There's Still a Future for Dirty Oil...

[GRG55]

Re: There's Still a Future for Dirty Oil...

Thanks, we should start an energy primer thread on iTulip. I'm sure EJ could pull in the occasional expert as he does with regard to economics. We have the expertise here to build a broad understanding of the possible energy outcomes over the next 20 years. Something like a "How one iTuliper uses energy" thread.

In 2109 our primary source of transportation energy will not be oil. Others can pull this in and predict a more accurate end date but I find it more important that we agree that oil as a transportation fuel has a knowable end date. If we can agree on that, then we can discuss how we might move from place to place or if we'll decide that wide ranging human transportation was a conceit of the 20th Century.

An interesting thought. Certainly at some point in human history the use of oil will have an end date. As to whether that date is knowable today is debatable.

If we could roll back the clock 50 or 75 years, one might have concluded that coal was on the way out as oil became the dominant fuel in the immediate post-WWII era, and the oil-endowed USA replaced coal-fired Great Britain as the dominant global economy. Yet today we humans use more coal than ever.

So I suspect we may endure a similar series of premature predictions of the demise of oil as a primary energy source [a la Kunstler], and spend untold amounts of effort trying to invent adequate man-made substitutions for the products traditionally made from oil...ethanol, bio-diesels, algae, whatever is next.

As for wide ranging human transportation being a conceit, I couldn't disagree more. We humans have been expanding the range of our explorations and migrations long before we discovered oil, and I would hope we would continue long after oil has been displaced by something else. I'll note that our most ambitious current "wide ranging" excursions - into space - don't use oil as the energy source for propulsion

[Guest]

Re: There's Still a Future for Dirty Oil...

Santafe2 -

GRG55 has remained "studiously skeptical" of petroleum seeing it's commercially effective depletion within 30-40 years, for as long as I've read him on these pages. We are of course, all about extreme diversity of opinions here. So in the spirit of that diversity, I've irritated GRG55 *notably* on the question of impending commercially utilisable petroleum scarcity many times in the past two years. And as GRG55 and I are both born in the same year, we can continue having cranky disagreements on this point well into our eighties presumably. :rolleyes:

[Starving Steve]

Re: There's Still a Future for Dirty Oil...

We have enough oil sand, tar, heavy oil, etc. in Alberta, to last 100 to 200 years. This doesn't mean cheap oil, but it means no shortage of high priced oil.

[Starving Steve]

Re: There's Still a Future for Dirty Oil...

No shortage of heavy oil in northern Alberta. There is plenty for everyone, especially if NW Alberta can be developed.

Banish these eco-nuts, and we all will do fine.

And North America has endless amounts of natural gas. It's being discovered everywhere.

And the world is going nuclear. The orders for nuclear power plants are coming in from all over the world. So we have a bright future if we get off our ass and banish these tree-huggers and start to produce energy. We can do. Se puede producir.

We can go hundreds of years with fossil fuels if we use our heads, produce, banish the nay-sayers, heat homes with natural gas and nuclear power, increase gas mileage, and don't go off on questionable tangents like electric cars, battery cars, etc.

[santafe2]

Re: There's Still a Future for Dirty Oil...

An interesting thought. Certainly at some point in human history the use of oil will have an end date. As to whether that date is knowable today is debatable.

I think we can look at the 2008 oil price shock and understand that we may already be in a new era. As you, I and many others on iTulip have pointed out, running out of oil is not the issue. The issue is providing a cheap transportation fuel and we are clearly using this fuel much faster than we're locating new reserves.

This from Charlie Maxwell - Barron's, Feb 2006:

In 1930 we found 10 billion new barrels of oil in the world and we used 1.5 billion. We reached a peak in 1964 when we found 48 billion barrels and used approximately 12 billion. In 1988, we found 23 billion barrels and used 23 billion barrels. That was the crossover when we started finding less than we were using. In 2005, we found about 5 billion to 6 billion and we used 30 billion. These numbers are just overwhelming.

http://www.rigzone.com/news/article.asp?a_id=37144

In this same article, Maxwell predicts a peak price of $130-$150 before a pull back, (not a bad call almost 30 months before it happened). He also talks about Canadian tar sands from an investors point of view.

If we could roll back the clock 50 or 75 years, one might have concluded that coal was on the way out as oil became the dominant fuel in the immediate post-WWII era, and the oil-endowed USA replaced coal-fired Great Britain as the dominant global economy. Yet today we humans use more coal than ever.

This is clearly a separate issue. There was no shortage of coal 75 years ago, oil was just a better way to produce energy.

See this article from Time magazine, 1923:

Despite the strict city regulations regarding the storing of oil, as well as the initial equipment cost, fuel oil gives a more even temperature, is cheaper to handle, saves expense and trouble with ashes. The Ritz-Carlton Hotel, Manhattan, which became a convert to fuel oil, has stated that the saving gained thereby is estimated at $25,490 during the first six months. On the average 130 to 140 gallons of oil are equivalent to a ton of coal.

http://www.time.com/time/magazine/ar...716565,00.html

As for wide ranging human transportation being a conceit, I couldn't disagree more. We humans have been expanding the range of our explorations and migrations long before we discovered oil, and I would hope we would continue long after oil has been displaced by something else. I'll note that our most ambitious current "wide ranging" excursions - into space - don't use oil as the energy source for propulsion

We can talk about this on another thread, another day or this thread will just go sideways and we'll lose sight of the tar sands discussion which is an important one. But I will chance one comment, chemical fuels are not a deus ex machina process. Plenty of fossil fuel is used in the production of rocket fuel. It's EROI makes ethonal look great by comparison but ethanol won't get you off the planet...:rolleyes:

[santafe2]

Re: There's Still a Future for Dirty Oil...

We have enough oil sand, tar, heavy oil, etc. in Alberta, to last 100 to 200 years. This doesn't mean cheap oil, but it means no shortage of high priced oil.

Agreed. Canadian oil sands are abundant and will last a long time. But oil sands are only a small part of our solution.

From Morgan Downey, Oil 101, pg. 27:

Oil sands are produced by separating extremely heavy crude oil from sand in a process similar to mining. Even with maximum investment in Canada and Venezuela, the two major global sources of oil sands, it will only account for 4 to 5 million bpd of oil by 2025, (under 3% of forecasted oil consumption).

We can't think of oil sands as a solution. It is like having a large water tank and having to survive on slowly dripping leak. And, if we develop a method to release energy from this resource much more quickly we will, of course, shorten it's life span by the same factor.

[Glenn Black]

Re: There's Still a Future for Dirty Oil...

It used to be US$50/bbl for breakeven >30 yrs ago. Today breakeven price varies between US$75 to as high as US$93, depending if it is strip mining, or insitu extraction.

For most, 4 bbl of oil equivalent must be produced to get 1 bbl of oil for sale. The other 3 are used to power the extraction process (natural gas is actually used), but this give you an idea of the truly "BAD DEAL" tar sands represent. Add to this the hundreds of acres of contaminated waste ponds and oozing sores in the earth surface.

In my opinion, tar sands deposits should be left where they are for another 1000 years, or until we can figure out a better, cheaper, more energy efficient way to extract/use this "resource".

[Roughneck]

Re: There's Still a Future for Dirty Oil...

Maxwell is a sharp guy. What some green heads don't understand is that even though we can use less energy,people have to drive to work. This isn't France. Ohh you can move closer to work,who wants to live in an american inner city? A replacement for gasoline as a transportation fuel should be a top priority. Wind and solar will not solve the problem. We should be exploting all our sorces of conventional oil to buy some time.Its sad that we are not. When obamas energy guy came to the gulf to talk about lifting the drilling ban,all he wanted to talk about was wind turbines in the gulf of mexico. :rolleyes:

[santafe2]

Re: There's Still a Future for Dirty Oil...

It used to be US$50/bbl for breakeven >30 yrs ago. Today breakeven price varies between US$75 to as high as US$93, depending if it is strip mining, or insitu extraction.

For most, 4 bbl of oil equivalent must be produced to get 1 bbl of oil for sale. The other 3 are used to power the extraction process (natural gas is actually used), but this give you an idea of the truly "BAD DEAL" tar sands represent. Add to this the hundreds of acres of contaminated waste ponds and oozing sores in the earth surface.

In my opinion, tar sands deposits should be left where they are for another 1000 years, or until we can figure out a better, cheaper, more energy efficient way to extract/use this "resource".

I agree with your point of view. If I ran the world, we'd all be conserving about 75% more energy than we are today. But I don't and almost everyone has a POV much less radical than mine so I try to find solutions that will work given our current reality.

As we define various types of energy we have to be careful not to mis-state their energy production cost. Tar sands are indeed 4X more energy intense to mine, process, deliver to end users but they do not have a negative EROI, (energy return on investment).

Where you may be getting tangled up is translating the 16:1 return on conventional oil vs. the 4:1 return for non conventional oil sands. Oil sands don't have a negative return just a less great return than oil. Of course, if I lived in Alberta I might feel differently...

[santafe2]

Re: There's Still a Future for Dirty Oil...

A replacement for gasoline as a transportation fuel should be a top priority. Wind and solar will not solve the problem. We should be exploting all our sorces of conventional oil to buy some time.Its sad that we are not. When obamas energy guy came to the gulf to talk about lifting the drilling ban,all he wanted to talk about was wind turbines in the gulf of mexico. :rolleyes:

The key for transportation over the mid term, (10-30 years), will be conservation and transitioning to fuels we think of as sources for stationary energy. Natural gas, coal, nuclear, geothermal, wind and solar. Other than natural gas, all of the others require energy to be processed and stored for later use. This is the beauty of oil as an energy source, it's a massive battery.

Whether it's Obama's guys or anyone else, pretending that wind energy is capable of offsetting oil energy is just dumb. Wind energy has very little utility when it comes to transportation.

Lost in this discussion is the idea of conservation. We may not want to live in the inner city to be close to work but that's a choice and that choice has costs. We should understand what those costs are so we can make choices that make sense for us and our families. The energy issue is so politicized it makes it difficult, almost impossible to unravel.

To me, energy use is like debt. It will have the same capacity to enslave. This site has an overwhelming majority who understand the capacity of debt to enslave but very few who understand our over dependence on energy and how that is driving policy, taxes, etc.

I'm trying to imagine the flogging someone would get on iTulip if they posted an "I love my debt" thread. But I see posts here every day defending one's right to use energy. To me, it's completely irresponsible. We're in a marathon and no one has water for the runners after the first couple of miles.

Oil sands. Nice stuff, lots of it. It should last for 5 generations but we've got to tear up 1/4 of Alberta to get it and we're acting like we have a plan after that. We have no plan. We're monthly payment energy consumers with no future. We've no energy savings, we're just hoping we'll come up with another answer.

When anyone says oil sands or nuclear or renewables are THE energy answer all I hear is a fool telling me that debt is good, a lot of debt is great and unsustainable debt is fantastic.

Please, take a look around you and realize that energy is today where debt was in 1980. This path we're on is a dead end.

[Guest]

Re: There's Still a Future for Dirty Oil...

Right on Santafe2. You tell it like it is.

[Aerius]

Re: There's Still a Future for Dirty Oil...

I don't know if that comparison if fair. Debt is basically spending now by forgoing future spending. Consumption of finite resources is (could be) improving your standard of living with no defined future ramification.

I mean, ultimately everything is going to run out if we continue the current path of exponential human population growth, whether it is oil, metals or water. Should we cut back from daily showers to twice a week showers to conserve water for the future generation or maybe boycott plastic utensils?

Peak oil or not, oil production isn't going to zero. Most of the top producing countries have not peaked and even citing Lukester's (rather bearish) saudi hero, there is 900 billion bbls of proven reserves (RLI 25-30 years at current rates).

I think we agree that stationary energy is abundant, and all that is needed is to replace the difference between supply and demand. Not easy by any stretch, but given the right price shock and political will, I don't think it is impossible.

Just keep in mind that as a percentage of discretionary spending, transportation fuel today is still significantly lower than decades past. Even at $4/gal although there was a lot of moaning and complaining, demand dropped by like 5%. While not insignificant, there wasn't a huge rush to move into the inner city or a big movement to public transit/carpooling. I guess my point is that if push comes to shove, people will adapt and there is still a lot of room for conservation efforts.

I also think it is comical to believe that world demand will continue to grow at some pie-in-sky number if oil is significantly higher. If the US can't afford it, some quasi-developing nation certainly cannot. This is not to mention that the distribution/infrastructure systems that are so entrenched in developed countries basically do not exist in many parts of the world so it is easier for them to move to other alternatives.

[Prazak]

Re: There's Still a Future for Dirty Oil...

The key for transportation over the mid term, (10-30 years), will be conservation and transitioning to fuels we think of as sources for stationary energy. Natural gas, coal, nuclear, geothermal, wind and solar. Other than natural gas, all of the others require energy to be processed and stored for later use. This is the beauty of oil as an energy source, it's a massive battery.

Whether it's Obama's guys or anyone else, pretending that wind energy is capable of offsetting oil energy is just dumb. Wind energy has very little utility when it comes to transportation.

Lost in this discussion is the idea of conservation. We may not want to live in the inner city to be close to work but that's a choice and that choice has costs. We should understand what those costs are so we can make choices that make sense for us and our families. The energy issue is so politicized it makes it difficult, almost impossible to unravel.

To me, energy use is like debt. It will have the same capacity to enslave. This site has an overwhelming majority who understand the capacity of debt to enslave but very few who understand our over dependence on energy and how that is driving policy, taxes, etc.

I'm trying to imagine the flogging someone would get on iTulip if they posted an "I love my debt" thread. But I see posts here every day defending one's right to use energy. To me, it's completely irresponsible. We're in a marathon and no one has water for the runners after the first couple of miles.

Oil sands. Nice stuff, lots of it. It should last for 5 generations but we've got to tear up 1/4 of Alberta to get it and we're acting like we have a plan after that. We have no plan. We're monthly payment energy consumers with no future. We've no energy savings, we're just hoping we'll come up with another answer.

When anyone says oil sands or nuclear or renewables are THE energy answer all I hear is a fool telling me that debt is good, a lot of debt is great and unsustainable debt is fantastic.

Please, take a look around you and realize that energy is today where debt was in 1980. This path we're on is a dead end.

Really enjoying your posts, SantaFe, and GRG55 as well. I do wish there were a dedicated thread to this topic.

What do you think of the merits of a carbon tax and/or a cap-and-trade?

[santafe2]

Re: There's Still a Future for Dirty Oil...

I don't know if that comparison if fair. Debt is basically spending now by forgoing future spending. Consumption of finite resources is (could be) improving your standard of living with no defined future ramification.

I mean, ultimately everything is going to run out if we continue the current path of exponential human population growth, whether it is oil, metals or water.

Welcome. Enjoyed your post. The debt fueled conspicuous and indulgent consumption we've experienced over the last 30 years is apparently going to change now that we're so far in debt publicly and privately that we've no choice. Watch how painful this is as it unfolds over the next 10 years. I see a corollary between the road we took with debt and the one we're embarking on with regard to energy.

Many posters here say we can just do this or just do that and we'll be fine. It is of course my opinion but given our current technology and our political and social structure, we haven't a chance of being fine for more than a few years.

And within the context of my analogy, this may not be 1980, it might be 1990 or 2000. Maybe we hit the energy wall in 5 years instead of 25 years. Personally, I plan to be prepared to live in a world where energy is a precious commodity.

[santafe2]

Re: There's Still a Future for Dirty Oil...

Really enjoying your posts, SantaFe, and GRG55 as well. I do wish there were a dedicated thread to this topic.

I would like to see this as well but for it to work the thread will require a moderator with broad ranging energy expertise and the time to manage and input to the thread. That's certainly not me on either count.

I've learned a lot reading here:
http://www.theoildrum.com/

What do you think of the merits of a carbon tax and/or a cap-and-trade?

I'm beginning to work through this but I don't have the knowledge to engage in a rational discussion. It's clear we're getting cap and trade legislation in the US. Since we'll have our own specific version of cap and trade we might be better served to focus on our legislation once we know it's form. From what I've seen, it's not going to be a radical shift but strange things happen to legislation on its way to signatures.