 | One (or two) years on - they have learned nothing | The Oil Drum: Europe | Sadad al-Husseini on Middle East OPEC oil fields |  |
Half a trillion barrels more than we thought? (Or, "The Tupi Field, the Pre-salt, and the Very Distant Future")
Posted by Euan Mearns on October 13, 2009 - 10:20am in The Oil Drum: Europe
At the end of the first day of the ASPO conference in Denver, we were treated to a fantastic presentation on the oil potential of the sub-salt basins on the margins of the South Atlantic Ocean given by Dr Marcio Mello who presented the evidence for a half trillion barrels of reserves in this new frontier province. So has a new Saudi Arabia been found?
Marcio Mello is president of HRT Petroleum, a Brazillian geological services company. Dr Mello's talk began with some background to the Tupi discovery in the Santos Basin, Brazil, and went on to extrapolate the geological and petroleum systems of Tupi to basins off southern Africa, the Amazon Basin, The Gulf of Mexico and The Congo Basin.
Dr Mello explained how the discovery of "diamondoid" structures in oil at shallow depth in Brazil gave evidence for mixing two types of petroleum, one that must have been formed at great depth below the Salt that blankets this basin. He had for many years tried to persuade Petrobras to drill deep, into the sub-salt strata, which of course they did eventually do leading to the discovery of Tupi.
The Tupi Field occurs in limestone reservoir at extraordinary depths of around 6000 meters beneath a salt layer that is around 2000 m thick. At such depths, temperatures would normally be too high for oil to survive but the secrets here are a combination of deep water and the conducting character of the salt which results in hot but tollerable temperatures at these great depths where the drill bit has proven intermediate grade crude oil to exist.
The geological story
The story starts during the Early Cretaceous when the continents of S America, Africa, Australia and Antarctica were joined in a supercontinent called Gondwanaland. A series of deep lakes formed along an axis of rifting that would eventually lead to the opening of the Atlantic Ocean. This is a tectonic setting similar to the East African rift valley. High levels of organic productivity lead to organic rich shales forming on the Lake bottom that were destined to become the source rocks. With progressive rifting the sea eventually invaded the rift valley lakes and an elongate shallow sea formed in which limestones were deposited. This is a setting not unlike the Red Sea today. The limestone, sitting on top of the organic shales, were destined to become the reservoir rocks.
And then something unusual must have happened to limit open access to the oceans, and with high evaporation rates, saline water built up in this shallow sea leading to the deposition of a very thick layer of salt, which formed an extensve seal, across the seabed.
The perfect geological storm
With progressive rifting, S America was eventually separated from Africa and the Atlantic Ocean began to open. The rift valley strata of black shale, limestone and salt was buried beneath sand and mud eroding off the newly formed continental margin and was buried to great depth, heated and squeezed. Eventually the source rocks matured and oil formed but with the extensive layer of salt above it could not escape and gathered instead in the limestone reservoirs that have now been drilled and called Tupi, Jupiter, Iara and Guara.
A mirror image in Africa?
When the continents split apart, roughly half the rift basin strata followed S America and half followed Africa. Dr Mello then went on to speculate that a mirror image of the Santos Basin may exist on the African side. I believe it has already been identified on seismic. Somewhat higher heat flows on this side would likely mean a gas and condensate play instead of oil.
Mapping oil seeps using satellites
Dr Mello also presented data acquired by satellites that could identify and map ocean surface oil slicks, formed by oil escaping from sub-surface reservoirs. Mapping these slicks with time allows the source on the seabed to be located and if this lies above a geological structure this may suggest a mature petroleum system below. A case study from the Cantarell Field was presented along with prospects mapped in this way from the deep water in the Gulf of Mexico.
500 billion barrels of reserves?
Dr Mello's talk was extremely slick and enjoyable. One has to remember he is a salesman as well as a scientist, accustomed to selling his ideas and reports to the oil industry. He speculated that the sub-salt basins on the margins of the S Atlantic together with the Amazon and Congo basins may contain 500 billion barrels of oil. So is this our oil supply problems solved? If he is right, then another Saudi Arabia may be found, but in much more hostile environment.
Cautionary notes
With a world economy intolerant of oil price >$80, there is a major question whether these ultra deep fields can be developed and produce oil at a price the world can afford. In the future, when our economy has adapted to a higher energy price environment and we are desperate for oil, then it seems likely that they will be developed one day. Indeed Tupi is currently on an extended well test.
Oil seeps sometimes are and sometimes are not good indicators of oil fields below. Explorationists need to be optimistic and there will ineviatbly be many disappointments in the years ahead.
Much of Dr Mello's presentation was extrapolation and speculation, but I will not be surprised to hear about a string of new discoveries from these plays in the decades ahead. 500 billion barrels will likely prove to be a wild over-estimate, but I do suspect that oil from the sub-salt will help soften the decline curve of future global oil supplies.
There is the ever present question of ERoEI, and Professor Hall was on hand to volunteer his services in exchange for a few barrels or their proxy - $$. Personally, I'd guess that ERoEI will not be an issue here since 20,000 bbls per day from single wells represents a very high flow of energy.
It will be many years before significant production volumes comes from the Santos Basin and this will not impact near term oil supply issues until at least 2020.
Finally, Dr Mello seemed very surprised to learn during the Q&A that 500 billion barrels was just 15 years global oil supply.
Half a trillion barrels more than we thought? (Or, "The Tupi Field, the Pre-salt, and the Very Distant Future")
PDF version
220 comments
Half a trillion barrels more than we thought? (Or, "The Tupi Field, the Pre-salt, and the Very Distant Future")
PDF version
220 comments
Personnel
Editors
Contributors
Peak Oil Primers
Archives
- November 2010 (3)
- October 2010 (6)
- September 2010 (4)
- August 2010 (7)
- July 2010 (6)
- June 2010 (7)
- May 2010 (2)
- April 2010 (8)
- March 2010 (4)
- February 2010 (6)
- January 2010 (3)
- December 2009 (5)
- November 2009 (8)
- October 2009 (12)
- September 2009 (6)
- August 2009 (5)
- July 2009 (11)
- June 2009 (8)
- May 2009 (16)
- April 2009 (10)
- March 2009 (7)
- February 2009 (10)
- January 2009 (15)
- December 2008 (9)
- November 2008 (9)
- October 2008 (9)
- September 2008 (13)
- August 2008 (10)
- July 2008 (14)
- June 2008 (23)
- May 2008 (16)
- April 2008 (12)
- March 2008 (16)
- February 2008 (9)
- January 2008 (13)
- December 2007 (13)
- November 2007 (16)
- October 2007 (22)
- September 2007 (8)
- August 2007 (9)
- July 2007 (16)
- June 2007 (8)
- May 2007 (7)
- April 2007 (7)
- March 2007 (10)
- February 2007 (10)
- January 2007 (12)
- December 2006 (9)
- November 2006 (15)
- October 2006 (4)
- September 2006 (5)
- August 2006 (5)
- July 2006 (9)
- June 2006 (5)
- May 2006 (10)
- April 2006 (9)
- March 2006 (13)
Vital Trivia
License
This work is licensed under a Creative Commons Attribution-Share Alike 3.0 United States License.
Euan, Thank you for the interesting article.
In both your lats, and fourth-from-last paragraphs you say 500 trillion barrels of oil, vice 500 billion.
I changed it.
But what are orders of magnitude among friends?
;-)
Excellent post Euan.
The 500 billion barrel number is an optimistic estimate of a known unknown. Good for raising capital.
The most important point you make is about the cost of extraction. Is ultra deep offshore Brazil equivalent to an underwater Canadian oil sands?
Yes, there is a lot of hydrocarbons there. But, as you point out, the cost floor is extremely high ($50-$70 maybe higher) and the tolerance for consumers to bear high prices may only be $80 per barrel.
The bigger issue is the oil accordion.
Now the economy can afford $100, yet oil companies require $60.
In the future the economy will be able to afford $90 and oil companies will require $70.
Then, $85 vs $80 etc.
This inversion may not be that far off.
In the last 12 months, the world has been well supplied with oil, so that a very small reduction in consumption could and did result in a very large price reduction. In 2,008, world oil consumption dropped by only 0.6% according to BP statistics. http://www.bp.com/productlanding.do?categoryId=6929&contentId=7044622 However, if we had a serious supply, problem, there would not be ceiling on the price of oil. It is essential for too many processes in our economy, and those who are still working and producing will pay the market price.
"""In the last 12 months, the world has been well supplied with oil, so that a very small reduction in consumption could and did result in a very large price reduction. In 2008 world oil consumption dropped by only 0.6% according to BP statistics."""
The we can assume small supply drop would have the opposite effect. At $80, $90, $100bbl or more, could deep water oil fields such as the South Atlantic be produced with a profit? It is very easy to envision prices high enough to support this development. If prices are raised in a planned, slow, controlled fashion, the economy will adapt. If we 'let the markets decide', we're boned.
I think there are both short term and long term "accordion" problems. What actually happens to economies when the price of necessities increases beyond their ability to make profits from them, the EROI threshold, is that businesses quit operating.
Exceeding that sustainable price for businesses and consumers with inflexible high overhead just cuts them out of the markets.
The way markets allocate resources there are two 'dieback' options. When supplies are inadequate you either shed parts so the food chains just gets leaner, or you shed whole food chains. It's like "wilting".
I think the latter is what we just saw last year, that speculators had found the supply of necessities insufficient and bid up the price till the economies shed enough demand. That was large sectors of old growth economic food chains and many millions of people turned marginally unproductive by it.
In the long term, if we avoid these short term risks of real whole system collapse, there's the continual slow improvement in the productivity of technology and economic systems to steadily lower the EROI the economies can afford. That learning takes time, though (improving ~1.2%/yr at present), and having an economy not able to wait as ours seems to be, could be fatal.
One thing I'm trying to figure out:
Good evidence has been presented for "vast" oil and gas resources - thinking shale gas and sub-salt. But the cost of development is high - maybe higher than the configuration of the global economy can curently afford to pay. So you bring on significant high cost production, and no matter what happens the result is a drop in price - either through the increase in supply or high price killing demand, resulting in recession, and the high cost production becomes uneconomic and gets shut down - leading to higher prices.
The oil accordian?
Euan -- "Oil Accordian". Sounds like a better title then any other I've seen. In my mind's simple eye it does capture the dynamic nature of the relationship: Diametric but an absolute and unseverable connection. Perhaps we'll chat about the AO aspect of PO ASAP before TSHTF. If that's OK with U.
Is the "oil price accordian" partially due to the mismatch in the way supply and demand evolve? Changes in supply tend to be discrete incremental steps (see below) whereas changes in demand tend to be smooth (growing with population and income) with very rare step changes.
The accordian results from the required price per barrel to justify supply costs forming a stairway pattern as new frontiers are reached? As demand grows relatively smoothly to justify transition to each step, some of the supply steps are found not to be so fruitful or cannot be brought online at a quick enough pace.
1. Land based: $10.
2. Shallow offshore: $15-25
3. Enhanced onshore: $30
4. Enhanced shallow offshore: $40
5. Deep offshore $50-$70
6. Oil sands $60-80
7. Ultra deep offshore: $70-$90
How will they know when to develop deep offshore oil if one month the price is $120 and six months later its back down to $70, then six months after that back to $140?
Oil producers can lock the price in at any time they want with futures.
Unless who ever holds the futures goes bankrupt and goes to Argentina...
Buster -- Locking ina price doesn't guarentee a profit...just the price that you'll sell th oil for. For every $ made on an hedge a dollar is lost by someone. Long term develoment projects are judged based upon a price model for the price of the project. Granted accurately predicting such a model is damn near impossible but that's how it's done regardless.
Not just that, but to do any selling (or buying for that matter) beyond the first couple of months out is going to be hard. The liquidity simply isn't there.
One contract is for 1000 bbls
If you produce 100,000 bbl/day you have to sell 100 contracts per day / 3000 per month. When you go past May 2011 you would be the entire open interest--> severely depressing prices.
Hedging works if it is relatively close to the current date and if your quantity to be hedged is relatively modest compared to the outstanding hedges.
Rgds
WeekendPeak
All of the preceding comments from Nate's onward illustrate the failure of the current cash- flow pricing model. It simply doesn't work any more.
At $90 a barrel, all profit resides with the producer, the refiner is underwater, the retailers and other users who kick small profits to the refiner (or producer if it is an integrated company) are squeezed out. Economy of scale cannot take place; there is no downstream income for marginal participants. Right now, these are going under @ prices far less than $80 a barrel. $40 a barrel is fatal for businesses whose productivity is structured around a lower price.
Oil will sell @ two hundred dollars a barrel, but not as motor fuel, or for recreation, for convenience, for waste and 'cruising' and the other uses that are economic only at a very low wellhead price.
Oil will be a chemical feedstock and high quality lubricant. It might be priced at $500 - 1000 a barrel and be a bargain. Oil might contain a cure for cancer or propel a space ship to Mars. It won't fuel jalopies in Ukraine or SUV's in Kansas ... or in Brasil. It will be too expensive. Welcome to the new oil age.
At the same time, oil at high prices cannot equal an economy. France's economy is not supported by wine at high prices, but by the productivity of its citizens leveraging cheap crude. Brazil (and other high- cost producers) have what else to offer besides (potential) crude, exactly? ...
Exactly, not much, and that is a big problem for Brazil ... and Canada and others stuck with the high cost oil. A high price use might not materialize. Even lower cost producers are in the 'price vice', including Saudi Arabia which is blowing through its legacy of accessible crude; breakneck depletion will leave it with little but regrets.
The auto age is dying right at our feet. If I didn't have to work tomorrow I would run out and buy a bottle of wine!
Brazil is the world's #2 agricultural exporter, it has some high tech (Embraer aircraft), a variety of raw materials and it's electricity is about 90% hydroelectric.
Best Hopes for Brazil,
Alan
Brazil is also a prime location for growing sugar which produces a good EROI compared to other crops when converted to fuel.
Thanks to it employing uneducated native indian labour at near slave wage rates. It high EROEI comes at a large social cost.
The wage rates may actually be worse than slavery-as the former owners of draft animals, we provided them with food and shelter in the off seasons and had a powerful incentive to take good care of them in all respects-horses and mules represented a considerable investment.
There are so many desperate people in places like the sugar country of Brtazil that there are apparently people willing to work for less than slave wages-a slave's "wages" in food and shelter cover the entire year, not just the busy season.
An injured horse or mule almost always got some health care, even if only very crude , in hopes of saving it for further work.
This said,what else can all those people do in the short term?Except maybe use thier machetes on the ruling class someday?
In the US when we make ethanol from corn we count the fuel for the machines that plow the fields and harvest the corn as part of the EI. In Brazil the cane is harvested by hand and the food calories to run those human machines is not counted in the EI, thus creating an unfair comparison of ERoEI. The workers cut as much as 12 TONS of cane a day. http://www.oilcrisis.com/BR/SugarCaneWorkers.htm
It is my belief that we should count the caloric EI of every human worker in every type of energy project as part of the EI for ERoEI. When you count the EI to ER of a cheeta chasing a gazelle the food calories are all that matter. When a subsitence farmer grows food he better grow at least as many food calories as he expends growing them and staying alive.
We have had our lives subsidized by cheap high ERoEI oil and thus have forgotten that humans are machines as well that need energy. Paying for stuff in dollars disconnects us from reality and makes it hard for us to think in terms of energy needed to do work. We put gas in machines and money in workers palms and think that those are different transactions, but money is just a way of paying the worker energy to feed himself, clothe himself, transport himself, house himself etc.
Think of it this way, if all those Brazilian workers were replaced by machines that used diesel wouldn't you count that diesel as part of the EI. If so why not count the energy needs of the Brazilian workers?
Sure,
I can see the injustice of how workers are treated in 3rd world countries but that wasnt my point. Pound for pound sugar will always give a better EROI than corn no matter how it is harvested. This combined with their deepwater oil finds means Brazil will, from a financial perspective, withstand any downturn in the world economy better than most.
Plus they are six time world soccer cup champions and there is always Carnaval!
I keep reading here that petroleum will have all sorts of uses after the "end of the automobile age" but according to the EIA something like 95% of the petroleum processed in the US goes to transportation fuel (gasoline, diesel, aircraft kerosene) or asphalt:
http://tonto.eia.doe.gov/dnav/pet/pet_pnp_wiup_dcu_nus_w.htm
"Locking ina price doesn't guarentee a profit...just the price that you'll sell th oil for."
That sounds simple but is actually great words of wisdom ROCKMAN. When you lock in a price, your essentially saying, "I can live with energy at this price" IF (and here is the big IF) you are buying the oil (or nat gas or coal or whatever) for use, not as a speculation on higher prices!
It is almost EXACTLY comparable to buying a home. Most folks who bought a home to live in, not as a speculative investment, have not been hurt by the recent "collapse" (unless, and this is a big UNLESS) they bought the home on very unfavorable terms (some call it usury).
If there is another half trillion or more barrels that can be accessed at any price below $150 per barrel (inflation adjusted, mind you) it completely "re-rolls" the dice...but I will deal with that in a post at the bottom of this string...
RC
The other side of this is that substitutes are roughly in the same cost range: PHEVs like the Volt* become economic at about $3.35/gallon gasoline ($90 oil?), in the longer-term (the time it takes to ramp up PHEVs) this also puts a cap on prices.
In roughly 5 years economies of scale will reduce the cost of PHEVs to the range of $80 oil, and we'll see a race between oil depletion and EV growth.
http://energyfaq.blogspot.com/2009/07/volt-battery-costs-part-3.html
*Pure EVs are cheaper, but much less convenient.
Are you aware of the price of gas in Europe?
Ok, if plug-in's and EV's are such a good idea, and if they're competitive at, say $3 gasoline prices, then why aren't they used more in Europe, where gas prices are higher?
There are a number of factors:
1) A different capital cost to operating cost picture.
EVs and PHEVs trade a higher purchase price for lower fuel consumption.
In Europe, fuel prices are 2-3 times as high as in the US, but due to historical factors (shorter distances, higher fuel taxes due to the high % of imports), average car in Europe uses about 1/3 as much fuel as one in the US. Further, European taxes on new cars are generally much higher in the US.
Thus, the economic case for EVs and PHEVs is actually worse in Europe, and the lack of EVs and PHEVs in Europe really doesn't add any useful information to the question of how competitive electric powertrains really are with oil in the US.
2) Pure EV's still can't compete on convenience with ICE vehicles. Even in Europe, fuel costs are only a part of driving costs, and the lower cost of an EV hasn't been quite worth the inconvenience. The logical transition from an ICE to an EV is the PHEV, which for some reason wasn't explored seriously until very recently when GM took that path.
3) Europeans have fewer garages, as their housing is much older.
4) Tax preferenced diesel occupies the high-MPG niche.
and perhaps most importantly,
5) there were large barriers to entry (billions in R&D and retooling, as well as resistance from ICE oriented manufacturers) for PHEV's, and there wasn't an obvious need for them. There was resistance from people in the industry who's careers would be hurt. This ranges from assembly line workers and roughnecks to automotive and chemical engineers. And, you've got to give them respect and compassion: they're people, and deserve to be helped as much as possible during a necessary transition away from oil.
Until we find a way to help these people, they're going to desperately fight any proposals to transition away from their industries, by honest attacks or dishonest: whatever works. You can't really blame them: they're just trying to protect their lives and families.
The alternative to buildinga new fleet of EV/PHEVs is to rebuild local towns and cities to drastically reduce the need for car use by US citizens so that they have equivalent living arrangements as Europeans. I suspect that will be an a accompanying trend to short range electric vehicles anyway.
Should be lots of batt-powered surplus golf-carts in the years to come:
http://www.peninsuladailynews.com/article/20091013/news/310139993
----------------------------
Golf course's money woes splitting quiet Sequim enclave
..The club has suffered from plummeting membership and revenue, losing half its players, including 48 who quit just this year, general Manager Tyler Sweet said last week.
..A golf course, Karr said, is one of the most harmful, wasteful land uses there is. Pesticides, herbicides and lots and lots of watering make it so, he said.
Karr would consider a return to a natural Sequim prairie ecosystem far more valuable than the putting greens, sand traps and fairways.
Tall weeds?
Meanwhile, in recent meetings with SunLand homeowners, Ratliff and the nascent SunLand Preservation Project have held up the spectre of a closed-down golf course, overrun with tall weeds and small animals.
Sweet has said that if the course goes without mowing and other maintenance, coyotes and rodents will move in.
Karr doesn't see this as such a terrible scenario -- and he calls the country club's argument, that property values will drop for everyone in SunLand while weeds and vermin take over, "fearmongering."
---------------------
http://www.cbssports.com/golf/story/12337350
--------------------------
Olympic golf a winner only with an attitude adjustment
..For the past three years, more golf courses have closed in the U.S. than have opened.
.. So let's take this show on the global road, shall we?
China, an emerging economic power, already has hundreds of courses, all but a couple of them private. That isn't doing much to dispel the notion that it's an elitist, expensive game, unavailable to the proletariat. It's exclusionary.
So, what are we really exporting? Bulldozing another 150 acres of Brazilian rainforest to build another golf course, erected primarily as a means of selling expensive view lots, doesn't sound like such a great idea, to be honest...
-----------------------
http://www.timesofmalta.com/articles/view/20091013/local/bleak-situation...
--------------------------
'Bleak' situation for northern hotels
Hotels in the north of Malta struggling to make ends meet are considering transforming their business into old people's homes, a hotelier has told The Times...
--------------------------
Man, Bob.. interesting stories.
Reminds me of the bumpersticker that says, 'Wouldn't it be great if our schools were fully funded, and the Navy had to have a bakesale to build a battleship?'
But I do want one of those carts!
Bob Fiske
That would be a nice way to live, but it would take 10 times as long, and cost 20 times as much.
It may take 10 times as long and cost 10 times as much to rebuild our shatterd towns and cities into something sustainable. It also may take several generations. But the end result is going to give so much more joy and comfort to the generations of the future than your techno-fantasy of PHEVS/EVS.
That's fine, but we don't have that kind of time.
We need to eliminate coal in the next 40 years - 20 would be better. We need to do do the same for oil, and just as quickly.
We don't have the luxury of doing this over 100 years.
BTW, PHEV/EVs are here now. Heck, the Prius has a complete electric drive-train - slap a plug on it, and a slightly larger battery, and you're there.
They were here before ICE vehicles - they just weren't quite as cheap as dirt cheap oil. Now that oil is no longer cheap, they're quite competitive.
See http://energyfaq.blogspot.com/2009/08/can-plug-in-hybrid-compete-on-pric...
Why don't we have time? PO does not mean no oil and the fact that a lot of driving is discretionary or wasteful commuting will be solved almost instantly once a price threshold forces people to behave more efficiently. Re-engineering neighbourhoods to accomodate alot more people who will be staying put on a daily basis will happen as result.
Saying they are here now doesn't make it so. The fact is you cannot buy a factory fitted Prius PHEV(that I know of) yet. Citing your own blog is hardly proof.
Cars are are mostly a luxury for the vast majority of people and they can make other arrangements. Jobs will disappear and businesses fold but new ones will open. I don't care if you think your current job is vital to the world - it isn't, get over it.
Trucks and heavy freight transport however are a much different story as they are the vital link that feeds most westerners anyway. I've yet to see Kenworth or Cummins propose an EV semi-trailer. We need to keep that fleet on the road and tractors in the fields to keep the food system going before we waste any more time trying to keep the whole consumer/commuter
Lots of other things will be quite competitive against expensive oil too and I'd suggest that investing in even more complexity will have rapidly diminishing returns whereas simplification is going to yield dividends long into the future.
Why don't we have time?
I think you agree that time is short.
once a price threshold forces people to behave more efficiently....Cars are are mostly a luxury for the vast majority of people and they can make other arrangements.
Yes, they'll buy more efficient cars. If they can't afford to do that, they'll carpool long before they move.
Re-engineering neighbourhoods
Is very, very slow and expensive.
Citing your own blog is hardly proof.
Oh, I don't expect you to take me as an authority. No, I was hoping you'd actually read the blog, and be convinced by the well-referenced information.
I've yet to see Kenworth or Cummins propose an EV semi-trailer.
See http://energyfaq.blogspot.com/2008/09/can-shipping-survive-peak-oil.html
investing in even more complexity will have rapidly diminishing returns
Priuses have much less than average maintenance costs, and carpooling is cheap.
If so, only for political reasons. Financial, too, in that people don't like to share, but a national plan for relocalizing/redistributing population and arable land similar to what is (sort of) happening in Detroit would really get things going.
This is why I advocate at the grassroots level. The changes we need are drastic, but freakishly simple. The idea it would cost more to power down and relocalize is just ridiculous when you can build a home out of scrap, and much of that scrap is in empty McMansions, etc.
We can do this cheaply and quickly, but it means moving forward with a new vision of what can be.
Cheers
The idea it would cost more to power down and relocalize is just ridiculous
Well, if you really want to go low-cost, wouldn't it just make sense to carpool? And, if HVAC is a problem, just turn down the thermostat and get out the down vests and comforters, and put an electric space heater in the room you're using?
You've got the tip, but what about the rest of the iceberg?
Cheers
Well, again, we're talking about the viability of suburbs.
How might energy scarcity make the suburbs non-viable? Well, the argument is that commuting and HVAC costs would become unaffordable - that's what's relevant to the suburbs vs urban areas.
So, carpooling solves commuting cost problems in the short-run, hybrids/PHEVs/EVs solve them in the long-run.
To solve HVAC in the short-run: turn down the thermostat and get out the down vests and comforters, and put an electric space heater in the room you're using. In the slightly longer-run, insulate, replace windows, go to air-based heat-pumps (or ground-based in the far north).
These would be much faster and cheaper than moving*.
*We should also note that existing multi-family housing is less energy efficient than single family housing.
I think you are not looking at the whole picture. Hybrids don't have much to offer on highway driving, and only offer significant improvements for city vehicles. They are expensive and complex, and fit into the jack-of-all, master of none category. I don't think they are a very good option for anyone except US-ians who want to appear 'green'.
Full-on electric hasn't caught on because of technology, not because of sinister oil executive plotting. It has taken a while to develop safe battery packs that don't explode when they have thermal issues, motors and motor controllers have not been very available, and the existing sales aren't enough to improve design or reduce prices through economies of scale. The only semi-successful EV has been the Tesla. They have had quite a few issues in their short life. More options are coming out as technology progresses, but you are still looking at high price, low utility vehicles while EV problems get solved.
Hybrids don't have much to offer on highway driving,
The Prius gets 55 MPG or better. The Volt will use zero fuel for the first 40 miles, and get 50 MPG after that.
They are expensive
The Prius is less expensive than the average US vehicle.
and complex
The Prius has much better than average reliability.
It has taken a while to develop safe battery packs that don't explode when they have thermal issues
True, but they're here now.
the existing sales aren't enough to improve design or reduce prices through economies of scale.
Of course - they haven't been for sale, except for the Tesla, which is being manufactured by people who had no experience making cars. I applaud Tesla for inspiring people, but let's be serious.
The only semi-successful EV has been the Tesla.
That's because it's pretty much been the only one. The EV-1, Rav4, etc were never intended for full production. GM plans to make 2-3,000 pre-production Volts - they only made 1,000 EV-1s. The EV-1 wasn't even a beta testing product - it was more like an alpha.
EV's are a solution to what!??? We have the 'V' sorted, the post-peak issue is the 'E'.
Now i wonder where the 'E' comes from? I wonder where the all the car's plastic bits come from? I wonder where the wire insulation comes from? I wonder where the steel and aluminum comes from? I wonder what condition those sources, those industries, will be in come the end of oil.
If we want to be producing something lets produce stuff that is pretty secure from degradation post-oil. A simple solar PV panel will last for a long time as an electricity generator. If we want to have electricity post-oil then lets churn out 5 square metres of PV per household fast. That will be our ration.
Electric vehicles to save the world? Don't be silly.
Nigel
EV's are a great fit with PV, and scads of them could be very simple refits from existing gas cars, and so reuse the parts that will otherwise soon be sent off to scrap.
Electric Motors for EV's have a very long life expectancy, with generally one moving part and a fraction of the caustic/acidic environment and vibration that eats up ICE cars.
Why are you willing to have a single item be your proposed solution? It will take many things all together. I'm all for the buildout of PV, but don't get simplistic with your conclusions.. there's a lot we need to use wheels for, and Electric is the cleanest and most durable way to do that.
Now i wonder where the 'E' comes from?
That's the easy part, at least in the US. Wind power is cheap and easy.
The problem is more about what goes into making a Prius than how little fuel it consumes.
I highly doubt that if one were to look at its Life Cycle Analysis data it would look any different than this one for Mini Cooper. Let's face it the sooner we get off the car kick the better off we will be.
http://www.scientificamerican.com/article.cfm?id=green-is-a-mirage
It's an interesting article.
Here's the relevant quote for EVs:
"An LCA reveals that in terms of global warming effluents, for example, everything in the car's life cycle from manufacture to getting scrapped pales when compared to the emissions while it is driven."
So, it really is the fuel used for driving that matters.
Even if the assessment got the ballpark right, the quote gives one no information whatsoever because the critical assumptions are not disclosed.
What matters depends.
And regarding your reasoning a few posts above... are you selling $80 strike 2015 oil calls? If you're right, there's free money waiting for you. :-)
Well, the striking thing about the article is that it didn't support the point made by the person who referenced it. It's surprising how often that happens...
I haven't looked at futures lately - what's the current price for 2015 calls?
I'm not seeing $80 calls for 12.2015. But I looked at the $100 strike which is a better bet if you think there's a cap at $80 anyway: they're at 18 now, up from 7 in mid-February. They were over 50 at one point.
EDIT: It's no surprising to me that people don't understand the links they post. I know why I'm loathe to post links. :-)
Well, what I said was "In roughly 5 years economies of scale will reduce the cost of PHEVs to the range of $80 oil, and we'll see a race between oil depletion and EV growth."
That doesn't tell us whether oil will exceed that price, only that there's a good substitute at that price, so that it will be hard for oil to stay above that price for long. Of course, it could easily stay high for longer than I stay liquid....
Yeah, I know... which is why it used a ":-)" after mentioning the calls.
In all seriousness, you don't know what the price of any substitute might be in 5 years. If you actually did, while that would indeed not enable you to make 100% reliable price predictions, you'd still have much better odds on the derivatives market than at the casino. There are ways to make sure you'd stay liquid.
Oh, I'm quite confident about the price of substitutes - the fundamentals here are quite clear (as I explain on my blog). I called the oil price peak last year (as you can also see on my blog) as did Richard Rainwater looking at much the same data.
I'm not so confident about the time before another price peak ends - the next peak is likely to be longer and lower. Things depend as much on the willingness of oil exporters to recycle petrodollars, and the willingness of oil importers like China and India to subsidize their price controls, as they do on the speed with which substitutes replace oil.
If exporters get as smart as China and Japan, they'll finance exports just as long as exports exist: that could support much higher prices for quite a while, if the US was stupid enough to continue borrowing to support it's addiction to oil. OTOH, if China, India and other importers with price controls wise up and eliminate price controls & subsidies (or, even better, replace them with taxes and import controls), the price could drop sharply.
EV/PHEV substitution will happen incrementally. Lifestyle substitution, especially carpooling, could happen quickly with the proper "victory-garden" promotion (although it's hard to see that kind of realism in US politics at the moment).
Predictions are hard, especially about the future.
You confidence is unwarranted. For one thing, you can not predict the price of batteries.
I've been using such batteries on laptops for a long time and there's no way I'd amortize them over 10 years.
you can not predict the price of batteries.
The price-performance improvement of batteries has been very consistent for quite some time, and it's accelerating. Those improvements are based in new tech (lower cost materials in newer chemistries), larger formats (which eliminate the overhead of packaging and controls per cell), improved manufacturing, and economies of scale.
I've been using such batteries on laptops for a long time
You're using out-dated battery chemistry, with inadequate temperature and charge-discharge management. Look into the newer li-ion chemistries being used by A123systems and LG (and many others).
In the marketing article you link to, the guy doesn't want to stick his neck out and articulate a price. Yet you do.
Not only that, you seem to be proposing that the future can readily be extrapolated from the past. You're essentially assuming economic BAU while calling for changes that would invalidate that questionable assumption.
In the marketing article you link to, the guy talks about putting in 250% of nameplate capacity, which would bring the effective cost to 875$/kwh. With the out-dated battery chemistry I'm using, charge-discharge management requires one to use considerably less energy than the battery is capable of delivering. And the guy is apparently proposing the same thing... yet you seem to ignore this.
For the consumer, the bottom-line is: are they issuing 10-year warranties for their batteries that one will be able to exercise if the capacity drops by over 20%? These new batteries are untested.
In the marketing article you link to, the guy doesn't want to stick his neck out and articulate a price.
I'm not sure what you mean. The CPI CEO is quite specific about what they're charging GM.
you seem to be proposing that the future can readily be extrapolated from the past.
Not at all - that's my point: we can see the outlines of what has to happen in the long-term, but timing cannot be "readily" identified.
You're essentially assuming economic BAU while calling for changes that would invalidate that questionable assumption.
hmmm. Could you elaborate?
the guy talks about putting in 250% of nameplate capacity
No, it's 200%. 8 KWH is used out of 16 total.
With the out-dated battery chemistry I'm using, charge-discharge management requires one to use considerably less energy than the battery is capable of delivering. And the guy is apparently proposing the same thing
Yes. GM is being extremely conservative. They don't have the luxury of the kind of risk that Tesla is taking. They're putting their reputation and company on the line with the Volt. They expect it to be their "halo car", as the Prius is for Toyota, and they hope to eventually use it as their core technology. This kind of conservative engineering doesn't tell us anything bad about the cell chemistry.
are they issuing 10-year warranties for their batteries that one will be able to exercise if the capacity drops by over 20%?
Yes.
These new batteries are untested.
Not really - more later...
Lithium ? That element that will have a peak production also and present in high concentrations in only a few countries ?
We have plenty of lithium - see http://energyfaq.blogspot.com/2009/02/could-we-run-out-of-lithium-for-ev...
Nick, that is one opinion (yours ?), although there are others with the same conclusion. I don't say that couldn't be the right one, but it's not for sure. To give an extreme comparison: I can find sites that claim that smoking doesn't cause lungcancer.
Like with oil, it's about the speed of extraction. The places with high concentration of lithium, such as in Bolivia, are the best. Other places are problematic and need a lot of energy for the extraction process. I read in an article that a maximum of 6 million cars (with lithium batteries) per year could be produced. Six million/year is not bad though. Recycling give large amounts if there are a lot of batteries available for that.
that is one opinion
I don't expect you to take me as an authority - I don't even tell you anything about my background (even though there's a lot there) because it's irrelevant. You should read the articles (and I give a lot of references and data) and form your own conclusions.
Other places are problematic and need a lot of energy for the extraction process.
Did the article give quantitative data, and references, or just state an opinion? Do you have the link?
As an example I bought a small (by US standards very small) car about 8 years ago for £7500 cash. Depreciation was about £1100 a year.
Tax £140 servicing/spares/tyres £200 insurance £250 petrol (at $8 a gallon) about £1000.
So petrol was about 37% of the cost of ownership, not including finance, even with three times the price you pay in the US.
I would love to buy an PHEV or EV, but I cannot justify the cost or inconvenience, and anyway they are simply not available in my town.
and carmakers won't make them while these sorts of market conditions prevail. If we can't afford to drive petrol vehicles at $80 oil, what makes you think we can afford to drive elctric ones at the same net cost that have much lower performance and convenience. I suspect that the threshold price for PHEVS/EVS is much higher and may never be reached due to the oil accordian effect. Eventually even the accordian will wither and die, along with the rest of the economy.
Euan
I suspect this is (going to be) the best short hand explanation of how EROEI manifests itself economically I have seen to date
back in july 2008 someone screamed EROEI (majoran IIRCr WT?)
the problem can be traced back to the original pricing of oil when EROEI was high back in the day. it was too cheap and the economy was optimized around the unstated notion of infinite resource. Depletion was never addressed in the price and the price adjustment required by the market NOW results in the "oil accordian"
a similar event to the 1980's except higher EROEI sources were available
the original price per barrel had to include the replacement of the resource with a (more)sustainable source.. if you don't do that from the get go the market('s invisible hand) has essentially shot too low.
we were doomed (corny but "the major short coming of the human race is etc etc ")
Gail's global reset button looks more attractive every passing day.
You've hit it exactly. if you don't do that from the get go the market('s invisible hand) has essentially shot too low. All the prizewinning economists and their fancy theories missed the obvious issue of pricing a depleting resource, which issue is of course cost of replacing the resource when it runs out
I think we may already be there, the oil cos need maybe $70 a barrel for new production, some, like oil sands, needs $80+ but the world went onto peak plateau somewhere around $45 - IMO there is no believable evidence that the world economy can afford to expand with a price around $70.
Don't forget, the most affordable oil was way back in 1998!
China and India can surge forward while OECD counties contract.
Less than 3 orders of magnitude :)
( or 6, using the UK version of Trillion)
you mean: 6, using the version used in most of Continental Europe
From your Tupi link above:
But from a link posted on Drumbeats two days ago:
Now I am a little confused. Will 2,000 barrels of oil per day eventually ramp up to 15,000 bp/d? If so why is the initial flow so slow? Is it thick like molasses at first but will, after a few months, warm up and start flowing over seven times faster? Is this normal? Does oil really flow slow at first then speed up? Why?
Ron P.
Very nice Euan. The man does have a basis for such optimism although it does strike me as being a tad too optimistic. He has the advantage to predict a future that is seldom available when a new play is discovered. Such new plays develop late because it's difficult to image the geology and/or generate an oil source/trapping model. In the case of DW BZ it's almost as simple a 1950's Texas baby geology. With modern seismic it's very easy to image the reservoirs now that they've proven the oil window. It was the water depth that prevented development. Had the WD been 200 m the play would have been developed decades ago IMO.
How obvious is the play now that they've proven the presence of oil? If I recall correctly the first 14 wells drilled down there discovered commercial oil reserves. Compare that to the N Sea where I believe it took 92 wells before the first commercial oil discovery was made. Another KSA? Maybe...time will tell. But given the engineering/economics involves it's very difficult to expect they'll ever approach the flow rates or recovery % of Ghawar et al. Unfortunately the public can't distinguish between high oil reserve numbers and delivery rates. Their view is simple: if there's lots of oil there just drill enough wells to produce the volume we need.
Rockman,
"Time will tell" is hard to refute for sure.
Stick your neck out a little farther and tell us roughly how many years minimum it will be before we know for SURE either way-several millions of bopd or just a meaningful dribble.
If you are all that old you will be retired anyway probably so it won't hurt your rep if you're wrong;).
Hell Mac...I'm a petroleum geologist. If being wrong bothered me I would have change professions years ago. But seriously, they'll start getting a handle on the total reserve picture relatively quick compared to other plays like the DW GOM. We have a technical term we use for plays like the DW BZ: "cookie cutters". I.E. the next 10 prospects we drill look a whole lot like the last five good ones we drilled. So in that sense they get some idea not too far down the road but even then I would guess a good 10 years before a solid regional picture comes together. Maybe 20 years before the corner the small fields. What I don't have is a sense of the sizes of the remaining ID's prospects. You naturally drill the bigger ones first. But in most trends the cumulative effect of the smaller fields is often greater than the biggies. OTOH, many of the smaller fields might not be commercial given the water depths. And in some plays you develop the big fields, deplete them and then use the infrastructure/sunk costs of those projects to supplement the development of the marginal projects. Floating production facilities are very expensive and take a while to build. But when you deplete that first field you just pull up anchors and tow it to the smaller field. But that's also a good reason to not use the size of the BZ ult recover to offer a sense of max future flow rates. I'll make a totally unverifiable claim (I am a geologist after all): Even if DW BZ develops as much recoverable oil reserves as all of the KSA I doubt they'll ever have half the max flow rate as the KSA. And they'll abandon that production at higher flow rates as Ghawar will be eventually abandoned.
Half a trillion more barrels?!?! There is climate change you can believe in. We should be able to ratchet the global temperature up at least another two degrees Celsius with that.
The more oil we find the longer we'll see business as usual and the faster we go back to the Jurassic as described here in this series of videos:
Crude - the incredible journey of oil
http://www.abc.net.au/science/crude/
My assessment of the triple whammy peak oil (2005-2008), the financial crisis and global warming can be found here in my submission #103 to the Australian Senate Inquiry on Fuel and Energy:
http://www.crudeoilpeak.com/?p=34
We need now legislation to set aside oil & gas for the sole purpose of serving as an energy input into all projects to get away from oil and to reduce our CO2 emissions
Yes, this would be some of the worst news I've heard - even in a long period of very bad news.
I would encourage my fellow climate doomers not to toss the baby with the bath water and think 7, or 70, or 700 generations ahead. The trick is to get these plays not developed by offering better solutions.
Just because we have a carbon problem now doesn't mean we always will. We are in a pattern of ice ages and warm periods and there is no reason to think that won't continue. There will come a time in the future when humanity will **need** more carbon in the air to fight off an ice age. This, in fact, is one of the better arguments for not using it now.
I realize this makes too much sense for the average person/politician/businessperson, but we gotta try.
Cheers
Well, that's a theory that I have not heard, unless we are talking about a very, very long time in the future. I'm not sure where the carbon would be expected to go to, at least in time frames meaningful to present human civilizations. But we will burn what we can get to.
I'm of the opinion the only way you get past greed/discount rates is to turn thinking from immediate to very long term. As they say, (some/a/an?) Native American tribe(s) managed things well for this reason. Seven generations and all.
There are human populations still extant that do think this way about their environment. If they can, we can - even if not likely.
Again, we gotta try.
The carbon presently in the atmosphere *will* eventually get taken up by the oceans, dead plants, etc. When that happens in conjunction with a Milankovitch (sp?) cycle, things will get colder. Very cold. Ice Age cold. Pumping some carbon into the air at that point should avoid or mitigate the ice age.
Some think we are already short-circuiting the current fall into an ice age. The time frames are not exact, but there does appear to have been 2k years of cooling trend prior to this current fossil fuel-induced spike.
I think we can get ourselves to think in terms of thousands of years. In theory.
Cheers
Welllll...
In the REALLY long term, we are getting a hotter and hotter sun, so C sequestration is going to be the optimal strategy over a multi-million-year time frame.
I like your approach, but I'm not sure it will sell any better in Peoria (so to speak) than anything else we've tried.
Somebody wrote a novel based on this premise ten years or more ago-the co2 saves our buttts fron the glaciers.
I threw it away after a few pages-the premise was interesting enough but the authur was worse than mediocre.
I think we humans are overcompensating with greenhouse gases both in the cumulative amount and the rate of emission compared to the reduction in insolation in the northern hemisphere due to Milankovitch Cycles. The acidification of the ocean is a catastrophic consequence.
A bit like PO - it is not the total emissions it is the flow rate that is the killer. Even more so for methane emissions.
This is all very well described in limits to growth - written over 30 years ago.
Very good insight ccpo. This is why we should be spending huge money on R&D to create energy sources cheaper than carbon, rather than wasting money reproducing expensive impractical energy systems.
http://www.theoildrum.com/node/5144#comment-476522
There are plenty of compounds that pack a much bigger incremental greenhouse effect at current concentrations. There's so much CO2 out there that you need to emit a mind-bogglingly huge amount to make a difference. My guess is that the rarer GHGs have more promise for Milankovic cycle management. The ones which have relatively short atmospheric residence times would also be safer to use.
Factually wrong. We have kicked planet Earth out of that pattern. The maximum CO2 concentration under natural climate change (Milankowitch cycles plus CO2 feedback) was never higher than 280 - 300 ppm. We are now approaching 390 ppm.
NASA climatologist JAMES HANSEN: There are two things that are cause of concern. First of all, if we look at the history of the Earth, we know that at the warmest interglacial periods, which were probably less than 1 degree Celsius warmer than today, it was still basically the same planet. Sea level was perhaps a few metres higher. But if we go back to the time when the Earth was two or three degrees Celsius warmer, that's about three million years ago, sea level was about 25 metres higher, so that tells us we had better keep additional warming less than about one degree. And the other piece of evidence is not from the history of the Earth but from looking at the ice sheets themselves, and what we see is that the disintegration of ice sheets is a wet process and it can proceed quite rapidly. We see that the ice streams have doubled in their speed on Greenland in the last few years and even more concern is west Antarctica because it's now losing mass at about the same rate as Greenland, and west Antarctica, the ice sheet is sitting on rock that is below sea level. So it is potentially much more in danger of collapsing and so we have both the evidence on the ice sheets and from the history of the Earth and it tells us that we're pretty close to a tipping point, so we've got to be very concerned about the ice sheets.
http://www.abc.net.au/7.30/content/2007/s1870955.htm
A good description is here:
http://www.scoop.co.nz/stories/HL0601/S00001.htm
No irrelevant link has ever turned an opinion into a fact.
The future does not exist yet and no one has been able to make reliable social forecasts so far.
Dude, do I really need to say, "except for human intervention?"
You must not have read many of my posts on climate.
Cheers
Tipping elements in the Earth's climate system (National Academy of Sciences of the USA)
"We conclude that the greatest (and clearest) threat is to the Arctic with summer sea-ice loss likely to occur long before (and potentially contribute to) GIS melt. Tipping elements in the tropics, the boreal zone, and West Antarctica are surrounded by large uncertainty and, given their potential sensitivity, constitute candidates for surprising society"
http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=2538841
The Limits to Growth
1972 Club of Rome Report
We end on a note of urgency. We have repeatedly emphasized the importance of the natural delays in the
population-capital system of the world. These delays mean, for example, that if Mexico's birth rate gradually
declined from its present value to an exact replacement value by the year 2000, the country's population
would continue to grow until the year 2060. During that time the population would grow from 50 million to
130 million. We cannot say with certainty how much longer mankind can postpone initiating deliberate
control of its growth before it will have lost the chance for control. We suspect on the basis of present
knowledge of the physical constraints of the planet that the growth phase cannot continue for another one
hundred years.
Again, because of the delays in the system, if the global society waits until those constraints
are unmistakably apparent, it will have waited too long.
If there is cause for deep concern, there is also cause for hope. Deliberately limiting growth would be
difficult, but not impossible. The way to proceed is clear, and the necessary steps, although they are new
ones for human society, are well within human capabilities. Man possesses, for a small moment in his
history, the most powerful combination of knowledge, tools, and resources the world has ever known. He
has all that is physically necessary to create a totally new form of human society--one that would be built to
last for generations. The two missing ingredients are a realistic, long-term goal that can guide mankind to
the equilibrium society and the human will to achieve that goal. Without such a goal and a commitment to
it, short-term concerns will generate the exponential growth that drives the world system toward the limits
of the earth and ultimate collapse. With that goal and that commitment, mankind would be ready now to
begin a controlled, orderly transition from growth to global equilibrium.
Am I way off or would fully burning 500Gb translate into less than 30 ppm, even with the preposterous assumption that all of it would remain airborne?
There's no way you'd get even 1C from that.
We have to get back to 350 ppm, if not 300 ppm, so +30 ppm means going in the wrong direction
http://www.350.org/
Thanks, Euan, you've put this into its proper perspective. So this could be a pipe dream like the Bakkens, and regardless it is self-limiting due to the expense of pre-salt extraction. Odd that Dr. Mellow has an extensive understanding of the formations and reserve potential, but was unaware of demand.
Well, it's a good thing we're getting these people together at ASPO then.
We really need to get more geologists and resource specialists from the USGS and influential institutions like the Colorado School of Mines in on these "debates". Maybe then we can iron this "theory" of depletion out a bit. (Our "ammo" is already soaking wet, Robert.)
It's also a bit odd that the slide is labeled "Petrobras 2006". Significant exploration has taken place since 2006.
Here's some more perspective: by 2020, when Tupi is supposed to be producing well, assuming 71,500,000 b/d current production, flat oil consumption rate and 6.5% avg. decline rate, we will need @40,000,000 b/d new oil production. That's **four** Saudi Arabias.
With 1%/yr. avg. demand destruction/shift to renewables? Still need @31,500,000 b/d new oil production. That's **three** Saudi Arabias.
With 2%/yr. avg. demand destruction/shift to renewables? Still need @24,000,000 b/d new oil production. That's **2.5** Saudi Arabias.
How about to 2030?
Assuming 71,500,000 b/d current production, flat oil consumption rate and 6.5% avg. decline rate, we will need @55,000,000 b/d new oil production. That's **five-and-a-half** Saudi Arabias.
With 1%/yr. avg. demand destruction/shift to renewables? Still need @41,000,000 b/d new oil production. That's **four** Saudi Arabias.
With 2%/yr. avg. demand destruction/shift to renewables? Still need @29,500,000 b/d new oil production. That's **three** Saudi Arabias.
Oh, and given the typical curve for DW wells Tupi should already be in decline by this time, right?
Cheers
Those are some really amazing figures. Do you know how many Saudis we need if oil consumption/demand continues to grow? I think I saw that other than last year, total world demand has been growing steadily at 1 1/2 million per year. What happens if demand grows at just 1 million per? My guess is that China and India and other emerging countries will continue to grow demand quickly especially since their development and growth will compound. The non-OECD countries climbed from 29 per day to 38 in 2008 and were just essentially flat to 09 and likely are headed higher again.
Also, I am curious about your selecting a 6.5 decline rate? I see projections all over the map but don't know what to believe.
Thanks, Peter
The numbers are all over. Essentially, and I'm sure I'll be corrected if even slightly wrong, 4.5% or so is net decline (all wells?). Around 6-7% is decline from all wells at or past peak (or is it all wells?). Natural decline, i.e., what would happen if we didn't do all sorts of things to enhance recovery is about 9%.
These from IEA last November, but about what many of us had been guessing long before that.
Cheers
Put me in the skeptical camp, but I was reminded of Dr. Hubbert's two If, Then statements about the US Lower 48 in 1956. If the Lower 48 URR are 150 Gb, then we peak in 1966. If the Lower 48 URR are 200 Gb, then we peak in 1971. In other words, a one third increase in URR only postponed the projected peak by five years. Proportional to Deffeyes' estimate of 2,000 Gb for world conventional URR, a one third increase would be about 700 Gb.
Regarding Brazil's status as a net oil importer, at their recent five year rate of increase in consumption, they would be consuming another 1.2 mbpd in 2018. So, to maintain their 2008 level of net oil imports, they would, at their recent rate of increase in consumption, need a net production increase of 1.2 mbpd by 2018.
and that strikes you as unlikely?
lets say there is 500GB under there what sort of lead times are we looking at?
a lot of the technology already exists..no?
I'm not pretending to know or second guess but do we have some idea or map of how the scenarios (high low mid) play out... the sort of thing TOD is good at?
I'm sure that there will be a post on Matt Simmons' presentation, but one of the points that Matt made was the wide gap between projections and reality. He stated that of the most recent 100 large oil field projects, only about 8 had met or exceeded their projected production rate.
A recent example is Thunderhorse, in the Gulf of Mexico. I am informed by a reliable industry source, who says he has seen the data, that Thunderhorse went from 200,000 bpd of crude oil to 60,000 bpd in one year (note that you need to differentiate between crude oil and barrels of oil equivalent in production reports).
Regarding the 500 Gb estimate, a well known scientist at ASPO suggested it might be a three letter word beginning in "L."
http://www.reuters.com/article/rbssEnergyNews/idUSN0837991820090708
UPDATE 2-Dry hole in offshore play shows Brazil oil risks
Wed Jul 8, 2009 11:27am EDT
the thunderhorse thing was not katrina related I take?
anyways cheers
You are talking about two different things Midi, WT is talking about depletion and you are talking about hurricane damage. But no, it was not Katrina, it was Dennis. But what WT is talking about has nothing to do with Dennis, all this has happened since the hurricane.
But the damage to Thunderhorse was not entirely due to the hurricane, it had something to do with valves left open when the platform was abandoned due to the hurricane.
Ron P.
Actually a design fault, rubber seals in bulkheads blew out owing to tremendous pressure differentials allowing water in - and the near catastrophe.
If WT's data are correct - and I've just been speaking to him - then this could kill off deep water developments - once bitten twice shy - or maybe even bankrupt.
What I don't understand is how it could be producing so much gas - unless super K zones have allowed water from below and gas from above to flood the perfs.
What data would that be? All we have here is a news piece and a projection. That's one dry hole among many wet ones: Integrated services yield efficiency in development
What I'd like to know more about are the major differences between the North Sea and Brazil deepwater - distances to fields from shore, depths, operating conditions on and below surface, difficulty of implementing pipelines; all of this to get a better handle on what we can expect in a development timeline. Because, barring lack of credit being an impedance, I don't see why these fields won't be developed to their fullest. Other lags might include a lack of semisubs and drillships, geopolitical interference, or lack of materials/manpower.
Darwinian
my stupid...cheers
There are technical problems in Australia's North West offshore fields as well. Can you comment on this:
Brazil was compared to KSA in the way that maybe they could become a major exporter of oil. If they ramp up their production with 1,2 mbpd and all is needed for increased own consumption than this makes no sense, that's the point.
If things go on like the past decennia, then oilproduction decline from a country goes together with much more export decline from that country, as many times written by westexas. But it is possible that oilconsumption goes down in almost every country when economic depression follows. In other words, ELM (every year more oil used by an oilproducer) could disappear then.
The price of the crude oil will remain high even if demand declines in oil importing countries because the oil producers will be able to reduce production to set the price where they choose, just as OPEC is currently doing. The oil revenue flowing into the oil exporting countries will invigorate their economies at the expense of the oil importing ones.
Also exports will still decline as long as domestic oil consumption declines slower than production. I think the chance of domestic oil consumption declining faster than oil production while oil revenue flows into the country is minimal.
UK consumption hit a peak in the early 70s, plateauing thereafter, even as their oil production and revenues therefrom hit its apex. Why wouldn't Brazil's consumption flatten out as well? What are the distinctions that would direct Brazil in a direction of ever-expanding consumption? They already drive very fuel efficient (=small) vehicles by and large, perhaps the population will develop a taste for the good life in the form of massive gas guzzlers.
Brazil is a developing nation, not a developed one. I am not aware of any developing nations where consumption has flattened out short of the type of internal social collapse that happened when the Soviet Union and its satellites fell apart.
Brazil's "ever-expanding consumption" will be driven by the same thing that drove increased OECD consumption: an expanding middle class. And there is much room for expansion in Brazil.
See the chart in my post down-thread to understand the scale of consumption in the US compared to Brazil. I see no reason for Brazilians not to consume every last drop of the oil they produce.
-- Jon
Of all this oil, what is the proportion that belongs to Brazil ?
45% to Brazil and the rest to British Gas and Repsol ?
very interesting post.
I hope that this does lower the decline rate when we go into Terminal Decline.
Maybe the curve will resemble the U.S. with production in alaska after Peak in the U.S., only, more gentle.
Actually, the average recovery rate of actual oil fields is 22% of OOIP so 500 Gb for the entire South Atlantic province is probably 110 Gb.
The world uses 31 Gb/year.
Offshore oil now accounts for 33% of daily oil production.
------------------------------------------------------------------
“Globally, a total of 500 billion barrels [bbl] of offshore oil has been discovered, of which 200 billion bbl has already been produced,” Sandrea said. “The ultimate recoverable reserves for the global offshore could be near 850 billion bbl.”
Offshore oil production will continue to grow strongly in the medium term and is expected to reach 35 million barrels per day (b/d) by 2015, up from 24 million b/d in 2005, he estimated.
The disparity in discovered vs. produced reserves is even greater for offshore natural gas, Sandrea said: “In regard to offshore natural gas reserves, more has been discovered (580 billion bbl of oil equivalent) than oil, and barely one-sixth has been produced.”(2008)
http://www.tulsabeacon.com/?p=413
that's one to commit to memory
Theoretically, offshore deepwater[DW] platforms should be easier to defend from insurgent attacks than onshore FF-infrastructure. What is not a theory is how very, very expensive these DW-platforms are to repair/replace if an attack is ultimately successful.
Thus, it seems plausible that the weak link; the infrastructure most likely to be future-targeted, is the crude & natgas pipelines coming ashore, and/or VLCCs and LNG-ships, plus anything further downstream in the FF-flow process to the end-consumer.
Continuing to extrapolate this thought: A continuing series of suicide bombers inside explosive rigged vehicles can certainly turn a lot of gas-stations into roaring infernos. Not to mention the added flaming danger of the detonation occurring when a 5,000 gal tanker truck is currently refilling the storage tanks. The logical security response to this is to make consumers park far away from the gas-pumps, then having to schlep 5-gal jerry cans back and forth until the vehicle is topped off again.
On the plus side: this physical exertion will give owners of large ICE-gas-hogs a much greater appreciation of their profligate energy usage. Also, perhaps it will encourage more ICE-owners to purchase wheelbarrows versus having one's arms strained by carrying two heavy 5-gal jugs a considerable distance. YMMV.
Bob Shaw in Phx,Az Are Humans Smarter than Yeast?
Additional thoughts that occurred to me:
We have had many prior weblinks on TOD disclosing the closing of thousands of gas-stations worldwide from their profitability detonating to nothing; they maybe going financially defunct faster than golf courses or nursing homes. Recall my prior weblinked post on 17% of Wisconsin nursing homes declaring bankruptcy this year.
A suicide bomber detonating his vehicle by a crowded, open-air farmers' market makes a hell of a mess in dead & maimed bodies, but actually destroys very little in the way of expensive infrastructure. It is an easy task, although very emotionally upsetting, to hose away the blood and small body bits. Then, bringing in new display tables and crates of new goods quickly restores the foodstuff operation.
Thus, one wonders if those in charge of picking out targets for their mostly young, detonating-charges will be profitably shifting to gas-stations versus farmers' markets. Picture a Taliban/AQ chieftain going to an owner of a string of gas-stations in Iraq and/or the 'Stans, then for a reasonable fee, offering to take-out his fuelish competition once and for all.
Playing the postPeak game of Monopoly the hard way? This might help explain why the racecar piece is so popular [link has photo of racecar, too]:
http://john.xanga.com/630410080/monopoly-on-monopoly-pieces/
-----------------------
Monopoly on Monopoly Pieces
When we were playing Monopoly this weekend, my wife said she was the car because she was always the Car growing up. I chose the Shoe because I have always liked the Shoe. But once she picked the Car, I kinda wanted to be the car too...I guess this is evidence that as much as I try to follow my own path, I am swayed by societal popularity.
I did some research to find what the most popular Monopoly pieces, and in 1998 Hasbro did a survey on exactly that:
Most popular @18%--the racecar. Least popular @ 3%--the wheelbarrow.
------------------------
Best postPeak hopes that the wheelbarrow becomes the popular choice:
http://web.archive.org/web/19960101-re_/http://www.uni-kiel.de/sino/ar/s...
IMO, the wheelbarrow is already the default gamepiece choice for those banksters living on Park Place as they cart countless loads of cash home from Wall Street and Washington, DC.
You can now buy a Prius gamepiece for your home game:
http://www.edmunds.com/insideline/do/News/articleId=116864
-----------------------
New "Monopoly" Ditches Racecar Game Piece for Prius
..the Monopoly game was created by Parker Brothers more than 70 years ago, during the depths of the Depression. More than 250 million copies have been sold since then.
What this means to you: Guess you'll have to bring your own thimble from now on. As far as the Detroit automakers are concerned, the updated Monopoly game is being launched amid a New Depression.
----------------------
I hope there will be a SpiderWebRiding railbike gamepiece in the postPeak version as it is much more efficient than the shoe gamepiece:
http://www.daylife.com/photo/0bLmcaEcFm97s
No sense in blowing up these grocery stores:
http://www.prosefights.org/pnmelectric/rateincreases/shoppingcarts.jpg
I could easily create a postPeak version of Monopoly, but I don't wished to be sued into penury worse than I already am.
Edits for further emphasis.
Monopoly was based on an earlier game called "The Landlord's Game" (patented by Lizzie Maggie 1904)the was intended to show the working class how "rents enrich property owners and impoverish the tenants." The fact that it has become such a popular game speaks volumes about how eager Americans are to envision themselves as wealthy no matter what the consequences are to others.
http://www.ideafinder.com/history/inventions/monopoly.htm
See the Pareto law mentioned elsewhere on this thread (with regards to oil sizes). Money squeezed in one area pops out in another area, which causes income disparity.
I wrote this from memory - so I hope I have recalled the numbers correctly. I can't recall if Dr Mello was talking oil in place or producible oil, but I suspect the former, in which case your comments about adjusting this down for recovery are entirely valid.
100 billion barrels recoverable - great news for Brazil and other countries with these reserves - but at that level we're down to 3 years consumption spread over 40 years - starting in 5 to 10 years time.
What is also missing is the quality of Brazil's (South Atlantic province) undersea oil.
The reason Tupi is so exciting is that it is at least intermediate crude. Most of Brazil's underseas discoveries have been viscous,heavy crude which is why it pumps slowly.
http://energy.ihs.com/News/WW-News/news-2008/Petrobras-using-FPSO-to-pro...
Hi,
Is there a way to get hold of the presentation Dr Marcio Mello made?
Thanks
I believe an edited version (with some slides removed) will be made available on the ASPO USA web site in due course.
I wonde if there is a mirror image off Africa's coast..., and what it looks like.
it's not going to be cheap oil obviously..., but flatening ut the decline rate during terminal decline would be nice.
That was a big part of his story. More heat over there, though, so perhaps more condensate and gas.
Here's the reddit and SU links for this post (we appreciate your helping us spread our work around, both in this post and any of our other work--if you want to submit something yourself to another site, etc., that isn't already here--feel free, just leave it as a reply to this comment, please so folks can find it.):
http://www.reddit.com/r/Economics/comments/9tmd8/half_a_trillion_barrels...
http://www.reddit.com/r/reddit.com/comments/9tmdb/half_a_trillion_barrel...
http://www.reddit.com/r/energy/comments/9tmku/half_a_trillion_barrels_mo...
http://www.stumbleupon.com/url/www.theoildrum.com/node/5867
Find us on twitter:
http://twitter.com/theoildrum
http://friendfeed.com/theoildrum
Find us on facebook and linkedin as well:
http://www.facebook.com/group.php?gid=14778313964
http://www.linkedin.com/groups?gid=138274&trk=hb_side_g
Thanks again. Feel free to submit things yourself using the share this button on our articles as well to places like stumbleupon, metafilter, or other link farms yourself--we appreciate it!
It was my understanding that the thickness of the salt layer made seismic imaging problematical because of the fluid nature of the salt. Is this true? If so, how might it affect this extrapolation?
I saw part of a show on the history channel (??) the other night where a guy was using silicon gel on a grid to model the behavior of salt domes. Apparently domes are fluid-like and the modleing worked very well for predicting extent of salt and what was beneath it. "Earth series?" just caught it by accident. Pretty cool though.
Sterling -- what makes salt such a unique rock is its density. It's so much lighter then the rocks which surround it that it will "flow" when the pressure of the overlying rocks push down on it. Just like those old lava lamps from the 70's. But all rocks, even igneous, will "flow" given high enough temps, pressure and time. Salt just does so at lower temps. In the last 10 years new seismic data has changed the standard view of salt domes in the Gulf Coast. Unlike the simple "mushroom" shape many were presumed to have. We now see many look more like a tear drop "floating" in a sea of other rocks. The mobile salt has completely seperated from the basal portion.
Thanks Rockman, I can appreciate the analogy to lava lamps. It reminds me that our lifetimes are just a blip in time. The fossil fuel age is just a blip in time. The idea of flowing rocks is one that really speaks to that. I won't get all nihilistic though.
S
ET -- I've seen the seismic sections in the DW BZ. Imaging through the salt is rather easy. It's rather thin (a couple of hundred feet) compared to the sub-salt plays in the GOM. last year I worked on a well which drilled through 24,000' of salt before getting to the rocks. And there are no salt domes in the DW BZ that I'm aware of. The BZ pre-salt is just a layer of salt sitting beteen the rock layers at a certain depth. The difficulty in developing this play was the water depth and the concern that it was too deep (hot) for oil to be anticipated.
ET -- I've seen the seismic sections in the DW BZ. Imaging through the salt is rather easy. It's rather thin (a couple of hundred feet) compared to the sub-salt plays in the GOM. last year I worked on a well which drilled through 24,000' of salt before getting to the rocks. And there are no salt domes in the DW BZ that I'm aware of. The BZ pre-salt is just a layer of salt sitting beteen the rock layers at a certain depth. The difficulty in developing this play was the water depth and the concern that it was too deep (hot) for oil to be anticipated.
Thanks Euan, very interesting story.
Can you precise if the 500 Gb figure is OIIP, 3P or something else?
If it's OIIP, The average recovery factor being around 30%, it gives only 150 Gb recoverable. Then, you`ll have all the technical complexities that will make the effective reserve additions dispersed over a long period of time making unlikely that it will lead to high flow rates.
Very good question. I hope there is an answer.
Otherwise it is pointless to talk about any "billions" (or even trillions).
I remember that being producible reserves, or at least discounted from OIIP.
Catalog of recent oil discoveries
Posted: Tue Sep 08, 2009 5:20 pm
The big number is so speculative that I don't think it really matters at this point how it is classified. Some of these basins have only a few to no wells. I'd guess the recoverable figure will lie somewhere between 100 and 300 billion - should actually say between 0 and 300 billion cos its yet to be proven that this oil can be produced commercially at a price we can afford, and 90% of it has yet to be found.
And apart from the mentioned time factor by Foucher their is the above comment from ROCKMAN:
So if 150 Gb is recoverable, maybe only 50 Gb is available from the bigger fields. The conclusion must be that flow rates never will come close to KSA production.
Did you get any information about how much of this estimated resource was under the South American and African Continents (Amazon and Congo Basins)or was it all deep water?
Sounds just like the hyperbole before the latest explorations of the Caspian Sea Basin.
As I remember they were predicting another Saudi Arabia there likewise - on the order of 200 to 300 billion barrels.Turns out they will be lucky to get 50 Gb total.And how about all that prosperity and stability it brought to the region of Eurasia eh!?
What about all of the inherent technicalities associated with deep sea drilling?
Lets face reality, we over shot and any additional production by 2020 is not going to help the imminent and total collapse of the world economy.At best this Dr Marcio Mello is sincerely over optimistic; or he is simply a corporate shill.
Its 5 til midnight and this kind of salespitch is utter b.s.
There are demonstrable reasons from geological antiquity and history why the Middle East was so prolific in oil production.Historiographical reasons that compelled Rockefellers Standard Oil to explore for oil there in the first place.And if modern geologists are not aware of Standard Oils logical modus operandi, it would behoove them to do a bit more research on the history of the oil industry before they make such ridiculous claims of another Saudi Arabia.
There will NEVER be another Saudi Arabia.
Here is a clue to consider that Rockefellers geologists were aware of, the petroleum molecule is primarily made up of what is left from chlorophyll matter - and it is not from alga - all uniformitarianism aside.
As usual, ROCKMAN and westexas put this discovery in perspective. Low flow rates due to high upfront costs of rigs to drill at such depths and questionable provable reserves equate to little more than a slight change an otherwise downward trajectory some 10 years from now, at best. Then westexas pointing out the need for Brazil to increase production to 1.2 mbpd in roughly ten years makes this find a zero sum gain - and that's for Brazil at current consumption, which is doubtful. While oil is a fungible, I wonder how long that will last. While a gentle slide is most preferable, ecological impacts notwithstanding, such news seems to do little to change reality: we're not finding new reserves fast enough to maintain our current rate of consumption much longer.
According to the CIA World Factbook entry on Brazil the population of Brazil in 2008 was 198 million. By comparison, the US popoulation estimate for July, 2009 is 307 million. Brazil has the fifth largest population in the world and the Brazillian population structure is heavily weighted toward those under 25.
So how much internal demand for oil could Brazil generate over the next decades? A lot! Aren't they, like the Chinese and everyone else, trying to emulate the American consumerist lifestyle?
Here's a chart from the Energy Export Databrowser that shows Brazilian production and demand on the scale of American demand:
There's plenty of room for them to increase demand and still seem frugal compared to Americans. It's not hard to imagine that Brazil could consume all of the oil they produce in the near future and still be looking for more. In general, I see no reason to expect that global demand for petroleum will decrease, despite any plateau in OECD demand.
The pre-salt play is great news for Brazil. But it will add nothing to global export markets.
-- Jon
"But it will add nothing to global export markets."
Except that they would have been developing with or without it, so it's less oil they'll be seeking from the export markets. Maybe not 1:1 less, but less. So the net effect will be more in the export markets than there would have been - same as if there had been an addition.
I well and truly hope that Dr Marcio Mello is completely wrong in his estimates, or that this oil is never touched. We need to put a stop to this oil consumption once and for all. For the sake of preserving the earth and its natural world, the LAST thing we need now is more Saudi Arabia's.
6 Km below the surface of the ocean!!! Good grief!!! I would love to see how they go about building the infrastructure for drilling.
Does anyone know if there is a video of Dr Mello's presentation anywhere?
It will be developed using floating production ships.
Sorry, but I like this one.
Staring down from the moon:
Seeing this little blue planet, ruled by some sort of stupid overlord monkeys, I really wonder why all the others are letting it happen. Can't they see that things are going down south really,really fast. Maybe they think " I can keep on doing this, others will stop first, for ever and ever".
From up here it looks like the human build planet heater is getting so hungry now that the CB's are seeing no other choice than to stop the first wave of servants from using to much fossils.
They really hope that this is gone free up enough energy to find more for the beast, and hopefully some extra for the moneypedal to build an even bigger beast. Ahh tankgootnezs they have found tupi. Everybody is saved!
But I haven,t figured out all those 3 winged blowers popping up all over the place, maybe some sort of global cooling device? They surely must know that when planet heater stops things wil cool down pretty pretty fast. But than again this species can only build bigger and "smarter" fires. Hmm keeps me puzzled.
I will preface this by saying that I do not care about the details of a specific geological structure relating to an individual reservoir formation. This is akin to saying that I don't care if the last week has been colder than average. Whether you buy into this point-of-view, I can't control, but any discussion of future predictions has to be filtered through the laws of probability and statistics, IMO.
To start, if we really want to, we can deduce a probability size distribution for all the reservoirs that have been discovered. This leads to close to a Pareto law distribution, which has some well known properties if you are familiar with Econ 101. As an example, the Pareto Law is also known as the 80/20 (or 90/10) law -- as in 20% of the people earn 80% of the income. The Pareto is also a fat-tail probability distribution to you fans of NN "Black Swan" Taleb and it is also fractally distributed as deduced by Mandelbrot. What this means is that there are indeed real likelihoods for further big discoveries, yet we can likely quantify this and really should if we want to figure out whether Mello is talking jive or not.
Take for instance another economics example. Do we know real bounds for a single individual's wealth? Obviously it takes a certain amount of time to aggregate other people's money in order to amass a certain level of wealth. This effectively places a cap on the maximum wealth that anyone could have in the world. The same thing holds true for an oil reservoir. Since the oil reservoir has collected its material slowly over time through the mechanisms of drift and diffusion from the surrounding area, there is likely a cap on the maximum amount that one will likely find in this finite world of finite duration.
With some rather simple math involving a generic random dispersion of drift transport velocities, one can derive a Pareto law for the size distribution of reservoirs and use that to empirically match what has been observed so far. For the USA, the instance of the Pareto Law, an inverse power-law with PDF exponent of n=2, says that between 70 to 80% of the oil is found in the top 3% largest reservoirs. You can come up with this number either by plotting a rank histogram of the data and doing the bean counting or by fitting the Pareto-like Dispersive Aggregation Model to the data. The best fit gives a cap of the maximum of around 10 GB and a characteristic size of around 1 MB (the low end). If we doubled the maximum from 10 GB to 20 GB then the total USA URR would go up 20% due to the logarithmic behavior of the cumulative.
Possibility 1: One big find of 500 GB
So what happens if we placed a 500 GB data point onto this histogram? The new point would obviously take on a rank of one and skew the successor sizes way off the accepted power-law trend line. This would violate even the acceptable laws of fat-tail probabilities, which are quite permissive in comparison to normal Gaussian statistics, and it would necessitate Taleb to come up with a fatter-than-fat set of laws to promote. Perhaps he could then call it "obese-tail" statistics? This is even blacker than the blackest black swan that Taleb could imagine, blacker than black pudding even. Remember, he was really only railing about narrow-tail Gaussian statistics that seemed to be the rage amongst the financial types. We already have a fat-tail distribution at our disposal and we should put it through the wringer.
Now I framed the data considering the case of USA size distributions alone. I haven't completed a rank histogram for the world but we probably need to. We can see how this supposedly huge reservoir fits in the power-law trend next to Ghawar and down to Canterell and below. If it did tip the scales, what that
would mean statistically is that there are likely many more reservoirs out there that could "fill the gap" of sizes less than this massive find down to Ghawar and below. This would in essence re-align the world's current histogram and we would need to re-estimate a potential URR. A 500 billion find when fat-tail stacked against Ghawar could by itself jack up the URR by 50% by a
Bayesian cascading effect. That is what the probability and statistics says.
Finding something almost an order of magnitude bigger than what we have would imply that we have stumbled on an exceedingly rare event and one that probably formed much more rapidly than all the other reservoirs in existence. This could also be just a fluke of nature and Mello could explain it all he wants, but the odds are against it.
Possibility 2: Lots of areas summing to 500 GB
In this case we assume that a typical distribution of sizes is operational. If you compare it to the UK North Sea data, to get an average of 100 MB per field, you will need 5000 regions to work on. This will line up pretty much on the UK plot but shifted outward so that the rank histogram intercepts along the x-axis at 5000.
This will be an impressive feat because it will likely take 10 times as many platforms as the UK put down.
The other possibility is somewhere in between the two I mentioned. Yet, I cannot conceive of how Mello could be so precise as to come up with a different mix. So pick the outcome. Either a big gamble that this consists of a big field, or more likely (if he hasn't exaggerated) a huge undertaking to recover what is claimed to be there.
This is also what makes this topic so dang interesting -
no one but TOD even considers the possibilities at this level of discourse (not to mention the old wives tale of finding the big ones first!)
Discussing the possibilities in terms of geology is also interesting, but as any skilled statistical mechanic knows, you don't have to know anything about the individual atoms to come up with something like the ideal gas law.
SPE has available the following summary article: Santos Basin Presalt-Reservoirs Development
It is the second article in this pdf.
Note the following from page 36 (their numbering):
Thanks for the excellent post, it helped me pick up some of the points I missed.
He talked fast and my notes were scribbled so some of this might not be accurate but here is some of what I jotted down.
The total I got was 490 billion barrels but scattered around the Atlantic basin - 140B in Brazil pre-salt, 130B off West Africa, 60B Central Congo (onshore), 30B Solimoes (sp?) Basin Venezuela? and/or Brazil? (onshore with associated gas) and 140B in the western Gulf of Mexico, probably in the area of BP's Tiber which is 20% owned by Petrobras. He said all were light sweet crude except the Gulf of Mexico - heavy and black. I also think he said Brazil pre-salt was 130B and 150B at other times in the presentation. He said Tiber was 1.8 billion barrels.
A few other notes - 400 meters of oil (I assume he means pay zone), gravity 28-30 API, GOR 230m3/m3 CO2 8%-12%, 2 Darcie’s, Vis 1cp, pressure 580 kgf/cm2.
He said there were 5 or 6 fields in Brazil pre-salt larger than Tupi. The models he had seemed to show numerous domes within the Tupi field.
He said the first well cost $240 million (I read elsewhere they had a lot of trouble and lost some equipment but that article had a similar cost number), the second well was $80 million and the third $50 million (I saw $60 million in an earlier write-up). The next two wells Petrobras plans to stimulate one and frac one as a test.
He said all the vertical wells tested at 15,000 to 20,000 bpd. Earlier I think he said they tested at 25,000, 20,000 and 35,000 bpd. I think he indicated he thought they could get up to 45,000 bpd per well with stimulation. You are correct - he is a salesman - but it was an impressive performance.
He said Petrobras has spent $100 million on 3D seismic with a 30 meter resolution.
Production is to ramp up from 2015 to 2030. I’ll believe that when I see it, although the current extended well test could be considered production and they can produce at least one more well from the FPSO currently onsite so they could be working up towards 30kbpd right now. From other sources: The FPSO is capable of 30kbpd but I understand they are holding it at 14kbpd. The FPSO was mobilized on a 10 year contract. This first extended well test is scheduled for 15 months
I asked Mello after the presentation if he meant oil in place or recovery and I believe he said it was estimated recovery but there was a lot of conversation and background noise. Also it does not match with Petrobras’ official releases saying Tupi is 5 to 8 billion recoverable.
I'm not sure you can assume anything about depletion from deepwater performance in the Gulf of Mexico. The structure may be very different - only time, drilling and production will tell - but then I'm not a geologist.
God is Brazilian.
While they are working on developing Tupi, here is the latest oil price which is almost $75.
http://www.oil-price.net/
Is Brazil the New North Sea? Rounding Out the Lessons of History
Surely the discussion of newly found oil reserves is sending a shiver down the spine of the current “dinosaur” generation of producers, i.e., Britain, Norway, Russia and most of all Saudi Arabia.
Saudi Arabia well recalls what happened when British and Norwegian North Sea oil came online in a big way post 1980. It essentially destroyed the price monopoly OPEC had enjoyed for a decade, and hurled oil prices into a collapse lasting almost two decades. But the effect was not just on Saudi Arabia, as any oilfield worker from Texas who lived through what was essentially a great depression for them as well will tell you.
So, is Brazil and Latin America the new North Sea? If so, the oil world will have to brace for a storm at least as great as the 1980’s if not greater, and the world will once more have to make adjustments and decisions based upon the new reality.
There is an uneasy sense of “here we go again” beginning to spread in the oil and gas industry as they become once again victims of their own success.
For a little perspective, we can look at slide 47 from the 2008 Proceedings of the ASPO-USA in this PDF file:
http://www.aspo-usa.org/aspousa4/proceedings/Bucke_Jim_ASPOUSA2008.pdf
Here it is given that the world will consume 693 billion barrels of oil between 2005 and 2025, i.e., a 20 year period. So if we take the half trillion barrel number of the south Atlantic ocean as a valid number, and we assume that all half trillion of it is recoverable (big assumption that) we get an interesting historical anomaly: The South Atlantic will last, if all goes well, about as long as the North Atlantic did as a major producer, roughly two decades.
What can we assume will have happened in those two decades, if history is any guide?
(a)We will have expelled the carbon from a half trillion barrels of oil into the air, added to the “dinosaur” fields production. Is there any climate model that people at TOD would accept as valid that can accommodate that without major catastrophic change, irreversible change (at least in our or our children’s lifetimes)?
(b)We will have the fuel for another 1980’s-90's style economic growth period, with all that this implies. In fact, given the recent developments in natural gas production, we may have even more energy available than we consumed in the 1980’s, an astounding period of the greatest wealth growth and transfer in world history, but also a period of astounding waste and consumption.
(c)Speaking of wealth transfer, we would see a wealth transfer from North to South unprecedented in world history. The U.S., Japan and Europe would once more pour money out of their nations to feed the expanding economy and thirst for oil, one presumes bought on credit since none of these nations have any real money to speak of any more.
(d)The Cornucopians would win the day. The “peak oil” argument would be essentially over. After declaring peak in 2005, then 2008, then..??? So many false alarms nobody would accept the peak argument as valid.
(e)Development on renewable and conservation technology would slow to a crawl. Only the “Green” and climate change arguments would still be credible, the last bulwark against the return to a flagrant, luxurious consumption. Whether they can hold the line is debatable, but anyone arguing for reduced consumption would have to do so from an environmental perspective.
(f)Somewhere between 40 and 50 years, beginning roughly around 1973 would be lost in the attempt to transfer to a newer, cleaner, more elegant and truly modern energy base would be lost, time that can never be recovered, and time is our greatest asset.
And then, somewhere around 2025 (maybe a little earlier, maybe a little later) the massive production from the south Atlantic would begin to wind down. The developed world, now massively in debt, having expelled billions of tons more carbon into the atmosphere and with a population demographic that resembles a giant indoor/outdoor old folks home, would watch as production once more slipped, and then (if the North Sea is any guide) drop like a stone, while we pray for a giant, SUPER GIANT find, somewhere…anywhere.
And although it will be no comfort to me, by then a wrinkled incoherent old man if I am alive at all, I would be able to say that the warning I have given so many times on TOD so many years ago was exactly, EXACTLY correct:
The only alternative worse than if the oil is not “out there” is this one: The oil is out there.
Thank you
Roger Conner Jr.
RC
scary.
In a way your arguing the oil accordian(+) idea with geo-socio-economic-psychology tacked on.
"catastrophic" is subjective but, clearly, change that will not be reversed within a handful of generations is highly likely barring geoengineering and other wild cards. It's already happening actually.
Compared to the long-lived emissions so far, 500Gb would not make much of a difference. Ditto for Ghawar and such. The carbon bugaboos remain coal, clathrates, oil sands and so on.
"(d)The Cornucopians would win the day. The “peak oil” argument would be essentially over. After declaring peak in 2005, then 2008, then..??? So many false alarms nobody would accept the peak argument as valid."
They are never going to bring these new fields online to offset the plateau/peak we are sitting on now. They have been factored into the equation as part of the downslope of the Hubbert curve.
According to the theory of Dispersive Discovery [ http://www.theoildrum.com/node/3287 ], by the year 2010 we will have discovered 90% of the recoverable conventional crude that exists on the earth. This amounts to around 300 GB yet to be discovered. So if the oil TBD discovered has to statistically come from somewhere, this can certainly be a part of that remaining composition. So yes indeed, this is all factored in.
500 billion barrels represents 15 years supply ... AT CURRENT RATES OF CONSUMPTION.
As someone else pointed out, if this is an OOIP volume, then the recoverable amount is a lot less. Not only that, but you have to half that to see how much it would delay peak. If recoverable in 50% (which is probably optimistic), then half recoverable is 125 billion barrels. Suddenly, it isn't so rosy. With rising consumption, that is probably less than 4 years delay to peak (if peak hasn't happened), assuming that the oil can be produced almost at quickly as conventional. In all likelihood, this supposed huge amount could only delay peak by a few years.
I'm sure that Dr Mello would be even more surprised to hear that.
We probably should be talking about new production slowing the decline rather than delaying the peak. Not that it's a certainty yet, but the world has been in decline for a year with no guarantee of a turn-around.
Graben Interno, Graben do Cluster... Sounds like an awful lot of grabbing at straws to me.
Very good FM! Also...FYI: a graben is a structural feature where two faults intersect in a V-like pattern when viewed from the side and produces a down thrown fault block. The upthrown fault block counterpart is called a horst. Doesn't mean anything as far as oil potential goes...just a morphological description of the geology.
Everyone seems to be missing that the 500 Billion barrels was Mello’s theoretical concept of pre-salt (and other?) potential around the ENTIRE Atlantic perimeter. The amount he claimed in Brazilian pre-salt is much less. Here is what I scribbled down (This guy should have been an auctioneer or maybe he is, I was willing to bid).
The total I got was 490 billion barrels but scattered around the Atlantic basin - 140B in Brazil pre-salt, 130B pre-salt off West Africa, 60B Central Congo (onshore), 30B Solimoes Basin in Venezuela (onshore with associated gas and not pre-salt) and 140B in the western Gulf of Mexico, probably in the area of BP's Tiber which is 20% owned by Petrobras. He said all were light sweet crude except the Gulf of Mexico - heavy and black.
He said there were at least 5 to 6 pre-salt offshore fields in Brazil larger than Tupi. If you assume that he meant 6 fields equal to 140B then the average field would be 23B. Petrobras claims Tupi as 5 to 8 recoverable. If the 140B is OOIP then the numbers start to make sense and the recovery from Brazil pre-salt looks to be in the 50 billion barrel range. Massive - but not near 500B and still very theoretical.
Considering there have only be a few holes drilled in just one of many theoretical fields (although maybe he considers Tiber as proven) and the geological anomalies that allow oil to exist at this depth may not be present in all the basins it is early days to claim another KSA.
As for this delaying peak oil, my personal opinion is that it will have little or no effect but could go a long way towards softening the down slope.
If peak oil (all liquids) is now - then pre-salt has no effect on the date of peak oil. If peak liquids is before 2018 then I doubt pre-salt will change much of anything. If the peak liquids date is past 2020 then pre-salt could contribute to extending the undulating plateau.
I also remember that Mello said that he calculated a 30% IRR at $50 oil.
None of this considers the Brazilian development plan which is just now unfolding but is beginning to look like it will delay production from a flat out effort where they would have to involve lots of international partners. Brazil has always been keyed to trying to trying to meet their own internal consumption need. They have been doing this for decades with conservation, sugar cane ethanol, etc. They have a mindset that may decide to slow development as they become completely self sufficient and limit the amount they export.
A lot depends on what the Brazilian government wants to do. Petrobras is arguably the world’s foremost deepwater producing company but if they keep development in house it will take them additional time to buy/build the necessary equipment.
For reference the Brazilian ethanol program was substantially more expensive than imported oil for at least a decade after they started the program but the government never gave up and subsidized the program until it ended up substantially cheaper than imported oil due to economies of scale and major increases in oil prices. They have a much longer view than the USA government whose foresight stops at the next primary election.
Thanks for the additional and more precise info.
Been lurking for over a year. Now I have what I think is a pertinent comment for this subject: Something I don't see in this discussion are the indirect costs of certain oil fields that are nonetheless weighing on our economy. I have seen estimates of Middle East oil costing upwards to $200/barrel at the beginning of our current wars in Iraq and Afghanistan due to the need for a military presence to safeguard the oil. That is not a direct cost to the oil companies but it must be figured in somehow because it is a real cost to all of us, not just in dollars, but also in lives. If the oil companies had to shoulder the military cost by being hit with a special tax to fund the military presence, or if that military cost were levied to all of us at the gas pumps, wouldn't it make the new discoveries, and the use of new technologies on older fields seem cheap? It doesn't seem to me that we will need a military presence off the coast of South America or Africa to protect these new discoveries, if indeed they do end up in production.
One of the big problems I see with large corporations tied in with big government on big projects is the tendency to farm out certain expenses to the general population, keeping those costs off the books, or hiding them in other places, such as our military.
Just as the energy cost in manual labor to harvest cane sugar needs to be factored in to ethanol production, so also must all costs to getting the oil to our shores be factored in.
This doesn't even touch the cost of the aftereffects of oil production, in terms of eroded soil, farmland buried under concrete streets and suburban houses, increased cancer rates due largely to chemicals derived from oil, etc., which have been touched on in other posts.
To sum up: If the $200 cost of Middle East oil is true when the military is included, shouldn't we as a nation be going gung ho for all kinds of alternatives? It seems to me that even including the cleanup costs of the Canadian tar sands area, that oil source is cheap compared to Middle East oil. Wind and solar sources for electricity are also cheap by comparison. Ethanol from corn is cheap by comparison. One can cook the books but reality is still reality.
Yes. But if there's anything the Free-Marketeers/Drill Drill Drill crowd dislike, it's including the cost of Externalities (AGCC, military spending, reduction in National Security etc). Privatise the Profits and Socialise the Losses, and all that.
I'm still an optimist!! I'm still confident that we will quite happily survive the transition to renewable energy. (However, I believe population control in the future will be of the utmost importance).
We're probably somewhere close to Peak oil at the moment. Whether it's in the past or the future isn't really very interesting, except for those who love saying: "I told you so". However, decline will be very slow as more oil fields are found and marginal oil fields are brought onto line.
At the same time we're lucky. Lucky we had the peak in oil prices last year. That set off a process of expansion of wind power and solar power and a conversion to electric cars - that has now gained such momentum - that it is almost unstoppable at any oil price.
Probably true, but from the point of view of an oil importing country largely irrelevant. Our model and recent case histories show that net export decline rates tend to accelerate with time.
Incidentally, I believe that there are five countries with North Sea production--Norway; UK; Denmark; Netherlands & Germany. EIA data show that their combined net oil exports went from 1.0 mbpd in 1999 to net oil imports of 1.5 mbpd in 2008, a swing of 2.5 mbpd in 9 years.
When more and more giant and smaller oilfields go in decline you need an increasing number of marginal oilfields to compensate. And what about the large number of workers in the oilindustry said to retire in the next decade ? A lot allready working longer than usual ?
what about the large number of workers in the oilindustry said to retire in the next decade ? A lot allready working longer than usual ?
Their IRA's have crashed. They'll be working for a while.
I read that a lot are about 70 years old !
So 'a while' could be a few more years, yes. Needed are a lot more when they want to develop the many marginal fields. The above ground factors are also a problem.
from the point of view of an oil importing country largely irrelevant.
That statement is too strong. The ELM is a useful thing to keep in mind, but the whole world balance is what matters most.
Well, I 'like' the statement of westexas:
"Oilproduction decline is like a plane descending for landing. Oil-export decline is like a nose-dive descent."
And that's too alarmist - net exports is only a part of the picture.
If consumption changes in KSA, that changes their available exports. If consumption changes in the US, that changes their demand for exports. Is there any difference in the impact on world oil prices?
If production changes in KSA, that changes their available exports. If production changes in the US, that changes their demand for exports. Is there any difference in the impact on world oil prices?
I don't know if it is too alarmist. Even the most optimistic export scenario from Foucher's top 5 exporters doesn't look good. But maybe there is a more optimistic one possible. Don't forget that exports become the most important part of the picture once that oilproduction starts to decline. Exports started allready to decline slightly from 2006 to medio 2008.
Consumption in KSA starts to decline when they have nuclear energy or a lot of solar power. Consumption in the U.S. will decline but there is China, India and some more. Their consumption will decline if the economic depression hits worldwide.
Even the most optimistic export scenario from Foucher's top 5 exporters doesn't look good.
My point is, that the world supply and demand situation is what matters, not what's going on in 5 countries. If Sam's analyis shows a sharp worldwide decline in liquids production, that's a matter for great alarm. If not, then not so much.
Don't forget that exports become the most important part of the picture once that oilproduction starts to decline.
Again, not really. The ELM is helpful in reminding us that oil exporters tend to cap their internal energy prices (and subsidize the internal distributors, who lose money on the deal), but the world-wide balance is what matters.
Consumption in KSA starts to decline when they have nuclear energy or a lot of solar power.
KSA per-capital consumption is already at the level of the US - why would it grow dramatically? They're planning some export-energy substitutions, like refinery expansion, petrochemicals and aluminum production, but refinery expansion and petrochemicals will replace refined products elsewhere, so the net effect is small.
Consumption in the U.S. will decline but there is China, India and some more.
Sure, but consumption is also declining in Japan, Germany and elsewhere. Also, please note that the willingness of governments to subsidize low internal prices isn't unlimited - at some point they tend to break the caps. Indian demand isn't rising that fast; China is pretty smart about such things, and is working to limit oil imports; and Brazil is working hard on production and ethanol.
Once production in an exporting country starts declining, if their consumption does not fall at the same rate, or at a rate faster than, the production decline rate, their net export decline rate will exceed the production decline rate and the net export decline rate will tend to accelerate with time.
We have reviewed 23 examples of production declines in exporting countries. So far, we have not seen a single example of an exporting country cutting their consumption enough to keep the net export decline rate above the production decline rate. I suggest that you review the chart of these 23 net exporters when we finish our paper.
Sam's best case is that the top five--accounting for half of world net oil exports--will have shipped 52% of their post-2005 cumulative net oil exports by the end of 2013.
Meanwhile, closer to home, combined net oil exports from Canada, Mexico and Venezuela dropped from 5.0 mbpd to 4.0 mbpd from 2004 to 2008.
And while OECD consumption is down, non-OECD consumption in recent years had increased significantly.
Once production in an exporting country starts declining, if their consumption does not fall at the same rate, or at a rate faster than, the production decline rate, their net export decline rate will exceed the production decline rate and the net export decline rate will tend to accelerate with time
Sure. That's simple math, and its been the case for exporters ever since Pennsylvania's exports started declining.
So far, we have not seen a single example of an exporting country cutting their consumption enough to keep the net export decline rate above the production decline rate.
Why would we expect to see that? Their consumption is based on the world market price and local pricing, not their levels of exports. Again, that's simple math, and its been the case for exporters ever since Pennsylvania's exports started declining.
Sam's best case is that the top five--accounting for half of world net oil exports--will have shipped 52% of their post-2005 cumulative net oil exports by the end of 2013.
So, what's Sam's projection for the whole world? Aleklett projects that total liquids (adjusted for BTU content) will only decline by 11% by 2030. What does Sam project for 10 and 20 years out?
Meanwhile, closer to home, combined net oil exports from Canada, Mexico and Venezuela dropped from 5.0 mbpd to 4.0 mbpd from 2004 to 2008.
And world production increased, though not by enough, which is why we got a price peak. It was the overall world balance of supply and demand that caused the price peak.
while OECD consumption is down, non-OECD consumption in recent years had increased significantly.
Absolutely. That's good for OECD balance of trade, not so good for non-OECD. It appears the OECD is heading in the right direction, others not so much.
Nick, the situation in most other exporting countries could be or is worse. Remember how fast many oil-exporting countries past peak change to an oil importer. From somewhere the oil has to come from, and with time there is less to go around. Because there are still 14 countries/regions pre-peak this is not so obvious yet. But there will come an oil-shock
Well that's where an overall analysis of the world situation comes in.
Aleklett (president of ASPO int'l) projects that total liquids (adjusted for BTU content) will only decline by 11% by 2030. That's very painful for BAU, but certainly not disastrous.
Also, see my last response to Westexas.
Nick, that is the opinion of Aleklett. There are other scenario's in either direction. A crash scenario is also possible, mainly because oil in the Middle East is concentrated in a few supergiants, in contrary to the situation in f.i. the U.S. (where by the way are a lot of people making money from thousands of fields producing 10-100 barrels per day).
If world production declines more than a few percent per year than balancing will be very difficult without an economic depression worldwide.
This sentence from westexas seems to me having an error: 'above' must be 'under'. The export decline rate was in fact higher than the production decline rate. In the ELM I don't believe much in price mechanisms. What is going to count could be economic depression.
the opinion of Aleklett. There are other scenario's in either direction.
Yes, I'd love to see a comparison by someone who's into that detail - I've raised the question several times, but haven't received a knowledgeable answer.
A crash scenario is also possible, mainly because oil in the Middle East is concentrated in a few supergiants
We've seen some, like Yibal & Cantarell. OTOH, these are statistically independent, and their behavior has been incorporated into these models, as best as possible.
If world production declines more than a few percent per year than balancing will be very difficult without an economic depression worldwide.
Not because of a lack of BTU's. See http://energyfaq.blogspot.com/2008/09/can-everything-be-electrified.html . OTOH, the trade imbalances it would create would indeed be very difficult to manage. I haven't seen a good model for what might happen - I would guess we'd see economic stagnation for a good 10 years. Eventually I would hope to see an aggressive response in the US, which could dramatically reduce oil consumption quickly.
Emergency measures could easily reduce consumption by 25% in 6 months by conservation (just make all highway lanes HOV, strictly enforced), and drilling (in ANWR and off the coasts) and large-scale CTL could both be done in 3 years under truly emergency conditions.
We have more than enough energy to build new vehicles. For that matter, we can carpool and telecommute during the transition. We really can. I'm often baffled by the lack of awareness of the potential of carpooling: the US could cut it's oil consumption by 25% in 3 months, if it chose to. It would be inconvenient, and require an emergency to do, but everyone would still get to work.
I noticed that error in the ELM discussion.
Because there are a few unknowns. The OPEC should be forced to give more data, the whay they do want information about the nuclear program of Iran. With pressure from all the industrialised countries.
Cantarell is extreme, however a one procent increase in average decline rate makes a big diffence for the production in the year 2030. And decline rates tend to increase. NGL and gas can replace oil only in some cases now. Transition to much more use of gas needs an enormous infrastructure replacement among other things.
Nick, HOV (carpooling) is more easily said than done. Drilling in ANWR and offshore is no solution for the coming 10-20 years, and that is problably the period that counts. The large scale CTL in South-Africa produces 160.000 barrels/day. In 2006 Sasol announced it may invest up to $ 6 billion in the next 5 year for a second CTL plant that produces 80.000 bd. I don't know how far they are now with that plan. But in 3 years the world couldn't have much CTL production, maybe 1 million barrels a day. This production needs also a lot of water.
Because there are a few unknowns.
Yes, but that doesn't explain what the difference is in their assumptions. It would be nice to know what, if any, there are. Or, perhaps the major difference is simply that Aleklett's projection includes all liquids (adjusted for BTU content).
Nick, HOV (carpooling) is more easily said than done.
Could you elaborate? Of course it's inconvenient, and people won't do it without good reason, like very high prices, rationing, etc. But I see no serious obstacles - centralized employer as well as peer-to-peer online matching systems would work well.
Drilling in ANWR and offshore is no solution for the coming 10-20 years
That's precisely the period for which they would be most useful. ANWR, in particular, would take 5-10 years to develop, which fits this period well.
CTL is another matter. It's highly capital-intensive (as well as very high CO2-wise), and I don't really expect it to be that important. It's important to note, however, that it's perfectly workable (it's water consumption is much less than agriculture), and it will be used if we have a true emergency.
Wind- and solarpower for generating electricity doesn't replace much oil in most developed countries. A few hundred thousand EV's produced per year you can't call a big momentum. It's 1% or less from the total amount of cars produced each year.
True - EV's haven't grown much yet. Still, it's correct that they've passed an inflection point.
Previously, there were very large barriers for EV's: large R&D investments, and a cultural change on the part of large vehicle manufacturers. Both of those have changed: the R&D is mostly spent, and the large vehicle manufacturers have accepted the idea of PHEV/EVs.
So, the momentum to PHEV/EVs is indeed now unstoppable.
Any guess what will be the first year that 1 million EV's are sold worldwide ? And which year more EV's are sold than other cars ?
Accepted the idea. Now finding enough buyers. A lot of people don't even want silent cars. Hate the idea having to charge for hours.
It's helpful to keep a wide perspective. There are 10's of millions of electric vehicles in forms other than highway-legal cars & light trucks. In China, electric bikes outsell ICE highway-legal cars & light trucks. Priuses have full electric drive-trains, though they don't plug in yet.
what will be the first year that 1 million EV's are sold worldwide ?
Including PHEVs, I would like 2012, but 2014 is more likely. The possible variability is enormous.
And which year more EV's are sold than other cars ?
Again, there will be a long transition from PHEVs to EVs. I would guess that plug-ins of some sort would exceed 50% market share in roughly 2024. With luck it will be much faster.
A lot of people don't even want silent cars.
It's very likely that there will be simulated sounds from speakers. It's likely some cars will allow you to customize, like ring-tones!
Hate the idea having to charge for hours.
That's why PHEVs will dominate for a long time.
If oilproduction starts to decline in 2012 then things are changing too early, too fast.
hhmm. Yes, I may have been too conservative - there are a lot of variables here.
Right now, oil prices are dictated by OPEC. If world economic growth picks up, and oil production stagnates, we could have another squeeze in 3 years. That would likely pull prices over $100/bbl, reduce US economic growth, and accelerate PHEV/EVs.
Toyota plans to hybridize all of their products by 2020 - that could pretty easily include plugs and bigger batteries.
Nick, it's not a matter of stagnation if oilproduction goes down in 2012. Then the situation is completely different from the 2005-2008 period. When economic depression hits, it will be very difficult to sell a lot of PHEV's/EV's.
Do you know if Toyota is going to use mostly lithium-based batteries ? I read somewhere that Toyota is concerned about the 'peak lithium' problem.
Bigger batteries and they take allready so much space.
Then the situation is completely different from the 2005-2008 period. When economic depression hits, it will be very difficult to sell a lot of PHEV's/EV's.
In 05-08 we saw homeowners borrowing directly from oil-exporters, via CDO's (also just as much from China & Japan). Now that's being replaced by sovereign borrowing (T-bills).
When economic depression hits, it will be very difficult to sell a lot of PHEV's/EV's.
If exporters stop taking t-bills, or the US stops being willing to borrow to finance imports, then we'll see stagnation. If the decision happens in a chaotic fashion (say, a currency crash), then we'll see chaotic economic activity. Could we see another bank panic, even one large enough to cause another depression? Sure. Is it likely? I'd say not. And, it's certainly not necessary based on physical limits.
Do you know if Toyota is going to use mostly lithium-based batteries ?
I think so - they're having a little trouble getting the newest li-ion chemistries from their suppliers - that's what delayed them.
I read somewhere that Toyota is concerned about the 'peak lithium' problem.
I'm not aware of that - do you have links? Take a look at http://energyfaq.blogspot.com/2009/02/could-we-run-out-of-lithium-for-ev...
Bigger batteries and they take allready so much space.
The Volt's battery is pretty manageable.
Nick, Googel: toyota "peak lithium". That gives 532 results.
"Toyota started researching a zinc-air battery, initially out of safety concerns (lithium-ion batteries sometimes explode). Germay’s RWE recently poured more research money into zinc-air batteries, too. Zinc-air and other metal-air batteries sidestep the lithium supply issue.
But if alternative batteries are still in the lab, that’s because they face a host of hurdles lithium-ion and nickel-metal hydrate batteries don’t share. Most importantly, zinc-air batteries aren’t rechargable and have a short lifespan—crucial negatives for the auto market. Some alternative batteries suffer from other shortcomings, too, including weight. That will leave lithium and existing nickel-metal batteries to share the global market in coming years, Lux figures."
From another article:
"So who's right? One way for non-experts to decide is to watch the money. GM, as noted, is banking on lithium batteries. So is Nissan, which reportedly plans to invest a billion dollars with NEC to produce lithium-ion batteries for the vehicle market. Honda reportedly plans to produce as many as 500,000 lithium-ion batteries a year. They must know something.
But then there's Toyota, the world's most experienced manufacturer of hybrid vehicles. Toyota uses nickel-metal hydride batteries in the Prius and doesn't see much future in lithium. "The future supply of lithium will not be able to sustain both the exponential growth in batteries for consumer electronics and a large automotive battery demand," said Jaycie Chitwood, environmental strategy manager for Toyota's advanced technology group."
Yes, who is right ? Apart from that: strong rising demand could make lithium-batteries much more expensive.
Googel: toyota "peak lithium". That gives 532 results.
Sure. Google "intelligent design". You'll get a lot more. Heck, even "flat earth" will get more.
As you note, "GM...Nissan...and Honda are banking on lithium batteries....They must know something."
As far as Toyota is concerned - sadly, this is part of a pattern of dishonesty. Several years ago they committed to 1st gen li-ion (cobalt) from a supplier in their Keiretsu, and then Toyota had some Q/A PR problems, and 1st gen li-ion had thermal runaway (fire) problems, and Toyota became nervous. They decided to go w/2nd-gen li-ion, but were caught without a good supplier. They're "dissing" li-ion until they can get their act together, and on the road. This is similar to their dishonest "dissing" of competitors to the Prius, especially GM's Volt.
One word: Valence
Google it.
RC
Yes, that's a good example of 2nd gen li-ion. Others include A123systems, LG/CP, and Toshiba. There are several others.
Nick, it was you who asked for sites. From the few hundreds I took only 2 from page 1 that could signify that there will be peak lithium if demand goes uphill. Also price-increase could become a problem. How can you be so convinced there is no peak lithium in the near future, even if only because of rising prices ? Or because some countries, like Bolivia, don't want (more) environmental disaster ?
First or second gen lithium. It's not from the same element to make them ? Or is it biolithium ?
Nick, it was you who asked for sites.
Well, I apologize - I was a bit snippy. My point was that you really need to read the sources, and understand them, so that you can judge their quality. In any case, you did answer my question with your quote from a Toyota employee. I was disappointed to see that they were up to their old, competitive disinformation tactics.
How can you be so convinced there is no peak lithium in the near future, even if only because of rising prices ?
Rising prices isn't a big problem, because lithium is a relatively small % of battery costs.
Or because some countries, like Bolivia, don't want (more) environmental disaster ?
There are a lot of sources, including China (which has never let the environment get in the way of exploiting a good resource...).
First or second gen lithium. It's not from the same element to make them ?
These are different battery chemistries, which use different things in their electrodes: cobalt vs iron, etc. They all use the same lithium in combination with these other elements. The Valence and A123systems web-sites help explain the chemistries.
China and lithium: one can account on the ELM. Also reserves in China are not that big, according to Wikipedia:
Lithium mine production (2008) reserves and reserve base in metric tonnes:
China 3,500 540,000 1,100,000
There will be more, but most in very low concentration. Seawater contains an estimated 230 billion tons, but here exists the same problem as with gold in seawater. The places with highest concentration of lithium will be gone rapidly, after this it takes more time and energy to extract the rest. Same as with oil. With time more and more recycling will be necessary.
Also when the price is ten times higher ?
That was one quote, there were a few others. A shame I didn't now about their tactics. But is it also a lie that the Prius don't(didn't) have li-batteries ?
China and lithium: one can account on the ELM
Do you mean that they'll use it mostly as an input to their manufacturing? I'm sure that's true, but that's OK.
I think I answered most of your questions in my article: http://energyfaq.blogspot.com/2009/02/could-we-run-out-of-lithium-for-ev...
The Prius uses NIMH now - Toyota says they expect to move to li-ion.
Nick, a quote from your site about lithium:
It's rather like uranium: in the short run there could be boom-bust cycles of supply expansion and shortfalls, but in the medium-term there aren't really resource limits.
Those supply shortfalls could be very annoying for the big car factories.
And a quote about Uranium:
I haven't really seen a definitive resolution of the question, but it looks to me like there are too many alternative sources of uranium, including weapons recycling, reprocessing and expansion of existing mines (including mines in the US, at substantially higher costs, of course), for us to have an absolute shortage.
All this is going for the lower flow rates Uranium, which needs more energy and time and, like you write, much higher costs. Cheap energy is one of the important necessities for growth.
Those supply shortfalls could be very annoying for the big car factories.
Yes, and they already are. Prius and other hybrid production has been slowed down by NIMH battery shortages, and it looks to me like the same is true for li-ion batteries. OTOH, we shouldn't exaggerate the problem: the supplies are out there, and these large companies are very good at solving these problems over time. On the 3rd hand, in the case of a fuel emergency, it might be difficult to ramp up battery production overnight - we'll need contingency plans for the interim.
All this is going for the lower flow rates Uranium,
We have a lot of stuff that could reprocessed into fuel rods in pretty short order. I'd be more concerned about the long lead time for nuclear plant construction.
like you write, much higher costs.
Well, I noted that US mines would be much higher cost. They're only one source, and uranium isn't a large cost component for nuclear power.
Cheap energy is one of the important necessities for growth.
That's a pretty strong meme on TOD and similar sites, and it's highly unrealistic. Energy need only be reasonable affordable - "cheap" isn't that important.
Because there are only a few factories that can make the reactor, which needs a extremely strong construction. Another problem is that soon a lot of nuclear plants need to be rebuilt, at least in Europe. A little comparable with the rust problem in the oil-industry. The time pressure will be enormous in the coming decades, and the amount of money needed tremendous.
Less cheap means that electricity, water, fuel and food is more expensive. For people with moderate to high income this is not so much a problem. The consequences are that car-industries (and other industries that make luxury products) can get serious troubles to survive. The book 'from mass-economy to information
economy' from Hawken, written in the '80's, describes what high oil prices did to the economy and farmers in the past.
The outcome from high(er) oilprices and dwindling oilsupplies could be somewhere between your optimistic view and my pessimistic view.
The time pressure will be enormous in the coming decades, and the amount of money needed tremendous.
That's why I would rely on wind, which is faster, easier and possibly cheaper. See http://energyfaq.blogspot.com/2009/03/how-expensive-is-wind-power-needed... and http://energyfaq.blogspot.com/2009/09/how-expensive-is-wind-power-needed...
For people with moderate to high income this is not so much a problem.
Yes. This is mainly a problem of income distribution, which in the US is a big problem.
The consequences are that car-industries (and other industries that make luxury products) can get serious troubles to survive.
Not really. Europe and Japan have had expensive energy forever, and they've done quite well. In the US, much of the problem is high-paid semi-skilled labor that is now being forced to compete on world markets.
what high oil prices did to the economy
One needs to distinguish between the US and the world, and identify problems caused by income transfers. Keep in mind that farmers, like the airlines, are in a very difficult business: small farmers will always be painfully squeezed.
I agree. Solar and wind can do a lot, also for sea transport. But I also agree with the Hirsch rapport that you have to begin with the transition a long time before peak oil to avoid (big) problems. The mentioned 20 years in that rapport could maybe be reduced to 10 years. It depends on how fast oilproduction declines.
In Europe also. It's about the people with lower paid jobs: they will get the problems and many will lose their jobs.
In many developing countries the majority of people earn $ 1-2/day. A bad situation when food gets more expensive.
But I also agree with the Hirsch rapport that you have to begin with the transition a long time before peak oil to avoid (big) problems.
I would agree, except....we need to define what we mean by "big". I think we have a fairly high risk of economic stagnation over a period of years (perhaps 5-10), and a small risk of substantial overall decline over a period of years. Now, most people would consider that an enormous problem, but in the PO community, that's often considered small potatoes.
The mentioned 20 years in that rapport could maybe be reduced to 10 years. It depends on how fast oilproduction declines.
You have to keep in mind that the Hirsch report was oriented entirely towards liquid fuels. He assumed that we'd go to biofuels and CTL, and improve conventional ICE vehicle MPG slightly. He didn't even consider the possibility of EVs or PHEVs.
It's about the people with lower paid jobs: they will get the problems and many will lose their jobs.
Yes, that's likely, unless the overall society chooses to do something about it.
In many developing countries the majority of people earn $ 1-2/day. A bad situation when food gets more expensive.
Yes, developing countries will have a harder time. Keep in mind that many of those described as earning $1/day aren't really that closely connected to the world of buying and selling that we know, so aren't that affected by oil prices. Haiti isn't typical.
1st Gen Lithoim Ion includes Lithium Cobalt (LiCo). These chemistries typically exhibit low storage with low risk, or high storage with high(er) risk. LiCo packs a punch, but can have Thermal Runaway (fire, explosion). You can imagine the fauz outrage from the MSM and 'concerned consumer groups' the first time a LiCo-equipped car incinerates its passengers (these dame people will convienently ignore the comparativly vast number of fires in vehicles using Fossil Fuels). By contrast, 2nd Generation Lithium focuses on Lithium Iron Phosphate chemistry, which is almost as energy-dense as LiCo, but isn't prone to thermal runaway.
Sometime before 1899:
That's an interesting article. Here's a blog post I wrote recently:
Would we have been better off without oil? Probably.
We would have gone to Electric Vehicles. By 1912 there were thousands of EVs on the road, and electric trucks were also selling well.
Ferdinand Porsche designed an extended range EV like the contemporary Chevy Volt in 1904*. Given that an ErEV uses 10% as much liquid fuel as a contemporary US ICE vehicle, it could have run on our limited supplies of ethanol - the Model T was built to run on ethanol.
The lack of oil would have slowed down personal transportation only slightly.
Isn't oil irreplaceable?
Electricity successfully replaced oil in the late 1800's for lighting - the Edison bulb was superior in every way to kerosene. If gasoline for automobiles hadn't come along, the oil industry would have been in real trouble.
Now it's time for electricity to do the same for transportation. Electric motors are superior in every way to infernal combustion engines. Now that oil is no longer dirt cheap, and batteries are finally good enough to power hybrids and plug-ins, the transition is under way.
“I'd put my money on solar energy… I hope we don't have to wait til oil and coal run out before we tackle that.” —Thomas Edison, in conversation with Henry Ford and Harvey Firestone, March 1931
That's a great quote, isn't it?
I read a conspiracy theory once, that claimed that Edison was developing an improved battery and planning an EV in cooperation with Henry Ford, but that all of his labs were attacked by arson to prevent it. I have no idea if this theory is credible**.
In the long run, of course, Edison was right. In the meantime, we have a solar derivative in the form of wind as our cheapest source of renewable power.
*Many ErEVs have been designed, including models in the 1960's, 70's and 80's. The EV-1 engineers built a rough version, in order to simplify vehicle testing. The Renault Elect’Road was the first ErEV sold, in 2003. It was discontinued after 500 were sold. It uses a manually controlled 21hp genset to extend the range of its 13kwh nimh battery pack. Electric only range is 50 miles, 60mph max speed, and the 10 liter gas tank allowed perhaps another 100 mile range. See here.
**Here's a quote from an enthusiastic reviewer of a book that discusses it:
"His new book, an exposé of the confluence of corrupt forces that killed the growth of nonfossil transportation fuels, the trolley system and what is now called "alternative energy," is presented in the context of history stretching over a millennium, back when wood was man's primary fuel and horses were the main form of conveyance.
"Quite the gripping Gilded Age saga. Black documents the machinations of the coal industry as well - back to the 13th century or thereabouts, the Royal Foresters and proscriptions against the commonry taking so much as a twig out of the woods; this evolving into use of coal far before the Newcome engine. Exactly how much of this is suitable stuff for Art Bell I'm not sure and don't care; the material on the decades of half-measure attempts to market crude EVs is where the story really hits its stride. " (source of quote)
http://www.internalcombustionbook.com/
Nick, look around you. There is almost no product that could have been made without oilderivates.
It surprises me how many people refer to 100-200 years ago, times with little industry and bad healthcare when life-expectance was low (average 30-50 years).
It is a great quote from Edison, but he couldn't imagine how different life would be now. Solar energy in a lot of ways cannot replace oil.
There is almost no product that could have been made without oilderivates.
Are you thinking of plastics? Metals and many other materials (carbon, silicon), can substitute. Plastics can be made with other organic chemicals - biomass would do just fine.
Plastics, of course, account for a relatively small % of oil consumption. Transportation is the largest, and wind & solar electricity will do just fine.
Plastics, medicines. Yes, there are substitutes, but they have to be made in large quantities to prevent economic downturn. Biomass production need some major breakthrough's to produce them on large scale. Some substitutes need scarce elements, like Neodynium for the magnetes in windmills. They will find solutions for those scarceties but to maintain this system of economic growth will be impossible for a long time to come.
Transportation is the largest and a very important one.
Solar and wind need a lot of time to scale up. For windmills the best places are used first. After large percentages of increases let's say the first 10 years, the increase will be much less per year on percentage basis. For now a lot of countries are building or thinking on new coalplants and nuclear.
Plastics, medicines.
Well, they're different. Medicines, if they require oil, mostly use natural gas for the basic organic chemicals needed.
Yes, there are substitutes, but they have to be made in large quantities to prevent economic downturn.
Not really. Plastics and medicine use a very small portion of oil consmption - less than 10%.
Biomass production need some major breakthrough's to produce them on large scale.
Not at all. On the scale needed for plastics, it wouldn't be difficult at all. I would agree that biofuel for a large % of transportation is a non-starter, but I'm not suggesting that. No one really is (though some are pretending to....).
Some substitutes need scarce elements, like Neodynium for the magnetes in windmills.
Neodymium is modestly scarce. OTOH, it isn't essential for the magnets in windmills - they're great for permanent magnets, but not needed for induction magnets.
They will find solutions for those scarceties but to maintain this system of economic growth will be impossible for a long time to come.
Not due to a shortage of BTU's. Trade imbalances may cause stagnation in oil importing countries for several years, until they face the urgency of the problem.
Solar and wind need a lot of time to scale up.
hmmm, not really. Wind is here: 40% of new generation in the US. Solar is about 8 years behind.
For windmills the best places are used first.
Well, the easiest are first, not necessarily the best. Sure, Europe is struggling for good locations. OTOH, the US really, really isn't.
For now a lot of countries are building or thinking on new coalplants and nuclear.
True. For better or worse (probably worse). That's why we don't have an energy shortage, we have a liquid fuels shortage and a climate change problem.
ok, that's only the production, not the whole chain including transportation.
Indeed, with large scale I was thinking on the transportation-sector.
I meant the time to reach 20-30% of the total electricity generation. Not as a percentage of new generation
that's only the production, not the whole chain including transportation.
Well, medical supply production requires relatively little transportation (they're pretty small, dense, high value items); and that gets back to oil for transportation, which is relatively easy to replace.
I meant the time to reach 20-30% of the total electricity generation. Not as a percentage of new generation
Well,
1) we have no danger of electricity shortages, especially in the US, and
2) we could reach 20% of US total electricity generation in 10 years, if we wanted to, and it would be pretty affordable. It's really a social choice. It's not a likely social choice, because of the resistance from the utility and coal industries (and their employees and investors), but it wouldn't be hard to do.
There was an article on TOD about collapse of the system, with an example of how many elements are needed to make a cellulair phone. The elements come from a lot of different countries and it is often a matter of 'just in time deliveries'. It is more than difficult to make the needed changes when oil starts to run out. In theory there will be enough oil for those deliveries; it is above all the economic downturn that will cause the problems.
Yes, that is different problem. And coal reserves don't seem to be that high. Some recent investigations are giving peak coal somewhere between 2030 and 2050. In a lot of countries the best quality coal has gone.
It is more than difficult to make the needed changes when oil starts to run out.
Some changes can be done very quickly, fortunately. See http://energyfaq.blogspot.com/2008/09/can-shipping-survive-peak-oil.html
Some recent investigations are giving peak coal somewhere between 2030 and 2050.
These investigations have confused peak supply with peak demand. See http://energyfaq.blogspot.com/2008/06/are-we-running-out-of-coal.html and http://energyfaq.blogspot.com/2009/02/are-we-running-out-of-coal-part-2....
Demand has soared recently in China and there are problems in India. You can read this in westexas comment in today's TOD article: Hubberts Peak - JK comic. Increase in demand will only stop when economic depression hits. IMO (and many others) an economic depression will make an energy transition more difficult, mainly because the problem of getting credit. This credit crisis cancelled allready some wind- and solarprojects. Probably this crisis will be a game compared to what is coming.
Demand has soared recently in China
That's a little too strong. For some long-term info see http://energyfaq.blogspot.com/2009/10/will-chinese-oil-demand-grow.html
You can read this in westexas comment in today's TOD article: Hubberts Peak - JK comic.
I find westexas a useful source of information, but too pessimistic.
Increase in demand will only stop when economic depression hits.
This, too, is too pessimistic.
IMO (and many others) an economic depression will make an energy transition more difficult, mainly because the problem of getting credit.
Not because of a lack of BTU's. See http://energyfaq.blogspot.com/2008/09/can-everything-be-electrified.html . OTOH, the trade imbalances it would create would indeed be very difficult to manage. I haven't seen a good model for what might happen - I would guess we'd see economic stagnation for a good 10 years. Eventually I would hope to see an aggressive response in the US, which could dramatically reduce oil consumption quickly.
Emergency measures could easily reduce consumption by 25% in 6 months by conservation (just make all highway lanes HOV, strictly enforced), and drilling (in ANWR and off the coasts) and large-scale CTL could both be done in 3 years under truly emergency conditions.
We have more than enough energy to build new electric vehicles. For that matter, we can carpool and telecommute during the transition. We really can. I'm often baffled by the lack of awareness of the potential of carpooling: the US could cut it's oil consumption by 25% in 3 months, if it chose to. It would be inconvenient, and require an emergency to do, but everyone would still get to work.
This credit crisis cancelled allready some wind- and solarprojects.
Some. It only reduced wind construction to a little below last year's, and solar has only slowed slightly.
I always read that windmills have permanent magnets. I don't know if induction magnets can be used as permanent magnets, I don't know the difference between the 2 magnets.
Yeah, there's a lot to learn when you start opening up subjects like this, isn't there?
Yes, it's a new study that I started 1,5 year ago. The subject is a magnet for my thoughts.
I bet. I've been thinking about it for about 30 years, ever since I read the original Limits to Growth.
This is important stuff. OTOH, you shouldn't allow yourself to be drawn into the unrealistic pessimism that exists here, and in even worse form in some other PO websites.
This is a good place to get some out-of-the-box thinking: http://peakoildebunked.blogspot.com/2006/07/307-confessions-of-ex-doomer...
My blog (which you can find by clicking on my name) is also good.