[PWALPOCO]

Telegraph News


Theres an article here which is related to the UKs recent emerging requirement to build nuclear power stations.

In the article , nearer the bottom , it indicates it would cost £12billion to construrct 10 stations.

Or £1.2 Billion per station. At approx conversion that is roughly $2.2 Billion.

At a required $500 million expenditure per day , thats gonna be just over 4 days to fund each station. Im assuming that "1500MW" is standard fare for a nuclear station costing $2.2 Billion.

We could split hairs over size and type of station but Starvids assertion doesnt look unrealistic in light of Mistui Babcocks estimates.



Paul

[Starvid]

$this->bbcode_second_pass_quote('elroy', '')$this->bbcode_second_pass_quote('', 'I')t is one new 1500 MW nuclear reactor every five days

[Starvid]

For your convenience and reading pleasure, I have decided to post the whole article.




$this->bbcode_second_pass_quote('', 'P')ARIS (ResourceInvestor.com) -- The International Energy Agency (IEA) report, “Resources to Reserves: Oil & Gas Technologies for the Energy Markets of the Future,” has broken step with other oil bodies by directly addressing the concerns of “peak oil” theorists.

In the introductory paragraph Claude Mandil, the IEA’s executive director, wasted no time in examining the subject.

He said, “soaring oil prices have again spotlighted the old question. Are we running out of oil? The doomsayers are again conveying grim messages through the front pages of major newspapers. ‘Peak oil’ is now part of the general public’s vocabulary, along with the notion that oil production may have peaked already, heralding a period of inevitable decline.”

Yet Mandil dismissed the idea that this situation is worrisome by stating, “the IEA has long maintained that none of this is a cause for concern.”

However not too far later on in the report, the IEA admits that most countries outside of OPEC “have passed their peaks in conventional oil production, or will do so shortly.”

They go on to paint a less than optimistic picture of future production in non-OPEC fields.

“Their world is one of maturing oil fields. Their exploration and production costs are typically higher but they limit OPEC’s monopoly effect, thus operating with smaller margins. Cost reduction is therefore a constant concern. Proven reserves (to) production ratios are small, averaging around 15 years and production in the older fields is declining.”

What “peak oil” supporters might find even more strange, is the use of the Hubbert Curve within the report, which is the mountain-shaped curve, showing increasing then declining production. It was created by the former Shell geologist M.K. Hubbert, to illustrate the theory of “peak oil.”

In a special section entitled just “Peak Oil” the IEA actually present the theory to its clients. They sum up by saying that

“The striking success of Hubbert in predicting the peak of U.S. production suggests that such conditions were more or less met in the U.S. during that time period.”

They then appear to question the current relevance of Hubbert in today’s oil market. Because they move on to say that “the controversies surrounding peak oil in the literature revolve around four main points. Does the Hubbert model apply to oil production worldwide? If the Hubbert model does apply, when will the peak in worldwide oil production be? What happens after the peak? How fast will the decrease of production be? What role does technology play in such models?”

The basic counter thrust of the IEA’s argument is that new technologies and increased investment can overcome any production inflection. But the level of investment that requires is truly astronomical. Repeating a figure they first used in the IEA World Energy Outlook report they estimate that the total necessary investment cost “for worldwide upstream operations and transport [of oil]” by 2030 will amount to “$5 trillion.”

That works out at roughly $564.5 million dollars a day, between now and 1 January 2030. Not surprisingly, they conclude that “neither private enterprises nor national companies necessarily have the incentive to assume the risk of tackling new types of resources such as oil sands or oil shales. Such players might choose, for example, to focus instead on maximising returns from their investments in deepwater in a high oil-price environment.”

The IEA goes on to say that “It should be noted, too, that there does not tend to be great interest in new types of resources among service and supply-sector players…they need to have ready customers for their new products and cannot easily justify developing products for a market that does not yet exist. Furthermore, private industry cannot be relied upon to invest in research on technologies that are too far from being economical.”

Indeed the report does throw up a great deal of questions: Questions of funding, or reserves and questions on the role of governments. But in doing so, has the IEA unwittingly opened a Pandora’s box of debate by answering its critics so directly?

[BabyPeanut]

$this->bbcode_second_pass_quote('', 'Y')et Mandil dismissed the idea that this situation is worrisome by stating, “the IEA has long maintained that none of this is a cause for concern.”

[PWALPOCO]

Starvid ,

thanks for the info , though I think we can all agree we dont need to worry about getting into the specifics on this one.

The $5 Trillion amount is equivalent to a lot of nuclear powerstations being funded every 4-6 days over the next 25 years !

Do you think we raised the 1st daily installment today ?


Paul

[fossilnut2]

"they estimate that the total necessary investment cost “for worldwide upstream operations and transport [of oil]” by 2030 will amount to “$5 trillion.”


Between now and 2030. that's all? that works out to about $33/year per world capita. Less than a dime a day. The USA debt alone is up around 8 trillion. The service on that debt (even if it didn't rise) would itself be nearly triple the 5 trillion from now until 2030.

5 trillion is a LOT of money. Some perspective, however, is needed. The amount of dollars will not be an issue if prices are firm and there's profits to be made. (of course there has to be fossil fuels out there to be invested in to be found and brought on stream... but that's a different issue).

[Starvid]

Yes, another comparison is the US economy, which is $10 trillion a year.

[glug_glug]

$this->bbcode_second_pass_quote('Starvid', 'Y')es, another comparison is the US economy, which is $10 trillion a year.

[tdrive]

At current E&P and lifting costs at about $10/bbl, this will add about
$7/bbl, so total cost will go to around $17/bbl just to physically find, lift
and bring to market the oil. Adding all other costs, profit margins,
downstream operations, etc. will easily add another $10 to $20/bbl.

On top add the risk premiums (terror, weather, geopolitics, etc).

The era of easy oil is clearly over. Even now I feel $60/bbl is cheap
unless there is a significant demand destruction ahead.

Cheers,

[Antimatter]

Instead of using irrelevant comparisons to power stations why not break it down and compare to current E&P expenditure? 5 trillion is $200 billion a year, which isn't alot more than the industry has been spending recently (100-150 billion).

[Starvid]

$this->bbcode_second_pass_quote('glug_glug', '')$this->bbcode_second_pass_quote('Starvid', 'Y')es, another comparison is the US economy, which is $10 trillion a year.

[AdzP]

The International Energy Agency report, 'Resources to Reserves' comes under the Oilcast analysis spotlight this week. As well as a long look at 'peak oil' the report is also an interesting document, as much by what it omits as by what it contains.

Plus odd weather systems, price movements, American refining capacity and a possible Russian oil exchange...

Listen here

[MicroHydro]

Nice to hear Adam again.

[BabyPeanut]

Seems they want to charge money for oilcast in the future.

I'd buy it but as a sleep aid. Adam's droning voice always makes me drift off.

[OilsNotWell]

Well, I think he's just fine. There's nothing else like it on the planet.

I hope your venture is very successful. Perhaps those involved in the financial world will be most interested, in addition to regular folks concerned about peak oil.

In fact, perhaps you can get syndicated for national radio business/investment news shows...

[tdrive]

Next week's OGJ will have a detailed article on IEA's recent report
providing many details. Paid subscription required. A sneak preview:

$this->bbcode_second_pass_quote('', 'I')n a new report, Resources to Reserves, IEA traces the challenges of providing the 1.5 trillion boe of oil and natural gas projected to be required worldwide over the next 25 years-an amount about equal to cumulative production over the last century.

Dismissing the “peak oil” notion that conventional oil is entering a period of inevitable decline, IEA Executive Director Claude Mandil asserted that “technological progress has always been the key factor to prove the doomsayers wrong.” He added, “Technology will enable new resources to be developed cost-effectively, and it will accelerate the implementation of new projects.”

[thomasjpaul]

...Is published on the 7th November, 2005.

Link

The IEA (International Energy Agency) concluded in its Winter Outlook Report 2004 that “. . . global production of conventional oil will not peak before 2030 if the necessary investments are made.”

Two questions about this:

1. Are they likely to change that assessment in this year's outlook?
2. Why did they conclude with 2030 when Mr. Simmons concludes 2005. What did they do differently?

(This is my first post... I hope I have maintained all due forum ettiquette

[Typhoon]

1. No, they aren't likely to change that assessment this year.

2. It's very easy to come to different conclusions. The IEA has a much higher estimate of undiscovered oil, which has no basis in reality given that oil discoveries have been steadily declining since the 1960's, without a meaningful trend reversal ever occurring. We started finding less than we consumed in the 1980's. Even in the last few years, there is a noticeable trend. The number of giant fields (>500 million bbl reserves) found declined in the years after 1999 and 2000 until we found none of them in 2004.

Reserves have always increased or stayed steady during the last few decades for two reasons. Number one is that it was found that more oil could be extracted from existing fields than originally thought. This happens when there is a transfer of probable and possible reserves into the proven category, and more possible reserves are added from oil originally in place (OOIP). In some cases, OOIP itself can be expanded based on further knowledge about fields. Number two is that many reserves, particularly in the Middle East, do not exist. Saudi Arabia's 260 billion barrels is massively overstated, and other OPEC countries probably have significantly overstated reserves. There were huge and sudden reserves increases in the 1980's, known as "paper barrels". OPEC countries were practically in a reserves arms race to get a greater share of output quotas.

Simmons has a more realistic idea of decline rates, and how these will soon more than offset the amount added by new projects. In summary, Simmons knows what he is talking about when he shows that an increasingly limited amount of countries are able to increase their production. Speaking of the world resource base generally, optimists like the EIA, IEA, and the USGS count on far more than a 2000 gb URR, largely because they think that technology, like multilateral intelligent wells and 3-D seismic, will allow a much higher percentage of OOIP to be recoverable. In reality, technology like has created a big illusion. In most cases, it temporarily allows higher well flow rates, but this drains the fields more quickly, so that when the declines come, they are very steep. (Remember the North Sea, or the Yibal field in Oman.)

There is at least a 25% chance that we have already passed Peak Oil, and odds are that if it hasn't already happened, it will happen by 2007. Think it's impossible that Peak Oil has happened? Think again. Bad data can obscure the peak until later when the effects are being felt. An example of bad data was the supposed oil glut in 1998. There was a huge "Missing Barrels" fiasco. The IEA was trying to hypothesize where the Missing Barrels could be. In reality, there was no glut, just a glut of bad data. Oil prices tripled in the following two years.

[Trindelm]

so we could be one cold-snap away from an economic meltdown?