Re: Question: Decline Vs. New Drilling

Unread postby mekrob » Thu 21 Sep 2006, 13:01:39

$this->bbcode_second_pass_quote('', '4')00 billion barrels? At 20 million barrels per day this is 20000 days worth right? 54 years? Or are you referring to the global market...

At the most conservative estimate using only US coal. 2 trillion barrels worth if liquefied using global coal reserves. Say we use 100 million barrels per day, this is still 25 years...


Why do you still assume that peak oil is about reserves? It isn't. It is about production rate. What is the production rate of coal going to be at its peak? From mathematical analysis I've seen, about 3.5 bln tons per year somewhere between 2040 and 2050 which is about three times current production rates. How can you expect coal to save us when it won't be for 40 years that we are exploiting it at those figures?

And in your figures of P/R of CTL, you always seem to neglect electricity. Now why is that? Don't forget to add in a 40% increase in coal demand for electricity as NG begins to deplete fast in the US. Or the fact that not all coal has the same energy density. It's always nice to gloss over those facts, isn't it?

$this->bbcode_second_pass_quote('', 'W')e're after fuel.


No, we're after energy. If we're after fuel, it's because we're using slave labor to convert energy from one form into another form (fuel), which isn't that good of a thing, ya know? We're looking to make sure that we don't have to revert back to the Middle Ages, where 100 people do the work so that 1 person and his mistress can drive SUV's. At least, I'm not for that. You might be.
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Re: Question: Decline Vs. New Drilling

Unread postby Dezakin » Thu 21 Sep 2006, 14:10:18

$this->bbcode_second_pass_quote('mekrob', '')$this->bbcode_second_pass_quote('', '4')00 billion barrels? At 20 million barrels per day this is 20000 days worth right? 54 years? Or are you referring to the global market...

At the most conservative estimate using only US coal. 2 trillion barrels worth if liquefied using global coal reserves. Say we use 100 million barrels per day, this is still 25 years...


Why do you still assume that peak oil is about reserves? It isn't. It is about production rate. What is the production rate of coal going to be at its peak? From mathematical analysis I've seen, about 3.5 bln tons per year somewhere between 2040 and 2050 which is about three times current production rates. How can you expect coal to save us when it won't be for 40 years that we are exploiting it at those figures?


We can safely assume that the reserve base is a good place to start given we dont even know when sweet light crude peaks. Now, if you want to change the game into how can coal save us... It pushes the peak of liquid hydrocarbons into the future by some time. I only claimed we had trillions of barrels of unconventional oil reserves. I believe that we'll be exploiting most of it...

In any case, given the vast amount of hydrocarbon production from other sources, it doesnt have to come all online at once, only fast enough to make up for depletion. I believe it can, and so many here believe its impossible.

$this->bbcode_second_pass_quote('', 'A')nd in your figures of P/R of CTL, you always seem to neglect electricity. Now why is that? Don't forget to add in a 40% increase in coal demand for electricity as NG begins to deplete fast in the US. Or the fact that not all coal has the same energy density. It's always nice to gloss over those facts, isn't it?


Electricity demand is relatively small compared to the hydrocarbon demand, especially when we're using such conservative estimates for coal conversion. (the average energy content per ton of coal is closer to 4.7 barrels per ton)

$this->bbcode_second_pass_quote('', '')$this->bbcode_second_pass_quote('', 'W')e're after fuel.


No, we're after energy. If we're after fuel, it's because we're using slave labor to convert energy from one form into another form (fuel), which isn't that good of a thing, ya know? We're looking to make sure that we don't have to revert back to the Middle Ages, where 100 people do the work so that 1 person and his mistress can drive SUV's. At least, I'm not for that. You might be.
Oh whatever... I present evidence that counters your viewpoint and now I'm out to enslave hundreds for my estate? Don't be so juvenile.

Energy we have plenty of... Its been illustrated over and over that we have enough nuclear fuel to build reactors to fuel all of civilization for the next twenty thousand years at the low end.
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Re: Question: Decline Vs. New Drilling

Unread postby mekrob » Thu 21 Sep 2006, 14:40:03

$this->bbcode_second_pass_quote('', 'W')e can safely assume that the reserve base is a good place to start given we dont even know when sweet light crude peaks


Didn't that happen last year? Energy Bulletin

$this->bbcode_second_pass_quote('', 'E')lectricity demand is relatively small compared to the hydrocarbon demand, especially when we're using such conservative estimates for coal conversion.


$this->bbcode_second_pass_quote('', 'h')ttp://www.eia.doe.gov/aer/txt/ptb1101.html


Small? It contributed 113 quadrillion BTU's in 2004 out of a total of 443 quads. That's more than 25%.

$this->bbcode_second_pass_quote('', '(')the average energy content per ton of coal is closer to 4.7 barrels per ton)


We may be getting confused here. If we're talking about CTL, then we shouldn't use energy content, but energy content of a barrel equivalent, that is after the inefficiency of CTL process. I believe it is 60%. That number is from JD, so who knows. Have you seen different? If that number is correct, then about 2.5-3.

$this->bbcode_second_pass_quote('', 'I')t pushes the peak of liquid hydrocarbons into the future by some time.

Ok, let's add in 2 trillion barrels of net oil, brand new. That's only 30 years that it will push peak back.

$this->bbcode_second_pass_quote('', 'D')on't be so juvenile.

I apologize. I incorrectly read into something you said. Plus I think I was pissed off when I said that.

Anyway, I enjoyed this. This is always brought up again and again and I tend to forget the numbers. The simple fact that people like you (I hate to make it sound like that) seem to forget is that while we may or may not possess the ability to get out of this via coal, CTL, nuclear, etc, there is a huge force called society that is going to keep us from going along that path. Even now, there is still a good amount of opposition to nuclear and such. By the time peak oil hits, which should be in the next decade or so, it will have a major toll upon the economy, making scaling up nuclear and such even harder, although there would be a greater willingness from the people.

There's simply too much at stake with oil. We have some nice big companies that make plenty of money. A DC that is oblivious to the situation. A population that is even more so who is in love with the car culture, gasoline car culture.

This is where the doom culture comes from. While there may be plenty of energy around us, that doesn't mean that we'll actually do the right thing.
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Re: Question: Decline Vs. New Drilling

Unread postby Dezakin » Thu 21 Sep 2006, 15:48:25

$this->bbcode_second_pass_quote('mekrob', '')$this->bbcode_second_pass_quote('', 'W')e can safely assume that the reserve base is a good place to start given we dont even know when sweet light crude peaks


Didn't that happen last year? Energy Bulletin

I don't know. I'm not sure we'll really know until several years after the fact when stagnation or decline is obvious.

$this->bbcode_second_pass_quote('', '')$this->bbcode_second_pass_quote('', 'h')ttp://www.eia.doe.gov/aer/txt/ptb1101.html


Small? It contributed 113 quadrillion BTU's in 2004 out of a total of 443 quads. That's more than 25%.

A larger percentage than I thought.

$this->bbcode_second_pass_quote('', '')$this->bbcode_second_pass_quote('', '(')the average energy content per ton of coal is closer to 4.7 barrels per ton)

We may be getting confused here. If we're talking about CTL, then we shouldn't use energy content, but energy content of a barrel equivalent, that is after the inefficiency of CTL process. I believe it is 60%. That number is from JD, so who knows. Have you seen different? If that number is correct, then about 2.5-3.

I prefer to use 2 for the number because it errs on the side of caution, but with external energy sources and chemical feedstocks, the conversion rate can be much higher, if the market pricing is right. For instance, if you use natural gas for hydrogenation of the syngas, you don't have to devote nearly as much coal to the parasitic process of hydrogen generation. If you have a giant reactor generating hydrogen from water, all you need from the coal is to partially oxidize it for the CO part of syngas.

I'm not suggesting that these processes will be used anytime soon, but they are certainly possible, where coal and natural gas resources are located close together or when coal gets expensive enough to justify external hydrogenation.

$this->bbcode_second_pass_quote('', '')$this->bbcode_second_pass_quote('', 'I')t pushes the peak of liquid hydrocarbons into the future by some time.

Ok, let's add in 2 trillion barrels of net oil, brand new. That's only 30 years that it will push peak back.

Thats a huge difference between massive economic shock due to lack of fuel and slow transition as fuel prices rise though. And fuel prices will rise because unconventional oil is much more expensive to process.

$this->bbcode_second_pass_quote('', 'A')nyway, I enjoyed this. This is always brought up again and again and I tend to forget the numbers. The simple fact that people like you (I hate to make it sound like that) seem to forget is that while we may or may not possess the ability to get out of this via coal, CTL, nuclear, etc, there is a huge force called society that is going to keep us from going along that path. Even now, there is still a good amount of opposition to nuclear and such. By the time peak oil hits, which should be in the next decade or so, it will have a major toll upon the economy, making scaling up nuclear and such even harder, although there would be a greater willingness from the people.

There's simply too much at stake with oil. We have some nice big companies that make plenty of money. A DC that is oblivious to the situation. A population that is even more so who is in love with the car culture, gasoline car culture.

This is where the doom culture comes from. While there may be plenty of energy around us, that doesn't mean that we'll actually do the right thing.
I dont think that the ride will be totally smooth, I just dont forsee a giant implosion.

My biggest concern right now is the incredibly conservative position of the oil majors. They all expect the oil price to crash soon, with memories of the asian financial crisis fresh in mind, and so they are very reluctant to invest in new infrastructure. Another five years and those positions will change, massive investments in infrastructure will be underway, and we'll have a temporary glut... albeit a high priced glut given production costs.

It certainly doesn't help that there are countries that seem to be positively insane in energy policy, like Germany; They expect to have economic growth, cut CO2 emitions, and phase out nuclear all at the same time. I guess their plan is to import electricity from France.

China and India should likewise should only be building new nuclear plants. They're gonna need the coal for fuel.
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Re: Question: Decline Vs. New Drilling

Unread postby RdSnt » Thu 21 Sep 2006, 20:18:21

I have to strongly disagree with this particular assessment. Heavy crudes are more vunerable to the decline in conventional petroleums than any other market because they rely on them for extraction.
No natural gas, no heavy crude.
Plus, re-read FatherofTwo's good outline of the problems of rapid development. All of that is dependent on ready and affordable energy.
As pressure mounts to bring resources to market faster and faster there is a magnification of the fragility of the whole system.

$this->bbcode_second_pass_quote('Dezakin', '')$this->bbcode_second_pass_quote('mekrob', '')$this->bbcode_second_pass_quote('', '
')The development of the tar sands seem to indicate that the answer is yes.


On top of the previous posts, look at how much it produces. Only about 1 mpd. At peak, it will probably be only a few million barrels per day (3.5 by 2015 is projected). It will probably level off at about 5 mpd. Even at 5 mpd, that will only make up for the decline in conventional fields by about 15 months. Add in new demand, and it's about 8 months. Every little bit counts, but that still isn't much.

Again, 1 trillion new barrels of oil, 150 mpd (not 5 mpd from tar sands) and peak is put off by 15 years. Not 500, not 100, not 50. 15! And I don't see us finding a 1,000 gigabarrel field anytime soon.

Unconventional oil easily represents trillions of barrels. Its everything from ultra-heavy tars to coal and gas being spun into liquid fuels.

The sweet light crude peak wont be noticed because it will just be a climb in price reflecting production costs from these unconventional sources as total liquid hydrocarbon production continues to climb. The liquid hydrocarbon peak is some ways further off.
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Re: Question: Decline Vs. New Drilling

Unread postby RdSnt » Thu 21 Sep 2006, 20:26:23

My god, will you please read about thermodynamics before you make these "perpetual motion" claims.

$this->bbcode_second_pass_quote('Dezakin', '
')I prefer to use 2 for the number because it errs on the side of caution, but with external energy sources and chemical feedstocks, the conversion rate can be much higher, if the market pricing is right. For instance, if you use natural gas for hydrogenation of the syngas, you don't have to devote nearly as much coal to the parasitic process of hydrogen generation. If you have a giant reactor generating hydrogen from water, all you need from the coal is to partially oxidize it for the CO part of syngas.

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Re: Question: Decline Vs. New Drilling

Unread postby Dezakin » Thu 21 Sep 2006, 20:47:41

$this->bbcode_second_pass_quote('RdSnt', 'I') have to strongly disagree with this particular assessment. Heavy crudes are more vunerable to the decline in conventional petroleums than any other market because they rely on them for extraction.
No natural gas, no heavy crude.


Heavy crudes require energy inputs to process, sure. We can provide that by using some of the energy from the product, but eventually we'll use techniques like in-situ recovery of shale by just building a big nuclear reactor for the process heat.

Also coal liquefaction doesnt require any extra energy inputs. You can get all the hydrogen you want from the water shift reaction, albeit at lower efficiencies than from natural gas.

$this->bbcode_second_pass_quote('RdSnt', 'M')y god, will you please read about thermodynamics before you make these "perpetual motion" claims.

$this->bbcode_second_pass_quote('Dezakin', '
')I prefer to use 2 for the number because it errs on the side of caution, but with external energy sources and chemical feedstocks, the conversion rate can be much higher, if the market pricing is right. For instance, if you use natural gas for hydrogenation of the syngas, you don't have to devote nearly as much coal to the parasitic process of hydrogen generation. If you have a giant reactor generating hydrogen from water, all you need from the coal is to partially oxidize it for the CO part of syngas.


Where, I wonder, do you get the idea that I don't understand thermodynamics or that I imply perpetual motion.
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Re: Question: Decline Vs. New Drilling

Unread postby grillzilla » Thu 21 Sep 2006, 22:06:57

I like to add my view from the trenches to FatherofTwo's posts concerning the difficulty in ramping up production.

I work at a small oil company. We can't get people who are qualified and experienced. Money is not nearly the problem as just a shortage of experienced technical workers. Naturally as a small company we get clobbered by the majors when it comes to salary offerings, but still...
We are reduced to getting people who may have engineering degrees or petroleum engineering degrees but have worked in other industries..in short they have the education but no experience. A good technical person in the L.A. basin commands their own price. We have to train them up.

Drilling a well is just extrordinarily perilous if your people have no experience.

How fast can the industry create experience? it takes years. Until the experience base exists you can't just ramp up production. At the best all that happens is a multimillion dollar well gets screwed up, you lose a few tens of thousands of dollars worth of tools, at the worst people die.

We can't rent a drilling rig to save our souls, so we had to buy one..we should get it in a few months (been a few months already). But that means we need a crew...ours is an old field, so blowouts are not nearly the problem that lost circulation will be. Experience, experience.

We had to send a guy to China to be sure we'd get our drilling pipe. All forms of equipment are in short supply too not just drilling rigs and pipe. Gotta wait for Schlumberger to get around to us for casedhole logs.

When I read about how all it will take is a few nukes to ramp up oil shales or tar sands I gotta wonder. The nuke industry can't be in any better shape than the oil industry... how fast can they ramp up?
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Re: Question: Decline Vs. New Drilling

Unread postby FatherOfTwo » Fri 22 Sep 2006, 18:04:20

$this->bbcode_second_pass_quote('RdSnt', 'I') have to strongly disagree with this particular assessment. Heavy crudes are more vunerable to the decline in conventional petroleums than any other market because they rely on them for extraction.
No natural gas, no heavy crude.


I know where you are going, but you're taking that a bit too far to extremes when you say "no natural gas no heavy crude".
For oil sands the main natural gas need is for steam, and that steam can also come from:
-nuclear plants
-THAI technology (which doesn't use steam but uses way, way less natural gas to start underground combustion)
-MSAR (which stands for multifine super atomized residue... it's the bitumen itself being atomized and burnt.)

I will concede that current oil sands development is grossly overly reliant on NG, and changing the fuel for steam generation isn't isn't exactly like snapping in a new lego block. So, it would take them time, and of course, $$$.
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Re: Question: Decline Vs. New Drilling

Unread postby Dezakin » Tue 26 Sep 2006, 02:51:17

$this->bbcode_second_pass_quote('FatherOfTwo', '')$this->bbcode_second_pass_quote('RdSnt', 'I') have to strongly disagree with this particular assessment. Heavy crudes are more vunerable to the decline in conventional petroleums than any other market because they rely on them for extraction.
No natural gas, no heavy crude.


I know where you are going, but you're taking that a bit too far to extremes when you say "no natural gas no heavy crude".
For oil sands the main natural gas need is for steam, and that steam can also come from:
-nuclear plants
-THAI technology (which doesn't use steam but uses way, way less natural gas to start underground combustion)
-MSAR (which stands for multifine super atomized residue... it's the bitumen itself being atomized and burnt.)

I will concede that current oil sands development is grossly overly reliant on NG, and changing the fuel for steam generation isn't isn't exactly like snapping in a new lego block. So, it would take them time, and of course, $$$.


Indeed its allready moving that direction, albeit slowly.

http://www.theglobeandmail.com/servlet/ ... y/Business
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Dezakin
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