Is the oil shortage real?

Speculators are forced to sell eventually or they have to take delivery. They are a minor footnote in this oil price rise.

 

Radical environmentalists have power now? Wow!

The problem is all the new fields are on average way, way smaller and therefore costlier to extract from.

 

hat may not turn out to be true, but a cursory compilation of present and future reserves shows that 248 billion barrels of oil are or could be available, with oil sand in Alberta, oil shale in the Rockies and considerable off-shore work near the United States. It is predicted by the Energy Information Administration that by 2030 consumptuion will be 118 million barrels. Using those figures, it would be 61 years before those present and future reserves would be depleted. Certainly, that doesn't mean pump prices will fall, but it does mean we are more than half a century away from any serious depletion.
Should we work on alternative energy sources now? Certainly.

 

The oil sands in Alberta are an environmental disaster and should not be counted on for the long term. There are good reasons to curtail those operations based on wildlife destruction, water scarcity/consumption, water contamination and CO2 emissions.

 

All you have to do is visit Ft. McMurry AB if you want to see how crazy oil shale is. The tar sands of AB use HUGE amounts of Nat. Gas and water to get the oil out of the sand. Similar process for oil shale. Burning all this Nat. Gas has a huge impact on Co2 emissions, making Canadian's among the worst Co2 emitters per capita. Does it make sense to burn fuel at a greater BTU rate to make fuel of a (net) lesser Btu rate, even if there were no environmental consiquences? Why not avoid the middle man, and use CNG n our cars if we need to burn something.

Icarus

 

If environmental disaster is an argument for not searching for oil, then shouldn't the effort be made to stop all drilling -- now, to prevent the possibility of such disaster? If that is a valid argument, then environmentalists should immediately cease to drive, cease using appliances that derive from oil, and cease any effort based on using oil.

 

I suspect we are not going to be able to use all the oil that's in the ground in the future because of the need to reduce carbon emissions. That's what OPEC and the oil companies are concerned about. The speculative bubble on oil prices doesn't help the oil suppliers--it just accelerates the move to alternate energy sources. All those B-school grads in OPEC know that. Right now, the oil companies are reeking in profits--and investing in energy alternatives.

 

There is a huge difference between bore holes and strip mining. Bore holes and their technology may not be very pretty, but the impact is compartavly benign. Contrast that to the strip mine of the Tar sands. Huge earth moving, huge amounts of water, and lots of contaminated tailings. Do a bit of searching around to see what I mean.

Fort McMurray: The Tar Sands | The Dominion
Fort McMurray: Tar Sands from Space | The Dominion
Woodland Cree Challenges Shell Tar Sands Expansion--Seeks to Prevent Another Ft. McMurray Disaster | Oil Sands Truth: Shut down the Tar Sands
Aida Edemariam on the environmental impact of the tar sands of Alberta in Canada | Environment | The Guardian
http://www.tarsandstimeout.ca/index2.php?option=com_content&do_pdf=1&id=38

I think that is enough for one post!
It aint pretty!

 

You sound just like those people that say, "Don't even think about criticizing the logging industry for unsustainable practices if you live in a wood frame house" That's just dumb.

 

Cynical? - Maybe.
Syclonal? - Definitely!

Hey Sy! How's it going? Dan here. Sorry I won't be able to join you guys on the roadtrip tomorrow.

The oil shale/tar sands discussion is a good one.

Jayman has made some really good comments in other posts about the energy required to extract oil from tar sands vs. the energy you get from the final product. I haven't seen any of his comments in this post.

Here's an excerpt from the June 2004 cover article of National Geographic titled "The End of Cheap Oil" about getting oil out of the Canadian tar sands. I quote this article often in these forums, especially now with oil prices going through the roof. I encourage everyone to read the whole article, and to keep in mind that it was first published 4 years ago. What is happening now should not be a surprise.
Here's the link:
End of Cheap Oil @ National Geographic Magazine
The first 8 paragraphs are on that page. For the whole article click on the continuation link at the bottom, where it says "to print the whole story, click here"

and here's the excerpt about the tar sands:
- - - - -
You can get a glimpse of it just north of Fort McMurray, a former fur-trading outpost in the Canadian province of Alberta. Just where the highway crosses the Athabasca River, veins of black, tarry sand streak the riverbanks. On a hot day tar sand is sticky and smells like fresh asphalt—the smell of money the locals call it. No wonder they're smug. The tar-sand deposits here and elsewhere in Alberta hold the equivalent of more than 1.6 trillion barrels of oil—an amount that may exceed the world's remaining reserves of ordinary crude. But this is no ordinary crude. In fact, it's a residue created when conventional oil escaped from its birthplace deep in the Earth's crust and was degraded into tar by groundwater and bacteria.

Most of the tar sand lies too deep or in deposits too sparse to be exploited. But oil-sand companies got a boost in the 1990s as technology improved and Canada cut the first few years of the royalties that companies were required to pay. The Alberta government reckons that 174 billion barrels could now be tapped economically. Last year the U.S. Department of Energy agreed and included that number in Canada's proven reserves. The move catapulted Canada to second place in the ranking of oil-rich states, right behind Saudi Arabia—and ahead of Iraq, Iran, and Kuwait.

But standing at the edge of a 200-foot-deep (60-meter-deep) pit where giant electric- and diesel-powered shovels devour beds of oil sand, Shell Canada Senior Vice President Neil Camarta acknowledges that there's a big difference between the oil-sand riches and free-flowing crude. "It's not like the oil in Saudi Arabia. You see all the work we have to do; it doesn't just jump out of the ground." Shell's is one of three big operations that together wring more than 600,000 barrels of oil a day from the Athabasca sands. Every step of the way takes brute force.

The sand has to be strip-mined, two tons of it for each barrel of oil. Dump trucks the size of mini-mansions haul 400 tons in a single load, in beds heated during the subarctic winters so the sand doesn't freeze into a giant blob. Next to the mine, the sand goes into the equivalent of giant washing machines, where torrents of warm water and solvent rinse out the tar, or bitumen, leaving wet sand that is dumped in tailing ponds.

Even then the bitumen is not ready to be piped off to a refinery like ordinary crude. To turn it back into crude oil, the operations either cook it in cokers, where temperatures of 900°F (500°C) break up the giant tar molecules, or heat it to lower temperatures and churn it with hydrogen gas and a catalyst. The result is a clean, low-sulfur crude—"beautiful stuff," says Camarta.

But producing it is not so pretty, he acknowledges. "This really is a big, big project," Camarta says of Shell's four-billion-dollar mine and plant, which opened last year. "It has a big footprint too, and we don't hide that—a big environmental and a big social imprint."

Other oil-sand operations have left the land north of Fort McMurray pocked with mines and lakes of sludgy gray tailings. So far less than 20 percent of the disturbed land has been restored to grassland and forest. Dust, diesel exhaust, and sulfurous fumes pollute the air. It takes three barrels of water to extract each barrel of bitumen, and although the plants are careful to recycle water, they still draw heavily on the Athabasca River. Heating all that water takes vast amounts of natural gas. Worried about Canada's dwindling natural gas supplies, Alberta has even considered someday building a nuclear reactor smack in the tar-sands region to supply power and steam.

The local First Nations people—Canada's Native Americans—mourn the loss of once pristine land. In the village of Fort McKay seven miles from Shell's mine, the company paid to build a community center on the poplar-clad banks of the Athabasca. Seated by a soaring fireplace bearing a Shell plaque, Chief Jim Boucher, president of the Athabasca Tribal Council, acknowledges that development has brought jobs and money. But the chief, who grew up trapping mink, muskrat, and beaver in intact forest, says: "In people's minds, what's going on is too much. We're losing too much of our land. The amount of destruction, especially in the minds of the elders, is horrendous."

Unless oil prices collapse, the destruction is likely to continue. With tar-sand production costs down to about ten dollars a barrel, the operations expect to make a handsome profit. Existing mines are expanding, and more companies are jumping in. Some are starting to exploit tar sands too deep to be mined, by forcing high-pressure steam down wells to melt out the bitumen. Production could reach two million barrels a day in a decade, according to the Alberta government.

That may be a comfort when the other up-and-coming oil fields of today start to dwindle, from the Gulf of Mexico to Russia. But the tar sands won't be enough to stave off new dependence on the volatile Middle East. The U.S. government's Energy Information Administration projects that in 20 years, the Persian Gulf will supply between one-half and two-thirds of the oil on the world market—the same percentage as before the 1973 embargo. Fifty years later, in other words, the Middle East will have regained all its old power over oil—and the U.S. government knows it. Whether or not Washington's war in Iraq was directly motivated by oil, American planners clearly hoped it would lay the groundwork for a stable, democratic Middle East—which, among other benefits, would in Washington's view put the world's oil supply in more trustworthy hands.
- - - - - -

 

The problem is NOT the traders and speculators, they're in every commodity. They're the grease that make the wheels move smoothly ( No I am not one ). If you want to see who's at fault then look in the mirror. As long as you and I push the 'PUMP' button then we are validating the risks of the speculators and traders. There is no one else at fault.

Don't buy oil. Use some other means of transport and get every one of your relatives and friends to do the same. Don't push the 'PUMP' button and you'll see the traders and speculators back out of the market. Then the price will drop.

However you have to consider this also. You have no control over what Chun Lee in China and Mr Singh in India do. If they want to buy more and more and more oil then no matter what you save personally they may continue to buy more and more ( and there's 10 times more of them as there are of us ) sucking up all the fuel that your and your relatives save. The traders and speculators will just make their money of Mr Lee and Mr Singh instead of you and I.

That's capitalism. The traders have the right to buy an oi contract if they want to take a risk, then you and I and Mr Lee and Mr Singh have the right to decide whether we like the price they are offering to us. If we don't then we don't buy and they get stuck holding the bag ( contract ).

That couldn't be fairer in my estimation.

 

Alberta is already in full drive but the limiting factors are surprisingly lack of manpower and the expense to expose and process the sands. The tar-sand and shale-oil both need massive amounts of after-extraction processing and energy input. Neither is as easy as punching a hole in the Texas plains or Saudi desert and collecting the shooting geysers.

Alberta has a huge shortage of labor and unbelievably high cost of living. All the sand has to be exposed first, scraped off, transported to processor, washed, filtered, washed, filtered, etc, etc until it can be collected as low grade oil. Shale oil is even more expensive and labor/energy intensive. At $100+ per bbl these start to become economically viable.

Then there's the question of how much can be collected and processed; i.e. how big is the pipeline? Canada has massive reserves but they don't yet have an extraordinarily wide pipeline ( volume of output ).

Finally their production has to account for two factors...
..the normal growth in demand from the world; using today as a baseline we all use 85 million bbl/day. In 2020 the world will need about 20% more fuel or about 100 million bbl / day.
..there are significant sources of fuel going out of production because they've been exhausted. Russia and Mexico are two of the latest and largest. ( see prior post )

Not only do the new sources have to accomodate growth they also have to do double duty making up for the sources no longer producing. That pipeline from Canada has to be really really HUGE.

 

Actually, I just became aware of this thread today as another forum member emailed me about it, having some questions regarding the numbers quoted

First of all, a $10/barrel Syncrude cost is 100% bulls***. The Tar Sands of Alberta were nothing more than a curiosity and an expensive, taxpayer-funded boondoggle until oil went north of $100/barrel

I'll agree we're not running out of oil anytime soon. What we have peaked on, and will soon run out of, is *cheap* oil, oil with an EROEI of +100:1. Tar sands syncrude is under 20:1, usually 10:1 after you factor the water consumption and energy required to heat the stuff

Second of all, there is no current method to treat the effluent from the pulverized tar "wash" process. All that arsenic and cadmium is sitting in giant retention ponds, in essence giant man-made lakes. That has caused problems just recently

Syncrude Canada Ltd. - News Room

With oil priced north of $130 a barrel, the Tar Sands will make a slight profit. Even when oil was first at $60, nobody wanted to touch the tar sands, except for the generous Canadian taxpayer

Some folks suggest in-situ recovery, by heating up the shale underground. This has never been done, although it is suggested you set up heat exchanger pipes underground to warm the shale. Then you wait +3 years for it to eventually liquify, then pump it out.

No mention of where the energy comes from to heat the process water to heat the shale in situ. Also no mention of the requirement to set up a chiller plant to FREEZE the ground around the shale recovery body, to prevent aquifer migration of arsenic and other heavy metals

Similar issues exist with the proven oil reserves in our coastal areas. As an example, the Hibernia field off the Grand Banks of Newfoundland. That oil is so expensive to extract that a Crown Corporation was setup to funnel taxpayer funds into the operation

I have to admit I'm disappointed some folks think the real reason why we're not touching our own proven oil and shale reserves has to do with whacky environmentalists. Nope, it has to do with COST.

So how about we cut out the bulls*** and get real? I mean, c'mon "shale cheaper than Mid East oil." You hear it all the time from the neocons. Of course, they have never been wrong about anything, right?

 

Jayman and Deadphish have it mostly right IMHO>

The fact that it is terribly expensive (jayman's point) AND terribly hard on the environment make oil shale, tar sands etc are a loser! IMHO because both deposits are so far "Out there" few people have a clue. It is easier for us denounce the practice to those that don't have a clue, when they can see the pictures and relate them to their own sense of place. Now to convince them to look!

Icarus

 

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I believe it is properly called the Crude Oil FAIRY. The crude oil ferry just brings us the oil, the Fairy makes it!

Icarus

 

Oh sure now you're trying to smear two groups now with the black sludge of petroleum.

 

Actually, I think it is generally the consensus among climate scientists, that the Earth will continue to warm long past the day that we stop emitting CO2.... i.e. If we stopped emitting tomorrow, we'd still have decades if not centuries of warming. There are delays, and positive feedbacks, etc......

 

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