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

[Starving Steve]

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

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.

There seems to be a link between energy consumption and standard of living. So, if that is true, the key to raising the standard of living of the turd world is to increase their consumption of energy.

This does not mean wasting energy, but it might mean: cars to replace foot-travel, electric lights to replace candles, central heating to replace wood-stoves, beautiful homes in the countryside to replace living in cramped apartments in urban slums, maybe forgetting holy books and prayers and installing the internet in every household; it might mean air travel, air freight, free trade, import substitution, etc.

I know this might not make any sense to the greenies, but going back to the old ways: living in caves, sweltering in the heat of summer, trying to grow everything needed locally, carrying bags of groceries onto a bus in winter in Winnipeg, doing without public utilities, etc. is not my idea of living a life worth living.

And there might be dividends to a high standard of living, worldwide--- maybe dividends like world peace.

Examine the countries where the Taliban and Al Qaide, Hamas, and Hesbollah operate. Examine the energy consumption and standard of living of the people in those countries. What do the people do all day with their time in those countries?..... The message is loud and clear.

Let me give the reader another example to think about: When I came to Vancouver Island, I noticed that sometimes I had to pay $1 for ONE wilted lettuce leaf in winter because that leaf was locally grown on Vancouver Island. But now, with air freight and free trade, in winter, I get boxes of fresh lettuce of all types and colours, enough lettuce to last an entire week, for $3.48; the lettuce comes from California. And not only that, I get fresh blackberries from Guadalajara, Jalisco, Mexico air freighted in at the cost of $4 for a one-pint box. Heretofore, I never had fresh berries of any kind to eat in winter on Vancouver Island.

Yes, to-day's lifestyle uses more energy, but the standard of living is better. And a higher standard of living, worldwide, is more conducive (sp?) to world harmony and peace.

[globaleconomicollaps]

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

. I'll note that our most ambitious current "wide ranging" excursions - into space - don't use oil as the energy source for propulsion

they do to use oil. Or did when we where making "wide ranging" excursions.

[GRG55]

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".

Your figures above for energy consumed for energy gained are complete and utter nonsense. If you had spent just one moment thinking about what you stated you would have realized that. But then why let the common sense testing of completely illogical "facts" get in the way of a preconceived position...:rolleyes:

When all you good folks in Ontario park your cars, and our idiot Federal Government stops bailing out bankrupt car manufacturers in a blatant attempt to buy Ontario votes, then maybe Albertans will stop producing the stuff that you seem to hate so much [but pays our taxes and feeds our families]. But I am not holding my breath, and neither should you.

[GRG55]

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

...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...

I love these kind of stats. I get your point santafe2, but the use of figures like this is just a wee bit disingenous. The area of Alberta that has been mapped to contain oil sands and heavy oil potential is about 140,000 sq km. The total area of the province is 661,848 sq km...so on the face of it the 25% figure above would appear to have some validity. Unfortunately mapped potential and actual extraction [past, present and future] bear little relationship to one another. The oil sands have been in production since 1967. Barely 2% of the mapped potential has to date been exploited. And that is undoubtedly the "best 2%", which today represents roughly 50% of Canada's crude oil production.

So I doubt very much that we, our grandchildren or their grandchildren, will ever see anything close to 25% of the Province of Alberta "torn up".

Here's a prediction all you iTulipers can take to the bank. As EJ pointed out several years ago in two articles on this site, there is no cheap and easy substitute for crude oil. Without the oil sands Canada becomes a net crude oil importer. Those two facts alone mean the oil sands are going to be an increasingly important part of the North America energy mix for many, many years to come.

[LargoWinch]

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

well into our eighties presumably. :rolleyes:

Luke: :rolleyes: ???

More like

[LargoWinch]

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

When all you good folks in Ontario park your cars, and our idiot Federal Government stops bailing out bankrupt car manufacturers in a blatant attempt to buy Ontario votes, then maybe Albertans will stop producing the stuff that you seem to hate so much [but pays our taxes and feeds our families]. But I am not holding my breath, and neither should you.

I have to say that I am shocked by the size of the Canadian bailout of GM.

Canada: $10B

US: $30B


...


Canada GDP: 1/10 of US (approx.)

enough said.

[GRG55]

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

I have to say that I am shocked by the size of the Canadian bailout of GM.

Canada: $10B

US: $30B


...


Canada GDP: 1/10 of US (approx.)

enough said.

Obama and the Ontario vote "dared" Harper not to write a big cheque and he and rest of those worthless politicians on Parliament Hill didn't have the cojones to call their bluff. Welcome to the world of minority government.

Those two-faced twits profess to be concerned about global warming, the use of fossil fuels, the fate of the polar bears, and so forth. Can you think of a better way to show your commitment to combat climate change than bailing out Chrysler and GM? :rolleyes:

As I said to another Ontarian elsewhere on this thread...when you stop using oil, we'll stop producing it.

[Guest]

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

Hi Aerius -

This assertion is in fact wide open to argument, and one or two energy and resources analysts make a very strong case for just the opposite. The increase in hydrocarbons consumption in developing nations is a far, far more dynamic driver of productivity and net earnings increases than it is in mature nations.

Hence when you take expensive oil, for a mature OECD business to consume a little more fuel does not reflect dramatically (if at all!) upon their bottom line. But for a fledgling company in India, China or Brazil the ability to ramp up fuel consumption is in a highly leveraged ratio to their productivity and hence earnings growth.

I think you will therefore find, that in a world of sharply rising oil prices, it is precisely the developing nations who demonstrate the greater resilience in consumption growth in the face of rising oil prices. The energy and resources analyst I've quoted several times here covers this point in detail - Andrew McKillop? He makes some quite compelling arguments about it in his articles.

My take away after reading McKillop on this is that you actually have very vigorous, intractable demand growth in the developing world as a consequence, and that segment of world GDP is going to rapidly overtake the developed world GDP in the next 20 years. The larger it's growing base, and it's higher intrinsic energy consumption growth, the faster the global net consumption growth tends to speed up.

There is even another, and amplifying dynamic that arises from the ramping oil price. It sets up the "conveyor belt" of non-discretionary spending which funnels rivers of cash from mature industrialised economies to A) the oil exporters and B) with a direct transmission mechanism to all the commodity exporter countries, as a high oil price translates directly through into the entire commodity complex.

McKillop's thesis (very well argued) is that this actually produces a global growth *enhancing* effect across the board for the entire commodity & industrialising nation sector. Oil booms spark global growth upswings, which set up a feedback loop into higher growth consumption from those same emerging small companies who unlock earnings growth from greater fuel consumption.

So when an oil boom gets going it sets up various feedback loops into gdp growth, industrialisation waves, and ever increasing consumption in the emerging economies - then the cycle breaks when prices get very high in a runaway price spike which finally throttles the entire thing back down. But the broad thesis is that when oil is bullish, you should look for a resurgence of growth in the industrialising world.

I tend see it 180 degrees opposite to the point you are stating here. Read a few of McKillops pieces on that - he's a very interesting read. You can find his articles collected over in the author-sorted pages at Financial Sense. Putting his suggestions all together, it spells a potential for "runaway" price mechanisms in petroleum, as the world consumption is not necessarily as orderly in adjusting to price as may appear at first glance.

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.

[bill]

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

Obama and the Ontario vote "dared" Harper not to write a big cheque and he and rest of those worthless politicians on Parliament Hill didn't have the cojones to call their bluff. Welcome to the world of minority government.

Those two-faced twits profess to be concerned about global warming, the use of fossil fuels, the fate of the polar bears, and so forth. Can you think of a better way to show your commitment to combat climate change than bailing out Chrysler and GM? :rolleyes:

As I said to another Ontarian elsewhere on this thread...when you stop using oil, we'll stop producing it.

CHANGE
http://en.wikipedia.org/wiki/Oleg_Deripaska
Deripaska is one of 16 global business leaders who drafted CEO Climate Policy Recommendations to G8 Leaders, a document outlining international business community's proposals to effectively tackle global warming. The proposals were signed by more than 100 of the world's leading corporations and handed to Japanese Prime Minister Yasuo Fukuda on June 20, 2008. G8 leaders discussed the recommendations during the summit in Japan on July 7-9, 2008. The process was coordinated by the World Economic Forum in collaboration with the World Business Council for Sustainable Development. ^{[6] [7]}
In May 2007, Magna International chairman Frank Stronach announced that Deripaska was becoming a strategic partner in Magna. ^[17]


http://en.wikipedia.org/wiki/Magna_International
On May 26 2009, BBC online reported that German government is considering 3 proposals for acquisition of Opel and Vauxhall including a Russian-backed bid from Magna.^[5] On May 29 2009, CNN online reported that Fiat has pulled out of Opel/Vauxhall acquisition talks leaving Magna as the only contender. ^[6] The German government later backed the deal.^[7]
Under the deal, Magna will take a 20 per cent stake in Opel and Sberbank, a Russian bank, will take a 35 per cent stake, giving their consortium a majority. GM will retain a 35 per cent holding, while the remaining 10 per cent will go to Opel employees.^[8]


[edit] Race to develop vehicles

Main articles: Electric vehicle and PHEV
Magna International Inc. has joined the race to develop a plug-in hybrid car and plans to have a prototype on the road next year or in 2010.^[10]
It can supply any or all of the electric vehicle subsystems, as well, it will have a vehicle concept that it could supply to a carmaker.^[11]
Political connections
The firm is also known for its political connections, such as having former Premiers of Ontario on its board, as well as connections with numerous other former politicians. Some politicians who have had notable positions with Magna include Mike Harris and Brian Tobin. In 1988, Frank Stronach ran as a candidate for parliament for the federal Liberal Party, but was defeated.
In 2004, Stronach's daughter and former company head Belinda Stronach

http://www.fleetnews.co.uk/news/stor...o-Magna-/50244
Friday 29 May 2009, 16:45
Car parts maker Magna International has emerged as the likely buyer for Vauxhall-owner GM Europe following talks with the German government on Friday afternoon.

Magna’s bid is being backed in part by the Russian Gaz group, which is owned by Oleg Deripaska.

[johnny531]

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

Excellent thread, all. Thanks.

Does anybody have any charts or statistics breaking down US oil consumption by type (eg, airlines, passenger traffic of various lengths, trucking, etc)? My google-fu isn't turning up much.

My understanding is that a massive proportion of our consumption is short-distance & non-commercial in nature. Though battery technologies for storing potential generated by stationary power sources are imperfect at best, isn't there some optimism to be had in approaches like the Volt? As frustratingly late and short-sighted as it has been? Have to start somewhere...

[LargoWinch]

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

Excellent thread, all. Thanks.

Does anybody have any charts or statistics breaking down US oil consumption by type (eg, airlines, passenger traffic of various lengths, trucking, etc)? My google-fu isn't turning up much.

My understanding is that a massive proportion of our consumption is short-distance & non-commercial in nature. Though battery technologies for storing potential generated by stationary power sources are imperfect at best, isn't there some optimism to be had in approaches like the Volt? As frustratingly late and short-sighted as it has been? Have to start somewhere...

johnny, GRG said a while ago that the "Volt" is a waste of resources. Now GM is bankrupt.

Lets wait for EJ's crude oil analysis...

[johnny531]

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

I didn't want to discuss the Volt so much as the hybrid electric-drive / gasoline generator approach, possibly fueled by diesel in the future. There are issues in the near- to mid-term (eg, mass producing NiMH batteries requiring rare-earth metals), but the essential point is that there may be plenty of opportunity for 'good-enough', economically practical solutions to make a large impact in consumption.

But agreed, let's see what EJ has to say...

[GRG55]

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

Excellent thread, all. Thanks.

Does anybody have any charts or statistics breaking down US oil consumption by type (eg, airlines, passenger traffic of various lengths, trucking, etc)? My google-fu isn't turning up much.

My understanding is that a massive proportion of our consumption is short-distance & non-commercial in nature. Though battery technologies for storing potential generated by stationary power sources are imperfect at best, isn't there some optimism to be had in approaches like the Volt? As frustratingly late and short-sighted as it has been? Have to start somewhere...

1. If Aunt Sally jumps in her Buick and heads to the mall to partake in that great American pastime...buying stuff...is that considered "non-commercial" consumption [in an economy where some 70% of GDP comes from just this sort of activity]?
2. The USA is a vast nation. The transportation system, and its differences from the solutions used in the densely populated, compact nations in much of Asia and Europe reflect that fact. One of the things that always struck me when I lived in the UK was how small the place was, and how quickly one could get clear across the country [on the train, not the motorway]. "Short distance" probably means something completely different to us compared to many of them...

[Sharky]

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

What are the prospects of using liquefied coal as a transportation fuel?

Since NG is plentiful, then why not convert cars to use it?

I agree with the premise of Peak Oil. However, the problem is that we don't have enough data to be able to say when the peak will happen, or how long the tail will be. There are too many parties involved who benefit by presenting distorted numbers to the public, that at best it seems like guesswork at the moment. At worst, manipulation on a massive scale.

In the long term, my feeling is that escalating energy costs will strongly encourage humans to live and work in much closer proximity than we do today. In my opinion, building and supporting suburbia has squandered a large fraction of our invaluable and largely irreplaceable energy resources, and in the long term it will not be supportable. Large-scale vertical urbanization is a much more energy efficient solution, in spite of how deplorable it might feel for many of us.

[santafe2]

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

I love these kind of stats. I get your point santafe2, but the use of figures like this is just a wee bit disingenous. The area of Alberta that has been mapped to contain oil sands and heavy oil potential is about 140,000 sq km. The total area of the province is 661,848 sq km...so on the face of it the 25% figure above would appear to have some validity. Unfortunately mapped potential and actual extraction [past, present and future] bear little relationship to one another. The oil sands have been in production since 1967. Barely 2% of the mapped potential has to date been exploited. And that is undoubtedly the "best 2%", which today represents roughly 50% of Canada's crude oil production.

And I get your point but you also make my points for me GRG. That you or your grandkids won't be able to see it is immaterial. The potential is there and it's very likely that potential will be tapped at an every increasing rate. And while production may have been on-going for 42 years, I certainly hope your not suggesting that in a world of $100+ oil Alberta will only contribute 67 of her sq. km each year, (140,000*.02)/42. I think production estimates are for a tripling by 2020 to ~3MM bbl/d and quintupling by 2030 to ~5MM bbl/d.

To help the more casual reader quantify this. Alberta oil sands take up an area the size of Florida and West Virginia combined. They have "only" dug out an area the size of Delaware so far.

That said, I wasn't suggesting it shouldn't be done, only that I'd probably not be too happy about it if I lived in Alberta. See what a good Southern neighbor I am?...;)