Oil: Wells tapped out?

[robertpaulsen]

Oil: Wells tapped out?
Critics pan scientist's forecast on world production
By Gary Scott Staff Writer

PASADENA - There it was, laid out in a simple linear graph for everyone to see: the end of an age of oil.

For anyone who fears oil companies run the White House, fumes at the thought of drilling in the Arctic National Wildlife Refuge or deems global-warming doubters deranged, there had to be something perversely gratifying about the picture of doom on display Thursday at Caltech's Beckman Auditorium.

"The peak of world oil production is happening right now," Ken Deffeyes, professor emeritus at Princeton University, confidently declared. "Here is the most important story since the Industrial Revolution."

And when Deffeyes said "right now," he meant it.

more...

http://www.pasadenastarnews.com/news/ci_3279368

[acmavm]

1. Gee, maybe if that's the case it's true that we should have been investing

in research for an alternative energy source. But if we had done that how would the BFEE and the Saudi royals, etc., have milked every last nickel out of the oil industry. You see, we have to keep our priorities straight here. Crime families before the peasants of the planet please.

[MrMonk]

2. I'm willing to wager

that the major oil companies have been quietly investing in companies that do serious R&D in all areas of alternative energies.

I'm also willing to wager that they'll hold back such technologies until the infrastructure that supports the oil economy is on the verge of collapse. Then - whoosh - they'll sweep down from the heavens to save us all.

[alfredo]

5. BP-British Petroleum has, as part of its advertizing campaigns,

their investment into new alternative fuels.

[Coastie for Truth]

6. Personal Experience - it's called RAPE

Been there, done that, bought the t-shirt, been laid off.

(Why do you think I am a self employed, entrepreneurial "consultant" in the energy field? Do you know what a 65 year old "consultant" is? :shrug: )

Business model -- buy the companies, milk the intellectual property (patents), issue the patents and put them on the shelf, lay off the inventors (after they have signed "non-competes").

Secondary business model - fund grad students and professors, get "non-competes", take "assignments" of their patents and put them on the shelf.

One problem - the US is unique in that a patent "owner" can get an injunction against an "infringer" --- even if the "owner" is not "practicing" the patent (i.e., is not selling the patented goods or offering the patented services).

BTW - there is no such thing as a "secret patent" - they are all "published" ---

[rman]

9. let me get this straight

the US patent system does facilitate the 'locking up' and making unusable of patents?

[Coastie for Truth]

17. You are reading too much into what I posted.

The US Patent System requires a full and complete disclosure -- there is no such thing as a "secret patent". The law provides:

The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.

But, and here is the kicker--

§ 281. Remedy for infringement of patent - A patentee shall have remedy by civil action for infringement of his patent.

Which would normally mean "Money" - like lost profits from making, using, and selling the invention - and lost licensing royalties from licensing others to make, use and sell the invention.

§ 283. Injunction - The several courts having jurisdiction of cases under this title may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.

Here's the "kicker" - "principles of equity" means a pretty darn high standard of fairness, and "clean hands" and "pure heart" (this doctrine goes back to the ecclesiastical law of the Anglican Church) except that in the US the courts accept a lame reason like "it may hurt my future business." In the rest of the world the reason has to be for real - like "It will hurt my present business."

[MrMonk]

21. I should have been more clear

I should have said "blocking implementation of the technologies" instead of "holding back."

[Coastie for Truth]

23. That is an anti-trust violation

In the Clinton Administration, Janet Reno did bring some anti-trust cases - and got some companies to open up their intellectual properties for licensing as part of a settlement.

(These monopolists don't like to risk a trial if they know they are guilty - so they open up their patent portfolios -- this goes back to the days of "talking pictures." Also in a trial they put all of their patents at risk - but by settling they only give up a few)

[rman]

8. 1st things 1st though: 2nd rate oil sources,

such as tar sand and oil shale.
Which require both new extraction and new refinery methods, for which they need a lot of money. That i think is the reason for the rising of oil prices for some 5 to 6 in a row.

[hatrack]

11. Saw a shale oil guy at a conference in Denver last month

They have a new in situ extractoin method, which frees up the kerogen by heading the rock that contains it and then pumping it up. Works OK in the one little tiny pilot they've run so far.

Just one problem - to fully exploit the oil shale in Colorado would require the equivalent of the entire generating capacity of the state of Colorado.

Next.

[rman]

16. "heating" the rock, i assume?

if so, it is as they say: it's the end of the era of cheap oil.

[hatrack]

20. Yeah, he said "Imagine the heating elements in a toaster"

Except much, much bigger." (paraphrasing)

Doesn't sound like very cheap oil to me.

[Dogmudgeon]

25. There's another proposal

One of the companies working on the Athabascan shale oil fields came up with it, IIRC.

They selectively freeze rock surrounding a deposit they want to work, then they heat that area. It makes an artificial oil bed, and the ice holds it in place, I guess.

Energy In vs Energy Out? (aka EROEI): A little better than piss-poor because piss does not burn. The company is claiming much better EROEIs, but I'll wait to see the monkeys flying out their asses first.

--p!

[Strelnikov_]

30. Link To Post That Discusses This 'Breakthrough'

Along with a link to a Rank Corp report addressing shale oil development.

http://www.democraticunderground.com/discuss/duboard.php?az=show_topic&forum=115&topic_id=30219#30281

I don't see how the EROEI can be much above 2.5 for this in-situ process. With an EROEI this low, why bother? Let's just use the energy invested for carbon neutral ethanol and biodiesel.

[sofa king]

13. Except for that last sentence, I'm right with you.

I don't think that greed is usually that far-seeing. Rather, I think that the most important research being done in the petroleum industry's labs is what is the mathematical profit curve which follows from peak oil. If extraction and supply become more difficult, as they are sure to do, that may actually positiviely affect profits for some time.

Only after profits begin to decline would it be beneficial to study alternative options. And by then, it may be too late. But I'll bet the oil companies don't care at all about that eventuality, so long as they still have the capital to buy whomever is actually trying to solve the problem.

[4dsc]

29. Oil depletion and technology are two different subject

I wish people wouldn't confuse the two subjects of oil depleton and technology. Oil depletion will take place in our lifetime.

Technology will not save the day, IMHO!!

[Strelnikov_]

3. Peak Oil = Peak Profits

The powers want to prevent a hasty switch to renewable/alternate energy and conservation just as they are approaching peak earning potential. That is, selling ever more expensive oil to an addicted world.

They have spent decades maneuvering the world into the position it is in now. They are well aware of 20 of more years required to develop substantial mitigation options to our petroleum consumption. During the period between peak and substantial mitigation, we will have no choice but to pay the price.

[robertpaulsen]

7. That's how they'll distort the truth.

I agree with your summation Peak Oil=Peak Profits. I believe that it is this tremendous profit margin that the oil companies will use to distort the truth about Peak Oil. They'll say, "Hey, there's no way we're running out of oil now. Look at how much we made this year!" I think the same rationale was used in 1970, with US oil companies crowing, "Remember that old coot Hubbert saying we were going to start running out of oil this year? We've never made more than we just did! Boy was he wrong!"

I read some thread the other day, maybe you remember it, where someone said the quickest way for a company to go bankrupt is to buy an increasing share of a shrinking market. Maybe that's why BP changed their slogan to Beyond Petroleum. They see the writing on the wall, they just don't want to read it too loud.

[mechanical mandible]

10. Environmentalists haven't helped either...

There hasn't been one refinery built in the USA in the last 25 years. At the same time we let people from California and New York make economic decisions for people in Alaska and around the Coast. A majority of people in Alaska support drilling in an area of the Anwar regions thats size is compared to a stamp in relation to a football field.

[robertpaulsen]

15. ANWR drilling is no Peak Oil solution.

Neither is building more refineries. This is not a problem we can drill or build our way out of with more oil. To reiterate what I quoted in a previous post, the quickest way for us to go bankrupt is to keep buying an increasing share of a shrinking market.

I highly suggest reading the home page of this site:

http://www.lifeaftertheoilcrash.net/

[rman]

19. The energy industry is mostly self-regulated

Thanks to that there are heavily polluting industries all over the US. I very much doubt that environmentalists have much to do with no new refineries being build.

[MrMonk]

22. New refineries haven't been built since the first "oil shock"

Oil companies were not going to invest in new plants while their control of the oil supply remained uncertain. They also have been closing plants since 1975, but they have managed to greatly expand the capacity of their remaining plants. The big environmental costs have been in restoring the areas that they have closed, and the second biggest cost (IIRC) has been in emissions control.

[Strelnikov_]

24. Ah Yes. The Tried And True 'Environmental Regulation' Red Herring

Environmental regulation has had little to do with the current abyss we face regarding our energy infrastructure. Free market 'planning' has much to do with the crises we are facing. That is, companies left on their own will pursue their own bottom line with little regard for infrastructure redundancy.

Since the 70's, I seem to remember that 2/3rd's of the nations refineries have been closed. The reason was consolation at larger facilities to effect economies of scale, and to eliminate and over-capacity. So, along comes a hurricane, 10% of refining capacity gone.

In the late 90's electric generating utilities made a run toward building natural gas fired power plants. This was primarily due to these plants being much less costly to build than coal fired plants, part of this differential being the cost of 'cleaning up' coal emissions. This was also due to Yergin's ridiculously optimistic estimates of natural gas reserves. Along comes a hard winter, 25% of the east and west coast generating capacity gone.

Did the cost of environmental regulation influence the decisions made by energy companies, without a doubt. However, complying with environmental regulation is just a cost of doing business. And the incremental savings of the absolute minimum like Texas would require over, say, a Minnesota, is not that great. The difference between Minnesota and China probably is significant, but I wonder how the people of Harbin like their wide-open free market right now.

No, the problem we are facing today is the result of a poorly regulated free market energy infrastructure system, not environmental regulation.

Oh, and regarding ANWR. None of the oil companies are interested. The attractiveness of ANWR was being able to use the Alaskan pipeline. Problem is, due to accelerating global warming, the pipeline is falling apart and will need major repairs exceeding what could be justified by ANWR's relatively paltry amount of oil.

[happyslug]

26. And the number of Gasoline stations are 1/2 the numbers in the 1970s

But Gasoline sales are almost 1/3 MORE than it was in 1970. Why? The stations became larger and larger. You no longer have two pump stations, you have 20 pump stations, selling more Gasoline than was sold by 10 stations in the 1970s.

The same with the failure to build Refineries, big oil just EXPANDED the ones they had. In fact these expanded so much that many Small refineries HAD TO CLOSE do to the excess capacity of these now larger refineries. Yes, no new refineries had been built for environmental reasons but all the large refineries just made themselves BIGGER, for Texas said any NEW refinery had to meet existing environmental regulation, any expanded OLD plant just had to meet the environmental requirements that existed when they were built (Even if for all practical purpose you have a completely different plant today then when it was first built).

Furthermore this is complicated by fact the oil producers built SEVERAL refiners themselves, and thus shipped REFINED oil products NOT crude to the US and Europe.

My Point is the NUMBER of Refiners are NOT important, the real issue is the ability to get refined oil products to your local gasoline station. Given the expansion of the Domestic oil Refineries, and foreign oil refiners you have no real shortage of refining capacity world wide. THE PROBLEM IS MORE A BASIC SHORTAGE OF OIL NOT REFINING CAPACITY.

Now there is a Shortage of refining capacity of Heavy crude. This requires additional refining over and above what "Sweat" crude needs. The problem is this is what the Saudis are trying to sell in place of Sweat Crude AND NO ONE WANTS IT FOR THE PEOPLE WHO CAN PROCESS IT ARE AT THEIR CAPACITY. As the shortage of oil gets worse you will see more and more of Heavy Crude on the market but no one will set up a refinery for it unless guaranteed a source of supply. Only the Gulf-states can provide such a Guarantee, but their word is NOT good enough, they have to provide data that the oil will be supplied. This data is being Denied and the only reason for that is that the Data shows even the Heavy Crude is NOT enough to feed our addiction to oil.

Thus the problem is NOT environmental restrictions on building new refineries, but the overall shortage of oil.

[TX-RAT]

27. Its the peak of the cheap oil

The oil is still there, we just finished 3 new wells, and are fixing to re-enter 9 old wells. we're going to take them down another 2300 ft and shoot 2 new zones. there are a lot of re-entry's going on right now. Some of the wells were drilled in the early 30's and 40's, when they didn't have the capability to drill past 3500 ft.

[phantom power]

28. Peak oil is generally defined as the end of cheap oil.

The notion is that our society (particularly American society, but industrial societies in general) is dependent not just on abundant oil, but abundant cheap oil.

We still have half of the oil left (more, if we count stuff like oil shale), but if that oil costs us 10x as much to extract and refine, then our economy takes a huge hit. If you buy into Kunstler, a fatal hit.

[Coastie for Truth]

4. I have read Deffeyes and Goodstein

(and probably cited Deffeyes and Goodstein as much as any other DUer, and I have probably cited Engdahl as much as any other DUer).

And, I think Deffeyes is 100% right.

I also agree - even on a Progressive Web Site - Nuclear power.

Yes, I are a injunear.

[mechanical mandible]

12. Nuclear power has never been safer....

At the same time, new UN administered death tolls from the Chernobyl disaster show that previous estimates were grossly over-estimated.

[sendero]

14. I agree..

.... unless some major energy breakthrough comes down the pike soon, nuclear is the best option.

I believe that the waste problem is solvable, given a serious effort, and I also think that we've learned a lot since the 70s.

Apparently France is having reasonable success with it.

[JohnyCanuck]

18. Today's entry from Kunstler's blog Clusterfuck Nation

Uncharted Territory

December 5, 2005

When people of any political persuasion cry for America to pull out of Iraq, what do they suppose will be the result? That America will go back to being the same nation of easy-motoring, McMansion-buying consumpto-trons we were in 1999? Things have changed.

The world oil markets have changed. Their stability through the 1990s was a transient phenomenon, and a circumstance which, unfortunately, put us to sleep. During that time, OPEC, led by Saudi Arabia, was the world's "swing producer" -- the oil producer with spare capacity that could always open the valves and pump more. And they did, even cheating on their own official quotas, which only had the effect of flooding the market with "product" and driving down the prices -- so by the end of the last century oil had sunk to $10 a barrel.

That was great for America in the short term. It reinforced the widespread illusion that the oil disruptions of the 1970s were a shuck and jive. We ramped up all our car-dependent behavior, built more malls and "lifestyle centers," carved more housing subdivisions in the farthest-out asteroid belts of the metroplexes, bought cars the size of tactical military vehicles, and acted as if this was a way of life with a future.

Many things have changed. One is that a potent segment of the Islamic world declared war on the west (jihad). Another is that OPEC, led by Saudi Arabia, has apparently lost its spare capacity, and therefore its role as the world's swing producer of oil. Another is that the North Sea and Alaskan oil fields have passed their production peaks and are depleting at phenomenal rates -- in the case of Great Britain's fields, up to 50 percent a year -- because they were drilled so efficiently with the latest technology. Yet Another is that rising ocean temperatures have led to several years of massive hurricanes wreaking havoc among the oil and gas platforms of the US Gulf Coast. Still another is the industrial turbo-expansion of China and India, taking advantage of their ultracheap labor to become the world's factories and back-offices, while jacking up their oil consumption.

http://jameshowardkunstler.typepad.com/clusterfuck_nation/2005/12/uncharted_terri.html#comments

[philb]

31. Some experts say there is huge supply of oil and prices are headed down

there still is lots of oil in the world; but there is also a maldistribution; declining in countries like U.S. that use the most.
also Japan is mostly without resources- unless their new interest in methane hydrates pays off. Methane hydrates have a lot more energy than other sources, but also have big environmental problem and dangers potential.