These days everyone is worried about oil. The primitive black goo has been linked to climate change, economic disruption and other problems, but make no mistake: We still need oil, and lots of it. Not only is American demand rising””this year it’s expected to top 21 million barrels per day””but ascendant economies in India and China have developed huge appetites for the stuff. The stark reality is that the supply is finite. “Peak oil” theorists argue that production is already maxed out, meaning imminent shortages and sharper price spikes; more optimistic experts believe that day is 20 to 30 years away. Both camps agree that the task ahead is twofold: Develop new supplies while learning to stretch existing reserves.
There has not been a major find on U.S. soil since Prudhoe Bay in 1968, which means most major exploration has moved to the deep waters of the Gulf of Mexico, where drilling and production are difficult and expensive. Last year, a Chevron-led consortium announced the discovery of the Jack field, 270 miles off Louisiana. It may hold 15 billion barrels, which would more than double domestic reserves. “The technology that is being brought to bear is phenomenal,” says energy writer Robert Bryce, author of Gusher of Lies. “What we are seeing today in offshore drilling is the terrestrial version of the space program.” Bryce is among those pushing to open offshore leases along the East and West coasts currently under federal moratorium but estimated to hold as much as 19 billion barrels of oil and 86 trillion cu. ft. of natural gas.
Tapping vast unconventional sources that don’t flow to the surface is also hugely challenging. The oil sands of Alberta, Canada, contain 175 billion barrels of proven reserves””the largest in the world outside Saudi Arabia””but the oil costs as much as $15 per barrel to produce, compared to $2 for Saudi crude.
http://tinyurl.com/4xkgrt
The fat lady ain’t sung yet. Don’t forget about the Bakken formation. We may have as much oil as the Saudis. I’m sure, however, that Al Gore and the other enviro-fascists in our country will come up with some “good” reason not to tap this source.
Just to be a bit preposterous, isn’t there a case to be made for leaving our oil in the ground while we slurp it up from the Middle East and elsewhere. If they’re running out as quickly as some people say, then maybe we should grab it while it’s relatively cheap.
The world is not running out of oil, just cheap oil. Peak Oil, BTW refers only to [i]conventional[/i] reserves.
I’ll believe that the problem is serious when I see a coal-fired steam engine pulling the cars down the track.
I think the piece is a piece of propaganda. “There has not been a major find on U.S. soil since Prudhoe Bay in 1968”. It’s just not true. I can think of two huge finds since then and I’m not up on the subject.
3. Bart Hall (Kansas, USA), I’ve thought about your speculation, myself. I thought the same thing when they put the USA’s largest coal reserve off limits for developement. Use up the rest of the world’s coal and keep ours in reserve.
I’m speaking with some sarcasm as the harm is to the developing countries. I can’t take the time to develope the idea.
Don
Yes, #3. The silver lining in this is that at this price numerous other energy sources become cost effective. There will be plenty of oil for a long time, but it is no longer cheap. I just hope the federal government doesn’t try to get involved. They will surely make things worse, as they always do.
As long as there is an income tax, mining leases on federal lands, and fees for offshore drilling leases, the federal government will be highly involved.
In the late 80’s early 90’s Chrysler developed an electric car called the Impact. This project cost Chrysler about 10 million dollars. The engineer in charge said hybrids would be the best fusion of current electrical and current automotive technology to reduce gas consumption. As far as I know Chrysler has done nothing with this technology. The Germans during World War Two were producing oil and gas from coal fairly efficiently. A friend of mine worked for a company that produced heavy coal mining equipment. In the 80’s the executives of this company said they were within 3 dollars a barrel of being competitive with oil for production of gas from coal. Why have we not duplicated this technology? The US has put hugh oil and coal fields off limits for production and it is just crazy. We have not put a a new oil refinery in about 25 years
IIRC, the Chrysler electric car was a failure, it had to be plugged in, and there were just not enough stations for it to ‘recharge’ in a given area, plus the speed was slow and the charge didn’t last that long. It was seen as a drain on R&D;at Chrysler to continue with it.
By the way, that is still a drawback with alternative fuel cars — not enough places to refuel with those alternate fuels. How many ‘hydrogen fuel stations’ have you seen lately?
Jim Elliott
“The Germans during World War Two were producing oil and gas from coal fairly efficiently.”
Sort of. Coal gasification was also used to make “manufactured gas” in the US before natural gas pipelines distributed natural gas throughout the US before WW II. Manufactured gas is the stuff that was 50% CO and CO2, so that led to quite a few household fatalities during the winter when people didn’t vent their houses sufficiently. But the basic process was a pretty heavy source of pollution, and you end up having to take the ensuing methane and then combine it into longer chains to get usable liquid fuels. So, it was energy intensive, but that was better than running out of hydrocarbons entirely for the Germans (or South Africans, decades later).
Possibly there are cleaner ways of doing this today, but it is still relatively expensive to use pure carbon to provide the energy to strip the hydrogen off of water to get methane, and then get the methane linked up to produce benzene or longer molecules.
Fox news had an article on friday about a field in N. dakota that has an estimated 4.5 billion barrels of oil.
Jim the car was the Chrysler Impact. Far from being slow it was quite quick. There was a good article in Discover Magazine about it. It was also very efficient with low drag, when it was breaked the engines charged the battery etc. If I remember correctly it got about 45 to 60 miles on a charge and could be charged at home. It was originally supposed to be a commuter car. One of the Scandinavian countries has about a 500 mile route that uses solar power to convert water to hydrogen to supply hydrogen powered cars. These folks have been doing research for years and are getting quite good at it. I really am not up that much on chemical engineering but I do know the German war machine ran on coal gasification at the end of the war. I still don’t know why we have shut down producing oil fields in Pennsylvania and companies in the US is not allowed to explore and develope oil deposits in other areas of the US.
“I’ll believe that the problem is serious when I see a coal-fired steam engine pulling the cars down the track” —Don Gander
Nice line.
“How Long Will the Oil Last?”
A lot longer at $100 a barrel than at $40. Prices change long-term behavior. We are, I suspect, seeing only the beginning of the change.
OPEC Official: Oil Price Rally May Come Under Pressure
WASHINGTON -(Dow Jones)- Diverging trends within global oil markets may start to play out during coming months, which could undermine oil prices, according to a senior official from the Organization of Petroleum Exporting Countries said Saturday.
“Over the last few months, fundamentals and financial market developments have been moving the oil market in opposite directions. How long this duality can continue is a key question facing the oil market in the coming months,” said Mohammad Alipour-Jeddi, head of OPEC’s petroleum market analysis department.
The remarks were contained in a speech to be delivered Saturday to the International Monetary Fund’s International Monetary and Financial Committee.
Concerns about a mismatch between strong demand and struggling supply “did not materialize,” and indeed the sharp spike in oil prices over the last six months is more attributable to the decline of the U.S. dollar and adjustments in investment portfolios to hedge against inflation risks, the official said.
The global oil market remains well-supplied, while demand could soften if the global economy slows, Alipour-Jeddi said in the statement.
Supply from non-OPEC countries plus OPEC natural gas liquids and non- conventional oil could top 1.4 million barrels a day in 2008, which is above the expected demand growth of 1.2 million barrels a day this year, Alipour-Jeddi said. Demand could be slower, depending on how fast the global economy slows, he said.
“This would result in a demand for OPEC crude that is lower than current OPEC production of 32.1 million barrels a day,” he said.
Non-OPEC oil supply in the first quarter expanded less than had been expected, but the pace appears to have picked up since, he said. Scheduled refinery maintenance in the second quarter is expected to be around 500,000 barrels a day, compared with refinery outages totaling 1.5 million barrels a day last year, and ethanol production is set to increase by 150,000 barrels a day, he said.
“These developments indicate that product markets this year should be less supportive of crude oil prices than in previous years,” Alipour-Jeddi said.
Crude oil inventories remain above the five-year average, leaving the market with sufficient crude stocks ahead of the spring season, although prices have continued to rise, he said.
Much could depend on the direction the U.S. dollar takes.
The weaker greenback makes oil cheaper in other currencies and also pushes investors to hedge against inflation and the dollar decline by switching directly to assets such as oil, gold and other commodities, Alipour-Jeddi said.
“The flow of investment funds between oil and financial assets has exposed the oil market to volatility in non-oil asset prices,” he said.
-By Matthew Cowley, Dow Jones Newswires; 201 938 5692; matthew.cowley@ dowjones.com
(END) Dow Jones Newswires
04-12-081115ET
Copyright (c) 2008 Dow Jones & Company, Inc
UPDATE 2-Brazil may have new supergiant oil find
Mon Apr 14, 2008 1:30pm EDT Email | Print | Share| Reprints | Single Page| Recommend (1) [-] Text [+]
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RIO DE JANEIRO, April 14 (Reuters) – An offshore find by Brazil’s state oil company Petrobras (PETR4.SA: Quote, Profile, Research)(PBR.N: Quote, Profile, Research) in partnership with Repsol-YPF (REP.MC: Quote, Profile, Research) and BG Group (BG.L: Quote, Profile, Research) may be the world’s biggest oil discovery in the past 30 years, the head of the National Petroleum Agency (ANP) said on Monday.
Haroldo Lima told reporters the find known as Carioca in the subsalt cluster could contain 33 billion barrels of oil equivalent, five times the recent giant Tupi discovery, further boosting Brazil’s prospects as an important world oil province and the source of new crude in the Americas.
Petrobras shares jumped 6.23 percent to 83.50 reais on the news, reversing early losses.
“It could be the world’s biggest discovery in the past 30 years, and the world’s third-biggest currently active field,” Lima told reporters.
He would not say whether the reserve estimate was recoverable or in-place. Petrobras last year put Tupi’s recoverable reserves at between 5 billion and 8 billion barrels of oil equivalent, most of it light oil.
The Carioca area lies west of Tupi in the prolific Santos basin, off the coast of Sao Paulo state.
“It’s subsalt, and we knew there were big expectations for the subsalt cluster in addition to Tupi. But if this is confirmed, it’s really huge,” said Sophie Aldebert, associate director with Cambridge Energy Research in Brazil.
“With that size, you’d have plenty of gains of scale that could easily offset the subsalt geological challenges,” she added. The challenges include shifting salt clusters that require reinforced piping and producing in deep waters from huge depths under the ocean floor