[pup55]

What's the recovery rate of the SPR?

LOL an interesting question, since it is going into an underground deposit, and there is no way to tell "exactly" how much is in there.

In fact there was a big scandal back in the 80's--many million barrels actually went unaccounted for.

You are correct to be waving the red flag.

The SPR management office is located in New Orleans, Louisiana.

The reserve is stored at four sites on the Gulf of Mexico, each located near a major center of petrochemical refining and processing. Each site contains a number of artificial caverns created in salt domes below the surface.

Individual caverns within a site can be up to 1000 m below the surface, average dimensions are 60 m wide and 600 m deep, and capacity ranges from 6 to 37 million barrels (1 to 4.3 million m³). Almost $4 billion was spent on the facilities. The decision to store in caverns was taken to reduce costs; the Dept. of Energy claims it is roughly 10 times cheaper to store oil below surface with the added advantages of no leaks and a constant natural churn of the oil due to a temperature gradient in the caverns. The caverns were created by drilling down and then dissolving the salt with water

.

Wikipedia

[ROCKMAN]

I have a vague memory that the max recovery rate is 2 million bbl/day. There have been cases where huge volumes of NG and propane have been leaked from the caverns but I haven't heard of major oil leaks. But maybe the gov't just hasn't told us about one. The salt is fairly stable but nature has its way of behaving as it wishes at times.

They should have a very accurate number of the volume in place though. That part is fairly simple reservoir engineering.

[heatingoilnyc]

It seems obvious that, in the face of the peak oil dilemma, the U.S. Strategic Petroleum Reserve is an umbrella under Niagra Falls. However, the SPR may offer some short-term relief in the case of a sudden and brief cutoff of oil supplies from one country or region.

Conservatives tend to laud the SPR as a protection from a catastrophic spike in the prices of petroleum products. Some liberals call it a scam meant to (further) line the pockets of the oil industry. Which is (more) true? Is the SPR worth what it costs the American taxpayers to keep it full?

A good summary of both arguments here: The HEAT Zone

[shortonsense]

It seems obvious that, in the face of the peak oil dilemma, the U.S. Strategic Petroleum Reserve is an umbrella under Niagra Falls. However, the SPR may offer some short-term relief in the case of a sudden and brief cutoff of oil supplies from one country or region.

http://www.fossil.energy.gov/programs/reserves/

"The U.S. Strategic Petroleum Reserve is the largest stockpile of government-owned emergency crude oil in the world. Established in the aftermath of the 1973-74 oil embargo, the SPR provides the President with a powerful response option should a disruption in commercial oil supplies threaten the U.S. economy."

Sounds like it was built for just such an emergency situation, rather than peak oil.

Is the SPR worth what it costs the American taxpayers to keep it full?

Absolutely. Its like keeping $500 emergency cash around, makes perfect sense. And now that peak oil has caused a collapse in crude prices its even cheap to fill it up.

[frankthetank]

The more oil we can get over here to the US with our worthless dollars, the better ...in my opinion...

[WyoDutch]

The SPR will keep those 20,000 active duty troops (assigned to maintain order when the whole system melts down) rolling down American main streets while the subjects, er.... citizens watch from behind drawn blinds.

[ROCKMAN]

Each can generate their own opinion. For myself, the use of the SPR to mitigate price spikes/short term shortages has always been a secondary motive. The Dept of Defense is the single largest consumer of oil on the planet. The SPR is essentially dedicated to their use in case of a sustained shortage IMO.

[Texas_T]

http://www.lewrockwell.com/blog/lewrw/a ... 79569.html

It seems like a common theme amongst those who argue against peak oil is the oft stated fact that "every year our proven reserves increase" or something along similar lines, as presented in the above video.

Just wondering if this is supported by facts...or is it just spin?

[Lore]

There maybe gold on the moon too, but what's the price to bring it back to earth?

[Beery]

If the proven reserves do keep increasing every year, I guess the question is, can we extract it and burn it faster than it's growing? If not, we'll be in trouble. At some point we'll run out of land and sea and we'll have to learn to drink oil.

[anador]

If the proven reserves do keep increasing every year, I guess the question is, can we extract it and burn it faster than it's growing? If not, we'll be in trouble. At some point we'll run out of land and sea and we'll have to learn to drink oil.

[Cid_Yama]

Actually, those that are making those claims are trying to count oil shale, which is a misnomer, as it isn't oil at all but Kerogen.

It can be made into a synthetic substance that can substitute for oil but it uses a lot of energy and expense to produce so the return on energy invested is quite low, as the Nazis discovered in WWII.

Most oil shale is just strip mined and the rocks burned like coal for electricity generation. Very expensive, very dirty, and a lot more work than coal.

Extraction rates could never keep up with oil.

Have they turned our schools into indoctrination centers that are just spitting out morons now, year after year?

[Lore]

T. Boone Pickens was on CNBC the other day and estimated that without subsidies Bakken Shale reserves would need to have oil at around $180 before it became economical to extract and refine. Which is a far cry from the touted $50 by many of the other insiders.

On top of which the extraction rates are limited by the energy and water you can put into the process. Presently we’re getting about 100 million barrels a year, or 4 days worth of US usage. Put into perspective, seven billion barrels are consumed by the U.S. every year. Total estimated reserves of the Bakken Shale, at best, is around 4.5 billion.

We're not about to drill our way out of the problem locally.

[Pops]

Proven reserves is a financial term. It means:

"How much oil can be delivered at a profit, at todays price, with todays technology"

At a high enough price, oil is virtually unlimited, like soylent green.

[vision-master]

T. Boone Pickens was on CNBC the other day and estimated that without subsidies Bakken Shale reserves would need to have oil at around $180 before it became economical to extract and refine. Which is a far cry from the touted $50 by many of the other insiders.

On top of which the extraction rates are limited by the energy and water you can put into the process. Presently we’re getting about 100 million barrels a year, or 4 days worth of US usage. Put into perspective, seven billion barrels are consumed by the U.S. every year. Total estimated reserves of the Bakken Shale, at best, is around 4.5 billion.

We're not about to drill our way out of the problem locally.

Link?

[Adelaidewonderer]

Proven reserves is a financial term. It means:

"How much oil can be delivered at a profit, at todays price, with todays technology"

At a high enough price, oil is virtually unlimited, like soylent green.

No it doesnt. If that was the case, we would have seen a huge jump in proven reserves during the price rise of 2008, and then a huge slump in proven reserves when the price fell at end of 2008.

Its a technical term not a monetary term.

[Pops]

[No it doesnt. If that was the case, we would have seen a huge jump in proven reserves during the price rise of 2008, and then a huge slump in proven reserves when the price fell at end of 2008.

Its a technical term not a monetary term.

Really?

You'd better inform these chumps...

Proved reserves are estimated quantities that analysis of geologic and engineering data demonstrates with reasonable certainty are recoverable under existing economic and operating conditions.

http://www.eia.doe.gov/international/reserves.html

Proved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with a high degree of confidence to be commercially recoverable from a given date forward, from known reservoirs and under current economic conditions.

https://www.cia.gov/library/publication ... 8rank.html

Quantity of energy sources estimated with reasonable certainty, from the analysis of geologic and engineering data, to be recoverable from well established or known reservoirs with the existing equipment and under the existing operating conditions.

http://www.businessdictionary.com/defin ... erves.html

Operating conditions includes operational break-even price, regulatory and contractual approvals, of which without these items cannot be classified as proven and are usually classified into probable. Price changes therefore can have a large impact on classification of proven reserves.

http://en.wikipedia.org/wiki/Proven_reserves

Reservoirs are considered proven if economic producibility is supported by either actual production or conclusive formation testing. The area of an oil reservoir considered proven includes those portions delineated by drilling and defined by gas-oil or oil-water contacts, if any, and the immediately adjoining portions not yet drilled, but which can be reasonably judged as economically productive on the basis of available geological and engineering data.

http://www.opec.org/library/Annual%20St ... nition.htm

Edited to fix links

[vision-master]

lol - Adelaidewonderer just got punked.

[Adelaidewonderer]

lol - Adelaidewonderer just got punked.

Not quite sure how Vision. Pops provided 5 samples, and only does one (wikipedia) link it to a monetary term (ie price changes).

The others refer to economic. What does economic mean = Using the minimum of time or resources necessary for effectiveness.

When oil prices fell to $12 a barrel in 1998, going by Pops interpretation, the world would have had very little proven reserves. Somehow the worlds proven reserves changed very little from $12 barrel prices in 1998 to $147 barrel prices in 2008.

Sort of runs counter intuative to his original statement of:

At a high enough price, oil is virtually unlimited, like soylent green

And yet we saw a oil prices rise 12 fold from 1998 to 2008, and no increase in proven reserves. So at $1400 a barrel, proven reserves will also not change.

[rockdoc123]

No it doesnt. If that was the case, we would have seen a huge jump in proven reserves during the price rise of 2008, and then a huge slump in proven reserves when the price fell at end of 2008.

Its a technical term not a monetary term.

Pops is exactly correct. You should do some searching on this site as I've posted the definitions and how they are applied in the industry on several threads over the past few years. And I should also point out that many companies took massive write downs on their proven and probable reserves when oil price dropped but that would have been seen in North America only amongst those companies actively looking at the non-mining heavy oil ventures which normally require a ~$75/bbl price to stimulate investment. The economic limit on proven producing reserves is a function primarily of operating costs and not finding and development costs. Hence companies would have to take write downs mainly on 2P which would require a higher price to warrant the investment needed to convert it to 1P. If memory serves me correctly it wasn't until a year later that companies were forced to report both 1P and 2P to the SEC whereas that was required by the OSC all along.
My suggestion is to look at the annual reports from a company like Nexen during that time period as their sagd projects would have been effected.